A n n u a l r e p o r t

Transcription

1 Annual report 27

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3 Annual report 27 progressing is evolving with a firm step, consolidating structures, diversifying, expanding, it is feeling confident in a market that changes daily

4 2 INFORME ANUAL 27 / CARTA DEL PRESIDENTE SACYR VALLEHERMOSO GROUP HIGHLIGHTS 3-YEAR HISTORICAL INFORMATION FINANCIAL INFORMATION (Millions of euros) Revenue EBITDA Net attributable profit Net cash flow Assets Equity Debt Gearing (%) EPS (euros) Chg. % 7/6 5,76 4,685 4, % 1,277 1, % % 1, % 29,777 27,127 14,37 9.8% 3,492 3,9 1, % 1,646 1, (13.1%) 47.1% 62.9% 46.6% (25.1%) % STOCK MARKET INFORMATION Market capitalization (millions of euros) Ordinary dividend per share (euros) Gross ordinary dividend (millions of euros) Share price at year-end (euros)* Annual change in share price Shares outstanding at year-end Chg. % 7/6 7,571 12,89 5,654 (4.9%) % % (4.9%) (4.9%) 126.5% 74.8% 284,636, ,636, ,47,634 * Adjusted for bonus share issues in July 25 (1x32) and June 26 (1x27). REVENUE ASSETS 6, GAGR=17.4% 3, GAGR=44.3% 5, 25, 4, 2, 3, 15, 2, 1, 1, 5, Millions of euros Millions of euros GROSS ORDINARY DIVIDEND ORDER BOOK 18 GAGR=22.% 6, GAGR=15.7% 5, 14 4, 1 3, 2, 6 Millions of euros , Millions of euros

5 key INFORME ANUAL 27 / CARTA DEL PRESIDENTE 3 figures SACYR VALLEHERMOSO GROUP HIGHLIGHTS 3-YEAR HISTORICAL INFORMATION OPERATIONAL INFORMATION (Millions of euros) Construction Order book Orders as No. of months sales Property Development Land bank (thousands of m 2 ) Pre-sales Contracted sales Asset valuation Unrealized gains Property Management Rental space (thousands of m 2 ) Occupancy rate % Rental portfolio Asset valuation Unrealized gains Concessions Revenue backlog Km under concession Gross capital investment Services Revenue backlog Chg. % 7/6 6,22 5,638 4,5 6.8% (16.3%) 3,824 4,2 4,55 (9.%) 1,35 1,654 1,53 (21.1%) 2,36 2,446 2,24 (3.5%) 6,969 7,8 6,13 (1.7%) 2,538 3,39 2,338 (23.3%) 1,536 1,543 1,423 (.4%) % 2,935 4,162 3,712 (29.5%) 4,725 4,592 3,48 2.9% 1,779 1,532 1, % 65,862 55,828 5, % 3,786 3,583 3,34 5.7% 7,153 6,239 5, % 1,124 9,89 6, % MOTORWAYS UNDER CONCESSION KM GAGR=6.5% 4, 3,5 3, 2,5 VALUATION OF PROPERTY DEVELOPMENT ASSETS 8, 6, 4, GAGR=6.62% 2, , Millions of euros VALUATION OF RENTAL PROPERTY ASSETS 5, GAGR=16.5% 4, 3, 2, Millions of euros

6 Contents LETTER FROM THE CHAIRMAN 6 SACYR VALLEHERMOSO GROUP 24 Origins and history 26 Quality and innovation 28 BUSINESS AREAS 3 Construction Sacyr-Somague 32 Property development Vallehermoso 48 Infrastructure concessions Itínere 6 Property management Testa 76 Services Valoriza 88 STOCK MARKET PERFORMANCE AND FINANCIAL COMMUNITY 114 Capital Evolution 116 Stock market 118 Investors relations 122 BUSINESS PERFORMANCE 124 Income Statement 126 Consolidated Balance Sheet 132 CONSOLIDATED FINANCIAL STATEMENTS 146 Auditor s Report 148 Consolidated Financial Statements 15 Consolidated Management Report 32

7 AnNUAL report 27 / CONTENTS 5 GOVERNING BODIES 1 Board of Directors 12 Board committees 16 Corporate governance 2 GROUP SHAREHOLDINGS 11 Repsol YPF 112 CORPORATE RESPONSIBILITY 138 Strategy 14 Activities 142 ADDRESSES 34 Spain 342 International 343

8 6 ANNUAL report 27 / LETTER FROM THE CHAIRMAN LETTER FROM THE CHAIRMAN DEAR SHAREHOLDERS 27 was a year marked by the change in the international economic climate. Rising commodity prices, particularly oil, as well as the crisis in the US real estate sector and the consequent liquidity crunch, have combined to make the global economic situation less stable and less buoyant. In this more complex environment, the Sacyr Vallehermoso Group has enjoyed yet another very positive year. Revenue grew to 5,76 million euros, up 23% from 26 on the back of solid performance in all business areas. EBITDA reached 1,277 million euros, up 2% from 26, yielding an EBITDA margin of 22.2%. This makes Sacyr Vallehermoso one of the most

9 ANNUAL report 27 / LETTER FROM THE CHAIRMAN 7 profitable groups in its sector at the national level and throughout Europe. If this outstanding performance in the business areas is coupled with the revenue from the Sacyr Vallehermoso Group s shareholdings (33% Eiffage and 2% Repsol YPF) that are not included in its revenue or the EBITDA margin as they are accounted for using the equity method, we arrive at a net attributable profit of 946 million euros, up 75% from 26. The levels of growth and profitability are locked in going forward by the Group s healthy backlog in construction, concessions, property management and development, and services. At December 27, the order book stood at 87,33 million euros, 12% more than at year-end 26. I would like to highlight some of the most important events at each of Sacyr Vallehermoso s business lines in 27. First, in construction, in addition to being awarded contracts alongside Somague for new projects in civil engineering (various stretches of high-speed railway networks, roads and motorways, etc.) and building (hospitals, offices, renovation projects, etc.), major milestones, such as the timely completion of two hospitals in the Madrid region, the first of eight under construction, have been reached. REVENUE GREW TO 5,76 MILLION EUROS, UP 23% FROM 26 ON THE BACK OF SOLID PERFORMANCE IN ALL BUSINESS AREAS. EBITDA REACHED 1,277 MILLION EUROS, UP 2% FROM 26, YIELDING AN EBITDA MARGIN OF 22.2%. THIS MAKES SACYR VALLEHERMOSO ONE OF THE MOST PROFITABLE GROUPS IN ITS SECTOR AT THE NATIONAL LEVEL AND THROUGHOUT EUROPE. Despite the difficult situation in property development since June with 3,27 housing units sold in 27 and 1,4 million euros in billings (up 12% from 26), Vallehermoso has proven why it is the country's leading developer. Its pre-sales portfolio (2,36 million euros), land bank (3.8 million square meters of developable land in prime locations) and the quality of its brand, which clients recognize and trust, allow us to look to the future with confidence.

10 8 ANNUAL report 27 / LETTER FROM THE CHAIRMAN THE LEVELS OF GROWTH AND PROFITABILITY SEEN IN 27 ARE LOCKED IN GOING FORWARD BY THE GROUP S HEALTHY BACKLOG IN CONSTRUCTION, CONCESSIONS, PROPERTY MANAGEMENT AND DEVELOPMENT, AND SERVICES, WHICH AT DECEMBER 27, STOOD AT 87,33 MILLION EUROS, 12% MORE THAN AT YEAR-END 26. CB Richard Ellis has valued the property assets of the property development division at 6,969 million euros, implying unrealized gains of 2,538 million euros. 27 was a very salient year for concessions. First, leading concessionaire Itínere was awarded four new concessions: Murcia International Airport (Aeromur), the first airport we will manage under a concession; two toll roads in Ireland: the M-5 Dublin ring-road and the N-6 Galway-Ballinasloe motorway; and a concession for the Santo Tomé del Puerto-Burgos first-generation A-1 motorway. Secondly, the Itínere-Europistas merger was finalised on 31 December creating the world s third largest concessionaire in terms of kilometers managed. As regards property management, Testa signed a rental agreement with a major cosmetics firm at the start of the year for a newly constructed office building to house its new corporate headquarters in calle Josefa Valcárcel. Construction on the Torre SyV, which reached 236 metres in height in July, continues. This milestone was celebrated with the hoisting of the tower s flag at an event attended by a number of prominent figures given the building s landmark status, most notably Madrid Regional Government President, Esperanza Aguirre, and Madrid Mayor, Alberto Ruiz Gallardón. In addition, two shopping centres were sold in accordance with the Group s asset rotation policy: Los Fresnos in Gijón and Lakua in Vitoria, as well as the Puente de Piedra home for the elderly in Zaragoza. CB Richard Ellis has valued Testa s assets at 4,725 million euros, implying unrealized gains of 1,779 million euros, up 16% from 26. In concluding this review of the year s most salient events, we must of course note the major contracts awarded in 27 in the

11 ANNUAL report 27 / LETTER FROM THE CHAIRMAN 9 services area. These include concessions for street cleaning and urban waste collection in numerous cities and municipalities (Soria, Puerto de la Cruz, Alcalá de Henares, etc ) and for waste treatment plants such as those located in Mataró (Barcelona) and Arganda del Rey (Madrid) as well as many other facility management and infrastructure contracts. As you can see, the Sacyr Vallehermoso Group has performed soundly this year which has proven difficult for the sector since access to finance and the confidence crisis caused has affected the business and its stock market performance. This is due to a profitability-oriented strategy underpinned by a solid balance sheet containing first-rate assets. All of these achievements have been possible thanks to the effort and dedication of every employee at Sacyr Vallehermoso and the trust that our shareholders have placed in us. I would like to thank all of you and stress that we will continue to work toward generating greater value for you all. Luis del Rivero Chairman of Sacyr Vallehermoso

12 GOVERNING BODIES Board of Directors Board committees Corporate governance

13 ANnUAL report 27 / GOVERNING BODIES 11

14 12 ANnUAL report 27 / GOVERNING BODIES BOARD OF DIRECTORS The Company s ultimate decision-making body is the General Meeting of Shareholders, where all Sacyr Vallehermoso Group s shareholders and the whole of its capital are represented. In all areas except those reserved for shareholders at the General Meeting, the Board of Directors is the company s main decision-making body. Its major responsibilities include approving general strategy, oversight and control of how the company is managed and assessing managers performance. At December 31, 27, Sacyr Vallehermoso s Board of Directors had 15 members: 3 executive, 1 proprietary and 2 independents. Its composition ensures constant vigilance over profitability for all shareholders and monitoring of strict compliance with the company s strategy.

15 ANnUAL report 27 / GOVERNING BODIES 13 MEMBERS OF SACYR VALLEHERMOSO BOARD OF DIRECTORS (At ) Type of Shares Name Post Representative director Representing Direct Indirect Total % Luis Fernando del Rivero Asensio Chairman Executive ,129,28 (I) 39,129, Manuel Manrique Cecilia Nueva Compañía de Inversiones, S.A. Diogo Alves Diniz Vaz Guedes Actividades Inmobiliarias y Agrícolas, S.A. Demetrio Carceller Arce Matías Cortés Domínguez José Luis Méndez López Mutua Madrileña Automovilista Participaciones Agrupadas, S.L. Francisco Javier Pérez Gracia Prilomi, S.L. Prilou, S.L. Juan Miguel Sanjuán Jover Torreal, S.A. Marta Silva de Lapuerta Gerardo Manso Martínez de Bedoya First Vice-Chairman and CEO Second Vice-Chairman Third Vice-Cairman Director Director Director Director Director Director Director Director Director Director Director Secretary non-director Vice-Secretary non-director Juan Abelló Gallo Víctor Guillamón Melendreras José Manuel Loureda López José Manuel Loureda Mantiñán Pedro del Corro García Lomas Executive Proprietary Proprietary Proprietary Proprietary Independent Proprietary Carlos Cutillas Proprietary Cordón Ángel López-Corona Proprietary Dávila Executive Proprietary Proprietary Independent Proprietary Finavague, S.L. Disa Corporación Petrolífera,S.A. CXG Corporación Caixagalicia, S.A ,995,772 25,995, (II) 5 28,465,284 28,995, (III) 14,52,215 14,52, ,251,586 (I) 17,251,586 3,29 17,2,566 17,23, ,278 14,232,848 14,234, ,25, 14,25, ,768,737 22,768, ,51 149, ,35,512 (IV) 14,35, ,121,29 (IV) 24,121, ,916,169 9,916, ,465,284 (III) 28,465,284 (I) Luis del Rivero Asensio has an indirect participation of 39,129,441 shares through Actividades Inmobiliarias Agrícolas, S.A. and Rimefor Nuevo Milenio. (II) Manuel Manrique Cecilia has an indirect participation of 25,995,772 shares through Cimofag,S.L. (III) Nueva Compañía de Inversores has an indirect participation of 28,465,284 shares in Torreal, S.A. (IV) Prilou, S.L, has a direct participation of 24,121,29 shares and an indirect participation through Prilomi, S.L. of 14,35,512 shares.

16 14 ANnUAL report 27 / GOVERNING BODIES The Board of Directors Regulations, which governs its organization and functioning, provide for three committees to help it fulfill its functions: - The Executive Committee, which is delegated all the Board s powers other than those reserved for the Board by law, company bylaws or the Board s own regulations. - The Audit Committee, whose key functions include supervision of the company s accounts, ensuring their compliance with the law and with generally accepted accounting principles, ensuring audits are carried out smoothly and efficiently, collecting information on compliance with the company s corporate governance rules and proposing any necessary improvements. - The Appointments and Remuneration Committee, which defines the ideal profile of candidates for the Board and the various Committees. This Committee also proposes the systems and amounts of annual remuneration for members of the Board and Management Committee and ensures the transparency of such remuneration.

17 ANnUAL report 27 / GOVERNING BODIES 15 COMPOSITION OF SACYR VALLEHERMOSO BOARD OF DIRECTORS COMMITTEES (At ) Appointments Excutive Audit and Remuneration Name Committee Committee Committee Luis Fernando del Rivero Asensio Manuel Manrique Cecilia Nueva Compañía de Inversiones, S.A. Diogo Alves Diniz Vaz Guedes Actividades Inmobiliarias y Agrícolas, S.A. Demetrio Carceller Arce Matías Cortés Domínguez José Luis Méndez López Mutua Madrileña Automovilista Participaciones Agrupadas, S.L. Francisco Javier Pérez Gracia Prilomi, S.L. Prilou, S.L. Juan Miguel Sanjuán Jover Torreal, S.A. Marta Silva de Lapuerta Chairman Director Director Director Director Director Director Chairman Director Director Director Director Director Director Chairman Director Secretary non-director Secretary non-director Secretary non-director

18 16 ANnUAL report 27 / GOVERNING BODIES BOARD COMMITTEES The Board s policy, as set out in the Board of Director s Regulations, is to delegate day-to-day management of the company to the executive bodies and the management team and to concentrate its activities on its general supervisory role. The bodies responsible for day-to-day management are: The Management Committee, responsible for implementing the decisions taken by the company s Board of Directors and Executive Committee. Sitting on the Management Committee are the Chairmen and/or CEOs of each business division, the CEOs of the central services at the holding company. The Operations Monitoring Committee is responsible for detailed individual analysis of each of the group s business lines: financial results, compliance with strategic plans, business opportunities, projects in progress, etc. It meets monthly and is composed of the Chairman and CEO of SyV and the CEO of the corresponding business unit. The Corporate Monitoring Committee is responsible for detailed individual analysis of each of the group s central areas. This Committee meets monthly and is composed of the Chairman and CEO of SyV and the corresponding General Manager.

19 ANnUAL report 27 / GOVERNING BODIES 17 COMPOSITION OF SACYR VALLEHERMOSO S MANAGEMENT BODIES (At ) Operations Corporate Management Monitoring Monitoring Name Post Committee Committee Committee Luis Fernando del Rivero Asensio Chairman of Sacyr Vallehermoso X X X Manuel Manrique Cecilia First Vce-President and CEO of X X X Vicente Benedito Francés Sacyr Vallehermoso Gabinet Chief to the Presidency and X X X Javier Gayo Pozo General Manager Chairman of Sacyr X X Miguel Heras Dolader CEO of Somague X X Rafael del Pozo García CEO of Vallehermoso X X Francisco Javier Pérez Gracia CEO of Itínere X X Fernando Rodríguez-Avial Llardent CEO of Testa X X Fernando Lozano Sainz CEO of Valoriza X X Salvador Font Estrany General Manager Energy X X José Antonio Guío de Prada Head of Contracting X X Luis Janini Tatay Head of Sales X X José Manuel Naharro Castrillo General Manager Resources X X José Carlos Otero Fernández General Manager Administration X X Ana de Pro Gonzalo and Finance General Manager Corporate X X Marta Silva de Lapuerta Development General Secretary to the Board and General Manager Law X X

20 18 ANnUAL report 27 / GOVERNING BODIES The breakdown of bylaw-stipulated emoluments received in 27 by board members was as follows: BYLAW-STIPULATED EMOLUMENTS PAID TO SACYR VALLEHERMOSO DIRECTORS Appointments Gross Executive Audit and Remuneration Total Name Board Committee Committee Committee (Euros) Luis Fernando del Rivero Asensio Manuel Manrique Cecilia Nueva Compañía de Inversiones, S.A. Diogo Alves Diniz Vaz Guedes Actividades Inmobiliarias y Agrícolas, S.A. Demetrio Carceller Arce Matías Cortés Domínguez José Luis Méndez López Mutua Madrileña Automovilista Participaciones Agrupadas, S.L. Francisco Javier Pérez Gracia Prilomi, S.L. Prilou, S.L. Juan Miguel Sanjuán Jover Torreal, S.A. Corporación Caixa Galicia, S.A. * TOTAL 72, 48, 12, 72, 48, 12, 35, 48, 398, 72, 48, 12, 72, 24, 96, 72, 48, 24, 144, 72, 24, 96, 42, 28, 14, 84, 72, 72, 72, 48, 24, 144, 72, 72, 72, 72, 72, 48, 24, 144, 72, 24, 96, 72, 24, 96, 3, 2, 1, 6, 1,358, 384, 96, 96, 1,934, * Ceased being director ( ). In turn, salaries paid to Sacyr Vallehermoso, S.A. executive directors in 27 for the performance of their executive duties within the company amounted to: SALARIES PAID TO SACYR VALLEHERMOSO DIRECTORS Name Fixed Variable Total (Euros) Luis Fernando del Rivero Asensio Manuel Manrique Cecilia Francisco Javier Pérez Gracia Diogo Alves Diniz Vaz Guedes * TOTAL 2,, 2,, 564,6 423, , ,6 188,31 423,63 362,95 5, ,763 3,163,15 662,565 3,825,714 * Ceased being executive director and became an external propietary ( ).

21 ANnUAL report 27 / GOVERNING BODIES 19 The company has not committed to any pension plan or life insurance obligations with its directors, save those set forth under the company s collective bargaining agreement in the case of those who are also employees. Neither are there any stock option plans available or loans extended to its directors. SUMMARY OF ANNUAL REMUNERATIONS OF SACYR VALLEHERMOSO DIRECTORS Name Remuneration under bylaws Attendance fees Board of Directors Executive Committee Audit Committee Appointments and Remuneration Committee SUB TOTAL Remuneration to directors exercising responsibilities in any group company Salaries Fixed Variable SUB TOTAL TOTAL Total (Euros) 1,358, 384, 96, 96, 1,934, 3,163,15 662,565 3,825,714 5,759,714

22 2 ANnUAL report 27 / GOVERNING BODIES CORPORATE GOVERNANCE Sacyr Vallehermoso s corporate governance structure is designed to meet the obligations and recommendations set out in current corporate governance legislation. This is partly achieved via two committees, the Audit Committee and the Appointments and Remuneration Committee, which report to and oversee certain decisions by the Board of Directors. In addition, the Executive Committee provides the necessary leadership in the implementation of decisions and feeds back information and suggestions to the Board. This structure is complemented by a body of internal regulations including the bylaws, the Board of Directors Regulations, the General Shareholders Meeting Regulations, and the Internal Rules of Conduct, all of which are published on the company s website. Sacyr Vallehermoso complies with best Corporate Governance practice, notably in the following areas: - The bylaws of Sacyr Vallehermoso do not contain any poison pills to limit the maximum number of voting rights that can be exercised by any given shareholder, nor is there any other type of restriction designed to block a potential takeover bid for the company. - External directors are in an ample majority over executive directors, thereby ensuring the Board s general oversight function. In 27, the 15 members of the Board included 3 executive directors and 12 externals, of whom 1 were proprietary and 2 independent. The company complies with the recommendation in the Unified Good Governance Code that the ratio between proprietary and independent external directors should mirror the proportion of the capital represented on the board by proprietary directors and the remainder of the company s capital. The Unified Code also allows this

23 ANnUAL report 27 / GOVERNING BODIES 21 proportional criterion to be relaxed so that the weight of proprietary directors can be greater than would strictly correspond to the total percentage of capital they represent in companies with a plurality of shareholders represented on the board who are not otherwise related. - The distribution of different types of Sacyr Vallehermoso directors is a fair reflection of the company s shareholder structure. Over sixty per cent of the capital is represented on the Board by different directors appointed by various shareholders who do not form a group of core shareholders. This diversity in the proprietary external directors encourages a culture of mutual oversight that benefits all shareholders. - The Chairman of the Board of Directors is also the company s leading executive officer. However, Sacyr Vallehermoso has adopted a formula which prevents the concentration of powers in a single person, by separating the posts of Chairman and Chief Executive Officer (who is also first Vice-Chairman). There are two other Vice-Chairmen, both external proprietary directors. Power is further decentralized through the Executive Committee, which includes 6 external directors. - The size of the Board of Directors is optimal for its efficient operation. At 15 members, it falls within the scope of the Unified Code recommendations. Board meetings are frequent, open and with a high degree of participation. - The company s corporate governance structure is not merely formal. The governing bodies carried out real and intensive work in 27, with 17 meetings of the Board, 9 meetings of the Executive Committee, 13 meetings of the Audit Commission and 4 of the Appointments and Remuneration Committee. - The members of the Board of Directors can consult any member of the company and are also entitled to consult external advisors. - Executive directors must tender their resignation from the Board of Directors at 65 years of age; the company has other protocols for circumstances involving board resignations, as a measure to help avoid directors becoming involved in situations of questionable suitability. - Total compensation paid to directors, for performing their Board duties and their executive duties, if any, is deemed moderate in comparison with market standards. - As an additional transparency measure, SyV Group discloses and breaks down this compensation on an individual basis. In addition, in accordance with article 43.2 of the company s

24 22 ANnUAL report 27 / GOVERNING BODIES bylaws, remuneration paid to executive directors must be approved each year by shareholders at the General Meeting. - All changes to the membership of the Board of Directors and Committees or to the remuneration of their members are reported on by the Appointments and Remuneration Committee, which is made up exclusively of external directors, prior to approval by the Board of Directors. - The Audit Committee, also made up exclusively of external directors and whose chairman is an independent external director, carries out a broad range of tasks designed to reinforce the transparency of the company s management. - Interim financial information is drawn up under the same accounting principles and professional practices as the annual financial statements, in order to maximize the comparability of data. - The company ensures that its shareholders have access to the information they require in accordance with recommendations on good corporate governance. SyV Group has put in place a number of communication channels for this purpose (see section on channels for dialogue below): the Company s website, regular financial reports, personalized attention through the Investors Relations department, etc. - The procedures for proxy voting at General Shareholders Meetings have been broadened and improved, while participation at the meetings has increased with the introduction of proxies as well as postal and other forms of remote voting. - To help shareholders exercise their vote to the best effect, separate votes are taken at the General Shareholders Meeting on materially separate items, so shareholders can express their preferences in each case, notably on the appointment or ratification of directors. - SyV s Board of Directors takes steps to periodically control and evaluate the quality and efficiency of its own operation and that of its committees, based on reports prepared by the committees. - The Risk Control and Management policy is formally presented to and approved annually by the Board of Directors. - SyV Group has a mechanism whereby staff can report, confidentially, any irregularities they detect regarding the behaviuor of the organization or its employees.

25 ANnUAL report 27 / GOVERNING BODIES 23 - The Board of Directors Regulations specifically govern the procedures for avoiding conflicts of interest with the maximum governing body. It provides that the director shall notify the Board of any potential direct or indirect conflict of interest in connection with the company s business. In the event of a conflict of interest, the director shall refrain from taking part in voting on any decision on related matters. - The Sacyr Vallehermoso bylaws also state that the Audit Committee is responsible for reporting on transactions with SyV directors that raise or could raise conflicts of interest whenever the Executive Committee considers it necessary. - Also, any conflicts of interest involving directors of the company must be disclosed in the Annual Corporate Governance Report. - The Board of Directors encourages informed participation by shareholders at the General Meetings, and is committed to taking all appropriate measures to ensure the General Shareholders Meeting can carry out its work efficiently in compliance with the law and company bylaws.

26 SACYR VALLEHERMOSO GROUP Origins and history Quality and innovation

27 ANnUAL report 27 / SACYR VALLEHERMOSO GROUP 25

28 26 ANnUAL report 27 / SACYR VALLEHERMOSO GROUP ORIGINS AND HISTORY Just over 2 years ago, an entrepreneurial group of engineers came together to found a new construction company Sacyr which from its inception would be fundamentally dedicated to civil engineering. The company was an unquestionable success from its earliest days and rapidly rose to become one of the leaders in the industry. Ten years later, in the same spirit and convinced that geographical and business diversification would add massive value to the company, they founded the concession business Itínere to carry out an initial tender awarded in Chile. By June 23, the SyV Group had merged with Spain s biggest and oldest property developer Vallehermoso, active since 1953 and created a rental property division Testa to forge an initial closely consolidated group of businesses, each with a leading position in its sector. This process has continued in recent years, combining organic growth with M&A and the Group s global ambitions with a growing international presence. The construction business was expanded into Portugal with the incorporation of Somague, and Italy with SIS. Ena and Europistas have made Itínere Infraestructuras one of the world s four leading concession operators, with operations in seven countries. Testa has gradually added high-value assets in France and the USA and Vallehermoso remains the market leader among the major property developers, positioned in a high value-added segment where each new project enhances the quality and prestige of its brand. The Group s entrepreneurial spirit has also taken it into the promising services sector. Water, renewable energy, environmental and other services have brought this division Valoriza up to cruising speed in a very short time, with more than 1 billion euros of orders. Internal efficiency and the acquisitions of Sufi and other

29 ANnUAL report 27 / SACYR VALLEHERMOSO GROUP 27 companies suggest the success that has accompanied the Group since foundation is set to continue. The latest acquisition was a major shareholding in the oil company Repsol. Aware that as is now evident the energy sector will play a leading strategic role over the next few years, Sacyr Vallehermoso became Repsol s largest shareholder with 2.1% of the company. The Group is now one of the leaders in the Spanish and European construction industries, with a drive and dynamism that have made it Spain s third-largest company by market capitalization and the fifth-largest in Europe. Its technological capacity, cost control and high-quality execution of enormously complex projects are recognized by the market as the defining features of the brand. Having come so far, Sacyr Vallehermoso is now a highly efficient group, with over 18, employees achieving some of the highest productivity ratios EBITDA margin for instance in Europe. SyV Group operates 5 business areas: Construction, carried out by Sacyr in Spain and Chile, Somague in Portugal and SIS in Italy. This division has been active since Management of transport infrastructure concessions, all of which were brought together under Itínere Infraestructuras at the end of 27. Itínere now has operations in Spain, Portugal, Ireland, Bulgaria, Chile, Costa Rica and Brazil. Property development, via Vallehermoso, throughout mainland Spain and the Spanish islands. Founded in 1921 Vallehermoso began its development activities in 1953 and is now the longest-standing company on the Spanish stock market. Rental property via Testa, which manages offices and shopping centers in many markets, notably Madrid, Barcelona, Paris and Miami. Services, managed by Valoriza, which is active in water management (integrated water cycle management, desalination and sewage works), alternative energy (engineering projects, construction and management of biomass and cogeneration plants, energy efficiency and solar power projects), environmental and public services (engineering, construction and operation of biomass and cogeneration plants, energy efficiency and solar energy) and multi-services (facilities management, motorway maintenance, motorway service stations, healthcare services).

30 28 ANnUAL report 27 / SACYR VALLEHERMOSO GROUP QUALITY AND INNOVATION Quality and innovation are the keys to the company s sustained success. Since it was founded, these two concepts have been the cornerstones of the SyV project and the differentiating feature of its brand. In 27, the company s achievements in both areas were recognized many times by the industry. In the area of Quality: In May the EuroTap consortium s annual report on tunnel safety rated the Avenida de Portugal tunnel in Madrid, built by Sacyr, as the best in Spain. The second-best of those rated was the Sartego tunnel on the AP-9 La Coruña, which is owned by Itínere Group. Also in May, the Beni Saf desalination project near Oran (Algeria) won the 27 Global Water for Desalination Deal of the Year. The Geida consortium, which includes SyV subsidiary Sadyt, is in charge of the design, financing, construction, operation and maintenance of the Beni Saf plant. In July, SyV subsidiary the Empresa Municipal de Aguas de Tenerife (EMMASA) was voted Spain s top water supplier in the Stiga Index of Spanish consumer satisfaction, thanks to the high levels of satisfaction, loyalty and recommendation among its customers. The Stiga Research Institute also named SyV the best service company in Spain out of any sector. In November, Somague won the Puente de Alcántara International Prize, awarded by the San Benito de Alcántara foundation, for its contribution to construction of the Alqueva dam on Portugal s Guadiana river.

31 ANnUAL report 27 / SACYR VALLEHERMOSO GROUP 29 In December, Testa received an honorable mention in the San Cugat architectural prizes, for its office building on the Avenida Vía Augusta. The jury cited the building s well structured volumes and clean lines, the transparency of the façade and the high quality of the building standards. In the same month, two Itínere motorways, via concession holder Triângulo do Sol, were voted among the best in Brazil. The SP 31 was ranked number one for the Limeira-Sao José do Rio Preto stretch, with the SP 326 between Barretos and Bueno de Andrada rated second. In the area of Innovation: Audasa, the concession holder for the AP-9 motorway and subsidiary of Itínere Group, launched a plan to invest more than 15 million euros in road safety over These investments were in addition to the normal investment made by the concession company to guarantee high levels of service on the motorway. More than 2 people worked full-time on maintenance and improvement work alone. SyV and the Fundación Universidad Alfonso X El Sabio, signed a framework agreement running for an initial two years and renewable annually thereafter, to cooperate on research and development. Valoriza Agua was awarded one of the biggest Ministry of Industry loans 2 million euros for the period under the PROFIT program of support for technical research and development granted to companies for R&D&I projects. The project, considered to be strategically important, seeks to develop an ambitious operating environment for integrated water cycle management for drinking water and sewer utilities, which would allow better management of operations, integrating information from telecommand and control systems, geographical data, and management applications within a single control and operation scenario. In December, the Somague Group, Somague Ingeniería, Neopul and Engigás, were among 15 companies to receive compliance certificates for their management and innovation systems in an initiative sponsored by the Portuguese Ministry of the Economy. In Somague s case the certificate is the only one granted to a group of companies out of 15 prizes awarded by the APCER (Portuguese innovation association) accredited by IPAC (Portuguese accreditation institute).

32 BUSINESS AREAS Construction Sacyr-Somague Property development Vallehermoso Infrastructure concessions Itínere Property management Testa Services Valoriza

33 AnNUAL report 27 / BUSINESS AREAS 31

34 32 AnNUAL report 27 / BUSINESS AREAS CONSTRUCTION SACYR-SOMAGUE The construction companies in the Sacyr Vallehermoso Group, notably Sacyr and Somague, again demonstrated their advanced technical, operational and commercial capabilities, and were rewarded with excellent financial results. Both Sacyr, which increased sales by nearly 34% and EBITDA by more than 18%, and Somague, which raised sales by nearly 1% and EBITDA by over 2%, made spectacular progress in the year in both absolute and comparative terms. The Group, which has been active in the Spanish construction industry through Sacyr since 1986, had the longest order book in the sector at 21.6 months of guaranteed work. In Portugal Somague, founded in 1974, increased revenue by around 1% and EBITDA by over 2%. Despite the still weak state of the Portuguese civil engineering market, Somague s operational capacity and leadership put it at the forefront of the sector. Sacyr Chile is also still one of the top two concession operators in the country and, in Italy, SIS has an order book of 1,532 million euros. Another success story is the Group s major presence in the Irish market, where Sacyr is currently building and will operate two motorways while Somague has won the tender to build a third. Over the year, public sector bodies ranging the Ministry of Development and the Environment, Adif, Aena, organizations belonging to various regional governments and municipalities as well as large numbers of private sector clients have placed their confidence in the group s construction companies, ensuring plenty of orders for the next few years.

35 AnNUAL report 27 / BUSINESS AREAS 33 As for the type of work executed, the Group is working on all kinds of infrastructure programs (high-speed railways, subways, airports, motorways, etc.) with a major presence in the construction of public and private sector buildings. With over 3,3 million euros of revenue, 115 million euros of profit and over 19 million euros in cash flow plus a backlog of more than 6 billion euros, 27 was a great year for the company. SACYR-SOMAGUE KEY FIGURES (Millions of euros) Revenue EBITDA Profit for the year Cash Flow Oder book Chg. % 7/6 3, ,62.8 2, % % % % 6,22.1 5, , % SECTOR BACKGROUND The construction sector grew in 27 at the same pace as the Spanish economy, underlining their interdependence. The industry grew by 3.8%, contributing around 11% to GDP and providing around 13% of national employment. Companies in the sector maintained high levels of activity, as did SyV with growth of 6.8% in its order book, 14.7% in cash flow, 11% in profit and nearly 28% in revenue. CONSTRUCTION AS A % OF SPANISH GDP 15% 1% 5% % (e*) Source: INE.

36 34 AnNUAL report 27 / BUSINESS AREAS Once again Spain was the EU s biggest consumer of cement, with 56 million tonnes. Between 1993 and 27 the volume of public tenders has grown at a CAGR of over 7%, with total investment over these 14 years of 335, million euros. Public tender volumes in 27 were in line with the average for this period at more than 47, million euros, 7% of which was for various types of civil engineering projects and the rest for buildings. The main projects were motorways (3.6%), hydro projects 1.5%, railways (14%), social infrastructure (15.8%) and urbanization (15.2%). The Ministry of Development was the biggest issuer of tenders (39.1%) among public sector bodies, followed by the regional governments (27.9%) and local government bodies (24.1%). PUBLIC TENDERS (Millions of euros) Construction 35 Civil Engineering Source: Ministry of Public Works. The new STIP (strategic transport infrastructure plan) is the main driver of civil engineering projects and is scheduled to last 15 years with a total investment of 25, million euros. The Spanish government will contribute 59.5% of the total budget with the other 4.5% coming from private sources. Civil engineering construction therefore is receiving a considerable boost from central government plus increasingly important contributions from the regional and local governments. That said, the levels of tendering by the latter two government tiers were down by 18% and 23.8% respectively in 27 compared to 26. This was offset by other major programs of investment, notably the AGUA initiative. The STIP envisages investment of 25, million euros between 25 and 22. Of this, 43% will go on railways, with the rest being spent on roads, ports, airports, urban transport and other infrastructure.

37 AnNUAL report 27 / BUSINESS AREAS 35 STIP INVESTMENT BY PROJECT TYPE 2% Other 13% Urban transport 43% Rail 1% Ports 7% Airports 25% Motorways Source: Ministry of Public Works. STRATEGY The strategy of SyV Group s construction division is built around three fundamental pillars: - Locally based structure and equipment. - Exploitation of synergies with Itínere, Testa, Valoriza and Vallehermoso. - Cutting edge technology, quality, on-time delivery of projects and risk prevention. Throughout its history, SyV Group s policy of diversifying into mutually complementary activities has not only driven a constant increase in activity and business measures but also allowed it to develop synergies between business lines. Its civil engineering and building construction areas complement not only its residential development arm, but also the rental and concession management areas as well as the business lines involved in integrated water cycle management, renewable energies, environmental and other services. The range of activities also protects against dips in the economic cycle. This, together with vital efficiency, effectiveness and management autonomy plus the use of advanced technology, is a natural way to maximize profitability and minimize risk. A key element in the group s construction strategy is the technical and technological capacity of Sacyr and the Group s other construction companies, which allows the Group to take on highly demanding projects, requiring the best human and technical resources. This is evident from tenders such as the Murcia Airport, work in progress such as Torre SyV in Madrid or the Sants-La Sagrera tunnel and completed projects such as the Plaza Elíptica transportation hub or the interconnection between lines 1 and 4 of the Madrid Metro.

38 36 AnNUAL report 27 / BUSINESS AREAS ACTIVITIES Backlog In 27 the order backlog on the Group s books topped 6, million euros for the first time, a 6.8% rise on the previous year. Orders are well diversified geographically 46% outside Spain and guarantee continued construction work for the next 21.6 months. Apart from Spain the main markets 54% of the order book were Italy, Portugal, Ireland, Costa Rica and Chile. The current backlog equates to approximately 4 million euros of future EBITDA. ORDER BOOK GEOGRAPHICAL REGION (Millions of euros) Chg. % 7/6 Spain Italy Portugal Ireland Costa Rica Chile Other countries TOTAL 3, , , % 1, , (.9%) % (11.8%) (54.5%) % 6,22.1 5, , % ORDER BOOK GEOGRAPHICAL REGION 1% Costa Rica 6% Ireland 1% Chile 2% Other countries 11% Portugal 25% Italy 54% Spain

39 AnNUAL report 27 / BUSINESS AREAS 37 Revenue Total revenue across the whole of SyV s construction division in 27 grew by 27.7%, to over 3,346 million euros. Of this 77% was in Spain with Portugal the next biggest contributor at 15%. REVENUE BY GEOGRAPHIC MARKET 1% Italy 2% Chile 5% Others REVENUE (Millions of euros) 15% Portugal Chg. % 7/6 Civil engineering Buildings TOTAL 2, , , % 1, % 3, ,62.8 2, % 77% Spain Civil engineering The Group is active in many different types of project, whose distribution mirrors the current pattern of public sector investment and the demands of private sector clients. Railway construction makes up 3%, followed by roads with 28%, urbanization and ancillary projects 25% and hydro projects 11%. CIVIL ENGINEERING REVENUE BY GOEGRAPHIC MARKET CIVIL ENGINEERING REVENUE BY PROJECT TYPE 1% Italy 4% Other countries 28% Urbanization and other 4% Chile 2% Airports 29% Motorways 17% Portugal 74% Spain 11% Hydro 3% Rail

40 38 AnNUAL report 27 / BUSINESS AREAS Major contracts won in 27 included: Contract awarded to the Aeromur consortium, led by Sacyr (6%), to build, finance, maintain and operate the international airport located in the region of Murcia. Sacyr s share of the construction work is valued at million euros. Construction of the Borras-Figueres link of the AVE high-speed rail line to the French border. Budgeted at million euros, the stretch will be 7.48km long and include initiatives of note such as the construction of five viaducts and a 1.75km tunnel. Construction of a turbot-fattening fish farm in Mira (Portugal) awarded to a consortium led by Somague, the Portuguese subsidiary of the Sacyr Vallehermoso Group, for 13.4 million euros. Construction of the third carriageway of the A-2 Zaragoza north ring-road motorway from Feria de Muestras to the Malpica junction (18km) for 89.2 million euros. The project includes nine junctions and 46 structures, which will be built in two phases as 42% of the total work must be completed by the start of Expo Zaragoza 28. Construction of the Barbastro relief road stretch of the A-22 Lleida-Huesca. This is a 1.6km section of motorway with a 34.7 million euro budget. Closing of the third Zaragoza beltway with Sacyr s 65% share of the work worth 9.7 million euros. This involves constructing a cut-and-cover tunnel and urbanization work on the upper section that will link the Delicias AVE station to the new Expo exits.

41 AnNUAL report 27 / BUSINESS AREAS 39 Construction of the Aramaio-Mondragón stretch of the Basque Country AVE rail platform (known as the Y Vasca ). The budget for this project is 67.5 million euros. Construction of the Parbayón-Cacicedo stretch of the S-3 Santander Bay by-pass motorway in Cantabria, for 67.4 million euros. Construction contract awarded to a 5/5 consortium made up of Somague and MECI for the new combined cycle plant commissioned by Sociedade Portuguesa de Cogeraçao Eléctrica, S.A. (SPCG). Investment in the project is over 65 million euros. Construction of the linkup stretch of the A-7 motorway s new Málaga west by-pass for a total of 6.3 million euros. Upgrade to motorway of a 5km Quintanadueñas-Villatoro stretch of the Burgos northern relief road for 55 million euros for the SEITT, including a 5m tunnel and a junction in Villatoro that will connect with the planned A-73 linking Burgos and Aguilar de Campoo. Construction of two fast lines of 2.5km and 1.7km in the city of Câmara de Lobos (Madeira), through highly mountainous terrain requiring several tunnels and viaducts, with a combined budget of 12 million euros. Expansion of Repsol s Cartagena refinery. Construction of railway infrastructure and other related projects giving access to the port of Aveiro (Portugal), including 4km of viaducts, for a budget of 27.8 million euros.

42 4 AnNUAL report 27 / BUSINESS AREAS Main sewers in the west basin of Pinto (Madrid), requiring the construction of a 2,746m sewer network using 3. x 3. meter prefabricated concrete components plus pipes and paving for the main road. The project also includes the construction of a storm overflow tank with a capacity of 11,272m 3. The Siles dam (Jaén) for 21.2 million euros. Dam of loose materials on the Guadalimar River with a capacity of 3Hm 3. Construction of the southern by-pass in Talavera de la Reina (Toledo) through the joint venture headed by Sacyr under a 58.3 million euro tender. One initiative of note included in the project is a 318m-long, 36m-wide cable-stayed bridge, with 18m-high piles. Projects delivered in 27 included the following: Stretches 4, 5 and 18 of the Navarre canal. Sacyr led the joint venture with a 5% stake. The project essentially comprised the construction of 18km of the new Navarre canal, with approximately 12km of open air, four tunnels totaling 6km in length, one cut-and-cover tunnel, three pumped sections and a siphon section using two 3.2 meter internal diameter pipes 7m in length. A 1.5km stretch of motorway between Manzanares and Herrera de la Mancha in Ciudad Real connecting Extremadura and the Valencia region with four overpasses and one underpass. A 1.3km stretch of motorway between Argamasilla de Calatrava and Puertollano in Ciudad Real connecting Extremadura and the Valencia region with 1 overpasses and seven underpasses.

43 AnNUAL report 27 / BUSINESS AREAS 41 Plaza Elíptica transportation hub in Madrid: opened on April 27 serving over 126, travelers daily. Interchange for two metro lines, 14 intercity bus routes and 1 local bus routes. Abdalajis tunnel on the Córdoba-Málaga high-speed rail line: 7,86m long, drilled with a tunnel-boring machine. AVE access to Málaga: completion of the first phase of work on the AVE high-speed rail line at Málaga as part of the Córdoba- Málaga line. Palma-Manacor concession. A 4km motorway between Palma and Manacor opened in January 27. AVE access to Barcelona, a 1,954m tunnel on the high-speed Madrid-Zaragoza-Barcelona-French border rail line, the first 1,544 of which will be mined while the rest will be cut-and-cover between panels. Viastur shadow-toll concession. 22km widening of the AS-18 and AS-17 roadways, which include 25 overpasses, four viaducts and three cut-and-cover tunnels. Stretch of the A-8 Cantábrico motorway, 5.8km in length between Abeledo and Regovide. Runway at the new Burgos Airport, for AENA, consisting of the construction of the runway and a taxiway.

44 42 AnNUAL report 27 / BUSINESS AREAS Interchange between lines 1 and 4 of the Madrid Metro. 4,5m of tunnel have been completed 3,1m of which were drilled with a tunnel boring machine while 9m was performed using the traditional method in Madrid as well as an interchange and three stations. Avenida de Portugal tunnel comprising two 1,35m stretches of four-lane road-traffic tunnels providing access to and from Madrid from the A-5. A 21.3m-wide boulevard was built on its surface with a 1,-space car park added between the latter and the roadway. Junction between the M-3 and the A-3 and additional restructuring work on the eastern M-3. The project included the construction of two 828m tunnels plus another of 1,5m crossing the current M-3 to provide direct access to and from Madrid from the A-3. Link between the District of Tetuán in Madrid and the M-3, Sor Ángela de la Cruz corridor with calle Marqués de Viana. The project included the construction of a couple of two-carriageway tunnels (one section mined and another section cut-and-cover) each 1,5m in length. Transmetro Oporto Metro. Vila Franca de Xira Azambuja North Line. In 27, progress was made on the following construction projects, among others: Road transport - A-7 motorway between Vandellós and Hospitalet del Infant, 7,7m in length through a calcareous massif that required a large number of blasts. The high number of services involved must be noted: mini-diversion of the Ebro and 24 power lines. - Navarra-Los Rábanos motorway, for the Ministry of Development, comprising the construction of a 7.5km stretch of motorway linking Soria with Los Rábanos on the A CV-35 concession. 52km stretch of motorway connecting the city of Valencia with Llosa del Obispo. - Shadow-toll concession in Barbanza (A Coruña) between Padrón and Santa Eugenia de Ribeira, 42km in length. It has 51 underpasses, 29 overpasses and 11 viaducts. - Construction of the 24km AP-46 toll motorway from Málaga- Alto de Las Pedrizas. - Upgrade to 22km/h of the Alcázar de San Juan-Manzanares stretch of railway.

45 AnNUAL report 27 / BUSINESS AREAS 43 - A 5km stretch of shadow-toll motorway between Cuéllar and Segovia (Autovía del Eresma) for the Castilla y León regional government. - Parbayón to Cacicedo stretch of the Santander Bay bypass motorway. - Widening of the M-5 Dublin ring-road from the current two carriageways to four in each direction along 25km with seven junctions. The project is due to be completed by October N-6 Galway-Ballinasloe toll motorway on the west coast of Ireland, 56km in length with a 7km link to Loughrea and 32km of access road. - Conversion into motorway of a 7.9km stretch of the Fines- Albox road in Almería. - Torvizcón-Cadiar road: Reconditioning of 12km of roadway located in Granada s Alpujarra mountains (Torvizcón-Cadiar stretch) with seven viaducts, a number of landslides, retaining walls and scenic overlooks with lookout points. - Access to Málaga port: A 2.2km stretch of urban motorway, linking the Málaga seafront with the A-7 and MA-21 motorways and the Guadalhorce and Azucarera industrial parks. Rail - Madrid-Levante AVE, Sax-Elda and Alzira-Algemessí stretches. This is the high-speed rail link between Madrid and Alicante. - Madrid-Galicia AVE, Carballino-Lalín stretch. 13.3km between Orense and Pontevedra provinces, including three tunnels of 2.1km, 1.5km and 2.8km, respectively. - Atlantic axis high-speed link in Galicia: the 5km Meirama- Bregua stretch includes a 3.5km tunnel.

46 44 AnNUAL report 27 / BUSINESS AREAS - The 1,326m Pajares tunnel drilled with a single-shielded closed-face tunnel boring machine on the Pajares relief road between Robla and Pola de Lena. - Upgrade to 22km/h of the Alcázar de San Juan-Manzanares stretch of railway. Upgrade of 45,981m of Iberian-gauge railway between Alcázar de San Juan y Manzanares, which also included the improvement of its electrification and signaling, communication and security facilities. - AVE access to Málaga, last stretch in the Madrid-Málaga line, with 3km of railway including 1,9m underground plus remodeling of the station platforms and roofs. - Seville Metro, interchange between Aljarafe Sur and Dos Hermanas passing through the downtown area of Seville s capital city. It consists of 22 stations and is 19km in length, of which 4km is being drilled with a tunnel boring machine. Hydro projects - Abrera desalination plant. A highly automated desalination plant with a daily capacity of 2,m 3 using electrodialysis reversal (EDR) technology. - Water distribution network for the seawater desalination plant in Valdelentisco (north sector - south sector of the Cartagena countryside. Phase III: projects involving the Alhama branch, including the Carrascoy Basin); awarded by Aguas de la Cuenca del Segura. - Connection to La Pedrera desalination plant. 4km of 1,2m to 6m diameter pipeline. The project includes a pumping station and an overflow tank. - Storm overflow tank in Abroñigales (Madrid). Project to store excess water flow during heavy rainfall that would otherwise overload capacity at the water treatment plants and which are not sufficiently dilute to be directly discharged into the Manzanares River. Storage capacity is 2,m 3. - Águilas-Guadalentín desalination plant for the Ministry of the Environment awarded to a joint venture in which Sacyr has a stake, with estimated annual output of 6Hm 3. The management thereof has also been awarded for a 15-year period. - Modernization of irrigation system in Viar, Seville province, with a surface area of 11,69ha. The project consists of setting up two filtration stations and a 1,3km pipeline and automating all irrigation. Airports - Ciudad Real Airport. Project management and construction of Ciudad Real s new private airport: Don Quixote Airport. The airfield will have a 4km runway. - Menorca Airport. Ports - Work on the Port of Valencia Dique del Este, 1,3 meters in length to create a docking area of 33,m 2 awarded to a

47 AnNUAL report 27 / BUSINESS AREAS 45 joint venture led by two group companies, Sacyr and Somague. - Ponta Delgada Port Terminal. Urbanization - Projects S4 and S5 in Pinto entail the urbanization of two industrial zones in the Pinto area of Madrid with a total surface area of 1,4,m 2. - Urbanization of Puerto Venecia in Zaragoza, for a British private-sector developer. Building The year also set a new record for revenue from building construction: 1,233 million euros, million euros of which came from residential building and from non-residential. Non-residential construction projects were quite varied, covering nearly all industry segments from office buildings, hospitals and homes for the elderly, to shopping and business centers, hotels and public buildings, including new construction and refurbishments. BUILDING CONSTRUCTION BY PROJECT TYPE BUILDING CONSTRUCTION BY GEOGRAPHIC MARKET 53% Non-residential 47% Residential 7% Others 13% Portugal 8% Spain Residential buildings whose main customer is Vallehermoso tended to focus on first homes in the largest provincial capitals. Major contracts won in the building business included: Construction of the Manises Hospital (Valencia), spanning over 48,m 2 with 21 rooms. The facility will be built to maximize energy savings and reduce emissions.

48 46 AnNUAL report 27 / BUSINESS AREAS Restoration of the Valencia tobacco factory. This modernist building s extensions added after 199 will be removed. After restoration, the building will be used by municipal authorities. Work on the Arte Sacro y Afines industrial park in Seville, as part of the Torneo Parque Empresarial project, one of the largest ongoing programs in Seville. Refurbishment of the Seminario Mayor de Comillas seminary in Santander. This modernist building is the future site of the planned Universidad de Castellano. The building will have modern classrooms with capacity for 6 students and a monumental church within its walls will be restored. Phases 1 and 2 of the urbanization of the Buenavista zone in Getafe. Projects delivered in 27 included: Parla Hospital (Madrid). Built in 18 months, the hospital opened on September 11. It has 18 beds, extendible to 24. Coslada Hospital (Madrid). Opened on September 16 having been built in 14.5 months. 187 beds, extendible to 239. Plaza Elíptica transportation hub in Madrid: Opened on April 27 serving over 126, travelers daily. Interchange for two metro lines, 14 intercity bus routes and 1 local bus routes. Santuario de Fátima. Inaugurated on October 12, this religious building has a grand circular nave over 15 meters high and seats 8,7. Building for the new Málaga Provincial Traffic Authority. One of the most modern facilities in Spain. More than 215 people will work there servicing thousands of users. It has a communications tower for the traffic control centre from where all the roads in the province are monitored. Extension of the Teatro de la Maestranza, Seville. This project entailed extending the stage and the rehearsal and performance spaces, installing technology that is unique in Spain and only in use elsewhere in the Copenhagen Opera House. The work was timed to keep the Maestranza open through the theatre and orchestral seasons, as it is the only space of its kind in Andalusia. EADS CASA office building annexed to San Pablo Airport in Seville. Building to be used as the main office and project-engineering site for A-4 M military transport plane assembly.

49 AnNUAL report 27 / BUSINESS AREAS 47 Major building projects underway included: Torre SyV for Testa in the northern zone of Madrid s Paseo de la Castellana. 25 meters high with 56,m 2 of lettable area to be used as a 5-star hotel (already let to the Hotusa chain) and offices. Industrial building on calle Emilio Muñoz, an industrial complex comprising nine buildings accessible via a main square with interconnected walkways. Total surface area is 77,195m 2. Parque de Medianas integrated into the planned Puerto Venecia recreational centre (Zaragoza) that will house Spain s largest shopping mall at over 72.9m 2. The main forces behind the project would be El Corte Inglés and IKEA. Industrial plant for Cervezas Damm brewery in Prat de Llobregat. Mixed structure building with 36,4m 2 of space housing two bottling plants and an intermediate technical plant as facilities. A parking lot has also been planned for the deck. Hotel Riu Karamboa, on the island of Boavista, Cape Verde, built on a 175,m 2 plot, with 8 rooms. Civic Initiative Pavilion for Expo 28 (Zaragoza) with a circular base brightly lit from above by two skylights. For the construction of the building, the main materials used have been pre-fabricated by nature: straw, bamboo, mud and wood and thereby reduce the use of energy. The covered surface area spans 2,214m 2, with a height of 21.5m and capacity for 1,2 attendees. Sonagol Clinic. A Coruña Shopping Centre, spanning 54,m 2, built for Chamartín La Grela, S.A. Palacio de Congresos for Expo 28 in Zaragoza, which will constitute, alongside the planned Pavilion-Bridge and International Pavilion buildings, the international exposition s welcoming area for the public. The covered surface area spans 31,254m 2 and the auditorium has 1,45 seats.

50 48 AnNUAL report 27 / BUSINESS AREAS PROPERTY DEVELOPMENT VALLEHERMOSO Vallehermoso s future is backed by 55 years experience. SyV Group s property development arm has consolidated its position over this time, not only as the longest-standing company in the Spanish sector but also as a market leader due to its business model, founded on solid fundamentals. This has proved a key differentiating factor and an essential support for business in the current market slowdown. The bulk of the slowdown has hit the second-home market and, in terms of target customers, lower-income earners who are finding it particularly hard to obtain finance. Vallehermoso s business is concentrated on first homes, in towns with populations above 1,, where there is real demand and high asset rotation and on homes for mid-high earners, who can access finance. This is a sound strategy, backed by the capacity, experience and track-record of Vallehermoso s professional teams and the quality of the widely recognized brand, which is why in 27 Vallehermoso delivered 3,687 homes generating billings of 1,128 million euros. Revenue in 27 was 1,4 million euros, an increase of over 12%. Of this, 1,128 million euros came from residential sales and 261 million from land sales. The remaining 1 million euros was from services.

51 AnNUAL report 27 / BUSINESS AREAS 49 VALLEHERMOSO KEY FIGURES (Millions of euros) Revenue EBITDA Profit for the year Cash Flow Pre-sales Chg. % 7/6 1,4. 1, , % % % % 2,36 2,446 2,24 (3.5%) Increases of 12.3% in revenue, 6.3% in net profit, 8.1% in EBITDA, 2.3% in cash flow plus an order book that still stands at 2,36 million euros means Vallehermoso remains at the head of the sector as the property developer with the stablest results of recent years and a backlog of pre-sales that offers reassurance in the current uncertain environment. SECTOR BACKGROUND Clearly, conditions in the sector in 27 were less favorable than in previous years as the gradual adjustment process that had been looming for several years finally took hold. The overall price for housing of all types was 2,85.5 euros per square metre, a rise of 4.8% year-on-year. While this was lower than in recent years it should be noted that growth for new build properties alone was higher at 5.7%. For all Spanish provincial capitals the price per square metre averaged 2,95 euros, with growth also exceeding 5%. In this environment, there are a number of clear signs of a gradual easing: Supply is likely to come down as many small and mid-sized developers are struggling to source funding for new projects. Housing demand should continue its downtrend, largely because of the rising cost of home mortgages although this is being partly offset for the moment as household disposable incomes are holding up reasonably well.

52 5 AnNUAL report 27 / BUSINESS AREAS The cooling of activity, with weaker demand and probably less supply should mean that prices continue to ease gently. Equally clear are data suggesting a shift to a new and perfectly sustainable level of demand in the market: Looking at the demographics, the biggest age Group for house-buying (those between 25 and 44), will continue to swell over the next few years before tending to stabilize after 211. POPULATION AGED FROM 26 TO Source: INE. Also, in terms of density (numbers of people living in each home) Spain is still above the European average, with 2.8 people on average sharing each home. PEOPLE PER HOME European average = Source: INE. Changes in Spain s population and demographic structure suggest we are moving towards a new level of demand where the trend in first and second homes will be a crucial factor as will the behavior of non-resident and immigrant populations.

53 AnNUAL report 27 / BUSINESS AREAS 51 Since 23, the affordability of buying a home on family finances has been getting increasingly stretched, a trend that is likely to continue over the coming year. Home purchase has long been the biggest capital expense in family budgets, but Spain still has one of the lowest levels of doubtful and defaulting mortgage loans in the OECD. This reflects stable levels of investment with, exceptions aside, very high levels of solvency. AFFORDABILITY: AVG. SALARY/ AVG. MORTGAGE REPAYMENTS 65% 67% 5% 41% 39% 33% 3% 27% 25% 26% 26% 27% 27% 28% 31% 38% 42% Source: INE y AHE. In summary, we are facing a less bouyant environment in volume terms. Demand particularly for first homes looks to be stable and after a moderate adjustment will steady at levels more appropriate to the new circumstances. In this climate, the company s strategic model, its business focus and clientele, its geographical spread and its brand, reputation for quality and policy of efficiency and profitability will be key to getting it through this transitional period. STRATEGY Vallehermoso is active in property development throughout the Iberian Peninsula, in both Spain and Portugal. Its emphasis is on new-build first homes and the strategy is based around high-quality developments targeted at a clientele of medium and medium-high earners. The geographical focus is on provincial capitals with over 1, inhabitants. The final elements in the Vallehermoso approach are full technical and economic control of the projects, an emphasis on the best sites and distinctive urban management.

54 52 AnNUAL report 27 / BUSINESS AREAS Asset valuation The value of Vallehermoso s property assets at December 31, 27, based on the independent appraisal of CB Richard Ellis, was 6,969 million euros with unrealized gains of 2,538 million euros. VALUATION OF VALLEHERMOSO ASSETS (Millions of euros) Land Construction in progress TOTAL UNREALIZED GAINS % 7/6 3,816. 4,74. 3,387. (18.9%) 3,153. 3,96. 2, % 6,969. 7,8. 6,13. (1.7%) 2,538. 3,39. 2,338. (23.3%) Land bank and pre-sales Vallehermoso s land bank at end-27 was 11.7 million m 2, with a buildable area of 3.8 million m 2, enough for 3,711 homes. Of this land, 65% is between 3 and 5 years old, and 94% has planning permission and a building license pending or granted in 3% of these cases. At December 31, 27, Vallehermoso had a large pre-sales portfolio of 2,36 million euros, which will be converted into sales over the next few years. AGE OF LAND BANK (YEARS IN PORTFOLIO) % >9 19% % -2 65% 3-5

55 AnNUAL report 27 / BUSINESS AREAS 53 LAND BANK: PLANNING PHASE LAND BANK BY GEOGRAPHICAL REGION 24% License granted 6% Planning 19% North 17% Murcia 22% Andalusia 1% Catalonia 11% Levante 11% Center 6% License applied for 64% Plan approved 4% Galicia 6% Canaries LAND BANK Revenue (million of euros) 2,982. 2, ,856.4 Total area (millions of m 2 ) Buildiable area (millions of m 2 ) Number of homes 3,711 32,448 3,139 Years

56 54 AnNUAL report 27 / BUSINESS AREAS ORDER BOOK (Millions of euros) 2,5 2,446 GAGR=7.99% 2,36 2, 2,24 1,5 1, GEOGRAPHICAL DISTRIBUTION OF PRESALES 1% Portugal 24% North 15% Andalusia 1% Canaries 1% Murcia 13% Catalonia 15% Levante 3% Galicia 27% Center

57 INFORME ANUAL 27 / ÁREAS DE ACTIVIDAD 55 ACTIVITIES Andalusia: the division is active throughout the region with offices in Sevilla, Málaga, Jerez de la Frontera (Cádiz), Granada and Almería. It has a clear focus on first homes but has broadened its business to include small-scale holiday home developments, in areas of very high quality and strong demand. ANDALUSIA Málaga Granada Córdoba Sevilla Cádiz Almería TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) , Canary Islands: the division operates across the Canaries archipelago with offices in Santa Cruz de Tenerife and Las Palmas de Gran Canaria. CANARY ISLANDS Tenerife Las Palmas TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros)

58 56 AnNUAL report 27 / BUSINESS AREAS Catalonia/Balearics: the head office is in Barcelona, but this regional division is active in four Catalan provinces as well as the Balearic Isles (Palma de Mallorca). CATALONIA/BALEARICS Barcelona Balearics Tarragona/Lérida Gerona TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) , Center: this regional division covers the Madrid region and adjacent provinces as far as Ciudad Real and Guadalajara. CENTER Madrid Guadalajara Ciudad Real TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) , , ,

59 AnNUAL report 27 / BUSINESS AREAS 57 Galicia: the division operates mainly in La Coruña and Vigo. GALICIA La Coruña Pontevedra TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) Levante: this regional division covers the three provinces of the Valencia region and the adjacent Albacete province. LEVANTE Castellón Valencia Alicante Albacete TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros)

60 58 AnNUAL report 27 / BUSINESS AREAS Murcia: Murcia has generated the strongest economic growth out of all of Spain s regions in recent years and is set to continue its development over coming years. MURCIA Murcia TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) North: this is the regional division covering the largest number of autonomous regions: Basque Country, Aragón, La Rioja, Asturias, Cantabria and Castilla y León. NORTH Valladolid Oviedo Bilbao Álava Zaragoza Santander Burgos Pamplona San Sebastian Leon Logroño TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) ,222 1,

61 AnNUAL report 27 / BUSINESS AREAS 59 Portugal: business in Portugal is conducted by Somague Imobiliaria from its offices in Lisbon and Oporto. PORTUGAL Lisbon TOTAL Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) In summary, the size and activity of Vallehermoso s 9 regional divisions are as follows, excluding 1,2 million euros for services invoired: ANDALUSIA CANARY ISLANDS CATALONIA CENTER GALICIA LEVANTE MURCIA NORTH PORTUGAL TOTAL VALLEHERMOSO Home sales Development Homes Homes for Revenue in 27 for sale for sale delivery (millions of euros) , , , , ,222 1, , ,936 8,

62 6 AnNUAL report 27 / BUSINESS AREAS INFRASTRUCTURE CONCESSIONS ITÍNERE In 27 a landmark year for SyV s concession area Itínere merged with Europistas creating the new Itínere Infraestructuras as from December 31, 27. Itínere earns the highest EBITDA margin (76.3%) of any of Europe s concession companies and also has the greatest numbers of road kilometres under construction. It is the third-largest concession company by total kilometres under management and the world s fourth-largest by number of concessions in which it is involved according to Public Works Financing Magazine. It has an excellent portfolio of concessions and substantial potential for growth. The sector itself has great growth potential. Itínere has since its foundation proved capable of generating new projects, winning 16 of 45 motorway tenders in Spain over the last 1 years making it probably the most successful concession bidder of recent times. Itínere is the second-biggest investor in Spain s toll motorway business with around 25% of the market by road kilometres under concession. It has stakes in 35 motorway concessions that currently have a total of 3,786km in operation or under construction. Besides Spain, the company is active in Chile, Portugal, Ireland, Brazil, Costa Rica and Bulgaria. Itínere has also diversified not only geographically but also in the nature and type of its assets. It now manages 1 airport, 1 metro line, 3 hospitals, 2 local transportation hubs and 1 service station management company.

63 AnNUAL report 27 / BUSINESS AREAS 61 At December 31, 27, it had 43 concessions either in operation or under construction including 4 added in 27: Murcia International Airport. M-5 Dublin ring-road (Ireland). N-6 Galway-Ballinasloe motorway (Ireland). Santo Tomé del Puerto-Burgos stretch of the A-1 motorway. ITÍNERE KEY FIGURES (Millions of euros) Revenue EBITDA Profit for the year Cash Flow Order book Chg. % 7/ % % (48.) 165.6% % 65, , , % SECTOR BACKGROUND Public-private partnerships to implement projects and manage public infrastructure and equipment have become an established part of the industrial landscape over the last decade. The concession sector is undergoing massive expansion and has a solid future. Demand for high-quality infrastructure and financial restrictions on government budgets make public-private cooperation a vital tool for upgrading existing infrastructure and building new projects. Also, the concession option is an attractive way for developing countries, which often have problems accessing adequate finance in international markets, to take forward their plans. The sector offers an attractive combination of security and growth, both because of the visibility of cash flows and the natural hedge between inflation and long-term interest rates which allows companies to take on attractive amounts of gearing. Spanish motorway concession holders earned around 2 billion euros in tolls in 27, with average increases of over 9.3% on 26. Over 68 million journeys, a rise of 6.4%, and ADT (Average Daily Traffic) of more than 25, vehicles suggests that the sector can look forward to the future with confidence.

64 62 AnNUAL report 27 / BUSINESS AREAS SPANISH SECTOR ADT: % GPD ADT 3, 2, CAGR=4.2% , 2 % Source: Ministry of Public Works & INE. STRONG GROWTH IN SPANISH TRAFFIC Spain 5.1% France 3.3% Italy 1.1% Source: ASECAP.

65 AnNUAL report 27 / BUSINESS AREAS 63 The number of vehicles on the road continues to grow steadily in Spain and at a faster pace than in neighboring countries. VEHICLES ON THE ROAD (Units) 28,, 21,, CAGR=1.9% 14,, 7,, Source: Ministry of Public Works. EUROPEAN BENCHMARKING: NUMBER OF CARS/1, POP. (26) 5 Average Italy Germany Switzerland UK Austria France Belgium Sweden Spain Netherlands Portugal Source: VDA (German automotive industry association). 1 Average not including Spain.

66 64 AnNUAL report 27 / BUSINESS AREAS In 27, according to data provided by ASETA (the Spanish association of toll motorway, tunnel, bridge and road concessionaires), the Spanish toll road network in operation ran for 3,361.4km with another 94km under construction. Both figures also include the toll-free stretches. Over 27, 26km of new conventional toll roads were opened to traffic. To this we need to add all the road contracts put out to tender by the regional governments under the shadow toll system, as well as those operated by companies that are not members of ASETA. In 28, and the coming years further major tenders are expected in Spain which Itínere is studying. These notably include: The Plan for Upkeep and Maintenance of the first-generation motorways. A number of motorways due to be put up for tender in the next few years by the Ministry of Development. Various regional governments also have plans to hold tenders for new toll roads. The international environment for motorway concessions is also very promising. It is expected that over the next few years many countries will continue to put new concession projects out to tender. Itínere, is already active or looking at participating in the following projects: Portugal: there are four major toll motorway projects currently in the pipeline where the Group is considering bidding. Portugal is also to develop concessions on various stretches of the Portuguese high-speed rail link (RAVE) and could also put the new Lisbon airport out to tender.

67 AnNUAL report 27 / BUSINESS AREAS 65 Italy: Italy is currently planning twenty-three concession motorway projects, entailing a total investment of more than 3, million euros. United States: A number of US states are planning to develop new transport infrastructure projects (Greenfield projects) or to privatize toll highways (Brownfield projects). There are a number of interesting projects in the pipeline, involving total investments of over 15, million euros. Brazil: Five motorways are currently under study in Sao Paulo state. Chile: Chile has invited tenders for the new Ruta 5 Norte and the Chilean government is studying Ruta 16. The completion of the Américo Vespucio Sur motorway and other private initiatives. Rest of the World: the Group expects numerous infrastructure concession tenders to be launched in 28 in countries ranging from Canada to Mexico and in the new EU member states. STRATEGY Itínere works continuously to consolidate its positioning as one of the world s leading infrastructure concession groups with a balanced portfolio of mature concessions and new projects and with the capacity to bid in tenders and privatisations the world over. Itínere Group s future aim is to combine a solid portfolio of concessions with a long outstanding period, averaging 26 years in 27 (31 years in Spain, 23 in Portugal, 25 in Chile and 14 in Brazil) with the winning of new concessions. REMAINING LIFE FOR CURRENT CONCESSIONS AT 31 DECEMBER Acega Madrid Sur Aucalsa Accesos Madrid T. Artxanda Audasa A. Galicia A. Levante I. Pza. Elíptica Palma-Manacor Viastur H. Noreste H. Parla Vespucio Sur Litoral Central Lusoponte Noepistas Audenasa A. Atlántico Avasa Aunor Vía Litoral Henarsa Rutas Pacífico Los Lagos El Elqui Triângulo do Sol AP-1 Europistas Aerop. Murcia Nororiente M5 Guadalmedina Trakia Motorway Eresma I. Moncloa Turia Metro Sevilla N6 Barbanza H. Majadahonda A. del Sol A. del Valle Arlanzón Concessions in operation Concessions under construction

68 66 AnNUAL report 27 / BUSINESS AREAS MOTORWAY KILOMETRES UNDER CONCESSION (Km) 143 Costa Rica 97 Ireland 235 Portugal 442 Brazil 1,795 Spain 1,766 1,846 1,87 2,462 2,569 3,89 3,279 3, Bulgaria 631 Chile Itínere maintains a high growth rate based on its experience in winning transport infrastructure build and operate tenders and its capacity to acquire concessions that are already operational and improve their profitability. In Spain, the core activity will remain toll motorways, but to ensure an appropriate degree of diversification the Group will continue to study other business areas such as airports, ports, railways, metro projects etc. Outside Spain, the company will continue to bid in new geographical markets with sound fundamentals and high growth prospects for demand and use of infrastructure, both in Europe (Ireland, Italy, Portugal) and in Latin America (Chile, US, Canada, Brazil and Mexico). In each case, the Group s strategy is to take controlling stakes that allow it to actively manage the projects in

69 AnNUAL report 27 / BUSINESS AREAS 67 which it participates. A stable and secure legal framework is the first and indispensable condition for considering any bid. A preference for greenfield projects (new build motorways to be run under a concession system) over brownfield (motorways that are already operating under public ownership) is a fixed element of Itínere s strategy although projects of the second type are not ruled out. Revenue backlog Itínere s revenue backlog of 65,862 million euros and the wide margins on its operations represent unrealized EBITDA on group concessions estimated at 5,24 million euros that will be realized over coming years. Concessions in operation Itínere s portfolio of operations comprises 2,77km of motorways in operation, 2 hospitals in Madrid, 1 local transportation hub also in Madrid and a service station management company. Concessions under construction Concessions that are in various stages of construction include over 1,km of road on 11 new motorway concessions, 1 metro line in Seville, 1 transportation hub, 1 hospital and an airport.

70 68 AnNUAL report 27 / BUSINESS AREAS CONCESSIONS IN OPERATION Company Motorway Stretch % ownership Cons. method Total Km. Avasa AP-68 Bilbao-Zaragoza 5.% Proportional Audasa AP-9 Ferrol-Tuy 1.% Audenasa AP-15 Irurzun-Tudela 5.% AP-1 Europistas AP-1 Burgos-Armiñón 1.% 84.3 Túneles Artxanda Túneles Artxanda 5.% 3. Madrid Sur AP-36 Ocaña-La Roda 4.% 177. Accesos Madrid R-3 M-4 - Arganda del Rey 25.16% Equity 31.9 R-5 M-4 - Navalcarnero 25.16% Equity 28.9 M-5 A6 - M % Equity 29.6 Aucalsa AP-66 León-Campomanes 1.% 86.8 Henarsa R-2, M-5 M-4 - Guadalajara; M-5 (N-I, N-II y M-4) 15.% Equity 8.3 Aunor C-415 Alcantarilla-Caravaca 1.% 62. Acega AP-53 Santiago de Compostela - Alto de Sto. Domingo 18.36% Equity 56.7 Madrid Sur R-4, M-5 M-4 - Ocaña; M-5 (N-II, N-IV) 35.% Equity 93.5 Autoestradas de Galicia AG-55 A Coruña-Carballo 1.% 32.6 AG-57 Puxeiros-Val Minor 1.% 25. Palma-Manacor MA-15 Palma Mallorca-Manacor 4.% Proportional 41.7 Viastur AS-17, AS-18 Oviedo-Porceyo, Lugones-Bobes 7.% 24.3 Neopistas EE:SS Alberique-Valdáliga-Guitriz 1.% Intercambiador Plaza Elíptica Madrid 8.% Hospital de Parla Parla (Madrid) 1.% Hospital del Noreste Coslada (Madrid) 1.% SPAIN El Elqui R-5 Norte Los Vilos-La Serena 1.% 1, Los Lagos R-5 Sur Río Bueno-Puerto Montt 99.95% Rutas del Pacífico R-68 Santiago-Valparaíso 5.% Proportional 11. Ruta 6 Enlace R-68 - Troncal Sur 5.% Proportional 1.6 Troncal Sur 5.% Proportional 21. Red Vial Litoral Central F-9 Algarrobo-Casablanca 5.% Proportional 33.4 NCC Cartagena-Algarrobo 5.% Proportional 24.1 F-962-G Variante Las Pataguas 5.% Proportional 22.4 Vespucio Sur Américo Vespucio-Avda. Grecia 5.% Proportional 24. CHILE Lusoponte Puente Vasco de Gama Puente 25 de Abril 17.21% 17.21% Equity Equity Autoestradas do Atlántico A-8 Sur Cril-Caldas da Rainha 12.5% Equity 81. A-8 Norte Caldas da Rainha-Leira 12.5% Equity 49. A-15 Caldas da Rainha-Santarém 12.5% Equity 4. Via Litoral ER-11 Ribeira Brava-Machico-Caniçal 12.% Financial inv PORTUGAL Triângulo do Sol SP-326 Matao-Bebedouro 5.% Proportional SP-333 Sertãozinho-Borborema 5.% Proportional SP-31 Sao Carlos-Mirasol 5.% Proportional BRAZIL TOTAL IN OPERATION 2,77.4

71 AnNUAL report 27 / BUSINESS AREAS 69 ACTIVITIES Following the bid for Europistas launched in 26, Itínere Infraestructuras, S.A. was merged into Europistas Concesionaria Española, S.A., by public deed on December 31, 27, taking effect as of midnight for accounting purposes. Itínere Infraestructuras, S.A. was dissolved without liquidation, all its assets being transferred to Europistas which acquired all rights and obligations by universal succession as of January 1, 28. The merger of Europistas and Itínere opened the way to the creation of a leading listed group combining the professional experience and the technical, financial and managerial capabilities of two concession groups specializing in infrastructure. The share exchange ratio agreed for the merger was: 16 Europistas shares of.49 euros nominal value for every 5 Itínere shares of 1 euro value. To meet the terms of the share exchange, Europistas shareholders approved at their General Meeting of June 28, 27, a capital increase of 267,358,42.8 euros via the issue of 545,629,392 new shares, with a nominal value of.49 euros each, plus the share premium arising from the difference between the net book value of the assets contributed by Itínere at the merger date (December 31, 27) and the total nominal value of the share capital, 213,584,3.32 euros.

72 7 AnNUAL report 27 / BUSINESS AREAS The capital increase (nominal 267,358,42.8 euros plus the 213,584,3.32 euro share premium) was fully paid by contribution to Europistas of all Itínere assets as of December 31, 27. In 27, Itínere maintained its constant effort to improve the quality of service to users which has driven an increase in satisfaction ratios and kept down accident indices. Traffic recorded in 27 rose significantly, as follows: YEAR-ON-YEAR CHANGE IN ADT Traffic (No. vehicles) % 7/6 Audasa 27,3 25,59 23, % Avasa 14,712 14,177 13, % AP-1 Europistas 23,189 22,178 21,26 4.6% Audenasa 19,751 19,22 16, % Aucalsa 1,288 9,683 9,6 6.2% Autoestradas de Galicia 11,93 11,19 1, % Aunor 12,72 11,97 11,11 6.8% Viastur 18,887 n/a n/a n/a Túneles de Artxanda 16,427 14,117 13, % Palma-Manacor 2,667 n/a n/a n/a Rutas del Pacífico 2,49 18,318 16, % El Elqui 4,42 3,68 3, % Vespucio Sur 54,627 44,97 n/a 21.5% Los Lagos 8,84 7,432 6, % Red Vial Litoral Central 2,168 2,49 1, % Triângulo do Sol 6,935 6,26 5, %

73 AnNUAL report 27 / BUSINESS AREAS 71 Revenue increased by 33.8% to million euros, for three reasons: traffic growth (ADT), the positive impact of CPI on the revision of tolls and the merger with Europistas. The excellent performance of all operating motorways is detailed below: TOLL REVENUE (Millions of euros) Motorway Chg. % 7/6 Audasa % Avasa % AP-1 Europistas n/a 1,276.9% Audenasa % Aucalsa % Autoestradas de Galicia % Aunor* (9.5%) Viastur 2.9 n/a n/a n/a Túneles de Artxanda n/a 1,25.% Palma-Manacor 2.1 n/a n/a n/a Rutas del Pacífico % El Elqui % Vespucio Sur % Los Lagos % Red Vial Litoral Central % Triângulo do Sol % * Tolls were increased by 15% until 26 under the concession agreement.

74 72 AnNUAL report 27 / BUSINESS AREAS Investments Total investment by Itínere in motorways in operation was 6,694 million euros, 458 million euros of this being for investments in work in progress. INVESTMENTS (Millions of euros) Audasa Avasa AP-1 Europistas Audenasa Aucalsa Autoestradas de Galicia Aunor Viastur Túneles de Artxanda Palma-Manacor Intercambiador de la Plaza Elíptica Neopistas Autovía del Turia Intercambiador de Moncloa Autovía del Eresma Autopista del Barbanza Autopista de Guadalmedina SPAIN Rutas del Pacífico El Elqui Vespucio Sur Los Lagos Red Vial Litoral Central Acceso Nororiente Triângulo do Sol Autopista del Valle Autopista del Sol AMERICA N-6 Galway-Ballisnaloe M-5 Dublin IRELAND TOTAL Operational In progress Operational In progress Operational In progress 2, , , ,81.3 1, , , , , , ,

75 AnNUAL report 27 / BUSINESS AREAS 73 CONCESSIONS UNDER CONSTRUCTION AT Autopista Guadalmedina Intercambiador Moncloa Autovía del Eresma Autovía del Turia Metro de Sevilla Autovía del Barbanza Hospital de Majadahonda Autovía del Arlanzón Aeropuerto Murcia Autopista Nororiente Autopistas del Valle Autopistas del Sol Trakia Motorway N-6 Galway-Ballinasloe M-5 Dublin TOTAL UNDER CONSTRUCTION % Expiry Total Country Stretch ownership Total km date investment Spain Málaga-Alto Las Pedrizas 8.% Spain Moncloa (Madrid) 8.% Spain Cuéllar-Segovia 73.% Spain Valencia-Losa del Obispo 8.% Spain Dos Hermanas-Aljarafe 31.13% Spain Padrón-Ribera 8.% Spain Majadahonda (Madrid) 2.% Spain Santo Tomé del Puerto-Burgos 1.% Spain - 6.% Chile Acceso Nororiente 1.% Costa Rica San José/Aeropuerto-San Ramón 35.% Costa Rica San José-Caldera 35.% Bulgaria Kalotinas-Bourgas 15.% Ireland Doughiska-Tulrush 45.% Ireland Circunvalación Dublin 45.% ,34.8 4,335

76 74 AnNUAL report 27 / BUSINESS AREAS The key features of concessions won by Itínere in 27 are as follows: In the early months of 27 the company signed the contract to build, operate and maintain the N-6 Galway-Ballinasloe motorway in Ireland. This was Itínere s first concession in the Irish market, which is very active in the concession sector and offers attractive opportunities. The term of the concession is 3 years with projected investment of 35 million euros. The project forms part of the National Development Plan 2-26 and includes 56km of toll motorway, a 7km bypass and 32km of access road. The consortium comprises Itínere (45%), FCC (45%) and PJ Hegarty (1%). Tolls will be levied on a rev shared basis.

77 AnNUAL report 27 / BUSINESS AREAS 75 Murcia International Airport: awarded in May 27 under a 4 year concession, with a projected investment budget of 266 million euros. The Group has a 6% stake, Caja Murcia and CAM have 6.7% each and the rest is provided by other investors. The concession is to build, finance, maintain and manage the airport as well as operating a 45,m 2 complementary activities area. Forecast capacity is for 5.4 million passengers in its opening year, rising gradually to 14 million. M-5 Dublin ring road: awarded in September 27, this concession is for a 41km beltway around Dublin. The concession lasts for 35 years with a projected budget of 38 million euros and the distribution of stakes in the project among the consortium is the same as for the N-6. The toll system is one of payment by availability. Upkeep and operation of the Santo Tomé del Puerto-Burgos stretch of the A-1 motorway. Awarded on October 3, 27, this concession forms part of the Upkeep and Maintenance Plan for Spain s so-called first generation motorways. The concession on this 146km stretch runs for 19 years. In 27, the following projects came into operation: The Plaza Elíptica transportation hub in Madrid. Itínere has a 6% stake in the concession. AS-18 between Oviedo and Gijón: it came into service on May 13, managed by Itínere s subsidiary, Viastur, Concesionaria del Principado de Asturias. The operational phase began on June 1 through a shadow toll system. AS-17 between Lugones and Bobes: this too came into service on May 13, with official operation beginning on June 1. Hospital de Parla: opened on September 11. The Group has a 1% stake in this concession which runs for 3 years, and is granted by the Madrid regional government. The hospital will serve a population of 164, and has 18 beds, extendible to 24. Hospital del Noreste: opened on September 16. Like the other hospital this is a concession awarded by the Madrid regional government. It will serve a population of 17,, offering 187 beds, extendible to 239.

78 76 AnNUAL report 27 / BUSINESS AREAS PROPERTY MANAGEMENT TESTA Testa is market leader with a top-quality portfolio of assets in prime sites, let to major companies and big clients. This has allowed Testa to maintain the high and stable occupancy rates that have typified its operations and which are now around 1%. Most of SyV Group s property management business is concentrated on office rentals in the cities of Barcelona, Madrid, Paris and Miami. It currently has over 1.5 million m 2 under management. Increases of 5% in revenue, 1.3% in EBITDA and 9.4% in profit testify to the healthy progress of the business model and the quality of the assets. The fall in the rentals portfolio is largely due to the transfer to Itínere of three Madrid hospitals (Majadahonda, Parla and Noroeste) that were a better fit with the concession arm than with the property management business. TESTA KEY FIGURES (Millions of euros) Revenue EBITDA Profit for the year Cash Flow Rental property order book Chg. % 7/ % % % % 2, , ,712.5 (29.5%) SECTOR BACKGROUND The rental property sector is healthy. All four indicators for the office market supply, absorption, prices and investment are positive.

79 AnNUAL report 27 / BUSINESS AREAS 77 The economy is likely to be less vigorous in 28 and growth lower. That said, the rentals sector is well placed to cope with such slower growth. In 27, offices in both Madrid and Barcelona registered signs of rising rents driven by the scarcity of supply, particularly in city centers. In Madrid for instance, gross absorption rose by 15% over the year, to over 941,m 2. Total office space in Madrid is now 11,2,m 2. Overall vacancy rates have fallen and now average 5.3%. In the business district top prices were up 15.9% to around 4. euros per m 2 /month. In Barcelona, office space also rose to 5 million m 2. Vacancy rates were 5.25% and in the business district rents were 27.5 euros per m 2 /month. CBD RENTS. MADRID OFFICES ( /m 2 /year) Source: CB Richard Ellis. CBD RENTS. BARCELONA OFFICES ( /m 2 /year) Source: CB Richard Ellis.

80 78 AnNUAL report 27 / BUSINESS AREAS The commercial sector developed strongly in 27 and, despite the high volumes of new projects, demand for space in centers remained solid and rents rose satisfactorily. Shopping centers have been expanding at a significant pace since the start of the 199s, and since 2 activity has stepped up a notch, largely due to urban planning rules in the peripheral zones, the centre and the coast. These factors and the proliferation of leisure centers throughout Spain should ensure a healthy future for the segment. In 27, 25 new centers opened in Spain taking the total number to 487. The gross lettable area is 11.9 million m 2, providing over 287, jobs with a footfall of over 1,6 million during the year. STRATEGY Testa plans to continue to expand its self-owned assets, which at December 31, amounted to 1.5 million m 2 of lettable space, through continued investment in prime buildings in the best areas that have the features to attract top level clients. The other assets of Testa Inmuebles en Renta are shopping centers, hotels, residential lets, old people s homes and, to a lesser extent, logistics warehouses and parking spaces. The Group pursues a dual aim of generating recurrent income with high EBITDA margins and building up unrealized capital gains on the value of its buildings. This aim is compatible with the rotation, when appropriate, of some assets. It is still most active in Madrid and Barcelona in Spain, Paris in France and Miami in the USA. Asset valuation Appraisers CB Richard Ellis valued Testa s assets as of December 31, 27 at 4,725 million euros, a 2.9% increase on the previous ASSET VALUATION OF TESTA (Millions of euros) Rental property Other property TOTAL UNREALIZED GAINS Chg % 7/6 4, , , % (14.3%) 4, , , % 1, , , %

81 AnNUAL report 27 / BUSINESS AREAS 79 year, with unrealized gains up by 247 million euros (16.1%) from 1,532 million to 1,779 million euros. PROPERTY ASSETS BY PRODUCT TYPE (Millions of euros) Offices Shopping centers Housing Hotels Logistics warehouses Old people s homes Buildings under construction Inventory Other TOTAL Chg. % 7/6 %s/total 2, , , % 61.9% (2.%) 1.4% % 5.7% % 4.6% % 3.3% (6.9%) 2.1% (16.9%) 11.% % %.7% 4, , , % 1.% ACTIVITIES Testa has projects in progress with a projected budget of million euros. They include offices, hotels, housing and old people s homes. Of this, million euros had been invested by year-end 27. The above ground area of these projects is 27,771m 2. WORK IN PROGRESS m 2 above Total Scheduled Product ground investment completation date Miami Torre SyV Palacio Congresos Vigo San Cugat II TOTAL OFFICES Torre SyV Palacio Congresos Vigo TOTAL HOTELS Consejo de Ciento TOTAL RES. HOMES Torrejón - Madrid Móstoles - Madrid Paracuellos - Madrid HOUSING 38,1 2,6 21,997 1,8 9,75 37,259 4,124 41,383 5,34 5,34 46,623 14,321 9,435 7, TOTAL 27,

82 8 AnNUAL report 27 / BUSINESS AREAS Revenue Testa made revenue in 27 of million euros, a 5% increase on 26. Of this, 1.7% was due to expansion of lettable area,.9% to higher occupancy and 2.% to revision of lease terms. Testa s EBITDA was over 2 million euros (21.5 million) up by over 1% on the year. By product, offices generated 67% of total revenue, followed by shopping centers (15%), residential (5%) and hotels (6%). Breaking revenue down by geographical location Madrid provided 48% of the total, Catalonia 17%, Paris 1% and Miami 8%. Property management activity At the start of 27 L Oréal Group signed the lease to move into one of Testa s Madrid buildings as its head office (around 2,m 2 on 6 storeys in calle Josefa Valcárcel). In May, Testa transferred to Sacyr Vallehermoso Group three hospitals run as concessions (Sur, Henares and Noreste) to Itínere. In early July, the Torre SyV reached its full height (236 metres above street level). Its 56 floors are now being fitted out, 33 of them for a 5-star special category 5-room hotel run by the Hotusa chain, which will be the highest in Europe. The other storeys will be given over to offices, the first of which were put on the market early in 28. In 27, as part of a normal strategy of asset rotation, Testa sold two of its shopping centers (Los Fresnos in Gijón, and Lakua in REVENUE BY PRODUCT TYPE (Millions of euros) Offices Shopping centers Hotels Housing Logistics warehouses Old people s homes Car park TOTAL RENT Services revenue TOTAL REVENUE Chg. % 7/ % % (17.2%) % % % % % % %

83 AnNUAL report 27 / BUSINESS AREAS 81 Vitoria) and an old people s homes in Zaragoza (Puente Piedra) for a combined 76.7 million euros. RENTAL BY PRODUCT TYPE 5% Housing 4% Logistics wharehouses 6% Hotels 15% Shopping centers 3% Old people s homes 67% Offices RENTAL BY GEOGRAPHICAL REGION (Millions of euros) Madrid Catalonia Paris (France) Miami (US) Andalusia Balearics Asturias Other TOTAL Services revenues TOTAL REVENUE Chg. % 7/ % (2.8%) % % % % % (1.6%) % % % RENTAL BY GEOGRAPHICAL REGION arics alusia 2% Asturias 7% Other mi ) 48% Madrid % s nce) 17% Catalonia

84 82 AnNUAL report 27 / BUSINESS AREAS The tables below give details of some factors underpinning the rise in Testa s revenue and occupancy rates. EVOLUTION OF RENTS Chg. % 7/6 Revenue (millions of euros) % Average unit income ( /m 2 /year) % Average lettable area (m 2 ) 1,541,66 1,515,669 1,395,15 1.7% Average occupancy (%) 98.5% 97.6% 96.8%.9% OCCUPANCY BY PRODUCT % Occup. m 2 Offices Shopping centers Hotels Housing Logistics warehouses Old people s homes Car parks TOTAL RENTS 99.% 62, % 19,661 1.% 8, % 14,83 1.% 21,43 1.% 45,582 1.% 382,72 99.% 1,535,926

85 AnNUAL report 27 / BUSINESS AREAS 83 Offices Testa had 62,749m 2 of rental office space at year-end. Another 2,6m 2 of prime office space was under construction in the Torre SyV (storeys 34-56) and the second phase of the Sant Cugat park would add another 1,8m 2. The building at Josefa Valcárcel 48, was pre-let early in 27 to L Oréal España, in line with Testa s policy of letting to top quality tenants. OFFICES Buildings m 2 area Parking spaces Ribera del Loira, 6 Endesa building 54,849 1,253 Avenida del Partenón Campo de las Naciones 37, Avenida de Bruselas, 33 Indra building 33, Complejo Princesa Complejo Princesa 33,668 Juan Esplandiú, O Donnell building 27, Parque Empresarial Ática Ática 7 23, Josefa Valcárcel, 48 Josefa Valcárcel, 48 19, Alcalá, 45 Alcalá, 45 18,655 4 Avenida de Bruselas, Edificio Amena 18, Costa Brava, 2-4 Raqueta 16, 335 Castellana Castellana, , Eucalipto, Los Jacintos 14, Príncipe de Vergara, 187 Príncipe de Vergara, 187 1, Pedro Valdivia, 1 Pedro Valdivia, 1 6, Juan de Mariana, 17 Juan de Mariana, 17 3,366 6 MADRID 333,881 5,737 Muntadas I Muntadas I 24,38 64 Avenida de Vilanova, Edificios Endesa 16, Sant Cugat I Sant Cugat 15, Diagonal, 65 Diagonal, 65 14, Sant Cugat II 1 San Cugat 1,8 251 Avenida Diagonal, 514 Diagona,l 514 9, Paseo Gracia, 56 Paseo Gracia, 56 8, Muntadas II Muntadas II 3, Paseo Gracia, 28 Paseo Gracia, 28 3, BARCELONA 15,979 1,648 REST OF SPAIN 37, Adriá Tower Tour Adriá 53, PARIS (FRANCE) 53, Brickell Ave Brickell Ave ,378 1,15 Brickell Ave. 141 Brickell Ave , MIAMI (US) 71,139 1,387 TOTAL 62,749 9,69

86 84 AnNUAL report 27 / BUSINESS AREAS Shopping Centers Testa s shopping center portfolio comprises 19,661m 2 of space in the following buildings, all of which are in the best shopping districts of capitals or fast-growing cities, after the sale of the two centers mentioned above. SHOPPING CENTERS Shopping center Location m 2 area No. stores Parque Corredor Madrid 37,73 14 Porto Pi Palma de Mallorca 26, Larios Málaga 21, Complejo Princesa Madrid 13,22 51 Centro Oeste Madrid 1, TOTAL 19, Hotels Testa s clients include some of the world s leading hotel chains. The hotels owned by the company are in standout buildings which are well located and enjoy excellent communications. Currently under construction is the 5 room 5 star superior hotel in the Torre SyV (floors 1 to 33). Once complete, the hotel will become a Madrid landmark for its height, the quality of its construction and its location in the Spanish capital s new business district. Also under construction is the Vigo Palacio de Congresos, which will include a hotel with 188 rooms of wich Testa owns 4%. Total hotel floorspace in operation is 8,629m 2.

87 AnNUAL report 27 / BUSINESS AREAS 85 HOTELS Hotel City Chain m 2 area Rooms Category Eurostars Grand Marina Barcelona Hotusa 2,3 274 * * * * * AC Forum Barcelona AC 13, * * * * Puerta Castilla Madrid Silken 13, * * * * Tryp Barcelona Aeropuerto Barcelona Sol Meliá 1, * * * * Tryp Oceanic Valencia Sol Meliá 9, * * * * Tryp Alameda Málaga Sol Meliá 6, 136 * * * * Tryp Jerez Jerez Sol Meliá 4, * * * * Eurostars Gran Madrid Madrid Hotusa 3,581 1 * * * * TOTAL 8,629 1,456 Old people s homes The increasing need for services for the elderly means that old people s residential homes are a stable and growing business for the future. Testa s operations in this field are focused on developing homes which can then be rented to specialist operators, thereby outsourcing all the risks of managing the business.

88 86 AnNUAL report 27 / BUSINESS AREAS Testa currently has 45,582m 2 of space given over to this business line, providing 889 rooms and a total capacity of 1,134 beds in Barcelona, Madrid, La Coruña and Santander. OLD PEOPLE S HOMES Residence City m 2 area Rooms Beds Les Corts Barcelona 12, Getafe Madrid 8, Faro de Hércules La Coruña 5, Sagrada Familia Barcelona 5, Los Madrazo Santander 4, La Moraleja Madrid 4, El Viso Madrid 3, TOTAL 45, ,134 Residential New plans to develop residential rental property by national and regional governments coupled with financial and tax incentives introduced by the government are helping to revive this market. Testa was the first private operator in Spain to create a dedicated subsidiary for this segment, Testa Residencial. At the moment Testa Residencial manages a portfolio of 1,355 homes and 1,137 parking places, with a surface area of 14,83m 2. RESIDENTIAL Building Area m 2 Parking spaces Homes Plaza Castilla 2, Alameda de Osuna 9, Conde Xiquena, 17 1, MADRID PRIVATE SECTOR 31, Alcorcón 1, Pavones Este 7, Valdebernardo 7, MADRID SUBSIDIZED HOUSING 25, Usera 11, Leganés 6, MADRID CONCESSIONS 18, Sta. María Benquerencia 1, TOLEDO SUBSIDIZED HOUSING 1, Benta Berri 18, S. SEBASTIAN CONCESSIONS 18, TOTAL 14,83 1,137 1,355

89 AnNUAL report 27 / BUSINESS AREAS 87 Logistics warehouses The logistics and industrial plants business has achieved very high occupancy rates, confirming healthy outlook for this Testa business. The company is centered in the Madrid-Barcelona corridor, especially around Henares, and continues to increase its profitability in this segment. Testa s logistics warehouses have a total floorspace of 21,43m 2 in Barcelona, Zaragoza, Guadalajara and Coslada near Madrid. LOGISTICS WAREHOUSES Building Location m 2 area Logistics warehouses Cabanillas del Campo (Guadalajara) 7,134 Logistics warehouses Alovera (Guadalajara) 39,879 Logistics warehouses Coslada (Madrid) 35,934 Logistics warehouses Azuqueca Henares (Guadalajara) 27,995 Logistics warehouses Pedrola (Zaragoza) 21,579 Logistics warehouses Lliça de Vall (Barcelona) 14,99 TOTAL 21,43

90 88 AnNUAL report 27 / BUSINESS AREAS SERVICES VALORIZA Despite being a new business, Sacyr Vallehermoso s services arm is the fastest-growing division in the Group, thanks to heavy outsourcing in its four business areas: Environmental services (services to municipalities, waste management, landscaping and environmental public works). Water services (integrated water cycle management, drinking water, desalination, purification and revitalization). Multi-services (facilities management, motorway maintenance, motorway service stations, healthcare services and hospital management). Energy (engineering projects, construction and management of biomass and combined cycle plants, energy efficiency, solar power and the development, construction and management of wind farms). These activities create synergies and complement the Group s traditional businesses, as well as generating high EBITDA margins and recurrent revenue. Services promote closer links with traditional clients and foster new commercial relationships. VALORIZA KEY FIGURES (Millions of euros) Revenue EBITDA Profit for the year Cash Flow Order book Chg. % 7/ % % % % 1, ,89.4 6, %

91 AnNUAL report 27 / BUSINESS AREAS 89 Revenue Valoriza s revenue rose 23.6% in 27, once Sufi, Emalsa and Emmasa were consolidated, making it easier to win new contracts. The breakdown of revenue by activity was as follows: environmental services 39%, water services 28%, multi-services 24% and energy 9%. REVENUE BY BUSINESS LINE 24% Multi-services 28% Water 9% Alternative energy 39% Environment REVENUE BY GEOGRAPHICAL REGION 3% Other 12% Portugal 85% Spain

92 9 AnNUAL report 27 / BUSINESS AREAS BACKLOG BY BUSINESS LINE Revenue backlog 3% Environment and Multi-services 13% Energy Valoriza is now able to bid on its own for any type of services contract in Spain. Its revenue backlog at December 31 was 1,124 million euros, up 2.4% on the previous year-end. SECTOR BACKGROUND 57% Water Environmental services, water, multi-services and alternative energy, are four strong and dynamic business lines that offer a still more promising future. They are also a good fit with the Group s other activities: construction, property management, property development and concessions, both because they offer synergies and because of their counter-cyclical stabilizing effect. From an environmental point of view, it is clear that waste reduction and recovery is set to be a key part of sustainable development as, besides efficient waste management, recycling and subsequent energy recovery, it makes a real contribution to reducing greenhouse gas emissions. There has been a clear and continuous trend since 1997 away from indiscriminate tipping of urban waste to the benefit of controlled landfill sites.

93 AnNUAL report 27 / BUSINESS AREAS 91 URBAN WASTE GENERATION (Kg/pop./year) Spain UE25 UE Source: MMA / Eurostat. URBAN WASTE MANAGEMENT (Thousand tonnes) 25, 2, 15, 1, 5, Controlled landfill Uncontrolled landfill Incineration with energy recovery Incineration without energy recovery Sorting and composting Selective collection Source: MMA. Also, as with the concession business, local governments are increasingly using private companies in this area, as they can bring in specialist knowledge and a commitment to quality. Integrated water cycle management is a key factor in the efficient use of water resources. Improving water supply and savings, along with pricing systems to promote its efficient use, make this a sector with high potential, particularly for the few companies such as Valoriza that can call on high levels of knowledge and experience in areas such as desalination, water treatment, reuse and integrated water cycle management. As a result, the trend for public authorities to outsource these various activities is a clear growth driver for the sector. At the same time, European Directive 91/271/EEC, the A.G.U.A. program and the approval in July 27 of the Spanish National Water Quality Plan: Treatment and Purification all provide for investment by different tiers of government and will help expand this sector.

94 92 AnNUAL report 27 / BUSINESS AREAS INVESTMENT IN WATER POLICY TOTAL AND MANAGEMENT CENTERS (Millions of euros) 2, 1, 1, ,474 1, ,836 1,72 1,792 1,85 (*) (*) (*) (*) Central govt. Regions State companies TOTAL (*) Estimate. TENDERS: LAUNCHED AND AWARDED WATER POLICY (Millions of euros) 4, 3, 2, 1, 1, , , ,49.4 1, , , , , , ,66. (*) 2,34. (*) Tenders launched Tenders awarded (*) Estimate.

95 AnNUAL report 27 / BUSINESS AREAS 93 In multi-services, Valoriza operates in three areas: - Facilities Management: which covers building management, including notably Itínere s hospital concessions, the healthcare sector which is expanding thanks to the Dependency Law and large cleaning contracts (hospitals, metro, etc.). - Services areas: roadside, hospital and transport system catering services. - Infrastructure Concessions: including those owned by the Group (Itínere) and full-service maintenance contracts with central and regional government. In the energy sector, regulation, both Spanish and European, has played a key role in promoting renewable energy and cogeneration. Guaranteeing stable and adequate remuneration for the various technologies has been a decisive factor in the growth of renewables and combined cycle power plants. This regulatory framework, notably Spain s Royal Decree 661/27 governing electricity generation under the special regime, has been used by the various tiers of government to develop alternative energy with the aim (approved by the EU) of supplying 2% of Spain s electricity from renewable sources by 22. An example of this firm institutional support is the increase in remuneration that followed the implementation of RD 661/27 for energy generated with technologies such as biomass (4%) and solar thermal (17%). STRATEGY The company is focused on winning new contracts and the organic growth of its activity. In 27, the backlog was over 1 billion euros, equivalent to unrealized EBITDA of around 1.1 billion euros. These orders suggest rapid increases in both revenue and EBITDA, with a corresponding widening of margins. Over the year, the company contributed EBITDA of more than 68 million euros and cash flow above 61 million to the Group. Valoriza s good fit with the Group s other activities, and the possibility of attracting new clients for different business lines, offers healthy prospects for future growth.

96 94 AnNUAL report 27 / BUSINESS AREAS ACTIVITIES Valoriza Gestión is the parent company for SyV Group s services divisions, providing general management services for this area. Valoriza Group has demonstrated strong and dynamic growth in recent years with a corporate restructuring and the acquisition of a number of service sector companies. In 27, it continued its strategy of growth and diversification in this field of activity, ending the year with revenue of million euros, a 23.6% increase on 26, and attributable profit up by 59.2% to 28.6 million euros. Operations for the next few years are underpinned by an order book that stood at 1,124.3 million euros at year-end 27. Environment services Sufi is the parent for a group of companies active in the environmental services sector. Revenue in 27 was over 25 million euros, up by 18%. Between them, Sufi s subsidiaries cover the whole of the waste management cycle: waste collection, recycling and energy recovery; recovery of by-products from waste water purification by drying and composting of residues, development of green spaces and environmental restoration and landscaping as well as management of municipal services (road cleaning, gardening, regulated parking, infrastructure maintenance, etc.). The services offered cover all phases of a project from project management and construction to operation and maintenance of the facilities. Contracts won in 27 included the following: Municipal services A 2-year concession for road cleaning and collection of solid urban waste for the Alcalá de Henares municipality in Madrid, worth 278 million euros. Street cleaning and solid urban waste collection in the city of Soria. The contract is for 8 years and has a total budget of million euros. Cleaning and collection of urban waste in the port of La Cruz (Tenerife) under a 1-year contract worth 14.8 million euros.

97 AnNUAL report 27 / BUSINESS AREAS 95 Collection, transport and treatment of solid urban waste for the Mancomunidad de Urgellet (Lérida), with a budget of 9.7 million euros. Vehicle clamping on public roadways and full-service management of the municipal pounds in the towns of Bilbao, Manises (Valencia), Getafe and Parla (Madrid) and Puertollano (Ciudad Real). Waste collection and cleaning for the Mancomunidad de Montearagón (Albacete), under a 1-year contract worth 3.4 million euros. Park and garden maintenance in Ciudad Real under a 2-year contract worth 2.5 million euros. Park and garden maintenance in Parla (Madrid) under a 2-year contract worth 1.8 million euros. Park and garden maintenance for Castro Urdiales (Cantabria) and Puerto Real (Cádiz). Waste treatment Construction and operation of a waste treatment and energy recovery plant in Mataró (Barcelona). This 15-year concession entails total estimated investment of 44 million euros. It will achieve 14 MW of power, be able to handle 19, tons a year and serve a population of over 5, in the Maresme region. Construction and operation of the construction and demolition waste treatment plant at Arganda del Rey (Madrid), awarded by the Madrid Regional Environmental Management and Development Department under a 2-year contract extendible for another 2. The plant will have annual capacity to treat 45, tons and will serve a population of 35,. Construction design and execution of the urban waste transfer station in the town of San Sebastián de los Reyes (Madrid). Underground burial of the solid urban waste collection containers in the towns of Málaga, San Fernando (Cádiz), San José de Valderas, Alcorcón and Fuenlabrada (Madrid), under a contract worth more than 8 million euros. Upgrade of the Las Calandrias (Jerez) plant and the Berrueco (Cádiz) landfill site for Empresa de Gestión Medioambiental, S.A., a 2.5 million euro contract. Environmental recovery and hydrological upgrade work at the Carvajal stream (Málaga).

98 96 AnNUAL report 27 / BUSINESS AREAS Landscaping work along the widened section of the A-334 between Fines and Albox (Almería) for Gestión de Infraestructuras de Andalucía, S.A. Reconditioning of the Cuña Verde wooded area along O Donnell street for the Madrid municipality. Enhanced access to the Orellana reservoir (Badajoz) for the Council for Agriculture and the Environment of the Extremadura regional government. Construction, operation, maintenance and operation of the Covilha biomass station (Portugal). Forecast revenue over the lifetime of this contract is 14 million euros. The most significant projects currently in operation in Spain are: Waste treatment Urban waste recycling and composting plant for Jerez de la Frontera and the northern Cádiz province (Las Calandrias). Population served: 488,.

99 AnNUAL report 27 / BUSINESS AREAS 97 Integrated urban waste treatment plant for Miramundo (Cádiz). Population served: 5,. Includes a recycling and composting plant for organic matter. Sorting plant for waste from selective collection of inorganic waste at Molins de Rei. Population served: 11,. Integrated urban waste treatment plant for Los Hornillos (Valencia). Includes a sorting, recycling, composting and biomethane production plant for organic matter. Treatment capacity: 49, tonnes/year. Gomecello (Salamanca). Includes a sorting, recycling, composting and biomethane production plant for organic matter. Treatment capacity: 17, tonnes/year. Plant for sorting of urban waste and production of biomethane from organic matter for Salto del Negro (Phase II). Gross waste treatment capacity: 75, tonnes/year. Biomethane capacity: 55, tonnes/year. Energy recovery facilities and landscaping of Valdemingómez landfill site (Madrid). Recycling, biomethane and composting plant at La Paloma, Madrid. Total treatment capacity: 25, tonnes/year. Municipal services Management of public services for urban solid waste collection, road cleaning and transport of products to the municipal transfer depot at Boadilla del Monte (Madrid). Management of public services for urban solid waste collection and road cleaning for the city of Cádiz. Management of public services for urban solid waste collection and road cleaning for the city of Toledo. Management of public services for urban solid waste collection and road cleaning for the city of Lleida. Management of public services for urban solid waste collection and road cleaning in Parla (Madrid). Management of public services for urban cleaning and collection and transport of solid waste for the municipality of Majadahonda (Madrid).

100 98 AnNUAL report 27 / BUSINESS AREAS Management of services for collection and transport of urban solid waste and urban cleaning in Lalín (Pontevedra). Management of road cleaning services for the district of Moratalaz (Madrid). Management of tree conservation services on Madrid s roads. Management of the upkeep of green areas in the city of Cádiz. Management of the upkeep of green areas in the city of Alcalá de Henares in Madrid. Management of 6, parking spaces in the regulated road parking scheme for the municipality of Madrid. Management of maintenance and upkeep services for public lighting, pipes and paving in Boadilla del Monte (Madrid). Treatment plants for wastewater residues Management, operation and maintenance of the following thermal drying plants for waste water treatment residues, with a combined cycle power system generating thermal energy from the drying process and electricity for the plant s own supply and the sale of any surplus. - Sant Adriá del Besós (Barcelona). Drying capacity: 25, tonnes/year of dehydrated waste. 24 MW of installed generating capacity.

101 AnNUAL report 27 / BUSINESS AREAS 99 - ERAR Sur (Madrid). Drying capacity: 29, tonnes/year of dehydrated waste. Installed generating capacity: 25 MW. - ERAR Butarque (Madrid). Drying capacity of 11, tonnes/year of dehydrated waste. Installed generating capacity: 18 MW. - Reocín waste treatment plant (Cantabria). Drying capacity: 53, tonnes/year. Installed generating capacity: 12 MW The most significant projects currently in operation in Portugal are: Hidurbe Gestión de Residuos: Company specialized in waste treatment it is a wholly owned subsidiary of Somague Ambiente, based in Oporto (Portugal). Procesl Environmental and hydraulic engineering: environmental consultancy 7% owned by Somague Ambiente and based in Lisbon (Portugal). Viveros de Falcao: a company specialized in the design, construction and maintenance of green and sporting space, based in Lisbon (Portugal). Operation, maintenance and upkeep services at the Meia Serra urban waste treatment center serving the island of Madeira. Includes an incinerator with an annual capacity of 17, tonnes, and an installed generating capacity of 1 MW. Operation, maintenance and upkeep services at the Lipor urban waste treatment plant (Oporto). Treatment capacity: 7, tonnes/year of gross waste.

102 1 AnNUAL report 27 / BUSINESS AREAS Water This covers two areas: engineering, development, construction, maintenance and operation of plants of all kinds (drinking water and water purification plants, desalination plants, tertiary treatments and recycling, industrial waste water treatment, agricultural treatment, etc.) and the integrated management of the water cycle under public sector concessions or in the private sector. Revenue from this activity was million euros in 27, up by 75.5% on the previous year. Valoriza Agua in Spain and AGS in Portugal and Brazil are responsible for the integrated water cycle management, serving more than 2.6 million people in these three countries. Valoriza Agua is one of the leading water management companies in Spain with a portfolio of contracts, in Spain and abroad, worth in excess of 5.8 billion euros. Noteworthy activities include the 25-year concession to manage the water cycle end-to-end in the city of Santa Cruz de Tenerife,

103 AnNUAL report 27 / BUSINESS AREAS 11 through its associate Emmasa, serving a population of 22, with daily consumption of 55,m 3. The facilities managed in Santa Cruz include a seawater desalination plant that produces 21,m 3 of fresh water every day. Valoriza Agua also owns 33% of Emalsa, the company that manages the full drinking water distribution cycle in Las Palmas de Gran Canaria. Emalsa supplies more than 4, people and has, among other facilities, a seawater desalination plant with daily output capacity of 8,m 3. Valoriza Agua also has a contract for integrated water cycle management in Alcalá de Henares (Madrid). This division won the following noteworthy contracts in 27: Sewage system cleaning and inspection in the city of La Coruña. It also led the winning consortium for the construction and operation of the water supply and treatment infrastructure in the town of Pioz (Guadalajara) under the Special Infrastructure Plan, with a 25-year concession and revenue estimated at 75 million euros. In Portugal, AGS supplies a population of over 1.3 million across 15 towns, including Setúbal, Cascáis, Gondomar and Barcelos. In Brazil AGS also runs two concessions in São Paulo state. Sadyt is a Valoriza Agua subsidiary and a leading player in the field of desalination and water treatment. In 27 it continued its vigorous expansion both in Spain and internationally. Current developments of significance at this subsidiary include the new water treatment plant in the city of Lugo, the new La Reguera waste water treatment facility in Madrid, the largest desalination plant to use reverse osmosis technology, under the umbrella of the Ministry for the Environment s A.G.U.A. program: Águilas-Guadalentín, and expansion of the Abrera drinking water plant in Barcelona, making it the world s largest reverse electro-dialysis (RED) plant with capacity of 2,m 3 a day. Sadyt is also an international leader in reverse osmosis plants and is currently developing projects in Algeria and Tunisia with combined daily production capacity of 5,m 3.

104 12 AnNUAL report 27 / BUSINESS AREAS INTEGRATED WATER CYCLE MANAGEMENT CONCESSIONS End of Order book Population Hm 3 distributed/ Concession % Valoriza contract (millions of euros) served Clients treated EMALSA Las Palmas, Santa Brígida EMMASA Santa Cruz de Tenerife AGUAS DE ALCALÁ Alcalá de Henares SPAIN TRATAVE Guimaraes, Santo Tirso, Vila Nova AGUAS DE GONDOMAR Gondomar AGUAS DE CASCAIS Cascais AGUAS DE BARCELOS Brcelos AGUAS DO SADO Setubal AGUAS DA FIGUEIRA Figueira da Foz FAGAR Faro AGUAS DO MARCO Marco do Canaveses AGS PAZOS DA FERREIRA Pazos da Ferreira AGUAS DE ALENQUER Alenquer TAVIRAVERDE Tavira AGUAS DA SERRA Covilha AGUAS DE CARRAZEDA Carrazeda PORTUGAL SANEAR São Paulo AGUAS DE MANDAGUAHY Mandaguahy-São Paulo BRAZIL TOTAL 33% 243 1,9 398, 162, % 231 1,63 223,2 7, % ,4 45,5 24 2,82 822,6 277,9 77 4% , % , 74, % , 17, 24 75% , 4, 4 4% , 61,3 12 4% , 38,2 6 33% , 32, % , 24,5.5 9% , 7,1 1 4% , 22,2 5 32% , 27, 3.4 1% , % , 5,2.5 2,942 1,342, 439, % , % , , ,88 2,596,6 716,

105 AnNUAL report 27 / BUSINESS AREAS 13 Multi-services Multi-services covers a variety of labor-intensive services: facilities management, management of motorway service stations, healthcare services, motorway maintenance, etc. The wide variety of activities in this area means that rather than setting out the divisions activities as a whole it is easier to describe each business individually. Valoriza Facilities Facilities management: includes internal and external cleaning of all types of public and private sector buildings, facilities maintenance, renovation, security, gardening, reception, internal and external mail, healthcare and ancillary services of all kinds. In 27, Valoriza Facilities continued to consolidate its presence throughout Spain with major contracts, winning 146 million euros of business from third-parties and 5 million euros from other SyV Group companies. The unit ended the year with revenue of 18.9 million euros. Most of the companies work is in the sectors of healthcare, culture, education, industrial transport, singular buildings and social services. In a departure from its normal business, it is also contracted to manage the Parla and Coslada hospitals in Madrid. Contracts won in 27 included: -service maintenance, cleaning and porter services for a number of secondary schools in Castilla-La Mancha, a contract worth 17.3 million euros. -service management (cleaning, maintenance, internal logistics, sterilization, security and catering) for the Parla and Noreste hospitals under a contract worth 5 million euros over 27 years. Cleaning services for the San Cecilio Hospital in Granada and subsidiary sites, with a total budget of 13.6 million euros over 2 years. Cleaning services for the Zaragoza town council s municipal social and cultural facilities. Cleaning, collection and transfer of waste at the Meixoeiro Hospital (Vigo), with a 5 million euro budget under a 2-year contract. Train cleaning at the TALGO factory in Las Matas (Madrid), with a 4.2 million euro budget under a 2-year contract. Extension of the facility cleaning services contract for the Catalan healthcare administration for a value of 3.2 million euros.

106 14 AnNUAL report 27 / BUSINESS AREAS Cleaning, maintenance and upkeep of the Bilbao municipal sports centers. Cleaning for the specialist medical clinics of Torrejón de Ardóz and Alcalá de Henares (Madrid). -service facility maintenance for the Reina Sofía Museum (Madrid). Electrical and mechanical maintenance of the control buildings of Repsol YPF s technology center laboratories. Maintenance and upkeep of Oviedo University s facilities. -service maintenance of the prison systems of Aragón, La Rioja and Navarra. Extension to the cleaning contract for the facility cleaning services contract for the Catalan regional government s citizen attention service. Cafestore Cafestore provides catering and management for motorway service stations. It had 27 service stations operating in Spain at end-27, having opened two during the year at Quintanilla de la Urz, Zamora (15.4 km along the A-52 on the right), and Agost in Alicante (696 along the Autopista del Mediterráneo AP-7, on both sides). All the service stations are located on main traffic routes. Cafestore is now Spain s third largest operator in this sector with 27 revenue of 26.6 million euros. In 27, it continued with work that will lead to the opening of the following facilities: The cafeteria at the Moncloa transportation hub (Madrid). The cafeteria at the Plaza Elíptica transportation hub (Madrid). Restaurant and cafeteria at the Parla Hospital (Madrid). Restaurant and cafeteria at the Hospital del Noreste (Madrid). La Roda service station (Albacete) on the A-3 between Madrid and Valencia. Albacete service station, also on the A-3, Madrid-Valencia. Pruvia service station in Asturias, on the motorway between Oviedo and Gijón. Lopidana service station in Álava, 35km along the N-1.

107 AnNUAL report 27 / BUSINESS AREAS 15 Valoriza Infraestructuras Valoriza Infraestructuras is responsible for the maintenance and upkeep of over 2,3km of motorway. It hires out its services to Itínere s concessions, the Spanish government s Directorate General of Highways and various regional governments. In 27, it had the following maintenance contracts: Road upkeep and winter management services for the AP-68 Autopista Vasco Aragonesa Bilbao-Zaragoza toll motorway. As part of 5/5 consortium with Iberpistas. The contract is for 4 years. Upkeep and maintenance of the AP-9 Autopista del Atlántico toll motorway, under a 3-year contract. Reconstruction work on the Viella Tunnel (Lérida), scheduled for completion in 1 months. Upkeep and operation of the A-2 motorway between kilometer marks 53 and 64 in a 5/5 joint venture with Stachys for 2 years. Upkeep and winter road management services for the AP-1 toll motorway over a 4-year period. Conservation work and operation of the N-141, from Bossost to the French border (Lérida), for 2 years. Upkeep and maintenance of the A Coruña-Carballo and Puxeiros-Vall Miñor motorways, for a 3-year period. Road upkeep and winter management services for the A-1 Arlanzón motorway along the Santo Tomé-Burgos stretch for 3 years. Technical service assistance for a series of conservation initiatives on the A-92 and A-92G in a 5/5 consortium with Prinur, from the Sacyr Vallehermoso Group. Upkeep services for various roads in the western region of Jaén in a 5/5 consortium with Prinur, from the Sacyr Vallehermoso Group. In 27, Valoriza Infraestructuras won a maintenance, upkeep, operation and technical assistance contract for five dams in Cáceres and Guadalajara opening up the prospect of expansion into the highly specialized dam market. This new activity is in addition to its existing canal upkeep work in Estremera and Aranjuez.

108 16 AnNUAL report 27 / BUSINESS AREAS Energy Valoriza Energía is responsible for the energy activities of the SyV Group. Its activities are focused on the development, construction and operation of energy efficiency and renewable energy projects. Valoriza Energía and its subsidiary Iberese have now completed more than 8 combined cycle power and biomass generation plants for private sector clients, with a total installed generating capacity of 8MW. Key achievements for Valoriza Energía in 27 included: Construction work began on the integrated biomass treatment complex in Linares (Jaén). This facility will carry out end-to-end management of olive oil by-products, extracting the oil, treating and reducing the waste via cogeneration, with the residue fueling a biomass energy recovery plant with installed capacity of 4MW. The company signed an agreement for the construction and commissioning of the silicon, mono- and multi-crystalline wafer facility in Puertollano. Valoriza Energía currently operates the following core business lines: Combined cycle power Preliminary energy studies, design, construction, start-up and operation. Valoriza Energía has, through Iberese, delivered more than 8 combined cycle power plants on a turnkey basis and is the majority shareholder and operator, via subsidiaries, of five combined cycle plants for drying olive oil waste: Olextra, a 16.9 MW combined cycle plant located in Villanueva de Algaidas, in the province of Málaga. Compañía Energética La Roda, a combined cycle plant with three gas powered engines and installed capacity of 8.2MW, in La Roda de Andalusia, Seville province. Compañía Energética Pata de Mulo, a 17.5MW combined cycle plant in Puente Genil, Córdoba province. In June the company inaugurated an olive waste treatment and reduction cogeneration facility in Puente del Obispo (Jaén). The plant has 3 natural gas powered engines and installed capacity of 24.9MW.

109 AnNUAL report 27 / BUSINESS AREAS 17 Construction of a similar installation was completed in 27 in Las Villas, Villanueva del Arzobispo (Jaén). COGENERATION PLANTS Capacity Power generated Primary energy Plant (MW) (MWh/year) saving (teo/year) Las Villas (Villanueva del Arzobispo, Jaén) , 13,4 Puente del Obispo (Puente del Obispo, Jaén) , 6,7 Pata de Mulo (Puente Genil, Córdoba) , 8,5 Olextra (Villanueva de Algaidas, Málaga) , 8,5 La Roda (Seville) , 3, In operation , 4,1 Iliturgitana de Orujos (Linares, Jaén) 25. 2, 6,7 Under construction 25. 2, 6,7 TOTAL , 46,8 In addition to these existing plants, Valoriza Energía is in the process of building five combined cycle plants for an investment of 127 million euros with potential capacity of 11MW. When complete these will save the equivalent of more than 7, tonnes of oil in primary energy. The main advantages of these plants can be summarized as follows: Saving of primary energy. Reduction in CO 2 emissions. Minimization of atmospheric emissions of particulates during the process of thermal drying of oil waste. Improved quality of product outputs from this drying process thanks to the prevention of benzopyrenes. Maintenance and creation of stable skilled jobs in rural areas.

110 18 AnNUAL report 27 / BUSINESS AREAS Biomass Valoriza Energía covers all aspects of the biomass energy recovery process, from sourcing the resources to transport logistics, storage and the ultimate energy recovery. Regarding biomass sources, Valoriza Energía is developing new energy crops with high yields for biomass production. In 27 it sowed more than 16 hectares of land and harvested over 17, tonnes of biomass suitable for conversion into energy. It is also investing in the development of new machinery for collecting waste left after agricultural and forestry work that will make it worthwhile to collect, transport and convert it into energy. Along with these actions to source and refine biomass for use as energy, Valoriza Energía in association with the Andalusian Energy Agency has developed a prototype automotive system for the collection and processing of timber biomass. The first commercial units will be delivered in 28. In the field of biomass applications and power generation, Valoriza Energía is the majority shareholder and operator, via subsidiaries, of two biomass power plants: Extragol is an 8.5MW electricity generating plant fueled by biomass located in Villanueva de Algaidas, in the province of Málaga. Biomasas de Puente Genil, is a 9.8MW biomass power plant in Puente Genil, Córdoba province. BIOMASS PLANTS Capacity Power generated Primary energy Plant (MW) (MWh/year) saving (teo/year) Extragol (Villanueva de Algaidas, Málaga) Biomasas de Puente Genil (Córdoba) In operation Bioeléctrica de Linares (Jaén) Under construction TOTAL , 25, , 27, , 52, , 25, , 25, , 78,

111 AnNUAL report 27 / BUSINESS AREAS 19 Solar power In solar energy, Valoriza Energía operates both thermo-electric and photo-voltaic technologies. Thermo-electric solar power: Valoriza Energía is currently developing a 15MW project using parabolic trough concentrators. This development is part of a strategic deal which aims to build 5MW capacity in association with the Israeli multinational Solel, a world leader in the design and manufacture of components for solar power parks. Photovoltaic solar energy: Valoriza Energía s plans include the development of photovoltaic installations close to its combined power or biomass plants, to take advantage of the electricity transmission infrastructure already in place. This would also minimize operating and maintenance costs by having skilled staff ready to hand. Wind power In 27, Valoriza Energía took part in wind power projects in the Canaries (via a tender process where Valoriza Energía bid for three wind farm with a total capacity of 3.4MW) and Extremadura, where it bid via a 5% owned subsidiary, Desarrollos Eólicos Extremeños, to build eight wind farms with a combined installed capacity of 265MW. Both regions are currently studying the bids presented and will reach a decision in 28. Similarly, Valoriza Energía, via Ibervalor de Energía Aragonesa, a 5/5 joint venture with Ibercaja is developing wind farms in Aragón, a region that plans to develop a second wind power plant in 28. Other activities Valoriza has a 5% share in Suardíaz Servicios Marítimos de Barcelona, S.L., a company dedicated to the commercial operation of all types of vessels and the general transport of goods. It currently provides bunkering services to Repsol in the port of Barcelona.

112 GROUP SHAREHOLDINGS Repsol YPF

113 ANnUAL report 27 / GROUP SHAREHOLDINGS 111

114 112 ANnUAL report 27 / GROUP SHAREHOLDINGS REPSOL YPF SyV Group has pursued a strategy of diversifying its investments over recent years. As part of this strategy in light of the growth potential and strategic importance of the energy sector currently and, particularly, in the near future, it decided in 26 to acquire a substantial holding in Repsol YPF. Repsol YPF is Spain s biggest company by revenue and fourth-largest by profit. Its core business is oil and gas extraction, transport, refining and distribution of derivative products. It is also Spain s biggest oil company and one of the top ten private oil concerns in the world, the leading exploration and production company in the Atlantic basin, the leading service station chain in Spain and in Argentina with 7, facilities world-wide, the leading distributor of Liquefied Petroleum Gas (LPG) in Spain and Latin America and the fourth-largest in the world, and the biggest chemicals company in Spain and Portugal. It also has a big stake in the gas and electricity markets of Spain, Europe and Latin America via its 3.8% holding in Gas Natural. This investment is now worth 6,525.5 million euros. Sacyr Vallehermoso is Repsol YPF s biggest shareholder with 2.1% of the capital and three seats on the board. It is also represented on the Executive and Investment Committees. Although SyV Group sees the Repsol acquisition as a strategic move, the 2,1% stake has generated positive financial returns, with a 2,1% increase in the 27 dividend to 1 euro per share and a 39% increase in the interim dividend for 28. Profit was 3,188 million euros, a 2% rise on 26. Profit from refining and marketing rose by 27% and that from gas and electricity by 1%. Debt was reduced by 2.5% to an all-time low and finance expense was cut by 53.5%.

115 ANnUAL report 27 / GROUP SHAREHOLDINGS 113 Besides these historic results, there are several key developments that, along with the new Strategic Plan, should ensure a promising future for Repsol YPF. Development of the I/R field in Libya. A new deep-water find in Brazil. Gas discovery in Bolivia. Start-up of production from the deep-water Genghis Khan field in the Gulf of Mexico. Gas discovery in Peru. Gas supply contract in Mexico. Integrated gas project in Angola. Increase in the methane tanker fleet. 3,2 million euro investment in the Cartagena refinery. Sale of 14.9% of YPF to the Petersen Group. Agreement to sell Chilean service stations. Sale for 815 million euros of the Torre Foster to Caja Madrid. Sale of 1% of CLH to Deutsche Bank. Rated best oil company for Corporate Social Responsibility in the 27 Good Company Rankings. Rated A+ in the Global reporting Initiative s CSR report.

116 STOCK MARKET PERFORMANCE AND FINANCIAL COMMUNITY Capital Evolution Stock market Shareholder and investor relations

117 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY 115

118 116 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY CAPITAL EVOLUTION At December 31, 27, Sacyr Vallehermoso s share capital was fully subscribed and paid. It comprised 284,636,213 shares with a nominal value of 1 euro each, of a single class and series, all conferring equal rights. The table shows the share capital of the company at the balance sheet date for the past three years. CAPITAL EVOLUTION (Euros) Share capital No. of shares 284,636, ,636, ,636, ,636, ,47, ,47,634 DIVIDENDS Dividends paid to shareholders in 27 were as follows:

119 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY 117 DIVIDEND PER SHARE (Euros) Diviend per share Shares Outstanding Treasury shares TOTAL % 7/ % 284,636, ,636, ,47,634.% 1,459,743 2,518,68 169,991, ,257,22 114,234, % In 27: The third interim dividend charged against 26 profit was paid at.15 euros gross per share, on January 16, 27. The dividend had been approved at the Board meeting of December 13, 26. At its meeting of March 7, 27, the Board agreed to pay a further dividend of.185 euros per share, which would be the final dividend in respect of 26, subject to approval of shareholders at the General Meeting. This dividend was paid on April 13, 27. At its meeting on July 11, 27, the Board resolved to pay an initial interim dividend against 27 profit of.15 euros gross per share. The dividend was paid on July 17, 27. On October 3, 27, the Board agreed to pay the second interim dividend for 27 of.15 euros gross per share. This was paid on October 11, 27. In 28 the following dividend payments were made: After its meeting of December 5, 27, the Board agreed to pay the third interim dividend charged against 27 profit of.15 euros per share. This dividend was paid on January 11, 28. A final interim dividend was approved by the company s Board on March 12, payable on April 8, 28, at.15 euros per share. Sacyr Vallehermoso remains firmly committed to its policy of maximizing shareholder remuneration. Total agreed remuneration for shareholders charged against 27 is 17 million euros, a 2.3% increase on the previous year s dividend.

120 118 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY STOCK MARKET The international environment in 27 was decidedly complex, with rising inflation and interest rates in the USA and the sub-prime crisis and credit crunch in the financial sector which then spilled over into other markets. All of this was reflected in leading international indices: the US Dow Jones and German DAX stock market indices fell in response to the downturn in the economic cycle. SHARE PRICE PERFORMANCE IN 27 Shares outstanding Trading volumes (thousands of euros) Trading days Closing price 26 (euros) Closing price 27 (euros) High (22/1/7) (euros) Low (17/9/7) (euros) Weighted average share price (euros) Average daily volume (shares outstanding) Liquidity (shares traded/capital) 284,636,213 6,114, ,39.6 * Ajusted for 1x27 bonus share issue held June 26. The Spanish market was also affected by the economic cycle. The rise in its benchmark index, the Ibex 35, slowed for the first time in recent years and its value was affected throughout the year. SyV Group shares ended the year at 26.6 euros. Continuing its policy of remunerating shareholders and investors, the company paid a.6 euro dividend per share in 27. Earnings per share in 27 were 3.3 euros, an increase of 74.5% on the previous year.

121 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY 119 The dividend yields was 2.7% compared to 1.1% in 26. There were contributions to growth from every one of the company s business areas as well as from its investment holdings. SACYR VALLEHERMOSO PRICE PERFORMANCE (Euros) TRADING VOLUMES (Thousands of euros) 6,, 4,, 2,,

122 12 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY At end-27, SyV s market capitalization stood at 7,571.3 million euros. SyV Group s share price was affected by the negative environment that enveloped the international construction sector. Sacyr Vallehermoso shares performed as follows in 27: PRICE PERFORMACE (Base 1= ) G. Mad SyV Ibex 35 Const. Index %

123 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY 121 STOCK MARKET DATA Share price (euros) High Low Average Close of year Average daily trading volume (No. of shares) Annual volume (thousands of euros) Sharesoutstanding at year end Market capitalization (thousand of euros) Weighting in the IGBM (%) EPS (euros/share) Cash flow per share (euros/share) Dividend (euros/share) Price / book value (x) Pay out (% attributable profit) Dividend yield (%) P/E P/ Cash flow % 7/ (11.19%) % % (4.89%) 675,39 858,168 89,16 (21.31%) 6,114,659 6,472,1 3,613,499 (5.52%) 284,636, ,636, ,47,634.% 7,571,323 12,88,63 5,654,99 (4.89%) (58.87%) % % % (48.25%) (31.25%) % (66.13%) (66.52%)

124 122 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY SHAREHOLDER AND INVESTOR RELATIONS Sacyr Vallehermoso gives high priority to relations and continuous contact with its shareholders and other investors, providing maximum transparency on the company s market and its future plans. COMMITMENT TO SHAREHOLDERS Maximise returns on shares Solidity and liquidity of the group on the stock market Maintain an active communication policy Ensure simultaneous and transparent information on its activities COMMUNICATION CHANNELS Meetings with shareholders or investors Meetings with analysts To achieve this, the group s central Investor Relations department maintains direct relationships with analysts and investors and is diligent in communicating with minority shareholders. In line with its policy to fully exploit information technologies the company seeks constantly to extend the coverage available via its internet communications channel, posting all corporate and financial information likely to affect the company s development. This information is made immediately available in the shareholder and investor information section of the corporate website ( for public notification in three languages Spanish, English and French.

125 ANnUAL report 27 / STOCK MARKET PERFORMENCE AND FINANCIAL COMMUNITY 123 Shareholders can contact Sacyr Vallehermoso in the following ways: Telephone shareholder helpline: Website: relacionesinversores@gruposyv.com accionistas@gruposyv.com COMUNICATIONS WITH SHAREHOLDERS 27 s + calls Meetings Meetings Phone contact Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. The most frequent questions received by the Investor Relations department relate to: - The General Shareholders Meeting - Dividends - Results - The capital increase SyV Group considers information transparency to be a core principle with a determining influence on policy. Specifically, it guarantees that information communicated to shareholders, to the markets where its shares are listed and to their regulators is accurate and complete, gives an accurate picture of its financial position and the results of its operations and is notified within the deadlines and in compliance with the other requirements laid down in the applicable standards and general principles of market functioning and good governance to which the company is committed. Finally, there is the quarterly Shareholder newsletter En Contacto, which summarizes the most important information affecting the company, its financial performance, trends in its business areas and in the share price, etc. At the moment, the print run for this newsletter is 5 and anyone interested can access it online via the webpage or subscribe to receive it regularly by .

126 BUSINESS PERFORMANCE Income Statement Consolidated Balance Sheet

127 AnNUAL report 27 / BUSINESS PERFORMANCE 125

128 126 AnNUAL report 27 / BUSINESS PERFORMANCE INCOME STATEMENT RESULTS ANALYSIS Group revenue in 27 was 5,759.8 million euros, a 23% increase on 26. EBITDA was 1,277.4 million euros, up by 19.9% giving an EBITDA margin of 22.2%, one of the highest in the sector for Spain and Europe. Net operating profit increased 6.6% to million euros. Net attributable profit was million euros, an increase of 74.5%. The financial statements at December 31, 27, include the following additions to the scope of consolidation: Concession company Europistas, in which SyV Group bought a 5% stake in November 26, by the full consolidation method. On December 31, 27, Itínere was merged with Europistas at a share exchange ratio of 16 Europistas shares, with a nominal value of.49 euros each, for every 5 Itínere shares, with a nominal value of 1 euro each. The new company was listed as from January 28 as Itínere Infraestructuras, S.A. In the interests of clarity, as the vehicle used for the takeover of Europistas was excluded from the merger it has been consolidated in the holding company rather than in the Itínere-Europistas sub-group.

129 AnNUAL report 27 / BUSINESS PERFORMANCE 127 CONSOLIDATED INCOME STATEMENT (Thousands of euros) Revenue Other income Total operating income External and operating income EBITDA Depreciation and impairment of goodwill Trade provisions NET OPERATING INCOME Net finance expense Exchange differences Profit from associates accounted for using the equity method Provisions for financial investments Gains on financial instruments at fair value through profit and loss Gain/loss on assets at fair value through profit or loss Proceeds from disposal of non-current assets Profit before taxes Income tax Consolidated profit for the year Attributable to minority interests NET ATTRIBUTABLE PROFIT % 7/6 5,759,81 4,684, % 257,269 25, % 6,17,79 4,89, % (4,739,673) (3,824,632) 23.9% 1,277,46 1,65, % (318,9) (27,19) 53.9% (39,762) 3, , ,92 6.6% (976,627) (358,852) 172.2% 22,575 6, % 951,82 181, % (7,994) (1,35) 491.9% 1,453 15,538 (9.7%) (2,2) 2,516 16,619 14, % 923, , % 26,918 (161,184) 95, , % (4,36) (19,455) (77.6%) 946, , % The activity of energy group Repsol YPF, in which SyV has held a 2.1% stake since Q4 26, is consolidated by the equity method. Figures for December 31, 27, include profit (consolidated according to the equity method) corresponding to SyV Group s 33% stake in Eiffage, for the full-year 27 while those for December 26 only include Eiffage s results over 9 months from March to December 26. The 33% holding was acquired between November 25 and March 26.

130 128 AnNUAL report 27 / BUSINESS PERFORMANCE REVENUE At December 31, 27, Group revenue was 5,759.8 million euros, up by 23% on 26. The detail by business area is as follows: REVENUE (Thousands of euros) Construction Sacyr Somague Residential development (Vallehermoso) Concessions (Itínere - Europistas) Property management (Testa) Services (Valoriza) Holding co. and adjustments REVENUE % 7/6 3,346,163 2,62, % 2,619,483 1,958,8 33.7% 726,68 662,19 9.8% 1,4,23 1,246, % 558,72 417, % 263, ,169 5.% 633,8 512, % (441,349) (363,268) 21.5% 5,759,81 4,684, % Construction revenue grew by 27.7% to 3,346.1 million euros at December 31, 27. A positive performance by construction in Portugal was accompanied by a sharp rise of 33.7% in other markets where the Group operates, particularly Spain. The extensive order book of 6,22.1 million euros at December 31 (+6.8%) guarantees substantial growth in future. Total contracted sales, indicative of Vallehermoso s business activity in the year, stood at 1,34.5 million euros, a 21.1% reduction on the same period the previous year. In concessions, 33.8% growth in revenue reflects the growth in traffic on the Group s motorway concessions, higher tolls, the merger with Europistas and, to a lesser extent, the openings of the Palma-Manacor motorway (in January 27), the Viastur motorway (in May 27), the Plaza Elíptica transportation hub in Madrid and two hospitals in the Madrid region (Hospital de Parla and Hospital del Noreste). In the property management business, Testa increased revenue by 5% to million euros. The rise was due to a combination of a 1% rise in average occupancy rates, a 2.1% rise in average unit rental income and a 1.7% increase in the lettable area over the period as new buildings came onstream. These included an

131 AnNUAL report 27 / BUSINESS PERFORMANCE 129 old people s home in Barcelona with 5,791m 2 and a 19,893 m 2 office building in Madrid at number 48 calle Josefa Valcárcel. There was also the full-year contribution in 27 from the Tour Adriá (Paris) and 141 Brickell Avenue (Miami), which in 26 contributed only 9 months rent (from March). The services business recorded a major increase in revenue of 23.6% to million euros thanks to organic growth in Valoriza s operations, particularly its water and multi-services arms. Geographically, 78.9% of revenue was generated in Spain and 13.8% in Portugal by Somague s construction business and Valoriza s services. The remaining 7.3% came mainly from Chile, including revenue from concessions in operation and works on these concessions, and from rental of Testa s buildings in Miami and Paris. REVENUE GEOGRAPHICAL REGION (Thousands of euros) Spain Portugal Chile Other countries REVENUE % 7/6 4,545,58 3,683, % 799, , % 227,79 112, % 187, , % 5,759,81 4,684, %

132 13 AnNUAL report 27 / BUSINESS PERFORMANCE GROSS OPERATING PROFIT (EBITDA) The Group s gross operating profit was up by 19.9% on the previous year, to 1,277.4 million euros. The cash-generating businesses (construction, property development) and the holding company contributed 44.8% of the consolidated operating profit at million euros and grew by 14.1% over the year. Businesses generating recurrent income (infrastructure concessions, property management and services) contributed 74.8 million euros or 55.2% of total EBITDA, a 25% increase on the previous year. EBITDA (Thousands of euros) Construccion (Sacyr - Somague) Residential development (Vallehermoso) Holding co. and adjustments Cash-generating activities Concessions (Itínere - Europistas) Property management (Testa) Services (Valoriza) Recurrent activities EBITDA % 7/6 226,521 19, % 357,242 33, % (11,148) (19,19) 572,615 51, % 425,79 32, % 21,522 19, % 68,56 52, % 74, , % 1,277,46 1,65, % DEPRECIATION Depreciation over the year, including technical depreciation and depreciation of revertible assets came to million euros. Of this, 68.8% corresponds to recurrent activities (infrastructure concessions, property management and services) which take up the largest share of capital employed. Itínere accounted for 45.8% of SyV Group s total depreciation charge (145.3 million euros), Testa for 14.1% (44.6 million euros) and Valoriza for 8.9% (28.2 million euros). NET FINANCE EXPENSE Net finance expense was million euros, compared to million euros in 26. This increase was mainly due to the direct cost of financing the acquisitions of Eiffage and Repsol YPF.

133 AnNUAL report 27 / BUSINESS PERFORMANCE 131 PROFIT FROM COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD This includes the share in profit from Repsol YPF (2.1% of 3,188 million euros in 27), which added million euros to profit for the year, and the share in Eiffage s profit at December 31 of 1 billion euros, which added million euros to profit. PROFIT FOR THE YEAR Total profit before tax was million euros. Attributable profit for the year was 946.4, an increase of 74.5%. REVENUE BACKLOG The backlog of future revenue was 87,33.2 million euros, mostly due to Itínere which contributed 75.4% of the total. The operating profit implied by this backlog is 54,694.2 million euros. The backlog has increased by 12% since December 31, 27, notably thanks to: Tenders won in civil engineering and building construction, which were responsible for a 6.8% increase in the order book. New concessions awarded in the year: Murcia Airport, the N-6 Galway-Ballinasloe motorway, the M-5 Dublin ring road and the Arlanzón motorway. In property management, the transfer of hospitals from Testa to Itínere, which reduced the rental portfolio but, due to the corresponding increase in Itínere s backlog, had no impact on the Group s overall order book. Organic growth in services. REVENUE BACKLOG (Thousands of euros) Sacyr (Order book) Somague (Order book) Vallehermoso (Pre-sales) Itínere - Europistas (Revenue Portfolio) Testa (Rents to end of lease) Valoriza (Order book) REVENUE BACKLOG 27 Revenue % EBITDA* EBITDA 5,92,33 7.1% 359, , % 52,974 2,36, % 62,237 65,861, % 5,24,52 2,935, % 2,342,196 1,124, % 1,96,414 87,33, % 54,694,199 * EBITDA margin at December 27.

134 132 AnNUAL report 27 / BUSINESS PERFORMANCE CONSOLIDATED BALANCE SHEET BALANCE SHEET The balance sheet total rose by 2,65.2 million euros, a 9.8% increase on the previous year-end. New investment in French construction firm Eiffage, to maintain SyV s 33% stake after Eiffage held a capital increase reserved for its employees, and in Itínere, to raise SyV s stake from 91% to 1%, accounted for 222 million euros of this rise. Activity in operational areas increased investment by a net 2,428.2 million euros. This notably included: Concessions that came onstream or were under construction which added million euros of new assets. Investments of million euros recorded on the balance sheet of the services business. The 93.2 million increase in PP&E in progress in the property management business was mostly due to the work completed on the Torre SyV. The detail and movements in the main balance sheet items in the year are as follows.

135 AnNUAL report 27 / BUSINESS PERFORMANCE 133 CONSOLIDATED BALANCE SHEET (Thousands of euros) Non-current assets Intangible assets Investments properties Concessions projects Property, plant and equipment Financial assets Other non-current assets Goodwill Current assets Inventory Receivable Financial assets Cash TOTAL ASSETS/LIABILITIES Equity Equity Minority interests Non-current liabilities Debt Financial instruments at fair value through profit or loss Provisions Other non-current liabilities Current liabilities Debt Trade payables Trade provisions Other current liabilities % 7/6 21,331,247 2,28,44 1,32,843 29,358 37,651 (17,293) 2,577,78 2,63,411 (52,632) 5,618,612 5,298,226 32,386 1,124, ,49 13,867 11,236,463 1,442,82 793,643 12,273 26,655 (14,382) 471,44 329, ,254 8,445,768 7,98,442 1,347,326 4,622,812 4,418,87 24,724 2,494,886 1,84, , ,7 129,4 53,66 1,146, 71, ,44 29,777,15 27,126,846 2,65,169 3,492,365 3,8,9 483,465 2,771,161 2,194,8 577,81 721,24 814,82 (93,616) 18,577,651 17,972,773 64,878 16,987,15 16,372, ,842 7,265 14,112 (6,847) 64,548 6,323 4,225 1,518,733 1,526,75 (7,341) 7,76,999 6,145,173 1,561,826 4,66,531 2,824,389 1,242,143 2,963,737 2,777, , , ,18 3,672 51, , ,396

136 134 AnNUAL report 27 / BUSINESS PERFORMANCE NON-CURRENT ASSETS Property assets include 2,577.8 million euros for buildings in operation. Intangible assets include another million euros of rental assets managed under long-term concessions. At year-end work in progress on the Torre SyV and other buildings under construction for future use as rental properties was valued at million euros with another million euros from combined cycle and power generation projects, water and sewer pipes and other projects for the services business. It also includes 38.7 million euros of investments-in-progress on future development land, recorded under Property, Plant and Equipment. Property, Plant and Equipment also includes machinery, technical facilities and other tangible assets. Total cumulative depreciation was million euros. Sacyr Vallehermoso Group invested 6,871.2 million euros in concession projects in operation (mainly motorways) and 55.7 million in projects under development. Non-current financial assets include 1,177.6 million euros of investments accounted for using the equity method, including investment in French construction firm Eiffage, Repsol YPF and the concession companies of Itínere-Europistas. It also includes million euros most of which corresponds to operating grants paid on various of Itínere s Chilean concessions and million euros of deferred taxes. Most of the remainder is debts owed by Group companies. CURRENT ASSETS Working capital totaled 8,445.8 million euros, a 19% increase on 26. The increase was due in part to a 24.7 million euro increase in inventories as a result of the expansion of construction activity. EQUITY Equity at December 31, 27, was 3,492.4 million euros, a 16.1% increase on the previous year. Of this, 2,771.2 million euros (79.3%) was attributable to shareholders of SyV and million euros to the Group s minority shareholders. At December 31, 27, the company had million shares outstanding with a nominal value of 1 euro.

137 AnNUAL report 27 / BUSINESS PERFORMANCE 135 DEBT At December 31, net debt owed by the parent company was 1,656 million euros, 8.3% of total Group debt for the period. Net debt on capital intensive activities was 9,911 million euros, 5.2% of the total. Detail of SyV Group net debt at December 31, 27: NET DEBT (Millions of euros) Corporate Capital Intensive activities Testa Itínere-Europistas Vallehermoso Other Eiffage Repsol YPF SyV Participaciones Other (been issued at December 31) NET DEBT Asset value* LTV 1,646 1, ,911 8,739 11, % 2,93 1,97 4, % 4,596 3, ,222 2,936 6, % 8,169 7,725 1, % 1,713 1,75 2, % 5,248 5,175 5, % ,7 23.6% 19,726 18,357 * Market value calculated as: stock market price at 31/12/7, independent valuation or internal company valuation. Parent company debt Parent company debt includes Sacyr Vallehermoso s 8 million euro commercial paper program of which 187 million euros had been issued at December 31. It also includes around 1,5 million euros of debt corresponding to the company s stake in the Repsol YPF and Eiffage acquisitions lent by financial institutions on the same terms as the principal loans for these acquisitions (see other activities). Capital intensive activities Debt used to finance transport concessions was 4,594.4 million euros in December 27. Of this 85% is project finance, lent with no additional recourse due to the visibility of cash-flows from the concessions. Debt on the rental property business takes the form of mortgages and leases totaling 2,93.3 million euros to finance

138 136 AnNUAL report 27 / BUSINESS PERFORMANCE assets either in operation or under development. Based on the last-known independent appraisal of assets, at December 31, 27, loan-to-value is 44.2% only. In property development, 3,222.1 million euros of net debt was used to finance inventory on Vallehermoso s balance sheet with a book value of 4,78.9 million euros. Pre-sales, i.e. homes where contracts have already been signed but have not been delivered to the customer, were 2,35 million euros, covering 73.2% of this debt. Other activities The 7,75 million euros of bank loans used to finance the Eiffage acquisition mature in 4 years. Interest is charged at a spread over Euribor (depending on the term) of.34% to.58%. These loans are collateralized by Eiffage shares, the market value of SyV s stake at December 31, 27, being 2,91 million euros.

139 AnNUAL report 27 / BUSINESS PERFORMANCE 137 The investment in Repsol YPF was financed through a 5,175 million euro bullet bank loan maturing in 6 years and paying interest of Euribor plus 1bp. The main guarantees on this loan were a pledge of Repsol YPF shares. This must be increased if the value of the shares falls to less than 15% of the outstanding value of the loan in the first 2 years (115% thereafter), by the pledge of additional liquid listed shares or cash. The market value of SyV s stake in Repsol at December 31, 27, was 5,956 million euros. The 1 euro per share dividend announced by Repsol YPF for 27 covers the servicing of the entire debt incurred for the acquisition of the stake (acquisition vehicle + parent company). Also recorded under this item is the 57 million euro debt to fund the acquisition of Europistas maturing November 28 or redeemable early if Itínere is floated. Finally, the structured debt in other businesses largely corresponds to the financing of Valoriza s environmental projects and concessions.

140 CORPORATE RESPONSIBILITY Strategy Activities

141 ANnUAL report 27 / CORPORATE RESPONSIBILITY 139

142 14 ANnUAL report 27 / CORPORATE RESPONSIBILITY STRATEGY SyV has committed itself to a corporate responsibility (CR) management model, designed to create long-term value for all our stakeholders and to contribute to progress in society and the economy through sustainable development. SyV s commitment to the principles of sustainable development requires ongoing attention not only to financial results but also to the impact of our activities on wider society and the environment, and to maintaining a fluid and healthy relationship with all the groups who are affected by our actions, our stakeholders. We want to ensure that all our corporate decisions, in whatever area of our business, should be taken in a responsible manner, always taking into account their potential social and environmental impacts. As the company s highest corporate body, the Board of Directors is responsible for defining and driving the Group s Corporate Responsibility strategy. In line with the Board s desire to take forward its socially responsible management model, and implement it at all levels of the organization, in September 27, SyV Group created a Corporate Responsibility Department. The new department, which reports directly to central management, is charged with implementing the CR decisions taken by the Group s corporate bodies and management, advising on decision-making and coordinating activities in this field among the different organizational units that make up Sacyr Vallehermoso Group.

143 ANnUAL report 27 / CORPORATE RESPONSIBILITY 141 Sacyr Vallehermoso considers corporate social responsibility as an ineluctable commitment to our stakeholder groups: the company must conduct itself with respect and always take account of the rights, needs and wishes of the different groups with which we interact. CORPORATE RESPONSIBILITY PLAN At the end of 27, having created its Corporate Responsibility Department, Sacyr Vallehermoso began work on a CR Plan that will set the strategic lines for the organization over coming years and guide CR policy within SyV Group and all its component companies. Although the timescale of the Plan has yet to be finalized, it is likely to cover the period from CORPORATE PURPOSE Sacyr Vallehermoso is a fully integrated group diversified in the areas of construction, property development, concessions, property management and services. The Sacyr Vallehermoso group is a sound company and a benchmark in all its fields of activities thanks to the work, scrupulousness and professional integrity of all the people who make up the company. The Sacyr Vallehermoso group s greatest strengths are the effort and dedication of its entire staff. All the Group s businesses are carried out in strict compliance with high quality standards. The Sacyr Vallehermoso group and all its businesses are continually developing and moving ahead, and are always open to new initiatives and improvements. The professional loyalty and dedication of all those who work for Sacyr Vallehermoso have made the Group one of Spain s top companies. Future progress is best guaranteed by preserving the Sacyr Vallehermoso group s distinguishing features: the pleasure it takes in work well done, continuous customer service, its pride in well-finished details, and timely and accurate compliance with deadlines and budgets.

144 142 ANnUAL report 27 / CORPORATE RESPONSIBILITY ACTIVITIES For Sacyr Vallehermoso corporate responsibility (CR) is a strategic priority, as underlined by the fact that it is the Board of Directors, the top governing body in the company, that is responsible for defining, taking forward and monitoring the Group s CR strategy. Characteristic features of the company s approach to CR include the following: Sacyr Vallehermoso is committed to meeting the expectations of all the people who work for it, paying particular attention to their well-being and their personal and professional development. Respect for the environment is a key issue in the execution of our activities. The aim is to meet the needs of customers and users ensuring maximum levels of satisfaction at the same time as putting in place the mechanisms to minimize any negative environmental impacts from our activities. SyV Group is dedicated to leading and taking forward its commitment to quality, mobilizing the resources required to achieve excellence and putting in place appropriate measures to ensure that the quality policy is implemented in practice by all its employees. Sacyr Vallehermoso considers itself an integral part of the communities it serves, and as such is always committed to driving and promoting their economic, social and cultural development.

145 ANnUAL report 27 / CORPORATE RESPONSIBILITY 143 The SyV group's Code of Ethics and Conduct governs the conduct of the SyV group and its employees both in the fulfilment of their duties and in their relationships with third parties and the market. It has created a range of channels for dialogue to ensure fluid and two-way communications with its different stakeholders. Through these, SyV ensures all these groups are kept informed in a transparent manner and receive all the information they require to meet their needs and expectations. In 27 specifically, the Group has taken a number of strategic steps to reinforce our CR practice. These notably included: The creation of a Corporate Responsibility Department within the organization. The new department is charged with implementing the CR decisions taken by the Group s corporate bodies and management, advising on decision-making and coordinating activities in this field among the different organizational units that make up Sacyr Vallehermoso Group. Signature of the United Nations Global Compact, under which Sacyr Vallehermoso commits to supporting and implementing the ten ethical principles that underpin this initiative, based on Universal Declarations and Agreements, in the fields of human rights, labor, the environment and anti-corruption. Publication of the first Annual Corporate Responsibility Report for the Group (covering 27), setting out an integrated vision of its economic, social and environmental performance.

146 144 ANnUAL report 27 / CORPORATE RESPONSIBILITY

147 ANnUAL report 27 / CORPORATE RESPONSIBILITY 145 Work is also underway on a number of other objectives for the near future, notably: Development of a Corporate Responsibility Plan. This will set the strategic lines for the organization over the coming years and direct CR within SyV Group and all its component companies. Creation of the Sacyr Vallehermoso Foundation, the Group s vehicle for channeling and organizing its social development actions. The core aim in creating the foundation is to maximise the impact of the company s social actions for its beneficiaries and contribute more effectively to the well-being and the development of the environment in which the Group conducts its activities. The firm commitment to a CR management model is already bearing fruit. We are, nonetheless, well aware that all the progress made so far has merely taken us the first few steps along a road where, in the spirit of continuous improvement, there will always be further progress to make. For more information on our management of CR see our Annual Corporate Responsibility Report, available on the Group s website at: (

148 CONSOLIDATED FINANCIAL STATEMENTS SACYR VALLEHERMOSO GROUP (SACYR VALLEHERMOSO, S.A. AND SUBSIDIARIES) Consolidated Financial Statements and Consolidated Management Report For the year ended December 31, 27 and Auditors Report on the Financial Statements

149 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 147

150

151

152 15 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheet at December 31 (Thosands of euros) ASSETS A) NON-CURRENT ASSETS I. Property, plant and equipment II. Concession projects III. Investment property IV. Other intangible assets V. Goodwill VI. Investments accounted for using the equity method VII. Non-current financial assets VIII. Deferred tax assets IX. Other non-current assets B) CURRENT ASSETS I. Inventories II. Trade and other receivables - Trade receivables - Receivable from employees - Current tax assets - Other receivables and provisions III. Current financial assets IV. Cash and cash equivalents V. Other current assets TOTAL ASSETS Note ,331,247 2,28,44 4 1,124, ,49 5 5,618,612 5,298, ,577,78 2,63, ,358 37, ,44 329, ,177,611 9,579, ,597 56, , ,77 12,273 26,655 8,445,768 7,98, ,622,812 4,418, ,474,238 1,831,266 1,913,563 1,429,575 1,296 1,45 355,796 2,57 23,583 2, ,7 129,4 1,146, 71,596 2,648 9,489 29,777,15 27,126,846 Notes 1 to 35 and the Appendix are an integral part of the Consolidated Balance Sheet.

153 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 151 Consolidated Balance Sheet at December 31 (Thosands of euros) EQUITY AND LIABILITIES A) EQUITY Note ,492, ,8,9 ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 2,771,161 2,194,8 I. Issued capital 284, ,636 II. Share premium 145, ,435 III. Reserves 1,932,911 1,437,816 IV. Translation differences (357,534) (127,414) V. Profit for the year attributable to equity holders of the parent 946, ,27 VI. Interim dividend paid in the year VII. Treasury shares MINORITY INTERESTS B) NON-CURRENT LIABILITIES (127,54) (53,136) 721,24 18,577,651 (88,6) 814,82 17,972,773 I. Deferred income 16 44,66 4,758 II. Provision for contingencies and expenses 17,1 64,548 6,323 III. Interest-bearing loans and borrowings 18 16,987,15 16,372,263 IV. Trading and other payables ,65 417,843 V. Deferred tax liabilities , ,862 VI. Payables to associates C) CURRENT LIABILITIES 1,941 7,76,999 1,724 6,145,173 I. Interest-bearing loans and borrowings 18 4,66,531 2,824,389 II. Trade and other payables 21 3,468,479 3,155,52 - Suppliers 2,963,737 2,777,122 - Payable to employees 19,73 13,485 - Current tax liabilities 215, ,49 - Income tax payable 27,17 51,35 - Other payables 243, ,811 III. Payables to associates 6,137 3,12 IV. Trade provisions 17,2 165, ,18 TOTAL EQUITY AND LIABILITIES 29,777,15 27,126,846 Notes 1 to 35 and the Appendix are an integral part of the Consolidated Balance Sheet.

154 152 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Consolidated Income Statement for the year ended December 31 (Thosands of euros) INCOME STATEMENT Revenue Own work capitalized Other operating income Government grants released to the income statement Other income OPERATING INCOME Change in inventories Supplies Employee benefits expense Depreciation and amortization expense Impairment of goodwill Change in trade provisions Other operating costs Other losses OPERATING COSTS OPERATING PROFIT Revenue from other marketable securities and asset-backed loans Other interest and similar income Net finance costs taken to investments Exchange gains FINANCE REVENUE Interest and similar expenses Change in value of financial instruments at fair value through profit or loss Change in provisions for financial investments Change in provisions for intangible assets, PP&E and securities portfolio NET FINANCE COSTS RESULTADO FINANCIERO Share of profit of associates Gain on disposal of assets PROFIT BEFORE TAX Income tax expense PROFIT FOR THE YEAR Attributable to: MINORITY INTERESTS EQUITY HOLDERS OF THE PARENT Basic earnings per share (euros) Diluted earnings per share (euros) Note ,759,81 4,684, ,39 113,846 98,853 64,765 21,2 2,394 14,6 6,76 6,17,79 4,89, ,15 916, (3,8,565) (3,167,962) 34 (7,394) (582,61) (317,163) (27,19) 8 (1,737) (39,762) 3, (1,26,57) (984,746) (13,294) (6,112) (5,98,335) (4,28,455) 918, ,92 12,363 6,674 79,377 64,855 31,238 14,717 22,575 6, ,553 93,7 (1,99,66) (445,99) 1,453 15,538 (7,994) (1,35) (2,2) 2,516 (1,18,167) (428,395) 25 (962,614) (335,388) 9 951,82 181, ,619 14, , , ,918 (161,184) 95, ,662 (4,36) (19,455) 946, , Notes 1 to 35 and the Appendix are an integral part of the Consolidated Income Statement.

155 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 153 Consolidated Cash Flow Statement Sacyr Vallerhermoso Group at 31 December (Thosands of euros) Net profit Minority interests Depreciation, amortization and provisions Government grants released to the income statemet Share of loss of investments accounted for using the equity method Net finance costs Income tax paid Cash flows from operating activities Trade and other receivables, work executed pending certification Inventories Trade payables Other current assets and liabilities Net change in working capital Net cash flows from operating activities Capital expenditure Purchase of property, plant and equipment and intangible assets Investment in real estate projects Investment in concession projects Purchase of financial assets Acquisition of subsidiaries, net of cash acquired Proceeds from disposal of property, plant and equipment and intangible assets Proceeds from disposal of real estate projects Proceeds from disposal of concession projects Proceeds from disposal of financial assets Interest and dividends received Net cash flows used in investing activities Proceeds from borrowings Repayment of borrowings Interest paid Change in loans and borrowings Dividends paid Acquisition/sale of treasury shares Change in equity finance Other sources of financing Other sources of financing Net cash flows from financing activities CHANGE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at January 1 Cash and cash equivalents at December 31 Note , , ,36 19, , ,12 16 (21,2) (2,394) 9 (951,82) (181,563) , ,86 12 (26,918) 161,184 1,34,243 1,74,815 (682,734) (236,475) 13 (24,725) (97,589) 186,615 89,143 (12,361) (324,581) (713,25) (722,52) 591,38 352,313 (683,236) (1,76,649) 4 y 7 (343,478) (332,662) 6 (9,57) (738,416) 5 (51,645) (522,212) 11 (435,95) (9,28,698) 8 (613,478) 4 y 7 71,54 58, ,741 79, , , ,859 36, ,838 (683,236) (1,76,649) 3,623,245 17,391,161 (1,99,275) (6,72,997) (956,592) (41,54) 757,378 1,259,66 (175,1) (118,844) (66,79) 259,345 (241,8) 14,51 12,24 289,736 12,24 289, ,62 1,689, ,44 335,561 71, ,35 1,146, 71,596

156 154 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement of Change in equity Sacyr Vallehermoso Group at 31 December (Thosands of euros) Issued capital Share premium Reserves Translation differences Profit for the year Interim dividend Dividends Treasury shares TOTAL Minority interests TOTAL EQUITY Income and expense recognized directly in equity Change in Total income and Translation Cash flow equity of expense recognized 25 differences hedge associates directly in equity 274, ,435 1,98,127 36,187 (33,798) 2,389 31,357 (158,771) (158,771) 413,126 (81,298) (46,96) 1,834,258 (158,771) 36,187 (33,798) (156,382) 145,491 (6,454) 2,37 (4,84) 1,979,749 (165,225) 38,557 (33,798) (16,466) Issued capital Share premium Reserves Translation differences Profit for the year Interim dividend Dividends Treasury shares TOTAL Minority interests TOTAL EQUITY Income and expense recognized directly in equity Change in Total income and Translation Cash flow equity of expense recognized 26 differences hedge associates directly in equity 284, ,435 1,437,816 4,422 66,334 16,756 (127,414) (19,415) (21,75) (23,12) 542,27 (88,6) 2,194,8 (19,415) 4,422 (144,371) (123,364) 814,82 (1,418) 2, ,8,9 (2,833) 42,75 (144,371) (122,499)

157 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 155 Total income Profit for and expense Appropriation Interim Capital Treasury Chg in scope the year for the year of profit dividend increase shares and other 26 1, , ,435 2, ,893 (1,165) 2,999 27,573 1,437,816 (158,771) (127,414) 542,27 542,27 (413,126) 542,27 81,298 (88,6) (88,6) 32,935 46,96 542,27 385,825 (88,6) 67,959 27,573 2,194,8 19,455 15, , ,82 561,662 41,196 (88,6) 67, ,531 3,8,9 Total income Profit for and expense Appropriation Interim Capital Treasury Chg in scope the year for the year of profit dividend increase shares and other , ,435 16,756 4,949 (9,223) (3,387) 1,932,911 (23,12) (357,534) 946, ,389 (542,27) 946,389 88,6 (127,54) (127,54) 52,658 (53,136) (53,136) 946, ,25 (127,54) (62,359) (3,387) 2,771,161 4,36 5,225 (98,841) 721,24 95, ,25 (127,54) (62,359) (12,228) 3,492,365

158 156 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 1. ACTIVITIES OF SACYR VALLEHERMOSO The Sacyr Vallehermoso Group is composed of the parent company Sacyr Vallehermoso S.A. and its subsidiaries and associates, as shown in Appendix I. The Company Sacyr Vallehermoso, S.A. arose from the takeover and merger of Grupo Sacyr, S.A. (absorbed company) by Vallehermoso, S.A. (absorbing company) in 23, as explained in the 23 financial statements. The registered office of the parent company is Paseo de la Castellana, It is recorded in the Madrid Mercantile Register volume 1884, folio 165, sheet M-33841, entry 677, with tax identification number A The corporate purpose of Sacyr Vallehermoso is: a. The acquisition and construction of urban property for rent or sale. b. The renovation of buildings for rent or sale. c. The purchase and sale of land, building rights and urban development lots, as well as management of planning administration, land transformation, development of urban infrastructure, division into lots, subdivision, compensation etc. and, in some cases, subsequent construction of buildings, participating in the whole urban development process up to the construction stage. d. The administration, conservation, maintenance and generally all activities related to the provision of urban facilities and services and the associated land, infrastructure, civil engineering works and other urban facilities provided for by local planning stipulations, either on the Company s own behalf or for third parties and the provision of architecture, engineering and urban development services relating to the urban lots or their ownership. e. The provision and marketing of all types of services and supplies relating to communications, IT and power distribution networks, as well as collaboration in the marketing and brokerage of insurance, security and transport services, either on the Company s own behalf or for third parties. f. The management and administration of shopping centers, senior citizens homes and centers, hotels and tourist and student residences. g. The contracting, management and execution of all kinds of construction work in its widest sense, both public and private, including roads, water supply projects, railways, port facilities, buildings, environmental projects and in general all activities related with construction. h. The acquisition, administration, management, promotion, leasing or other form of operation, construction, purchase and sale of all kinds of property, as well as advising on all the above transactions. i. The development of all kinds of engineering and architectural projects, as well as the management, oversight and advice on execution of all kinds of construction work. j. The acquisition, holding, exploitation, administration and sale of all kinds of securities on the Company s own behalf, except for those activities reserved by law, and specifically by the Spanish Securities Market Law (Ley del Mercado de Valores), for other types of institution. k. The management of public water supply, sewer systems and sewage works. l. The management of all kinds of concessions, subsidies and administrative permits for projects, services and combinations of the central, regional, provincial and local governments awarded to the Company and investment in the capital of companies responsible for such concessions. m. The operation of mines and quarries and marketing of their products. n. The manufacture, purchase, sale, import, export and distribution of equipment, installation of construction equipment and materials or other items for use in construction. o. The acquisition, exploitation by whatever means, marketing, licensing and sale of all types of intellectual property and patents and other forms of industrial property. p. The manufacture and marketing of prefabricated and other products related to construction. q. The management of subsidiaries and investees in Spain and abroad via a presence on their corporate bodies. The strategic and administrative management of subsidiaries

159 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 157 in Spain and abroad, and the provision of legal, economic, accounting, personnel, budgeting, financial, tax, marketing and IT consultancy services to these companies. The Company may also carry out any of the above activities comprising its corporate purpose indirectly through equity investments in other institutions or companies sharing similar or identical corporate purposes. Appendix 1 provides a list of the subsidiaries comprising the Sacyr Vallehermoso Group, their activities, registered address and percentage ownership. 2. SCOPE OF CONSOLIDATION AND SUBSIDIARIES For the purposes of preparing the accompanying consolidated financial statements, the companies comprising the Group were classified into the following groups: Subsidiaries: legally independent companies that form a single economic unit with a unified management strategy over which the Group exercises effective direct or indirect control. Jointly controlled entities: companies that are jointly managed in cooperation with one or more other companies that have an equity interest in the venture. Associates: companies in which one or more Group companies has significant influence on management. a) Consolidated companies 26 Companies included within the scope of consolidation for these financial statements are presented in Appendix I, along with details of the percentage ownership held by the Group, the consolidation method used, their group classification, activity, registered office and other information. All subsidiaries have been fully consolidated, which involves the inclusion in the balance sheet of Sacyr Vallehermoso, S.A. of all the assets, rights and liabilities of the subsidiary, and the inclusion in its income statement of all the income and expenses used to determine the subsidiaries results. Jointly controlled entities have been consolidated using proportionate consolidation, which involves the inclusion in the balance sheet of Sacyr Vallehermoso, S.A. of all the assets, rights and liabilities of the jointly controlled entity and in its income statement of all the income and expenses used to determine the joint controlled entity s results in proportion to the Group s interest in the jointly controlled entity. Associates have been accounted for using the equity method. Under this method, the investment in the associate is initially recognized at cost and its carrying amount is then increased or decreased to reflect the share of the results of operations of the associate for the year subsequent to its acquisition. The annual financial statements of the most significant Group companies are audited by the following statutory auditors: ERNST & YOUNG: Sacyr Vallehermoso, S.A., Sacyr Vallehermoso Participaciones, S.L., Sacyr Vallehermoso Participaciones Mobiliarias, S.L., Sacyr, S.A.U., Scrinser, S.A., Cavosa Obras y Proyectos, S.A., Sacyr Italia, S.P.A., Autovía del Noroeste Concesionaria de la Comunidad Autónoma de la Región de Murcia, S.A. (Aunor), Avasacyr S.L.U., Itínere Infraestructuras, S.A., Enaitínere, S.A.U., Sociedad Concesionaria de Palma Manacor, S.A., ENA, S.A., Autopistas del Atlántico, S.A. (Audasa), Autopista Astur Leonesa (Aucalsa), Autopistas de Navarra (Audenasa), Autoestradas de Galicia, Viastur Concesionaria del Principado de Asturias, S.A., Autovía del Turia Concesionaria de la Generalitat Valenciana S.A., Autovía del Eresma Concesionaria de la Junta de Castilla y León, S.A., Autovía de Barbanza Concesionaria de la Xunta de Galicia, S.A., Intercambiador de Transportes de Moncloa, S.A., Intercambiador de Transportes de Plaza Elíptica, S.A., Autopista de Guadalmedina Concesionaria Española, S.A., Neopistas, S.A.U., Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (Emmasa), Valoriza Gestión S.A.U., Valoriza Energía, S.L.U., Valoriza Agua, S.L., Valoriza Conservación de Infraestructuras, S.A., Cafestore, S.A.U., Valoriza Facilities, S.A.U., Iberese, S.A., Compañía Energética de Pata de Mulo, S.L., Secaderos de Biomasa, S.L., Olextra, S.A., Extragol, S.L., Compañía Energética de la Roda, S.L., Compañía Energética de Puente Genil, S.L., Empresa Mixta de Aguas de Las Palmas, S.A. (Emalsa), Sufi, S.A., Omicrón, S.A., Sacyr Chile, S.A., Constructora ACS-Sacyr, S.A., Cavosa Chile, S.A., Gesvial, S.A., Operadora del Pacífico, S.A., Itínere Chile, S.A., Sociedad Concesionaria del Elqui, S.A., Sociedad Concesionaria de Los Lagos, S.A., Sociedad Concesionaria de Rutas del Pacífico, S.A., Sociedad Concesionaria de Autopista Nororiente, S.A., Vallehermoso División de Promoción, S.A.U., Tricéfalo, S.A., Testa Residencial, S.L.U., Trade Center Hotel, S.L.U.,

160 158 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Testa Inmuebles en Renta, S.A., Parking Palau, S.A., Tesfran, S.A., Pazo de Congresos de Vigo, S.A., Hospital de Parla, S.A., Hospitalaria del Noreste, S.A., Somague SGPS, Grupo Somague Engenharia, Grupo Somague Itínere, Grupo Somague Ambiente and Grupo Somague Inmobiliaria. PRICE WATERHOUSE COOPERS: Autovía Vasco Aragonesa S.A. (Avasa), Sociedad Concesionaria de Litoral Central, S.A., Sociedad Concesionaria de Vespucio Sur, S.A., Constructora Sacyr-Necso, S.A., Constructora Necso-Sacyr, S.A. and Europistas Concesionaria Española, S.A., ECT AUDITORES: Ideyco, S.A.U., Prinur, S.A.U., Sadyt, S.A.U., Febide, S.A. and Prosacyr Ocio, S.L., DELOITTE & TOUCHE: Bardiomar, S.L. and Repsol YPF, S.A. KAUFMAN ROSSIN & CO.: Brickell Office and Testa American Corporation. ATTEST CONSULTING, S.L.: Aguas de Toledo, A.I.E. SRL: Nodo di Palermo, S.P.A. and SIS, S.P.A. PRICEWATERHOUSECOOPERS AUDIT AND SALUSTRO REYDEL (MEMBER OF KPMG INTERNATIONAL): Joint audit of Eiffage, S.A. Constructoras Andaluzas con Centroamérica, S.A., Constructora San José-La Caldera, S.A., Constructora del Magdalena Medio, S.A., Sacyr Colombia, Jabalquinto, S.L., Dareling, S.A., Echezarreta, AIE, Millinium Energía, S.A., Sociedad para la Valoración de la Biomasa de Andalucía, S.A., Comercializadora de Oficinas en Pozuelo, S.A., Castellana Norte, S.A., Proixample, S.A., Nova Icaria, S.A., Biothys, S.L., Enerbut, S.A., Agroconcer, S.A., Servicio de Estacionamiento Regulado, S.L., Residuos de Construcción y Demolición Navalcarnero, S.A., Tecnologías Medioambientales Asturianas, S.L., Sílices Turolenses, S.A. and Ainco Canarias Internacional, S.L. were excluded from the scope of consolidation as the overall impact of their inclusion was insignificant. The most significant balance sheet and income statement items of consolidated foreign companies are translated into euros using the year-end exchange rate method. The rates applied were as follows: 26 Exchange rate Average Year-end Dollar / euro Chilean peso / euro Brazilian real / euro Mozambique metical / euro Angolan Kwanza / euro Cape Verde escudo / euro Macao pataca / euro , , Companies included within the scope of consolidation for these financial statements are presented in Appendix I, along with details of the percentage ownership held by the Group, the consolidation method used, their group classification, activity, registered office and other information. All subsidiaries have been fully consolidated, which involves the inclusion in the balance sheet of Sacyr Vallehermoso, S.A. of all the assets, rights and liabilities of the subsidiary, and the inclusion in its income statement of all the income and expenses used to determine the subsidiaries results. Jointly controlled entities have been consolidated using proportionate consolidation, which involves the inclusion in the balance sheet of Sacyr Vallehermoso, S.A. of all the assets, rights and liabilities of the jointly controlled entity and in its income statement of all the income and expenses used to determine the jointly controlled entity s results in proportion to the Group s interest in the jointly controlled entity. Associates have been accounted for using the equity method. Under this method, the investment in the associate is initially recognized at cost and its carrying amount is then increased or decreased to reflect the share of the results of operations of the associate for the year subsequent to its acquisition. In the event of changes recognized directly in the associate s equity, the Group recognizes its share of these changes directly in its own equity. The annual financial statements of the most significant Group companies are audited by the following statutory auditors: ERNST & YOUNG: Sacyr Vallehermoso, S.A., Sacyr Vallehermoso Participaciones, S.L., Sacyr Vallehermoso Participaciones Mobiliarias, S.L., Sacyr, S.A.U., Scrinser, S.A., Cavosa Obras y Proyectos, S.A., Sacyr Italia, S.P.A.,

161 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 159 Autovía del Noroeste Concesionaria de la Comunidad Autónoma de la Región de Murcia, S.A., Avasacyr S.L.U., Itínere Infraestructuras, S.A., Enaitínere, S.A.U., Sociedad Concesionaria de Palma Manacor, S.A., ENA, S.A., Autopistas del Atlántico, S.A. (Audasa), Autopista Astur Leonesa (Aucalsa), Autopistas de Navarra (Audenasa), Autoestradas de Galicia, Viastur Concesionaria del Principado de Asturias, S.A., Autovía del Turia Concesionaria de la Generalitat Valenciana S.A., Autovía del Eresma Concesionaria de la Junta de Castilla y León, S.A., Autovía de Barbanza, Intercambiador de Transportes de Moncloa, S.A., Intercambiador de Transportes de Plaza Elíptica, S.A., Autopista de Guadalmedina Concesionaria Española, S.A., Neopistas, S.A.U., Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (Emmasa), Valoriza Gestión S.A.U., Valoriza Energía, S.L.U., Valoriza Agua, S.L., Valoriza Conservación de Infraestructuras, S.A., Cafestore, S.A.U., Valoriza Facilities, S.A.U., Iberese, S.A., Compañía Energética de Pata de Mulo, S.L., Secaderos de Biomasa, S.L., Olextra, S.A., Extragol, S.L., Compañía Energética de la Roda, S.L., Compañía Energética de Puente Genil, S.L., Empresa Mixta de Aguas de Las Palmas, S.A. (Emalsa), Sufi, S.A. Sacyr Chile, S.A., Constructora ACS-Sacyr, S.A., Cavosa Chile, S.A., Gesvial, S.A., Operadora del Pacífico, S.A., Itínere Chile, S.A., Sociedad Concesionaria del Elqui, S.A., Sociedad Concesionaria de Los Lagos, S.A., Sociedad Concesionaria de Rutas del Pacífico, S.A., Sociedad Concesionaria de Autopista Nororiente, S.A., Vallehermoso División de Promoción, S.A.U., Tricéfalo, S.A., Testa Residencial, S.L.U., Trade Center Hotel, S.L.U., Testa Inmuebles en Renta, S.A., Parking Palau, S.A., Tesfran, Pazo de Congresos de Vigo, S.A., Hospital de Parla, S.A., Hospitalaria del Noreste, S.A., Somague SGPS, Grupo Somague Engenharia, Grupo Somague Itínere, Grupo Somague Ambiente, Grupo Somague Inmobiliaria, Compañía Energética las Villas, S.L., Compañía Energética de Linares, S.L., Compañía Energética Puente del Obispo,S.L., Europistas Concesionaria Española, S.A., Autopistas de Bizkaia, S.A., Túneles de Artxanda, S.A., AP-1 Europistas Concesionaria del Estado, S.A., Autovía del Arlanzón, S.A., Itínere Ireland Limited, N-6 Operations Ltd, N-6 Concession Holding Ltd, N-6 Concession Ltd, M-5 Concession Holding Ltd, M-5 Concession Ltd, Itínere Infraestructura LLC, Itínere North America LLC and Sociedad Concesionaria Aeropuerto de la Región de Murcia, S.A. PRICE WATERHOUSE COOPERS: Autovía Vasco Aragonesa S.A. (Avasa), Sociedad Concesionaria de Litoral Central, S.A., Sociedad Concesionaria de Vespucio Sur, S.A., Constructora Sacyr-Necso, S.A., Constructora Necso-Sacyr, S.A., y, Autopista Madrid del Sur, S.A., Autopistas de Levante, S.L., M-Capital, S.A., Aplicaçao urbana, S.A., Boremer, S.A., Sociedad de Operación y Logística, S.A. and Gestora de Autopistas, S.A. ECT AUDITORES: Ideyco, S.A.U., Prinur, S.A.U., Sadyt, S.A.U., Obras y Servicios de Galicia, S.A. Sofetral, S.A. and Prosacyr Ocio, S.L. DELOITTE & TOUCHE: Bardiomar, S.L, Repsol YPF, S.A., Build 2 Edifica, S.A., Camarate Golf, S.A., Hospital de Majadahonda, S.A., Accesos de Madrid, S.A., Autopista del Valle, Autopista del Sol, S.A., Metrofangs, S.L., Valdemingómez 2, S.A., N-6 Construction Ltd and M 5 Ltd. KAUFMAN ROSSIN & CO.: Brickell Office and Testa American Corporation. SRL: Nodo di Palermo, S.P.A. and SIS, S.P.A. KPMG: Autopista del Henares, S.A., Metro de Sevilla, S.A. and Autopista Central Gallega, S.A. PRICEWATERHOUSECOOPERS AUDIT AND SALUSTRO REYDEL (MEMBER OF KPMG INTERNATIONAL): Joint audit of Eiffage. ACR: Aeropuerto de la Región de Murcia, S.A. ATTEST CONSULTING: Tecnológica Lena, S.L. Constructora del Magdalena Medio, S.A., Sacyr Colombia, Jabalquinto, S.L., Dareling, S.A., Echezarreta, AIE, Millinium Energía, S.A., Sociedad para la Valoración de la Biomasa de Andalucía, S.A., Comercializadora de Oficinas en Pozuelo, S.A., Castellana Norte, S.A., Proixample, S.A., Nova Icaria, S.A., Biothys, S.L., S.A., Agroconcer, S.A., Servicio de Estacionamiento Regulado, S.L., Residuos de Construcción y Demolición Navalcarnero, S.A., Tecnologías Medioambientales Asturianas, S.L., Sílices Turolenses, S.A. and Ainco Canarias Internacional, S.L. were excluded from the scope of consolidation as the overall impact of their consolidation was insignificant. The most significant balance sheet and income statement items of consolidated foreign companies are translated into euros using the year-end exchange rate method. The rates applied were as follows:

162 16 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 Exchange rate Average Year-end Dollar / euro Chilean peso / euro Brazilian real / euro New Mozambique metical / euro Angolan Kwanza / euro Cape Verde escudo / euro Macao pataca / euro b) Changes in the scope of consolidation 26 The changes in the consolidation scope in 26 are as follows: b1) Additions to the consolidation scope Eiffage, a French multi-services group, in which Sacyr Vallehermoso has a 32.61% stake. - Europistas Concesionaria Española, S.A., concession operator for the AP-1 Burgos motorway, 5%-owned by Sacyr Vallehermoso Participaciones, S.L. and parent of a group of motorway concession companies. The group comprises the following companies: Túneles de Artxanda, S.A., concession holder for the tunnels of Artxanda (5%); Autopista de Bizkaia, S.A., concession company whose corporate purpose is the maintenance and operation of an existing segment of the A-8 motorway in Bizkaia (5%); Inversora Autopista de Levante, S.L., concession holder for the Ocaña-La Roda motorway (4%); Inversora de Autopistas del Sur, S.L., operator of the R-4 motorway (25%). - Repsol YPF, integrated gas and oil group, 2.1%-owned by Sacyr Vallehermoso Participaciones Mobiliarias, S.L. - Sacyr Vallehermoso Participaciones, S.L., holding company for the Group s interest in Europistas. Its sole shareholder is Sacyr Vallehermoso, S.A. - Sacyr Vallehermoso Participaciones Mobiliarias, S.L., set up as a holding company for the Group s interest in Repsol YPF. Its sole shareholder is Sacyr Vallehermoso, S.A. - Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (Emmasa), a company whose corporate purpose is to manage the whole water cycle in the municipality of Santa Cruz de Tenerife. Sacyr Vallehermoso, S.A. owns a 94.64% stake. - Intercambiador de Transportes de Moncloa, S.A., whose corporate purpose is the construction, maintenance and operation of the concession for a transportation hub at Moncloa. Its main shareholders are Itínere Infraestructuras, S.A. (6%) and Sacyr, S.A.U. (2%). - Autovía del Eresma Concesionaria de la Junta de Castilla y León, S.A., whose corporate purpose is the construction, maintenance and operation of the Valladolid-Segovia motorway. Its main shareholders are Itínere Infraestructuras, S.A. (53%) and Sacyr, S.A.U. (2%). - Autopista del Sol, S.A., whose corporate purpose is the operation of the San José-La Caldera motorway. Itínere Costa Rica Valle del Sol, S.A. has a 35% stake in the company. - Autovía del Barbanza Concesionaria de la Xunta de Galicia, S.A., whose corporate purpose is the construction and operation of the Barbanza motorway. Its main shareholder is Itínere Infraestructuras, S.A. with an 8% stake. - Autopista del Guadalmedina Concesionaria Española, S.A., whose corporate purpose is the construction and operation of the Malaga motorway. Its main shareholders are Itínere Infraestructuras, S.A. (7%) and Sacyr, S.A.U. (1%). - Tecnologías Avanzadas Asturianas, S.L., principally dedicated to the provision and management of public services. It is wholly owned by Sufi, S.A., its sole shareholder. - Hidroandaluza, S.L., dealer in IT and electronic equipment, wholly owned by Sufi, S.A. - Comercializadora de Compost, S.A., whose principal activity is waste treatment and urban services, wholly owned by Sufi, S.A. - Santacrucera de Aguas, S.L., whose principal activity is water purification and treatment, wholly owned by Valoriza Agua, S.L. - Geida Tlemcen, S.L., a water purification and treatment company, 33%-owned by Sadyt, S.A.

163 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Biomasa de las Navas, S.L., whose corporate purpose is the production and marketing of biomass, wholly owned by Valoriza Energía, S.L.U. - Compañía Energética Espiel, S.L., whose corporate purpose is to carry out projects, research and development on the marketing of electric and thermal power, wholly owned by Valoriza Energía, S.L.U. - Geolit Climatización, S.L., whose purpose is the purchase and use of biomass for the production and sale of energy. Its main shareholder is Valoriza Energía, S.L.U., which has a 63.5% stake. - Compañía Energética Linares, S.L., a power research and generation company, 45% owned by Valoriza Energía, S.L.U. - Desarrollos Eólicos Extremeños, S.L., a power research and generation company, 5%-owned by Valoriza Energía, S.L.U. - Sacyr Costa Rica, S.A., whose main activity is the contracting, management and execution of all kinds of work and construction in Costa Rica. It is wholly owned by its sole shareholder Sacyr, S.A.U. - Eurolink, S.C.P.A., Italian construction company whose corporate purpose is the building of a segment of the Messina bridge. Sacyr S.A.U. has a stake of 18.7%. - Constructora San José San Ramón, S.A., a Costa Rican construction company whose corporate purpose is the construction of the San José - San Ramón road link (Autopista del Valle), 33%-owned by Sacyr, S.A.U. - Prinur Centroamérica, S.A., a company whose main activity will be the contracting, management and execution of all kinds of works and construction projects, 99.16%-owned by Prinur, S.A.U. - Cortijo del Moro, S.A., a property development company, 4%-owned by Claudia Zahara 22, S.L. - Tesfran, S.A., French owner of the Adria tower (in the Paris financial district of La Defense). Testa, S.A. has a stake of %. - Pazo de Congreso de Vigo, S.A., whose corporate purpose is a build, operate and maintain the new Vigo auditorium. Its main shareholders are Testa, S.A. (4%) and Sacyr, S.A.U. (1%). - Hospital de Majadahonda, S.A., whose corporate purpose is to build and operate the Puerta de Hierro public hospital in Majadahonda, 2%-owned by Testa, S.A Brickell Office LLC, a US company that owns the building at 141 Brickell Avenue in Miami (Florida), wholly owned by Testa American Corporation. b2) Removals from the consolidation scope - Ecorreciclaje de Arcos, S.L., formerly owned by Sufi, S.A., which was sold. - Promociones Eólicas del Altiplano, S.A., formerly owned by Sufi, S.A., which was sold. b3) Changes in percentage ownership - Sacyr Vallehermoso, S.A. increased its percentage ownership of Itínere Infraestructuras, S.A. from 82.75% to 91.38%. - Vallehermoso División Promoción, S.A.U. increased its stake in Habitat Baix from 7% to 1%. - Sufi, S.A. sold to Omicron-Amepro, S.A. its 35.67% stake in Consultora de Ingeniería y Empresa, S.L., giving Omicron-Amepro 1% ownership of the company. - Sufi, S.A. sold 5% of its stake in Compost del Pirineo, S.A. It continues to own the remaining 5%. - Omicron-Amepro, S.A. transferred to Hidroandaluza, S.A. its 6.53% stake in Sufi. - Omicron-Amepro, S.A. spun off part of its assets to Sufi, S.A., transferring its 3% stake in Hidroandaluza, S.A., which is now wholly owned by Sufi, S.A. It also transferred its 25% stake in Sílices Turolenses, S.A. which is now 5%-owned by Sufi, S.A. and its 45% stake in Comercializadora de Compost, S.A. which is henceforth wholly owned by Sufi, S.A.

164 162 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS - Itínere Infraestructuras, S.A. raised its percentage ownership of Metro de Sevilla S.A. from 27.83% to 31.13%. - Itínere Chile, S.A. raised its percentage ownership of Concesionaria del Elqui S.A. from 72.67% to 75%. - The consolidation of Europistas Concesionaria Española, S.A., which owns 25% of Inversora de Autopistas del Sur, increased the Sacyr Vallehermoso Group s interest in the latter company from 1% to 35%. 27 The main changes in the consolidation scope in 27 are as follows: b1) Additions to the consolidation scope - Suardiaz Servicios Marítimos de Barcelona, S.L., a transport company acquired for the transport of merchandise, 5.3%-owned by Valoriza Gestión, S.A. - Compañía Orujera de Linares, S.L., set up to produce, extract and sell pomace oil; 51%-owned by Valoriza Energía, S.L.U. - Bioeléctrica de Linares, S.L., incorporated to generate power via biomass combustion; 55%-owned by Valoriza Energía, S.L.U. - Ibervalor Energía Aragonesa, S.A., set up to build, operate and maintain wind farms in Aragón; 5%-owned by Valoriza Energía, S.A. - Inte RCD Huelva, S.L., set up to treat and recycle waste; 6%-owned by Inte RCD. - Alcorec, S.L., incorporated to manage and demolish waste; 1%-owned by Sufi, S.A. - Constructora San José Caldera, S.A., whose corporate purpose is the construction of the San José Caldera road link; 33%-owned by Sacyr Costa Rica, S.A. - Sacyr Ireland Limited, set up to oversee the construction and maintenance of the N-6 highway in Ireland; wholly-owned by Sacyr, S.A.U. - N-6 Construction Limited, incorporated to build the N-6 motorway in Galway; 42.5%-owned by Sacyr Ireland Limited. - Sociedad Concesionaria Aeropuerto de la Región de Murcia, S.A., set up to build the Murcia international airport; 6%-owned by Sacyr, S.A.U. - M-5 (D&C) Limited, an Irish company incorporated to build, design and operate the M-5 toll ring-road in Dublin; 25.5%-owned by Sacyr Ireland Limited and 17% by Somague Ireland Limited. - Somague Ireland Limited, an Irish company set up to build, design and operate the M-5 toll ring-road in Dublin; 1%-owned by Somague Engenharia, S.A. - Itínere Infraestructure LLC, a US company set up to build, maintain and operate all kinds of concessions; wholly owned by Itínere Infraestructuras, S.A. - Itínere North America LLC, a US company set up to build, maintain and operate all kinds of concessions; 1%-owned by Itínere Infraestructura LLC. - Itínere Ireland Limited, an Irish company set up to build, maintain and operate all kinds of concessions; wholly owned by Itínere Infraestructuras, S.A. - N-6 Concession Holding Ltd, an Irish company set up as a holding company for the Group s investment in N-6 Concession Ltd; 45%-owned by Itínere Ireland Limited. - N-6 Concession Ltd, an Irish company set up to operate the N-6 motorway concession in Galway; 1%-owned by N-6 Concession Holding Ltd. - N-6 Operations Ltd, an Irish company set up to operate the N-6 motorway concession in Galway; 5%-owned by Itínere Ireland Ltd.

165 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS M-5 Concession Holding Ltd, an Irish company set up as a holding company for the Group s investment in M-5 Concession Ltd; 45%-owned by Itínere Ireland Limited. - M-5 Concession Ltd, an Irish company set up to operate the M-5 shadow toll motorway forming the Dublin ring road; 45%-owned by M-5 Concession Holding Ltd. - AP-1 Europistas Concesionaria del Estado, S.A., incorporated to maintain and operate the AP-1 motorway; wholly owned by Eurpistas Concesionaria Española, S.A. - Autovía del Arlanzón, S.A., set up to maintain and operate the Santo Tomé del Puerto (Burgos) stretch of the A-1 motorway; 95%-owned by Europistas Concesionaria Española, S.A. The additions to the consolidation scope did not entail business combinations. b2) Removals from the consolidation scope - Nova Cala Villajoyosa, S.L., a property development company that went into liquidation. - Tecnologías Avanzadas Asturianas, S.L., a subsidiary of Sufi, S.A., which was wound up. - Omicrón Amepro, S.A., formerly owned by Sufi, S.A., which was sold. - Consultora de Ingeniería y empresa, S.L., formerly owned by Sufi, S.A., which was sold. - Tecnologías Avanzadas de la Macaronesia, S.A., a subsidiary of Sufi and investee of Omicrón Amepro, which was sold. - Portuguese concessionaire Autoestradas Do Oeste, S.A. sold a 4% stake in Autoestradas Do Atlántico, S.A. - Sadyt, S.A. sold its entire shareholding in Geida Benisaf. - Aplicaciones de la Biomasa, S.A., which was wound up. - Somague Ambiente, S.A. sold its entire business in Macao, which comprised Cesl Asia and its investees. - Somague Engenharia sold its shareholding in Harmattan Construçoes e Empreendimentos Inmobiliarios, S.A. and Espaço Portimao, L.d.a., owned by Somague Inmobiliaria, S.A., which were dissolved. None of these removals was significant. b3) Changes in percentage ownership - Sacyr Vallehermoso, S.A. increased its percentage ownership of Eiffage from 32.61% to 33.1%. - Sacyr Vallehermoso, S.A. increased its percentage ownership of Itínere Infraestructuras, S.A. from 91.38% to 1%. - Testa, Inmuebles en Renta, S.A. increased its percentage ownership of Tesfran, S.A. from % to 99.94%. - Itínere Infraestructuras, S.A. raised its percentage ownership of Viastur Concesionaria de Asturias, S.A. from 47.5% to 7%, by acquiring Sacyr, S.A.U. s 22.5% interest. - Although this does not affect the consolidation of the Sacyr Vallehermoso Group, Itínere Infraestructuras, S.A. underwent a corporate restructuring. Sacyr Vallehermoso, S.A. acquired from Sacyr, S.A.U. 3% of Hospital de Parla, 3% of Hospital del Noreste, S.A. and 6% of Intercambiador de Plaza Elíptica, S.A., and from Testa, S.A. 2% of Hospital de Majadahonda, 6% of Hospital de Parla and 6% of Hospital del Noreste. Finally, it acquired from Valoriza Facilities, S.A.U. 5% of Hospital de Parla and 5% of Hospital del Noreste. - Subsequently, Itínere Infraestructuras, S.A. held a capital increase, in which Sacyr Vallehermoso, S.A. participated by contributing the aforementioned companies. - Itínere Infraestructuras, S.A. raised its percentage ownership of Somague Itínere, S.A. from 8% to 1%, by acquiring Somague Ambiente, S.A. s 2% interest.

166 164 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS - Somague Itínere, S.A. acquired Somague Engenharia, S.A. s 7.2% stake in Vialitoral, S.A., raising its total shareholding to 12%. - Sufi, S.A. lowered its stake in Inte RCD from 33% to 25% and, indirectly, its holding in Inte RCD Bahía de Cádiz from 2% to 15%. - Gestión e Infraestructuras de Canarias, S.A., belonging to Sufi, which was 7%-owned by Tecnologías Avanzadas de la Macaronesia, was sold, leaving Sufi with just a 27% shareholding. - Sadyt, S.A. increased its ownership interest in Geida Skikda from 25% to 33%. It also raised its stake in Geida Tlemcen from 33% to 5%. b4) Other changes - Gestión e Infraestructuras de Canarias, S.A. was consolidated using the equity method following the sale of Omicrón Amepro, S.A., which until then held an indirect stake of 35%, rather than using the full consolidation method. - Gicsa Zona Verde y Paisajismo, A.I.E., was consolidated using the equity method rather than proportionately as it is a subsidiary of Gestión e Infraestructuras de Canarias, S.A., in which, as indicated above, the Group reduced its shareholding. - Compost del Pirineo, S.A. changed its name to that of S.L. - Compañía Energética de Linares, S.L. was consolidated using the equity method rather than proportionately as in 27 it do not hold enough seats on the board for there to be considered joint management. - Concesionaria Palma Manacor, S.A. was proportionately consolidated rather than using the equity method. By unanimous decision in 27, there is joint control in decision making. - Autopista de Bizkaia, S.A. was proportionately consolidated rather than using the equity method after a decision by the majority of the members of its board of directors in Testa Hospitalaria de Coslada, S.A. changed its name to that of Hospital del Noreste, S.A. - Testa Hospitalaria de Parla, S.A. changed its name to that of Hospital de Parla, S.A. 3. BASIS OF PRESENTATION AND CONSOLIDATION a) Basis of presentation The parent company s directors have prepared these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. The Sacyr Vallehermoso Group has adopted the latest versions of all applicable standards issued by the European Union Accounting Regulatory Committee (hereinafter IFRS-EU ), whose application is mandatory before December 31, 27. The Group has not adopted the following IFRS standards or interpretations issued by the IASB that take effect later than January 1, 27. Mandatory applications: Annual periods Standards and amendments beginning on: Amendment to IAS 23 Borrowing Costs January 1, 29 (*) Amendment to IAS 1 Presentation of Financial Statements revised presentation January 1, 29 Amendments to IAS 32 and IAS 1 Puttable Instruments and Obligations arising on Liquidation January 1, 29 IFRS 3 Business Combinations July 1, 29 (**) IFRS 8 Operating Segments January 1, 29 IAS 27 Consolidated and Separate Financial Statements July 1, 29 (**) Amendment to IFRS 2 Vesting Conditions and Cancellations January 1, 29 (*) Borrowing costs related to qualifying assets capitalized as of January 1, 29. (The Group already capitalizes its borrowing costs, so the standard will not have a significant impact on the Group s accounts). (**) The new standards will replace the current IFRS 3 and IAS 27.

167 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 165 Mandatory applications: Annual periods Interpretations beginning on: IFRIC 11 Group and Treasury Share Transactions March 1, 27 IFRIC 12 Service Concession Arrangements January 1, 28 IFRIC 13 Customer Loyalty Programs July 1, 28 IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction January 1, 28 The Group has already adopted IFRS 7 Financial Instruments: Disclosures. Its adoption has not had a significant impact on the Group s financial position or its consolidated results, although it has entailed new disclosures in the accompanying consolidated financial statements. In relation to concession companies, the International Financial Reporting Interpretations Committee (IFRIC) has issued its interpretation no. 12 regarding Service Concession Agreements, which has yet to be adopted by the EU and as such cannot be considered definitive. Accordingly, at yearend 27 the Group had applied the IFRSs effectively adopted by the EU, which differ significantly from those provided for in the current accounting regime applicable to toll road concessions in Spain, particularly in relation to the recognition of finance costs throughout the life of the concession agreement. Under the sector adaptation within the Spanish Chart of Accounts, finance costs are accrued as a function of revenue. The 27 individual financial statements of each Group company will be presented for approval at the respective General Shareholders Meetings within the periods established by prevailing legislation. The directors of the parent company consider that this process will have no material impact on the consolidated 27 financial statements. The Sacyr Vallehermoso Group s consolidated financial statements for 27 were prepared by the parent company s board of directors on March 12, 28. They are expected to be approved at the parent company s General Shareholders Meeting without amendment. Unless stated otherwise, the figures in these consolidated financial statements are shown in thousands of euros, rounded to the nearest thousand. b) Comparative information For comparison purposes, the Sacyr Vallehermoso Group presents 27 consolidated financial information following the same criteria as those applied in preparing the 26 financial statements. c) Accounting policies These financial statements were prepared in accordance with IFRS-EU and comprise the consolidated balance sheet, consolidated income statement, consolidated cash flow statement, consolidated statement of changes in equity and the accompanying notes which form an integral part of the consolidated financial statements. They have been prepared on a historical cost basis, except for financial instruments held for trading and available-for sale financial assets, which have been measured at fair value. Non-current assets held-for-sale are measured at the lower of carrying amount and fair value less costs to sell. The accounting policies were applied uniformly by all Group companies. The most significant accounting policies applied by the Sacyr Vallehermoso Group in preparing the consolidated financial statements under IFRS-EU are as follows: c1) Use of judgments and estimates In preparing the accompanying consolidated financial statements the Group s Directors have used estimates to measure certain items. These estimates are based on past experience and various other factors believed to be reasonable under the circumstances. These estimates refer to:

168 166 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS - The assessment of potential impairment losses on certain assets. - The useful life of property, plant and equipment and intangible assets. - The recoverability of deferred tax assets. - Estimates for the consumption of concession assets. Although these estimates are performed based on the best information available at December 31, 27, events may occur in the future that require their subsequent adjustment. The estimates are therefore reviewed on an ongoing basis, with the impact of any changes to the estimates recognized in profit and loss currently. c2) Basis of consolidation The consolidated financial statements comprise the financial statements of Sacyr Vallehermoso, S.A. and subsidiaries at December 31, 27 and 26. The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. Adjustments are made as required to harmonize any differences in accounting policies. Information on subsidiaries, jointly controlled entities and associates is given in Appendix I, which forms an integral part of these financial statements. c2.1 Consolidation principles Consolidated companies are consolidated from the date that the Group obtains control of the company and deconsolidated when the Group ceases to exercise control. When control of a subsidiary ceases, the results for the part of the year when the subsidiary was under Group control are shown in the consolidated financial statements. c2.2 Subsidiaries Companies falling within the scope of consolidation are only fully consolidated in the following circumstances: (i) subsidiaries in which the parent company has a direct or indirect shareholding of over 5% and a majority of the voting rights in the corresponding governing bodies; (ii) others in which the ownership interest is equal to or less than 5%, but where there are agreements between shareholders that allow the Sacyr Vallehermoso Group to control the management of the subsidiary. c2.3 Jointly controlled entities Jointly controlled entities included within the scope of consolidation are consolidated using the proportionate consolidation method where: there are two or more venturers linked by a contractual arrangement that establishes joint control. The Group combines its share of the assets, liabilities, income and expenses of the jointly controlled entity, line by line, in its consolidated financial statements. The Sacyr Vallehermoso Group includes temporary joint ventures (Uniones Temporales de Empresas or UTE and Agrupaciones de Interés Económico or AIE) under this heading. c2.4 Associates Companies over which the Sacyr Vallehermoso Group has significant influence, but not control are consolidated using the equity method. In preparing these consolidated financial statements it has been assumed that the Group exercises significant influence over those companies where it has a holding of over 2%, except in specific cases where its holding is less than 2%, but significant influence can be clearly demonstrated. Investments in associates are recognized on the consolidated balance sheet at cost plus changes in the percentage of ownership subsequent to the initial acquisition, depending on the Group s interest in the net assets of the associate, less any impairment in value. The consolidated income statement reports the Group s percentage interest in the associate s results. In the event of changes recognized directly in the associate s equity, the Group recognizes its share of these changes directly in its own equity. c2.5 Intra-group transactions The following transactions and balances have been eliminated on consolidation: - Positive and negative balances and costs and income arising from intra-group transactions.

169 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Gains and losses from buying and selling property, plant and equipment and any material unrealized gains on inventories. - Internal dividends and interim dividends payable recognized by the company paying them. c2.6 Financial year end The closing date for the financial statements of the companies making up the Sacyr Vallehermoso Group is December 31. c2.7 Minority interests The value of the share of minority interests in the equity and profit or loss for the year of consolidated subsidiaries is shown in Minority interests on the consolidated balance sheet and consolidated income statement, respectively. c2.8 Translation of financial statements of foreign subsidiaries The balance sheet and income statement items of consolidated foreign companies are translated to euros using the year-end exchange rate method, which means: - All assets, rights and obligations are converted to euros using the exchange rate in force at the foreign subsidiaries balance sheet date. - Income statement items are translated at the average exchange rate for the year. - The difference between the equity of foreign companies, including profit or loss for the year translated at year-end exchange rates, and the equity arrived at by translating the assets, rights and liabilities using the above criteria is shown as Translation differences under equity on the consolidated balance sheet. c3) Goodwill Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business combination over the parent company s share in the net fair value of the acquiree s identifiable assets, liabilities, and contingent liabilities. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating unit or groups of cash-generating units to which the goodwill relates. Where the recoverable amount of the cash-generating unit or groups of cash-generating units is less than the carrying amount of the cash-generating unit or groups of cash-generating units to which goodwill has been allocated, the Group recognizes an impairment loss. The Group has made use of the exemption that allows it not to apply IFRS 3 retrospectively to business combinations that took place before the transition date to IFRS. Therefore, the consolidated balance sheet includes goodwill, net of accumulated amortization up to December 31, 23, generated prior to the transition date, arising from the difference between the consideration paid for acquisitions and their carrying amounts plus any unrealized capital gains attributable to the acquired assets at the acquisition date. Impairment losses relating to goodwill cannot be reversed in future periods. Subsequent increases to the percentage ownership in subsidiaries are recognized as the difference between the consideration paid and the amount of goodwill recognized. c4) Other intangible assets These include service concession arrangements, computer software, development costs, key money and greenhouse gas emission rights, and are carried at acquisition or production cost, less any accumulated amortization and any accumulated impairment losses. An intangible asset is recognized only if it is probable that the future economic benefits attributable to the asset will flow to the Group and the cost of the asset can be measured reliably.

170 168 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Service concession arrangements are recognized at the consideration paid by the Group for concession and operation fees and are amortized on a straight-line basis over the concession period. Costs incurred for each development project are capitalized when the Group can demonstrate: - the technical feasibility of completing the intangible asset so that it will be available for use or sale, - its intention to complete the asset for use or sale, - how the asset will generate future economic benefits, - the availability of resources to complete the asset, and - the ability to measure reliably the expenditure during development. Capitalized development costs are amortized over the period of expected future revenue or benefit from the project. Computer software reflects the amount of computer programs acquired from third parties and exclusively those intended for use over several years. It is amortized over its useful life, which is generally four years. Key money is the amount paid for the right to lease business premises. It is amortized over its useful life, which is generally five years. Greenhouse gas emission rights recognizes rights received under the various national allocation plans. In light of the UN Framework convention on climate change and the Kyoto Protocol which set a European Community target for reduction in greenhouse gas emissions, an emissions rights trading system has been created. Emission rights are measured at their price of acquisition or production. Sendeco, the Spanish system from CO 2 emission rights trading, published the price of a CO 2 emission right at 5.85 euros. They are measured at fair value at the start of each calendar year. A balancing entry is made under government grants and released to income as the rights are used. Emission rights are not amortized but a provision for emission costs is recognized under Provisions as greenhouse gas emission rights are gradually used. In April of the following year the rights consumed are settled with the authorities and adjustments made to the amounts relating to greenhouse gas emission rights under intangible assets, provisions and government grants. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized. c5) Property, plant and equipment Property, plant and equipment is stated at cost, equivalent to book value under the Spanish General Chart of Accounts, including all directly related costs incurred before the asset becomes available for use, less accumulated depreciation and accumulated impairment losses. The costs of expanding, upgrading or improving property, plant and equipment which increase their productivity, capacity or efficiency or prolong their useful life are capitalized as an increase in the cost of the asset. Repair and maintenance costs for the year are recognized in profit or loss. Leased assets in which the terms of the arrangement transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item are classified as finance leases. Properties acquired through finance leases are carried at the lower of fair value and the present value of the minimum lease payments at the inception of the lease, less any accumulated depreciation and impairment. Depreciation is recognized in the consolidated income statement on a straight-line basis over the estimated useful life of each asset. Depreciation of the assets begins from the moment they become available for use. Depreciation of property, plant and equipment is based on cost using the straight-line method over the period of the

171 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 169 asset s estimated useful life, except for machinery, which is depreciated using the declining balance method in nearly all cases. Buildings for own use Machinery Materials for installations Tools and associated equipment Transport equipment Furniture and fittings Data processing equipment Complex pieces of plant and equipment Other property, plant and equipment At each financial year end, the Group reviews and, where necessary, adjusts the assets residual values, useful lives and depreciation method. In accordance with the accounting treatment allowed by IAS 23, borrowing costs that are directly attributable to the acquisition or development of property, plant and equipment are capitalized when assets require more than a year to be ready for their intended use. c6) Investment properties Investment properties are recognized at cost, including directly attributable start-up costs, the initial estimate of decommissioning costs and transaction costs. Subsequent investments in the property are recognized at cost, applying the same criteria as for property plant and equipment. In accordance with the accounting treatment allowed by IAS 23, borrowing costs that are directly attributable to the acquisition or development of investment properties are capitalized when assets require more than a year to be ready for their intended use. The costs of any improvements that increase the properties rental yield are capitalized each year. In contrast, repairs which do not prolong or improve the useful life of the assets, as well as maintenance costs are recognized directly in profit or loss as incurred. Investment properties are derecognized when sold or permanently withdrawn from use and no future economic benefits are expected from their disposal. Any gains or losses on the retirement or disposal of an investment property are recognized in profit or loss in the year of retirement or disposal. Investment properties are depreciated based on their acquisition cost using the straight-line method over their estimated useful life, as revised annually, which is 5-68 years. c7) Concession projects Concession projects includes the technical and economic studies, projects, expropriations, compensation and replacement of services and easements, construction of projects and installations, project management and administration expenses, finance costs accrued over the construction period from sources of investment effectively financing the investment in the concession project and all costs of construction accrued before the assets are ready for their intended use. Certain items acquired before December 31, 23 include revaluations of assets for inflation that the Group made before the transition date to IFRS. Positive differences between the carrying amount of equity in certain subsidiaries at the date of acquisition and the amount of the investment were included under Investment in operational highways only if there were sufficient unrealized capital gains at the time of acquisition to justify the difference. Some subsidiaries have begun to depreciate some items of reversible property, plant and equipment over an estimated useful life that is less than the concession period. These items continue to be depreciated over their estimated useful life. In relation to other investments in concession projects, i.e. reversible assets that are not technically depreciated over the life of the concession, in 27 the Group opted to use a depreciation method based on the economic use of the assets under concession. c8) Financial assets Financial assets are initially measured at fair value, which generally coincides with acquisition cost, adjusted for any directly attributable transaction costs, except for financial assets held for trading, for which gains or losses are recognized in profit or loss.

172 17 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS The Group classifies financial assets into the following groups: - Loans to companies accounted for using the equity method: this includes loans granted by the various Group companies to companies consolidated using the equity method. - Available-for-sale financial assets: these are investments in equity instruments that do not meet IFRS criteria for consideration as investments in subsidiaries, associates or joint ventures. These are initially measured in the consolidated balance sheet at fair value. Any gains or losses arising from changes in fair value are recognized directly in equity until the investment is derecognized or determined to be impaired at which time the cumulative gain or loss previously recorded in equity is recognized in profit or loss. - Other loans and receivables: after initial measurement at the fair value of collection right, loans and receivables are carried at amortized cost, which entails original carrying amount less repayments of principal, plus interest receivable, and less any allowance for impairment or default. Accrued interest is recognized in the consolidated income statement as an increase in the amount receivable, provided the interest is not paid during the period of accrual. - Financial assets held for trading: those acquired for the purpose of selling in the near term to obtain profits on fluctuations in their prices. - Financial instruments at fair value through profit or loss: the Group uses derivative financial instruments such as currency contracts and interest rate swaps to hedge its interest rate and foreign currency risks (see Note c.2 for a detailed explanation). - Guarantees and deposits given: these represent the amounts given as guarantee or deposit of compliance with obligations. Financial assets are derecognized when: - the rights to receive cash flows from the asset have expired; or - the Group has transferred its rights to receive cash flows from the asset and transferred substantially all the risks and rewards incidental to ownership of the asset. In the accompanying consolidated balance sheet, financial assets and, in general, all assets and liabilities, are classified based on their contractual or estimated maturity. For these purposes, those maturing in 12 months or less are classified as current and those maturing in over 12 months as non-current. There are no significant differences between the fair values and carrying amounts of the Sacyr Vallehermoso Group s financial assets and liabilities. c9) Impairment c9.1) Impairment of property, plant and equipment and intangible assets Impairment losses are recognized for all assets or, where appropriate, for cash-generating units, when an asset s carrying amount exceeds its recoverable amount. Impairment losses are recognized in the consolidated income statement. The Group assesses at each balance sheet date whether there is an indication that a non-current asset may be impaired. Where such indications exist, and in the case of goodwill even if they do not, the recoverable value of the assets is estimated. Recoverable amount is the higher of the asset s or cash-generating unit s net selling price and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For assets that do not generate cash inflows that are largely independent of those from other assets or groups of assets, the recoverable amount is determined for the cash-generating units to which the asset belongs. Impairment losses in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units and, then, to reduce the carrying amount of the other assets based on a review of the individual assets that show indications of impairment.

173 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 171 Except in the case of goodwill, a previously recognized impairment loss is reversed if there has been a change in the estimates used to determine the asset s recoverable amount. The reversal of an impairment loss is recognized in profit or loss. An impairment loss can only be reversed to the extent where the increased carrying amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset. c9.2 Impairment of financial assets When a decline in the fair value of an available-for-sale financial asset has been directly recognized in equity and there is objective evidence that the asset is impaired, the cumulative losses previously reported in equity are recognized in profit or loss for the year. The cumulative loss recognized in profit or loss is the difference between cost and current fair value. An impairment loss on an investment in an equity instrument classified as available for sale is reversed through equity, with no effect on profit or loss. If the fair value of a fixed-income financial instrument classified as available for sale increases and this increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, this loss can also be reversed in profit or loss. The recoverable amount of held-to-maturity investments and receivables carried at amortized value is calculated as the present value of the expected future cash flows discounted at the original effective interest rate. Current investments are not discounted to present value. Impairment losses on held-to-maturity financial investments or receivables carried at amortized cost are reversed if the subsequent increase in the recoverable amount can be objectively related to an event occurring after the impairment loss was recognized. c1) Inventories Land lots, developments in progress and completed buildings, all of which are held for sale, are measured at cost of acquisition or construction, as described below: - Properties: developments in progress are measured according to the cost system indicated below. Buildings that were acquired after completion are recorded at cost, including costs directly attributable to the acquisition. - Developments in progress: costs incurred for property developments whose construction is not yet complete. These include direct construction costs certified by the relevant project managers, development costs and finance costs incurred over the construction phase. Once construction has begun, the value of buildings and other structures includes the cost of the land lots on which they are built. - Land lots and adaptation of land: valued at acquisition cost which includes costs directly related to purchases. The value of land and lots also includes the capitalized cost of spending on the project, on urban development, and on planning up to the completion of work to ready the lot for development. Inventories includes the finance costs accrued during the construction phase. Stockpiles of raw and other materials and consumables are valued at cost. Products and work in progress are valued at their cost of production, which includes the cost of materials, labor and direct production costs. The Group writes down the value of its inventories where costs exceeds market, based on appraisals by independent experts. Project start-up costs are costs incurred up to the start of construction, and are recognized in profit or loss based on the stage of completion over the lifetime of the project s execution. In the property development business, impairment losses are provisioned in their entirety for projects that are estimated to produce losses.

174 172 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS c11) Trade and other receivables Discounted bills pending maturity at December 31 are included in the accompanying consolidated balance sheets under Trade receivables, with a balancing entry in Interestbearing loans and borrowings. c12) Cash and cash equivalents Cash and cash equivalents comprise cash at banks and at hand and short-term deposits with an original maturity of three months or less and no exposure to significant changes in value. c13) Capital increase costs Capital increase costs are recognized as a decrease in equity, net of any tax effect. c14) Treasury shares Shares of the parent company held by the Group are shown at cost and recognized as a deduction from equity. No gain or loss is recognized in profit or loss on the purchase, sale or cancellation of treasury shares. Any profit or loss from the sale of these shares is recognized directly in equity. c15) Provisions Provisions are recognized in the consolidated balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Amounts recognized as provisions are the best estimate of the amounts required to offset the present value of the obligations at the consolidated balance sheet date. Provisions are reviewed at each consolidated balance sheet date and adjusted to reflect the current best estimate of the liability. The policy on contingencies and expenses is to make provisions for the estimated amount of probable or certain liabilities arising from legal proceedings in progress, compensation or obligations pending, and for guarantees and other similar commitments. These are recorded as soon as the liability or obligation becomes known. The provision for construction completion is recorded on the liabilities side of the balance sheet and reflects the estimated amount of liabilities on completion of construction which cannot yet be determined or for which the actual settlement date is not known, being contingent upon the fulfillment of certain conditions. Provisions are made according to the best estimates of the annual accrual, which is between.5% and 1% of the completed project. c16) Financial liabilities Financial liabilities are initially measured at fair value less attributable transaction costs. After initial recognition, financial liabilities are subsequently measured at amortized cost, with any differences between cost and redemption value recognized in consolidated profit or loss over the period of the borrowings using the effective interest rate method. Liabilities maturing in less than 12 months from the balance sheet date are classified as current, while those with longer maturity periods are classified as non-current. The Group has two pension plans that provide complementary retirement benefits to the employees of certain companies on top of their Social Security entitlements. In accordance with Spanish law these schemes are outsourced and take the form of a defined benefit plan in the case of Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (Emmasa) and life insurance policies in the case of Empresa Mixta de Aguas de Las Palmas, S.A. (Emalsa). Both pension plans underwent an independent actuarial valuation at year end in accordance with IAS 19. Actuarial gains and losses are recognized as income or expense when the net cumulative unrecognized actuarial gains and losses for each individual plan at the end of the previous reporting period exceeded 1% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses are recognized over the expected average remaining working lives of the employees participating in the plans.

175 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 173 The past service cost is recognized as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits are already vested immediately following the introduction of, or changes to, a pension plan, past service cost is recognized immediately. Liabilities in respect of defined benefits are the sum of the present values of the obligations and unrecognized actuarial gains and losses, less past service costs not yet recognized and less the fair value of plan assets designated to settle the obligations. The value of any asset is the sum of any past service cost not yet recognized and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan. c17) Foreign currency transactions Foreign currency transactions are converted to euros at the exchange rate ruling at the date of the transaction. Gains or losses from foreign currency transactions are taken to profit or loss as they occur. Foreign currency receivables and payables are translated into euros using the exchange rate ruling at the balance sheet date. Unrealized exchange differences on transactions are taken to consolidated profit or loss. c18) Government grants Government grants are recognized where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Non-repayable investment grants used to finance reversible assets are recognized as deferred income at their fair value. These grants are released to profit or loss in proportion to the depreciation charged for the assets financed with the grants. Certain Chilean companies have recognized in their financial statements the annual grants receivable from the Chilean Ministry for Public Works pursuant to their respective concession contracts. These receivables are recognized in profit and loss following the same criteria as those used to depreciate assets under concession. c19) Income tax expense Income tax expense each year is calculated as the sum of the current tax expense derived by applying the current tax rate to the tax base for the year, after taking into account all applicable tax credits and relief, and the change in deferred tax assets and liabilities which are recognized in profit or loss. Income tax expense is recognized in the consolidated income statement except when it relates to items recognized directly in equity, in which case it is recognized in equity. Sacyr Vallehermoso, S.A. and its subsidiaries, in compliance with Royal Decree 4/24 dated March 5 approving the revised Income Tax Law (Ley del Impuesto sobre Sociedades), have decided, with the approval of each company s corporate bodies, to file taxes under the consolidated tax regime for 27, and have duly notified the A.E.A.T. (the Spanish tax authorities), which notified Sacyr Vallehermoso, S.A., the Group s parent company, that its tax number is 2/2. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates used are those enacted at the balance sheet date. Deferred income tax is recognized using the liability method for all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The Group recognizes deferred income tax liabilities for all taxable temporary differences, except: - where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss; and - in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except where the timing of the reversal of the temporary difference can be controlled by the parent and it is probable that the temporary difference will not reverse in the foreseeable future.

176 174 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS The Group recognizes deferred tax assets for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized except: - where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and - in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. At December 31, 27, the deferred taxes on unpaid dividends from foreign companies is estimated at 22,411 thousand euros. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. The Group also reassesses unrecognized deferred income tax assets at each balance sheet date and recognizes them to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. c2) Derivative financial instruments and hedging The Group uses derivative financial instruments such as currency contracts and interest rate swaps to hedge its interest rate and foreign currency risks. Such derivative financial instruments are initially recognized at fair value at the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Any gains or losses arising from changes in fair value on derivatives during the year that do not qualify for hedge accounting are taken directly to profit or loss. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference to market values for similar instruments. For the purpose of hedge accounting, hedges are classified as: - fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability; - cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a forecast transaction; - hedges of a net investment in a foreign operation. Hedges of the foreign currency risk of a firm commitment are recognized as cash flow hedges. At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument s effectiveness in offsetting the exposure to changes in the hedged item s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated. Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

177 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Fair value hedges Fair value hedges are hedges of the Group s exposure to a change in the fair value of a recognized asset or liability or of an unrecognized firm commitment or of an identified portion of such an asset, liability or firm commitment, that can be attributed to a particular risk and may have an impact on profit or loss. In fair value hedges, the carrying amount of the hedged item is adjusted to reflect gains and losses in the hedged risk, the derivative is remeasured at fair value and the gains and losses from both are taken to profit or loss. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability, with a corresponding gain or loss recognized in profit or loss. The changes in the fair value of the hedging instrument are also recognized in profit or loss. The Group ceases to recognize a fair value hedge if the hedging instrument matures or is sold, expires or is exercised, no longer meets the criteria for hedge accounting or the Group decides to change its classification. - Cash flow hedges Cash flow hedges are hedges of exposure to changes in cash flows attributable to a specific risk attributable to a recognized asset or liability or a highly probable forecast transaction that may have an impact on profit or loss. The effective portion of the gain or loss on the hedging instrument is recognized directly in equity, while any ineffective portion is recognized immediately in profit or loss. Amounts taken to equity are transferred to the income statement when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast sale or purchase occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability, the amounts taken to equity are transferred to the initial carrying amount of the non-financial asset or liability. If the forecast transaction is no longer expected to occur, amounts previously recognized in equity are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast transaction occurs. If the related transaction is no longer expected to occur, the amount is taken to profit or loss. - Hedges of a net investment Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognized directly in equity, while any gains or losses relating to the ineffective portion are recognized in profit or loss. On disposal of the foreign operation, the cumulative value of any such gains or losses recognized directly in equity is transferred to profit or loss. c21) Related parties The Group defines as related parties its direct and indirect shareholders, subsidiaries and associates, directors and key management personnel, as well as any individuals or legal entities dependent on such persons. c22) Revenue and expense recognition In general, income and expenses are recorded according to the accruals principle, that is, at the moment the goods or services represented by them are provided, regardless of when actual payment or collection occurs. Revenue is only recognized when all the following criteria have been satisfied: - The risks and rewards of ownership have been transferred, - control over goods has been transferred, - the amount of revenue and costs incurred or to be incurred can be measured reliably, and - it is probable that the economic benefits associated with the transaction will flow to the Company. The Sacyr Vallehermoso Group uses the following methods to recognize revenue in the following specific business areas: - Construction companies Contract income corresponds to the sum of the stipulated contract price plus the value of the changes made to original

178 176 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS work, as well as claims or incentives which are likely to be received and can be reasonably quantified. Contract costs include: Net costs directly related to the contract, such as direct labor costs and materials, etc. Related contract costs, e.g., insurance, finance costs, indirect costs such as technical assistance not directly related to a specific contract. These costs are distributed equally using systematic, rational criteria. Other costs billable to the customer under the contract, which include certain general administration and development costs, provided that they have been specified in the contract. Costs that cannot be attributed to the contracting activity or allocated to specific contracts are excluded from construction contract costs. The recognition of revenue or costs related to a construction contract differs depending on whether the outcome of the contract can be estimated reliably. To estimate contract outcome reliably, the following criteria must be satisfied: It is probable that the economic benefits budgeted in the contract will flow to the Group. The contract costs can be identified clearly and quantified reliably. For contracts with a fixed price, it must likewise be possible to measure the costs to complete the project and the current stage of completion reliably, so that actual costs incurred can be compared with the prior estimates. If the outcome of the contract can be sufficiently reliably estimated, contract revenue and costs are recognized by reference to the stage of completion at the balance sheet date. Where the contract outcome cannot be measured reliability, revenue is recognized only to the extent the expenses incurred are eligible to be recovered, while costs incurred during the period are recognized in the period. If the outcome of a contract is expected to be a loss, the loss is recorded immediately. To assess the stage of completion of a contract, which determines the revenue or profit to be recognized, the Sacyr Vallehermoso Group uses the percentage-of-completion method (costs incurred as a proportion of total budgeted costs). The difference between the original production amount at the beginning of each project and the amount certified for each up to the date of annual financial statements, is recorded in Completed work pending approval under Trade and other receivables. Auxiliary work performed for construction projects, which include general and specific construction installations and study and project expenses, are allocated proportionally to the relation between costs incurred and budgeted costs. The unamortized amount is recognized in Inventories on the consolidated balance sheet. The estimated costs of termination of the project or contract are provisioned on an accrual basis to Trade provisions on the balance sheet over the lifetime of the project or contract and expensed based on the proportion of work completed as a percentage of estimated costs. Costs incurred after completion of work but before its final termination are taken to these provisions. - Property companies The method applied is to recognize profit and loss in each year and report sales as Revenue when the risks and rights incidental to ownership of the property have been substantially transferred to the buyer. Prepayments by clients before the building is delivered are reported as Customer prepayments under Trade payables on the liabilities side of the balance sheet. For developments expected to generate a loss, full provisions are recorded once this becomes known. - Concession companies Income and expenses are recorded according to the accruals principle, that is, at the moment the goods or services represented by them are provided, regardless of when actual payment or collection occurs. Revenue is only recognized when all the following criteria have been satisfied:

179 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 177 The risks ownership have been transferred. Control over goods has been transferred. The amount of revenue and costs incurred or to be incurred can be measured reliably. It is probable that the economic benefits of the transaction will flow to the Company. The Group recognizes foreseeable liabilities and potential losses arising in the current or prior years as soon as they are known, provided they comply with IFRS-EU requirements in connection with risk recognition. c23) Assumable mortgage loans Assumable mortgage loans are included under Interest-bearing loans and borrowings in the consolidated balance sheet. c24) Advances received on orders As there is no foreseeable need to terminate the contracts of employees and that employees who retire or leave the Company of their own accord are not entitled to compensation, any termination benefits are expensed when decisions are made and notified to the employee concerned. Given that there are no plans to dismiss permanent staff in the near future, no provision has been recorded for termination benefits in 26 and 27. c26) Environmental issues Costs incurred to acquire systems, equipment, and installations for the purpose of eliminating, mitigating or monitoring the potential environmental impact of Group s activities carried out in the normal course of business are recorded as investments in fixed assets. Other environment-related expenses that do not concern the acquisition of fixed assets are recorded as expenses for the year. This heading appears under Trade payables on the liabilities side of the accompanying consolidated balance sheet and includes prepayments of billings received from customers on uncompleted work and on buildings awaiting delivery. The Company s directors consider that any contingencies arising in connection with environmental matters are adequately covered by existing insurance policies. c25) Termination benefits 4. PROPERTY, PLANT & EQUIPMENT Companies must compensate employees contracted for a project or service when they cease to work on the projects for which they were contracted through no fault of their own. The movement in the various items under this heading in 26 and 27 and the related accumulated depreciation are as follows: 26 Balance at Reclasification Changes Transaction Balance at Thousands of euros 12/31/5 Additions Disposals and transfers in scope differences 12/31/6 Land and buildings Plant and machinery Other installations, tools and furniture Prepayments and work-in-progress Other items of P,P&E Cost Impairment Impairment Land and buildings Plant and machinery Other installations, tools and furniture Prepayments and work-in-progress Other items of P,P&E Accumulated depreciation 236,861 5,555 (8,96) 3,553 15,733 (1,242) 251, ,378 69,966 (23,35) 5,245 22,215 (1,78) 386,719 65,641 12,755 (3,381) 1,19 4,163 (639) 79,729 43, ,881 (24,988) (66,763) (3,22) 492,231 59,362 16,656 (5,23) 5 4,563 (552) 75,56 1,79, ,813 (65,63) (56,725) 43,454 (4,213) 1,285,289 (3,747) (1,413) 9,492 (4,668) (3,747) (1,413) 9,492 (4,668) (24,26) (3,898) 1,88 3 (2,27) 114 (29,79) (13,477) (43,263) 19,587 (622) (4,953) 1,76 (158,22) (4,964) (8,9) 3,15 (365) (8,496) 53 (54,154) 1,879 (6) 1,873 (42,581) (7,651) 6,422 (1,235) (3,178) 474 (47,749) (236,349) (62,821) 3,247 (2,198) (18,834) 2,824 (287,131) TOTAL 839, ,579 (35,356) (49,431) 24,62 (1,389) 993,49

180 178 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 Balance at Reclasification Changes Transaction Balance at Thousands of euros 12/31/6 Additions Disposals and transfers in scope differences 12/31/7 Land and buildings Plant and machinery Other installations, tools and furniture Prepayments and work-in-progress Other items of P,P&E Cost Impairment Impairment Land and buildings Plant and machinery Other installations, tools and furniture Prepayments and work-in-progress Other items of P,P&E Accumulated depreciation 251,554 24,283 (3,866) 8,767 1,969 (213) 255, ,719 32,478 (21,12) 43, (248) 441,746 79,729 17,158 (4,521) 211 (53) (9) 92, , ,19 (6,313) (131,228) (35) 585,44 75,56 22,379 (6,597) (1,249) 3,296 (189) 92,696 1,285, ,317 (69,399) (8,194) 5,51 (74) 1,467,774 (4,668) (5,377) 3, (6,561) (4,668) (5,377) 3, (6,561) (29,79) (5,89) 495 (5,375) (7) 1 (39,846) (158,22) (44,385) 1,62 5,685 (123) (5) (186,23) (54,154) (11,673) 3,669 (2,161) (77) 71 (64,325) 1,873 (1,873) (47,749) (1,128) 5,555 6,718 (933) 82 (46,455) (287,131) (72,76) 2,339 2,994 (1,14) 158 (336,856) TOTAL 993,49 249,864 (45,69) (77,167) 4,361 (582) 1,124,357 In 26 and 27, the key items under Prepayments and work in progress were the power plants being built by the Valoriza Group and work by the Testa Group on the Torre SyV tower in Madrid, as well as a number of buildings under construction for future rental. In 27, the Group capitalized 9,489 thousand euros of borrowing costs as part of the construction costs of buildings. The amount capitalized in 26 was 5,246 thousand euros. As of December 31, 26 there were no significant commitments to acquire property, plant and equipment. Impairment losses and corresponding reversals are reported under Change in provision for impairment of intangible assets, property plant and equipment and securities portfolio. 33,849 and 276,834 thousand euros, respectively, while the principal amounts of these liabilities were 2, and 214,672 thousand euros, respectively. Certain items of property, plant and equipment, with net carrying amounts of 42,247 and 378,42 thousand euros at December 31, 27 and 26, respectively, corresponded to the Property division. The fair values of these assets based on independent appraisal were 54,326 and 478,486 thousand euros, respectively. The assessments were performed in accordance with the Valuation and Assessment Standards by the Royal Institution of Chartered Surveyors (RICS) of Great Britain and in accordance with the International Valuation Standards (IVS) published by the International Valuation Standard Committee (IVSC) by appraiser CB Richard Ellis. The gross carrying amounts of items pledged as collateral of financial liabilities at December 31, 27 and 26 were There is no property, plant and equipment that is not used in operations.

181 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS CONCESSION PROJECTS The movement in the various items under this heading in 26 and 27 and the related accumulated amortization are as follows: 26 Balance at Reclasific. Changes in Translation Balance at Thousands of euros 12/31/5 Additions Disposals and transfers scope differences 12/31/6 Concession projects Concession projects under construction Cost Amortization Accumulated amortization TOTAL 5,42,49 14,57 (198) (1,56) 1,126,585 (126,638) 6,433,249 44, ,25 12,564 (4,729) 414,383 5,464, ,757 (198) 11,58 1,126,585 (131,367) 6,847,632 (1,27,244) (91,784) (21,86) 22,375 (1,549,46) (1,27,244) (91,784) (21,86) 22,375 (1,549,46) 4,194,13 284,973 (77) 12,44 915,779 (18,992) 5,298, Balance at Reclasific. Changes in Translation Balance at Thousands of euros 12/31/6 Additions Disposals and transfers scope differences 12/31/7 Concession projects Concession projects under construction Cost Amortization Accumulated amortization TOTAL 6,433,249 38,887 (9,911) 383,911 46,98 (21,877) 6,871, , ,758 (2,24) (367,344) (1,842) 55,715 6,847,632 51,645 (12,151) 16,567 46,98 (23,719) 7,376,882 (1,549,46) (21,964) 3,236 (2,628) 1,492 (1,758,27) (1,549,46) (21,964) 3,236 (2,628) 1,492 (1,758,27) 5,298,226 29,681 (8,915) 13,939 46,98 (22,227) 5,618,612 In 27, the Group companies Hospital de Parla, S.A., Hospital del Noreste, S.A., Intercambiador de Plaza Elíptica, S.A. and Viastur, Concesionaria del Principado de Asturias, S.A. began operations and, therefore, investments in these companies were transferred from Concession projects under construction to Concession projects. Additions to Concession projects under construction were mainly due to the granting of construction certificates to companies in the infrastructure construction phase. The concession projects under construction or being operated by the Group s concession companies at the balance sheet dates in 27 and 26 are as follows:

182 18 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Thousands of euros Accumulated Carrying Under Accumulated Carrying Under Cost amortization amount construction Cost amortization amount construction Autopistas del Atlántico (AUDASA) Autopista Astur-Leonesa (AUCALSA) Autopista Vasco Aragonesa (AVASA) Autopistas de Navarra (AUDENASA) Autoestradas de Galicia Autovía del Noroeste CCARM S.C. Palma Manacor Viastur Concesionaria del Principado Autovía del Turia Autovía del Eresma Autopista del Barbanza Autopista de Guadalmedina Autovía del Arlanzón Neopistas Europistas Concesionaria Española AP-1 Europistas, Concesionaria del Estado Túneles de Artxanda Investment in motorways in Spain Triangulo do Sol Autopista del Valle S.C. Lagos S.C. Litoral Central S.C. Vespucio Sur S.C. Autopista Nororiente S.C. Rutas del Pacífico S.C. Elqui N-6 Concession Ltd M-5 Concession Ltd Autopista del Sol Investment in motorways outside Spain Motorways Hospital de Parla Hospital del Noreste Hospitals Itemosa (Intercambiador de Moncloa) Itepesa (Intercambiador Plaza Elíptica) Interchanges Sacyr S.A.U. (Plaza de la Encarnación) S.C. Aeropuerto Región Murcia Desaladora de Alcudia Sacyr S.A.U. (Comisarias Gisa) Other TOTAL 2,294,827 (412,113) 1,882,714 2,298,92 (367,882) 1,931,2 791,961 (3,525) 491, ,921 (286,392) 51, ,225 (34,793) 368, ,665 (283,295) 386,37 436,173 (181,727) 254, ,488 (167,951) 265, ,88 (39,448) 131,64 17,888 (33,576) 137,312 97,467 (3,217) 67,25 97,71 (24,732) 72,339 46,97 (2,224) 44,683 12,73 (2,859) 117,214 72, ,344 48,77 53,234 1,17 46,826 5,844 1, ,179 16,59 (3,559) 13,31 1,75,365 (272,666) 82,699 1,74,514 (28,564) 865,95 58,67 (6,2) 51,867 52,71 (4,514) 47,557 5,781,743 (1,556,331) 4,225, ,722 5,584,52 (1,376,96) 4,27, ,14 82,31 (22,56) 59,471 3,164 52,42 (2,312) 32,9 7,36 3,341 3, ,217 (58,545) 165, ,84 (51,269) 18,571 34,824 (3,731) 31,93 35,913 (3,28) 32, ,66 (3,27) 12, ,863 (1,266) 124, ,936 64,85 175,568 (39,25) 136, ,253 (33,523) 147,73 214,174 (69,55) 144, ,456 (62,848) 158,68 22,781 12, ,42 (196,96) 657, , ,727 (172,498) 676,229 75,865 6,636,163 (1,753,237) 4,882, ,149 6,433,247 (1,549,44) 4,883, ,879 83,316 (1,538) 81,778 57,736 93,127 (1,684) 91,443 57, ,443 (3,222) 173, ,587 67,21 41,993 58,561 (1,811) 56,75 32,375 58,561 (1,811) 56,75 67,21 74,368 17,23 7,98 2,849 6,455 19,858 2,569 46,365 1,549 6,871,167 (1,758,27) 5,112,897 55,715 6,433,247 (1,549,44) 4,883, ,383

183 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 181 Amounts shown for the construction phase of concession projects include interest on the borrowings that effectively financed investment in the motorway concerned. These finance costs were capitalized as Investments in motorways under construction. Investments in motorways in operation also includes interest capitalized by the concession companies. At December 31, 27 and 26, finance costs capitalized by companies were as follows: Thousands of euros Autopistas del Atlántico (AUDASA) Autopista Astur-Leonesa (AUCALSA) Autopistas de Navarra (AUDENASA) Autoestradas de Galicia Autopista Vasco Aragonesa (AVASA) Autovía del Noroeste CCARM Viastur Concesionaria del Principado (1) Pamasa Itepesa (Intercambiador Plaza Elíptica) (3) Hospital del Noreste (2) Hospital de Parla (2) S.C. Elqui S.C. Lagos S.C. Rutas del Pacífico S.C. Litoral Central S.C. Vespucio Sur Autopista AP-1 Túneles de Artxanda 15,825 92,27 17, ,5 4,33 4,483 4,642 1,279 4,152 3,78 11,186 17,211 11,499 1,588 31,867 21,423 2,486 15,825 92,27 17, ,5 4,33 11,566 17,796 11,89 1,642 32,951 21,423 CAPITALIZED FINANCE COSTS (CONCESSIONS IN OPERATION) 352, ,611 Thousands of euros Autovía del Turia, S.A. Viastur Concesionaria del Principado (1) Autovía del Eresma Autovía del Barbanza Itepesa (Intercambiador Plaza Elíptica) (3) S.C. Autopista Nororiente Hospital de Parla Hospital del Noreste 5,557 2,34 1,894 1,873 4, ,25 2,675 1, ,557 2,22 CAPITALIZED FINANCE COSTS (CONCESSIONS UNDER CONSTRUCTION) 16,747 11,12 (1) This toll road began operating in May 27. (2) These hospitals were opened in September 27. (3) This transport interchange was opened in April 27. The average capitalization rate used to determine the interest expense capitalized was 4.94%. The breakdown of the operating phase of concession projects is as follows: Concesion period Date put into End of service concession Companies/concessions in operation Autopistas del Atlántico (AUDASA) Autopista Astur-Leonesa (AUCALSA) Autopistas de Navarra (AUDENASA) Autoestradas de Galicia Autopista Vasco Aragonesa (AVASA) Autovía del Noroeste CCARM Viastur Concesionaria del Principado S.C. Palma Manacor Neopistas Intercambiador de Plaza Elíptica Hospital del Noreste Hospital de Parla Triangulo do Sol Autopista AP-1 Túneles de Artxanda Autopistas de Bizkaia Autovía del Arlanzón S.C. Elqui S.C. Lagos S.C. Litoral Central S.C. Vespucio Sur S.C. Rutas del Pacífico Companies/concessions under construction (*) S.C. Autopista Nororiente Autopistas del Valle Autopistas del Sol Autovía del Turia Autovía del Barbanza Autovía del Eresma Intercambiador de Moncloa Autopista del Guadalmedina M-5 Concession N-6 Concession (*) Year in which the companies/concessions under construction are expected to come on stream corresponds to the expected date the company/concession is put into service.

184 182 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS The breakdown of investment commitments by Group companies to concession projects is as follows: Thousands of euros Completion Investment made Committed date at 12/31/7 investment Autovía del Turia Autopista de Guadalmedina Autopista del Barbanza Autovía del Eresma S.C. Autopista Nororiente Auopista del Valle Autopista del Sol N-6 Concession Ltd M-5 Concession Ltd Trakia Motorway Itemosa (Moncloa transportation hub) Metro de Sevilla Aeropuerto de Murcia Hospital de Majadahonda INVESTMENT PROPERTIES The movement in the various items under this heading in 26 and 27 and the related accumulated depreciation are as follows: 26 Balance at Reclasification Transaction Balance at Thousands of euros 12/31/5 Additions Disposals and transfers differences 12/31/6 Rental buildings Cost Provision for impairment Provision for impairment Rental buildings Accumulated depreciation TOTAL 2,167, ,546 (4,759) 38,793 (33,391) 2,822,34 2,167, ,546 (4,759) 38,793 (33,391) 2,822,34 (9,492) 13,54 (9,492) (5,48) (9,492) 13,54 (9,492) (5,48) (149,489) (39,297) 5,735 (4,645) 1,283 (186,413) (149,489) (39,297) 5,735 (4,645) 1,283 (186,413) 2,8, ,249 14,48 24,656 (32,18) 2,63, Balance at Reclasification Transaction Balance at Thousands of euros 12/31/6 Additions Disposals and transfers differences 12/31/7 Rental buildings Cost Provision for impairment Provision for impairment Rental buildings Accumulated depreciation TOTAL 2,822,34 9,57 (8,889) 62,68 (14,371) 2,798,169 2,822,34 9,57 (8,889) 62,68 (14,371) 2,798,169 (5,48) 5,48 (5,48) 5,48 (186,413) (44,181) 8,668 1,537 (22,389) (186,413) (44,181) 8,668 1,537 (22,389) 2,63,411 (35,124) (66,741) 62,68 (12,834) 2,577,78

185 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 183 In 26, the main changes in Rental buildings included the acquisition of two office buildings, one in La Défense (Paris) and another at 141 Brickell Avenue, Miami (US). In 27, the main changes in this heading were the sales of the Lakua (Vitoria) and Los Fresnos (Gijón) shopping centers, the Puente de Piedra (Zaragoza) senior citizens home and the start-up of the office building at Josefa Valcárcel, 48 (Madrid). Rental buildings also includes a lease arrangement (in which the Group is lessee) on 8 buildings in various Spanish provinces which are rented out to Endesa group companies. The gross initial cost of the properties is 333, thousand euros and their net costs at December 31, 27 and 26 are 311,221 thousand and 315,281 thousand euros, respectively. The lease expires on February 14, 218 and the price of the purchase option is 115,884 thousand euros. The finance lease was arranged in 23. The breakdown of principal repayments outstanding under this lease at December 31, 27 and 26 is as follows: Thousands of euros Subsequent years - 8,344 8,768 9,214 9,683 1,176 1, ,512 8,419 8,755 9,16 9,47 9,848 1,242 1, ,651 TOTAL 222,39 241,143 term of one year s mandatory duration for both parties. Article 9 also states that on expiry of this term the lease can be extended by annual stages at the discretion of the lessee for up to a minimum of 5 years, when the lease shall be terminated. At each annual extension rent is revised upward by the equivalent of the National General Index of the consumer price index. In private homes rent is stated in the lease as all inclusive (bills). In government-sponsored housing, rent is set at a fixed level for each class of home, but services and utilities can be billed monthly on the same receipt. Besides one month s legal deposit, the Group requires a bank guarantee for 4-6 months rent, depending on the circumstances. - For non-residential use The law allows issues of term, rent, etc. to be freely agreed between the parties. Normally, a term is agreed with the lessee and rent is updated annually in accordance with the National General Index of the Consumer Price Index. Leases for terms longer than four years normally include a provision to revise the rent to market prices at the annual review for years 4-5, 8-1, etc. These leases normally specify rent plus bills and require, besides the statutory deposit of two-months rent, a bank guarantee for six monthly payments (rent plus bills plus VAT). The table below shows the Group s billings in future years under rental agreements outstanding as of December 31, 27 and estimates for the annual revisions in rents until expiry of the lease, which is assumed not to be renewed. In calculating the rent revisions we assumed an index of 2.5% for all years. All leases in the Testa group, except for those signed abroad, comply with Law 29/1994 dated November 24 on Urban Leases. Under this Law, given the make-up of Testa s property portfolio, there are two types of lease: - For residential use Article 9 of the Law states that the duration of the lease shall be freely agreed between the parties. Testa normally sets a Thousands of euros Subsequent years - 253, ,25 239, ,55 22,98 1,782, , ,18 25, , ,597 2,99 2,725,52 TOTAL 2,935,181 4,161,79 The estimated decline in rental income in future years between 26 and 27 is mainly due to the sale of the holdings in the

186 184 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Parla and Noreste hospitals to the concession division, which does not recognize this as rental income. The Group s investment properties have been appraised by CB Richard Ellis in accordance with the Valuation and Assessment Standards by the Royal Institution of Chartered Surveyors (RICS) of Great Britain and in accordance with the International Valuation Standards (IVS). The investment properties of the Group s property division at December 31, 27 and 26 were appraised at 3,998,9 and 3,821,237 thousand euros, respectively. The amounts corresponding to the principal of financial debt relating to this item at December 31, 27 and 26 were 1,56,586 and 1,76,36 thousand euros, respectively. The gross carrying amounts of items pledged as collateral of financial liabilities at December 31, 27 and 26 were 1,741,49 and 1,613,44 thousand euros, respectively, while the principal amounts of these liabilities those dates were 1,56,586 and 1,76,36 thousand euros, respectively. accordance with the International Valuation Standards (IVS) published by the International Valuation Standard Committee (IVSC). As at December 31, 26 there were no significant commitments to acquire investment properties. Impairment losses and corresponding reversals are reported under Change in provision for impairment of intangible assets, property plant and equipment and securities portfolio. In accordance with IAS 23, borrowing costs that are directly attributable to the acquisition, construction or production of assets may be capitalized. In 27 and 26, the Group capitalized 9,489 thousand and 5,246 thousand euros, respectively, of borrowing costs as part of the construction costs of investment properties. The amount capitalized in prior years was 7,56 thousand euros. Impairment of these assets is recognized as the difference between the net carrying amounts of the assets and the value appraised by an independent expert. This assessment was performed in accordance with the Valuation and Assessment Standards published July 31, 23 by the Royal Institution of Chartered Surveyors (RICS) of Great Britain and in 7. OTHER INTANGIBLE ASSETS The movement in the various items under this heading in 27 and 26 and the related accumulated amortization are as follows: 26 Balance at Reclasific. Changes in Translation Balance at Thousands of euros 12/31/5 Additions Disposals and transfers scope differences 12/31/6 Development costs Service concession arrangements Key money Computer software Prepayments Greenhouse gas emission rights Cost Service concession arrangements Key money Computer software Accumulated amortization TOTAL 4 (4) 233,129 73,49 (32,674) 25,956 53,797 (5,135) 348,563 2, ,15 16,637 1,567 (52) 2,194 1,721 (6) 21, (238) 3,316 3, ,862 78,373 (33,414) 28,37 55,518 (5,141) 376,55 (27,33) (1,432) 9,591 (3,395) (2,616) 266 (51,889) (387) (18) (3) (597) (13,57) (2,676) 494 (1,135) 6 (16,368) (4,747) (13,288) 1,85 (3,425) (21,751) 272 (68,854) 212,115 65,85 (23,329) 24,882 33,767 (4,869) 37,651

187 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Balance at Reclasific. Changes in Translation Balance at Thousands of euros 12/31/6 Additions Disposals and transfers scope differences 12/31/7 Service concession arrangements Key money Computer software Prepayments Greenhouse gas emission rights Cost Service concession arrangements Key money Computer software Accumulated amortization TOTAL 348,563 8,893 (23,76) 25 1,66 2, ,115 3,15 71 (161) 3,564 21,611 3,544 (928) 183 (56) (1) 24,344 2, ,3 3, (3,131) 1,56 376,55 16,161 (27,819) 24 1,1 2, ,379 (51,889) (8,26) 1, (349) (76) (59,637) (597) (2) 29 (768) (16,368) (2,25) (17,616) (68,854) (1,656) 1, (349) (752) (78,21) 37,651 5,55 (25,895) ,566 29,358 Service concession arrangements at December 31, 27 and 26 include a 75-year concession to rent out buildings in Bentaberri on behalf of the Basque Regional Government expiring in 274, a 2-year concession awarded by IVIMA to manage residential property in Usera (Madrid) expiring in 219, a concession in the Campo de Tiro de Leganés development lasting 2 years and expiring in 218, an administrative concession with the Barcelona port authority to operate a hotel, expiring in 222, but with an option to automatically extend it to 252, a residence in calle Rodríguez Marín (Madrid) under a 98-year concession maturing in 299 and a hotel at Passeig Taulat 278 (Barcelona) under a 5-year concession expiring in 252. Additions to Service concession arrangements" in 26 mainly relate to the 59 million euro fee paid by Sacyr Vallehermoso, S.A. for access to the water market of Santa Cruz de Tenerife. Other additions were due to changes in scope, mainly the change in the accounting of Empresa Mixta de Aguas de Las Palmas, S.A. from using the equity method in 25 to full consolidation in 26. In 27, Itínere-Concessoes de Infraestructuras S.A. corrected the adjustments made up to December 31, 26 in the accounts of Triangulo do Sol regarding the inflation adjustments to fees (19,33 thousand euros) payable to the Brazilian authorities granting the concession, entailing a decrease of 19,33 thousand euros in Service concession arrangements. This correction led to an increase in the goodwill associated with the investment (see Note 8). The fair values of intangible assets, whose net carrying amounts at December 31, 27 and 26 were 16,67 thousand and 19,986 thousand euros, respectively, corresponding to the property management division based on appraisals by CB Richard Ellis in accordance with the Valuation and Assessment Standards published by the Royal Institution of Chartered Surveyors (RICS) of Great Britain and in accordance with the International Valuation Standards (IVS), amount to 19,448 thousand and 184,64 thousand euros, respectively. The amounts corresponding to the principal of financial debt relating to this item at December 31, 27 and 26 were 14,175 and 15,12 thousand euros, respectively. The gross carrying amounts of items pledged as collateral of financial liabilities at December 31, 27 and 26 were 36,727 and 36,71 thousand euros, respectively. The principal amounts of these liabilities were 14,175 and 15,12 thousand euros, respectively. 8. GOODWILL a) Changes in goodwill The movement in 27 and 26 in this heading is as follows:

188 186 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 26 Balance at Reclassification Impairment and Balance at Thousands of euros 12/31/5 Additions Disposals and transfers translation diff. 12/31/6 Holding Somague SGPS Itínere Infraestructuras Valoriza Group Sufi Emalsa Hidro 4 Focus Airport Services Águas de Mandaguahy Águas de Cascais FM 2 Viveiros do Falcão Hidurbe Aguas do Marco Taviraverde Somague Group Somague Engenharia (Soconstroi) Engigas CVC Somague Ediçor Neopul Somague Investimentos Tegael Itínere Group Lusoponte Oesterota Triangulo do Sol Itínere Brasil AEO Vallehermoso Group Fortuna Golf Habitat Network Lusivial Promoçao e Gestao TOTAL 81,93 95, ,244 81,93 81,93 95,314 95, , (3,3) (18,769) (175) 15,247 11,362 (3,3) 98,62 18,769 (18,769) (5) (2) 76 2,26 2,26 1,332 (168) 1, ,241 2, ,144 31,144 18,482 18,482 3,677 3,677 1,356 1, ,172 1,172 4,793 4, ,663 (23) 13,64 7,327 7,327 1,932 (1,932) 1,538 (23) 1, ,191 1,932 4,123 1,874 1, ,431 1, ,777 95,639 (3,3) (18,769) (198) 329,149

189 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Balance at Reclassification Impairment and Balance at Thousands of euros 12/31/6 Additions Disposals and transfers translation diff. 12/31/7 Holding Somague SGPS Itínere Infraestructuras Valoriza Group Sufi Suardiaz Hidro 4 Focus Airport Services Águas de Mandaguahy Águas de Cascais FM 2 Viveiros do Falcão Hidurbe Aguas do Marco Taviraverde Fagar Somague Group Somague Engenharia (Soconstroi) Engigas CVC Somague Ediçor Neopul Somague Investimentos Gaeltec Tegael Itínere Group Lusoponte Triangulo do Sol Itínere Brasil AEO Testa Group Tesfran Vallehermoso Group Fortuna Golf Habitat Network Lusivial Promoçao e Gestao TOTAL 177, ,553 31,797 81,93 81,93 95, , ,867 15,247 2,474 (1,189) 6 16,538 98,62 98,62 2,24 2, (25) ,26 2,26 1,164 (1,164) ,241 2, ,144 1,297 32,441 18,482 18,482 3, ,545 1,356 1, ,172 1,172 4,793 4, ,64 6, ,88 7, ,86 1,515 4,993 6, , ,611 1,611 1,611 1,611 1,611 1,874 (1,737) (36) 1,431 (1,431) , ,87 (1,189) (1,643) 471,44 In 27, except for the goodwill from the Vallehermoso Group, which suffered a 1,737 thousand euro impairment, after carrying out impairment tests on all existing goodwill the Sacyr Vallehermoso Group found no further need to recognize losses in the value of goodwill in the consolidated income statement. In 26, goodwill existing in Empresa Mixta de Aguas de Las Palmas, S.A., was reclassified after the company went from being reported by the equity method in 25 to proportionate consolidation in 26. This goodwill was capitalized in 26 as an increase in the value of this company s service concession arrangements.

190 188 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS With effect from January 1, 26, the Group acquired an 8.63% stake in Itínere Infraestructuras, S.A. raising its overall holding to 91.38% from 82.75% in 25. The acquisition gave rise to goodwill of 95,314 thousand euros. In addition, in April 27 the Group acquired the remaining 8.62% of Itínere Infraestructuras, S.A., with the transaction giving rise to additional goodwill of 133,553 thousand euros. On March 1, 27, the Group acquired 9.13% of Tesfran, S.A. for 63,574 thousand euros, raising its stake in this company from 89.96% to 99.9%. This purchase produced 1,611 thousand euros of goodwill. b) Impairment testing of goodwill The Group tests each of the cash-generating units to which goodwill is related for impairment at each reporting date. Impairment is determined by assessing recoverable amount. Recoverable amount is the higher of the asset s fair value less costs to sell and value in use. Fair value is defined as the price for which a company could be sold between knowledgeable, willing parties in an arm s length transaction. The recoverable amount of each cash-generating unit determined by this method is then compared to its carrying amount, considered to be the sum of its assets and net goodwill. Where recoverable amount is less than the carrying amount, an irreversible impairment loss is recognized in the income statement. Where recoverable value cannot be measured reliably (in general, because the company is not listed on an organized financial market), it is valued using other methods. Three situations should be noted: - Goodwill capitalized as an increase in the value of concession projects: In these cases the unit is valued by discounting dividends that the shareholder will receive until the expiry of the concession. Dividends are discounted to present value using a rate that combines an IRR benchmarked to a 1-year bond from the country where the concession-holder operates and a beta reflecting the company s gearing. - Goodwill capitalized as an increase in the value of investment properties and inventories: In these cases, goodwill is valued using the Royal Institute of Chartered Surveyors (RICS) Appraisal and Valuation Standards published July 31, 23 and in accordance with the International Valuation Standards (IVS) published by the International Valuation Standards Committee (IVSC). - Other goodwill: In these cases, goodwill is valued by discounting the estimated forecast future cash flows to their present value using a discount rate that reflects the time value of money and the risks specific to the asset. At December 31, 27, goodwill of the Sacyr Vallehermoso Group mainly related to the acquisition in 25, 26 and 27 of the shareholdings in Itínere Infraestructuras, Sufi and Somague. In all cases, the recoverable amount of each cash-generating using is based on value in use, where the estimated future cash flows are discounted to their present value using a discount rate that reflects the time value of money and the risks specific to the asset. Two methods were used to value Itínere, offering a range of values to determine possible impairment. The first entails discounting dividends throughout the life of the concession and the second entails discounting the future cash flows based on the financial projections of each concession to expiration. The main difference between the two methods is the accounting and legal restriction on the distribution of dividends at the various companies, which causes the value of discounted dividends to be less than that of discount cash flows. With these accounting or legal restrictions on dividend payments, such as allocations to the legal reserve or profit for the distribution of available cash, the two methods would yield exactly the same amount. The key assumptions on which the Group s management has based its financial projections, based on the current situation of each concession project appraised individually, are as follows: - Toll reviews, as established in the concession arrangements of each project or legislation applicable to this type of contract. In all cases, this review is a direct function of inflation, so estimates of consumer prices have

191 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 189 been used bearing in mind the peculiarities of each market where the Group conducts is activity. - Traffic growth, with estimates made on a project-by-project basis considering the Group s broad experience, as well as the specific features of each geographical area, the current situation and the prospects for growth of each concession. - Investment and operating costs, also based on individual analysis of each concession project. - Borrowing requirements and specific conditions for raising funds (costs, terms, ratios, etc.) of each concession project. Given the individual characteristics of the concession activity (each project is subject to a specific and generally pre-established period, at the end of which the infrastructure reverts back to the government without compensation), the forecast period for cash flows corresponds to the length of each concession project. The growth rates of each of the above assumptions, above all traffic and toll revisions, were estimated bearing in mind the individual features of each market based on the Group s past experience and macroeconomic forecasts. Dividends are discounted to present value using a rate that combines an IRR benchmarked to a 1-year bond from the country where the concession-holder operates and a beta reflecting the company s gearing. Specifically, the discount rate, considered to be the return warranted on each project or Ke, is calculated using the Capital Asset Pricing Model (CAPM), establishing the risk-free rate (yield on the 1-year government bond) plus a market premium in accordance with the company s levels of gearing and risk perception. With these variables, the warranted return or Ke (cost of equity) for Spain and Chile (the main markets where the ITINERE Group carries out its business) is 7% and 8%, respectively. The valuation of Somague, under the same key assumptions as those used for Itínere, was made by discounting estimated cash flows for several motorway and water concessionaires that shareholders will receive through the concession periods based on the financial plans. The main assumptions underlying this valuation are as follows: - Growth rates in a range of 2% to 4%. - Discount rates based on the estimated cost of capital (CAPM) calculated using a risk-free rate benchmarked to the Portuguese 15-year government bond, a beta that reflects the risk of the assets and gearing, and a market risk premium. With these assumptions, the discount rate or Ke (cost of equity) falls within a range of 7% and 1%. Sufi s valuation is made in the discount of estimated cash flows to the end of its various concession projects. Management s projects are based on the following key assumptions: - Growth rates in a range of 2% to 4%. - Discount rates based on the weighted average cost of capital (WACC) of between 6% and 8%. There were no changes, nor are any reasonably expected, in the key assumptions on which management has determined the recoverable amount of the cash-generating units (or groups of cash-generating units) that could indicate that the carrying amount of the cash-generating unit (or groups of cash-generating units) exceeds recoverable amount. Sensitivity analyses are performed each year (several assumptions are made regarding discount and growth rates) to guarantee that under no scenario is there any impact on the recoverability of the Group s goodwill. c) Business combinations The net assets and goodwill acquired in the main business combinations carried out by the Sacyr Vallehermoso Group in 27 and 26, along with the contribution of the newly acquired businesses to revenue and Group profit for the year, are listed below. In 27, there were no business combinations. On November 28, 26, the Group acquired 5% of the shares of Europistas Concesionaria Española, S.A. The fair value of identifiable assets and liabilities at the date of acquisition were as follows:

192 19 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Thousands of euros Carrying Fair amount Adjustments value Concession projects Investments accounted for using the equity method Other assets Total assets Interest-bearing loans and borrowings Deferred tax liabilities (non-current) Other non-current liabilities Current liabilities Total equity and liabilities Total net assets Minority interests 213,26 9,32 51, ,254 23,321 5,428 7,197 73, ,72 66,182 (33,91) 689, ,187 1,664, , ,435 1,165,349 (582,143) 92,857 1,65,489 51,692 2,2,38 23,321 54,863 7,197 73, ,57 1,231,531 (615,234) Total fair value of net assets acquired Purchase price cash paid and directly attributable costs 33,91 583,26 616, ,297 The business acquired contributed 5,513 thousand euros of revenue to the Sacyr Vallehermoso Group in 26 and a loss after tax of 2,54 thousand euros, of which 66 thousand euros is attributable to minority interests. Thousands of euros 26 Ordinary revenue 73,312 Profit (loss) 1,27 Cash flow generated by the acquisition of Europistas Concesionaria Española, S.A. in 26 was as follows: Thousands of euros 26 Net cash acquired with the subsidiary 2,819 Cash paid (616,297) CASH RECOGNIZED ON THE ACQUISITION (613,478) The recoverable value of the Europistas Group is based on its value in use. This is calculated using the method of discounting dividends receivable by the shareholder until the expiry of the concession. Dividends are discounted using an IRR benchmarked to a Spanish 1-year bond (specifically the bond yield used was around 4.1%) plus a spread of 1-4bp depending on the risk and length of each concession. The rate of increase in revenue is determined by the growth in average daily traffic (ADT) and inflation. The inflation rates applied were as follows: 3% to 29, 2.5% to 219 and 2% after 219. The resulting entity includes the Europistas consolidated group in accordance with the International Financial Reporting Standards as adopted by the European Union. d) Other acquisitions With effect from January 1, 26, the Group acquired an 8.63% stake in Itínere Infraestructuras, S.A., raising its overall holding from 82.75% in 25 to 91.38% in 26. The acquisition gave rise to goodwill of 95,314 thousand euros. The cash amount paid in 26 was 119,75 thousand euros. On April 14, 27, the Group acquired the remaining 8.62% of Itínere Infraestructuras, S.A., giving its 1% ownership. The total cost of the transaction was 162, thousand euros, including the cash transferred and directly attributable costs. With this transaction, the minority interests in the Itínere Group disappear, with the Group fully consolidating 1% of the company. Ordinary revenue and profit for the year for the resulting entity had the acquisition date been January 1, 26 would have been: On March 1, 27, the Group acquired 9.13% of Tesfran, S.A., raising its stake to 99.9%.

193 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 191 The price paid was 63,574 thousand euros and the transaction lowered the minority interest in the company from 1.4 % to.91%. The acquisition of minority interests is not a business combination under IFRS 3 and there is no specific accounting prescribed for this type of transaction under this standard. Prior to these acquisitions the Sacyr Vallehermoso Group already exercised control over Itínere and Tesfran. The acquisition of minority interests in companies already considered subsidiaries does not require changes to the fair value of the assets and liabilities arising from the business combination carried out previously. The Sacyr Vallehermoso Group has elected to recognize the difference between the amount paid and the amount recognized under minority interests related to the acquisition as goodwill. 9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD The changes in this heading in 27 and 26 are as follows: 26 Share of Change Balance at Changes in profit Dividends in Balance at Thousands of euros 12/31/5 Transfers scope (loss) received equity Additions Disposals 12/31/6 Build2Edifica, S.A. Eurolink S.C.P.A. Sacyr Group Alazor Inversiones, S.A. Tacel Inversiones, S.A. Aeropuertos Región de Murcia, S.A. IRASA S.C. Palma Manacor Metro de Sevilla, S.A. A. Madrid Sur Autoestradas do Oeste Lusoponte Tenemetro PPPS Oesterota SMLN Itínere Group Biomeruelo de Energía, S.A. Partícipes de Biorreciclaje, S.A. Biorreciclaje de Cádiz, S.A. Gestión de Partícipes del Biorreciclaje, S.A. Infoser Estacionamiento Regulado, A.I.E. Parque Eólico La Sotonera, S.L. Inte RCD, S.L. Inte RCD Bahía de Cádiz, S.L. Biomasas del Pirineo, S.A. Cultivos Energéticos de Castilla, S.A. Geida Skikda, S.L. Geida Beni Saf, S.L. Geida Tlemcen, S.L. Empresa Mixta de Aguas de las Palmas, S.A. CEI (31) ,5 (2) 28, ,5 4 (31) 28,399 36,992 (7,649) 2,868 32,211 2,334 (1,314) 1,2 11 (39) 71 2,72 (1,836) 817 1,683 7, 7, 23,931 2,838 26,769 2,19 47 (216) 19,94 1,49 (751) (656) 433 (351) 9,165 2,617 3,396 (373) 5, (9) 217 (1,1) (19) (1,11) (751) 751 (43) (6) (49) 14,716 (8,175) 6,956 (94) 12, (24) 15 (54) (2) (56) (26) 961 (4) 1 (3) ,269 2 (26) 23 (1) (21) (33) 37 (17) (5) (62) (47) 29 (4) 1 (3) 7,133 (7,133) 9 (1) 8 (to be continued)

194 192 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS (to be continued) 26 Share of Change Balance at Changes in profit Dividends in Balance at Thousands of euros 12/31/5 Transfers scope (loss) received equity Additions Disposals 12/31/6 Ambigal LRTM Tratave Cascais Sede Nova Fagar Excehlentia Valoriza Group Camarate Golf, S.A. Nova Benicalap, S.A. Novacala Villajoyosa, S.A. Club de Campo as Mariñas, S.A. Mola 15, S.L. Claudia Zahara 22, S.L. Puerta Oro de Toledo, S.L. Habitat Network M Capital, S.A. Empresa Imobiliários Espaço Portimao Vallehermoso Group Parking Palau, S.A Centro d Oci Les Garverres, S.L Hospital de Majadahonda, S.A. PK Hoteles, S.L. Testa Group Edimecânica Soconstrói Engenharia Ferropor Engigás-Cabo Verde Tegael Marrocos HSE Complexo Tivane Parques da Alegria-Madeira Harmattan PPPS Vortal Maguetcno Archipelag Avition Somague Group Autopistas de Bizkaia, S.A. Inversora Autopistas de Levante, S.L. A. Madrid Sur SyV Participaciones Group Repsol YPF, S.A. SyV Part. Mobiliarias Group Eiffage, S.A. Eiffage Group (1) ,26 (19) 517 (21) 1, ,689 (7,133) 759 1,6 (289) 5,32 4,643 (1) 4, (1) 321 1,186 (884) (131) (16) ,82 (6,81) 1 2,1 2, (23) (21) 1 (1) 16,484 (6,823) (94) 29 (4) 8,746 1, , (55) 516 3,632 3,632 5,694 (252) (6) 5,436 7,354 3,632 (176) (6) 1, (1) ,772 (1,447) 1, , ,24 (99) (36) 43 (43) (146) 146 1,624 2, (1,526) 2,964 2, , ,43 (3,999) 535,44 524, ,314 1,65,491 (3,621) 1,61,87 6,525,55 88,838 (87,946) (15,972) 6,42,47 6,525,55 88,838 (87,946) (15,972) 6,42,47 1,868,879 12,197 (21,61) (1,719) 1,938,756 1,868,879 12,197 (21,61) (1,719) 1,938,756 SACYR VALLEHERMOSO GROUP 141,27 9,477, ,563 (19,547) (116,691) 8,252 (2,832) 9,579,598 (to be continued)

195 Build2Edifica, S.A. Eurolink S.C.P.A. Sacyr Group Alazor Inversiones, S.A. Tacel Inversiones, S.A. Aeropuertos Región de Murcia, S.A. IRASA S.C. Palma Manacor Metro de Sevilla, S.A. A. Madrid Sur Hospital de Majadahonda, S.A. Autoestradas do Oeste Lusoponte Tenemetro PPPS Oesterota SMLN Itínere Group Biomeruelo de Energía, S.A. Partícipes de Biorreciclaje, S.A. Biorreciclaje de Cádiz, S.A. Gestión de Partícipes del Biorreciclaje, S.A. Infoser Estacionamiento Regulado, A.I.E. Parque Eólico La Sotonera, S.L. Inte RCD, S.L. Inte RCD Bahía de Cádiz, S.L. Biomasas del Pirineo, S.A. Cultivos Energéticos de Castilla, S.A. Geida Skikda, S.L. Geida Beni Saf, S.L. Geida Tlemcen, S.L. Alcorec, S.L. Inte RCD Huelva, S.L. Gestión de Infraestructuras de Canarias, S.A. Compañía Energética de Linares CEI Ambigal LRTM Tratave Cascais Sede Nova Fagar Excehlentia AGS-Hidurbe Valoriza Group Camarate Golf, S.A. Nova Benicalap, S.A. Novacala Villajoyosa, S.A. ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 193 (to be continued) 27 Share of Change Balance at Changes in profit Dividends in Balance at Thousands of euros 12/31/6 Transfers scope (loss) received equity Additions Disposals 12/31/7 351 (291) 6 28, ,5 28,399 (291) 2 28,11 32,211 (7,966) (1,97) 23,148 1,2 (1,73) (149) (22) ,683 (1,29) 1,172 1,565 7, (7,) 26,769 26,769 19,94 (1,551) (5,297) 1,6 14,152 3,632 3,632 9,165 13,94 (1,381) 21,724 5,64 2,2 (3,562) 4, (4) 1,851 2,64 (1,11) (171) (1,281) 74 2,888 2,962 (49) (1,4) (578) (1,667) 12,557 3,632 (7,) 3,38 (5,297) 2,232 (2,28) 97, (1) 173 (56) (37) (543) ,268 (3) (3) (6) 6 24 (11) 73 1, (599) 1,124 (1) (8) (17) 2 7 (8) 174 (7) (1) (3) (4) 7 (23) 29 (43) (3) 3,435 (3,482) 2 (48) (14) (36) (2) (8) ,31 2, ,512 (43) 1, ,32 3,51 (2,72) 74 1,517 (747) 6,666 4,633 (5) 4, (222) (32) (to be continued)

196 194 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Club de Campo as Mariñas, S.A. Mola 15, S.L. Claudia Zahara 22, S.L. Puerta Oro de Toledo, S.L. Habitat Network M Capital, S.A. Vallehermoso Group Parking Palau, S.A Centro d Oci Les Garverres, S.L Hospital de Majadahonda, S.A. PK Hoteles, S.L. Testa Group Edimecânica Socontrói Engenharia Ferropor Engigás-Cabo Verde Tegael Marrocos HSE Complexo Tivane Parques da Alegria-Madeira Harmattan PPPS Vortal Maguetcno Engipul Archipelag Avition Puerto Marín Mulle del Leste Auditorio de Vigo Somague Group Autopistas de Bizkaia, S.A. Inversora Autopistas de Levante, S.L. A. Madrid Sur SyV Participaciones Group Repsol YPF, S.A. SyV Part. Mobiliarias Group Eiffage, S.A. Eiffage Group (to be continued) 27 Share of Change Balance at Changes in profit Dividends in Balance at Thousands of euros 12/31/6 Transfers scope (loss) received equity Additions Disposals 12/31/7 29 (33) (4) ,1 2, (24) 525 8,746 (32) (279) 8,283 1, (248) (137) (3) 513 3,632 (3,632) 5,436 (156) 7 5,35 1,84 (3,632) (21) (248) 7 (137) 6, (14) (51) (1) 25 4 (5) (54) 1, (1,193) (1) 1 5 (5) 1,24 (1,24) (154) (52) (2) 2 (1) 1 (161) 161 (63) 63 1,248 (1,248) (65) 65 2, (3,844) 639 2,152 (2,151) 1 535,44 (13,6) 2,41 524, ,314 (6,713) (13,243) 2,588 56,946 1,61,87 (2,151) (19,719) (13,243) 4,629 1,31,386 6,42,47 637,919 (214,979) (27,231) (1) 6,636,178 6,42,47 637,919 (214,979) (27,231) (1) 6,636,178 1,938,756 42,61 331,948 (31,47) 81,534 (873) 2,362,379 1,938,756 42,61 331,948 (31,47) 81,534 (873) 2,362,379 SACYR VALLEHERMOSO GROUP 9,579,598 36, ,82 (246,274) (144,371) 9,367 (7,99) 1,177,611 Additions in 26 mainly include the acquisitions of a 2.1% stake in Repsol YPF, S.A. and a 32.61% stake in Eiffage, S.A. Both of these companies were consolidated using the equity method. The movement in Changes in equity in 26 comprised a 33,798 thousand euros reduction in reserves of consolidated companies and an 82,893 thousand euros reduction for translation differences. 27 included a change in equity at Repsol YPF, S.A. and Eiffage, S.A. With Repsol YPF, S.A., this was mainly due to the decrease in translation differences, which led to a

197 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 195 reduction of 21,75 thousand euros. The dividend receivable from Repsol at December 31, 27 amounted to 122,147 thousand euros, recognized under Current financial assets. The change with Eiffage, S.A. was mainly due to changes in the company s equity not recognized in 26 amounting to 4,765 thousand euros and in 27 amounting to 4,769 thousand euros. In addition, S.C. Palam Manacor is now consolidated using proportionate consolidation (until 26 it was consolidated using the equity method) following the joint management agreement between its controlling shareholders. Inversora de Autopistas del Sur, S.L. which is in turn a shareholder in Autopistas Madrid Sur, C.E.S.A., whose corporate purpose is the construction, maintenance and operation of the R-4 toll highway between Madrid and Ocaña, the M-5-Ocaña section, the M-5 ring road in Madrid, the segment between state highways N-IV and N-II; the southeast M-4-M-5 axis and the extension of the connection between the N-II and the Eastern distributor, and initiatives to upgrade the M-5 on the M-49 stretch to the N-IV. In 27, the value of this investment was adjusted after recalculation of the IFRS-EU adjustments to the deferred finance cost recognized in accordance with Spanish GAAP under changes in equity. At December 31, 27, Repsol YPF was trading at euros per share, giving a value for Sacyr Vallehermoso s stake of 5,955,97 thousand euros. This value is less than the average purchase price of euros per share. Nonetheless, the value in use of Repsol YPF is greater than the carrying amount of the investment. Meanwhile, French company Eiffage s share price ended 27 at euros, putting Sacyr Vallehermoso s stake at 2,71,981 thousand euros. This company s value in use also exceeds the carrying amount of the investment. The impairment tests performed on this investments are as follows: a) Shareholding in Eiffage The Sacyr Vallehermoso Group estimated the recoverable amount of its investment in Eiffage at the reporting date to assess the need to write down the carrying amount. Recoverable amount is the higher of fair value less costs to sell and value in use. The Group estimated value in use in accordance with IAS 36. The value in use estimation of Eiffage was calculated as the sum of the individual amounts determined for each cash-generating unit, as follows: - Construction: the division that brings together all the building and property activities. - Civil engineering: The division responsible for all activities related to civil engineering and public works. - Installations: the division that mainly comprises electricity installation activities. - Metallic constructions: this branch of the business develops all types of metal structures, including oil platforms, metal roofs for buildings, bridges, etc. - Concessions: this division is responsible for construction, operation and maintenance of transport infrastructure concessions. As this business is made up of concessions with varying periods of operations, individual projections have been made for the motorways, especially: Autoroutes Parin Rhin Rhone (APRR), Viaduc de Millau and Societé Marseillaise du Tunnel Prado Carénage (SMTPC). The value in use calculation for each cash-generating unit was made by discounting free cash flows in order to calculate their enterprise value. Once the total enterprise value of the cash-generating units is calculated, net debt and minority interests are deducted. As the concessions are of limited duration, the calculations were performed based on the estimated future cash flows to the end of the concession period. For the other divisions 5-year projections were used, with residual value calculated based on normalized cash flow in the last year projected to perpetuity at growth rates (g) between 1% and 1.5%. Estimated cash flows are discounted at a rate based on WACC, which depending on the weightings ranges from 6.4% to 9.4%. Key assumptions used in discounted cash flow calculations: - Discount rate of free cash flows to shareholders (Ke): between 9.4% and 12%.

198 196 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS - Risk-free rate (Rf): the yield on the French 1-year government bond, which at December 31, 27 was 4.35%. - Unleveraged betas (Beta u): between.6 and 1.1. A sensitivity analysis was performed based on these assumptions using the ranges, above all growth to perpetuity (between % and 3%) and WACC (between 5% and 1%), for each cash-generating unit. In addition, a peer multiple valuation was made to compare the results. These analyses point to the reasonableness of the recoverable amount recognized in base scenarios of the valuation, so no impairment losses were required. b) Shareholding in Repsol The Sacyr Vallehermoso Group estimated the recoverable amount of its investment in Repsol to assess the need to write down the carrying amount. Recoverable amount is the higher of fair value less costs to sell and value in use. The Group estimated value in use in accordance with IAS 36. The value in use calculation for Repsol was made using discounted estimated cash flows generated by the group less net debt and minority interests. 5-year projections were used, with residual value calculated based on normalized cash flow in the last year projected to perpetuity at a growth rate (g) of 1.5%. Estimated cash flows are discounted at a rate based on WACC, which considering the weightings of each source of capital is estimated at around 11.5%. Key assumptions used in discounted cash flow calculations: - Discount rate of free cash flows to shareholders (Ke): around 14%. - Risk-free rate (Rf): the yield on the Spanish 1-year government bond, which at December 31, 27 was 4.4%. - Unleveraged betas (Beta u): 1. A sensitivity analysis was performed based on these assumptions using the ranges, above all growth to perpetuity (between.5% and 2.5%) and WACC (between 11% and 12%). These analyses point to the reasonableness of the recoverable amount recognized in base scenarios of the valuation, so no impairment losses were required. The table below presents the financial highlights of the main companies accounted for using the equity method in 27 and 26:

199 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Total Total Operating Profit Thousands of euros assets liabilities Revenue profit (loss) Accesos Madrid Acega Aeropuerto de Murcia Henarsa Pamasa Metro de Sevilla Autopista Madrid Sur Autoestradas do Oeste Lusoponte Tenemetro PPPS SMLN Inversora Autopistas de Levante Build2Edifica Eurolink Camarate Golf Mola 15 Puerta Oro de Toledo M Capital, S.A. Nova Benicalap Habitat Network Tratave Aguas do Sado Fagar Taviraverde LRTM Biomeruelo de Energía Partícipes de Biorreciclaje Biorreciclaje de Cádiz Gestión Partícipes Biorreciclaje Infoser Estacionamiento Regulado Parque Eólico La Sotonera Inte RCD Inte RCD Bahía de Cádiz Biomasas Pirineo Cultiv. Energéticos Castilla Geida Skida Geida Beni Saf Geida Tlemcen Eiffage Repsol Soconstrói Engenharia HSE Vortal Maguetcno Normetro Ferropor Edimecânica Archipelag Avition Centro d Oci Les Gavarres PK Hoteles 22 Parking Palau Hospital de Majadahonda Autopistas de Bizkaia 1,135,842 1,7,813 21,811 27,243 (34,762) 327, ,774 7,433 7,461 (7,968) 1,897 1,325 1,671 (314) 635,77 613,329 2,975 21,751 (26,64) 161, ,127 2,49 355, ,739 5, ,13 576,71 17,92 2,11 (1,93) 214, ,131 (1,384) 893,77 833,282 59,52 65,1 19,746 7,563 1,68 1,253 1,37 (29) (685) 1,186 1,186 6 (2) 571, ,611 6,787 12,272 (1,62) 16,24 16,24 4, ,567 3,577 19,634 68,873 51,55 (46) 38,451 35,354 4,551 4,551 (2) 36,217 3,218 1,555 1,555 11,354 4,889 1,819 1, , , ,841 2, ,383 65,384 7,512 1, ,37 17,54 11,639 12, ,515 12,829 7,292 8,669 (661) 8,22 6,515 6,278 6, , ,665 1, ,939 17,457 (5) 34,542 28,657 12,67 13, (6) ,443 1, ,197 2,992 4,976 4,917 1, (83) (151) (18) (17) 5,757 5,75 1,54 2,348 (248) 8,396 8,283 2,51 2,51 (187) (12) 23,45, 2,696, 1,74, 1,74,73 377, 45,21, 27,159, 51,355, 55,8, 3,124, 1,532 1,56 23,9 6,633 66,329 15,744 9,938 4,237 2,87 4, (16) 43 28,149 28, , (13) 535 (145) 2, (255) 28,842 23,819 4,46 4,46 (776) 4, ,467 1, ,65 112,97 7,453 3,151 12, ,22

200 198 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 Total Total Operating Profit Thousands of euros assets liabilities Revenue profit (loss) Accesos Madrid Acega Aeropuerto de Murcia Henarsa Metro de Sevilla Autopista Madrid Sur Hospital de Majadahonda Autoestradas do Oeste Lusoponte Tenemetro PPPS SMLN Valitoral Inversora Autopistas de Levante Build2Edifica Eurolink Camarate Golf Mola 15 Puerta Oro de Toledo M Capital Nova Benicalap Habitat Network Tratave Aguas do Sado Fagar Taviraverde LRTM Biomeruelo de Energía Partícipes de Biorreciclaje Biorreciclaje de Cádiz Gestión Partícipes Biorreciclaje Infoser Estacionamiento Regulado Parque Eólico La Sotonera Inte RCD Inte RCD Bahía de Cádiz Biomasas Pirineo Cultiv. Energéticos Castilla Geida Skida Geida Tlemcen Alcorec Inte RCD Huelva Gestión de Infraestructuras de Canarias Gicsa Zona Verde y Paisajismo Compañía Energética de Linares Eiffage Repsol Soconstrói Engenharia HSE Vortal Maguetcno Normetro Engipul Ferropor Edimecânica Archipelag Avition Centro d Oci Les Gavarres PK Hoteles 22 Parking Palau Tratave Aguas do Sado Fagar Taviraverde LRTM 1,165,213 1,73,27 24,216 3,2 (31,633) 326, ,3 8,745 8,92 (5,844) 1, ,45 2, , 647,13 25,47 26,65 (17,23) 583, ,763 1, , ,143 23,591 26,68 (15,55) 249, , ,286 36,884 55, , ,985 62,45 65,768 11,745 8,395 1,513 1,81 1,835 (13) (933) 27,324 3,674 (4,161) 328,135 33,447 5,759 5,773 8,151 58,125 58,837 18,289 18,917 (21,375) 13,269 12, ,72 4,72 2,33 78,622 6,824 (46) 47,96 44,81 37,54 31,55 11,943 4,896 2,347 2, , , ,997 63,8 8,349 11,773 1,428 34,481 32,868 12,128 12, ,176 11,874 9,493 11,292 (1,349) 9,195 7,283 7,68 7, , , ,56 1, ,939 17,569 39,465 31,72 12,643 13,981 1, (9) 1,87 1, ,473 18,746 4,631 4,631 1, (32) (159) (2) 7,53 7, (121) 3,84 3, (93) (133) 28,867 28, ,353 6,158 (4) 25,99, 21,433, 12,577, 12,577,23 1,, 47,164, 28,2, 52,98, 55,923, 3,188, 1 1 (1) 3,152 1,488 3,772 1,277, , ,75 1, (2) (2) 31,5 31,5 85,858 (1) 4 (1) (1) 153 (14) (14) (161) (161) 2,44 53 (12) 31,421 26,663 5,175 5,321 (479) 3, ,42 1, ,997 69,997 8,349 11,773 1,427 34,481 34,481 12,128 12, ,176 25,176 9,493 11,292 (1,349) 9,195 9,195 7,68 7, ,51 1,

201 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 199 The Group classifies companies as associates when it exercises significant influence over their management, regardless of whether its holding is less than 2%. At December 31, 27, the Group s holding in Eiffage stood at 33.1%, with a cost of 1,91,94 thousand euros. The holding in Repsol at that date was 2.1%, with a cost of 6,525,55 thousand euros. 1.CONTRIBUTION BY COMPANIES CONSOLIDATED USING PROPORTIONATE CONSOLIDATION The tables below give basic financial information on companies consolidated using proportionate consolidation in 26 and 27: 26 Non-current Current Non-current Current Thousands of euros assets assets liabilities liabilities Revenue Expenses Gestora Operadora del Pacífico Rutas II S.C. Litoral Central S.C. Rutas del Pacífico S.C. Vespucio Sur Sociedad de Operación y Logística Autopistas del Valle Autopista del Sol Autopista Vasco Aragonesa (AVASA) S.C. de Palma de Manacor Aguas de Toledo Aparcamiento Recadero Boremer Central Térmica la Torrecilla Compost del Pirineo Desgasificación de Vertederos Iniciativas Medioambientales del Sur Valdemingómez 2 Empresa Mixta de Aguas de Las Palmas Desarrollos Eólicos Extremeños Gicsa Zona Verde y Paisajismo Metrofangs Tecnologías Avanzadas de la Macaronesia Compañía Energética de Linares Constructora ACS-Sacyr Constructora Necso-Sacyr Constructora Sacyr-Necso Constructora San José-San Ramón Tecnológica Lena Aplicaçao Urbana Claudia Zahara 22 Cortijo del Moro Sofetral Bardiomar Pazo de Congresos de Vigo PK Inversiones Provitae Europistas, Concesionaria Española Túneles de Artxanda Triangulo do Sol 427 1, ,34 3, , ,88 4, ,9 1,57 94,151 5,7 8,181 9,25 338,678 3, ,777 1,13 43,892 45,94 27,392 37,33 248,777 3,22 26,214 31,17 3,745 1,946 3,47 1,523 3,49 2,478 9,667 2, ,63 1,63 4, , ,4 16, ,513 52,44 149,58 88,189 17,5 5 6,692 1,75 5,194 2,61 1,723 3, , ,86 8,372 14,378 5,465 19,693 19, ,67 8, ,27 9,578 9,24 37,62 3,44 28,35 17,191 6,14 57, ,82 1,82 2,16 2,16 36,87 14,251 28,73 11,16 27,895 27, ,681 4,214 19,937 4, ,135 1,451 1,4 6, ,444 4,596 3,895 3,85 9,882 2,43 2,95 8,96 11,1 1,169 15,619 79,46 13,315 5,626 24,165 24,512 24,653 1,75 21, ,273 1, ,992 1,627 13,835 12,692 37,63 6,3 27,513 6,422 16,237 15,14 1,285 19,31 9, , , ,64 29,14 199,618 76,563 6,27 3,883 1,687 3,549 8,319 4, ,942 6,17 61,884 16,477 62,242 51,317

202 2 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 26 Non-current Current Non-current Current Thousands of euros assets assets liabilities liabilities Revenue Expenses Gestora Operadora del Pacifíco Rutas II S.C. Litoral Central S.C. Rutas del Pacífico S.C. Vespucio Sur Sociedad de Operación y Logística M-5 Concession Holding Ltd M-5 Concession Ltd N-6 Operations Ltd N-6 Concession Holding Ltd N-6 Concession Ltd Autopistas del Valle Autopista del Sol Autopista Vasco Aragonesa (AVASA) S.C. de Palma de Manacor Aguas de Toledo Aparcamiento Recadero Suardíaz Servicios Marítimos de Barcelona Boremer Central Térmica la Torrecilla Compost del Pirineo Desgasificación de Vertederos Iniciativas Medioambientales del Sur Valdemingómez 2 Empresa Mixta de Aguas de Las Palmas Ibervalor Energía Aragonesa Desarrollos Eólicos Extremeños Metrofangs M 5 (D&C) Ltd N-6 Construction Ltd Constructora ACS-Sacyr Constructora Necso-Sacyr Constructora Sacyr-Necso Constructora San José-Caldera Constructora San José-San Ramón Tecnológica Lena Aplicaçao Urbana Claudia Zahara 22 Cortijo del Moro Sofetral Bardiomar Pazo de Congresos de Vigo PK Inversiones Provitae Europistas, Concesionaria Española AP-1 Europistas Túneles de Artxanda Autovía del Arlanzón Triangulo do Sol 375 1, ,731 3, , ,168 4, ,726 8,574 97,873 7,928 9,242 8, ,12 29,58 328,774 3,599 45,29 56,36 271,52 41, ,828 5,41 36,452 46,673 3,541 2,185 3,344 1,576 4,731 4, ,645 26,145 33,718 22,54 5,385 5, ,143 9,343 54,162 5,79 9,185 9,185 9,621 1, ,7 1,7 5, , ,725 15,45 557,62 57, ,39 14,35 129,541 16, ,174 5,576 7,95 11,25 4, ,469 4,23 1,26 3, , ,17 1,379 12,569 1,281 2,797 2,1 17,727 8,758 12,927 8,288 15,83 18, , (4) ,37 1,367 1,698 9,729 7,969 7,336 37,593 31,72 22,398 21,552 59,892 57, ,442 17,416 24,618 17,554 28,2 28, ,265 9,561 2,98 3, ,529 3,699 2,685 19, , ,482 1,685 1, , ,962 3, ,6 5,659 1,746 1,722 8,618 11,138 2,95 16,51 29,872 3,446 12,558 56, ,366 43,987 28,525 32,589 24, ,236 1,76 1 1, ,712 1,222 2,577 2,45 36, ,712 2,239 8,23 5,172 11,467 8,98 2,292 6, , , ,626 1,96 78,711 51,144 61,86 42,32 198,41 26, ,58 9,418 17,995 12,896 96,84 1,832 78,329 3,572 5,895 8,663 1,365 3, ,955 7,42 63,393 28,264 72,37 54,923

203 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 21 There were no contingent liabilities or commitments in respect of the above businesses in 26 and NON-CURRENT FINANCIAL ASSETS Changes in 26 and 27 in the different items under this heading are as follows: 26 Balance at Reclasification Change Tranlation Balance at Thousands of euros 12/31/5 Additions Disposals and transfers in scope differences 12/31/6 Loans to companies accounted for using the equity method Available-for-sale financial assets Other loans and receivables Financial instruments at fair value through profit or loss Long-term guarantees and deposits given 41,257 19,37 491,994 64,718 11,634 25,136 6,489 18,285 2,399 (9,59) (1,889) (9,579) (34,5) 645 (91,19) (23,23) 19 7,71 95 (366) (56,43) (3) 44,27 32,8 39,8 18,285 32,682 Cost Provision for impairment Provision for impairment 77,6 117,943 (1,493) (1,493) (145,477) (113,577) 7,914 (56,799) 517,1 (1,493) (1,493) TOTAL 77,6 17,45 (145,477) (113,577) 7,914 (56,799) 56, Balance at Reclasification Change Tranlation Balance at Thousands of euros 12/31/6 Additions Disposals and transfers in scope differences 12/31/7 Loans to companies accounted for using the equity method Available-for-sale financial assets Other loans and receivables Held-for-trading financial assets Financial instruments at fair value through profit or loss Long-term guarantees and deposits given 44,27 32,8 39,8 18,285 32,682 2,712 25,17 122,88 12,67 54,984 2,672 (26,44) (22,126) (36,752) (16) (6,685) (692) (26,51) (5) (2,58) 8,46 (11) (17) (11,494) (2) 36,277 34,19 446,61 12,67 73,253 28,66 Cost Provision for impairment 517,1 (1,493) 238,935 (91,983) 1,493 (27,243) 6,391 (11,513) 631,597 Provision for impairment (1,493) 1,493 TOTAL 56, ,935 (81,49) (27,243) 6,391 (11,513) 631,597 In accordance with Article 86 of the revised Spanish Corporations Law (Ley de Sociedades Anónimas), Group companies have disclosed all companies in which they have taken a shareholding of over 1% or, where they already held such a shareholding, any additional acquisitions or sales above 1%. Available-for-sale financial assets: these relate to equity investments that do not meet IFRS criteria for consideration as investments in subsidiaries, associates or joint ventures and are shown in the consolidated balance sheet at fair value.

204 22 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Loans to companies accounted for using the equity method includes loans granted by the Group to companies accounted for using this method. Noteworthy in 27 was the decrease in the loan to Autoestradas do Oeste, S.A., which belongs to the Somague Itínere-Concessoes Group. This company sold 4% of its holding in Autoestradas do Atlántico, S.A., which allowed it to pay back part of the loans granted by Somague Itínere-Concessoes de Infraestructuras S.A. to a value of 13,867 thousand euros. A 2,24 thousand euro provision made against this loan was reversed. Other loans and receivables in 26 and 27 basically comprises payments pending over the long term from government grants and other compensation for the completion of work ordered by the Chilean Ministry for Civil Engineering which are included in the contracts of Elqui, Lagos, Rutas, Litoral and Vespucio Sur. In 26 and 27, these amounted to 325,541 and 348,846 thousand euros, respectively. The rate used to discount these receivables to their present value was 4.95%. It also includes loans made in 27 by Chilean companies ELQUI, LITORAL and RUTAS to their shareholders Abertis Infraestructura Chile, Ltda., Acciona Concesiones Chile, S.A. and ACS Chile, S.A. of 1,451 thousand euros, 4,722 thousand euros and 2,836 thousand euros, respectively. In 26 this receivables balance diminished significantly due the translation effect following depreciation of the Chilean peso relative to the euro. The maturity schedule of loans and receivables from the Chilean government at December 31, 26 and 27 is as follows: Thousands of euros In two years In three years In four years In five years and after TOTAL Non-current maturities ,521 28,339 32,825 24,5 33,888 24, , , , , TAX SITUATION a) Consolidated tax group As stated in note 3.c.19 of the notes to the 27 consolidated financial statements, Sacyr Vallehermoso, S.A. and its subsidiaries, in compliance with Royal Decree 4/24 implementing the amended Income Tax Law (Ley del Impuesto sobre Sociedades), have decided with the approval of each company s corporate bodies, to file taxes under the consolidated tax regime for 27, and have notified the A.E.A.T. (the Spanish tax authorities), which has notified the parent company that its tax number is 2/2. The companies belonging to the tax group are as follows: Aurentia, S.A., Autoestradas de Galicia, S.A., Autopista concesionaria Astur Leonesa, S.A., Autovía del Noroeste Concesionaria de la Comunidad Autónoma de la Región de Murcia, S.A., Autopistas del Atlántico, S.A., Avasacyr S.L.U., Biomasa de las Navas, S.L., Biomasas de Puente Genil, S.L., C.E. Barragua, C.E. Escombreras, C.E. Espiel, C.E. Las Villas, Cafestore, S.A.U., Capace, S.L.U., Cavosa Obras y Proyectos, S.A., Compañía Energética Puente del Obispo, S.L., Compañía Energética La Roda, S.L., Compañía Energética de Pata de Mulo, S.L., Empresa Mixta Aguas S. Cruz de Tenerife, S.A., ENA Infraestructuras, S.A., Enaitínere, S.L.U., Erantos, S.A., Eurocomercial, S.A.U., Fortuna Golf, S.L., Gescentesta, S.L., Gesfontesta, S.A., Gestora Canaria de Lodos de Depuradora, S.A., Habitat Baix, S.L., Hidroandaluza, S.L., Hospital de Parla, S.A., Hospital del NoresteS S.A., Ideyco, S.A.U., Inchisacyr, S.A., Intercambiador de Transportes de Plaza Elíptica, S.A., Itaceco, S.L., Itínere Infraestructuras, S.A., Navinca, S.A., Neopistas, S.A.U.,, Nisa Vallehermoso, S.A., Obras y Servicios de Galicia y Asturias, S.A., Olextra, S.A., Prinur, S.A.U., Prosacyr Hoteles, S.L., Prosacyr Ocio, S.L., Sacyr Vallehermoso Participaciones Mobiliarias, S.L., Sacyr Vallehermoso Participaciones, S.L., Sacyr Vallehermoso, S.A., Sacyr, S.A.U., Sociedad Anónima de Depuración y Tratamientos, S.A., Santacrucera de Aguas, S.L., Scrinser, S.A., Secaderos de Biomasa, S.L., Servicios Medioambientales y Energéticos de Valencia 27, S.L., Spica Siglo XXI, S.L., Sufi, S.A., Testa Inmuebles en Renta, S.A., Testa Residencial, S.L.U., Trade Center Hotele, S.L.U., Tradirmi, S.L., Valoriza Agua, S.L., Valoriza Conservación e Infraestructuras, S.A., Valoriza Energía, S.L.U., Valoriza Facilities, S.A., Valoriza Gestión, S.A.U. and Vallehermoso División Promoción, S.A.U. b) Years open to inspection The Company is, in general, open to inspection of all taxes for which it is liable for the last four years. The directors of the

205 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 23 parent company consider that any tax liabilities arising from tax reviews of the years open to inspection would not be material. c) Tax rate The main nominal tax rates used in calculating tax expense on Group companies income are as follows: - Spain: 32.5% in 27; 35% in 26 - Portugal: 27.5% - Chile: 17% - Brazil: 33% - Ireland: 12.5% - Costa Rica: 3% - Italy: 33% - United States: 3% - Mozambique: 32% Thousands of euros Consolidated profit before tax 923, ,846 Income tax calculated at the domestic tax rate (4) 3, ,995 Permanent differences (1) (231,358) (116,57) Consolidation adjustments (2) 22,423 13,354 Offset of unused tax losses (752) (272) Tax deductions and relief (3) (16,375) (88,32) Adjustment for foreign tax rates (5,699) (1,8) Adjustment for change in tax rate (4) (9,351) 2,446 Other adjustments 3,949 Income tax expense (26,918) 161,184 Effective tax rate (2.9%) 22.3% Deferred tax assets 7,545 (18,221) Deferred tax liabilities 3,114 (512,761) Current tax expense 73,741 (459,798) The Sacyr Vallehermoso Group recognized an income tax expense of 161,184 thousand euros in 26 and an income tax receivable of 26,9189 thousand euros in 27, representing effective tax rates for each year of 22.3% and - 2.9%, respectively. The change in the effective tax rate between 26 and 27 was mainly due to the large share of profits of companies accounted for using the equity method, which went from 181,563 thousand euros to 951,82 thousand euros. The change in these results is not proportionately reflected in tax. The reconciliation between tax expense and the product of accounting profit multiplied by Spain s domestic tax rate is as follows: (1) Permanent differences are due to events that create discrepancies between the accounting and tax treatment of income and expense or gains and losses. They mainly relate to dividends received and paid between companies included in the consolidated tax group. Dividends are shown as a deduction within consolidation adjustments. (2) Consolidation adjustments reflect the difference between consolidated profit before tax and the sum of taxable income at each of the companies included in the scope of consolidation. These differences relate primarily to the elimination of intra-group dividends and financial investment provisions, as well as gains or losses on investments accounted for using the equity method. (3) Tax credits. Principal tax credits in 26: Relief on double taxation of dividends (42,943 thousand euros) received by: - Sacyr Vallehermoso Participaciones Mobiliarias, S.L. from Repsol (87,946 thousand euros). - AVASACYR from AVASA (27,75 thousand euros). - ENA from AUDENASA (7, thousand euros).

206 24 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Relief for investment abroad by the holding company Sacyr Vallehermoso (23,5 thousand euros). AUDENASA s tax exemption on profits below the threshold of 1% of its share capital (5,965 thousand euros). Relief for investments in environmental protection in the Services division (Valoriza) of 1,592 thousand euros. Principal tax credits in 27: Relief on double taxation of dividends (85,89 thousand euros) received by: - Sacyr Vallehermoso Participaciones Mobiliarias, S.L. from Repsol (214,979 thousand euros). - AVASACYR from AVASA (37,38 thousand euros). - ENA from AUDENASA (11,671 thousand euros). AUDENASA s tax exemption on profits below the threshold of 1% of its share capital (5,544 thousand euros). Relief for investments in environmental protection in the Services division (Valoriza) of 5,69 thousand euros. (4) The tax reform published in Spain s Official State Gazette on November 29, 26 includes, inter alia, a reduction in the general corporate income tax rate from 35% to 32.5% in 27 and to 3% thereafter. As a result of this modification, the Company s directors adjusted the measurement of its deferred tax assets and liabilities to reflect the tax rate expected to apply when they reverse. d) Change in deferred taxes The movement in deferred tax assets and liabilities in 26 and 27 is as follows: 26 Balance at Changes in Translation Impact on Balance at Thousands of euros 12/31/5 Increases Decreases scope differences equity 12/31/6 Deferred tax assets Deferred tax liabilities 464, ,834 (233,998) (1,476) (21,581) 356,77 27,11 2,564 (173,61) 499,435 (12,215) (1,422) 719, Balance at Changes in Translation Impact on Balance at Thousands of euros 12/31/6 Increases Decreases scope differences equity 12/31/7 Deferred tax assets Deferred tax liabilities 356,77 22,554 (113,157) (85) (2,898) (15,866) 427, ,862 69,97 (97,164) 14 (2,872) 689,747 In 26 and 27, deferred tax assets and liabilities recognized in respect of profit and loss were mainly due to the decapitalization of the finance costs of concession companies and the depreciation of concession projects. The Impact on equity column shows the amount of deferred tax assets and liabilities generated by the impact on equity of the remeasurements of financial instruments classified as cash-flow hedges. The increase in deferred tax liabilities in 26 due to changes in consolidation scope relates to the adjustments to the business combination described in note 8.3.

207 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 25 e) Tax loss carryforwards Some Group companies have tax losses that can be carried forward and offset against taxable income at the individual company level in subsequent years. The detail of unused tax loss carryforwards as of December 31, 26 applicable in future years is as follows: Year generated TOTAL Year generated Consolidated tax group Other companies Thousands of euros (73) (92) (9) (169) (682) (1,366) (741) (7,193) (2,47) (1,378) (23,11) Thousands of euros (7) (31) (26) (35) (328) (352) (47) (348) The detail of unused tax loss carryforwards as of December 31, 27 applicable in future years is as follows: Year generated TOTAL Year generated TOTAL Consolidated tax group Other companies Thousands of euros (6) (71) (9) (166) (635) (1,365) (721) (6,887) (2,127) (27) (12,194) Thousands of euros (7) (31) (26) (35) (328) (634) (586) (814) (639) (3,1) TOTAL (1,597) In 26 there was a significant rise in unused tax loss carryforwards mainly due to the consolidation for tax purposes of the Sufi Group. 27 featured a decrease in unused tax loss carryforwards. This was mainly due to the offset of loss carryforwards at Sufi, S.A. and the sale of Omicrón-Amepro, S.A. The period during which tax loss carryforwards can be offset is fifteen years from the date they were first generated. None of these tax losses is reported as a deferred tax asset in the consolidated balance sheet.

208 26 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 13.INVENTORIES The breakdown of Group inventories at December 31, 27 and 26 is as follows: Thousands of euros Land and lots Developments in progress Buildings Auxiliary work and start-up costs Prepayments Construction materials and other supplies Adaptation of land Work-in-progress and semi-finished goods Goods for resale Finished goods By-products, waste and recycled materials Provision for impairment 2,163,736 1,48,812 36, , ,423 86,783 68,89 48,191 8,496 2, (1,157) 2,457,611 1,162,417 24, ,875 18,71 7,585 65,394 14,619 9,56 3, (86) TOTAL 4,622,812 4,418,87 The value of Group inventories at December 31, 26 and 27 includes finance and other costs, with 79,657 and 113,963 thousand euros having been added in 26 in 27, respectively. The carrying amount of work in progress pledged as debt collateral at December 31, 26 and 27 was 995,462 thousand and 1,319,73 thousand euros, respectively. 14.TRADE AND OTHER RECEIVABLES The breakdown of Trade and other receivables on the asset side of the consolidated balance sheet at year end 27 and 26 is as follows: Thousands of euros Trade receivables Completed work pending approval 1,512,652 4,911 1,29,383 22,192 Receivable from companies accounted for using the equity method Other receivables Receivable from employees Deferred tax assets Provisions for impairment 12, ,344 1, ,796 (45,884) 2, ,85 1,45 2,57 (38,58) TOTAL 2,474,238 1,831,266 The breakdown of this heading by business area is as follows: Thousands of euros Sacyr Somague Itínere Valoriza Vallehermoso Testa Adjustments and others 1,357,12 324, , , ,517 19,823 (8,263) 1,24, , , ,387 21,457 26,29 (19,553) TOTAL 2,474,238 1,831,266 In addition, at December 31, 27 part of the property and developments under construction were mortgaged as collateral for the repayment of assumable bank loans used to fund the specific development activity. Of the amounts recognized under Developments under construction at December 31, 27 58,5 thousand euros was current and 9,81 thousand euros was non-current. At December 31, 26, 79,332 thousand euros was short cycle and 453,85 thousand euros was long cycle. Independent appraiser CB Richard Ellis valued the property assets of the Property Development division at 6,969 million euros at December 31, 27. Of this amount, 3,816 million euros related to land and 3,153 million euros to work in progress and other assets. Noteworthy was the balance of Trade receivables, which mainly comprises the contribution of the Construction division. In 27, this was 1,61,14 thousand euros. The average collection period for the Sacyr Vallehermoso Group is approximately 9 days. 15.EQUITY The breakdown and movement in this heading in 27 and 26 is shown in the consolidated statement of changes in equity, which is an integral part of the consolidated financial statements.

209 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 a) Appropriation of profit for the year of Sacyr Vallehermoso, S.A. (parent company) The proposed appropriation of profit of the parent company, Sacyr Vallehermoso, S.A., for 27 and 26 by the directors, pending approval at the Shareholders Meeting in the case of the 27 figures, is as follows: Euros Profit after tax 176,654,684,88 191,23,471,13 To legal reserve, 2,33,115,8 To voluntary reserves 6,663,59,13 47,733,152,86 To dividends 169,991,625,75 141,257,22,47 The 169,991, euros corresponding to dividends is equivalent to.6 euros per share and includes the following interim payments: - 42,584,359.8 euros approved on July 11, 27 (.15 euros per share), paid on July 17, ,478,87.5 approved on October 3, 27 (.15 euros per share), paid on October 11, ,476,47.5 approved on December 5, 27 (.15 euros per share), paid on January 11, ,451,988.4 euros approved on March 12, 28 (.15 euros per share), payable on April 8, 28. The amount approved in 27 is recognized under Interim dividend paid in the year on the liability side of the balance sheet and deducted from equity. The amount approved in 27 and payable at December 31, 27 is recognized under Other payables on the liability side of the balance sheet. b) Share capital At December 31, 27, share capital comprised 284,636,213 bearer shares with a nominal value of one euro each, fully subscribed and paid in, all of which confer the same voting and dividend rights. At December 31, 27, all shares issued and in circulation were admitted to trading on the Spanish electronic trading system (the Continuous market). Since September 3, 24, the shares of Sacyr Vallehermoso, S.A. have been listed on the Portuguese stock exchange. Its share price at the close of trading on December 31, 27 was 3.6 euros per share. At the General Shareholders Meeting of June 29, 27, the parent company and its subsidiaries were authorized to acquire treasury shares in accordance with Article 75 and the first additional provision of the Spanish Corporation Law, revoking the unused portion of the authorization granted at the General Shareholders Meeting of May 5, 26. At the same meeting, the board was also authorized to increase capital via the issuance of 149,126,6 new shares with a nominal value of 1 euro each as consideration in the takeover bid offer for up to 62,136,83 ordinary shares of French company Eiffage. As at December 31, 27, this capital increase had not been carried out. The Company s shareholders at the balance sheet dates 27 and 26, as recorded in the registers of the Spanish Stock Exchange Commission (Comisión Nacional del Mercado de Valores or CNMV) are as follows: Torreal, S.A./N. Cía de Inversiones Cymofag, S.L. Prilou, S.L. Participaciones Agrupadas, S.R.L. Rimefor Milenio Nuevo, S.L. Actividades Inmobiliarias y Agrícolas, S.A. Disa Corporación Petrolífera, S.A. Finavague, S.L. Prilomi, S.L. Mutua Madrileña Automovilista CXG Corporación Caixagalicia, S.A. Other shareholders with less than 5% 1.1% 9.133% 8.474% 7.999% 7.686% 6.61% 6.43% 5.95% 5.26% 5.6% 5.% % 1.1% 8.914% 8.441% 7.999% 7.686% 6.61%.% 5.165% 5.% 5.6% 5.% 3.727% TOTAL c) Share premium The share premium is subject to the same restrictions and can be used for the same purposes as voluntary reserves. d) Reserves - Legal reserve % 1.% Companies must transfer at least 1% of profit for the year to a legal reserve until such reserve reaches an amount equal to 2% of share capital. This reserve is not distributable to shareholders and may only be used to offset a debit balance in the income statement provided no other reserves are available.

210 28 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS At December 31, 27, the legal reserve of the parent company amounted to 2% of share capital. - Cash flow hedges The amounts recorded in reserves in respect of cash-flow hedges entered into by the Group at December 31, 26 and 27 were 3,73 thousand and 44,125 thousand euros, respectively. In 26, the Company transferred to the income statement a 2,45 thousand euro loss on its cash flow hedges, while in 27, it transferred a gain of 11,2 thousand euros. Valuation gains and losses in 26 and 27 were 16,72 thousand and 33,15 thousand euros, respectively. These amounts are shown net of tax. e) Dividends In 26, the Company board resolved to pay shareholders four interim dividends against profit for the year: Date of Payment Interim dividend Dividend per share approval date (Euros) (Euros) July 12, 26 July 21, 26 28,833, October 4, 26 October 16, 26 29,879, December 13, 26 January 16, 27 29,886, March 7, 27 April 13, 27 52,657,

211 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 29 On July 11, 27, the Company board of directors resolved to pay shareholders an interim dividend out of 27 profit equivalent to 15% of the nominal share price, implying a total distribution of 42,584 thousand euros. The table below shows that the Company has sufficient liquidity to fund this distribution: SACYR VALLEHERMOSO, S.A. STATEMENT OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF JULY 11, 27 Cash and investments at May 31, 27 Undrawn credit facilities at May 31, 27 Estimated receivables and payables at the date of approval 91, ,843, ,456,49.89 NET CASH AVAILABLE 147,391, JUSTIFICATION OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF JULY 11, 27 Profit after tax as at May 31, 27 Appropriation to legal reserve 275,771, ,33,115.8 PROFIT AFTER TAX LESS APPROPRIATION TO RESERVES 273,738, INTERIM DIVIDEND PAID. MAXIMUM AMOUNT DISTRIBUTABLE 273,738, DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27 APPROVED AT THE BOARD OF DIRECTORS MEETING OF JULY 11, 27 Shares issued by SACYR VALLEHERMOSO, S.A. Treasury shares Shares with dividend rights Proposed dividend per share (euros) 284,636,213 74, ,895, INTERIM DIVIDEND APPROVED (*) 42,584,359.8 (*) The dividend will be due and payable on July 17, 27.

212 21 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS On October 3, 27, the Company board of directors resolved to pay shareholders an interim dividend out of 27 profit equivalent to 15% of the nominal share price, implying a total distribution of 42,479 thousand euros. The table below shows that the Company has sufficient liquidity to fund this distribution: SACYR VALLEHERMOSO, S.A. STATEMENT OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF OCTOBER 3, 27 Cash and investments at August 31, 27 Undrawn credit facilities at August 31, 27 Estimated receivables and payables at the date of approval 124,599, ,125, (3,157,21.26) NET CASH AVAILABLE 143,568,373.6 JUSTIFICATION OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF OCTOBER 3, 27 Profit after tax as at August 31, 27 Appropriation to legal reserve 236,279, PROFIT AFTER TAX LESS APPROPRIATION TO RESERVES 236,279,21.86 INTERIM DIVIDEND PAID 42,584,359.8 MAXIMUM AMOUNT DISTRIBUTABLE 193,694,662.6 DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27 APPROVED AT THE BOARD OF DIRECTORS MEETING OF OCTOBER 3, 27 Shares issued by SACYR VALLEHERMOSO, S.A. Treasury shares Shares with dividend rights Proposed dividend per share (euros) 284,636,213 1,444, ,192,47.15 INTERIM DIVIDEND APPROVED (*) 42,478,87.5 (*) The dividend will be due and payable on October 11, 27.

213 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 211 On December 5, 27, the Company board of directors resolved to pay shareholders an interim dividend out of 27 profit equivalent to 15% of the nominal share price, implying a total distribution of 42,476 thousand euros. The table below shows that the Company has sufficient liquidity to fund this distribution: SACYR VALLEHERMOSO, S.A. STATEMENT OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF DECEMBER 5, 27 Cash and investments at October 31, 27 Undrawn credit facilities at October 31, 27 Estimated receivables and payables at the date of approval 11,52, ,449, ,235,36.53 NET CASH AVAILABLE 17,24, JUSTIFICATION OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF DECEMBER 5, 27 Profit after tax as at October 31, 27 Appropriation to legal reserve 227,753, PROFIT AFTER TAX LESS APPROPRIATION TO RESERVES 227,753, INTERIM DIVIDEND PAID 85,63, MAXIMUM AMOUNT DISTRIBUTABLE 142,69,89.3 DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27 APPROVED AT THE BOARD OF DIRECTORS MEETING OF DECEMBER 5, 27 Shares issued by SACYR VALLEHERMOSO, S.A. Treasury shares Shares with dividend rights Proposed dividend per share (euros) 284,636,213 1,459, ,176,47.15 INTERIM DIVIDEND APPROVED (*) 42,476,47.5 (*) The dividend will be due and payable on January 11, 28.

214 212 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS On March 12, 27, the Company board of directors resolved to pay shareholders an interim dividend out of 27 profit equivalent to 15% of the nominal share price, implying a total distribution of 42,452 thousand euros. The table below shows that the Company has sufficient liquidity to fund this distribution: SACYR VALLEHERMOSO, S.A. STATEMENT OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF MARCH 12, 28 Cash and investments at December 31, 27 Undrawn credit facilities at December 31, 27 Estimated receivables and payables at the date of approval 246,898, ,993, (123,46,778.54) NET CASH AVAILABLE 253,485, JUSTIFICATION OF LIQUIDITY SUPPORTING THE DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27, APPROVED AT THE BOARD OF DIRECTORS MEETING OF MARCH 12, 28 Profit after tax as at December 31, 27 Appropriation to legal reserve 176,654, PROFIT AFTER TAX LESS APPROPRIATION TO RESERVES 176,654, INTERIM DIVIDEND PAID 127,539, MAXIMUM AMOUNT DISTRIBUTABLE 49,115,47.53 DISTRIBUTION OF THE INTERIM DIVIDEND IN RESPECT OF 27 APPROVED AT THE BOARD OF DIRECTORS MEETING OF MARCH 12, 28 Shares issued by SACYR VALLEHERMOSO, S.A. Treasury shares Shares with dividend rights Proposed dividend per share (euros) 284,636,213 1,622, ,13, INTERIM DIVIDEND APPROVED (*) 42,451,988.4 (*) The dividend will be due and payable on April 8, 28.

215 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 213 f) Treasury shares At December 31, 27, the parent company held 1,459,743 treasury shares, equivalent to.5128% of its share capital. The average price paid was 36.4 euros per share. The movement in treasury shares in 26 and 27 is as follows: Balance at 12/31/5 Shares boughts Shares sold Bonus rights issue Balance at 12/31/6 Shares boughts Shares sold Bonus rights issue Balance at 12/31/7 2,518,68 14,685,962 (17,345,312) 141,282 2,634,191 (1,174,448) 1,459,743 On September 18, 27, 97 shares of SyV related to the bonus issue charged to unrestricted reserves carried out in 24, but which were not allocated at that date, were sold (at a price of euros per share). Sacyr Vallehermoso was custodian of these shares during the legal 3-year limit, after which, in accordance with Article 59 of the Spanish Corporation Law, they were sold. The net expense of 2, euros and the euros of dividends received during these three years are on deposit at the Spanish General Deposit Fund (Caja General de Depósitos) for the related parties. At December 31, 27, Sacyr Vallehermoso held 1,187 shares of SyV related to the bonus issues carried out in 25 and 26. At the 27 balance sheet date, the SyV share price was 26.6 euros, 4.89% lower than the year-earlier figure (45. euros per share). g) Minority interests This equity item on the consolidated balance sheet represents the value of all the stakes held by minority shareholders in the equity of the Group s consolidated subsidiaries. Minority interests on the consolidated income statement shows the portion of profit for the year attributable to these minority shareholders. The increase in Minority interests in the 26 balance sheet was due mainly to the share of minority interests in profit for the year, the acquisition of 5% of Europistas Concesionaria Española, S.A. and the acquisition of 89.95% of French company Tesfran, S.A. The decrease in 27 was due mainly to the acquisition by the Group of the remaining 8.62% of Itínere Infraestructuras, S.A., which took its shareholding to 1%, and the acquisition on March 1, 27 of 9.13% of Tesfran, S.A., raising its stake from 89.96% to 99.9%. 16.DEFERRED INCOME The changes in this heading in 26 and 27 are as follows: 26 Changes in Balance at Reclasification consololidation Transaction Balance at Thousands of euros 12/31/5 Additions Disposals and transfers scope differences 12/31/6 Government grants Other income 451,62 5,212 16,119 24,42 (24,48) (26,832) 1, ,417 (52,24) (143) 392,62 8,696 TOTAL 456,274 4,161 (51,312) 1,383 6,419 (52,167) 4, Changes in Balance at Reclasification consololidation Transaction Balance at Thousands of euros 12/31/6 Additions Disposals and transfers scope differences 12/31/7 Government grants Other income 392,62 8,696 18,519 5,6 (21,2) (3,17) 14,8 1 (1,331) (2) 394,3 1,63 TOTAL 4,758 23,579 (24,127) 14,81 (1,351) 44,66

216 214 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS This item largely consists of government grants to the Itínere Group. Pursuant to the administrative concession dated September 11, 1995, the Galician regional government granted AUTOESTRADAS a non-repayable capital grant of 72,121 thousand euros. This grant, provided for in the clauses of the concession agreement, was extended in order to guarantee the profitability of the concession. It has been received in full. AUTOESTRADAS has another capital non-payable grant for 1,52 thousand euros, by virtue of the agreement with the Xunta de Galicia to subsidize the stretch between PK 19+6 and on the AG-57 highway. This grant has also been received in full. At December 31, 27 Autoestradas had recognized income of 14,82 thousand euros in this connection (vs. 13,569 thousand euros in 26). At December 31, 26 and 27, LAGOS, ELQUI and LITORAL recognized the capital grants receivable from the Chilean Ministry for Civil Engineering for 312,11 and 286,184 thousand euros, respectively, in accordance with the terms of their respective concession agreements, which are paid throughout the lives of the concessions. The purpose of these grants is to ensure the profitability of the concessions. The grants represent a mandatory annual payment, in a fixed and defined amount, by the Chilean Ministry. The original amounts are denominated in Chilean UFs (Unidades de Fomento). The Chilean Ministry s payment obligation is subject to the tender terms contained in the respective concession agreements, which provide that the amounts must be settled subject to the pertinent authorization to begin operations at the infrastructure in question at a set date, at the value of the UF on the last day of the month prior to the payment date. In subsequent years, the payment is made on the same date each year. If the last year of the concession period is less than 12 months from the most recent payment date, the payment shall be made in proportion to the months of operation. Group subsidiary S.C. Palma Manacor, S.A. received non-repayable grants from the Consell Insular de Mallorca of 37 million euros, paid half-yearly in installments with the last being due in 21. By December 31, 27, the Company had received a total of 5,6 thousand euros from this grant (vs. 2,1 thousand at December 31, 26). 17.PROVISIONS AND CONTINGENT LIABILITIES a) Provisions for contingencies and expenses The changes in this heading in 26 and 27 are as follows: 26 Changes in Balance at Reclasification consololidation Transaction Balance at Thousands of euros 12/31/5 Increases Decreases and transfers scope differences 12/31/6 Provision for pensions and similar obligations Provision for taxes Other provisions 1,561 45,9 7,217 4,291 27,315 (2,154) (6,87) (2,855) 2,262 (19,465) 1,315 1,917 (3) 8,64 8,765 42,918 TOTAL 55,57 38,823 (29,96) (17,23) 12,232 (3) 6, Changes in Balance at Reclasification consololidation Transaction Balance at Thousands of euros 12/31/6 Increases Decreases and transfers scope differences 12/31/7 Provision for pensions and similar obligations Provision for taxes Other provisions 8,64 8,765 42,918 2,499 23,269 18,774 (2,518) (11,919) (25,229) (737) 68 (4) 22 8,621 2,111 35,816 TOTAL 6,323 44,542 (39,666) (737) ,548

217 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 215 The breakdown of the main provisions for contingencies and expenses by segment is as follows: 26 Thousands of euros Emmasa Vallehermoso Valoriza Somague Other TOTAL Provision for pensions and similar obligations Provision for taxes Other provisions TOTAL 5,794 2, ,64 5, ,811 8,765 16,544 9,42 9,276 3,613 4,65 42,918 22,338 15,369 11,799 4,262 6,555 6, Thousands of euros Emmasa Vallehermoso Valoriza Construcción Other TOTAL Provision for pensions and similar obligations Provision for taxes Other provisions TOTAL 5,921 1, ,621 6,82 1,326 7,99 3,993 2,111 9,179 13,429 7,588 4,615 1,5 35,816 15,1 2,231 1,79 12,761 5,666 64,548 Other provisions principally relates to litigation and claims by third parties arising from activity in each segment, which have been recognized based on the best estimates made at the balance sheet date, none of these being of a material size. It also includes guarantees in respect of Portuguese group Somague, and its liabilities in the construction business for completion and termination of project contracts. Provisions for taxes at December 31, 27 includes tax liabilities for which there is uncertainty regarding the amount and maturity and for which it is probable an outflow of resources from the Group will be required to settle the liability as a result of a present obligation. Noteworthy is the contribution of Sacyr S.A.U. for 6,258 thousand euros related to penalties from assessments raised by the tax authorities. Provisions for pensions and similar obligations includes pension commitments with the following Group companies. Subsidiary Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (Emmasa) has a defined benefit pension plan that meets its obligations to provide additional pension benefits on top of the Social Security entitlements of its employees up to 1% of the remuneration that each employee receives when they reach retirement age and to pay these amounts to surviving beneficiaries in the event of death. The Company meets all its retirement commitments through external pension funds, which at the balance sheet date for the year were measured in accordance with IAS 19. The valuation assumptions used are as follows: Assumptions as at 1/1/27 Discount rate for liabilities Future salary increases Expected rate of return on assets CPI Social security full pension growth rate Assumptions as at 12/31/27 Discount rate for liabilities Future salary increases Expected rate of return on assets CPI Social security full pension growth rate Strategic allocation of fund assets Euro private fixed income European equities Non-European equities Euro zone property TOTAL Percentage 4.75% 3.75% 6.25% 2.25% 1.75% 5.25% 3.75% 6.% 2.25% 1.75% 37.5% 27.5% 2.% 15.% 1.% The Company s policy when recognizing actuarial gains or losses is to amortize them over the remaining working life of the employees concerned, currently 18 years, unless the

218 216 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS unrecognized gain or loss at the end of the year exceeds 1% of the present value of plan assets or of the defined benefits obligations under the plan. The reconciliation of movements over the period and the present value of plan assets and liabilities is as follows: Thousands of euros Plan liabilities Actuarial liability as at January 1 Service cost Interest cost Actuarial liability from plan improvements Actuarial (gain) / loss Acquisitions Decreases Settlements Benefits paid Actuarial liability as at December 31 Plan assets Fair value of plan assets at January 1 Expected return on plan assets Actuarial (gain) / loss Contributions Acquisitions Settlements Benefits paid by the Fund Fair value of plan assets at December 31 Financial position at December 31 (Deficit) / surplus Unrecognized amounts: Actuarial (gain) / loss Plan improvements Unrecognized assets Balance sheet (provisions) / asset Annual pension expense Service cost Interest cost Expected return on plan assets Amortization of actuarial (gain) / loss Amortization of plan improvements Decreases Settlements Additional benefits Tax charge on individual policies Annual pension expense Reconciliation Balance sheet (provision) / asset at January 1 Annual pension expense Contributions Balance sheet (provision) / asset at December 31 14,453 14, (2,24) 1,19 1,915 1, ,221 11,791 14,453 9,23 9, ,486 (565) 52 1,77 1,915 1, ,81 9,23 (4,99) (5,223) (4,154) (4,533) (684) (236) ,19 (4,533) (5,466) (242) (1,19) 621 2,42 (4,154) (4,533)

219 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 217 Empresa Mixta de Aguas de Las Palmas, S.A. (Emalsa) is under an obligation to provide additional benefits on top of the Social Security entitlements of Company employees who joined the Company before January 1, 1994 in the event of retirement, permanent disablement or to their surviving beneficiaries in the event of death. When it became mandatory to outsource pension commitments, the Company chose to outsource its obligations through life insurance contracts both for current and past employees. At the balance sheet date the Company measured its pension commitments covered by insurance policies in accordance with IAS 19, based on the following assumptions: Percentage Assumptions on future policy renewals Mortality tables PER2 NP Future increase in pensionable salary 3,5% Future increase in gross salary 3,25% CPI and increases in Social Security bases and full pension 2,5% Future assumptions on strategic provisions plan Interest rate 4,8%-5,25% Future increase in pensionable salary 3,5% Future increase in gross salary 3,25% CPI and increases in Social Security bases and full pension 2,5% Pension increase 2,5% The present value of plan assets and liabilities is as follows: Thousands of euros Plan liabilities Present value of actuarial liability as at January 1 Current employees with accrued insured benefits Former employees in receipt of insured benefits Total present value of actuarial liability as at January 1 Plan assets Fair value of plan assets at January 1 Current employees with accrued insured benefits Former employees in receipt of insured benefits Total fair value of plan assets at January 1 Balance sheet (provision) / asset Plan liabilities Present value of actuarial liability as at December 31 Current employees with accrued insured benefits Former employees in receipt of insured benefits Total present value of actuarial liability as at December 31 Plan assets Fair value of plan assets at December 31 Current employees with accrued insured benefits Former employees in receipt of insured benefits Total fair value of plan assets at December 31 Balance sheet (provision) / asset Reconciliation Balance sheet (provision) / asset at January 1 Annual pension expense Contributions Balance sheet (provision) / asset at December 31 3,372 3,114 4,3 4,355 7,672 7,469 2,177 2,95 3,537 3,565 5,714 5,66 (1,958) (1,89) 1,486 3,372 5,236 4,3 6,722 7,672 2,852 2,177 5,738 3,537 8,59 5,714 1,868 (1,958) (1,958) (1,89) (1,35) (568) 1, (1,868) (1,958)

220 218 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS b) Trade provisions The movement in this heading in 27 was as follows: 27 Balance at Balance at Thousands of euros 12/31/6 Increases Decreases 12/31/7 Trade provisions 162,18 92,766 (89,94) 165,852 The breakdown of trade provisions by segment is as follows: 26 Thousands of euros Vallehermoso Sacyr Other TOTAL Trade provisions TOTAL 52,718 64,24 45, ,18 52,718 64,24 45, ,18 27 Thousands of euros Vallehermoso Sacyr Other TOTAL Trade provisions TOTAL 62,55 78,384 24, ,852 62,55 78,384 24, ,852 The main trade provisions are in respect of: - Vallehermoso (Property Development): this relates to estimated costs and liabilities that may be incurred in terminating a development, which include liabilities that may come to light between the handover of the development units and expiry of the 1-year guarantee. None of the provisions on individual developments is significant enough to require additional disclosure. - Sacyr (Construction): this relates to estimated costs and liabilities arising from termination of projects or contracts, which cannot yet be precisely determined as regards its exact amount or payment date. The general criteria for recognizing these provisions are described in Note 3. c) Contingent liabilities At December 31, 26 and 27 Group companies had provided guarantees amounting to 2,89,448 thousand and 1,867,884 thousand euros, respectively. The breakdown of guarantees provided is as follows:

221 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Financial guarantees Technical guarantees Thousands of euros Spain Abroad Spain Abroad TOTAL Holding company Sacyr Itínere Valoriza Vallehermoso Testa Somague TOTAL 1,152 1,152 8,514 22, , ,81 923,657 62,381 12,161 98,962 2,11 193,614 12,487 3,635 97,258 12,44 125, ,36 161, ,833 5,279 15,349 2, ,849 38,754 1,47,43 178,442 2,89, Financial guarantees Technical guarantees Thousands of euros Spain Abroad Spain Abroad TOTAL Holding company Sacyr Itínere Valoriza Vallehermoso Testa TOTAL 1,46 1,46 69,719 16,75 79,518 47, ,413 51, ,825 42, ,43 5,933 61,22 27,43 94, ,27 156, ,481 4,493 11,781 16, ,61 16,75 1,96, ,555 1,866,615 In the Construction divisions Sacyr Group and Somague Group guarantees correspond to the normal liability in the construction business to complete and terminate project contracts. In the infrastructure Concession division Itínere Group a distinction is made between technical guarantees (deposits for tender, construction and operation of toll motorways) and financial guarantees (bank guarantees). The guarantees by Valoriza group largely correspond to project completion contracts. In the Property Development division (Vallehermoso Group) a distinction is made between: - Technical guarantees, relating to the contracts for completion and sale of developments, land tenders and down payments by buyers of the property. - Financial guarantees, which mainly relate to deferred payments for the acquisition of land lots. - Collateral of 57,448 thousand euros.

222 22 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 18.LOANS AND BORROWINGS The breakdown of the Group s borrowings at the end 26, by division and maturity, is as follows: 26 MATURITY Subsequent TOTAL Thousands of euros years BORROWING Sacyr Vallehermoso, S.A. - Bank borrowings - Bonds and other marketable debt securities Sacyr Group - Bank borrowings - Bonds and other marketable debt securities Itínere Group - Bank borrowings - Bonds and other marketable debt securities Valoriza Gestión Group - Bank borrowings - Bonds and other marketable debt securities 798, ,881 91,849 91, , ,615 33,773 85,217 85,217 1,62,912 1,62,912 36,35 36,35 152,558 85,348 67,21 44,994 44, , ,319 15,536 15,536 12,136 99,651 2,485 39,84 39,84 623, ,438 3,328 3,328 89,522 85,886 3,636 14,21 14,21 21, 21, 1,884 1, ,783 62,349 7,434 15,328 15,328 1, 1, 22,39 22,39 3,66,733 1,894,416 1,172,317 19,952 19,952 3,73,55 3,73,55 171, ,256 3,755,12 2,45,265 1,349,855 39,541 39,541 Vallehermoso Group - Bank borrowings 1,38,917 1,38,917 1,394,825 1,394, ,84 234,84 2,611 2,611 27,477 27,477 2,968,67 2,968,67 - Bonds and other marketable debt securities Testa Group - Bank borrowings - Bonds and other marketable debt securities Somague Group - Bank borrowings - Bonds and other marketable debt securities SyV Participaciones Mobiliarias Group - Bank borrowings - Bonds and other marketable debt securities SyV Participaciones Group - Bank borrowings - Bonds and other marketable debt securities EMMASA-Emp. Mixta de Aguas de S. Cruz de Tenerife - Bank borrowings - Bonds and other marketable debt securities 168,56 168,56 16,49 16,49 2,32 2,32 49,678 49,678 1,962 1, , ,267 47,446 47, ,5 668, ,677 66,677 62,759 32,759 3, ,28 67,28 8,59 8, ,147 79,147 2,361 2,361 5,175, 5,175, 118, , ,356,438 1,356,438 8,83 8,83 1,957 1,957 2,6,613 2,6, ,567 25,567 3, 5,177,32 5,177,32 836, ,966 5,337 5,337 TOTAL 2,824,389 4,235,34 899,45 88,956 5,735,613 4,692,949 19,196,652

223 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 221 The breakdown of the Group s borrowings at the end 27, by division and maturity, is as follows: 27 MATURITY Subsequent TOTAL Thousands of euros years BORROWING Sacyr Vallehermoso, S.A. - Bank borrowings - Bonds and other marketable debt securities Sacyr Group - Bank borrowings - Bonds and other marketable debt securities Itínere Group - Bank borrowings - Bonds and other marketable debt securities Valoriza Gestión Group - Bank borrowings - Bonds and other marketable debt securities Vallehermoso Group - Bank borrowings - Bonds and other marketable debt securities Testa Group - Bank borrowings - Bonds and other marketable debt securities Somague Group - Bank borrowings - Bonds and other marketable debt securities 791,577 66, ,23 196, , ,18 295,883 7, ,74 148,74 1,328,432 1,328, ,46 358,46 158, , ,23 661,23 7,558 7, , ,829 2,546 78,531 78, , ,963 72,544 72,544 66,316 36,316 3, 1,799,6 1,799,6 34,192 34, ,83 286,15 3,725 35,319 35, , ,944 85,992 85,992 8,51 8,51 21, 21, 3,64 3,64 176,165 15,632 7,533 21,648 21,648 88,842 88,842 2,714 2, , 125, 1,67 1,67 448, , ,793 2,27 2,27 16,44 16,44 137,42 137,42 12,15 12, ,51,595 2,57,58 994,87 123,89 123,89 1,111,615 1,111,615 1,882,559 1,882,559 5,362 5,362 3,586,84 3,41, ,23 37,236 37,236 4,486,744 3,159,835 1,326,99 428, ,398 3,268,394 3,268,394 2,625,44 2,625,44 253, ,584 3, SyV Participaciones Mobiliarias Group - Bank borrowings - Bonds and other marketable debt securities SyV Participaciones Group - Bank borrowings - Bonds and other marketable debt securities EMMASA-Emp. Mixta de Aguas de S. Cruz de Tenerife - Bank borrowings - Bonds and other marketable debt securities Vespucio Sur (*) - Bank borrowings - Bonds and other marketable debt securities Pamasa (*) - Bank borrowings - Bonds and other marketable debt securities Europistas - Bank borrowings - Bonds and other marketable debt securities 114, ,854 57,34 57, ,495 32, ,119 12, , ,266 5,133,6 5,133, ,869 66, ,869 1,869 1,771 1,771 4,498 1,856 2,642 3,711 3,711 14,763 14,763 5,248,454 5,248,454 57,34 57,34 3,387 3,387 4,82 1,999 2,821 4,654 4, , ,381 TOTAL 4,66,531 1,433,214 2,885,785 5,74,42 763,569 6,2,494 21,53,636 (*) Borrowings of companies not included in the Itínere Group are shown at the share of the Sacyr Group consolidated by the equity method.

224 222 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS The Sacyr Vallehermoso Group has debt in foreign currency at companies whose streams of payments and receipts are in foreign currency. It has policies in place to mitigate the related risk. The main foreign currency debts are with the Chilean companies. These debts are indexed to the Chilean peso or the Unidad de Fomento (equivalent to current pesos). These companies receipts and payments are in Chilean pesos. The breakdown at December 31, 27 and 26 is as follows: Thosand units thousand thousands Company Type of finance Currency of debt Non-euro of euros Non-euro of euros Sociedad Concesionaria del Elqui, S.A. Project finance Unidades de Fomento Sociedad Concesionaria del Elqui, S.A. Project finance Chilean peso Sociedad Concesionaria de Los Lagos, S.A. Project finance Unidades de Fomento Sociedad Concesionaria de Los Lagos, S.A. Project finance Chilean peso Sociedad Concesionaria de Autopista Nororiente, S.A. Project finance Chilean peso Sociedad Concesionaria de Vespucio Sur, S.A. Bond issue Unidades de Fomento Sociedad Concesionaria de Vespucio Sur, S.A. Project finance Unidades de Fomento Sociedad Concesionaria Rutas del Pacífico, S.A. Bond issue Unidades de Fomento Sociedad Concesionaria Litoral Central, S.A. Project finance Chilean peso Sociedad de Operación y Logística, S.L. Leasing Unidades de Fomento Chilean companies Sanear Loan facilities Brazilian real CGS Credit facilities Macau pataca Cesl Asia Loan facilities Macau pataca Águas de Mandaguahy Loan facilities Brazilian real Triângulo do Sol Loan facilities Brazilian real SGIS Lease financing US dollar Sogel Credit facilities US dollar Somague companies Sacyr Costa Rica Credit facilities US dollar Sacyr companies 3,883 11,332 84,342, ,85 4, ,56 17,399, ,819 7,595,12 97,164 27,54,12 39,194 2,613 7,564 2,613 68,181 1,869 5,48 1,82 47,487 5, ,899 5,391 14,67 27,672,288 38,87 25,177,555 35, , ,86 664, ,611 1, , ,999 2,749 11, 1, ,226 13,956 16,498 5,867 2,665 1,826 2,773 2, ,672 13,571 1,

225 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 223 The detail of maturities for the Chilean companies foreign currency debt in 27 and 26 is as follows: Thousands of euros MATURITY Subsequent years Total Chilean companies 27 19,53 21,756 25,367 27,59 571,17 664,873 Thousands of euros Subsequent years Total Chilean companies 26 54,68 18,74 21,648 25,185 44,6 559,611 The detail of maturities for the foreign debt of companies belonging to the Somague group in 27 and 26 is as follows: Thousands of euros MATURITY Subsequent years Total Somague companies 27 8,376 1,66 3, ,76 16,672 Thousands of euros Subsequent years Total Somague companies 26 7, , ,362 13,571 The breakdown of maturities for the foreign currency debt of companies in Costa Rica in 27 is as follows: Thousands of euros MATURITY Subsequent years Total Costa Rican companies There are no significant differences between the fair values and carrying amounts of the Sacyr Group s financial assets and liabilities. The interest rates on non-current financial liabilities are reviewed quarterly, half-yearly and annually. The strategic investments in various assets have standalone financing. These investments, coupled with the (non-recourse) financing of the concession projects, form part of the Group s long-term financial policy, leaving short-term financing to meet its working capital requirements. The main investments financed in 26 were still in the Group s portfolio at the end of 27. These were: 1. The acquisition of 2.1% of energy company Repsol YPF, S.A. for 6,526 million euros The acquisition of the stake in Repsol YPF, carried out via the special purpose vehicle Sacyr Vallehermoso Participaciones Mobiliarias, was financed with a syndicated bank loan of 5,175 million euros, with a single and final maturity at 5 years. These shares are pledged in guarantee of repayment of the loan and other obligations assumed. This floating-rate loan, granted under market conditions, bears interest at the Euribor rate chosen by the lender plus

226 224 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS a margin. The derivative instrument entered into to hedge this loans reduces the impact of a potential increase in the Euribor rate by two-thirds. This interest rate swap (IRS) was arranged for 66% of the loan principal and has the same maturity as the underlying liability. It is determined to be 1% effective. The cost of this borrowing bearing in mind the hedge at the balance sheet date was 4.98%. Among the borrower s additional obligations are to maintain a value-to-loan ratio on the market value of the Repsol shares pledged. This ratio was being met at the balance sheet date. Failure to meet the ratio could trigger the execution of the pledge. The total value of the guarantees given by Sacyr Vallehermoso (with recourse to shareholders) have a limit of 1,275 million euros. balance sheet date. Failure to meet the ratio could trigger the execution of the pledge. On April 19, 27, Sacyr Vallehermoso applied for authorization by the French securities market authorities (AMF) to lauch a takeover bid for all the shares of Eiffage that it did not already own; i.e million shares, representing 66.7% of the company s share capital. The offer entailed a share exchange in the proportion of 12 new SyV shares for every 5 existing Eiffage shares. The AMF rejected the bid, alleging a concerted action between Sacyr Vallehermoso and other shareholders, and requested that Sacyr Vallehermoso make an alternative offer entailing an all-cash bid for 1%. Sacyr Vallehermoso appealed the decision before the Paris Court of Appeals. The French courts are slated to issue a ruling on the AMF s decision on April 2. In January, after the balance sheet date, Sacyr Vallehermoso pledged 24,52,131 shares of Testa Inmuebles en Renta, S.A. (21.22% of its share capital) due to the fall in the REPSOL YPF share price and in order to comply with the terms of the guarantee contract. The unpaid amount for the Repsol YPF shares was financed with the 1,175 million euros subordinated loan from the special purpose vehicle in the form of the loan received by its sole shareholder, Sacyr Vallehermoso S.A., and a 2 million euros capital contribution. Both amounts were eliminated on consolidation. 2. The acquisition of 3.33% of Eiffage as part of the Group s purchase of the French company, in which it now owns 33.1% The investment, made in 26, amounted to 1,78 million euros. The bank loans that financed this investment had a year-end balance of 1,712 million euros, mostly falling due within two years, with possibility of renewal for another two. Interest on the loans are indexed to the Euribor rate chosen by the lender plus a spread of around.4bp. The average interest rate on these loans at December 31, 27 was 4.95%. In all cases, the shares of Eiffage were pledged in respect of the obligations acquired. Among the borrower s additional obligations are to maintain a value-to-loan ratio on the market value of the Eiffage shares pledged. This ratio was being met at the 3. Acquisition of 5% of Europistas The investment, made in 26, amounted to million euros. The investment was financed with a 56 million euros syndicated loan taken out by special purpose vehicle Sacyr Vallehermoso Participaciones maturing in 28 and in any case with proceeds from the public offering and/or subscription of Itínere Infraestructuras shares arising from the merger with Europistas. This floating-rate loan, granted under market conditions, bears interest at the Euribor rate chosen by the lender plus a margin. The final interest rate at December 31, 27 was 5.25%. The unpaid amount for the Europistas shares was financed with the 5 million euros subordinated loan from the special purpose vehicle in the form of the loan received by its sole shareholder, Sacyr Vallehermoso S.A., and a 1 million euros capital contribution. Both amounts were eliminated on consolidation. The merger between the Europistas and Itínere was approved by the companies respective boards of directors on April 17, 27 with effect from January 1, de Acquisition of Itínere shares On April 17, 27, Sacyr Vallehermoso acquired 12.1 million shares of Itínere Infraestructuras from Caixanova representing 8.62% of its share capital for 162 million euros. This gave it 1% ownership.

227 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 225 This acquisition was financed with a 2-year 16 million euros loan, renewable for another two years. The loan bears interest at the Euribor rate plus.5bp and will be repaid with the proceeds from the Itínere IPO. 19.TRADE AND OTHER PAYABLES (NON-CURRENT) The breakdown of this heading at December 31, 27 and 26 is as follows: Thousands of euros Other payables Unpaid portion of equity investments Derivative financial instruments 38,685 41,7 7, ,729 41,2 14,112 TOTAL 429,65 417,843 The breakdown of Other payables in 27 and 26 is as follows: Thousands of euros Bills of exchange payable Other non-current payables Long-term guarantees and deposits 87, ,872 3,23 164, ,342 34,41 TOTAL 38, ,729 Regarding financial instruments, the Group does not generally use financial instruments that expose it to negative market contingencies that could undermine its equity. Only where the risk warrants, will the Group use derivatives or similar instruments to achieve effectiveness in the hedging relationship. It avoids speculative positions in the domestic and international financial markets. The Group s intention is to adapt financial liabilities to the best market conditions. Accordingly, on occasion it refinances certain liabilities. When any liability or its underlying is renegotiated, the derivative financial instrument used to hedged the related cash flow risk is adapted. After an in-depth analysis of its derivatives portfolio, the Group has classified as cash flow hedges those that hedge the cash flows arising from the related liabilities. IAS 39 requires the Group to assess hedge effectiveness both prospectively and retrospectively. As a result of this assessment, the Group has classified its derivatives as follows: - Effective hedge, when the relationship between the performance of the hedging instrument and the underlying falls between a 8%-125% range. In these instances, the derivatives are recognized in equity. - Ineffective hedge, when the impact of fluctuations in derivatives that are considered ineffective or speculative is recognized in profit or loss. The table below shows the net asset and liability derivatives entered into by the Group at the balance sheet date 26 and 27, their measurement and the breakdown by maturity of the notional amounts: 26 Notional Thousands of euros Valuation Notional Subsequent years DERIVATIVES Interest rate hedges Cash flow hedges Derivatives not designated as hedges Interest rate derivatives 11,691 1,878,964 (21,786) (6,52) 36, ,656 1,251,681 (7,518) 416,314 7, , ,719 8,972

228 226 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 Notional Thousands of euros Valuation Notional Subsequent years DERIVATIVES Interest rate hedges Cash flow hedges Derivatives not designated as hedges Interest rate derivatives 64,681 5,761,814 (17,851) ,65 3,519,111 1,427,582 1,37 236,374 79, , ,843 * Negative amounts imply increases in notional amounts, while positive amounts relate to redemptions. The amounts recognized in the income statement are as follows: Thousands of euros , , and beyond 1,22 TOTAL 11,691 Thousands of euros , , , , and beyond 1,731 TOTAL 64,681 The notional amount of derivative contracts entered into relates to the amount on which future settlement of the derivative is based and does not represent a risk assumed by the Group. The amount under Total equity for the year ended December 31, 27 corresponding to cash flow hedges after tax was 4,422 thousand euros. 2.RISK MANAGEMENT POLICY Financial risk management policy and the instruments taken out to execute it is in large part determined by specific legislation and standards governing the sectors in which the Group operates and the financial market environment. The SyV Group is exposed to a series of risks. We analyze them either as a whole or individually for each of the Group s business areas depending on the nature of the risk: a) Credit risk The following table presents a summary of the Group s borrowings at December 31, 27: Thousands of euros Average Date of Period current of next for Amount interest rate review renewal Loan for acquisition of Repsol Loan for acquisition of Europistas Loan Torre Adriá Loans for acquisition of Eiffage Other borrowings Credit facilities Loans/project finance Mortgage loans Bonds and other marketable debt securities Other 5, ,713 2,978 5,587 2,485 1, % 5.25% 5.24% 4.95% 4.92% 5.4% 5.2% 4.19% - 25/1/28 28/2/28 27/3/28 24/1/28 According to facility According to loan According to loan According to issue - 1,3,6 months 1,3,6 months 1,3,6 months 1,3,6,12 months 1,3,6,12 months 1,3,6,12 months 1,3,6,12 months According to issue - TOTAL 21,54

229 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 227 In 26, borrowings can be summarized as follows: Millions of euros Loan for acquisition of Repsol Loan for acquisition of Europistas Loan Torre Adriá Tranche A Loan Torre Adriá Tranche B Loans for acquisition of Eiffage Other borrowings Credit facilities Loans/project finance Mortgage loans Bonds and other marketable debt securities Other TOTAL Average current Date of Period Amount interest rate next review for renewal 5, % 11/1/27 6 months % 28/5/27 6 months 1 4.2% 27/3/27 1,3,6 months 5 4.3% 27/3/27 1,3,6 months 1,75 3.9% 2/1/27 1,3,6,12 months 2, % According to facility 1,3,6,12 months 4,98 4.2% According to loan 1,3,6,12 months 1, % According to loan 1,3,6,12 months 1,38 4.1% According to issue According to issue ,196 The breakdown of credit risk by business area is as follows: - Property rental: as leases with tenants or other lessees require advance payment of rents and stipulate legal financial and other guarantees on signing renewal of the rental contracts which cover possible defaults on rent payments, credit risk in this business is virtually zero or immaterial. Average collection periods (in days) from customers for rents and services provided, based on the balance sheets at the reporting date 27 and 26, were as follows: Thousands of euros Trade receivables (less VAT) Advance quarterly billing Tesfran, S.A. (less VAT) Total trade receivables Revenue 13,2 (7,13) 5, ,821 12,64 (7,355) 5,25 251,169 AVERAGE COLLECTION PERIOD (NO. DAYS) Infrastructure concessions: concessionaires are paid in cash, by electronic payment methods and using credit cards, where the default risk is assumed by the entities managing collection. A further portion of income is derived from payments by the various public authorities granting the concessions, primarily regional governments, in accordance with the terms and conditions provided for in the respective concession agreements. These public entities all enjoy very high credit ratings. As a result, there is virtually no credit risk. At the balance sheet day, no financial assets were in default or impaired and no guarantees had been accepted against payment. - Services: credit risk in services is analyzed individually for the Group s different businesses. Energy Following the publication of Royal Decree 661/27 in the Official State Gazette (B.O.E.) of May 26, 27, all energy companies must sell energy at the market price established by this decree. The selling price is guaranteed by the Royal Decree for 25 years, thus there is virtually no credit risk. The main customers are the electricity market operator (OMEL), MEFF and Endesa. Both the OMEL and MEFF are public organizations in charge of overseeing the sale of electricity in Spain, while Endesa is a utility with high credit ratings.

230 228 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Environment Key to assessing the credit risk of this activity is the breakdown and type of customers: 84% are public entities and 16% private customers. Among public customers, nearly 9% are town councils, with the central or regional government making up the remainder. Credit risk is zero or immaterial and where there are delays or default, this is made up with late-payment interest under the law governing public administration contracts (Ley de Contratos con las Administraciones Públicas). Private customers do not show any major problems of insolency, as credit reports are required before signing the contracts. At each reporting date, allowances for doubtful debts are recorded on balances owed by private customers that are over one year past due. No individual amounts are significant. Water The drinking water distribution business is exposed to specific credit risk, as supply is associated with the collection of the rate. Experience in this business indicates a default rate of below 1%. Multi-services Most of Valoriza Facilities s customers are public (57%). It is among its private customers (16%) where tougher contracting conditions and pro-active collection management leave a minimal level of risk. At Valoriza Conservación de Infraestructuras, the breakdown of loan rights shows a solid guarantee due to the nature of the debtor: public institutions, the central and local governments represent 55% of the total, with Group companies making up the remainder. Cafestore, which runs highway service areas and manages restaurants and cafeterias in large installations, there is no credit risk as payments are received in cash at the time of the sale or provision of the service. - Construction: To assess the credit risk of this business, we divide the Group s customers by type: - 67% relates to public institutions, regional governments and local corporations; i.e. the public sector with high creditworthiness. - 33% relates to private customers. To offset default risk the Group implements control mechanisms before awarding projects based on studies of customer solvency. The Group s financial and legal departments also continuously monitor this risk throughout project execution, with an average collection period of 57 days. At the year end, there were no significant financial assets in default or impaired. There was also no need to have any guarantees to ensure collection. Accordingly, credit risk is negligible. - Residential development: To assess the credit risk in the development business, the Group looks at the breakdown of the companies revenue by business and customer type. Revenue in 27 for this division breaks down as follows: - Sale of housing units: 8% - Sale of land and provision of services: 2% To study credit risks, the mechanics of sales of homes must be understood. The customer pays between 1% and 2% of the price before delivery; in 27 the percentage was 16%. Upon delivery, the customer pays the reminder in cash and assumes the mortgage loan, so there is no credit risk. With land sales, the Group generally collects payment up front in cash or with guaranteed bills. b) Liquidity risk - Rental property: Given the sector in which the Testa Group is active, the investments that it makes, the finance that it obtains to make these investments, the EBITDA it generates and the occupancy rates of its buildings,

231 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 229 liquidity risk is negligible. Excess cash is invested in highly liquid and risk-free deposits. Investments in buildings are partly financed from resources generated by the Group and partly from longterm loans (7-15 years). These investments generate sufficient cash flow to meet operating costs, service debt (payment of interest and principal), pay the Group s overheads and remunerate equity. The ratio of net debt to the market value of assets in 27 and 26 is as follows: Thousands of euros Interest-bearing loans and borrowings Cash and cash equivalents NET FINANCIAL BEBT ASSET VALUATION 2,625,44 (532,119) 2,93,321 4,725,296 2,6,613 (99,236) 1,97,377 4,592,9 LOAN TO VALUE 44.3% 41.54% The average total occupancy rate for all buildings in 27 and 26 was 98.5% and 97.6%, respectively. - Infrastructure concessions: due to the nature and characteristics of the businesses collections and payments structure, EBITDA, project financing, toll systems and clearly-defined, systematic investment upgrade programs, liquidity risk in this business is negligible. For these reasons the concessionaires have no need for credit lines. That said, the parent company of the Itínere Group has assigned working capital credit lines to cover possible timing differences causing gaps in cash flow at its subsidiaries and to meet any fresh demands for capital for projects under way or newly awarded concessions. The financing structure, products, hedging arrangements, guarantees and the most appropriate financing instruments are selected as a function of the nature and extent of the risks inherent in each project, with a view to eliminating or mitigating them. Financing tends to take the form of structured project financing where the lender assumes substantially all the transaction risks in exchange for the receipt of guarantees, so that the financing is non-recourse to the developers and shareholders. For all these reasons there is virtually no liquidity risk. - Services: liquidity risk in services is analyzed individually for the Group s different businesses. Energy: The financing structure, products, hedges and guarantess of these projects are all part of project financing, where the lender assumes the transaction risks as the funds provided are guaranteed with the cash flows generated by the project, with limited recourse to shareholders. Environment: Similar to infrastructure concessions and energy projects, in the environment area investments are large at the start of the projects and recovered throughout the project s life. The Group uses project financing for the largest investments and lease lines to finance the acquisition of machinery and equipment. In both cases, the investments are financed by the projects themselves through the cash flow generated. Water The Group estimates that there is no liquidity risk in this business as investments are financed with the cash flow generated by projects. Multi-services Valoriza Facilities has sufficient credit lines to cover its payment obligations. It can also resort to debt factoring as most of its contracts are with public administrations. Therefore, liquidity risk is minimal. At the financial year end, Valoriza Conservación did not have any problems raising financing. The breakdown of its financial liabilities was as follows: - Credit lines: 58%. - Finance leases: 33%. - Government-subsidized loans: 9%.

232 23 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Cafestore has no liquidity risk as it has bank loans and receives financing from the Group. - Construction: the construction business has adequate liquidity to cover its forecast obligations for the short term by arranging credit lines. Any cash excesses are invested in highly liquid and risk-free deposits, provided this is in line with best financial management practice. The Group draws up annual and monthly cash budgets (with breakdowns and updated daily) to manage its liquidity risk and meet its funding needs. The Company s large net cash position enables it to comfortably meet maturities, so liquidity risk is minimal. - Residential development: The assessment of liquidity risk in the development business is based on an analysis of the financing structure. Land purchases are financed through bilateral loans with corporate guarantees. As agreed with the financial institutions, these loans become mortgage loans when the building permit is obtained. This takes place prior to commencement of development of the homes; i.e. the investment. The mortgage loan covers the entire investment. The first draw down pays off the bilateral loan, with the financial entity earmarking the funds for the long-term financing of the development, which takes place in two stages. The mortgage debt or mortgage loans granted to the developer are not repaid with the cash flow generated in the business, but rather with sales via assumption of the loans. Therefore, the debt/ebitda ratio cannot be used for this business. To reduce liquidity risk, the Group has tightened its criteria and requires stricter pre-contract levels before undertaking new developments. At December 31, 27, the parent company of this business area had developments financed with facilities linked to projects (bilateral loans) amounting to 1,826 million euros. Mortgage loans arranged stood at 1,498 million euros, of which 1,28 million euros had been drawn down, leaving an undrawn amount of 47 million euros. The undrawn amount covers the pending investment in developments in progress, which at the year-end totaled million euros. c) Market risk The main market risks to which the Group is exposed are interest rate and foreign currency risk, which are assessed globally. - Interest rate risk: a significant portion of the Group s interest-bearing loans and borrowings are at fixed rates, as a result of hedging instruments put in place such as interest rate swaps which reduce business exposure to rising interest rates. The structure of Group borrowings at December 31, 27 and 26, distinguishing between fixed and hedged rate borrowings after taking into consideration hedging arrangements and floating rate borrowings, is as follows: Thousands of euros Amount % Amount % Fixed-rate or hedged borrowings Floating-rate borrowings TOTAL 7,712, % 3,751, % 13,341, % 15,445, % 21,53,633 1.% 19,196,652 1.%

233 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 231 Interest rate risk has been limited through the use of hedges, all of which use interest rate swaps (IRS). These financial instruments guarantee payment of a fixed rate on loans required to finance projects in which the Group participates. Of the derivatives in place, over 9% are 1% effective hedges. As a result, a one point rise in the Euribor rate is fully offset by the hedging positions. The timing and terms of these derivatives are designed to match the features of the underlying borrowings, such that their maturity is equal to or slightly less than that of the debt they hedge, and the outstanding notional underlying is equal to or slightly less than the outstanding principal on the hedged debt. The sensitivity analysis of profit and equity to interest rates is as follows: Thousands of euros Borrowing cost at current average cost (Co) 1,36, ,958 (Co) +1 point (Co) 1 point (Co) +1 point (Co) 1 point Borrowing cost at average cost +/-1 point: 1,158,741 93, , ,67 Change in profit: (82,541) 89,918 (72,168) 71,728 Change in equity: 17,376 (2,258) 56,315 16,18 - Foreign currency risk: it is Group policy to denominate borrowings in the same currency in which the business cash flows are denominated. This level of matching means that at present the Group is not exposed to significant exchange rate risk. One risk to note within this category is translation risk, i.e. risks arising from the translation of the financial statements of foreign operations whose functional currency is not the euro. The bulk of foreign investment is in Chile, a country characterized by a high degree of economic, political and social stability. Other market risks to which the Group is exposed are: - Slowdown in the real estate sector: to face a slowdown in the real estate sector caused by weaker demand and tougher mortgage lending conditions, the property development business enjoys a high level of pre-sales (8,2 homes worth 2,36 million euros), ensuring over 9% of estimated revenue in 28. In the development business there is a high concentration of middle-upper class customers. 43% of the developments are located in towns with population of over 15,. 99% of the homes developed are in Spain, with only 2% representing second homes, where risk can be greater. Although the pace of projects and project starts has eased in line with the fall in demand, the developments in progress alone are sufficient to meet the targets for the next two years (28 and 29). Of these, 64% are already sold, with scheduled delivery over the next two years. In addition, in 28 development is scheduled to begin on at least 1,169 homes. Of these, 37% are already sold, entailing projected investment in construction of 159 million euros and total income of 551 million euros, with delivery scheduled throughout Risks associated with expansion abroad: The Group plans to continue expanding its business in other countries, seeing this as a way to improve growth and future profitability. An exhaustive analysis is conducted before making any foreign investment, which can last for several years on the ground. Nonetheless, any expansion into new geographical regions carries some risk as it will

234 232 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS involve working in markets where the Group does not have the same degree of experience as it has in its current markets. - Regulatory risk: Group companies have to comply with rules specific to the sector and general regulations (e.g. accounting, environmental, labor, data protection and tax regulations), changes in which could either help or hurt the Group s businesses. d) Capital management policy The principal aim of the Group s capital management policy is to ensure the financial structure complies with prevailing standards in the countries where the Group operates. It also aims to maintain stable credit ratings and maximize shareholder value. The Group s gearing at the reporting date 27 and 26 is as follows: 21.TRADE AND OTHER PAYABLES (CURRENT) The breakdown of this heading under current liabilities in 27 and 26 is as follows: Thousands of euros Advances received on orders Certified work pending execution Trade payables Bills of exchange payable SUPPLIERS Bills of exchange payable Other payables Current guarantees and deposits OTHER PAYABLES Payable to employees Current tax liabilities Income tax payable 487, ,518 1,31, ,836 2,963, , ,389 19,73 215,263 27,17 491, ,64 989, ,624 2,777, , ,811 13, ,49 51,35 TOTAL 3,468,479 3,155,52 Thousands of euros Gross debt Cash Current financial investments 21,53,636 1,146, 182,7 19,196,652 71, ,4 Net debt 19,725,566 18,357,52 Total equity Total equity 3,492,365 3,8,9 + net debt 23,217,931 21,365,952 GEARING RATIO 84.96% 85.92% Worth noting is the balance of Trade payables, mainly from the construction and services divisions, which contributed 79,787 and 149,81 thousand euros, respectively, of the total. Of the construction balance, 487,737 thousand euros relates to Sacyr, S.A.U., with 168,538 thousand euros owed to the temporary joint ventures in which the company participates. In both cases these arise in the Company s normal course of business.

235 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS REVENUE The breakdown of revenue from the Group s ordinary activities in 26 and 27 by division and geographical market is as follows: 26 Other Thousands of euros Spain Chile Portugal Brazil France China Italy markets TOTAL Holding Sacyr Group Itínere Group Valoriza Group Vallehermoso Group Testa Group Somague Group TOTAL ,56,14 49,771 24,814 2,321 1,637,1 314,966 63,142 1,675 32, , ,29 65,475 4,431 22,722 14,44 485,61 1,226,983 18,289 1,245,272 23,186 23,658 19, ,63 638,286 19, ,119 3,683, , ,725 37,62 23,658 22,722 24,814 56,54 4,684, Cape Other Thousands of euros Spain Portugal Chile Brazil France U.S.A. Verde Italy Algeria Ireland markets TOTAL Holding company Sacyr Group Concesions Valoriza Group Vallehermoso Group Testa Group Somague Group TOTAL ,18,417 79,612 25,919 32,41 2,246, ,58 1,528 7,733 36, , ,646 77,926 5,672 14, ,156 1,379,836 19,986 1,399,822 26,451 31,773 19, ,852 7,351 2,538 72,889 4,622, ,791 15,345 41,697 31,773 19,628 2,538 25,919 14,912 32, ,759,81

236 234 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS In 26 and 27 there were no transactions with Group companies or joint ventures outside the scope of consolidation. Transactions with companies accounted for using the equity method related to income obtained by companies of the Sacyr Vallehermoso Group on transactions with the following companies: Thousands of euros Eurolink, S.C.P.A. 14 1,462 Transactions by Sacyr S.A.U. 14 1,462 Repsol YPF, S.A. 1,21 1,23 Transactions by Neopistas, S.A.U. 1,21 1,23 S.C. Palma Manacor, S.A. 449 Metro de Sevilla, S.A Hospital de Majadahonda, S.A. 54 Transactions by Itínere, S.A Biomeruelo de Energía, S.A. Transactions by Sufi, S.A. Biomeruelo de Energía, S.A Transactions by Eurocomercial, S.A.U Biomeruelo de Energía, S.A. 124 Transactions by Desgasificación de Vertederos, S.A. 124 Mola 15, S.L. Transactions by Vallehermoso Div. Promoción, S.A.U. 124 Compañía Energética de Linares, S.L. 5,995 Transactions by Iberese, S.A. 5,995 Repsol YPF, S.A. 1,946 Transactions by Autoestradas de Galicia, S.A. 1,946 Repsol YPF, S.A. 4,471 Transactions by Autopista Conc. Astur-Leonesa, S.A. 4,471 Repsol YPF, S.A. 13,154 Transactions by Autopista del Atlántico, C.E.S.A. 13,154 Repsol YPF, S.A. 742 Transactions by Cafestore, S.A.U. 742 Repsol YPF, S.A. 3,816 Transactions by Autopista de Navarra, S.A. 3,816 Compañía Energética de Linares, S.L. 5 Transactions by Sacyr, S.A.U. 5 Compañía Energética de Linares, S.L. 1 Transactions by Valoriza Gestión S.A.U. 1 A. Madrid Sur, S.A. 15 Transactions by Ena Infraestructuras, S.A. 15 In accordance with paragraph 4 of IAS 11 Construction Contracts, the table below provides the following disclosures on contracts in progress at the balance sheet date: aggregate costs incurred and recognized profit (less recognized losses), the amount of advances received and the amount of withholdings: Thousands of euros Cumulative revenue on contracts in progress at year end Contracts in progress at year end Cumulative costs incurred ( ) ( ) Cumulative income recognized Advances received Withholdings Completed work pending approval, net Advanced certification SUPPLIES The breakdown of this heading by item and business in 27 and 26 is as follows: Thousands of euros Consumption of commercial inventories Consumption of raw material and other consumables Other external expenses 99,92 517,956 1,499,77 1,684, , ,623 TOTAL TOTAL 3,8,565 3,167,962 Thousands of euros Sacyr Itínere Valoriza Vallehermoso Testa Other and adjustments 1,959,891 6,4 278, ,25 79 (18,138) 1,414,367 4, ,688 1,647, (166,21) 3,8,565 3,167,962

237 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS OTHER OPERATING COSTS The breakdown of this heading in 27 and 26 by item and business area is as follows: Thousands of euros External services Taxes other than income tax Other operating expenses 1,64,897 74,782 66, ,141 65,749 52,856 TOTAL 1,26,57 984,746 The Sacyr Vallehermoso Group uses derivative financial instruments to eliminate or significantly reduce its inte rest rate, foreign currency and market risk in monetary transactions, asset positions and other. In general, these instruments are treated as hedges when they qualify for hedge accounting. Those that do not are classified as held for trading, with gains or loss recognized directly in profit or loss. Other finance costs include changes in held-for-trading financial instruments (which are settled at the financial year end), recognized directly in profit or loss. Thousands of euros Sacyr Somague Itínere Valoriza Vallehermoso Testa Other and adjustments 449,45 457,498 12,952 91,58 81,422 49,911 (25,316) 318, ,546 75,866 73, 46,45 53,743 (3,767) TOTAL 1,26,57 984, FINANCE REVENUE AND COSTS The breakdown of finance revenue and costs in 27 and 26 is as follows: Thousands of euros Finance costs From bank loans and credits From issues of marketable debt securities (debentures and bonds) Change in provisions for impairment of financial investments Other financial costs Change in value of financial instruments (cash flow hedges) Change in provisions for (1,17,6) (823,851) (85,975) (7,994) (189,78) 1,453 (446,449) (366,213) (78,886) (1,35) 15,538 intangible assets, PP&E and equity investments (2,2) 2,516 TOTAL FINANCE COSTS Income from other marketable securities (1,18,167) 12,363 (428,395) 6,674 Other interest and finance income Net finance costs taken to investments Translation differences TOTAL FINANCE REVENUE 79,377 31,238 22, ,553 64,855 14,717 6,761 93,7 NET FINANCE COST (962,614) (335,388) 26.NET GAIN (LOSS) ON DISPOSAL OF ASSETS The detail of the net gain or loss on disposal of assets recognized in the consolidated income statements for 27 and 26 is as follows: Thousands of euros Holding company Sacyr Itínere Valoriza Vallehermoso Testa Other and adjustments 2,292 (455) 33 12,569 (181) 5,581 (3,22) (15) (38) 6,82 1, ,1 TOTAL In 27, gains on disposal of assets related mainly to the Valoriza Group, which posted a pre-tax gain of 12,569 thousand euros form the sale of the companies it owned in Macao in line with the corporate restructuring carried out between Geida Beni Saf, S.L., Geida Skikda, S.L. and Geida Tlemcen, S.L. and the sale of its 2% holding in Somague Itínere-Concessoes e Infraestructuras, S.A. The gain on the latter was eliminated on consolidation with the Sacyr Vallehermoso Group. Noteworthy at the Testa Group was the capital gain obtained on the sale of a residence in Zaragoza and the Lakua and Los Fresnos shopping centers. 27.EARNINGS PER SHARE 16,619 14,751 Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity eholders of the parent by the number of ordinary shares outstanding during the year.

238 236 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued if all dilutive potential ordinary shares were converted into ordinary shares. As there were no potential shares in issue in 27 and 26 basic earnings per share are the same as diluted earnings per share. Net profit attributable to the equity holders of the parent (thousands of euros) Weighted average number of shares outstanding ( ) Less: average number of treasury shares held ( ) Average number of shares for basic earnings for share calculation Basic and diluted earnings per share (euros) In 26, the Company increased capital with a charge to reserves. As a result, the number or ordinary shares in circulation before the capital increase has been adjusted to what it would have been had the operation taken place at the start of the reporting period. There have been no transactions involving ordinary shares or potential ordinary shares between the balance sheet date and the date of preparation of these financial statements. 28.CASH FLOW , ,27 284, ,636 (89) (3,735) 283,746 28, The cash flow statement included in these financial statements was drawn up in compliance with IAS 7. It is broken down into three types of cash flow, based on inflows and outflows of cash through the consolidated Group: - Net cash flows from operating activities: these include movements in cash resulting from the operations of all the businesses managed by the Group. - Net cash flows from investing activities: this aggregates cash flows generated from acquisitions and disposals of property, plant and equipment, intangible assets, concession projects, property and financial assets. - Net cash flows from financing activities: this includes inflows of cash from borrowings and the issue of bonds, and other sources of external finance, as well as outflows of cash on repayment of borrowings or bonds, interest payments and dividends. a) Operating activities The Sacyr Vallehermoso Group posted a sharp increase in net cash flows from operating activities in 27. The breakdown by division in 26 and 27 is as follows: NET CASH FLOWS FROM OPERATING ACTIVITIES Thousands of euros Construction Concessions Development Rental Holding company and other (*) TOTAL (*) Includes consolidation adjustments. 7,53 235, ,25 34, ,468 (453,131) 17,398 23,89 (89,383) 26, ,38 352,313 Net cash flow from operating activities in the Construction division was virtually nil in 27, as despite the increase in inflows from operations (184,665 thousand euros compared to 155,783 thousand euros in 26), those from working capital adjustments were lower. In the Infrastructure Concession division, net cash flows from operating activites rose in 27 on the back of higher traffice volumes and increases in tolls. In the Property Development division, net cash flow from operating activities surged 592,599 thousand euros in 27, mostly due to the net increase in working capital deriving from the marked decrease in net investment in land and plots compared to the year before. This prevented the outflow of cash that such investments would have entailed and left a positive net inflow of cash from normal operating activities. In the Rental Property division, cash flows from operating activities were lower in 27 than the year before, mainly due to the acquisition of land lots for the development of

239 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 237 private sector housing in Getafe and Alcalá de Henares (Madrid), which were capitalized as an increase in inventories. b) Investing activities The Sacyr Vallehermoso Group made far fewer investments in 27 than in 26, mostly because of the major acquisitions carried out by the Group s holding companies the year before, which included: - 2.1% of energy company Repsol YPF, S.A. for 6,526 million euros % of Eiffage, raising the Company s total stake to 32.61%, for 1,78 million euros - 5% of the motorway concession group Europistas for 616 million euros The breakdown of net cash flows from investing activities in 27 and 26 by business is as follows: NET CASH FLOWS USED IN INVESTING ACTIVITIES Thousands of euros Construction Concessions Development Rental Holding company and other (*) TOTAL (*) Includes consolidation adjustments. (161,58) (167,686) (483,737) (14,963) (16,982) (18,424) (26,131) (735,744) 275,194 (9,769,832) (683,236) (1,76,649) Investment by the Infrastructure Concession division was far greater In 27. Basically these investments were in the concession projects for the Parla and Nororiente hospitals (26,771 thousand euros), the Moncloa and Plaza Elíptica transportation hubs (37,485 thousand euros) and the companies S.C. Autopista Nororiente (69,131 thousand euros), Autovía del Turia (63,574 thousand euros), Viastur (47,556 thousand euros), Autovía del Eresma (43,127 thousand euros), Autovía del Barbanza (4,982 thousand euros), Guadalcesa (4,815 thousand euros), and the newly formed Irish companies M-5 Concession Ltd and N-6 Concession Ltd (35,339 thousand euros). The Rental Property division s capital expenditure in 27 related to work in progress by the Company, basically on the Torry SyV, which is scheduled for completion by the end of 28. Financial investments chiefly comprised additional investment in shares of Tesfran S.A. In accordance with its asset rotation policy, in 27 the Testa Group sold the following mature assets: Property, plant and equipment: land in the Coslada transport centre (Madrid). Real-estate projects: two shopping centres (Lakua-Vitoria and Los Fresnos-Gijón) and a residence in Zaragosa. Concession projects: the Parla and Noreste (Coslada) hospitals, to Sacyr Vallehermoso Group. c) Financing activities The Group s net cash flows from financing activities were significantly lower in 27 than 26, mostly because of the lower investment. The breakdown of cash flows from financing activities in 26 and 27 is as follows: NET CASH FLOWS FROM FINANCING ACTIVITIES Change in Other sources Interests Dividens Change in 26 debt of financing paid paid treasury shares TOTAL Construction Concessions Development Rental Holding company and other (*) 111, , ,235 69,37 8,891,198 (1,723) (182,545) (267,184) 31, ,231 (3,942) (214,954) (19,778) (8,354) (64,476) (47,88) (66,5) (31,43) 26, ,345 22,372 (252,93) 479,773 61,21 9,83,472 TOTAL 1,67, ,736 (41,54) (118,844) 259,345 1,689,897 (*) Includes consolidation adjustments.

240 238 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS NET CASH FLOWS FROM FINANCING ACTIVITIES Change in Other sources Interests Dividens Change in 27 debt of financing paid paid treasury shares TOTAL Construction Concessions Development Rental Holding company and other (*) 226,827 59,55 299, ,828 (21,958) 84,251 (175,928) (61,16) (7,51) 172,371 (4,13) (264,41) (23,94) (11,138) (519,189) (127,138) (14,85) (234,597) (32,564) 234,94 (66,79) 143,81 135,776 (19,128) 468,616 (21,472) TOTAL 1,713,97 12,24 (956,592) (175,1) (66,79) 527,62 (*) Includes consolidation adjustments. The Construction division raised its bank borrowings as a result of the increase in investments. The Infrastructure Concession notably increased its Net cash flow from financing activities on 26, largely due to the rise in bank borrowings as a direct consequence of the increased investment in concession projects. The Property Development division received 299,723 thousand euros of net inflows from financing, down from 833,235 thousand euros in 26. As indicated above, this was because in 27 it made smaller investments in inventories, which increased the volume of free cash flow from the property development operations. The Rental Property division increased its financial debt largely by taking out additonal mortgage loans. This mortgage finance provided the bulk of the free cash held by the Testa Group at the reporting date. The holding company received the following dividends from investees: - From Eiffage: 31,47 thousand euros - From Repsol: 214,979 thousand euros As Repsol and Eiffage are accounted for using the equity method, the dividends received directly affect the Group s consolidated cash flow. 29.ORDER BOOK BY ACTIVITY The breakdown of the order book by activity and nature of business at December 31, 27 and changes from 26 are as follows: Thousands of euros Var. Abs. Var.% Sacyr (construction backlog) Somague (construction backlog) Vallehermoso (pre-sales) Itínere-Europistas (concession income) Testa (leases to maturity) Valoriza (services contracts) 5,92, ,78 2,36,151 65,861,519 2,935,181 1,124,256 4,924, ,228 2,445,687 55,828,32 4,161,79 9,89, , ,552 (85,536) 1,33,199 (1,226,528) 233,839 3,41% 3,18% (3,5%) 17,97% (29,47%) 2,36% TOTAL 87,33,218 77,964,557 9,338,661 11,98%

241 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 239 The decrease in Testa s portfolio is due to the transfer in May of the Parla and Coslada hospitals to Itínere Infraestructuras. The portfolio amounted to 1,21 million euros (575 million for Hospital de Parla and 626 million euros for Hospital de Coslada). Had this transfer not been carried out, Testa s portfolio would have been practically unchanged from DIRECTORS REMUNERATION AND OTHER BENEFITS 26 In 26, the following changes were made to the board of directors of the parent company: I. José Seixas de Queiroz Vaz Guedes retired from the board on January 11, 26. II. Vicente Benedito Francés retired from the board on May 5, 26. III. Francisco Javier Pérez Gracia was appointed to the board on January 11, 26. IV. Mutua Madrileña Automovilista (represented by Carlos Cutillas Cordón) was appointed to the board on October 4, 26. The Group has no commitments to members of the board of directors in respect of payment of pensions or life insurance premiums. Nor are there any agreements entitling members of the Company s board of directors to compensation upon their removal or resignation from the board. Since January 26, members of the board of directors receive the following remuneration approved by the SyV board of directors on the recommendation of the Appointments and Remuneration Committee: - As director: 72, euros, gross annually. - As member of the Executive Committee: 48, euros, gross annually. - As member of the Audit or Appointments and Remuneration Committees: 24, euros, gross annually. Also, the SyV board, on proposal of the Appointments and Remuneration Committee, in accordance with Article 43.1 of the Company by-laws, approved that the Chairman and First and Third Vice Chairman, who are currently executive directors and are remunerated as such in accordance with Article 43.2 of the by-laws, should be paid the same as the other board members in respect of their duties as directors. However, as the Second Vice Chairman is a non-executive director and therefore receives no remuneration under Article 43.2 of the by-laws, it was agreed that he should be paid a fixed sum for his duties as Second Vice Chairman of the board in respect of 26 and under Article 43.1 of the by-laws of 35, euros, gross annually. The table below shows the individual breakdown of the by-law stipulated emoluments received in 26 by the directors in office during the year:

242 24 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Euros Appointments and Board of Executive Audit Remuneration Bylaw-stipulated directors emoluments Directors Committee Committee Committe Total Luis Fernando del Rivero Asensio Manuel Manrique Cecilia Nueva Compañía de Inversiones, S.A. Diogo Alves Diniz Vaz Guedes Demetrio Carceller Arce Prilou, S.L. Mutua Madrileña Automovilista Participaciones Agrupadas, S.R.L. Torreal, S.A. Grupo Satocán, S.A. Corporación Caixa Galicia, S.A. Matías Cortés Domínguez Vicente Benedito Francés (Baja ) José Seixas de Queiroz Vaz Guedes (Baja ) Actividades Inmobiliarias y Agrícolas, S.A. Prilomi, S.L. Francisco Javier Pérez Gracia 72,. 48,... 12,. 72,. 48,... 12,. 35,. 48, ,. 72,. 48,... 12,. 72,. 48,.. 24,. 144,. 72,. 48,.. 24,. 144,. 18, ,. 72,. 48,. 24,.. 144,. 72,.. 24,.. 96,. 72,.. 24,.. 96,. 72,. 12,.. 24,. 18,. 72,... 24,. 96,. 3,.... 3,. 6,.... 6,. 72,.. 6,.. 78,. 72, ,. 66, ,. TOTAL 1,334,. 348,. 78,. 96,. 1,856,. The table below shows the individual detail of the salaries received in 26 by the directors in office during the year: Euros Salaries paid to directors Fixed Variable Total Luis Fernando del Rivero Asensio Diogo Vaz Guedes Manuel Manrique Cecilia Francisco Javier Pérez Gracia TOTAL 1,25,.. 1,25,. 362, , ,5. 537, , , , , ,442. 2,375, , ,162, The SyV Management Committee is composed of: Luis Fernando del Rivero Asensio, Manuel Manrique Cecilia, Marta Silva de Lapuerta, Vicente Benedito Francés, Fernando Rodríguez Avial, Rafael del Pozo Garcia, Javier Pérez Gracia, Javier Gayo Pozo, José Antonio Guio de Prada, Ricardo Martín Lucas, José Manuel Naharro Castrillo, José Carlos Otero Fernández, Ana de Pro Gonzalo, Fernando Lozano, Luis Janini Tatay and Salvador Font Estrany. Remuneration of members of the Management Committee who were not also members of the board of directors in 26 was 3,91, euros. In accordance with the disclosure required by Article 127.ter 4 of the Spanish Corporations Law, the following activities, investments, posts and functions were held by directors of Sacyr Vallehermoso, S.A. over the year in companies whose activity is identical, similar or complementary to that of the Company or the Group of which it is parent (according to the broad interpretation of this article by the ICAC, the information refers to companies or activities included in the Group except where indicated otherwise): - Luis Fernando del Rivero Asensio, was a member of the board of directors of Testa Inmuebles en Renta, S.A., Sacyr, S.A., Valoriza Gestión, S.A.U., Vallehermoso

243 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 241 División Promoción, S.A.U., Itínere Infraestructuras, S.A., Europistas, S.A., Autovía del Noroeste Concesionaria de la Comunidad Autónoma de la Región de Murcia, S.A., Autopista Vasco Aragonesa Concesionaria Española, S.A., Autopistas de Barbanza Concesionaria de la Xunta de Galicia, S.A., Autopistas del Atlántico Concesionaria Española, S.A., Somague, S.G.P.S., S.A., Repsol YPF, S.A. and Tesfran, S.A. (Chairman). He was also joint and several director of Sacyr Vallehermoso Participaciones, S.L.U. and Sacyr Vallehermoso Participaciones Mobiliarias, S.L.U. - Manuel Manrique Cecilia, was a member of the board of directors of Testa Inmuebles en Renta, S.A., Sacyr, S.A.U., Valoriza Gestión, S.A.U., Vallehermoso División Promoción, S.A.U., Itínere Infraestructuras, S.A., Inchisacyr, S.A., Obras y Servicios de Galicia y Asturias, S.A., Autopista Vasco Aragonesa Concesionaria Española, S.A., Itínere Chile, S.A., Autopistas de Navarra, S.A., Scrinser, S.A., Europistas, S.A. and Somague Engenharia, S.A. He also owns 13,1 shares in Tesfrán (Group company) via Telbasa Construcciones e Inversiones, S.L. (a non-group company) of which he is the sole owner and which owns rental properties. - José Manuel Loureda Mantiñán (representative on the board of Prilou, S.L.) was a member of the board of directors of Testa Inmuebles en Renta, S.A., Sacyr, S.A.U., Valoriza Gestión, S.A.U. (Chairman), Vallehermoso División Promoción, S.A.U., Itínere Infraestructuras, S.A., Autopista Vasco Aragonesa Concesionaria Española, S.A. and Somague, S.G.P.S., S.A. - Nueva Compañía de Inversiones, S.A. was, outside the Group, a director of Sociedad General de Aguas de Barcelona, S.A. in which it has a.14% capital stake, and Chairman and CEO of Torreal, S.A. Indirectly, via direct and indirect interests in Torreal, S.A., it owns stakes of 6.656% in Sociedad General de Aguas de Barcelona, S.A., 1% in Miralver Spi, S.L.U., 5% in Promociones Inmobiliarias Molinar, S.A. and 27.41% in SAR Residencial y Asistencial. Also, Juan Abelló Gallo was Chairman and CEO of Nueva Compañía de Inversiones, S.A. and its representative on the board of Sacyr Vallehermoso, S.A. - Torreal, S.A. was a director of Itínere Infraestructuras, S.A. and Valoriza Gestión, S.A.U., represented by José Díaz Rato Revuelta and Pedro del Corro García-Lomas, respectively. Also outside the Group, Torreal S.A. owns the following direct or indirect shareholdings: 6.656% in Sociedad General de Aguas de Barcelona, S.A., 1% in Miralver Spi, S.L., 5% in Promociones Inmobiliaria Molinar, S.A. and 27.41% in SAR Residencial y Asistencial, S.A. Finally, Pedro del Corro García-Lomas was a director of Testa Inmuebles en Renta, S.A. and, outside the Group, Chairman of Miralver Spi, S.L. and a director of Torreal, S.A. and Torreal Sociedad de Capital Riesgo de Régimen Simplificado, S.A. He also has, also outside the Group, the following shareholdings: 1.29% in SAR Residencial y Asistencial, S.A. - Diogo Alves Diniz Vaz Guedes was a member of the board of directors of Valoriza Gestión, S.A. Also, outside the Group, he has a % interest in the share capital of Esquilo SGPS, S.A., of which he was Chairman, and via this owns controlling positions in Aquapura Hotels Resort e SPA, S.A. with a 61.75% stake, Artepura-Investimentos Inmobiliarios, S.A. with a % stake and Enerpura- Energía e Ambiente, S.A. with a 99.6% stake. He also acts as Chairman of all these companies. - Participaciones Agrupadas, S.L. was a member of the board of directors of Testa Inmuebles en Renta, S.A., Sacyr, S.A.U. and of Vallehermoso División Promoción, S.A.U. - Grupo Satocán, S.A. was, outside the Group, controlling shareholder of Satocan, S.A., a building company mainly active in the Canary Islands, which is in turn directly or via family-members wholly owned by Juan Miguel Sanjuán y Jover, who was representative of Grupo Satocán, S.A. on the board of directors of Sacyr Vallehermoso, S.A. - CXG Corporación Caixagalicia, S.A. has interests in the following companies outside the Group: Autovía del Barbanza Concesionaria de la Xunta de Galicia, S.A., 2%; Astroc Mediterráneo, S.A., 5%, C por G Desarrollos Inmobiliarios, S.L., 1%, C por G Paim, S.L., 1%, Fonrestaura II, S.A., 6.67%, Home Galicia, S.A., 1%, Lazora, S.A., 6.54%, Desarrollos Territoriales Inmobiliarios, S.A., 25%, Sociedad de Fomento y Desarrollo Turístico, S.A., %, Sociedad Gestora de Promociones Inmobiliarias y Desarrollo Empresarial, S.L., 5%, Tasagalicia Consult, S.A., 1%, Tasagalicia, S.A., 9.5%, Bia Galicia S.A. de Seguros y Reaseguros 5%, Correduría de Seguros, S.A., 1%, Plásticos Ferro GPF, S.L., 2.134%, Unión Fenosa, S.A., 9.99%, Caja de Seguros Reunidos (Caser), S.A., 6.88%, Gas Galicia, S.A., 1%, Islalink, S.A., 26%, Reganosa 1%, Investimentos Ibéricos SGPS, S.A., 5%, Galp Energía SGPS, S.A., 3% and Torre de Hércules, S.L., 1%.

244 242 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS It also has indirect interests, via C por G Desarrollos Inmobiliarios, S.L., in the following companies outside the Group: Albazul del Castillo, S.L.U., 1%; Altabrava del Mar, S.L.U., 1%, Atlántica Cyo, S.L., 5%, Blancacima del Noroeste, S.L.U., 1%, Boreal Desarrollo Inmobiliario, S.A., 2%, Comarexur, S.L., 5%, Cincovillas del Golf, S.L., 5%, Construziona Galicia, S.L., 17%, Daeca Comarex, S.L., 75%, Desarrollos Inmobiliarios Fuenteamarga, S.L., 33%, G.P.S. del Noroeste 3, S.L., 5%, Galeras Entreríos, S.L., 5%, Galicat Invest, S.L., 5%, Hayedo de Montesaltos, S.L.U., 1%, Ingalix Desarrollos Inmobiliarios, S.L., 5%, Jocai XXI, S.L., 5%, Landix Operaciones Urbanísticas, S.L., 5%, Proboin, S.L., 25%, Promociones Urbanísticas Hayaplus, S.L., 5%, Saltavalles de Azul, S.L., 5% and Señorio del Retiro, S.L., 33.33%. CXG Corporación Caixagalicia, S.A. was a member of the boards of directors of the following companies which exercise the same, similar or complementary activities to those of Sacyr Vallehermoso, S.A.: Desarrollos Territoriales Inmobiliarios, Gas Galicia, SDG, S.A., Investimentos Ibéricos, SGPS, S.A., Autovía de Barbanza, sociedad concesionaria de la Xunta de Galicia, S.A., Isalink, S.A., Fonrestaura II, S.A. and Astroc Mediterráneo, S.A. Finally, José Luis Méndez López (representative of CXG Corporación Caixagalicia, S.A. on the board), was a member of the boards of directors of the following companies: CXG Corporación Caixagalicia, S.A. (Chairman and CEO), Unión Fenosa, S.A. (Vice President and member of the Executive Committee), Caja de Seguros Reunidos, Compañía de Seguros y Reaseguros, S.A. (Vice Chairman) and Promoción Urbanística Integral 2.5, S.L. He also acts on behalf of a third party as General Manager of Caja de Ahorros de Galicia. - Mutua Madrileña Automovilista, S.S.P.F., outside the Group, has the following direct or indirect shareholdings: 1% in Inmomutua Madrileña, S.A.U., 2.94% in Actividades de Construcción y Servicios, S.A. and 99.88% in Mutuamad Infraestructuras, S.L. It is represented on the board of Sacyr Vallehermoso, S.A. by Carlos Javier Cutillas Cordón, who, outside the Group, acts as Chairman and CEO of Inmobiliaria Chamartín, S.A., Chamartín Ocio y Deportes, S.L., Chamartín Monterroso, S.L., Chamartín Sur, S.L. and Chamartín Renta y Desarrollo, S.L. He also acts as CEO of Chamartín Área Centro, S.L. - Javier Pérez Gracia was a member of the boards of Testa Inmuebles en Renta, S.A., Valoriza Gestión, S.A.U., Vallehermoso División Promoción, S.A.U., Itínere Infraestructuras, S.A., Autopistas de Navarra, S.A., Avasacyr, S.A., Neopistas, S.A., Iberese, S.A., Gescentesta, S.A., Ibergement Assesments, S.L., Tacel Inversiones, S.A., Autopista Vasco Aragonesa de Servicios y Concesiones, S.A. and Iberese, S.A., Europistas, S.A. (Chairman), Hospital de Parla, S.A. (Chairman) and Hospital del Noreste, S.A. (Chairman) as well as director of Ena Infraestructuras, S.A. and Enaitínere, S.L. - Demetrio Carceller Arce was a member of the board of Vallehermoso División Promoción, S.A.U. Outside the Group he was director of Servicios y Obras Canarios, S.A. (Chairman), Inmuebles del Archipiélago, S.A., and Canariense de Urbanización, S.A. - José Manuel Loureda López (representative on the board of Prilomi, S.L.) was a member of the board of Sacyr, S.A.U. He was also acting director at Sociedad Concesionaria Autopistas Nororiente, S.A. Sociedad Concesionaria Rutas del Pacífico, S.A., Sociedad Concesionaria Vespucio Sur, S.A. and Sociedad Operación y Logística Infraestructuras, S.A. In accordance with Article of the Spanish Securities Market Law, in the course of the year the following transactions were carried out between directors and the Company: (i) exercise of a put option, granted in 25 by Sacyr Vallehermoso, S.A. in favor of CXG Corporación Caixagalicia, S.A. on the whole of the shares that CXG Corporación Caixagalicia, S.A. held in Itínere Infraestructuras, S.A., representing 8.62% of its share capital, and (ii) agreement of a put option contract, granted by Itínere Infraestructuras, S.A., to CXG Corporación Caixagalicia, S.A. on shares owned by the latter in Autovía de Barbanza Concesionaria de la Xunta de Galicia, S.A. representing 2% of its capital. 27 In 27, the following changes were made to the Board of Directors of the parent company: I. Grupo Satocan, S.A. (represented by Juan Miguel Sanjuán Jover), resigned from the board on January 1, 27. II. Juan Miguel Sanjuán Jover was appointed director on January 1, 27. His appointment was ratified at the shareholders meeting of June 29, 27.

245 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 243 III. Cxc Corporación Caixa Galicia, S.A. (represented by José Luis Méndez López) resigned from the board on May 1, 27. IV. José Luis Méndez López was appointed director on May 1, 27. His appointment was ratified at the shareholders meeting of June 29, 27. V. The appointment of Mutua Madrileña Automovilística as a director was ratified at the shareholders meeting of June 29, 27. The Group has no commitments to members of the board of directors in respect of payment of pensions or life insurance premiums. Nor are there any agreements entitling members of the Company s board of directors to compensation upon their removal or resignation from the board. Members of the board of directors receive the following remuneration approved by the SyV board of directors at the proposal of the Appointments and Remuneration Committee: - As director: 72, euros, gross annually. - As member of the Executive Committee: 48, euros, gross annually. - As member of the Audit or Appointments and Remuneration Committees: 24, euros, gross annually. Also, the SyV board, on proposal of the Appointments and Remuneration Committee, in accordance with Article 43.1 of the Company by-laws, approved that the Chairman and First and Third Vice Chairman, who are currently executive and proprietary directors, respectively, are remunerated as such, in accordance with Article 43.2 of the by-laws, should be paid the same as the other board members in respect of their duties as directors. However, as the Second Vice Chairman is a nonexecutive director and therefore receives no remuneration under Article 43.2 of the by-laws, it was agreed that he should be paid a fixed sum for his duties as Second Vice Chairman of the board in respect of 27 and under Article 43.1 of the by-laws of 35, euros, gross annually. The table below shows the individual detail of the statutory payments received in 27 by the directors in office during the year: Euros Appointments and Board of Executive Audit Remuneration Bylaw-stipulated directors emoluments Directors Committee Committee Committe Total Luis Fernando del Rivero Asensio Manuel Manrique Cecilia Nueva Compañía de Inversiones, S.A. Diogo Alves Diniz Vaz Guedes Demetrio Carceller Arce Prilou, S.L. Mutua Madrileña Automovilista Participaciones Agrupadas, S.R.L. Torreal, S.A. Grupo Satocán, S.A. (until ) Corporación Caixa Galicia, S.A. (until ) Matías Cortés Domínguez Actividades Inmobiliarias y Agrícolas, S.A. Prilomi, S.L. Francisco Javier Pérez Gracia Jose Luis Méndez López Juan Miguel Sanjuán Jover 72,. 48,... 12,. 72,. 48,... 12,. 35,. 48, ,. 72,. 48,... 12,. 72,. 48,.. 24,. 144,. 72,. 48,.. 24,. 144,. 72, ,. 72,. 48,. 24,.. 144,. 72,.. 24,.. 96, ,. 2,.. 1,. 6,. 72,... 24,. 96,. 72,.. 24,.. 96,. 72, ,. 72, ,. 42,. 28,.. 14,. 84,. 72,.. 24,.. 96,. TOTAL 1,358,. 384,. 96,. 96,. 1,934,.

246 244 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS The table below shows the individual breakdown of the salaries received in 27 by the directors in office during the year: Euros Salaries paid to directors Fixed Variable Total Luis Fernando del Rivero Asensio Manuel Manrique Cecilia Diogo Vaz Guedes Francisco Javier Pérez Gracia TOTAL 2,,.. 2,,. 564, , , ,95. 5, , , , , ,163, ,565. 3,825, In 27, the following members of the board of directors of Sacyr Vallehermoso, S.A. received remuneration from other Group companies: Francisco Javier Pérez Gracia (99,685.2 euros), Manuel Manrique Cecilia (49,24.47 euros) and Luis Fernando del Rivero Asensio (44, euros). The SyV Management Committee is composed of: Luis Fernando del Rivero Asensio, Manuel Manrique Cecilia, Marta Silva de Lapuerta, Vicente Benedito Francés, Fernando Rodríguez Avial, Rafael del Pozo Garcia, Javier Pérez Gracia, Javier Gayo Pozo, José Antonio Guio de Prada, José Manuel Naharro Castrillo, José Carlos Otero Fernández, Ana de Pro Gonzalo, Fernando Lozano, Luis Janini Tatay, Miguel Heras Dolader and Salvador Font Estrany. Compared to 26, Ricardo Martín Lucas stepped down from the Management Committee on July 16, 17 and Miguel Heras Dolader was included in September 17, 27. Remuneration of members of the Management Committee who are not also members of the board of directors in 27 was 5,37, euros. In accordance with the disclosure required by Article 127.ter 4 of the Spanish Corporations Law, the following activities, investments, posts and functions were held by directors of Sacyr Vallehermoso, S.A. over the year in companies whose activity is identical, similar or complementary to that of the Company or the Group of which it is parent: - Luis Fernando del Rivero Asensio is a member of the boards of Testa Inmuebles en Renta, S.A., Sacyr, S.A.U., Valoriza Gestión, S.A.U., Vallehermoso División Promoción, S.A.U., Itínere Infraestructuras, S.A., Europistas, C.E.S.A., Autovía del Noroeste Concesionaria de la Comunidad Autónoma de la Región de Murcia, S.A., Autopistas del Atlántico Concesionaria Española, S.A., Autovía del Barbanza Concesionaria de la Xunta de Galicia, S.A., Autopista Vasco Aragonesa Concesionaria Española, S.A., Sociedad Concesionaria Aeropuerto de Murcia, S.A., Aeropuerto de la Región de Murcia, S.A., Somague, SGPS, S.A., Tesfran, S.A. (Chairman) and Repsol YPF, S.A. (Vice Chairman). He is also joint and several director of Sacyr Vallehermoso Participaciones, S.L.U. and Sacyr Vallehermoso Participaciones Mobiliarias, S.L. - Manuel Manrique Cecilia is a member of the boards of de Testa Inmuebles en Renta, S.A., Sacyr, S.A.U., Valoriza Gestión, S.A.U., Vallehermoso División Promoción, S.A.U., Itínere Infraestructuras, S.A., Inchisacyr, S.A., Autopista Vasco Aragonesa Concesionaria Española, S.A., Autopistas de Navarra, S.A., Europistas, C.E.S.A., Itínere Chile, S.A. and Scrinser, S.A. Outside the Group he has a 49.9% shareholding in Telbasa Construcciones e Inversiones, S.L. - José Manuel Loureda Mantiñán (in representation of Prilou, S.L) is a member of the boards of Testa Inmuebles en Renta, S.A., Sacyr, S.A.U., Valoriza Gestión S.A.U. (Chairman), Vallehermoso División Promoción, S.A.U., Itínere Infraestructuras, S.A., Autopista Vasco Aragonesa Concesionaria Española, S.A., Somague SGPS, S.A. and Repsol YPF, S.A. - José Manuel Loureda López (representative on the board of Prilomi, S.L.) is a member of the boards of Sacyr, S.A.U., Sis, SV Lidco. Libia, Sacyr Brasil, Sacyr Chile, Sacyr Irlanda, Sacyr Costa Rica and Somague. He is also acting director at Sociedad Concesionaria Autopistas Nororiente, S.A., Sociedad Concesionaria Rutas del Pacífico, S.A., Sociedad Concesionaria Vespucio Sur, S.A. and Sociedad Operación y Logística Infraestructuras, S.A.

247 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Outside the Group, Nueva Compañía de Inversiones, S.A. is Chairman and CEO of Torreal, S.A. Indirectly, via direct and indirect shareholdings in Torreal, S.A., it owns 1% of Miralver Spi, S.L. and 5% of Promociones Inmobiliarias Molinar, S.A. In addition, Juan Abelló Gallo is Chairman and CEO of Nueva Compañía de Inversiones, S.A. and its representative on the board of Sacyr Vallehermoso, S.A. - Torreal, S.A. is a member of the boards of Itínere Infraestructuras, S.A. and Valoriza Gestión, S.A.U. Acting in its name and representing the company are José Díaz-Rato Revuelta and Pedro del Corro García-Lomas, respectively. In addition, outside the Group, Torreal S.A. owns the following direct or indirect shareholdings: 1% of Miralver Spi, S.L. and 5% of Promociones Inmobiliaria Molinar, S.A. Finally, Pedro del Corro García-Lomas is a director of Testa Inmuebles en Renta, S.A. and, outside the Group, Chairman of Miralver Spi, S.L., Torreal, S.A. and Torreal Sociedad de Capital Riesgo de Régimen Simplificado, S.A. - Participaciones Agrupadas, S.L. holds a seat on the board of directors of Testa Inmuebles en Renta, S.A., Sacyr, S.A.U. and Vallehermoso División Promoción, S.A.U. In addition, Ángel López-Corona Davila is a director of Itínere Infraestructuras, S.A. and outside the Group a director of Tavex Algodonera, S.A. - Francisco Javier Pérez Gracia is a member of the boards of Valoriza Gestión, S.A.U., Itínere Infraestructuras, S.A., Vallehermoso División Promoción, S.A.U., Testa Inmuebles en Renta, S.A., Autopistas de Navarra, S.A., Europistas, S.A., Ena Infraestructuras, S.A., Neopistas, S.A., Avasacyr, S.L., Enaitínere, S.L., Autopista Vasco Aragonesa Concesionaria Española, S.A., Hospital de Parla, S.A., Hospital del Noreste, S.A. and Sociedad Concesionaria Aeropuerto de Murcia, S.A. - Demetrio Carceller Arce is a member of the board of Vallehermoso División Promoción, S.A.U. Outside the Group he is director of Servicios y Obras Canarios, S.A. and Inmuebles del Archipiélago, S.A. - Diogo Alves Diniz Vaz Guedes is a director of Valoriza Gestión, S.A. Outside the Group, he holds % of Gespura, SGPS, S.A., of which he is Chairman. Through this company, he holds majority stakes in Aquapura Hotels Resort e SPA, S.A. (61.75%), Artepura- Investimentos Imobilíarios, S.A. (74.976%) and Enerpura- Energía e Ambiente, S.A. (99.6%). He is Chairman at all three companies. - Mutua Madrileña Automovilista, S.S.P.F., outside the Group, has the following direct or indirect shareholdings: 1% of Inmomutua Madrileña, S.A.U., 99.99% of Mutuamad Infraestructuras, S.L, 59.99% of Cirve, S.A., 55.66% of Zatrin, 43.14% of Promociones e iniciativas Vall Romanes, S.L., 42% of Palau 86, S.L. and 51.71% of Parking Clínica, S.A. It is represented on the board by Carlos Javier Cutillas Cordón, which is Chairman and CEO of Inmobiliaria Chamartín, S.A. and Chamartín Sur, S.L., and CEO of Chamartín Área Centro, S.L. - José Luis Méndez López is a member of the boards of directors of the following companies: CXG Corporación Caixagalicia, S.A. (Chairman and CEO), Unión Fenosa, S.A. (Vice Chairman and member of the Executive Committee), Caja de Seguros Reunidos, Compañía de Seguros y Reaseguros, S.A. (Vice Chairman), Corporación C por G Willis, Correduría de Seguros y Reaseguros, S.A. (Chairman representing CXG Corporación Caixagalicia, S.A.) and Promoción Urbanística Integral 25, S.L. He also acts on behalf of a third party as General Manager of Caja de Ahorros de Galicia. - Miguel Sanjuán y Jover is Chairman of Grupo Satocan, S.A., the majority shareholder of Satocán, S.A. This company s core business is construction in the Canary Islands. Sacyr Vallehermoso Group carries out transactions with related parties on an arm s length basis. The most significant of these in 26 and 27 were as follows:

248 246 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Undrawn amounts Amount drawn down (Thosands of euros) (Thosands of euros) Name Related to SyV company Transaction CAIXA GALICIA CXG CORPORACIÓN CAIXA GALICIA, S.A. SACYR VALLEHERMOSO, S.A. Financing Guarantees Financing 85,8 33,6 6, 62,6 36,1 6, 77,361 21, ,312 21,6 2,755 SACYR, S.A. Guarantees Financing 18, 83,84 7, 26,64 2,897 26,64 3,49 6,46 VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. TESTA INMUEBLES EN RENTA, S.A. ITÍNERE INFRAESTRUCTURAS, S.A. ENAITÍNERE, S.A. VIASTUR SyV PARTICIPACIONES, S.A. SyV PARTICIPACIONES MOBILIARIAS, S.A. TÚNELES DE ARTXANDA NEOPUL AUTOVÍA DE BARBANZA AUDENASA ENA INFRAESTRUCTURAS, S.A. SOMAGUE INVESTIMENTOS, S.A. Guarantees Financing Guarantees Financing Financing Financing Financing Financing Financing Financing Financing Guarantees Financing Financing 12, 22,274 8,25 2, 4, 5 2, 3,3 1, , 29, ,92 8,25 2, 4, 1, 5, 9,915 22,274 8,25 2, 4, 5 3,3 1, ,462 2, ,92 3,42 2, 4, 1, 47,889 SOMAGUE ENGENHARIA, S.A. Guarantees 1, 1,78 Total CAIXA GALICIA 43,56 318, , ,261 CAIXANOVA PARTICIPACIONES Financing AGRUPADAS, S.R.L. IBERESE, S.A. VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. ENA INFRAESTRUCTURAS, S.A. PALACIO DE CONGRESOS DE VIGO, S.A. Guarantees Financing Guarantees Guarantees 6 52, , , ,242 33, , , ,242 Acqusition of shares of Itínere 16, SACYR VALLEHERMOSO, S.A. SyV PARTICIPACIONES MOBILIARIAS, S.A. SOMAGUE INMOBILIARIA, S.A. SOMAGUE ENGENHARIA, S.A. AUDASA ENAITÍNERE, S.A. Total CAIXANOVA Itínere put option Itínere call option Financing Financing Financing Financing Guarantees Financing Derivatives 4, 6, 5, 5, 5, 5, 3, 3, 7,1 7,1 2,55 4,55 5,6 8 5,59 8 8, 1,339 1, 1, 163,66 164, ,11 274,73 139,625 92,36 (to be continued)

249 CíTRICOS LUIS DEL RIVERO / DEL SURESTE JOSÉ MANUEL LOUREDA SACYR VALLEHERMOSO, S.A. CXG CORPORACIÓN CAIXA GALICIA, S.A. SACYR VALLEHERMOSO, S.A. ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 247 Undrawn amounts Amount drawn down (Thosands of euros) (Thosands of euros) Name Related to SyV company Transaction UNICAJA PARTICIPACIONES AGRUPADAS, S.R.L. SACYR VALLEHERMOSO, S.A. Guarantees Financing 62, 1, 62, 59,194 7,85 54,664 Acqusition of plot 37,44 Financing 164, , , ,66 VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Guarantees Financing 3, 6, 3, 6, 21,875 3,699 28,793 1,582 SACYR, S.A. ITÍNERE INFRAESTRUCTURAS, S.A. SyV PARTICIPACIONES MOBILIARIAS, S.A. SyV PARTICIPACIONES, S.A. TÚNELES DE ARTXANDA BIPUGE EXTRAGOL, S.A. OLEXTRA, S.A. COMPAÑÍA ENERGÉTICA PATA DE MULO, S.A. SECADEROS DE BIOMASA, S.A. Guarantees Financing Financing Financing Financing Financing Financing Financing Financing Financing Financing 1, 2, 1, 1, 1, 4, ,565 3,982 2,81 2, 1, 4, ,863 4,364 1,949 5,463 2, 1, 1, 1, 4, ,565 3,982 1,582 2, 1, 4, ,863 4,364 1,61 SUFI, S.A. ENAITÍNERE, S.A. Guarantees Financing 1,5 6,936 1,5 7, , ,138 Total UNICAJA 337, , , ,882 CAJA ÁVILA PARTICIPACIONES VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Financing 12, 12, 3,913 11,918 AGRUPADAS, S.R.L. ENAITÍNERE, S.A. Total CAJA ÁVILA Financing 1,557 13,557 1,63 13,63 1,557 5,47 1,63 13,521 CAJA MURCIA PARTICIPACIONES VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Financing 121, ,115 96,988 12,574 AGRUPADAS, S.R.L. SyV PARTICIPACIONES MOBILIARIAS, S.A. AUTOVÍA DEL NOROESTE C.C.A.R.M., S.A. Financing Financing 1, 2,99 1, 3,142 1, 2,99 1, 3,142 Total CAJA MURCIA 134,93 128,257 19, ,716 CAMPSA RED, S.A. REPSOL YPF, S.A. CAFESTORE AUCALSA AUCALSA NEOPISTAS CAFESTORE PRINUR, S.A. Total CAMPSA RED, S.A. Commercial/Purchase Commercial/Purchase Commercial/Sale Commercial/Sale Commercial/Sale Commercial/Purchase (5) 9 (41) Commercial/Purchase Acquisition of Itínere shares (to be continued) ,75 (to be continued)

250 248 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS (to be continued) Undrawn amounts Amount drawn down (Thosands of euros) (Thosands of euros) Name Related to SyV company Transaction EYCOVA, S.L. MANUEL MANRIQUE SACYR VALLEHERMOSO, S.A. Commercial/Purchase SACYR, S.A.U. Commercial/Purchase Total EYCOVA, S.L GESPEVESA REPSOL YPF, S.A. SACYR, S.A.U. Commercial/Purchase FRANCISCO JAVIER FRANCISCO JAVIER PÉREZ GRACIA PÉREZ GRACIA VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Residential sale 25 1,15 1,15 LEÓNIDES LEÓNIDES GUTIÉRREZ GUTIÉRREZ POZO VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Residential sale 428 PEDRO PALENZUELA PEDRO PALENZUELA MARAÑÓN VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Residential sale 464 FERNANDO RUIZ FERNANDO RUIZ CABELLO CABELLO VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Residential sale 132 JOSÉ MANUEL LOUREDA PRILOU, S.L. VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Residential sale 481 LA RESTINGA, C.B. JAVIER PÉREZ GRACIA VALORIZA CONSERVACIÓN Commercial/Purchase MUTUA MADRILEÑA MUTUA MADRILEÑA SACYR VALLEHERMOSO, S.A. Insurance VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Insurance 9 11 CAVOSA Insurance SCRINSER Insurance SACYR, S.A.U. Insurance 1, Total MUTUA MADRILEÑA AUTOMOVILISTA 1,711 1, PETROCAT REPSOL YPF, S.A. SACYR, S.A.U. Commercial/Purchase 1 REPSOL BUTANO, S.A. REPSOL YPF, S.A. AUCALSA Commercial/Sale 17 2 AUDASA Commercial/Purchase 12 PROSACYR OCIO, S.L. Commercial/Purchase 13 CAFESTORE Commercial/Purchase (1) Total REPSOL BUTANO, S.A (1) REPSOL COMERCIAL REPSOL YPF, S.A. CAFESTORE Commercial/Purchase 1, REPSOL COM. REPSOL YPF, S.A. SUFI, S.A. Commercial/Purchase (5) DE PROD. PETR. VALORIZA FACILITIES, S.A.U. Commercial/Sale CAFESTORE Commercial/Sale (3,583) 52 CAFESTORE Commercial/Purchase 1,361 NEOPISTAS Commercial/Sale 1,21 95 VALORIZA CONSERVACIÓN INFRAESTR. Commercial/Purchase 13 SCRINSER, S.A. Commercial/Purchase 14 AUDASA Commercial/Sale CAVOSA Commercial/Purchase SACYR, S.A.U. Commercial/Purchase 4, Total REPSOL COMERCIAL DE PROD. PETROLÍFEROS 3, (to be continued)

251 REPSOL REPSOL YPF, S.A. S.A. DEPURACIÓN Y PETRÓLEOS, S.A. TRATAMIENTOS REPSOL YPF LUBR. REPSOL YPF, S.A. CAVOSA Y ESP. SACYR, S.A.U. ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 249 (to be continued) Undrawn amounts Amount drawn down (Thosands of euros) (Thosands of euros) Name Related to SyV company Transaction Commercial/Sale Commercial/Purchase Commercial/Sale SACYR, S.A.U. Total REPSOL YPF LUBRICANTES Y ESPECIALIDADES Commercial/Purchase 7,677 7, REPSOL YPF, S.A. ACCIONISTA SIGNIFICATIVO TESTA INMUEBLES EN RENTA, S.A. NEOPISTAS AUCALSA SUFI, S.A. Residential rental Commercial/Sale Commercial/Purchase Commercial/Purchase (1,92) (119) VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Commercial/Purchase 34 VALORIZA FACILITIES TESTA RESIDENCIAL, S.A. Total REPSOL YPF, S.A. Commercial/Sale Residential rental , (92) (119) SDAD. CATALANA REPSOL YPF, S.A. TESTA INMUEBLES EN RENTA, S.A. Office rental DE PETROLIS SCRINSER, S.A. Total SDAD. CATALANA DE PETROLIS Commercial/Purchase SOLRED, S.A. REPSOL YPF, S.A. SACYR, S.A.U. SCRINSER CAVOSA SADYT IDEYCO, S.A.U. CAFESTORE CAFESTORE VALORIZA CONSERVACIÓN VALORIZA FACILITIES, S.A. VALORIZA AGUA, S.L. SACYR VALLEHERMOSO, S.A. AUDASA AUDASA AUCALSA AUCALSA VIASTUR AUDENASA AUTOESTRADAS AUTOESTRADAS OMICRON-AMEPRO, S.A. SUFI, S.A. Total SOLRED, S.A. Commercial/Purchase Commercial/Purchase Commercial/Purchase Commercial/Purchase Commercial/Purchase Commercial/Sale Commercial/Purchase Commercial/Purchase Commercial/Purchase Commercial/Purchase Commercial/Purchase Commercial/Sale Commercial/Purchase Commercial/Sale Commercial/Purchase Commercial/Purchase Commercial/Sale Commercial/Sale Commercial/Purchase Commercial/Sale Commercial/Sale , , , , ,15 25, (1,83) (4,43) (3,537) (1,478) (9) (15) (19,178) , (952) (27) (125) (141) (1) (13) (978) (to be continued)

252 25 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS SOCIEDAD GENERAL DE AGUAS DE BARCELONA, S.A. TORREAL, S.A. TESTA INMUEBLES EN RENTA, S.A. Commercial/Purchase UNIÓN FENOSA CXG CORPORACIÓN COMERCIAL, S.L. CAIXA GALICIA, S.A. SACYR VALLEHERMOSO, S.A. Commercial/Purchase UNIÓN FENOSA CXG CORPORACIÓN DISTRIBUCIÓN S.A. CAIXA GALICIA, S.A. SACYR VALLEHERMOSO, S.A. Commercial/Purchase UNIÓN FENOSA, S.A. CXG CORPORACIÓN CAIXA GALICIA, S.A. SACYR VALLEHERMOSO, S.A. VALORIZA FACILITIES, S.A. Total UNIÓN FENOSA, S.A. Commercial/Purchase Commercial/Purchase LUIS JAVIER CORTÉS MATÍAS CORTÉS Commercial/ DOMÍNGUEZ DOMÍNGUEZ SACYR VALLEHERMOSO, S.A. Services TELBASA CONSTR. MANUEL MANRIQUE CECILIA VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Residential sale E INVERSIONES, S.L. SACYR, S.A. Office rental Total TELBASA CONSTRUCCIONES E INVERSIONES, S.L. GRUPO SATOCÁN, S.A. GRUPO SATOCÁN, S.A. VALLEHERMOSO DIVISIÓN PROMOCIÓN, S.A.U. Acquisition of plot REPSOL POLÍMEROS, LDA REPSOL YPF, S.A. SOMAGUE ENGENHARIA Commercial/Sale REPSOL YPF LUBRIC. ESPECIALES REPSOL YPF, S.A. SOMAGUE ENGENHARIA Commercial/Purchase REPSOL PORTUGUESA, S.A. REPSOL YPF, S.A. SOMAGUE ENGENHARIA Commercial/Purchase REPSOL PORTUGUESA, S.A. REPSOL YPF, S.A. HIDURBE Commercial/Purchase ASIRU, S.A. REPSOL YPF, S.A. CAFESTORE Commercial/Purchase (to be continued) Undrawn amounts Amount drawn down (Thosands of euros) (Thosands of euros) Name Related to SyV company Transaction (32) ,215 1,134 5,732 1, , , , REPSOL DIRECTO, S.A. REPSOL YPF, S.A. VALORIZA FACILITIES, S.A. COMP. LOGÍSTICA HIDROCARB. REPSOL YPF, S.A. SACYR S.A.U. PETRÓLEOS DEL NORTE, S.A. REPSOL YPF, S.A. SACYR S.A.U. Commercial/Purchase Commercial/Sale Commercial/Purchase 44 2,45 1,2 85

253 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS EVENTS AFTER THE BALANCE SHEET DATE The most important events to have taken place since the balance sheet date 27 were: - On January 11, 28, Sacyr Vallehermoso distributed to its shareholders a gross interim dividend of.15 euros per share, in respect of its 27 profit. - On January 15, 28, Sacyr Vallehermoso. via its subsidiary Sacyr Vallehermoso Participaciones Mobiliarias, S. L. received from REPSOL YPF, S.A. a.5 euros per share gross dividend, generating total net income of million euros. - On January 18, the Sacyr Vallehermoso Group, through its Appointments and Remuneration Committee, made a series of organizational changes aimed at streamlining the Group s corporate areas. Specifically, in the corporate area, growth in the Group s business led the General Administration and Finance Department to be split into two new areas: Administration, which will be run by José Carlos Otero Fernández, and Finance, headed up by Fernando Lacadena Azpeitia. There were also new appointments in the Group s operating segments. At Testa, the parent of the rental property business, Fernando Rodríguez-Avial Llardent was appointed Executive Chairman. Until now, he was the company s CEO, a post which will be filled by Daniel Loureda López. In the property development area, Vallehermoso has appointed Rafael del Pozo García Executive Chairman. Until now, he was the company s CEO, a post which will be filled by Miguel Ángel Peña Pinilla. - On January 31, 28, the Nanterre (Paris) commerce court held a hearing on the case between Sacyr Vallehermoso and other Spanish shareholders of investee Eiffage and Eiffage s Board of Director s for deriving some Spanish groups from exercising their voting rights at the French company s General Shareholders Meeting of April 18, 27. After the parties pleaded their cases, the Court set the date for its ruling at May 6, On January 23, 28 Sacyr Vallehermoso pledged a total of 24,52,131 shares of its Testa Inmuebles en Renta, S.A. subsidiary (21.22% of its share capital) in favor of the bank syndicate that granted it financing to acquire the 2.1% stake in Repsol YPF. This guarantee was provided because the Repsol YPF share price closed three straight days below the 15% value-to-loan ratio established in the financing agreement for the first two years of the loan. - On February 5, 27, the Paris Court of Appeals held the hearing on the case between Sacyr Vallehermoso and the French securities market authorities (AMF) over the latter s rejection of the takeover bid for Eiffage launched on April 19, 27. After hearing the lawyers, the judge overseeing the case set April 2, 28 as the date for issuing its ruling. - On February 21, 28, the European Commission authorized the takeover bid launched by Sacyr Vallehermoso for Eiffage, without conditions, after verifying that it would not undermine competition in all or a substantial part of the European Economic Area. - On February 21, 28, associate Repsol YPF sold 14.9% of its Argentine subsidiary, YPF, to the Petersen group for a total of 2,235 million dollars. In the same deal, it gave the Argentine group an option on a further 1.1% of YPF, which would take its shareholding up to 25%. - On February 28, 28, Repsol YPF unveiled its ambitious Strategic Plan. The plan entails total investment of 32,8 million euros. Among other targets, the company aims to triple net profit excluding extraordinaries and disposals and double EBITDA by 212. By the end of the period, 55% of Repsol s assets should be in OECD countries, with the relative weight of Latin America falling to 31%. The company s organic growth should be guaranteed through 1 major projects, which make up 6% of investment in its core businesses (upstream, downstream and LNG). In the upstream (exploration and production) business, Repsol will develop five large projects: The Shenzi and Genghis Khan mega fields in the US waters in the Gulf of Mexico; the Carioca deep water field in Brazil; the I/R field in the Murzuq bais in Libya; the Reggane block in Algeria and Block 39 in Peru.

254 252 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS These and other projects will enable the company to increase its production of hydrocarbons and liquefied gases, and meet its ambitious targets. - On March 12, 28, the board of directors of Sacyr Vallehermoso approved a gross interim dividend, in respect of 27 profit, of.15 euros per share. This dividend will be payable on April 8, 28. This distribution brings the total remuneration to shareholders in respect of the 27 financial year to.6 euros per share, a 2% increase on 26. The pay-out (i.e. the percentage of profit for the year that the Company allocates to dividends) is 18.5%. In the Group s Construction division, the divisional parent company Sacyr, S.A.U., has won the following tenders for projects since the end of 27: - In early January 28, Sacyr won the tender to remodel the Santo Tomé del Puerto-Burgos stretch of the A-1 old generation Spanish motorway budgeted at million euros. - Also that month Sacyr, S.A.U., in a consortium with its subsidiary Cavosa and Alstom Hydro, won the contract to build Iberdrola s new La Muela II hydro power plant located in the town of Cortés de Pallás (Valencia). The 73.3 million euros will enlarge the plant s capacity to 1,48 MW to prevent summer blackouts on the Alicante coast. - On January 18, 28, ADIF, of the Development Ministry, awarded a contracft to a consortium made up of Sacyr Group companies Cavosa and Scrinser the contract to build the 5.64km tunnel for the high-speed train (AVE) in Barcelona linking the Sants and La Sagrera stations. With a budget of million euros, work is slated to begin in the Spring of 28. The total execution period is 35 months, including 12 months to complete study and preparatory work before digging with a latest generation tunnel boring machine. - In January, beer maker DAMM, S.A. awarded a contract to build a warehouse in Catalonia for a total of 1.96 million euros. - Construcción of the Nexity industrial park in Sant Cugat (Barcelona) for Domus Sorolla, with a budget of million euros. - In February, the consortium made up of Sacyr, Prinur and Proyectos Técnicos y Obras Civiles won the contract to channel the Guadarranque river in San Roque (Cádiz). With a budget of million euros, the project entails enlarge the channel to 13 meters wide and 25 kilometers long. - In February, the construction unit of the Valencia Port Authority proposed the consortium comprising Sacyr, Somague, Dragados, FPS, Cyes and Sedesa to carry out the protection works in the Valencia Port enlargement. The project has a million budget and a schedule of 4 months. - Also in February, public company Entidad Pública Empresarial de Suelo (SEPES) awarded Sacyr the 11.4 million euros urban works contract of the Pozo Hondo Ampliación industrial partk in the town of Campo de Criptana (Ciudad Real). In the Infrastructure Concession are, headed up by Itínere Infraestructuras, the following significant events have taken place since the balance sheet date: - At midnight on December 31, 27, the merger between Europistas and Itínere Infraestructuras took effect. Under the merger, Europistas absorbed Itínere Infraestructuras, which was dissolved without liquidation, all its assets being transferred to Europistas which acquired by universal succession all the rights and obligations of Itínere Infrestructuras as of January 1, 28. The merger deed was filed in the Madrid Mercantile Register on January 3, 28, and transferred to the Vizcaya Mercantile Register (as the company s registered office was moved to Vizcaya province), where it was registered on January 21, On January 8, the Board of Directors of Itínere Infraestructuras, S.A. set up, within the board, an

255 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 253 Executive Committee and an Appointments and Remuneration Committee. At the meeting, Pedro Pérez Fernández was appointed Chairman of the board and Francisco Javier Pérez Gracia as CEO. In addition, Bilbao Bizacaia Kutxa, represented by Alicia Vivanco González, was ratified as Vice Chairman. - On January 24, 28, Neopistas, the Itínere Group subsidiary specializing in motorway service area management, was awarded the concession for a new service area on the A-66, Ruta de la Plata, Zafra-Sevilla stretch, kilometer 68,875, at Calzadilla de Los Barros (Badajoz). - On February 6, 28, Itínere Chile opened the first stretch (the Poniente stretch) of the Nororiente de Santiago de Chile highway. The stretch is 7.7 km in length and runs from the Avenida El Valle in the Chicureo region to kilometer 21 of Ruta 5 Norte (Panamericana). A total of 14 kilometers still need to be completed, with the motorway scheduled to begin operation in early 29. It will be Santiago s fifth urban highyway, serving more than 5, people. - On February 6, following authorization by the Andalusia regional government and the EIB, Transportes Urbanos de Zaragoza, S.A.U. sold all its shares in Metro de Sevilla, Sociedad Concesionaria de la Junta de Andalucía, S.A. to the other partners in the venture. The holding acquired by Itínere was 1.64%, comprising 14,9 shares with a nominal value of 1 euro each, plus the corresponding portion of the participating loan granted to the Company. The total amount paid by Itínere for both concepts was 2.3 million euros. - On February 18, 28, the enlargement of the Moncloa transport interchange in Madrid (known as the Módulo Arco ) was opened. The new infrastructure will act as the terminal for intercity buses linking the Spanish capital with the north-east of the Madrid region. It is expected to welcome 36, passengers a day, benefiting more than 3 municipalities. - Autopistas del Atlántico, C.E.S.A. (Audasa), guaranteed by ENA Infraestructuras, S.A., both wholly owned subsidiaries of Itínere, has launched a 95,326 thousand euro issue of tax-efficient bonds. The subscription period began on February 18 and runs until March 14, 28, inclusive. The bonds pay a 4.85% annual coupon with a 1-year maturity from the payment date, i.e. March 27, 218. The issue is mainly targeted at retail investors and allocated pro-rata. The issue will fully refinance all of Audasa s maturing obligations this year. - In mid February, the Euromoney Group international Project Finance magazine gave out its ninth Deal of the Year award, for the leading project finance deals worldwide in 27. In the category Latin American PPP Deal of the Year 27 the award went to the financing project of concessionarie Autopistas del Sol, in Costa Rica. This consortium, set up to build and operate the toll highway between the cities of Caldera asnd San José for a period of 25 years, is made up of Itínere (35%), Globalvía (48%) and Soares da Costa (17%). The decision was based on its being the first PPP motorway in Costa Rica and because of complexity of its financing. The award was given in New York on March 6. In the Services segment, headed by Valoriza Gestión, S.A., the most notable events since the balance sheet date were as follows: - In January, Valoriza s Portuguese subsidiary, Hidurbe, won the tender to design, build and operate a forest biomass-powered thermoelectric plant in Portalegre (Portugal) for a period of 25 years. The project entails a total investment of million euros for the construction and million euros for the operation and management of the energy. - On February 25, 28, Valoriza Agua, a subsidiary of Valoriza Gestión, won the concession to provide drinking water to the town of Almadén (Ciudad Real). The contract has a budget of 28.5 million euros and a duration of 2 years. Valoriza Agua will provide service to a population of over 8,8. - Also in February, Valoriza Agua became a finalist in the tender to design, build and operate a desalination plant in Perth (Australia) for 25 years. This project, which entails

256 254 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS an investment ranging from 3 to 4 million euros, will supply more than 4, people, with maximum capacity of 28, cubic meters per day. In addition, to limit the impact on the environment, the plant will be run with renewable energies. - On February 29, 28, Valoriza Energía and Israeli company Solel, a leader in thermal solar power, announced an agreement to build and operate three solar plants in Lebrija (Seville). Total investment in the project will exceed 85 million euros, with combined installed capacity of 15 MW. In the Property Development division, headed by Vallehermoso División Promoción, the most notable events since the balance sheet date were as follows: - Independent appraiser CB Richard Ellis valued the property assets of the Property Development division at 6,969 million euros at December 31, 27, compared with 7,8 million euros in 26. The unrealized gains stood at 2,538 million euros, compared with 3,39 million euros at the end of 26. Of this amount, 3,816 million euros related to land and 3,153 million euros to work in progress and other assets. In the Property Management division, headed by Testa Inmuebles en Renta, the most notable events since the balance sheet date are as follows: - The property assets of Testa Group were valued by the independent appraiser CB Richard Ellis at 4,725 million euros, 2.9% more than in 26, with unrealized gains of 1,778 million euros, a 16.1% increase on the previous year. 33.AUDIT FEES Audit fees paid to all the auditors of the parent company and its subsidiaries in the consolidation scope were 1,821,712 and 1,537,692 in 27 and 26, respectively. The fees paid to Group auditors for services other than audit in 27 and 26 were 271,618 and 485,283 euros, respectively. 34.PERSONNEL The average number of employees in 27 and 26 was as follows: Average number of employees University graduates Other qualified employees Skilled technicians Clerical staff Other 1,868 1,175 2,299 1,76 11,296 1,738 1,53 2,372 1,778 8,16 AVERAGE NUMBER OF EMPLOYEES 18,344 15,11 At December 31, 27, of total staff 12,711 employees were in Spain. Of these, 21 were managers and directors. Of the directors, 11 were women. The breakdown of employee benefits expense incurred by the Group in 27 and 26 is as follows: Thousands of euros Wages, salaries and similar expenses 536,34 443,95 Social security costs, et al. 164,54 138,75 32.ENVIRONMENTAL ISSUES TOTAL 7, ,61 In line with its environmental policy the Group has a number of ongoing activities and projects to ensure it complies with legislation in this area. Regarding possible contingencies in the environmental area, the Group considers that these are adequately covered by the civil liability insurance policies outstanding, and has therefore not created any specific environmental contingencies provisions in the balance sheets at December 31, 27 and SEGMENT INFORMATION The Sacyr Vallehermoso Group determines its segment reporting as follows: - Primary: by business segments, as this is the most transparent way to reflect the source and nature of the Group s risks and returns.

257 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Secondary: by geographical segments, differentiating between the businesses in different markets. The primary segment reporting format reflects the Group s current organization and management structure, which is based around seven business areas: - Holding company: the Group s corporate structure, represented by its holding company Sacyr Vallehermoso, S.A., Sacyr Vallehermoso Participaciones, S.A. and Inchisacyr, S.A. - Construction: the civil engineering and building business in Spain, Portugal, Chile, Italy, Costa Rica and other markets (Sacyr and Somague groups). - Concessions: motorway concession business (Itínere and Europistas groups). - Services: multi-services business (Valoriza and Emmasa groups). - Repsol YPF: shareholding in the Repsol YPF group and its holding company. - Property Development: property development business (Vallehermoso group). - Property management: the property management business (Testa Group). - Eiffage: the Group s stake in the Eiffage Group. The segment information also includes a column for Consolidation adjustments. The secondary segment reporting format breaks down each primary business segment by geographical area, providing information on: - external income, based on location of customers. - gross assets, including: property, plant and equipment, concession projects, investment property and intangible assets, based on the location of each asset. - acquisitions of fixed assets, including: property, plant and equipment, concession projects, investment property and intangible assets, based on the location of each asset.

258 256 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 26 Thousands of euros ASSETS HOLDING COMPANY CONSTRUCTION CONCESSIONS SERVICES A) NON-CURRENT ASSETS I. Property, Plant and equipment II. III. IV. Concession projects Investment properties Other intangible assets V. Goodwill VI. Investments accounted for using the equity method VII. Non-current financial assets VIII. Deferred tax assets IX. Other non-current assets B) CURRENT ASSETS I. Inventories II. Trade and other receivables III. Current financial assets IV. Cash and cash equivalents V. Other current assets TOTAL ASSETS 5,614,558 95,825 7,114,8 63,517 6,92 182,931 35, ,98 83,379 5,139,715 5,779 58,864 29,323 37,652 69,69 27,467 13,64 15,248 31,366 1,164,425 5,32 5,543,18 575,58 395,737 25,32 5,774 8,13 327,85 12,961 13, ,687 2,157, , ,921 1,25 297,681 3,75 25,944 43,391 1,546, , ,889 6,478 37,734 7,847 3, ,86 128, ,887 15,772 3, ,666,245 3,18,241 7,438,351 1,26,438 EQUITY AND LIABILITIES HOLDING COMPANY CONSTRUCTION CONCESSIONS SERVICES A) EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT MINORITY INTERESTS B) NON-CURRENT LIABILITIES 1,59,759 1,59,759 3,73,323 61, ,96 8, ,218 1,38, ,78 76,14 5,921, , ,258 9, ,315 I. Deferred income 381,912 16,73 II. Provision for contingencies and expenses 2,963 4, ,137 III. Interest-bearing loans and borrowings 2,931,669 28,566 4,331,2 227,698 IV. Trade and other payables 765,964 65,926 56,911 6,627 V. Deferred tax liabilities 2,727 6,392 71,397 2,558 VI. Payables to associates C) CURRENT LIABILITIES I. Interest-bearing loans and borrowings II. Trade and other payables 93, ,881 91,549 2,221,56 198,258 1,928, , ,66 217,215 1,592 46,876 87,18 316,19 III. Payables to associates 2, IV. Trade provisions 12,733 92,59 2,446 V. Other current liabilities 546 TOTAL EQUITY AND LIABILITIES 5,666,245 3,18,241 7,438,351 1,26,438

259 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 257 CONSOLIDATION REPSOL YPF REAL ESTATE RENTAL EIFFAGE ADJUSTMENTS TOTAL 6,421,87 37,848 3,166,22 69,882 (4,219,523) 2,28,44 9,88 378,43 993,49 69,353 5,298,226 54,95 2,466,18 19,353 2,63, ,985 2,749 37,651 1,875 18, ,149 6,42,469 8,743 1,83 1,938,76 9,579, ,123 13,71 (1,868,878) (4,512,544) 56, ,29 356,77 13,338 26, ,216 4,326, ,287 (47,641) 7,98,442 4,91, (1,599) 4,418,87 9,935 21,457 27,929 (444,42) 1,831,266 87,946 1,29 84 (15,264) 129,4 61,335 31,84 99,236 71,596 (9,376) 9,489 6,58,33 4,634,61 3,293,489 69,882 (4,69,164) 27,126,846 CONSOLIDATION REPSOL YPF DEVELOPMENT EQUITY EIFFAGE ADJUSTMENTS TOTAL 163,15 464,517 1,148,827 69,882 (1,813,676) 3,8,9 163,15 461,714 1,81,255 69,882 (1,833,67) 2,194,8 2,83 67,572 19, ,82 6,349,6 1,891,18 1,887,442 (2,48,41) 17,972, ,696 4,758 15,37 3,51 6,323 5,175, 1,659,754 1,838,556 16,372,263 1,174,6 214,958 37,258 (2,48,41) 417, , , ,724 67,688 2,278, ,22 (468,87) 6,145,173 2,32 1,38, ,55 2,824,389 65, ,642 79,894 (458,714) 3,155,52 3,12 52,718 1, ,18 1,249 7,578 (9,373) 6,58,33 4,634,61 3,293,489 69,882 (4,69,164) 27,126,846

260 258 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 26 Thousands of euros INCOME STATEMENT HOLDING COMPANY CONSTRUCTION CONCESSIONS SERVICES Revenue -External sales -Group companies Own work capitalized Other operating income -External sales -Group companies Government grants released to the income statement Other income OPERATING INCOME Change in inventories Supplies Employee benefits expenses Depreciation and amortization expense Impairment of goodwill Change in trade provisions Other operating costs Other losses OPERATING COSTS OPERATING PROFIT Revenue from equity investments Revenue from other marketable securities and asset-backed loans Other interest and similar income Net finance costs taken to investments Exchange gains FINANCE REVENUE Finance and similar costs Change in fair value of financial instruments at fair value through profit or loss Change in provisions for financial investments Change in provisions for intangible assets, PP&E and securities portfolio FINANCE COSTS NET FINANCE COST Share of profit (loss) of associates Gain (loss) on disposal of assets PROFIT BEFORE TAX Income tax expense PROFIT FOR THE YEAR Attributable to: MINORITY INTERESTS EQUITY HOLDERS OF THE PARENT 8,717 2,62, , , ,297,834 41, ,889 8, ,984 6,746 27,162 4,727 8,22 36,94 43,686 42,557 5,732 18, ,18 5,382 16,658 43,67 2, ,751 17,131 3, ,337 3,119 52,454 2,668,27 449, ,782 (114) 113,87 4,324 (3,) (1,515,589) (4,162) (28,847) (21,662) (32,217) (47,948) (161,325) (4,635) (4,761) (96,75) (18,972) 6,669 (21,512) (33) (2,7) (46,572) (754,263) (76,572) (8,171) (296) (1,384) (518) (2,942) (69,61) (2,539,919) (225,983) (542,3) (17,156) 128, ,56 31, , ,379 4, ,762 36,953 23,13 4, ,787 1, ,24 (55) 181,263 55,739 41,945 5,898 (11,46) (3,87) (29,493) (13,454) (142) 13, (1,21) (698) (447) (773) (1,86) (32,455) (195,543) (14,925) 8,43 23,284 (153,598) (9,27) 2,645 (11,797) 759 (13) (38) 6,83 1,879 63, ,837 64,248 25,39 6,595 (48,288) (35,55) (6,192) 123,829 15,549 29,193 19,198 (1,959) (13,66) (1,244) 123,829 13,59 15,533 17,954

261 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 259 CONSOLIDATION REPSOL YPF REAL ESTATE RENTAL EIFFAGE ADJUSTMENTS TOTAL 1,246, ,168 (371,983) 4,684,664 1,245,15 246,61 4,684,664 1,647 5,17 (371,983) 63, ,846 1, (48,197) 64,765 1, , (48,197) 138 2,394 1, ,76 1,249, ,758 (356,23) 4,89, ,785 (4) 916,798 (1,647,198) (749) 283,583 (3,167,962) (24,829) (6,629) (582,61) (2,557) (41,643) (1,872) (27,19) 2,616 (33) 3,367 (1) (46,45) (53,743) 72,621 (984,746) (153) (819) (6,112) (1) (91,381) (13,89) 354,332 (4,28,455) (1) 348, ,868 (1,871) 861,92 (167,52) 1,261 4 (15,987) 6, ,692 5,27 (21,165) 64,855 5,246 14,717 (1,428) 6, ,953 8,849 (24,654) 93,7 (28,387) (19,778) (78,926) 37,152 (445,99) 1,73 15,538 (139) (1,35) 3, ,516 (28,387) (19,917) (73,465) 37,157 (428,395) (28,373) (15,964) (64,616) (167,497) (335,388) 88,838 (93) (177) 12, , ,1 14,751 6, ,767 91,76 12,198 (169,368) 722,846 9,931 (117,34) (24,871) (161,184) 7, ,463 66,25 12,198 (169,368) 561, (573) (2,246) (19,455) 7, ,69 65,632 12,198 (171,614) 542,27

262 26 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 Thousands of euros ASSETS HOLDING COMPANY CONSTRUCTION CONCESSIONS SERVICES A) NON-CURRENT ASSETS I. Property, Plant and equipment II. III. IV. Concession projects Investment properties Other intangible assets V. Goodwill VI. Investments accounted for using the equity method VII. Non-current financial assets VIII. Deferred tax assets IX. Other non-current assets B) CURRENT ASSETS I. Inventories II. Trade and other receivables III. Current financial assets IV. Cash and cash equivalents V. Other current assets TOTAL ASSETS 6,364,468 1,58,712 7,566,57 77,81 8,89 171,17 34, ,477 46,364 5,572,248 3,16 29,324 24, ,555 28,764 19,88 16,538 28,751 1,128,517 6,665 6,283,81 746, ,767 21,511 68,761 8,55 348,222 8,95 4, ,592 2,717,263 4,187 52, ,423 3,124 24,895 7,734 1,99, ,959 42,28 12,894 3,15 14,745 6, , , ,732 68,132 27,26 3,627 6,69,6 3,775,975 7,966,757 1,272,858 EQUITY AND LIABILITIES HOLDING COMPANY CONSTRUCTION CONCESSIONS SERVICES A) EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT MINORITY INTERESTS B) NON-CURRENT LIABILITIES 1,9,356 1,9,356 4,113,39 585, ,863 1, ,725 1,671, , ,2 5,678,87 292, ,157 7, ,255 I. Deferred income 12, ,232 18,221 II. Provision for contingencies and expenses ,74 1,893 25,89 III. Interest-bearing loans and borrowings 2,795,263 25,835 4,362, ,696 IV. Trade and other payables 1,34,81 136,524 28,76 114,168 V. Deferred tax liabilities 12,973 3, ,433 2,339 VI. Payables to associates C) CURRENT LIABILITIES I. Interest-bearing loans and borrowings II. Trade and other payables 1,486,314 1,361, ,371 2,818, ,986 2,361,92 617, ,83 218,715 1, , ,88 381,349 III. Payables to associates 3, IV. Trade provisions 62 98, ,85 V. Other current liabilities 89 TOTAL EQUITY AND LIABILITIES 6,69,6 3,775,975 7,966,757 1,272,858

263 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 261 CONSOLIDATION REPSOL YPF REAL ESTATE RENTAL EIFFAGE ADJUSTMENTS TOTAL 6,65, ,85 3,29, ,442 (5,248,149) 21,331,247 8,856 42,247 1,124,357 5,618,612 53,848 2,416,337 17,595 2,577, ,67 2,634 29, , , ,44 6,636,177 8,281 6,838 2,362,382 1,177,611 19, ,93 358,652 (1,91,94) (5,672,852) 631,597 (5,355) 1,518 (2,41) 427,255 7,34 12,273 22,426 4,289, ,444 (496,917) 8,445,768 4,78,959 16,157 (1,598) 4,622,812 98, ,517 2,156 (364,241) 2,474, ,147 1,84 7,262 (121,7) 182, , ,869 1,146, 3 (1,8) 2,648 6,87,719 4,716,575 3,858, ,442 (5,745,66) 29,777,15 CONSOLIDATION REPSOL YPF DEVELOPMENT EQUITY EIFFAGE ADJUSTMENTS TOTAL 393,14 458,139 1,119, ,442 (2,488,542) 3,492, ,14 455,124 1,113, ,442 (2,486,384) 2,771,161 3,15 5,986 (2,158) 721,24 6,38,2 2,11,346 2,311,656 (2,761,8) 18,577, ,142 44,66 2,232 3,44 64,548 5,133,6 1,939,962 2,266,98 16,987,15 1,174,6 148,645 31,16 (2,761,8) 429,65 1,381 7, ,747 1, ,55 2,148,9 427,585 (495,516) 7,76, ,854 1,328, ,46 4,66,531 54, ,82 58,173 (487,782) 3,468, ,273 6,137 62,55 1, ,852 9,199 (1,8) 6,87,719 4,716,575 3,858, ,442 (5,745,66) 29,777,15

264 262 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 27 Thousands of euros INCOME STATEMENT HOLDING COMPANY CONSTRUCTION CONCESSIONS SERVICES Revenue -External sales -Group companies Own work capitalized Other operating income -External sales -Group companies Government grants released to the income statement Other income OPERATING INCOME Change in inventories Supplies Employee benefits expenses Depreciation and amortization expense Impairment of goodwill Change in trade provisions Other operating costs Other losses OPERATING COSTS OPERATING PROFIT Revenue from equity investments Revenue from other marketable securities and asset-backed loans Other interest and similar income Net finance costs taken to investments Exchange gains FINANCE REVENUE Finance and similar costs Change in fair value of financial instruments at fair value through profit or loss Change in provisions for financial investments Change in provisions for intangible assets, PP&E and securities portfolio FINANCE COSTS NET FINANCE COST Share of profit (loss) of associates Gain (loss) on disposal of assets PROFIT BEFORE TAX Income tax expense PROFIT FOR THE YEAR Attributable to: MINORITY INTERESTS EQUITY HOLDERS OF THE PARENT 564 3,346, , , ,536, ,218 58,376 89,63 35,738 52,74 4,819 17,252 17,86 67,24 63,739 11,797 19,27 4,979 6,488 1,828 18,62 62,225 3, ,467 2, ,54 1,954 7,419 67,886 3,417,261 68, ,48 (21) 181,469 5,54 (2,86,559) (7,84) (292,874) (26,536) (358,237) (64,42) (222,724) (2,753) (44,625) (192,68) (28,187) 1,58 (31,814) 466 (5,38) (5,876) (919,994) (11,93) (98,19) (1,64) (7,436) (471) (2,772) (8,957) (3,267,196) (374,21) (644,74) (13,71) 15,65 234,216 35, , ,522 3,132 5,456 1,425 2,644 32,677 25,676 4,871 19,293 2,457 (517) (1,746) 25,476 (654) 518,484 61,25 75,91 8,99 (44,249) (38,215) (264,847) (21,425) 1,31 (7,25) (57) 19 (66) 612 (447,499) (38,932) (263,537) (2,794) 7,985 22,318 (187,636) (12,695) 482 (16,681) (2,719) 3,491 1, ,565 61,45 174,434 29,933 32, ,46 (57,469) (11,113) (3,413) 186, ,965 18,82 29,72 (1,476) 3,939 (491) 186, ,489 22,759 28,581

265 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 263 CONSOLIDATION REPSOL YPF REAL ESTATE RENTAL EIFFAGE ADJUSTMENTS TOTAL 1,4,23 263,821 (442,797) 5,759,81 1,399, , ,446 5,759, ,97 (94,243) 78 83, ,39 3, (66,924) 98,853 3, , (67,41) 21, , ,6 1,43,76 266,598 (426,26) 6,17,79 2,352 (1) 189,15 (944,25) (79) 322,56 (3,8,565) (23,268) (5,29) (7,394) (2,5) (44,618) (1,872) (317,163) (1,737) (1,737) (3,932) (52) (39,762) (465) (81,422) (49,911) 14,21 (1,26,57) (12) (873) (13,294) (465) (1,54,634) (11,193) 424,394 (5,98,335) (465) 349,72 165,45 (1,812) 918,744 (449,22) ,621 8 (15,443) 12, ,162 2,951 (1,626) 79,377 9,488 31, , ,783 3,463 (565,91) 145,553 (317,77) (23,94) (11,138) 116,69 (1,99,66) 143 1,453 (76) (7,994) 367 (2,256) (83) (2,2) (317,77) (23,433) (112,251) 115,986 (1,18,167) (317,43) (7,65) (81,788) (449,15) (962,614) 637, (2) 331, ,82 (181) 5,581 (6,44) 16,619 32, ,346 89, ,948 (457,39) 923,831 13,19 (112,847) (16,889) (1) 26, ,61 228,499 72, ,948 (457,31) 95,749 (212) (519) (5,61) (4,36) 423,61 228,287 71,77 331,948 (462,911) 946,389

266 264 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Thousands of euros Holding company Spain Construction Spain Portugal Chile Italy Other Ireland Costa Rica Concessions Spain Chile Brazil Portugal Costa Rica Ireland United States Services Spain Portugal China Algeria Brazil Development Spain Portugal Rental Spain France United States TOTAL 27 Acquisitions External sales Gross assets of fixed assets ,563 6, ,563 6,198 2,967, ,98 85,65 2,18, ,822 69,217 7, ,62 1,668 79,612 36, ,919 5, ,538 26,992 3,542 32,41 1,8 54 4, ,169 7,421,19 484, ,58 6,348, ,276 7,733 91,713 74,778 36,25 116,636 2,915 1, , ,312 39, , , ,35 488, ,166 18,35 77, ,266 39,83 14, , ,399,822 7, ,379,836 5, ,986 64, ,852 3,333, ,241 26,451 2,598, ,979 31, ,491 19, , ,759,81 12,2,24 854,18

267 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Acquisitions External sales Gross assets of fixed assets ,475 63, ,475 63,964 2,295,129 48,988 15,849 1,56,14 244, ,35 638, ,952 7,558 49,771 37,44 3,653 24,814 5,919 3,35 19,833 12,845 3,459 2,321 5, ,691 6,83, , ,966 5,822, ,995 63,142 87,14 39,458 32,631 16,277 1,367 1, ,145 4, ,61 555, , ,29 347,63 74,649 65,475 24,12 57,993 22,722 3, , , ,245,272 7,68 4,998 1,226,983 17,68 3,747 18,289 52,388 1, ,64 3,339, ,56 23,186 2,59, ,794 23, , ,491 19,22 15,741 47,221 4,684,664 11,331,73 1,388,76

268 266 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Appendix: Scope of Consolidation 26 NOTE: Indirect shareholdings are calculated based on the owner of the stake. Percentage Stake Investment Company stake owner (euros, ) SACYR VALLEHERMOSO GROUP Subsidiaries and Holdings Sacyr Vallehermoso, S.A. Madrid Eiffage, S.A. France 32.61% Sacyr Vallehermoso, S.A. 1, Sacyr Vallehermoso Participaciones, S.L. Madrid 1.% Sacyr Vallehermoso, S.A. 1. Sacyr Vallehermoso Participaciones Mobiliarias, S.L. Madrid 1.% Sacyr Vallehermoso, S.A. 2. CONSTRUCTION Subsidiaries and Holdings Sacyr, S.A.U. Madrid Inchisacyr, S.A. Madrid Sacyr Chile, S.A. Chile Somague, S.G.P.S. Portugal 1.% 9.25% 9.75% 91.75% 8.25% 1.% Sacyr Vallehermoso, S.A. Sacyr Vallehermoso, S.A. Sacyr, S.A.U. Sacyr, S.A.U. Inchisacyr Sacyr Vallehermoso, S.A Construction Cavosa, Obras y Proyectos, S.A. Madrid Scrinser, S.A. Barcelone Prinur, S.A.U. Seville Prinur Centroamérica, S.A. El Salvador Ideyco, S.A.U. Toledo Cavosa Chile, S.A. Chile Febide, S.A.U. Vizcaya Constructora ACS-Sacyr, S.A. Chile 91.% 9.% 85.% 1.% 1.% 1.% 1.% 1.% 5.% Prinur, S.A.U. Sacyr, S.A.U. Sacyr, S.A.U. Sacyr, S.A.U. Prinur, S.A.U. Prinur, S.A.U. Cavosa, S.A. Sacyr, S.A.U. Sacyr Chile, S.A

269 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 267 Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Equity Holding company for Sacyr Vallehermoso Group French multi-services company Investment vehicle for stake in Europistas Conc. Esp., S.A. Investment vehicle for stake in Repsol YPF, S.A. 284, , ,895 (88,6) 373, 1,12, 377, - 1, (71) (2,469) - 2, (1,47) 69,53 - Construction holding company Investment vehicle for stake in Sacyr Chile Investment vehicle for stake in Chilean construction firms Holding company for Somague Engenharia 52,32 218,544 75,425-2,4 (49) (66) - 14,278 43,439 29,595-13, ,527 - Proportionate Explosives, blasting and drilling/boring Civil engineering Civil engineering Civil engineering Technical trials and quality control Explosives, blasting and drilling/boring Civil engineering Construction in Chile 5,151 6,95 3, ,557 6,869-3,185 2,49 3,82-1 (1) (59) - 2,583 (335) , (69) 15,925 (14,742) (to be continued)

270 268 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Constructora Sacyr-Necso, S.A. Chile 5.% Sacyr Chile, S.A..1 Constructora Necso-Sacyr, S.A. Chile 5.% Sacyr Chile, S.A..1 Obras y Servicios de Galicia y Asturias, S.A.U. Santiago de Compostela 1.% Sacyr, S.A.U. 1. Consorcio Cavosa Agecomet Chile 6.% Cavosa Chile, S.A..2 Tecnológica Lena, S.L. Asturias 35.% 15.% Sacyr, S.A.U. Cavosa, S.A Intercambiador de Transportes de Plaza Elíptica, S.A. Madrid 8.% Sacyr, S.A.U Constructora San José-San Ramón, S.A. Costa Rica 33.% Sacyr, S.A.U..5 Sacyr Italia, S.p.A. Italy 1.% Sacyr, S.A.U..14 SIS, S.C.P.A. Italy 6.% Sacyr, S.A.U..18 Nodo Di Palermo, S.p.A. Italy 99.8% SIS, S.C.P.A Somague Engenharia, S.A. Portugal 1.% Somague, SGPS Sacyr Costa Rica, S.A. Costa Rica 1.% Sacyr, S.A.U..688 Eurolink, S.c.p.A. Italy 18.7% Sacyr, S.A.U New technologies Aurentia, S.A. Madrid 74.95% 25.5% Prinur, S.A.U. Sacyr, S.A.U Build2Edifica, S.A. Madrid 6.16% Sacyr, S.A.U..82 CONCESSIONS Subsidiaries and Holdings Itínere Infraestructuras, S.A. Madrid Itínere Chile, S.A. Chile 91.38% 88.26% 7.6% 4.68% Sacyr Vallehermoso, S.A. Itínere Infraestructuras, S.A. Inchisacyr Ena Infraestructuras, S.A Somague Itínere-Concessoes de Infraestruturas, S.A. Portugal Europistas Concesionaria Española, S.A. Madrid Enaitínere, S.L.U. Madrid Avasacyr, S.L.U. Madrid 8.% 2.% 5.% 1.% 1.% Itínere Infraestructuras, S.A. Somague Ambiente, S.A. Sacyr Vallehermoso Participac., S.L. Itínere Infraestructuras, S.A. Itínere Infraestructuras, S.A

271 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 269 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Proportionate Proportionate Proportionate Equity Construction in Chile Construction in Chile Civil engineering Construction in Chile Civil engineering Construction, maintenance and operation of the Plaza Elíptica transportation hub Construction of the San José - San Ramón road link Construction in Italy Construction in Italy Construction in Italy Civil engineering and building Construction in Costa Rica Construction in Italy (23) - 17 (1,139) 4,223-1, - (255) - 37 (899) (3) 831-3,714 (21) (6) (33) - 3 (5) 1-4, (24) (1) (37) (157) - 15, - (11) - Equity Integrated internet services Construction internet portal ,927 3, Concessions holding company Concession operator in Chile 14, ,317 (8,214) - 29,467 (32,76) (1,631) - Operation of concessions Construction and operation of the AP-1 Burgos - Armiñón motorway Stake in ENA Infraestructuras, S.A. Stake in Autopista Vasco Aragonesa, S.A. 2,545 13, ,951 5,53 18,871-46,354 22,261 23,813-31,715 51,125 21,112 - (to be continued)

272 27 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) ENA Infraestructuras, S.A. Madrid 1.% Enaitínere, S.L.U. 1, Itínere Costa Rica, S.A. Costa Rica 1.% Itínere Infraestructuras, S.A Concessionaires Autopistas del Atlántico, C.E.S.A. (AUDASA) La Coruña 1.% ENA Infraestructuras, S.A Autopista Concesionaria Astur-Leonesa, S.A. (AUCALSA) Asturias 1.% ENA Infraestructuras, S.A Autopista de Navarra, S.A. (AUDENASA) Navarre 5.% ENA Infraestructuras, S.A Autoestradas de Galicia, S.A. (AUTOESTRADAS) La Coruña 1.% ENA Infraestructuras, S.A Neopistas, S.A.U. (NEOPISTAS) Madrid 1.% Itínere Infraestructuras, S.A. 9.4 Autopista Vasco Aragonesa C.E., S.A. (AVASA) Vizcaya 5.% Avasacyr, S.A.U Infraestructuras y Radiales, S.A. (IRASA) Madrid 15.% Autopista Vasco Aragonesa C.E., S.A. (AVASA) 14.6 Aeropuertos de la Región de Murcia, S.A. Murcia 12.5% Itínere Infraestructuras, S.A..17 Autovía del Noroeste Concesionaria de la CARM, S.A. (AUNOR) Murcia 1.% Itínere Infraestructuras, S.A Metro de Sevilla Sociedad Conc. de la Junta de Andalucía, S.A. Seville 31.13% Itínere Infraestructuras, S.A Alazor Inversiones, S.A. (ALAZOR) Madrid 13.5% 11.66% Itínere Infraestructuras, S.A. ENA Infraestructuras, S.A Tacel Inversiones, S.A. (TACEL) Madrid 9.36% 9.% Itínere Infraestructuras, S.A. ENA Infraestructuras, S.A Sociedad Concesionaria del Elqui, S.A. Chile 75.% Itínere Chile, S.A Sociedad Concesionaria de Los Lagos, S.A. Chile 99.95% Itínere Chile, S.A Sociedad Concesionaria Rutas del Pacífico, S.A. Chile 5.% Itínere Chile, S.A Sociedad Concesionaria Litoral Central, S.A. Chile 5.% Itínere Chile, S.A Sociedad Concesionaria de Vespucio Sur, S.A. Chile 48.% 2.% Itínere Chile, S.A. Sacyr Chile, S.A Sociedad Concesionaria de Rutas II, S.A. Chile 5.% Itínere Chile, S.A..7 Sociedad Concesionaria de Autopista Nororiente, S.A. Chile 99.9%.1% Itínere Chile, S.A. Sacyr Chile, S.A Sociedad Concesionaria de Palma-Manacor, S.A. Balearic Islands 35.% 5.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Gestora de Autopistas, S.A. (GESA) Chile 49.% Itínere Chile, S.A..68

273 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 271 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Construction and operation of motorways Investment vehicle for stakes in Costs Rica concessions 425,12 53,89 76,845 (68,811) 956 3,375 (22) - Proportionate Equity Equity Motorway concession El Ferrol - Tuy Motorway concession Campomanes - León Motorway concession Irurzun - Autop. Ebro Motorway concession A Coruña - Carballo Construction and operation of service stations Concession A-68 Motorway Concession R-2 Motorway Construction and operation of airports Concession Autovía del Noroeste Equity Operation of Line 1 of the Seville metro Equity Equity Proportionate Proportionate Proportionate Proportionate Equity Proportionate Concession R-3 and R-5 motorways Motorway concession Stgo.Compostela-Alto Sto.Domingo Concession Ruta 5 Chile (Los Vilos - La Serena) Concession Ruta 5 Chile (Río Bueno-Pto.Montt) Concession Ruta 68 Chile (Santiago - Valparaíso - Viñas del Mar) Concession Red Vial Litoral Central (Algarrobo - Casablanca - Cartagena)) Ring-road concession (Américo Vespucio - Chile) Construction and operation of service stations (Vella Veramonte) Concession for North-east access - Santiago Concession C-715 motorway Palma - Manacor Operation of concessions in Chile 195,918 (47,597) 34,527 (22,) 326,248 (159,882) (1,94) - 17,435 (13,556) 21,16 (14,) 26,73 (1,798) 2,11 (2,) 9,38 (776) ,595 (159,551) 56,691 (52,192) 9,835 37,93 (26,64) - 1,36 (474) (314) - 14,46 (1,985) (425) - 86, (1) ,6 (65,169) (34,762) - 32,25 (19,543) (7,968) - 89,491 (17,23) 13,926-75,626 (1,994) 1,779-92,236 (42,334) (1,21) - 28,11 (12,322) (1,7) - 71,52 (1,434) (4,893) , , , (34) - (to be continued)

274 272 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Gestión Vial, S.A. (GESVIAL) Chile 99.99% Itínere Chile, S.A..62 Operadora del Pacífico, S.A. (OPSA) Chile 5.% Itínere Chile, S.A..9 Sociedad de Operación y Logística, S.A. Chile 5.% Itínere Chile, S.A..1 Inversora de Autopistas del Sur, S.L. Madrid 25.% 1.% Europistas Conc. Española, S.A. ENA Infraestructuras, S.A Autovía del Turia, Conc. de la Generalitat Valenciana, S.A. Valence 6.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Viastur Concesionaria del Principado de Asturias, S.A. Asturias 47.5% 22.5% Itínere Infraestructuras, S.A. Sacyr, S.A.U Itínere CR Valle del Sol, S.A. Costa Rica 1.% Itínere Costa Rica, S.A Autopista del Valle, S.A. Costa Rica 35.% Itínere Costa Rica, S.A Intercambiador de Transportes de Moncloa, S.A. Madrid 6.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Autovía del Eresma Conc. de la Junta de Castilla y León, S.A. Burgos 53.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Autopista del Sol, S.A. Costa Rica 35.% CR Valle del Sol 1.33 Autovía de Barbanza Conc. de la Xunta de Galicia, S.A. La Coruña 8.% Itínere Infraestructuras, S.A Autopista del Guadalmedina Conceseionaria Española, S.A. Malaga 7.% 1.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Túneles de Artxanda, S.A. Vizcaya 5.% Europistas Conc. Española, S.A Autopistas de Bizkaia, S.A. Vizcaya 5.% Europistas Conc. Española, S.A. 1.5 Inversora Autopista de Levante, S.L. Madrid 4.% Europistas Conc. Española, S.A SERVICES Subsidiaries and Holdings Valoriza Gestión, S.A.U. Madrid Somague Ambiente, S.A. Portugal Valoriza Energía, S.L.U. Madrid Valoriza Agua, S.L. Badajoz Valoriza Facilities, S.A.U. Madrid Sufi, S.A. Madrid 1.% 1.% 1.% 1.% 1.% 93.47% 6.53% Sacyr Vallehermoso, S.A. Valoriza Gestión, S.A.U. Valoriza Gestión, S.A.U. Valoriza Gestión, S.A.U. Valoriza Energía, S.L.U. Valoriza Gestión, S.A.U. Hidroandaluza, S.A

275 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 273 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Proportionate Equity Operation of concessions in Chile Operation of concessions in Chile Operation of concessions in Chile R-4 motorway concession 56 1, , , ,748 (1,93) - Concession Autovía CV-35 and CV-5 northern relief road Motorway concession AS-18 and widening of AS-17 Operation of concessions 21,552 (715) (338) - 14,326 (924) (2) - Proportionate Proportionate Proportionate Equity Equity Concession Corridor "San José - San Ramón" Construction and operation of Moncloa transportation hub Construction and operation of Valladolid-Segovia highway Operation of San José - La Caldera Motorway Construction and operation of Barbanza highway Construction and operation of Málaga motorway Concession holder for the Tunnels of Artxanda Maintenance and operation of A-8 motorway Concession Ocaña - La Roda motorway 2,474 9, , , ,116 1, , ,88 5, ,73 (1,57) (2,566) - 3, 1,116 1,22-67,918 28,851 (8,8) - Services holding company Environmental consultancy and management Power generation projects Environmental consultancy and management Integrated property management 122,133 38,936 15,983-1, 69,846 3,27-2,545 13, ,841 11,563 1,284-1,181 (2,798) 1,37 - Environmental management 17,129 18,648 5,646 - (to be continued)

276 274 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Services Environment Valoriza Conservación de Infraestructuras, S.A. 1.% Madrid Energy Repsol YPF, S.A. 2.1% Madrid Iberese, S.A. 1.% Vizcaya Olextra, S.A % Seville 12.% Extragol, S.L % Seville 25.% Secaderos de Biomasa, S.A. (SEDEBISA) 83.28% Seville 15.% Biomasas de Puente Genil, S.L. 83.8% Seville 15.% Compañía Energética de Pata de Mulo, S.L. 83.8% Seville 15.% Compañía Energética de La Roda, S.L. 75.% Seville 15.% Compañía Energética Barragua, S.L. 9.% Seville Compañía Energética Las Villas, S.L. 9.% Seville Compañía Energética Puente del Obispo, S.L. 9.% Seville Biomasa de las Navas, S.L. 1.% Seville Compañía Energética Espiel, S.L. 1.% Seville Geolit Climatización, S.L. 63.5% Jaen Desarrollos Eólicos Extremeños, S.L. 5.% Caceres Compañía Energética Linares, S.L. 45.% Seville New technologies Compañía Energética Escombreras, S.L. 1.% Madrid Burosoft, Sistemas de Información, S.L. 7.% Madrid Water Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (EMMASA) 94.64% Canary Islands Valoriza Gestión, S.A.U. Sacyr Vallehermoso Partic. Mobii., S.L. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Facilities, S.A.U. Sacyr Vallehermoso, S.A..74 6,

277 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 275 (to be continued)) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Environmental consultancy and management Equity Proportionate Proportionate International integrated oil and gas company Power generation projects Power generation projects Power generation projects Energy recovery from kernel oil Power generation projects Power generation projects Power generation projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects 1,22,863 13,527,648 3,124, (439,511) 1,387 5,491 3,18-4,6 (98) (86) - 2,44 1, ,9 3,685 (167) - 2, ,152-2,6 1,814 (671) - 1,3 772 (154) - 6 (1) (1) - 6 (1) (24) - 6 (1) (37) (1) (1) - 1,8 - (9) (2) (2) - development Telecommunications services IT systems 31 9 (1) (1,39) (14) - Water supply 1,346 (3,279) 1,752 - (to be continued)

278 276 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Aguas de Toledo, AIE Toledo 5.% Valoriza Gestión, S.A.U..3 Geida Skikda, S.L. Madrid 25.% Sociedad Anónima Depuración y Tratamientos (SADYT).8 Geida Beni Saf, S.L. Madrid 25.% Sociedad Anónima Depuración y Tratamientos (SADYT).8 Geida Tlemcen, S.L. Madrid 33.% Sociedad Anónima Depuración y Tratamientos (SADYT).1 Empresa Mixta de Aguas de Las Palmas, S.A. (EMALSA) Canary Islands 33.% Nueva Nuinsa, S.L Sociedad Anónima Depuración y Tratamientos (SADYT) Murcia 1.% Valoriza Gestión, S.A.U..27 Santacrucera de Aguas, S.L. Canary Islands 1.% Valoriza Agua, S.A..3 Sufi Group Omicrón-Amepro, S.A. Madrid 1.% Sufi, S.A. 2.1 Promociones Renovables del Maestrazgo, S.L. Seville 1.% Sufi, S.A..6 Gestión Partícipes del Biorreciclaje, S.A Cadiz 33.34% Sufi, S.A..2 Tecnologías Avanzadas Asturianas, S.L. Asturias 1.% Sufi, S.A..1 Compost del Pirineo, S.A. Huesca 5.% Sufi, S.A..58 Sufi Cantabria, S.L. Madrid 1.% Sufi, S.A Metrofangs, S.L. Barcelone 21.6% Sufi, S.A Boremer, S.A. Madrid 5.% Sufi, S.A. 1.9 Biomasas del Pirineo, S.A. Huesca 44.% Sufi, S.A..2 Valdemingómez 2, S.A. Madrid 4.% Sufi, S.A. 1.2 Cultivos Energéticos de Castilla, S.A. Burgos 44.% Sufi, S.A..13 Central Térmica la Torrecilla, S.A. Madrid 5.% Sufi, S.A. 1.1 Infoser Estacionamiento Regulado, A.I.E. Madrid 16.67% Sufi, S.A..3 Gestora Canaria de Lodos de Depuradora, S.A. Canary Islands 85.% Sufi, S.A..9 Servi. Med. y Energéticos de Valencia 27, S.A. Valence 99.83% Sufi, S.A..6 Parque Eólico la Sotonera, S.L. Zaragoza 3.16% Sufi, S.A..6

279 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 277 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Equity Toledo water supply Operator of desalination plants (248) - Equity Operator of desalination plants 3 - (187) - Equity Operator of desalination plants 3 - (12) - Proportionate Water supply in las Palmas Water treatment and purification Water treatment and purification 28,247 (7,782) 2, ,139 (1,126) Equity Proportionate Proportionate Proportionate Equity Proportionate Equity Proportionate Equity Equity Civil engineering and environmental studies, projects, supplies and services Treatment of urban and residual solid waste biomass, etc. Activities related to the management and treatment of urban solid waste Maintenance of parks and gardens Urban street and interior cleaning Development of composting plants Application of digital environmental systems to treatment of urban solid waste Management & construction over 15 years of San Adrià de Besó purification plant Contracting and management of project cleaning services Development of biomass energy systems Degasification project at the Valdemingómez landfill site Development of biomass energy systems Development of power generation plants Auxiliary services to the control of regulated on-street parking in Madrid Contracting with producers of solid waste Planning, construction and completion of all kinds of public and private sector projects Production of renewable energy 1,269 1,558 (1,75) - 6 (4) (1) - 6 (74) 6-12 (44) 39-1,161 (718) (13) - 1,511 (34) (1) - 8,54 2, ,176 5, (89) 3-3,6 (243) (32) (12) - 2,1 (32) (2) (21) , 89 1,396 - (to be continued)

280 278 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Consultora de Ingeniería y Empresa, S.L. La Coruña 1.% Omicrón-Amepro, S.A..16 Hidroandaluza, S.A. Seville 1.% Sufi, S.A..27 Comercializadora del Compost, S.A. Madrid 1.% Sufi, S.A..6 Gestión de Infraest. Canarias, S.A. Canary Islands 27.% 7.% Sufi, S.A. Tecnologías Avanzadas de Macaronesia, S.A..2.4 Partícipes del Biorreciclaje, S.A. Madrid 33.34% Sufi, S.A..2 Biorreciclaje de Cádiz, S.A. Cadiz 49.% Partícipes del Biorreciclaje, S.A Iniciativas Medioambientales del Sur, S.L. Cadiz 5.% Sufi, S.A..2 Inte RCD, S.L. Seville 25.% Sufi, S.A..5 Inte RCD Bahía de Cádiz, S.L. Cadiz 6.% Inte RCD, S.L..9 Eurocomercial, S.A.U. Asturias 1.% Sufi, S.A..45 Desgasificación de Vertederos, S.A. Madrid 5.% Eurocomercial, S.A.U..3 Biomeruelo de Energía, S.A. Cantabria 2.% Eurocomercial, S.A.U..1 Tecnologías Avanzadas de la Macaronesia, S.A. Canary Islands 5.% Omicrón-Amepro, S.A..3 Gicsa Zona Verde y Paisajismo, A.I.E. Canary Islands 5.% Gestión e Infraestructuras de Canarias, S.A..3 Other services Cafestore, S.A. Madrid 1.% Valoriza Gestión, S.A.U. 8. Vinci Park Sacyr Aparcamientos, A.I.E. (Ap. Recadero) Madrid 5.% Valoriza Gestión, S.A.U..3 Tecnologías Medioambientales Asturianas, S.L. c/ Siglo XX, 28-Bajo; 3328 Gijón 4.% Sufi, S.A. REAL ESTATE DEVELOPMENT Subsidiaries and Holdings Vallehermoso División de Promoción, S.A.U. Madrid 1.% Sacyr Vallehermoso, S.A Somague Imobiliaria, S.A. Portugal 1.% Vall. Div. Promoción, S.A.U. 15. Developers Erantos, S.A.U. Madrid 1.% Vall. Div. Promoción, S.A.U..47 Navinca, S.A. Barcelone 1.% Vall. Div. Promoción, S.A.U. 1.84

281 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 279 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Studies, project and site management in the field of engineering consultancy Buying and selling IT equipment (192) (2) - Drains, waste water purification and sewage systems Studies, work and projects Equity Waste management 6 (1,573) (5) - Equity Proportionate Equity Equity Proportionate Equity Management, storage, transport treatement and elimination of waste Street cleaning, collection, transport and treatment of waste, water purification, etc. Construction and demolition waste services Construction and demolition waste services Engineering, consultancy and import/export of products for deposit and sale Recovery of biogas from degasification of landfill sites 1,83 3, (47) (81) - 15 (66) (163) (119) (1) - 6 1, (1,2) Proportionate Proportionate Civil engineering and environmental studies, projects, supplies and services Projects and maintenance of green spaces in the Canaries (145) Proportionate Not consolidated Catering services and retail outlets Car park operation in Toledo Provision of environmental and specialist energy services in rural areas 2,5 59 (732) (44) 39 - Property development holding company Property development holding company in Portugal 97, ,47 22,142-15, (2,931) (71) - Property development Property development ,839 (14) 62 - (to be continued)

282 28 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Iparan Promociones Inmobiliarias, S.L. Vizcaya 1.% Vall. Div. Promoción, S.A.U..84 Prosacyr Ocio, S.L. Madrid 1.% Vall. Div. Promoción, S.A.U Tradirmi, S.L.U. Madrid 1.% Vall. Div. Promoción, S.A.U..33 Capace, S.L.U. Madrid 1.% Vall. Div. Promoción, S.A.U..2 Tricéfalo, S.A. Madrid 6.% Vall. Div. Promoción, S.A.U Nova Benicalap, S.A. Valence 22.5% Vall. Div. Promoción, S.A.U..8 Spica Siglo 21, S.L. Madrid 99.97%.3% Vall. Div. Promoción, S.A.U. Tradirmi, S.L Aplicaçao Urbana, S.A. Portugal 25.% 25.% Vall. Div. Promoción, S.A.U. Somague Inmobiliaria, S.A Nova C. Villajoyosa, S.A. Madrid 25.% Vall. Div. Promoción, S.A.U..44 Promociones Residenciales Sofetral, S.A. Madrid 3.% Vall. Div. Promoción, S.A.U. 1.5 Club de Campo As Mariñas, S.A. La Coruña 19.99% Vall. Div. Promoción, S.A.U..18 Mola 15, S.L. Madrid 2.% Vall. Div. Promoción, S.A.U..62 Camarate Golf, S.A. Madrid 26.% Vall. Div. Promoción, S.A.U Claudia Zahara 22, S.L. Seville 4.% Vall. Div. Promoción, S.A.U M. Capital, S.A. Malaga 7.45% Vall. Div. Promoción, S.A.U..41 Puerta de Oro Toledo, S.L. Madrid 35.% Vall. Div. Promoción, S.A.U. 2.1 Habitat Baix, S.L. Barcelone 1.% Vall. Div. Promoción, S.A.U Fortuna Golf, S.L. Madrid 1.% Vall. Div. Promoción, S.A.U..36 Habitat Network, S.A. Madrid 9.9% Vall. Div. Promoción, S.A.U Cortijo del Moro, S.A. Seville 1.% Claudia Zahara, S.L PROPERTY RENTAL Subsidiaries and Holdings Testa Inmuebles en Renta, S.A. Madrid 99.33% Sacyr Vallehermoso, S.A

283 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 281 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Equity Proportionate Equity Proportionate Equity Equity Equity Proportionate Equity Equity Equity Proportionate development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property 845 (134) (28) (44) , ,15 (1,439) (567) (1,545) (347) - 2,524 (1,36) (12) - 3,497 2,747 1, (12) - - 3,1 (1) (2) - 18, (145) (38) - 6, (823) (713) - 3,585 2, , (1) (783) (4) , (3) - Property management holding company 692, ,113 42,433 (16,51) (to be continued)

284 282 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Property Management Companies Nisa, V.H., S.A.U. Barcelone 1.% Testa, Patrimonio en Renta, S.A Trade Center Hotel, S.L.U. Barcelone 1.% Testa, Patrimonio en Renta, S.A Testa Residencial, S.L.U. Madrid 1.% Testa, Patrimonio en Renta, S.A Testa American Real Estate Corporation Estados Unidos de América 1.% Testa, Patrimonio en Renta, S.A Gesfontesta, S.A. Madrid 1.% Testa, Patrimonio en Renta, S.A..64 Prosacyr Hoteles, S.A. Madrid 1.% Testa, Patrimonio en Renta, S.A Gescentesta, S.A. Madrid 1.% Testa, Patrimonio en Renta, S.A..3 Itaceco, S.L. Madrid 1.% Testa, Patrimonio en Renta, S.A..6 Bardiomar, S.L. Barcelone 5.% Testa, Patrimonio en Renta, S.A. 2.9 Provitae Centros Asistenciales, S.L. Madrid 5.% Testa, Patrimonio en Renta, S.A PK Inversiones, S.L. Madrid 5.% Testa, Patrimonio en Renta, S.A..3 PK Hoteles, S.L. Madrid 32.5% Testa, Patrimonio en Renta, S.A Parking Palau, S.A. Valence 33.% Testa, Patrimonio en Renta, S.A..8 Hospitalaria de Parla, S.A. Madrid 6.% 35.% 5.% Testa, Patrimonio en Renta, S.A. Sacyr, S.A.U. Valoriza Facilities, S.A.U Hospitalaria del Noreste, S.A. Madrid 6.% 35.% 5.% Testa, Patrimonio en Renta, S.A. Sacyr, S.A.U. Valoriza Facilities, S.A.U Centre d Oci Les Gavarres, S.L. Barcelone 21.5% Testa, Patrimonio en Renta, S.A..54 Tesfran, S.A. France 89.96% Testa, Patrimonio en Renta, S.A. 6.2 Pazo de Congresos de Vigo, S.A. Pontevedra 4.% 1.% Testa, Patrimonio en Renta, S.A. Sacyr, S.A.U Hospital de Majadahonda, S.A. Madrid 2.% Testa, Patrimonio en Renta, S.A. 3.66

285 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 283 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Property rental 1, Property rental 12,2 4,548 1,621 - Property rental 12,696 1,244 4,191 - Property rental 7,387 (14,351) Property rental ,276 - Property rental 18 4, Property rental Property rental Proportionate Property rental 1, (1,798) 1,223 - Proportionate Property rental 6,314 (1,374) (72) - Proportionate Property rental 6 (33) 13 - Equity Property rental 5,81 (2) (776) - Equity Property rental 2, Property rental 11,82 (244) - - Property rental 14,3 (432) - - Equity Property rental 2, (255) - Property rental 667, - 7,489 - Proportionate Property rental 11,1 8,3 (26) - Equity Property rental 18,283 (125) - -

286 284 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Scope of Consolidation 27 NOTE: Indirect shareholdings are calculated based on the owner of the stake. Percentage Stake Investment Company stake owner (euros, ) SACYR VALLEHERMOSO GROUP Subsidiaries and Holdings Sacyr Vallehermoso, S.A. Madrid Eiffage, S.A. France 33.1% Sacyr Vallehermoso, S.A Sacyr Vallehermoso Participaciones, S.L. Madrid 1.% Sacyr Vallehermoso, S.A. 1. Sacyr Vallehermoso Participaciones Mobiliarias, S.L. Madrid 1.% Sacyr Vallehermoso, S.A. 2. CONSTRUCTION Subsidiaries and Holdings Sacyr, S.A.U. Madrid 1.% Sacyr Vallehermoso, S.A Inchisacyr, S.A. Madrid Sacyr Chile, S.A. Chile Somague, S.G.P.S. Portugal Construction Cavosa, Obras y Proyectos, S.A. Madrid Scrinser, S.A. Barcelone Prinur, S.A.U. Seville Prinur Centroamérica, S.A. El Salvador Ideyco, S.A.U. Toledo Cavosa Chile, S.A. Chile Febide, S.A.U. Vizcaya Constructora ACS-Sacyr, S.A. Chile Constructora Sacyr-Necso, S.A. Chile 9.25% 9.75% 91.75% 8.25% 1.% 91.% 9.% 85.% 1.% 1.% 1.% 1.% 1.% 5.% 5.% Sacyr Vallehermoso, S.A. Sacyr, S.A.U. Sacyr, S.A.U. Inchisacyr Sacyr Vallehermoso, S.A. Prinur, S.A.U. Sacyr, S.A.U. Sacyr, S.A.U. Sacyr, S.A.U. Prinur, S.A.U. Prinur, S.A.U. Cavosa, S.A. Sacyr, S.A.U. Sacyr Chile, S.A. Sacyr Chile, S.A

287 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 285 Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Equity Holding company for Sacyr Vallehermoso Group French multi-services company Investment vehicle for stake in Europistas Conc. Esp., S.A. Investment vehicle for stake in Repsol YPF, S.A. 284, , ,435 (127,539) 373, 1,57,52 1,, - 1, (2,542) (13,366) - 2, 81, Construction holding company Investment vehicle for stake in Sacyr Chile Investment vehicle for stake in Chilean construction firms Holding company for Somague Engenharia 52,32 218, ,77 (52,32) 2,4 (556) 2,795 (1,92) 14,278 26,815 12,659-13,5 6,739 7,51 - engineering Proportionate Proportionate Explosives, blasting and drilling/boring Civil engineering Civil engineering Civil Technical trials and quality control Explosives, blasting and drilling/boring Civil engineering Construction in Chile Construction in Chile 5,151 6,395 8, ,426 7,926-3,185 2,79 4, (75) - 2,583 (273) , ,86 (56) (867) (to be continued)

288 286 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Constructora Necso-Sacyr, S.A. Chile 5.% Sacyr Chile, S.A..1 Obras y Servicios de Galicia y Asturias, S.A.U. Santiago de Compostela 1.% Sacyr, S.A.U. 1. Consorcio Cavosa Agecomet Chile 6.% Cavosa Chile, S.A..2 Tecnológica Lena, S.L. Asturias 35.% 15.% Sacyr, S.A.U. Cavosa, S.A Constructora San José-San Ramón, S.A. Costa Rica 33.% Sacyr, S.A.U..5 Constructora San José-Caldera CSJC, S.A. Costa Rica 33.% Sacyr Costa Rica, S.A.. Sacyr Italia, S.p.A. Italy 1.% Sacyr, S.A.U..14 SIS, S.C.P.A. Italy 6.% Sacyr, S.A.U..18 Nodo Di Palermo, S.p.A. Italy 99.8% SIS, S.C.P.A Somague Engenharia, S.A. Portugal 1.% Somague, SGPS Sacyr Costa Rica, S.A. Costa Rica 1.% Sacyr, S.A.U..688 Eurolink, S.c.p.A. Italy 18.7% Sacyr, S.A.U Sacyr Ireland Limited Ireland 1.% Sacyr, S.A.U..1 N-6 Construction Limited Ireland 42.5% Sacyr Ireland Limited. M-5 (D&C) Limited Ireland 25.5% 17.% Sacyr Ireland Limited Somague Ireland Limited. N/D Sociedad Concesionaria Aeropuerto de la Región de Murcia, S.A. Spain 6.% Sacyr, S.A.U New technologies Aurentia, S.A. Madrid Build2Edifica, S.A. Madrid 74.95% 25.5% 6.16% Prinur, S.A.U. Sacyr, S.A.U. Sacyr, S.A.U CONCESSIONS Subsidiaries and Holdings Itínere Infraestructuras, S.A. Madrid 1.% Sacyr Vallehermoso, S.A Itínere Chile, S.A. Chile Somague Itínere-Concessoes de Infraestruturas, S.A. Portugal 88.26% 7.6% 4.68% 1.% Itínere Infraestructuras, S.A. Inchisacyr Ena Infraestructuras, S.A. Itínere Infraestructuras, S.A Europistas Concesionaria Española, S.A. Madrid 5.% Sacyr Vallehermoso Participac., S.L Enaitínere, S.L.U. Madrid 1.% Itínere Infraestructuras, S.A

289 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 287 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Proportionate Proportionate Proportionate Equity Proportionate Proportioante Construction in Chile Civil engineering Construction in Chile Civil engineering Construction of the San José - San Ramón road link Construction of the San José Caldera road link Construction in Italy Construction in Italy Construction in Italy Civil engineering and building Construction in Costa Rica Construction in Italy Construction in Ireland Construction in Ireland Construction in Ireland Construction in Spain , (255) (719) (574) (27) (3) 2-4, (19) (1) - 1,383 (314) (79) - 15, (123) (12) - 22, Equity Integrated internet services Construction internet portal ,927 (94) - - company Concessions holding Concession operator in Chile 17,59 324,474 (14,62) - 29,467 (39,958) (3,283) - Operation of concessions Construction and operation of the AP-1 Burgos - Armiñón motorway Stake in ENA Infraestructuras, S.A. 2,545 14,93 2,368-65,951 65,221 19,558-46,354 56,811 2,453 - (to be continued)

290 288 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Avasacyr, S.L.U. Madrid 1.% Itínere Infraestructuras, S.A ENA Infraestructuras, S.A. Madrid 1.% Enaitínere, S.L.U Itínere Costa Rica, S.A. Costa Rica 1.% Itínere Infraestructuras, S.A Itínere Ireland Limited Ireland 1.% Itínere Infraestructuras, S.A M-5 Concession Holding Ltd Ireland 45.% Itínere Ireland Limited.5 N-6 Concession Holding Ltd Ireland 45.% Itínere Ireland Limited.5 Itínere Infraestructure LLC USA 1.% Itínere Infraestructuras, S.A Concessionaires Autopistas del Atlántico, C.E.S.A. (AUDASA) La Coruña 1.% ENA Infraestructuras, S.A Autopista Concesionaria Astur-Leonesa, S.A. (AUCALSA) Asturias 1.% ENA Infraestructuras, S.A Autopista de Navarra, S.A. (AUDENASA) Navarre 5.% ENA Infraestructuras, S.A Autoestradas de Galicia, S.A. (AUTOESTRADAS) La Coruña 1.% ENA Infraestructuras, S.A Neopistas, S.A.U. (NEOPISTAS) Madrid 1.% Itínere Infraestructuras, S.A. 3.4 Autopista Vasco Aragonesa C.E., S.A. (AVASA) Vizcaya 5.% Avasacyr, S.A.U Infraestructuras y Radiales, S.A. (IRASA) Madrid 15.% Autopista Vasco Aragonesa C.E., S.A. (AVASA) Aeropuertos de la Región de Murcia, S.A. Murcia 12.5% Itínere Infraestructuras, S.A..17 Autovía del Noroeste Concesionaria de la CARM, S.A. (AUNOR) Murcia 1.% Itínere Infraestructuras, S.A Metro de Sevilla Sociedad Conc. de la Junta de Andalucía, S.A. Seville 31.13% Itínere Infraestructuras, S.A Alazor Inversiones, S.A. (ALAZOR) Madrid Tacel Inversiones, S.A. (TACEL) Madrid Sociedad Concesionaria del Elqui, S.A. Chile 13.5% 11.66% 9.36% 9.% 75.% Itínere Infraestructuras, S.A. ENA Infraestructuras, S.A. Itínere Infraestructuras, S.A. ENA Infraestructuras, S.A. Itínere Chile, S.A Sociedad Concesionaria de Los Lagos, S.A. Chile 99.95% Itínere Chile, S.A Sociedad Concesionaria Rutas del Pacífico, S.A. Chile 5.% Itínere Chile, S.A Sociedad Concesionaria Litoral Central, S.A. Chile 5.% Itínere Chile, S.A Sociedad Concesionaria de Vespucio Sur, S.A. Chile 48.% 2.% Itínere Chile, S.A. Sacyr Chile, S.A

291 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 289 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Proportionate Stake in Autopista Vasco Aragonesa, S.A. Construction and operation of motorways Investment vehicle for stakes in Costs Rica concessions Concessions holding company Concessions holding company Concessions holding company Concessions holding company 31,715 72,29 31, ,12 61,515 79,449 (71,77) 956 2, ,384 - (351) (5) - 1,73 (5) - - Proportionate Equity Equity Motorway concession El Ferrol - Tuy Motorway concession Campomanes - León Motorway concession Irurzun - Autop. Ebro Motorway concession A Coruña - Carballo Construction and operation of service stations Concession A-68 Motorway Concession R-2 Motorway Construction and operation of airports Concession Autovía del Noroeste Equity Operation of Line 1 of the Seville metro Equity Equity Proportionate Proportionate Proportionate Concession R-3 and R-5 motorways Motorway concession Stgo.Compostela-Alto Sto.Domingo Concession Ruta 5 Chile (Los Vilos - La Serena) Concession Ruta 5 Chile (Río Bueno-Pto.Montt) Concession Ruta 68 Chile (Santiago - Valparaíso - Viñas del Mar) Concession Red Vial Litoral Central (Algarrobo - Casablanca - Cartagena)) Ring-road concession (Américo Vespucio - Chile) 195,918 (58,959) 49,847 (29,) 326,248 (18,98) 6,16-17,435 (67,37) 21,536 (17,82) 26,73 (2,78) 3,3 (2,84) 2,855 (39) (121) - 237,95 (153,98) 49,356 (7,84) 11,61 26,463 (17,23) - 1,36 (788) ,46 (1,527) , (1) ,6 (99,931) (31,663) - 32,25 (27,511) (5,844) - 89,491 (6,432) 21,85-75,626 5,587 13,648-92,236 (44,963) (11,17) - 28,11 (13,878) ,52 (16,997) (1,221) - (to be continued)

292 29 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Sociedad Concesionaria de Rutas II, S.A. Chile 5.% Itínere Chile, S.A..7 Sociedad Concesionaria de Autopista Nororiente, S.A. Chile 99.9%.1% Itínere Chile, S.A. Sacyr Chile, S.A Sociedad Concesionaria de Palma-Manacor, S.A. Balearic Islands 35.% 5.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Gestora de Autopistas, S.A. (GESA) Chile 49.% Itínere Chile, S.A..68 Gestión Vial, S.A. (GESVIAL) Chile 99.99% Itínere Chile, S.A..62 Operadora del Pacífico, S.A. (OPSA) Chile 5.% Itínere Chile, S.A..9 Sociedad de Operación y Logística, S.A. Chile 5.% Itínere Chile, S.A..1 Inversora de Autopistas del Sur, S.L. Madrid 25.% 1.% Europistas Conc. Española, S.A. ENA Infraestructuras, S.A Autovía del Turia, Conc. de la Generalitat Valenciana, S.A. Valence 6.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Viastur Concesionaria del Principado de Asturias, S.A. Asturias 7.% Itínere Infraestructuras, S.A. 1.3 Itínere CR Valle del Sol, S.A. Costa Rica 1.% Itínere Costa Rica, S.A Autopista del Valle, S.A. Costa Rica 35.% Itínere Costa Rica, S.A Intercambiador de Transportes de Moncloa, S.A. Madrid 6.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Autovía del Eresma Conc. de la.junta de Castilla y León, S.A. Burgos 53.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Autopista del Sol, S.A. Costa Rica 35.% CR Valle del Sol 1.33 Autovía de Barbanza Conc. de la Xunta de Galicia, S.A. La Coruña 8.% Itínere Infraestructuras, S.A Autopista del Guadalmedina Concesionaria Española, S.A. Malaga 7.% 1.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Hospital de Majadahonda, S.A. Madrid 2.% Itínere Infraestructuras, S.A Hospital de Parla, S.A. Madrid 95.% 5.% Itínere Infraestructuras, S.A. Sacyr, S.A.U Hospital del Noreste, S.A. Madrid 95.% 5.% Itínere Infraestructuras, S.A. Sacyr, S.A Interc. de Transportes de Plaza Elíptica, S.A. Madrid 6.% 2.% Itínere Infraestructuras, S.A. Sacyr, S.A AP-1 Europistas, Concesionaria del Estado, S.A. Bilbao 1.% Europistas Conc. Española, S.A Autovía del Arlanzón, S.A. Burgos 95.% 5.% Europistas Conc. Española, S.A. Valoriza Conserv. e Infraest. S.A Túneles de Artxanda, S.A. Vizcaya 5.% Europistas Conc. Española, S.A Autopistas de Bizkaia, S.A. Vizcaya 5.% Europistas Conc. Española, S.A. 1.5

293 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 291 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Proportionate Proportionate Proportionate Proportionate Equity Construction and operation of service stations (Vella Veramonte) Concession for North-east access - Santiago Concession C-715 motorway Palma - Manacor Operation of concessions in Chile Operation of concessions in Chile Operation of concessions in Chile Operation of concessions in Chile R-4 motorway concession ,655 (169) ,5 2,15 (3,75) - 1, , , ,844 (15,55) - Concession Autovía CV-35 and CV-5 northern relief road Motorway concession AS-18 and widening of AS-17 Operation of concessions 36,25 1, , (2,22) Proportionate Proportionate Equity Concession Corridor "San José - San Ramón" Construction and operation of Moncloa transportation hub Construction and operation of Valladolid-Segovia highway Operation of San José - La Caldera Motorway Construction and operation of Barbanza highway Construction and operation of Malaga motorway Concession Majadahonda hospital 2,474 8, , , 1, , ,4 (237) ,88 5, ,283 (125) - - Proportionate Proportionate Construction and concession Parla hospital Construction and concession Noreste hospital Construction and concession Plaza Elíptica transportation hub Concession of the AP1 motorway Motorway concession Santo Tomé de Puerto-Burgos Concession holder for the Tunnels of Artxanda Maintenance and operation of A-8 motorway 11, (452) - 14,3 891 (562) - 3,714 2 (419) - 88,8 (13,6) 5,99-18, ,73 (1,571) (2,767) - 3, 383 1,56 - (to be continued)

294 292 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Inversora Autopista de Levante, S.L. Madrid 4.% Europistas Conc. Española, S.A Itínere North America LLC USA 1.% Itínere Infraestructure LLC.89 N-6 Concession Ltd Ireland 1.% N-6 Concession Holding Ltd.5 N-6 Operations Ltd Ireland 5.% Itínere Ireland Limited. M-5 Concession Ltd Ireland 1.% M-5 Concession Hoilding Ltd.5 SERVICES Subsidiaries and Holdings Valoriza Gestión, S.A.U. Madrid 1.% Sacyr Vallehermoso, S.A Somague Ambiente, S.A. Portugal 1.% Valoriza Gestión, S.A.U Valoriza Energía, S.L.U. Madrid 1.% Valoriza Gestión, S.A.U Valoriza Agua, S.L. Badajoz 1.% Valoriza Gestión, S.A.U Valoriza Facilities, S.A.U. Madrid 1.% Valoriza Energía, S.L.U Sufi, S.A. Madrid Suardíaz Servicios Marítimos de Barcelona, S.L. Madrid 93.47% 6.53% 5.3% Valoriza Gestión, S.A.U. Hidroandaluza, S.A. Valoriza Gestión, S.A.U Compañía Orujera de Linares, S.L. Seville 51.% Valoriza Energía, S.L.U..2 Bioeléctrica de Linares, S.L. Seville 55.% Valoriza Energía, S.L.U..6 Ibervalor Energía Aragonesa, S.A. Zaragoza 5.% Valoriza Energía, S.L.U..2 Services Environment Valoriza Conservación de Infraestructuras, S.A. Madrid 1.% Valoriza Gestión, S.A.U..74 Energy Repsol YPF, S.A. Madrid 2.1% Sacyr Vallehermoso Partic. Mobil., S.L Iberese, S.A. Vizcaya 1.% Valoriza Energía, S.L.U Olextra, S.A. Seville Extragol, S.L. Seville Secaderos de Biomasa, S.A. (SEDEBISA) Seville Biomasas de Puente Genil, S.L. Seville 75.59% 12.% 43.76% 25.% 83.28% 15.% 83.8% 15.% Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A

295 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 293 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Equity Proportionate Proportionate Concession Ocaña - La Roda motorway Development and study of new concessions in the US Construction and concession N-6 Galway -Ballinasloe stretch Maintenance and operation of N-6 Galway -Ballinasloe stretch Proportionate Construction and concession M-5 Dublin ring road 67,918 24,744 (21,375) - 1, (1,725) - 5 1, (5) - 5 (1,518) - - Proportionate Proportionate Services holding company Environmental consultancy and management Power generation projects Environmental consultancy and management Integrated property management Environmental management Martime services Oil recovery Biomass power generation plant Wind energy 122,133 45,57 42,189-1, 34,563 1,814-2,545 14,93 2,368-83,841 11, ,181 (2,588) 2,25-17,129 24,168 6, , (11) (2) (4) - Environmental consultancy and management Equity International integrated oil and gas company Power generation projects Power generation projects Power generation projects Energy recovery from kernel oil Power generation projects 1,22,863 14,712,569 3,188, (61,432) 1,387 6,95 1,658-4,6 (963) (379) - 2,44 2,38 (256) - 2,9 3,576 (143) - 2,6 1, (to be continued)

296 294 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Compañía Energética de Pata de Mulo, S.L. Seville Compañía Energética de La Roda, S.L. Seville Compañía Energética Barragua, S.L. Seville Compañía Energética Las Villas, S.L. Seville Compañía Energética Puente del Obispo, S.L. Seville Biomasa de las Navas, S.L. Seville Compañía Energética Espiel, S.L. Seville Geolit Climatización, S.L. Jaen Desarrollos Eólicos Extremeños, S.L. Caceres Compañía Energética Linares, S.L. Seville New technologies Compañía Energética Escombreras, S.L. Madrid Burosoft, Sistemas de Información, S.L. Madrid Water Empresa Mixta de Aguas de Santa Cruz de Tenerife, S.A. (EMMASA) Canary Islands Aguas de Toledo, AIE Toledo Geida Skikda, S.L. Madrid Geida Tlemcen, S.L. Madrid Empresa Mixta de Aguas de Las Palmas, S.A. (EMALSA) Canary Islands Sociedad Anónima Depuración y Tratamientos (SADYT) Murcia Santacrucera de Aguas, S.L. Canary Islands Sufi Group Gestión Partícipes del Biorreciclaje, S.A. Cadiz Compost del Pirineo, S.L. Huesca Sufi Cantabria, S.L. Madrid Metrofangs, S.L. Barcelone 83.8% 15.% 75.% 15.% 9.% 9.% 9.% 1.% 1.% 63.5% 5.% 45.% 1.% 7.% 94.64% 5.% 33.% 5.% 33.% 1.% 1.% 33.34% 5.% 1.% 21.6% Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Iberese, S.A. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Energía, S.L.U. Valoriza Facilities, S.A.U. Sacyr Vallehermoso, S.A. Valoriza Gestión, S.A.U. Sociedad Anónima Depuración y Tratamientos (SADYT) Sociedad Anónima Depuración y Tratamientos (SADYT) Valoriza Agua, S.A. Valoriza Agua, S.A. Valoriza Agua, S.A. Sufi, S.A. Sufi, S.A. Sufi, S.A. Sufi, S.A

297 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 295 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Equity Power generation projects Power generation projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects Power generation and research projects 2,6 1, ,3 624 (431) - 6 (2) (2) - 6 (25) 1,124-5 (38) 1,55-6 (1) (49) - 6 (1) - - 1,8 (9) (2) - 15 (2) (114) - 2 (2) (4) - Telecommunications services IT systems development (1,323) - - Proportionate Equity Water supply Toledo water supply Operator of desalination plants 1,346 (2,582) 1, ,817-3 (248) (123) - Equity Operator of desalination plants 3 (12) (126) - Proportionate Water supply in las Palmas Water treatment and purification Water treatment and purification 28,247 (5,684) 2,8-2,5 2, Equity Proportionate Proportionate Activities related to the management and treatment of urban solid waste Development of composting plants Application of digital environmental systems to treatment of urban solid waste Management & construction over 15 years of San Adrià de Besó purification plant 6 (68) (8) - 1,161 (732) 255-1,511 (35) (12) - 8,54 4, (to be continued)

298 296 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) Boremer, S.A. Madrid 5.% Sufi, S.A. 1.9 Biomasas del Pirineo, S.A. Huesca 44.% Sufi, S.A..2 Valdemingómez 2, S.A. Madrid 4.% Sufi, S.A. 1.2 Cultivos Energéticos de Castilla, S.A. Burgos 44.% Sufi, S.A..13 Central Térmica la Torrecilla, S.A. Madrid 5.% Sufi, S.A. 1.1 Infoser Estacionamiento Regulado, A.I.E. Madrid 16.67% Sufi, S.A..3 Gestora Canaria de Lodos de Depuradora, S.A. Canary Islands 85.% Sufi, S.A..9 Servi. Med. y Energéticos de Valencia 27, S.A. Valence 99.83% Sufi, S.A..6 Parque Eólico la Sotonera, S.L. Zaragoza 3.16% Sufi, S.A..6 Hidroandaluza, S.A. Seville 1.% Sufi, S.A..27 Comercializadora del Compost, S.A. Madrid 1.% Sufi, S.A..6 Gestión de Infraest. Canarias, S.A. Canary Islands 27.% Sufi, S.A..2 Partícipes del Biorreciclaje, S.A. Madrid 33.34% Sufi, S.A..2 Biorreciclaje de Cádiz, S.A. Cadiz 49.% Partícipes del Biorreciclaje, S.A Iniciativas Medioambientales del Sur, S.L. Cadiz 5.% Sufi, S.A..2 Inte RCD, S.L. Seville 25.% Sufi, S.A..5 Inte RCD Bahía de Cádiz, S.L. Cadiz 6.% Inte RCD, S.L..9 Inte RCD Huelva, S.L. Cadiz 6.% Inte RCD, S.L..9 Eurocomercial, S.A.U. Asturias 1.% Sufi, S.A..45 Desgasificación de Vertederos, S.A. Madrid 5.% Eurocomercial, S.A.U..3 Biomeruelo de Energía, S.A. Cantabria 2.% Eurocomercial, S.A.U..1 Gicsa Zona Verde y Paisajismo, A.I.E. Canary Islands 5.% Gestión e Infraestructuras de Canarias, S.A..3 Alcorec, S.L. Seville 1.% Sufi, S.A. Other services Cafestore, S.A. Madrid 1.% Valoriza Gestión, S.A.U. 8. Vinci Park Sacyr Aparcamientos, A.I.E. (Ap. Recadero) Madrid 5.% Valoriza Gestión, S.A.U..3

299 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 297 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Proportionate Equity Proportionate Equity Proportionate Equity Equity Contracting and management of project cleaning services Development of biomass energy systems Degasification project at the Valdemingómez landfill site Development of biomass energy systems Development of power generation plants Auxiliary services to the control of regulated on-street parking in Madrid Contracting with producers of solid waste Planning, construction and completion of all kinds of public and private sector projects Production of renewable energy 2,176 5,286 (2,192) (6) (158) - 3,6 (1,328) (44) (3) - 2,1 (34) (1) (21) (1) - 2, 221 1,57 - Buying and selling IT equipment (4) - Equity Drains, waste water purification and sewage systems Studies, work and projects 6 3 (2) (134) - Equity Waste management 6 (1,69) - - Equity Proportionate Equity Equity Equity Proportionate Equity Management, storage, transport treatement and elimination of waste Street cleaning, collection, transport and treatment of waste, water purification, etc. Construction and demolition waste management Construction and demolition waste recycling Construction and demolition waste recycling Engineering, consultancy and import/export of products for deposit and sale Recovery of biogas from degasification of landfill sites 1,83 4,582 1, (11) - 12 (45) (32) - 15 (212) (4) (93) , (13) (9) (5) Proportionate Equity Projects and maintenance of green spaces in the Canaries Construction and demolition waste management (18) (4) - Proportionate Catering services and retail outlets Car park operation in Toledo 2,5 (224) (to be continued)

300 298 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) REAL ESTATE DEVELOPMENT Subsidiaries and Holdings Vallehermoso División de Promoción, S.A.U. Madrid 1.% Sacyr Vallehermoso, S.A Somague Imobiliaria, S.A. Portugal 1.% Vall. Div. Promoción, S.A.U. 15. Developers Erantos, S.A.U. Madrid 1.% Vall. Div. Promoción, S.A.U..47 Navinca, S.A. Barcelone 1.% Vall. Div. Promoción, S.A.U Iparan Promociones Inmobiliarias, S.L. Vizcaya 1.% Vall. Div. Promoción, S.A.U..84 Prosacyr Ocio, S.L. Madrid 1.% Vall. Div. Promoción, S.A.U Tradirmi, S.L.U. Madrid 1.% Vall. Div. Promoción, S.A.U..33 Capace, S.L.U. Madrid 1.% Vall. Div. Promoción, S.A.U..2 Tricéfalo, S.A. Madrid 6.% Vall. Div. Promoción, S.A.U Nova Benicalap, S.A. Valence 22.5% Vall. Div. Promoción, S.A.U..8 Spica Siglo 21, S.L. Madrid Aplicaçao Urbana, S.A. Portugal Promociones Residenciales Sofetral, S.A. Madrid 99.97%.3% 25.% 25.% 3.% Vall. Div. Promoción, S.A.U. Tradirmi, S.L. Vall. Div. Promoción, S.A.U. Somague Inmobiliaria, S.A. Vall. Div. Promoción, S.A.U Club de Campo As Mariñas, S.A. La Coruña 19.99% Vall. Div. Promoción, S.A.U..18 Mola 15, S.L. Madrid 2.% Vall. Div. Promoción, S.A.U..62 Camarate Golf, S.A. Madrid 26.% Vall. Div. Promoción, S.A.U Claudia Zahara 22, S.L. Seville 4.% Vall. Div. Promoción, S.A.U M. Capital, S.A. Malaga 7.45% Vall. Div. Promoción, S.A.U..41 Puerta de Oro Toledo, S.L. Madrid 35.% Vall. Div. Promoción, S.A.U. 2.1 Habitat Baix, S.L. Barcelone 1.% Vall. Div. Promoción, S.A.U Fortuna Golf, S.L. Madrid 1.% Vall. Div. Promoción, S.A.U..36 Habitat Network, S.A. Madrid 9.9% Vall. Div. Promoción, S.A.U Cortijo del Moro, S.A. Seville 1.% Claudia Zahara, S.L

301 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 299 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend Property development holding company Property development holding company in Portugal 97, , ,244 (48,672) 15, (3,641) (978) - Equity Proportionate Proportionate Equity Equity Equity Proportionate Equity Equity Equity Proportionate Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development Property development (16) - 1, , ,15 (2,6) (1,892) (4,64) - 3,497 2, (285) - - 3,1 (3) , (182) (2) - 6, (1,535) (1,76) - 3,585 2, , (1) (783) (952) (1) , (to be continued)

302 3 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Percentage Stake Investment Company stake owner (euros, ) PROPERTY RENTAL Subsidiaries and Holdings Testa Inmuebles en Renta, S.A. Madrid 99.33% Sacyr Vallehermoso, S.A Property Management Companies Nisa, V.H., S.A.U. Barcelone 1.% Testa, Patrimonio en Renta, S.A Trade Center Hotel, S.L.U. Barcelone 1.% Testa, Patrimonio en Renta, S.A Testa Residencial, S.L.U. Madrid 1.% Testa, Patrimonio en Renta, S.A Testa American Real Estate Corporation USA 1.% Testa, Patrimonio en Renta, S.A Gesfontesta, S.A. Madrid 1.% Testa, Patrimonio en Renta, S.A..64 Prosacyr Hoteles, S.A. Madrid 1.% Testa, Patrimonio en Renta, S.A Gescentesta, S.A. Madrid 1.% Testa, Patrimonio en Renta, S.A..3 Itaceco, S.L. Madrid 1.% Testa, Patrimonio en Renta, S.A..6 Bardiomar, S.L. Barcelone 5.% Testa, Patrimonio en Renta, S.A. 2.9 Provitae Centros Asistenciales, S.L. Madrid 5.% Testa, Patrimonio en Renta, S.A PK Inversiones, S.L. Madrid 5.% Testa, Patrimonio en Renta, S.A..3 PK Hoteles, S.L. Madrid 32.5% Testa, Patrimonio en Renta, S.A Parking Palau, S.A. Valence 33.% Testa, Patrimonio en Renta, S.A..8 Centre d Oci Les Gavarres, S.L. Barcelone 21.5% Testa, Patrimonio en Renta, S.A..54 Tesfran, S.A. France 99.9% Testa, Patrimonio en Renta, S.A Pazo de Congresos de Vigo, S.A. Pontevedra 4.% 1.% Testa, Patrimonio en Renta, S.A. Sacyr, S.A.U

303 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 31 (to be continued) Consolidation Corporate Share Interim method purpose capital Reserves Profit (loss) dividend holding company Property management 692, ,51 47,836 (16,513) Property rental 1, Property rental 12,2 6,169 1,665 - Property rental 12,696 5,435 5,17 - Property rental 7,387 (18,913) 1,533 - Property rental ,95 - Property rental 18 4, Property rental Property rental 6 (1) - - Proportionate Property rental 7,631 (1,25) 2,851 - Proportionate Property rental 6,314 (1,445) 66 - Proportionate Property rental 6 (19) - - Equity Property rental 5,81 (563) (479) - Equity Property rental 1,998 1, (75) Equity Property rental 2,524 (126) (12) - Property rental 667, ,499 (8,351) Proportionate Property rental 11,1 8,95 - -

304 32 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Consolidated Management Report at 31 December GENERAL ECONOMIC TRENDS AND BUSINESS PERFORMANCE IN THE INTERNATIONAL ECONOMIC ENVIRONMENT After four years of solid growth, in 27 the global economy faced a series of challenges which caused GDP growth to slow to 3.6% from 5.2% the year before. Factors such as a steady rise in basic food prices, record prices for commodities and oil, the crisis in the US real estate sector and the consequent liquidity crunch have combined to make the global economic situation less stable and more unpredictable. Once again last year, the main drivers of the world s economy were emerging markets, led by China and India, with combined GDP growth of 7.4%. Meanwhile, world trade rose 8.7%,.9pp less than in 26. All economies enjoyed positive performances (see below). Of the three major blocks, the EU and Japan grew slightly faster than forecast, while the US economy lost steam. Another feature of 27 worldwide was the euro s sharp appreciation vis-à-vis the dollar, up by 12% on 26. This hurt net trade in Europe further, but helped keep inflationary pressures caused by rising oil and gas prices at bay. US GDP growth eased.7pp to 2.2% in 27, in the wake of the subprime mortgage crisis. As well as employment, household consumption was also affected and, more importantly, liquidity in the US financial system, prompting a series of cash injections by the Federal Reserve (the Fed) to stave off recession. In 28, the world s foremost economy is expected to slow further, with GDP growth forecast at %. Shaping the economy will again be real estate and tougher credit conditions, not to mention high oil prices. Inflation in the US ended 27 at a 17-year high of 4.1%, pushed up by increases in the price of fuel (+29.6% for gasoline alone) and food (e.g. 32.5% increase in dairy products). Core inflation (ex-fresh food and energy prices) rose 2.4%, well above the government s 1% target.

305 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 33 Another problem plaguing the US economy has been its huge trade deficit, which fell 6.2% from 26 but remained at 771,6 million dollars. Exports of goods and services rose by 12.7% to 1.62 billion dollars, while imports rose by 5.9% to 2.33 billion dollars. Oil was once again the US main import, costing the country 331,231 million dollars, with an average price for the year of dollars per barrel. On the interest rate front, the Federal Reserve cut another half point off its benchmark rate in September, to 4.75% at year-end. The move was aimed at galvanizing the economy after the initial summer fallout from the mortgage and liquidity crises. The monetary authority realized afterward that it had not gone far enough, and in 28 is expected to continue lowering rates to between 2.5% and 2.75%. Economic growth in the euro zone also lost steam in 27. According to Eurostat (the European Community statistics office), euro zone GDP rose by 2.7%, compared to 2.9% on aggregate for the EU as a whole. By country, on data published to date, the highest GDP growth was in Slovakia, at 14.1%, followed by Latvia, at 9.6%, Lithuania at 8.1% and Estonia, at 4.5%. In the euro zone, Spain led the way at 3.8%, while GDP grew more modestly in France and Portugal, at 1.9%, and in Germany, at 1.6%. Inflation was 3.1% in the euro zone in 27, two tenths above 26 levels, and 3.2% in the EU-25. The countries with the highest rates were Slovenia (5.7%), Luxemburg and Spain (both with 4.3%), Greece (3.9%) and Austria (3.5%) while inflation stood at 2.8% in France and Italy. In contrast, the lease inflationary countries were the Netherlands, at 1.6%, and Finland, at 1.9%. Outside the euro zone, the highest rates were recorded in Latvia, Bulgaria and Estonia, with 14%, 11.6%, and 9.7%, respectively, and the lowest in the UK, Denmark, and Sweden and Slovakia, with 2.1%, 2.4% and 2.5%, respectively. As for euro zone interest rates, despite pressure from some governments to lower rates in the fourth quarter of 27 as a means of cushioning the impact of the liquidity crunch and, to some extent, helping prevent the economy from slowing, the ECB raised rates twice in the year, each time by a quarter point, taking the key refinancing rate to 4% at year-end. The ECB continues to keep a close watch over prices, so that for as long as they remain at current levels, rate cuts are unlikely. Outside the euro zone, UK interest rates ended 27 at 5.5%. The outlook for 28 is somewhat more promising, although much will depend on inflation trends in the early months of the year. If inflation tails off and the credit market crisis continues, we could see a CPI of between 3.25% and 3.5% by the year end. Turning to Japan, 27 was a year of mixed results, with GDP advancing a mere 1.9%. Nonetheless, the economy continues to recover slowly but surely, fuelled by a rebound in investment and renewed competitiveness. The country was able to escape deflation, with inflation running at.8% -its highest level in a decade- underpinned by higher oil and food prices. The downside to the uptick in inflation is the potential negative impact on consumption, which is the main driver of the Japanese economy, contributing more than 55% of GDP. In an attempt to continue to reactivate the economy, the Japanese monetary authorities raised interest rates by a quarter point in February. The Chinese economy grew by 11.4% in 27, once again beating all expectations and posting its fifth successive year of double-digit growth. With GDP of 2.33 trillion euros, it remained the world s fourth largest economy, but is closing in on Germany. The pace of growth in China last year was the sharpest in 14 years, having expanded at 13.1% back in Per capita income in urban areas rose 17.2% to 1,3 euros, compared to 15.4% in rural areas, to 39 euros, further widening the economic divide. Economic forecasts for 28, based on the country s public statistics office, point to a figure of 1.8%, with expansion dampened by the Chinese government s attempts to prevent the economy from overheating. Inflation ended the year at 4.8% in China, well above the 3% target and more than double the 1.5% rate of 26. China s trade surplus soared further in 27, jumping another 47% to 179,3 million euros. Other highlights in China last year include the sharp increase in FDI by non-financial institutions, with a 13.6% increase to 51,1 million euros, and the 43.3% surge in reserves, to 1.4 trillion euros, one of the largest of any country in the world.

306 34 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS GDP in Latin America and the Caribbean grew 5.1% in 27, the fifth consecutive year of regional growth of over 4%. Growth was once again underpinned by vigorous demand in international markets (above all China and India) for the raw materials produced in the region, which is pushing prices higher. The region continued to generate jobs, which brought unemployment down to 8.5% from 8.7% in 26. Real wages received a further boost from growing demand for labor, rising 3%. For 28 expectations are for a slightly slower pace of growth, with GDP growth easing to around 4.7% as a consequence of the slowdown in the global economy and the prevailing liquidity crisis, which could drive raw materials prices lower. This effect should partly be offset by the steady rise in oil prices, benefiting countries such as Venezuela, Argentina, Trinidad and Tobago, or Bolivia. Spain had the euro zone s highest current account deficit again, due to the negative trend in net factor income and current and capital transfers. The economy s borrowing requirements exceeded 99, million euros (or 9.5% of GDP), compared to 79, million euros in 26 (8.1% of GDP). Final consumer expenditure eased 4bp to 3.6%. This was due to lower growth in spending by households (3.1% vs. 3.7% in 26) and non-profit organizations. On the other hand, growth in public spending was.3pp higher (5.1% vs. 4.8%). The growth in gross fixed capital formation was.9pp lower (5.9% vs. 6.8%). The performances by components were uneven, with investment in construction tapering off to 4% from 6% and in other products to 4.2% from 4.6%, but investment in capital goods increasing to 11.6% from 1.4% THE SPANISH ECONOMY The Spanish economy grew 3.8% in 27, a tenth of a point lower than in 26. It was once again one of the fastest growing economies in the EU which, according to Eurostat, grew 2.9% on aggregate (two tenths less than the euro zone average). On the demand side, 27 marked a continuation of the trends in domestic and export demand initiated in 26. Domestic demand contributed 4.6 percentage points to GDP growth, compared to 5.1 points in 26, as spending by end consumers and gross fixed capital formation eased further. Meanwhile, the negative contribution by net trade to GDP growth was.5 points lower, at.7bp vs. 1.2bp, as export growth outstripped import growth. Within net trade, exports of goods and services rose slightly on the year before (4.7% vs. 4.6%), as did exports of services, somewhat faster (6.5% vs. 6.2%). Growth in both indicators was more robust in the first three quarters of the year. Meanwhile, the pace of growth of imports of goods and services declined from the year before, to 6.6% from 8.3%. The performance was similar to that of exports, i.e. higher growth in the first three quarters and slowdown in the last. On the supply side, we note that all the major sectors of the Spanish economy contributed positively to GDP growth again. Growth picked up in services (4.2% vs. 4.1% in 26), manufacturing (3.1% vs. 2.9%) and primary raw materials (3.8% vs. 2.4%), and slowed in construction (3.8% vs. 5%) and energy (1% vs. 1.4%). Regarding the job market, the Labor Market Survey (EPA) reflects a lower pace of job creation in 27 than in previous years. Unemployment ended the year at 8.6% of the active population,.3pp higher than in 26. The number of unemployed rose by 117, in the year, to 1,927,6. That said, 475,1 jobs were created, taking the total number of employed to a new all-time high of 2,476,9 people. Spain s Social Security system ended the year with 564,387 new registered contributors, implying an average annual increase of 3.2% and taking the average number registered to 19,231,986. Breaking this down by Social Security regime, the General scheme rolls rose by 3.91% with 556,815 new members, and the Self-Employed scheme by 3.39%, which equates to 12,174 new members. The remaining regimes (Agriculture, Marine, Coal and Household) fell by an average of 94,61 contributors. Following completion of the process to regularize migrant workers in 25 and 26, foreign workers totaled 1,981,16 or 8.61% of the workforce. Of the total, 672,87

307 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 35 came from other EU countries and 1,39,19 from other countries. By sector of activity, nearly half of new social security registrants were in sectors related to the provision of community services, led by Healthcare and Social Services. These registered 2,38 new contributors, 2.49% of the total in 27. Registrants also rose sharply in Manufacturing, with 65,23 new signups, 2.93% more than in 26. Meanwhile, the downturn in the Construction sector led to the loss of 64,59 contributors to the General regime. By gender, there were 11,21,694 men and 8,171,83 women, representing 57.82% and 42.18%, respectively, of total contributors. As for prices, Spanish inflation in 27 was 4.2% compared to 2.7% in 26. By group, the highest growth rates came in: Transport, with a.4pp increase to 7.1% mainly on the back of jumps in the prices of fuel and lubricants; Food and Beverages, with a 6.6% surge in year-on-year rates due to higher milk, fresh fruit and vegetable oil prices; and Alcoholic Beverages and Tobacco, where prices fell.5pp to 6.1%, as cigarette prices remained unchanged. Core inflation in Spain was running at 3.3% at the end of 27, up from 2.5% in 26. By region, the most inflationary were Murcia, with a 4.7pp rise, Castilla La Mancha and Castilla León, both with 4.5pp increases, and Aragón, with a 4.4pp increase, while those registering the smallest increases were Ceuta and Melilla, with increases of 3pp and 3.8pp, respectively, La Rioja and the Balearic Islands, both with 3.9pp increases, and Madrid, with a 4pp increase. Looking at the national economy, the public administrations registered their third straight surplus in 27. Specifically, according to national accounts the surplus totaled a record 23,368 million euros, equivalent to 2.23% of GDP. Only five countries in the euro zone ended the year in the black, with Spain boasting the highest surplus after Finland. Of this 2.23%, 1.29% corresponds to the central government and 1.25% to the Social Security, as the regional and local governments registered deficits of.17% and.14%, respectively. In 27, public debt as a percentage of GDP fell further, to a 2-year low of 36.2%. This is nearly half the euro zone average of 66%. Tax revenues rose 11.8% in 27. Within direct taxes, there were increases in personal income tax withholdings and corporate taxes of 15.7% and 2.5%, respectively, driven by employment, positive returns on capital and growth in corporate earnings. Indirect tax revenue also rose sharply, led by a 2.2% jump in VAT receipts. Part of the surplus is also due to astute public spending policy; public expenditure amounted to 38.7% of GDP in 27. On the Spanish stock market, the key indicator, the Ibex-35 Spanish blue chip index, ended the year 7.32% higher, marking its fifth straight year of gains. The index ended the year at 15,182.3 points, putting the total return for the last five years of %. As explained above, the US subprime mortgage crisis put a brake on the Spanish stock market s bull run towards mid summer. The ensuing widespread liquidity crunch, caused by the securitization of these junk mortgages, took a heavy toll on stock exchanges in general, and Spain s in particular. Sharp volatility drove a dramatic increase in trading volume, which rose by more than 5% after having already topped the 1 billion euro mark in 26. By sector, the largest gains were in energy, fuelled by M&A activity, in renewables, lifted by public policy, and communications, led by Telefónica s rally in the second half as investors sought save-haven. Meanwhile, the main laggards were real estate and construction stocks. To wrap up, we should mention the appreciation of the euro against US dollar in 27. The euro appreciated throughout 27, ending the year 12% higher, at dollars.

308 36 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 1.3.SyV s BUSINESS SECTORS The construction sector In 27, the construction sector was once again one of the main drivers of the Spanish economy. Sector growth of 3.8% matched overall Spanish GDP growth (see above). Cement consumption in 27 grew for the eleventh consecutive year, by.3%, to a record 56 million tons. This reinforced Spain s position as the EU s leading consumer of cement. The cement sector produced a total of 54.5 million tons,.85% more than in 26. Imports of cement and clinker (the raw material for cement) rose 6.5% to million tons, mainly from China and Egypt, while exports fell again in the year, by 6.77% to 1.5 million tons. In 27, a total, of 47,12.48 million euros worth of public contracts were put out to tender, virtually matching the 26 figure. By type of project, the largest share was for motorways, with 14,231.7 million euros (3.6% of the total), followed by social infrastructure (education, health, sports and other fields) with 7,362.5 million euros (15.8%), urban development, with 6, million euros (14.2%), railways, with 6,52.86 million euros (14%), and water supply projects, with 4, million euros (1.5%). Broken out by the various tiers of Spanish government, the Development Ministry was responsible for 39.1% or 18,42.6 million euros worth of contract tenders, followed by the regional governments, for 27.9% or 13, million, the local governments, for 24.1% or 11, million euros, the Environment Ministry, for 5.2% or 2,433.2 million euros, and the remaining ministries for 3.7% or 1, million euros. Within the central government, which increased contracting put out to tender by 38.9% over 26, the Development Ministry raised its tenders by 58.6%. At this ministry, the Directorate General for Highways increased its tenders by 154.5% to 8,86.83 million euros, the Railway Infrastructure Manager (ADIF) by 1.4% to 3,699.3 million euros and the Spanish airports and air navigation operator (AENA) by 66.1% to 2, million euros. Also noteworthy were the 1, million euros of tenders put out by the state water companies, under the Development Ministry, 8.5% more than in 26. Calls for bids by Spain s regional and local governments were 18% and 23.8% lower, respectively, than the year before. By regional government, tender activity increased at the Basque government by 88% to million euros, at the Murcia regional government by 27.1% to million euros, at the Balearic government by 25.3% to million euros, at the Andalusian government by 21.2% to 2, million euros and by the Galician government by 14.4% to million euros. The sharpest decreases in tendering were by the Castilla La Mancha government, down 68.3% to million euros; the La Rioja government, down 59.1% to million euros, the Aragón government, down 44.5% to million euros and the Madrid government, down 41.4% to 1,19.65 million euros. In local government, town councils outside provincial capitals were the most active, tendering 5, million euros, following by those of provincial capitals, at 3,11.81 million euros, those of municipalities, at 1,864.8 million euros and, lastly, those of other local authorities, at million euros. In all, these councils put less out to tender than in 26. The outlook for the industry in 28 remains extremely bright, as infrastructure development features prominently in the Spanish central government budget. A series of major initiatives are already underway, such as the Strategic Transport Infrastructure Plan ( STIP ) and the AGUA program. The STIP entails the highest level of investment in infrastructure made in Spain to date, with a total of 25, million euros earmarked for the entire period, which equates to an annual average of 15,5 million euros. The focal point of this Plan is rail travel, which represents 48.7% of total investment. The target by the end of the project is to have 1,km of high-speed railway (AVE), to put 95% of the Spanish population within 5km of an AVE station. Over 1,8k are currently being built, including the Atlantic axis, the Levante and Mediterranean corridors and the Galicia and Extremadura lines, also known as Y Vasca. The project also has a budget for the conventional rail network, including investment in commuter services in large cities and the integration of railways in various town centers.

309 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 37 The STIP also entails heavy investment in highways, with Spain set to have over 15,km of highways and motorways by 22. A number of projects are underway, such as the complete refurbishment of the 2,13km of first-generation motorways. At December 31, 27, contracts had been tendered and awarded for 1 sections involving a total of 997km. The road stretches included in the second phase are scheduled for tender in 28. These entail investment of 1,52 thousand euros covering more than 69km. The project investment sums are paid to the concessionaire over a 19-year period via revenue per vehicle and kilometer. The winning concessionaires must first adapt, renovate and upgrade the old roads. Then they must undertake the required replacement and repair works, so that the infrastructure is kept in the best working/driving conditions. Thirdly, they commit to maintaining the roads from when the concession agreement comes into force. The plan also addresses Spanish airports and ports. In order to meet the expected increase in demand by 22 (forecasts point to double the current number of passengers), several projects are being carried out at this type of facility to enlarge capacity. These include the enlargement of the Madrid- Barajas, El Prat, Málaga, Alicante, Valencia and Canary and Balearic Island airports. In addition, several ports are being upgraded and enlarged. Plans are to include 61km of new berths, create 2,2 hectares of land and 3, hectares of protected water area. Projects in this respect include the construction of the La Coruña and El Ferrol ports and the enlargement of the Barcelona, Bahía de Algeciras, Valencia and Gijón ports The motorway concession sector In 27, according to data provided by ASETA (the Spanish association of toll motorway, tunnel, bridge and road concessionaires) and supplied by its members, the Spanish toll road network in operation currently stretches 3,361.4km with another 94km under construction. Both figures also include the toll-free stretches. Over 27, 26km of new conventional toll roads were opened to traffic. On top of this were all the road contracts put out to tender by the regional governments under the shadow toll system, as well as those operated by companies who are not members of ASETA. Total revenue collected by concession companies in 27 from tolls paid on Spanish motorways was 1, million euros, representing growth of 9.36% on 26. As for the number of journeys, the network recorded a total of million transactions, 6.35% more than in 26, of which 26.92% availed of automatic tolls. Average daily traffic (ADT) was 25,11 vehicles, up by 8.45% on 26, of which 21,486 were light and 3,624 heavy vehicles. Spain can expect another round of tenders for major projects in 28. These include the following, for which Itínere has already submitted a tender or is considering bidding: The Plan for Conservation and Maintenance of the so-called first-generation motorways. Although a few projects under this plan were already tendered in 27, including the concession won by our investee, Europistas (the A-1, Sto. Tomé del Puerto-Burgos stretch), many others are due this year, including: the Madrid-Sto. Tomé del Puerto stretch, the A-3, Madrid-L. P. Cuenca stretch; A-4, the Kilometer 67.5 (R4)-Puerto Lápice stretch; the A-4, L. P. Jaén/Ciudad Real-L. P. Córdoba/Jaén stretch; the A-4, L. P. Córdoba/Jaén-L. P. Seville/Córdoba stretch and the A-4, L. P. Sevilla/Córdoba-Seville stretch. The Radial 1 (R1) toll road in the Community of Madrid. The first stretch, the M12/R2-El Molar link, is currently being put out to tender, with an expected investment of 25 million euros. Other motorways to be put out to tender by the Ministry of Development next year include the Toledo-Ciudad Real N-IV highway, the AP-7 Valencia By-Pass, the Tres Mares Cantabria-Miranda de Ebro motorway, the AP-37 Alicante- Murcia motorway and phase 2 of Radial 3 (R3) Arganda-Tarancó. Various regional governments also have plans to hold tenders for new toll roads. These include: - The Community of Madrid, which plans to tender one traditional toll motorway, the M-61 A-1 kilometer 2 link with A-6 kilometer 22-Tunnels of El Pardo, and three shadow toll stretches, the widening of the M-1, R2 - M-111 stretch, the widening of the M-6, A-6 to A-5 and M-44 stretch, and the widening of the M-44, A-5 and M-47 stretch. - The Community of Valencia, which is looking at tendering various stretches of shadow-toll motorway

310 38 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS including the Segura CV-91 axis (Alicante) and two stretches of the Ronda Suprametropolitana CV-5. - The Generalitat de Catalunya, which may hold tenders for new stretches of shadow toll motorway, including Axis 6 Eix Llobregart Berga-Bagá and Axis 7 Eix se L Ebre Amposta-A2 Lleida. - The Community of Aragon, which plans to call for bids for a shadow-toll concession on the Cariñena-Gallur link. - The Community of Castille and Leon, which is studying two shadow-toll concessions, the Ávila-Adanero stretch and the widening of the CL-11, Ágreda-Almazán stretch in Soria. - The Principality of Asturias, which is studying a shadow toll motorway, the AS-17 Avilés-Langreo. - The Community of Andalusia, which is set to call for bids for a traditional toll motorway, the A-397 Ronda- Costa del Sol. The international environment for motorway concessions is also very promising. It is expected that over the next few years many countries will continue to put new concession projects out to tender. The Sacyr Vallehermoso Group, through Itínere Infraestructuras, S.A., is already participating or considering participating in the following projects: Portugal: Itínere, via its subsidiary Somague Itínere, has reached the final phase of the tender for IP4 Túnel do Marao, with an estimated investment of 4 million euros. There are also another four toll motorway projects currently out for tender for which the Group is considering bidding. These are the 4 million euro Transmontana project, the estimated 5 million euro Douro Interior motorway, the estimated 4 million euro Baixo Alentejo motorway, and the 1 million euro Baixo Tejo project. Portugal is also to develop concessions on various stretches of the Portuguese high-speed rail link (RAVE) and could also put the new Lisbon airport out to tender. Italy: Italy is currently planning twenty-three concession motorway projects, entailing a total investment of more than 3, million euros. At the time of writing the following projects where Itínere is bidding are pending final decision: The Puerto Ancona access highway, with investment estimated at 47 million euros; Caianelo- Benevento, with a budget of 7 million euros; and the Broni-Mortara motorway, entailing investment of 8 million euros. United States: A number of US states are planning to develop new transport infrastructure projects (greenfield projects) or to privatize toll highways (brownfield projects). There are a number of interesting projects in the pipeline, involving total investments of over 15, million euros. At the moment, Itínere is bidding in a number of tenders, including the U.S. Route-46 corridor, between Richmond and Norfolk, Virginia, with an approximate investment of 1,2 million euros, and the North Tarrant Express, in Fort Worth, Texas, with estimated investment of 4 million euros. It is also studying projects in other states. Brazil: Five motorways are currently under study in the state of Sao Paulo: the Marechal-Rondon-Leste, with estimated investment of 5 million euros, the Marechal- Rondon-Oeste, 25 million euros, the Raposo-Tavares-Leste motorway, 55 million euros, the Don Pedro I motorway, with a forecast 6 million euro investment, and the 3 million euro Ayrton Senna- Carvalho Pinto. Chile: Chile is holding tenders for a concession on the new Ruta 5 Norte, Vallenar-Caldera stretch, an existing 411km motorway, with an estimated investment for the works of 18 million euros. Another project pending award at the time of writing is the Ruta 16, Coronel-Tres Pinos stretch, with a budget of 17 million euros. Also under study by the Chilean government is completion of the Autopista Américo Vespucio Sur project, for which Itínere has pre-qualified, for an investment of over 5 million euros, the 73km Concepción-Cabrero motorway,

311 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 39 budgeted at 13 million euros, and other projects proposed by the private sector, one of them by the Group: the concession for Ruta 5 South Puerto Montt-Pargua, 54km in length, for an estimated investment of 7 million euros. Rest of the World: The Group expects numerous infrastructure concession tenders to be put out in 28 in countries ranging from Canada to Mexico and in the new EU member states The housing market At 31 December 27, house prices stood at an average of 2,85.5 euros/m 2, 4.8% higher than in 26 and the lowest since 1998 according to Ministry for Housing data. Prices for homes, including government-sponsored and private housing, new and existing homes, and land therefore, continued to slow, with growth in the single digits. Despite regulation, government subsidized housing prices rose 5.5% in 27. The growth in existing homes was 4.2%, while new house prices rose 5.7% in 27. According to data released by appraisal company Sociedad de Tasación, average house prices continued to rise in 27. Specifically, the average price per square meter of built floorspace across all Spanish provincial capitals stood at 2,95 euros per m 2 at year-end 27, growth of 5.1% on 26. The most expensive cities for buying new homes were Barcelona, averaging 4,543 euros per m 2, San Sebastián, averaging EUR 4,61 euros and Madrid, at 3,971 euros. The lowest prices were in Pontevedra, at 1,477 euros per m 2, Badajoz, at 1,54 euros, and Lugo, at 1,52 euros per m 2. House price inflation was noteworthy in Valencia, where an average sized house cost 8.7% more than in 26. Prices also jumped 8.5% in Almería and 8.4% in Barcelona. At the other of the scale was Oviedo where house prices rose a scant.9%. New housing prices fell in Segovia and Vitoria, by 2.7% and 2,5%, respectively. By district in Barcelona, the Sarriá-Sant Gervasi district registered the highest jump in average new house unit prices, up 16.7%, followed by Horta Guinardo, up 11.7% and Sant Andreu, where growth reached 1.3%. In contrast the districts of Les Corts, Ciutat Vella and Nou Barris, saw the lowest price gains, with 2.9%, 1.2% and.5%, respectively. In Madrid, average new house unit prices rose fastest in the Moncloa district in 27, up 18.1%, followed by Hortaleza, up 7.5% and Puente de Vallecas, where prices increased by 3.5%. In the centre and Chamberí districts, to the contrary, prices dropped 12.8% and 5.1%, respectively. Looking at house price trends in the provinces, prices were highest in the provinces of Barcelona (2,913 euros/m 2 ), Vizcaya (2,831 euros/m 2 ) and Guipúzcoa (2,823 euros/m 2 ). On the other hand, prices were lowest in the provinces of Guadalajara, (1,11 euros/m 2 ), Zamora (1,24 euros/m 2 ) and Orense (1,8 euros/m 2 ). Price growth was very noteworthy in certain emerging provinces such as Lugo (14%), Guipúzcoa (12.4%) and Zaragoza (1%) in 27. In contrast, prices advanced by just 1%, 1.3% and 2.4%, respectively, in Guadalajara, Tenerife and Leon. Lastly, analyzing house price growth by region, average new house prices were above the national average considering provincial capitals - in Catalonia, at 4,155 euros/m 2, Madrid, at 3,971 euros and the Basque Country, at 3,375 euros. It is worth highlighting that the Basque Country was the only multi-provincial region where all the provincial capitals surpassed the 3, euros/m 2 threshold (average new house prices). On the other hand, Extremadura was the only multiprovincial region where house prices in all provincial capitals stood at the lower end of the range, below 1,8 euros/m 2. Existing home prices fell 2% in Barcelona last year. Nonetheless, Barcelona continued to consolidate its position as the most expensive city in Spain, with average prices at 4,769 euros/m 2. Existing house prices also fell in Madrid by.3% to 4,262 euros/m 2. This makes second hand home purchases 11.89% cheaper in Madrid than in Barcelona. In terms of the outlook for the housing market in 28, there is widespread consensus among the experts that new house prices will tend to stabilize in the wake of the heady prices reached in prior years.

312 31 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Analysts signal at least three factors that should breathe a certain amount of life into the housing market. Firstly, the Euribor, the benchmark rate for most Spanish mortgages, is falling by more than at any time since April 26. The Euribor fell back to 4.3% mid-january and its monthly average dropped to 4.57%,.22 points below the year-end rate of 4.79%. In addition, the latest forecasts point to rate cuts by the ECB in the second half of 28 in an attempt to reactivate economic growth in the eurozone, which means the Euribor should continue to trend downwards in the coming months. Secondly, the recent reform to the Mortgage Act has led to a reduction in the maximum commission that can be charged on early cancellation or switches of floating rate mortgages, from 1% to.5%. Thirdly, the real estate sector is beginning to take stock of the fact that almost five million immigrants live in Spain. This segment of the population, potential buyers, is shaking up the housing market. In fact, according to the Ministry for Housing, foreign residents account for 11.3% of real estate transactions completed in 2Q7. The same source indicates that immigrants bought around 7% of new homes and a significant chunk of second hand housing, in turn facilitating existing home sales by Spaniards who then go own to acquire new homes. On another front, government subsidized housing is expected to play a key role in the short term based on the expectations placed on this segment by the Spanish government and the G-14, which represents the largest real estate players in Spain. According to COAPIS (the general council for real estate agents), 415, of the 5, homes expected to be built in 28 will be promoted by public initiatives. The housing market should therefore remain strategic in 28. The areas with the greatest scope for development remain Madrid, where, according to the experts, most new housing will be concentrated in the metropolitan belt (particularly to the south and north-east), Barcelona, Valencia and Valladolid. The market should also be buoyant in Segovia, Guadalajara, Cuenca and Toledo, cities near the Spanish capital currently benefiting from significant infrastructure spend The property management sector The Group enjoyed a highly favorable office market in 27, for three key reasons: (i) a continual rise in prices in the main business areas, (ii) a high uptake of new leases, and (iii) a decline in vacancy rates. The Madrid office market performed very well throughout the year. Gross absorption was close to 941,4m 2, 15% more than in the previous year thanks to pre-rental and presale agreements on the Torre Espacio and Torre Caja Madrid in the Cuatro Torres Business Area. By district, the area surrounding the A-1 motorway was one of the most attractive locations thanks to its excellent communications, with absorption of 349,m 2, according to data from CB Richard Ellis. The Central Business District absorbed 161,m 2 of office space. Note that over 26,m 2 were pre-leased over the year. Total office space in the city was 11,2,m 2 with vacancy rates 6.6% below those of 26. Inside the M-3 ring-road there is still a shortage of office space. A further 213,m 2 of new office space was added, 61% of forecast volumes, with 85% of which was located outside the city centre. Overall vacancy rates fell in 27 to an average 5.3% citywide. Vacant office space is less than a million m 2, of which just 163,826m 2 are for sale. Demand outstripped all expectations in 27 and was up on the previous year. Gross absorption was 84,m 2. There were 815 major transactions during the year, the most since 2 and a 5.15% increase on the previous year. Most in demand were office-only buildings, with modern facilities, located in areas with good services and access. It appears that tenants are willing to pay high prices for high-quality offices in contemporary spaces, even when these are outside downtown districts. The maximum price in the business district was around 4. euros/m 2 /month, a 15.9% rise on the previous year. The highest prices for offices outside the centre of Madrid were registered in the area surrounding the A2 motorway, at euros/m 2 /month. In relative terms, the periphery of the city is

313 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 311 the area offering the highest returns. Prices in this area rose 18.5% on 26. In sum, the highest rents in 27 were 6% above those registered in 26. Prime rents were up by 16%, a healthy figure although slightly down on 26. Investment in Madrid office space totaled 4,2 million euros in 27, 15% more than in 26. In 27, 117,m 2 of office space was sold in 138 major transactions. The biggest clients were banks and service companies. 74% of investors deciding to invest in Madrid opted for the office market over alternatives such as shopping centers or logistics warehouses. Yields continued to rise in Madrid, in contrast to most European capitals with the exception of London. The net yield on prime property was 4.5% in the last quarter of 27, up by.6% on the same period of 26. In 28, we expect 395,m 2 to come onto the market of which 37% is already pre-let. A third of this space is in three buildings (Torre Espacio, Torre Cristal and Torre Sacyr) in the Cuatro Torres Business Area, due to open in 28. Together these buildings make up 34% of the surface area of all new projects in the pipeline. CB Richard Ellis forecasts supply in 29 at near 322,m 2, of which close to 1% is reserved. Notable new projects in 29 include BBVA s financial campus. It is expected that 81% of activity in the office market will be concentrated outside the M-3 ring-road. Forecasts point to sustained growth in the Madrid office market. Absorption is expected to taper slightly while remaining above its 1-year average. Vacancy rates are expected to remain low and prices high, even possibly nudging higher for most emblematic buildings. In Barcelona, office space on the market continued to trend upwards, rising to 269,65m 2, giving an overall vacancy rate of 4.72%, one percentage point above 26 levels. In 27, new projects added 127,m 2 to total office supply. This took total office space in Barcelona to the current level of 5 million m 2. Banks were the most active clients in the major transactions of 27. The number of firms seeking office space fell by 15% on 26 and the average surface area leased shrank 7%. The vacancy rate was 5.25%, slightly higher than in 26, despite similar absorption rates, as a result of new buildings coming onto the market. On the demand side, the office market in and around Barcelona absorbed 367,827m 2 of space in 27, similar to that of the previous two years. 4% of new rentals formalized in the last quarter of 27 were located in the New Business Areas. Breaking down supply by district shows that prime locations led the price rankings, at 27.5 euros/m 2 /month in the Central Business District according to a CB Richard Ellis report, followed by the New Business Areas at 23 euros/m 2 /month, the City Centre at 21 euros/m 2 /month and the Periphery at 17 euros/m 2 /month. Overall, rents rose with the biggest gains taking place in the New Business Areas. Investment in the Barcelona office market totaled 1,919 million euros in 27, growth of 16% on 26. Yields were also higher than the previous year. By district, the biggest rise in yields compared to 26 were in the Periphery, up by 6.5%, followed by the New Business Areas and the Central Business District, up by 5.25% and 4.5%, respectively. For 28, CB Richard Ellis projects a total of 79,5m 2 of new office space in the Periphery and 81,151m 2 in the New Business Areas. Big projects in the area dubbed the New Central Districts include Distrito 22@, with 112,m 2 of space, Nueva Gran Vía and Plaza Europa de L Hospitalet. Other new projects are located in Viladecans, Viladecans, San Cugat del Vallès and Cornellà de Llobregat. Other sources maintain that, over the next 24 months, a total of 893,511m 2 of office space will be delivered, of which 39% for private and public use such as the Nueva Ciudad Judicial (legal campus). Forecasts for the next few years point to stable growth in rents as a result of a balanced supply and demand and a significant spike for flagship buildings. It is also expected that absorption volumes will be similar to those of recent years and that supply will rise as projects scheduled for completion between 28 and 21 come onto the market.

314 312 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS As for shopping centers, in 27 Spain had 487 malls, with a gross lettable area (GLA) of 11,97,35m 2, according to data from the Spanish Shopping Centre Association, generating a total of 287,314 jobs. Footfall was over 1,6 million and sales of goods and services were 38,554 million euros, a 5.3% increase on 26. The net asset value of shopping malls stood at 28,55 million euros. There are 154 projects currently under way which will provide 4,8,m 2 of new GLA. In 27, 25 new malls were inaugurated adding 664,325m 2 of retail space, an increase of 5.3% from 26. This surface area ranks Spain number four in Europe by floor space given over to the construction of new shopping centers. These new malls created 15,773 new jobs. Breaking down shopping centers by type, the following picture emerges: most are classed as small, making up 28.7% of all existing shopping centers with a GLA of 1,633,65m 2. In second place are the Hypermarkets, accounting for 21.8% and a GLA of 1,236,752m 2. In third place are the malls classed as medium-sized, 21.1% of the total with a GLA of 2,958,775m 2. Geographically, 18.9% of GLA is in the Community of Madrid, 18.7% in Andalusia and 11.1% in the Community of Valencia. Catalonia ranks fourth, with 8.4% of total GLA. The greatest density of shopping centers is found in Madrid, with 441m 2 of GLA per 1, inhabitants, and Asturias with 396m 2 of GLA/1,. Average density across Spain is 263m 2 of GLA/1, population. In 27, according to a report by the Spanish Shopping Center Association, 1,58 million euros were spent on property transactions and 1,395 million euros on managing new openings. In 28, 25 new centers are slated to open, which will add a further 8,m 2 of floorspace. The trend of recent years is expected to continue, with new GLA added close to or slightly above the average levels seen over the last five years The services and environmental sector In relation to the renewable energy and cogeneration sector, the most important development in 27 was the publication of Royal Decree 661 dated 25 May, 27, enacting the regulations governing electricity generation under special regime, specifically establishing a new legal framework governing renewable energies. This new framework, essentially in relation to remuneration of solar thermal and biomass power, prompted a myriad of developments that had been on hold pending regulatory clarification. Nonetheless, the developments presented to the public authorities to date do not yet cover the targets set in the nation s renewable energy plan which sets target capacity for 21 for 5 MW in solar thermal power. Today just 11 MW of capacity is connected to the grid. The target for biomass energy is 1,317 MW compared to less than 4 MW on the grid today. In addition, the energy savings and efficiency plan calls for installed cogeneration capacity of 9,215 MW in 21, compared to under 7, MW in 27. Experts cite additional challenges for the future such as the need to develop even further other renewable technologies such as solar thermal and biomass power in addition to perfecting electricity storage systems to ensure available reserves under all eventualities. In terms of cogeneration, under the umbrella of the action plan for the Spanish Energy Efficiency Strategy, known as E4, the goal is to upgrade efficiency to boost development and realize the potential of high efficiency cogeneration capacity. In December 27, the United Nations Framework Convention on Climate Change, also dubbed the Bali Summit, renewed commitment, as a matter of global interest, to the international commitment to reduce greenhouse gas emissions and mitigate the impact on global climate change. Despite the best efforts of the European Union, a clearly defined consensus and commitment on the part of all participating nations was not reached. Some progress was made, however, giving rise to the Bali Roadmap, signed by19 member states of the United Nations. The Bali

315 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 313 Roadmap represents a very watered down agreement. The consensus statement reached makes no explicit reference to specific emission reduction targets, instead setting a timeline and timeframe for the negotiators, representing member nations, to identify ways to reduce pollution, set specific binding targets and establish the means by which the necessary technology can be transferred to developing nations for this purpose, and lastly, create a financing system in which the developed nations will be net contributors, to meet the targets set. The nations represented at the summit held very clearly defined positions, grouped into discrete blocks. The US and oil producing nations oppose mandatory emission reduction targets. China, India, Brazil and the emerging economies of the G77 accept the principle of voluntary reductions and believe that emissions need to be tabulated per capita and not on a global basis. The European Union, meanwhile, defends mandatory emission cuts in the range of 2% to 3% by 22. Against this backdrop, Spain backs the idea that within the EU emission reduction targets should be allocated on a per capita basis. Finally, although without a vote, NGOs and environmental experts believe that an agreement on mandatory cuts needs to be struck as soon as possible. The outlook for the water sector in Spain for 28 and beyond is promising. In the desalination subsegment, the leading companies have planned significant investments. AcuaMed, for example, has committed to 1,3 million euros worth of water desalination and recycling projects in 28 and 29. In addition, regional water authorities including Agencia Catalana del Agua, Canales del Taibilla, Aguas de la Cuenca del Sur and Aguas de la Cuenca del Segura, have slated investment of over 8 million euros over the next two years for desalination, recycling and irrigation projects. On a parallel basis, a private market is emerging, driven by the tourism and agriculture sectors in Murcia, Almeria and the Canary Islands. Forecasts additionally point to ongoing market growth, albeit more moderate, boosted by planned extensive investments, especially along the coasts of Murcia and Almeria and also in the Balearics. In addition, the US, China and North African nations have expressed interest in desalination technology, awarding construction contracts to Spanish firms. The outlook for the salt and brackish water desalination plant management market is markedly upbeat in 28, when the first plants developed by AcuaMed are slated to come on stream. The recycling segment is expected to receive a boost from reverse osmosis technology nationwide, with the exception of the humid regions of northern Spain. Here we would highlight the leading position, in Spain and abroad, commanded by the Sadyt Group company operating in this segment. The market for the design and construction of wastewater treatment plants will continue to be underpinned by the sizeable investments underway and planned by the Ministry for the Environment and also at the regional government level, with a view to bringing practice in line with European Union legislation in this area. As you will recall, all towns with waste discharges of 2, population equivalents, or 1, actual inhabitants, were meant to have wastewater collection and treatment facilities in place by the end of last year. This legislation is requiring high levels of investment in this kind of environmental infrastructure. Throughout Spain, the 17 regional governments have budgeted investment amounting to 4,53 million euros between 25 and 212 to ensure compliance with the urban wastewater directive. The regions with the highest budgets in this area are Andalusia, at 1,4 million euros, the Community of Valencia, at 1,4 million euros, Catalonia, at 39 million euros, and the Community of Madrid, with 34 million euros budgeted. All required treatment facilities are expected to be adjudicated by 29 for a total value of 2,6 million euros. In the last 1 years the Ministry for the Environment and the regional governments have invested close to 4,7 million euros on building, extending or upgrading treatment facilities. These investments are borne by the Ministry itself, the regional governments and the town councils. The regional governments account for a growing percentage of this investment, currently more than half, while the local

316 314 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS governments don t tend to assume more than 2% of the total amount. The Ministry makes up the difference, financing in full all investments rated of common interest and which are typically developed by the hydrographic confederations. This market is additionally being underpinned by growth in water recycling projects (tertiary treatment). Another factor driving sector growth is the development of sewage sludge treatment (thermal drying, composting, etc). A growing and highly competitive treatment management market is growing up alongside, which warrants minimum contract volumes to generate reasonable returns. There is a clear trend among all the public administrations to manage these facilities indirectly. Another prevailing trend is the aggregation of several treatment plans under a single contract to generate the scale required to ensure an attractive and economically viable business. This market has fragmented in recent years with the emergence of local and regional players which have prospered under the guiding hand of their regional governments. The end-to-end water cycle management market (distribution and treatment) is stable and growing steadily (6%) with even margins. Water rates are rising on a generalized basis, with significant discrepancies across the various town councils. The enhanced efficiency of water networks and supply systems is pushing operators margins higher. Various management formulae coexist. On the one hand, direct management by municipal services, clearly on the wane. Meanwhile, indirect management by public companies, mixed partnerships or concessionaires is rising. Today a number of public water management companies, such as Canal de Isabel II (with a share of 12%) have emerged as efficient operators. However, there are also town councils directly managing the water cycle via municipal systems that, with exceptions, are providing inadequate service as a result of inexperience in water treatment and distribution, and which can be expected to gradually outsource these services. 2. PERFORMANCE OF THE SACYR VALLEHERMOSO GROUP 2.1.AN HISTORIC YEAR FOR GROUP EARNINGS Sacyr Vallehermoso Group produced another exceptional financial performance in 27, which was a landmark year for all its five divisions: Construction (headed by Sacyr and Somague), Concessions (Itínere and Europistas), Property Development (Vallehermoso), Property Management (Testa) and Services (Valoriza). The Group s strength throughout 27 was reflected in the consolidated financial statements. Sacyr Vallehermoso posted a 23% increase in consolidated revenues to 5, million euros, and a 74.5% increase in net attributable profit, to million euros, ranking it once again one of the most profitable groups in its sector. The EBIT margin was 16%, confirming yet again the Group s healthy levels of profitability. EBITDA was 1, million euros, growth of 19.9% on 26, giving an EBITDA margin of 22.2%. Cash flow was 1,315.7 million euros, a 76.6% increase on 26. Total assets at year-end 27 stood at 29,777.2 million euros, up 9.8%, while equity stood at 3, million euros, growth of 16.7%. These levels of growth and profitability are locked in going forward by the Group s healthy backlog in Construction, Concessions, Services, Property Development and Property Management. At December 31, the order book stood at 87,33.22 million euros, 11.98% more than at year-end 26. The total value of the Group s property assets (at the Vallehermoso and Testa groups) came to 11,694 million euros at December 31, implying unrealized capital gains of 4,316.5 million euros. Over the next few pages we set out some of the most significant events unfolding in 27, followed by reports on the main events in each business unit. On April 17, Sacyr Vallehermoso acquired 12,113,98 shares in Itínere Infraestructuras, S.A. from Caixa Ahorros de Vigo,

317 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 315 Ourense y Pontevedra (Caixanova), representing an 8.62% stake in the company, for 16 million euros. This transaction gave Sacyr Vallehermoso outright ownership of Itínere Infraestructuras. On April 19, 27, Sacyr Vallehermoso applied for authorization by the French securities market authorities (AMF) to launch a takeover bid for all the shares of French firm Eiffage that it did not already own. At that date Sacyr Vallehermoso held 31,47,259 shares in Eiffage, representing an ownership stake of 33.32%, so that the public bid was targeted at 62,136,83 shares. The bid consideration comprised newly issued Sacyr Vallehermoso shares in the proportion of 12 new shares, each with a nominal value of 1 euro and of the same class and carrying the same rights as those already outstanding, for every 4 Eiffage shares tendered, each with a nominal value of 4 euros. This exchange premium represented a 3.6% premium to the weighted average price of Eiffage shares in the month ending March 2, 27 (the last trading date not influenced by M&A rumors) and a premium of 34.4% to the average valuations, based on sum-of-the-parts methodology, published by six financial analysts in 27 for Sacyr Vallehermoso (La Caixa, Morgan Stanley, Citigroup, UBS, Merrill Lynch and ING) and by another six analysts in the case of Eiffage (Citigroup, Deutsche Bank, Oddo Securities, JP Morgan, UBS and Société Generale). To raise the necessary financing the plan was that Sacyr Vallehermoso would undertake an equity issue in the required amount, to be subscribed by the Eiffage shareholders accepting the bid, i.e., structured as a rights issue with preemptive rights waived with an undefined portion expected to be left unsubscribed. The proposed equity offering envisaged issuance of up to 149,126,6 new shares, each with a nominal value of 1 euro, for a maximum amount of 149,126.6 euros. The effectiveness of the takeover bid was conditional upon (i) an acceptance rate that would give Sacyr Vallehermoso, in addition to the shares in Eiffage it already held, at least 6% of the voting rights in Eiffage, and (ii) approval by the shareholders of Sacyr Vallehermoso in general meeting of the equity offering to fund the acquisition. A successful transaction would create the fourth largest European construction and services group by revenues and the second largest by EBITDA and assets, based on 26 year-end figures. The combined company would have had a very solid position in its home markets (France, Spain and Portugal) and significant growth potential internationally. The deal would have generated significant synergies that would have created value for the shareholders of both companies. The enlarged group would have had a solid financial structure and a leadership position in each of its businesses, i.e., construction, public and private, concession operations and maintenance, noteworthy among which motorways, the real estate sector, in housing development and real estate rentals and environmental services such as energy, full cycle water management and multi-services. In short, the deal would have given rise to one of the first cross border tie-ups between two European construction groups, leaders in their respective home markets. Eiffage would have been fully autonomous, retaining its French headquarters, its current management team, and, to ensure full service of the shareholders of both companies, would have continued to trade, as at present, on the Paris Euronext exchange. Sacyr Vallehermoso would have also requested that its shares be admitted to trading on the French exchange. The idea was also to give continuity to the common shareholder-focused culture at both companies where priority is granted to shareholder representation, employees and to management. On June 26, 27, the French securities watchdog, the AMF, rejected the bid presented by Sacyr Vallehermoso for Eiffage on its interpretation that the deal did not comply with French legislation based on its belief, again according to the watchdog s own criteria, that Sacyr Vallehermoso had acted in concert with other Spanish shareholders in the French construction firm. Further, the AMF requested Sacyr Vallehermoso to present a new bid, formulated as a cash rather than all share bid and at the maximum price paid by any of the shareholders, again according to the AMF, acting in concert. The AMF additionally ruled that Sacyr Vallehermoso must present, in addition to a new bid for

318 316 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Eiffage, a separate bid for highway concessionaire APPR, an Eiffage subsidiary, based on its consideration that APPR is a strategic asset of the French group. That very day Sacyr Vallehermoso lodged an appeal against the French regulator s decision before the Paris court of appeals, alleging there had been no collusion whatsoever on the part of Sacyr Vallehermoso. At no time was the AMF able to prove the existence of any agreement that could be construed as concerted action. In its session of September 2, the appeals court set the hearing for February 5, 28. On June 29, 27, the Group held its General Shareholders Meeting in Madrid. Besides approving the financial statements for 26, shareholders at the meeting voted to approve a capital increase for a nominal amount of 149,126,6 euros via the issue of 149,126,6 shares, in order to fund the consideration offered as part of its public bid to acquire up to 62,136,83 ordinary shares of Eiffage. This issue had not been undertaken at December 31, 27. In 27, Sacyr Vallehermoso remained the leading shareholder of the French multi-services group Eiffage, with a 33.1% ownership stake and a total investment valued at 1,91.94 million euros at year-end. Eiffage is France s third largest construction company, after Vinci and Bouygues, and is ranked seventh in Europe by revenues. It was founded in 1844 and over its long history has built a series of landmarks such as the Eiffel Tower (1889) in Paris, the Sydney Opera House (1973) and the Millau Viaduct (24) in Aveyron (France), which at 343 meters is the world s highest bridge. Eiffage currently has more than 63, employees across an international network that spans 5 subsidiaries, grouped into five divisions: Eiffage Construction: the division encompassing all the building and property activities of the group, including house building, shopping centers, industrial buildings, offices and hospitals as well as refurbishment and renovation of historic buildings. In 27, this division generated revenues of 3,81 million euros, growth of 12.8% on 26. Of this, 592 million euros came from the real estate business. Eiffage Civil Engineering: headed up by Appia, this division is responsible for all civil engineering-related activities from construction and maintenance of motorways, ports and high-speed rail links, to the manufacture of mastic, decommissioning and excavation work. In 27, this was the Eiffage Group s biggest revenue generator, with revenue of 4,114 million euros, growth of 13.2% on 26. Forclum: a division bringing together all the group s electrical and air-conditioning installation activities, including design, installation, operation and management of power and communications (fiber optic) grids. In 27, revenue in this business amounted to 2,529 million euros, up 26.1% on 26. Eiffel: this branch of the business develops all types of metal structures, including oil platforms, metal roofs for buildings, bridges, artworks etc. In 27, revenues from this activity were 318 million euros, a 3.3% increase on 26. Eiffage Concessions: this division is responsible for construction, operation and maintenance of transport infrastructure concessions. A key point to note is Eiffage s presence in Autoroutes Paris Rhin Rhone (APRR), which was partially privatized by the French government in 25, and which manages and operates 2,25 km of motorway in the Paris-Dijon-Lyon-Grenoble-Clermont Ferrand corridor. This has made Eiffage one of Europe s leading concession groups. Another company to highlight in this division, is the Compagnie d Eiffage du Viaduc de Millau which runs the concession on the Millau Viaduct. In 27, revenue in this business amounted to 1,834 million euros compared to 1,49 million euros in 26. Eiffage has a strong presence across Europe. Outside France its subsidiaries are active in countries including Belgium, Spain, Germany, Poland, the Czech Republic, Portugal, Italy and Luxembourg. At the consolidated level, last year Eiffage generated total revenue of 12,596 million euros, 17.2% more than in 26. Of this, 1,192 million euros was generated in France (8.91%), 2,229 million euros in the rest of Europe (17.7%) and 175 million euros in the rest of the world (1.39%). Profit attributable to the group reached 1, million euros compared to 377 million euros in 26. Of this figure, 667 million euros corresponded to one-off capital gains, 484 million euros generated on the sale of its stake in Cofiroute (17.1%) to Vinci on March 1, 27 and 183 million euros on the sale of part of its investment in Compagnie d Eiffage du Viaduc de Millau (49%) to Caisse des Dépôts on July 23.

319 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 317 In 27 Eiffage paid a gross dividend of 1 euro per share. Sacyr Vallehermoso s share of this payout amounted to 31.5 million euros. Eiffage s order book stood at 9,8 million euros at year-end 27, up 12.1% on 26. Eiffage is listed on the Paris stock exchange. It ended 27 with a share price of euros, down 6.51% on the yearearlier figure, valuing the company at 6, million euros. Throughout 27, Sacyr Vallehermoso remained the core shareholder of Repsol YPF, via its investee Sacyr Vallehermoso Participaciones Mobiliarias, S.L., with a 2.1% ownership stake and a total investment valued at 6, million euros at year-end. In addition to the directors appointed to the Repsol YPF board in 26, specifically Luis del Rivero, Chairman of Sacyr Vallehermoso, and Juan Abelló, second Vice Chairman, the energy group appointed Manuel Loureda Mantiñán as proprietary director on January 31, 27. Founder of Sacyr, Mr. Loureda has held numerous executive positions in the Group during his career, including CEO until 2 when he took over as Chairman. After the merger with Vallehermoso, he was appointed Chairman of the Group. He currently serves as director of Sacyr Vallehermoso and Chairman of Valoriza. This appointment gives Sacyr Vallehermoso three directors on the board of the oil company. At the same board meeting, the directors representing Sacyr Vallehermoso were appointed to several positions within Repsol YPF s steering committees. Luis del Rivero was appointed to the Standing Committee while Juan Abelló and José Manuel Loureda were appointed to the Strategy, Investment and Competition Committee. On May 31 Sacyr Vallehermoso Participaciones Mobiliarias signed the long-term syndicated loan agreement to finance the acquisition of its stake in Repsol YPF. It is a 5-year loan with a face value of 5,175 million euros. The banks in the syndicate include Banco de Santander, Citigroup, Calyon and Caja Madrid, in addition to 38 other Spanish and international banks. The loan agreement was signed in 26 and the terms have not been altered since it was syndicated. The investment in Repsol YPF falls under the umbrella of Sacyr Vallehermoso s strategy of diversification and growth and is designed to complement the Group s other divisions by participating in a long-term business offering sustained profitability which will boost the Group s margins and earnings. Repsol YPF is the leading oil company in Spain and one of the top ten private oil concerns in the world. It is the leading operator of service stations in Spain and Argentina, with nearly seven thousand filling stations world-wide. It is also the leading distributor of liquefied petroleum gas (LPG) in Spain and Latin America, ranked fourth worldwide, with annual volume sales of over 3.7 million tons to more than 15 million customers. In chemical products it is the market leader in Spain and Portugal, offering a range of over 2,5 products and is the world leader in agricultural plastics. Repsol YPF owns a 3.847% stake in the gas utility Gas Natural SDG, S.A., and 15% of energy company Compañía Logística de Hidrocarburos CLH, S.A. It has nearly 38, employees and an international presence across more than 3 countries on five continents through its four main divisions: Oil & Gas Exploration and Production (E&P): strongly positioned in the strategic regions of South America, the Gulf of Mexico, Caribbean and North Africa. Refining and Marketing (R&M): mainly in South America and Europe. Chemicals: in countries including Argentina, Mexico, Spain, Portugal, Italy, Denmark and Algeria. Gas and Electricity: with a strong presence in Spain, South America and Italy. Repsol YPF s strong performance in 27 was reflected in its financial statements. It generated revenue of 53,865 million euros. EBITDA was 8,573 million euros while net profit amounted to 3,188 million euros. Forecasts for the next few years are upbeat, underpinned by rising demand for oil and gas in both industrialized and emerging economies. In 27 Repsol YPF paid a gross dividend of.72 euro per share (an interim dividend of.36 euros per share and a final dividend of.36). Sacyr Vallehermoso Participaciones Mobiliarias, S.L. s share of the dividend amounted to million euros. On November 1, 27, Repsol YPF announced a very significant increase in its shareholder remuneration policy for the coming years, stating its intention of raising the pay-out to between 4% and 5%. In fact, the interim dividend paid out against 27 earnings on January 15, 28 was raised to.5 euros per share, a year-on-year increase of 4%.

320 318 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS In early 28 Repsol YPF is expected to unveil an ambitious Business Plan for designed to diversify its asset portfolio and boost organic growth. One of the prime initiatives contemplated in the business plan is the sale of 25% of YPF, in order to bring on board Argentine investors with the aim of boosting the business development in the region and unlocking value at this investee. On December 21, 27 Repsol reached an agreement with the Petersen Group (owned by Argentine businessman Enrique Eskenazi), for the sale of up to 25% of YPF. The transaction will be completed in two phases. Initially, 14.9% of the Argentine company will be sold to the Peterson Group for 2,235 million dollars (1,527 million euros); within a maximum period of four years, the Argentine group can exercise a call option for an additional 1.1%, for a further outlay of 1,515 million dollars (approx. 1,3 million euros). The price agreed to values 1% of YPF at 15, million dollars (1,25 million euros). Later, Repsol YPF plans to undertake an equity offering, floating an additional 2% of the Argentine company to enable the participation of retail investors, as is the case for all employees of the Repsol Group. Repsol YPF is listed in Spain, where it forms part of the benchmark Ibex-35 index, and in the US. It ended 27 with a share price of euros and market capitalization of 29, million euros Performance of the Construction division (Sacyr-Somague) The Group s Construction division, led by Sacyr and Somague, grew strongly again in 27. These companies and their subsidiaries won major contracts put out to tender by the various tiers of central government (Development Ministry, Environment Ministry, ADIF, AENA, etc), regional government (Comunidades Autónomas) and local government (town councils), as well as numerous civil engineering and building contracts put out to tender by the private sector. The main contract wins in Spain during the year were: The construction, financing, maintenance and management of the Murcia international airport. The Aeromur consortium, led by Sacyr with a 6% stake and whose other shareholders include Caja de Ahorros del Mediterráneo, Caja Murcia, Inocsa, Cementos La Cruz, the Monthisa Group and the Fuertes Group, each with 6.67% interests, will manage the airport for a period of 4 years. The budgeted construction spend is million euros. In this way, Aeromur has seen all the hard work and dedication put into a project initiated back in 21 pay off. Construction is expected to last 36 months, with the complex slated to open in 21. Given the size of the airport facility, some 555 million euros have been earmarked for investment over the term of the concession. The airport will have an initial capacity of 5 million passengers, although after planned enlargements this will rise to 14 million by 23. To achieve these targets, the consortium has been in contact with 15 companies and operators, including the Europe s leading low cost carriers. The terminal, with over 28,m 2, will be modular, enabling it to handle large capacity and making it highly flexible and functional. It will have new boarding areas, permitting the addition of fingers. The consortium will broaden the complex s service offering by building various installations, such as a pilot training center, an airport services center, an aeronautical industrial park and a logistics park, as well as a shopping center. This will be a pioneering project in Spain environmentally, standing out for its low levels of emissions, noise, energy consumption and light pollution. The construction of the AVE line to the French border: Borras-Figueres (Girona). The winning consortium is composed of the Sacyr Group (35%), Cavosa (35%) and Scrinser (3%). With a total budget of million euros, the section will be 7.48km long and include singular works such as the construction of 5 viaducts and a 1.75km tunnel. The expansion and upgrade of the northern by-pass in Zaragoza. With a total budget of million euros, the project will improve the current by-pass and all its links,

321 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 319 along 18.5km, from the junction with the A-2 to Malpica. A third lane will be added and several links will be restructured, including those connecting to the airport, the A-36, the Actur and the Expo links, as well as the A-123 Zaragoza-San Mateo de Gállego and the A-129 Zaragoza-Sariñena junctions. The construction of the AVE platform in the Basque Country (known as the Y Vasca ): Aramaio-Mondragón section. The total budget for this project is million euros. The construction, in joint venture with Group construction company, Cavosa, of the Parbayón-Cacicedo stretch of the S-3 motorway, the Santander Bay by-pass, in Cantabria. With a total budget of 67.4 million euros, the stretch, which includes several structures to salvage existing roads and passes, will provide an alternate route to the S-1, which handles both long haul and city and intercity traffic to and from Santander. Two parallel tunnels of over 6m in length will also be built. The construction, in a joint venture with Group construction company Prinur, of the linkup stretch of the A-7 motorway s new Malaga west by-pass, for a total of 6.35 million euros. The construction of the Cadagua link road (Bilbao). With a total budget of 59.6 million euros and a scheduled execution timeframe of 29 months, the winning consortium, comprising Sacyr (6%) and Excavaciones Baranda (4%) will execute the 6th tranche of the 36km-long Bilbao ring road called Supersur. The construction of the Quintadueñas-Villímar section of the Burgos BU-3 ring road. The project budget is 55.4 million euros, to be executed over 34 months. The winning consortium is made up of Sacyr (8%) and Cavosa (2%). Work also includes the construction of the second carriageway of the Burgos northern relief road between the Villatoro and Villímar link roads. The construction of the southern by-pass in Talavera de la Reina (Toledo). The winning consortium comprises Sacyr (52.5%), Aglomancha (32.5%) and Electricidad Jesús Bárcenas (15%). The project has a 5.29 million euro budget and a schedule of 36 months. The main feature of this project is the construction of a cable-stayed bridge over the Tagus river. The repairs and solidification of the Bellvitge tunnel for the Barcelona high-speed railway line. With a budget of 45 million euros, the project, to be carried out by Cavosa, will enable the AVE to reach Barcelona in early 28. The construction of the Atlantic axis stretch of the AVE line section: A Portela (Barro)-Cerponzóns. The winning consortium is composed of Group companies, Sacyr (45%), Cavosa (4%) and Portuguese investee Neopul (15%). The 6.25km-long section has a budget of million euros and a schedule of 42 months. Other works included in the project are the construction of three viaducts, a 1,3m tunnel, two underpasses and a pedestrian gateway. The refurbishment of the Seminario Mayor de Comillas seminary (Santander). The winning consortium comprises Sacyr (35%), Acciona (35%), Cenavia and E- Bolado (15% each). With a million euro budget and an execution period of 48 months, the project will be carried out in three stages. The first, slated to take 13 months, includes remodeling the cloister, the main entrance and the main hall. The second, estimated at 14 months, will focus on the west cloister, including refurbishing the façade and development work. The third, projected at 15 months, entails restoration of the church that separates the cloisters. The construction of the Barbastro relief road section of the A-22 Lleida-Huesca. With a total budget of 29.9 million euros, the section will run between the El Pueyo and Castejón del Puente link roads, crossing the N-24 and the junction to the town. The renovation work on the Fabrica de Tabacos tobacco factory in Valencia. The winning consortium is 5%- owned by Sacyr and Secopsa. With a million euro budget, the project entails reforming the modernist building by concealing the elements added after 199, when it was built for the regional fair. Once completed, it will house various municipal facilities. The water supply expansion in Aranjuez and surrounding area from the Almoguera-Algodor mains supply, with a total budget of 28.9 million euros. The winning consortium is made up of Sacyr and CIOPSA. The construction of the new Hospital de Manises (Valencia). The winning consortium, in which Sacyr has a

322 32 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 6% interest, Rovaer Alcia 2% and Secop 2%, will have a budget of million euros. The facility will have a surface area of over de 48,m 2 and 21 rooms, covering the healthcare needs of the town of l Horta Oest y Sud. Leveraging the latest technical and functional advances, it will also enjoy maximum energy saving and minimum external emissions (air, water and waste). Urban development of the Los Molinos and Cerro Buenavista subdivisions in Getafe (Madrid). With a budget of million euros, the street, pipes, lighting and complementary works will pave the way for construction of 12, homes in this Madrid town. The construction of the Igorre (Bilbao) relief road. The million euro project was awarded to a consortium composed of Sacyr (6%) and Amenabar (4%). The construction of a platform and railway in the Castellbisbal junction for the branch line linking Vallés to the Port of Barcelona and Can Tunis. The winning consortium is composed of Sacyr Group companies (4%), Scrinser (3%) and Portuguese investee Neopul (3%). The project has a 22.5 million euro budget and a schedule of 12 months. The refurbishment of the La Travesía de Hermigua road (La Gomera, Canary Islands). The winning consortium is 7%-owned by Sacyr, 15% by Construcciones Darias and 15% by Pedro Luis Darias. With a total budget of million euros and a scheduled time for completion of 3 months, the project involves refurbishment of the TF-711 San Sebastián highway in La Gomera, the main road communicating the towns in the northeast of the island. The project design and construction of the Siles reservoir in Jaén. With a budget of 21.1 million euros and a schedule of 3 months to complete, the reservoir will have a capacity of 3 cubic hectometers and a straight dam with crest length of 29m, with a maximum height of 55m over the Guadalimar river channel. This project aims to satisfy existing demand for water in the municipalities within the region, which has a population of around 13,. Furthermore, protection against the gullies will be carried out in Puerta de Segura and Puente de Génave, as well as the enlargement and improvement of the irrigated area (3,5 hectares). Construction of the link between the lower Guadalquivir canal and the Torre de Águila reservoir in Utrera (Seville), for million euros. The construction of subtranche B of the Segarra- Garrigues channel. The project has a budget of million euros and will be carried out by a consortium comprising Sacyr (4%), Scrinser (4%) and José Antonio Romero Polo (2%). Included in the Environment Ministry s AGUA program, the project, in the town of La Noguera, will help different irrigation areas along its 8km. The construction of the waste water removal system in Pinto (Madrid). This project has a total budget of million euros. The construction of 168 homes in Cabo de Gata (Almería), for real estate developer Urbis. The total budget for this project is 18.1 million euros. Work on the Arte Sacro y Afines industrial park in Seville. This project has a budget of 16.3 million euros and forms part of the Torneo Parque Empresarial project. It will give rise to a new major business area in the Andalusian capital, with large space for offices and other types of services and installations. The construction of the Malaga commuter railway station. The winning consortium is made up of Sacyr (8%) and Prinur (2%). With a total budget of million euros, the project entails expanding the tunnel access area and the station s platforms over a total of 6m. It forms part of the railway integration works in Malaga in line with the construction of the Córdoba-Málaga high-speed AVE railway. The key projects won by the Group abroad are as follows: In March 27, the final contract for the design, construction, financing and management of the N-6 Galway-Ballinasloe motorway in Ireland was signed. The winning consortium is made up of Itínere, FCC and local partner PJ Hegarty and was selected as preferred bidder on July 24, 26. Included as part of the strategic corridor between Galway and Dublin, this motorway is a priority of the Irish National Development Plan (NDP) for The project includes the construction of 56km of motorway and 32km of access roads, with a total budget of 288 million euros for the construction phase alone. The operating concession, with a 36-year life, extendible to 4, will be run by Itínere Infraestructuras.

323 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 321 Also in March, the consortium made up of Itínere, Global Vía and PJ Hegarty was selected preferred bidder in the tender for the design, construction, financing and management of the M-5 toll ring road around Dublin (Ireland). The project includes 41 km of motorway for a total investment of 4 million euros. The concession is for 35 years. The financing of the project was arranged in October, half with the European Investment Bank (EIB) and half with La Caixa, RBS, MCC and Fortis. In December, the consortium comprising Sacyr, Somague, Jan de Nul (Belgium), Impregilo (Italy) and Panamian local partner Cusa was shortlisted in the tender to enlarge the Panama Canal. The project entails the construction of a third set of locks and, given its technical complexity, is considered one of the foremost civil engineering projects worldwide. With an estimated budget of 3,8 million euros, the Panama Canal Authority (ACP) plans to award the contract in December 28. The Group s Construction division, headed by Sacyr, S.A.U. and Somague, posted a 27.7% increase in revenue in 27 to 3, million euros, driving an 11.3% increase in net profit, to million euros. The EBIT margin was 4.49%, confirming the robust level of profitability achieved by the division. EBITDA (operating profit plus depreciation & amortization and change in trade provisions) advanced 18.9% to million euros, leaving an EBITDA margin for the division of 6.8%. Balance sheet assets in the Construction business ended 27 at 3, million euros. The Construction backlog at December 31, 27 stood at 6,22.11 million euros, guaranteeing steady high growth and sustainable margins Performance of the Concession division (Itínere-Europistas) Itínere Infraestructuras, S.A., the holding company for the Sacyr Vallehermoso Group s concessions division, continued to consolidate its growth trajectory in 27. At December 31, 27, Itínere participated in 43 concessions, of which 28 were already in operation (24 motorways, totaling 2,77 km, 2 hospitals in Madrid, one transportation hub, also in Madrid, and one motorway service management company). Itínere was also involved in 15 new concessions under construction: 11 new highway concessions, totaling 1,16 km, one underground line in Seville, one transportation hub, one hospital in Madrid and one airport in Murcia. By country the concessions are located as follows: 28 in Spain, 6 in Chile, 3 in Portugal, 2 in Ireland, 2 in Costa Rica, 1 in Brazil, and 1 in Bulgaria. This ranks Itínere Spain s second largest motorway operator with a market share of 24.8% by kilometers of road and 19.2% by revenue. Itínere is the world s fourth-largest infrastructure operator according to the Public Works Finance Magazine, and the leading highway operator in Chile, where it has an 18% market share by kilometers. In 27, Itínere was awarded, in chronological order, the following concessions: In March, as detailed in an earlier section of this management report, the Aeromur consortium was awarded the construction, financing, maintenance and management of the Murcia s new international airport. Itínere holds a 4-year operating concession for this airport. With estimated revenue of 3,714.5 million euros, this marks the Group s first airport concession win. The airport is slated to open in 21, offering its services to the main European low cost carriers. The airport will have an initial capacity of 5 million passengers, a figures expected to reach 14 million by 23 following a series of planned enlargements. On October 3, Itínere, though its investee Europistas, won the tender to maintain and operate the Santo Tomé del Puerto-Burgos stretch of the A-1 first generation Spanish motorway (Autovía del Arlanzón). The concession lasts 19 years and this project forms part of a plan approved by the government in 26 to upgrade and maintain Spain s so-called first generation motorways.

324 322 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS The stretch concerned is 146km in length and forms part of the old Madrid-Irún A-1 road. Abroad, Itínere won the following key contracts: On March 22, 27, the Irish National Roads Authority (NRA) selected the consortium formed by Itínere (45%), FCC (45%), and PJ Hegarty (1%), as preliminary preferred tenderer in the tender for the design, build, financing and operation concession for the M-5 Dublin ring-road. With planned investment of 3 million euros and a 35-year concession, the works are expected to be completed in early 211. On September 27, the project financing was concluded and, simultaneously, the concession contract was signed with the Irish government. 41km in length in total, this concession entails, among other works, the 24km upgrade of the sections of the M-5 between the existing M1 and the N3 junctions and between the N7 junction and the Sandyford transportation hub; the project entails the upgrade of the M-5 to a three lane motorway along with major interchange improvements. The consortium will operate and maintain the sections upgraded and widened (24km), the section between the N4 and N7 junctions (7km), the section between the N3 and N4 junctions (1.3km), and the section between the Sandyford and N11 junctions (11km). The motorway will use a free flow automatic tolling system. On April 4, 27, the consortium made up of Itínere (45%), FCC (45%), and PJ Hegarty (1%) reached financial close on the N-6 Galway-Ballinasloe toll road. The concession for the design, construction, financing and operation of the road for a 3-year period was signed with the Irish National Roads Authority on the same day. The consortium had been selected preferred bidder on June 24, 26. Total project investment is estimated at almost 36 million euros, of which 288 million euros will go on building the motorway. The toll road is expected to be ready by August 29. The scheme comprises 56km of dual carriageway, a 7km single carriageway link to the Loughrea bypass and 32km of access roads, entailing the following additional works: 4 grade-separate junctions at Glennascaul, Athenry, Carrowkeel and West Ballinasloe, 26 overpasses, 6 underpasses, 3 rail crossings, 1 major river crossing and a toll plaza close to Cappataggle. The concessions put into operation by Itínere last year were as follows: On April 27, 27 the Plaza Elíptica transportation hub was inaugurated in Madrid. A 35-year contract, this hub is servicing 126,3 users daily from large urban agglomerations in southern Madrid and the Province of Toledo. Feeding into the hub are lines 6 and 11 of the Madrid underground, 14 city bus routes and 1 intercity bus routes. The number of users is set to increases if the busway and HOV lane to Toledo is built and underground line 11 is extended. These initiatives would put minimum transit at million passengers throughout the life of the concession. On May 13, 27 the 2.7km Viastur stretch of the AS-II motorway between Oviedo and Porceyo was inaugurated. The works completed included the additional carriageway along the AS-17 between Lugones and Bobes, 3.6km in length, the construction of a service lane between Venta del Jamón in Llanera and La Venta de Venares in Gijón and one service area. This is a 3-year concession, entailing investment of 19 million euros. Average Daily Traffic (ADT) in the months of 27 in which it was operative reached 18,887 vehicles. On September 11, 27, the Hospital Infanta Cristina located in the southern Madrid municipality of Parla was inaugurated. This facility will service all users in Area 2 of the Community of Madrid (over 165, inhabitants). The hospital has 18 beds, extendable to 24 in 217. The concession is for a 3-year period and the management undertaken by Itínere is limited to non-healthcare services, as the medical staff is provided by the Madrid regional government. The build, undertaken by Sacyr, was completed in a record time of 18 months to the highest level of building and installation standards. On September 16, 27, the Hospital del Henares was put into service. Located in the town of Coslada, also in Madrid, the facility serves a population of over 17,. The concession period is 3 years and the facility has 187 beds, extendable to 239 in 217. Again, Itínere s

325 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 323 management contract is limited to non-healthcare services. This project was highly complex from a technical standpoint due to both the short execution timeframe (14.5 months) and the uneven topography of the plot. Last year the Itínere Group concluded the following transactions: On April 17 the boards of Europistas and Itínere approved the merger of the latter into the former, proposing, as later ratified at the companies respective general meetings, an exchange ratio of 16 shares of Europistas, each with a nominal value of.49 euros, for every 5 shares, each with a nominal value of 1 euro, of Itínere. Accordingly, Europistas will issue a total of 545,629,392 new shares, each with a nominal value of.49 euros, to effect the merger. This exchange ratio was determined on the basis of valuations prepared by investments banks Calyon, S.E., in its role as financial advisor to Itínere, and JP Morgan Chase Bank, N.A., advisor to Europistas, which both issued to the respective boards a fairness opinion stating that the exchange ratio was fair from a financial standpoint to the shareholders of both companies. The aforementioned exchange ratio valued Europistas at 1,235,53,799.5 euros, equivalent to 9.15 euros per share, and Itínere at 4,992,58,936.8 euros. On May 11, as set down in the merger proposal, Itínere issued 3,36,17 new shares, each with a nominal value of 1 euro and all of the same class and carrying the same rights as those then outstanding, thereby increasing its capital by a nominal amount of 3,36,17 euros. These newly issued shares were subscribed for in full by Sacyr Vallehermoso, S.A. in exchange for the following shareholdings: 11,229 shares of Hospital de Parla, S.A., representing 95% of its share capital, 13,585 shares of Hospital del Noroeste, S.A., also representing 95% of that company, 731,316 shares of Hospital de Majadahonda, S.A., equivalent to 2% of the company, and 2,228,1 shares of Intercambiador de Transporte Plaza Elíptica, S.A., 6% of its capital. As a result of the above, Itínere s share capital stood at 17,59,185 euros comprised of 17,59,185 shares with a nominal value of 1 euro each, fully subscribed and paid up. The shareholdings contributed had been previously transferred by Testa Inmuebles en Renta to Sacyr Vallehermoso, also in May 27, in order to reorganize the group s structure. This brought the whole of the hospital concession business under Itínere. Sacyr Vallehermoso is currently the leading builder and operator of hospital concessions in Spain and Europe. Over the last four years, eleven hospitals have been tendered in public-private partnership under concession format (eight in Madrid, one in Burgos, one in Palma de Mallorca and one in Manises, Valencia). Itínere participates in the management of three of these facilities and Sacyr has built five. On June 28 Europistas held its General Shareholders Meeting. Agenda items approved included the ratification of the proposed merger with Itínere Infraestructuras. Other related resolutions passed included the change in its business name, taking the absorbed company s name, Itínere Infraestructuras, and in its headquarters to Bilbao. Its shareholders also ratified the issuance of 1 new share for every 15 outstanding, charged against reserves, and a new board composition following the modification of its shareholders structure. On October 1, and as agreed at Europistas General Shareholders Meeting, and following due approval by the Spanish cabinet on July 2, the AP-1 Burgos-Armiñón toll road was spun off. As a result of this transaction, Europistas, S.A. transferred the concession for the aforementioned toll road to the vehicle set up for this purpose, AP-1 Europistas Concesionaria del Estado, S.A.U., which is now the holder of this concession. The merger of Itínere Infraestructuras, S.A. into Europistas Concesionaria Española, S.A., and the block transfer by way of universal succession of all the assets of the former to the latter, was ratified by public deed on December 31, 27, taking effect as of midnight for accounting purposes.

326 324 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS As a result of the above, Europistas issued 545,629,392 new shares, represented by book entry, each with a nominal value of.49 euros and all of the same class and carrying the same rights as those already outstanding, thereby increasing its capital by a nominal amount of 267,358,42.8 euros. These shares were swapped in their entirety for the shares of Itínere Infraestructuras, S.A. owned by Sacyr Vallehermoso, S.A. Also then notarized was the change in the absorbing company s name to that of the absorbed company, Itínere Infraestructuras, S.A. In terms of financing, 27 was another highly important year for Itínere. The most noteworthy transactions were as follows: Autopistas del Atlántico (Aucalsa) was refinanced in June, with a syndicated loan lead-arranged by CECA and repayment of a bond issue and its associated swap. The refinancing totaled 3 million euros, and was arranged with a 9-month maturity so that it will fall due together with another transaction maturing in 28. Both will then be refinanced via a larger scale long-term bond issue. At the start of August the group concluded a multi-tranche 25-year financing facility for up to 85.7 million euros in connection with the shadow toll Barbanza motorway, a concession granted by the Galician regional government. The lead arrangers were Bank of Scotland and Depfa Bank. At the start of November, Itínere Infraestructuras appointed the coordinators for its IPO (a combination of primary and secondary shares) scheduled for 1H8. The global coordinators are Citigroup, JP Morgan and UBS, and in Spain, Itínere has appointed Caja Madrid, La Caixa and Banco de Santander as underwriters. It will also use Merrill Lynch as its IPO advisor. Based on the independent expert valuations prepared as the basis for the exchange ratio used to effect the Itínere-Europistas merger, the concessionaire is valued at around 11 billion euros (equity plus debt). Management has committed to a free-float of at least 1 billion euros following the IPO while the Sacyr Vallehermoso Group will retain a majority shareholding in Itínere. On December 11, Itínere Chile closed the financing for the construction of the toll motorway Acceso Nororiente in Santiago de Chile. The 25 million dollar syndicated loan was arranged by Banco de Chile. It is dominated in Chilean pesos and has a maximum maturity of 23 years. The loan is structured in a number of tranches and is secured by minimum revenue guarantees extended by the Chilean government. On December 21, the concessionaire Autopistas del Sol (Costa Rica), made up of Itínere, 35%, Globalvía, 35%, Soares da Costa, 17% and M&S DI-MS Desarrollos Internacionales, 13%, closed the financing for the toll highway linking the towns of Caldera and San José. The 247 million dollar syndicated loan, with a maximum maturity of 2 years, was lead arranged by the Banco Centroamericano de Integración Económica (BCIE) and Caja Madrid, with additional support from MIGA, a subsidiary of the World Bank. The tolls, to be collected in colons (the local currency), are indexed to the US dollar and will be adjusted to reflect fluctuations in the colon/dollar exchange rate every three months. The concessionaires are therefore hedged against any risk of depreciation by the colon. There Costa Rican government has also extended a minimum revenue guarantee for the first 17.5 years of the concession. The Concessions division, headed by Itínere Infraestructuras and Europistas, generated million euros of revenue in 27, 33.8% more than in 26, thanks once again to healthy growth in traffic across all its concessions as well as authorized toll increases. The EBIT margin was 5.32%, underlining the sound profitability of this business. Net profit reached 41.2 million euros compared to million euros in 26. EBITDA was million euros, up 32.9% on 26, giving an EBITDA margin of 76.3%. Year-end assets totaled 6,344.9 million euros, of which concession assets stood at 4,92.23 million euros. Equity, at December 31, was million euros. The concession orderbook stood at 65, million euros at year-end, locking in sustained growth and margins at this division.

327 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Performance of the Services division (Valoriza-Emmasa) Earnings momentum remained strong in 27 at the Sacyr Vallehermoso Group s services business, headed by Valoriza Gestión, S.A. The company continues to focus strategically on growth and diversification in the services area. The highlights in each of the business lines that form this unit environment, water, energy and multi-services were as follows: Environment 27 was a very good year for this division which is headed up by the Sufi subgroup. More specifically, revenue climbed 18% on 26 to 25 million euros, while net profit reached 11 million euros. EBITDA was 23.5 million euros. Over the year, the division won the following important contracts under the scope of its municipal services: Street cleaning and solid urban waste collection in the municipality of Alcalá de Henares (Madrid). This 2-year contract is worth 278 million euros. A total of 24 million euros will be invested throughout this period to upgrade the city s waste containers and renovate the waste collection vehicle fleet. Street cleaning and solid urban waste collection in the city of Soria. With a budget of million euros, this service agreement covers a population of over 35, inhabitants under an 8-year contract, extendable by a further 2 years. Cleaning and collection of urban waste in the port of La Cruz (Tenerife) under a 1-year contract worth million euros. Solid urban waste collection, transport and treatment for the community of Urgellet (Lerida), with a budget of 9.26 million euros. Vehicle clamping on public roadways and full-service management of the municipal pounds in the towns of Bilbao, Manises (Valencia), Getafe (Madrid), Parla (Madrid) and Puerto Llano (Ciudad Real). Cleaning and collection in the community of Montearagón (Albacete), under a 1-year contract worth 3.37 million euros. Park and garden maintenance in Ciudad Real under a 2-year contract worth 2.5 million euros. Park and garden maintenance (zone II) in Parla (Madrid) under a 2-year contract worth 1.8 million euros. Park and garden maintenance for Castro Urdiales (Cantabria) and Puerto Real (Cadiz). Sufi won the following waste treatment contracts, among others: Construction and operation of a waste treatment and energy recovery plant in Mataró (Barcelona). This 15-year concession entails total estimated investment of 44 million euros. Part of this amount, 8 million euros, will be earmarked for upgrading and adapting the existing plant, with estimated planned capacity of 14 MW. The new complex will be able to handle 19, tons a year and will service a population of over 5, in the Maresme region. Construction and operation of the Construction and Demolition Waste (CDW) plants in the town of Arganda del Rey (Madrid). The contract, awarded by the Department for Environmental Management and Development of the Comunidad de Madrid (GEDESMA), is valid for two years, extendible for another two, and entails investment of 7.7 million euros for construction and million euros for operation. The plant will have annual capacity to treat 45, tons and will service a population of 35,. Construction design and execution of the urban waste transfer station in the town of San Sebastián de los Reyes (Madrid) for a budgeted 2.78 million euros. In environmental services, the noteworthy contract wins were the following: Underground burial of the solid urban waste collection containers in the towns of Malaga, San Fernando (Cadiz),

328 326 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS San José de Valderas (Madrid), Alcorcón (Madrid) and Fuenlabrada (Madrid), a contract worth 8.4 million euros. Upgrade of the Las Calandrias (Jerez) plant and the Berrueco (Cadiz) landfill for Empresa de Gestión Medioambiental, S.A. (EGMASA), a 2.5 million euro contract. Environmental recovery and hydrological upgrade work at the Carvajal stream (Malaga), a 1.4 million euro project for the Andalusian Water Agency. Landscaping work along the widened section of the A-334 between Fines and Albox (Almeria) for Gestión de Infraestructuras de Andalucía, S.A. (GIASA), a 1.2 million euro contract. Reconditioning of the forest area called Cuña Verde along O Donell street for the town council of Madrid, for 98 thousand euros. Enhanced assess to the Orellana dam (Badajoz) as part of an 86 thousand euro project for the Council for Agriculture and the Environment of the Extremadura regional government. Lastly, in Portugal, local subsidiary Hidurbe won the following contract: Construction, operation, maintenance and operation of the Covilha biomass station (Portugal). Forecast revenue over the lifetime of this contract is 14 million euros. Water The Sacyr Vallehermoso Group operates in the water management business through Valoriza Agua. At year-end 27 it provided integral water management services to 2.6 million people in Spain, Portugal and Brazil (this service is provided through AGS outside Spain), supplying more than 184 cubic hectometers of water a year. Valoriza Agua is one of the leading water management companies in Spain with a portfolio of contracts, in Spain and abroad, worth in excess of 5.8 billion euros. Noteworthy activities include the 25-year concession to manage the end-to-end water cycle in the city of Santa Cruz de Tenerife, through its associate Emmasa, serving a population of 22, with daily consumption of 55, cubic meters. The facilities managed in Santa Cruz include a seawater desalination plant that produces 21, cubic meters of fresh water every day. Valoriza Agua also owns 33% of Emalsa, the company that manages the integral drinking water distribution cycle in Las Palmas de Gran Canaria. Emalsa supplies more than 4, people and has, among other facilities, a seawater desalination plant with daily output capacity of 8, cubic meters. Valoriza Agua also manages the integral water cycle in Alcalá de Henares (Madrid). This division won the following noteworthy contracts in 27: Sewage system cleaning and inspection in the city of La Coruña, for a budgeted 2 million euros. Valoriza leads the winning consortium for the construction and operation of the water supply and treatment infrastructure in the town of Pioz (Guadalajara) under the Special Infrastructure Plan. The project has an estimated budget of 8.75 million euros and the concession is for 25 years, over the life of which revenues are estimated at 75 million euros. In Portugal, AGS supplies a population of over 1.3 million across 15 towns, noteworthy among which are Setubal, Cascais, Gondomar and Barcelos. In Brazil AGS runs two concessions in Sao Paulo state. Sadyt is a Valoriza Agua subsidiary and a leading player in the field of desalination and water treatment. In 27 it continued its vigorous expansion both in Spain and internationally. Current developments of significance at this subsidiary include the new drinking water treatment plant in the city of Lugo, the new La Reguera waste water treatment facility in Madrid, the largest desalination plant to use reverse osmosis technology, under the umbrella of the Ministry for the Environment s AGUA program: Águilas-Guadalentín, and expansion of the Abrerá drinking water plant in Barcelona, which will have the world s largest capacity in reverse electro-dialysis (RED): 2, cubic meters a day. Sadyt is also the leading reverse osmosis player abroad, where it is currently developing projects in Algeria and Tunisia with combined daily production capacity of 5, cubic meters.

329 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 327 Energy The energy business is conducted under the Valoriza Energía brand. In 27, the Group continued to develop new engineering projects as well as the construction and management of biomass and co-generation plants. Valoriza, and its specialist subsidiary Iberese, have built over 8 co-generation plants for private sector clients with total installed capacity of 8 MW. Milestones achieved by Valoriza Energía in 27 were as follows: In June the company inaugurated an olive waste treatment and reduction cogeneration facility in Puente del Obispo (Jaén). This combined cycle plant, entailing investment of over 18 million euros, is equipped with three natural gas powered engines and has installed capacity of 24.9 MW. Construction of a similar installation was completed in Villanueva del Arzobispo (Jaén). Meanwhile construction began on the integral biomass treatment complex in Linares (Jaén). This facility is engaged in the end-to-end management of olive oil, with one section carrying out the oil extraction activities, another treating and reducing the waste via cogeneration, and the last, a biomass energy recovery plant to reuse the remaining kernels, olive pulp and other available biomass. The company signed an agreement for the construction and commissioning of the silicon, mono- and multi-crystalline wafer facility in Puertollano (Ciudad Real) for Silicio Solar SAU. The company is in the final stage of negotiations to finance a 5 MW solar farm in Lebrija (Seville). Construction of this facility is expected to begin in 2H8. Multi-services In the multi-services business, Group company Valoriza Facilities, a specialist in full-service building and facility cleaning, had an excellent year in 27, winning important contracts, including: Integral maintenance, cleaning and porter services for a number of secondary schools in Castilla La Mancha, a contract worth 17.3 million euros. Cleaning services for the San Cecilio Hospital in Granada and its associated centers, for a total budget of million euros over the two-year contract. Cleaning services for the Zaragoza town council s municipal social and cultural facilities for a value of 7.16 million euros. Cleaning, collection and transfer of waste at the Meixoeiro Hospital (Vigo). The contract is for 2 years and has a budget of 4.86 million euros. Train cleaning at the TALGO factory in Las Matas (Madrid) for a budget of 4.18 million euros under a 2-year contract. Extension of the facility cleaning services contract for the Catalan healthcare administration for a value of 3.2 million euros. Cleaning, maintenance and upkeep of the Bilbao municipal sports centers for a value of 2.75 million euros. A 2.53 million euro cleaning contract for the specialist medical clinics of Torrejón de Ardóz and Alcalá de Henares, both in Madrid. service facility maintenance for the Reina Sofía Museum (Madrid), for a total value of 2.5 million euros. Electrical and mechanical maintenance of the control buildings of Repsol YPF s technology center laboratories under a 3-year contract with a 2.2 million euro budget.

330 328 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Maintenance and upkeep of Oviedo University s buildings and installations for a value of 2.5 million euros. -service maintenance of the prison systems of Aragón, La Rioja and Navarra, a contract worth 1.7 million euros. Extension of the facility cleaning services contract for the Catalan regional government s citizen attention service for a value of 1.64 million euros. Cafestore, a Group company specializing in the operation of motorway service areas and in the management of large scale restaurants and cafeterias in public facilities, opened the following areas in 27: Quintanilla service area (right hand side), located at the 15.4 km mark of the A-52 Rías Bajas motorway, in the municipality of Quintanilla de Urz (Zamora). Agost service area (both sides) at the 696 km mark of the AP-7, Mediterranean motorway, in the municipality of Agost (Alicante). This company expects to open the following facilities in 28: The cafeteria at the Moncloa transportation hub (Madrid), which will service over 31, passengers daily. The cafeteria at the Plaza Elíptica transportation hub (Madrid), which will service over 126, passengers daily. Restaurant and cafeteria at the Parla Hospital (Madrid). Located at the heart of this hospital, managed by the Group through Itínere Infraestructuras, this facility will service the hospital staff as well as visitors and patients attending the hospital. Restaurant and cafeteria at the Coslada Hospital (Madrid). Located within the hospital, also run by Itínere, these facilities will service hospital personnel and visitors. The La Roda service area (Albacete) located along the A-3 Madrid-Valencia motorway. The Albacete service area, also on the A-3. The Pruvia service area in Asturias located on the Viastur motorway joining Oviedo and Gijón, managed by Itínere Infraestructuras, which will also operate the petrol station. The Lopidana service area (Álava) located at the 35.5 km mark of the N-1 (in both directions). Valoriza Infraestructuras is the Group company engaged in road maintenance and conservation. In 27 it won the following noteworthy contracts: Road upkeep and winter management services for the AP-68 Autopista Vasco Aragonesa Bilbao-Zaragoza toll motorway. The winning consortium is a 5/5 joint venture between Iberpistas and Valoriza Infraestructuras. This 4-year contract entails a budget of 12 million euros. Upkeep and maintenance of the AP-9 Autopista del Atlántico toll motorway for a budget of 8.9 million euros under a 3-year contract. Reconstruction of the Viella tunnel (Lérida). The project has a budget of 5.13 million euros and an execution schedule of 1 months. Upkeep and operation of the A-2 motorway stretch between kilometer marks 53.1 and The winning consortium is a 5/5 joint venture between Valoriza Infraestructuras and Stachys. The project entails investment of 4.45 million euros over a two-year execution period. Upkeep and winter road management services for the AP-1 toll motorway for a total budget 3.71 million euros over a 4-year period. Conservation work and operation of the N-141, from Bossost to the French border (Lérida), for a budget of 3.3 million euros under a 2-year contract. Upkeep and maintenance of the A Coruña-Carballo y Puxeiros-Val Miñor motorways with a budget of 3.13 million euros under a 3-year contract.

331 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 329 Road upkeep and winter management services for the A-1 Arlanzón motorway along the Santo Tomé-Burgos stretch with a budget of approx. 3 million euros under a contract estimated to last 3 years. Technical service assistance for a series of conservation initiatives on the A-92 and A-92G. The winning consortium is owned 5/5 by Grupo Valoriza Infraestructuras and Prinur. The project budget is 2.69 million euros. Upkeep services for various roads in the western region of Jaén. This contract has a budget of 2.4 million euros and the winning consortium is a 5/5 joint venture between Valoriza Infraestructuras and Prinur. The Sacyr Vallehermoso Group s Services division, which also includes management of Emmasa, a subsidiary directly owned by the Group s parent company, ended 27 with revenue of million euros, 23.6% more than in 26. Attributable profit was million euros, up 59.2%. EBITDA rose 29.8% on 26 to million euros to give an EBITDA margin of 1.8%. Total assets at year-end amounted to 1, million euros while equity was million euros, growth of 6%. Momentum in this division over the next few years is assured by an order book that, at December 31, 27, stood at 1, million. The targets for 28 and beyond are focused on the organic development of existing businesses in a bid to achieve the critical mass that will allow the division to optimize profitability in each of its business lines. That said, the Group is always watching for new business development opportunities that allow it to improve profitability and consolidate synergies with other Group activities Performance of the Property Development division (Vallehermoso) The Group s Property Development division had another good year in 27. It sold 3,27 homes, generating revenue of 1,34 million euros. The number of homes delivered was 3,687. The geographical distribution of sales contracted in 27 is as follows: northern zone 23.6%, central zone 26.9%, Catalonia 12.9%, Andalusia 15%, Levante 14.9%, Galicia 3.4%, other 3.3%. Over the year, Vallehermoso spent a total of million euros on acquiring land, raising its land bank at year-end to million square meters, including 3.8 million square meters of developable land, enough for more than 3,711 homes. Independent appraiser CB Richard Ellis valued the property assets of the Property Development division at 6,969 million euros at December 31, 27, implying unrealized gains of 2,538 million euros. Of this amount, 3,816 million euros corresponded to the land bank and 3,153 million euros to work in progress and other assets. One of the highlights at Vallehermoso in 27 was the special prize for urban development awarded by the City of Barcelona for the Pla de Palau project being developed by the company locally. Eight standalone buildings, of varying heights and outstanding quality from both the technical and design standpoints, are being erected on a surface area stretching 9,m 2 located beside the Olympic port. y integrated within their surroundings, these buildings are being built using next generation technology and stand out for the high quality of finishings and fittings. In 27 the Vallehermoso Group generated revenue of 1,4.2 million euros, growth of 12.29%. Attributable profit rose 6.33% to million euros, comfortably outperforming the guidance provided throughout the year. The division generated EBITDA of million euros, growth of 8.13% on 26, yielding an EBITDA margin of 25.5%. Cash flow generated by the sub-group was million euros, a 2.3% increase on 26. Total assets at year-end stood at 4, million euros while equity stood at million euros. Contracted sales pending recognition in the income statement at year-end amounted to 2,36.15 million euros.

332 33 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Performance of the Property Management division (Testa) Financially, 27 was also a very good year for the Testa Group, which is responsible for Sacyr Vallehermoso Group s Property Management division. Early in 27, Testa signed a deal to lease one of its most emblematic Madrid buildings to the L Oréal Spain cosmetics group. The building on calle Josefa Valcárcel is a new-build and has 2,m 2 of floor space across six floors. It also has the latest climate control and noise insulation technology and is equipped with solar panels in line with the company s policy on the environment, health and safety. The building is currently being refurbished and L Oréal expects to move in all its Spanish operating divisions during the early part of 28. By bringing its workforce into one building the company hopes to improve efficiency. The building is located in one of the best connected areas of Madrid. It is also surrounded by parks and gardens and a wide range of additional services such as shops, hotels, restaurants and schools. In May, as part of the reorganization of the Group s operational structure, Testa transferred all its hospital investments to Sacyr Vallehermoso, S.A. These comprised a 6% stake in Parla Hospital, another 6% holding in Hospital del Noroeste (Coslada) and a 2% stake in Majadahonda Hospital. That same month, these investments were transferred to Itínere Infraestructuras in subscription for a capital increase. Since that date, the hospital concession business is operated by Itínere Infraestructuras. Construction of the Sacyr Vallehermoso tower in the Cuatro Torres Business Area in Madrid reached its highest point on July 3. The building, which is owned by Testa, is 236m 2 high, making it the group s tallest building, a feat celebrated by over 5 people congregated in a specially erected marquee. Guests at the event included the President of the regional government of Madrid, Esperanza Aguirre, and the capital s mayor, Alberto Ruiz-Gallardón. Chairman Luis del Rivero and the building s architect, Carlos Rubio Carvajal, spoke on behalf of the Sacyr Vallehermoso Group. The celebration concluded with a light sshow on the building and a cocktail party. Located in Madrid s new exclusive Cuatro Torres Business Area (CTBA), the Torre Sacyr Vallehermoso 56 storeys are now being equipped with fittings and furnishings for use as hotel and office space. The five-star hotel will be the highest in Europe, with the topmost of the 5 rooms on the 33rd floor. Services will include a spa, swimming pool and restaurant and will come into use in mid-29. The hotel will be managed by specialist company Hotusa which has already signed the pertinent lease. The remaining storeys (from 34 to 56) will be used as office space. Testa is currently looking for tenants. In October, Testa sold the senior citizen home it managed in Zaragoza to the Euroresidencias group. The deal entailed the exercise of a put option written in 22 with Euroresidencias, a company specialized in the management of geriatric residences, generating income of 11.7 million euros. In December, in accordance with the company s strategy of rotating mature assets, two of the shopping centers managed by Testa were sold: Los Fresnos, in Gijón, and Lakua, in Vitoria. The sale raised a total of 65 million euros, which will go to fund new investment projects. Testa owns 1,543,165m 2 of rental assets which in 27 generated a total of million euros in rental income. Of total rental income, 66% is earned from office space (169.5 million euros), 15.3% from shopping centers (39.4 million euros), 6.3% from hotels (16.3 million euros) and the remaining 12.4% (31.7 million euros) from rental of industrial premises, housing, senior citizens homes and car parks. The average occupancy rate across all buildings was 98.5%, a.9% improvement on 26, while average annual rental

333 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 331 income per occupied square meter was 14.1 euros, a 2.1% increase on 26. In the office market, Testa owns 62,749m 2 and 9,69 parking spaces, mainly in Madrid (333,881m 2 with 5,737 parking spaces) and Barcelona (15,979m 2 and 1,648 parking spaces). Group company Gescentesta was set up in 25 to undertake management of Testa s six shopping centers, plus those belonging to the real estate investment funds also managed by the division. These are located in various Spanish cities. Gescentesta manages a total of 27,647m 2 and 982 retail units, providing a wide range of retail, leisure and restaurant services. In residential letting, Testa manages a stock of 1,355 properties and 1,137 parking spaces, providing a total of 14,83m 2 of space, mainly in Madrid and its suburbs. Testa s nine hotels span a total floorspace of 85,674m 2 and 1,56 rooms. These are all high class establishments, fully equipped, and classed as four- or five-star hotels. They are all leased out to top class hotel management chains. The Testa Group generated revenue of million euros in 27, up 5% on 26. Attributable profit rose 9.3% to million euros. The EBIT margin was 62.7%, underlining the high profitability of this division. EBITDA surged 1.3% to million euros, leaving an excellent EBITDA margin for the division of 79.8%. Cash flow generated by the sub-group was million euros, a 14.7% increase on 26. Total assets at year-end 27 stood at 3,858.7 million euros and equity was 1, million euros. The property assets of the Testa Group were valued by independent consultant CB Richard Ellis at 4,725 million euros, a 2.9% increase on 26, implying unrealized gains of 1,778.5 million euros, 16.11% more than at year-end GEOGRAPHICAL MARKET The Sacyr Vallehermoso Group is present, through its subsidiaries, on all continents. In 27, it continued to consolidate its presence in countries where it is already established such as Chile, Portugal, Italy, France, Ireland, Costa Rica, Brazil, Algeria, etc. The Group also pursued its firm policy of internationalization and diversification, seeking business opportunities in new markets. These included the global presence brought by the Group s stake in leading energy company Repsol YPF which, as we explain above, has a strong presence throughout the Americas, Africa, Europe and Asia. Last year, and under the umbrella of Sacyr Vallehermoso s international expansion policy, the growing prominence of the group s business in Ireland was noteworthy. Various Group companies including Itínere, Sacyr, Somague, etc., won important contracts on the island. Below we list some of the highlights: In March 27, the definitive contract for the design, construction, financing and management of the N-6 Galway-Ballinasloe motorway in Ireland was signed. The winning consortium, made up of Itínere (45%), FCC (45%) and local partner PJ Hegarty (1%), was selected preferred bidder by Ireland s National Roads Authority (NRA) on July 24, 26. This project falls under the umbrella of the country s strategic west-east corridor devised to reduce point to point travel times and to boost development of the central and western regions of Ireland. The project entails investment of over 35 million euros of which 288 million euros will be earmarked for the build. The concession runs for 36 years, extendable to 4. The toll dual carriageway (in both directions) will stretch 56km between Galway and Ballinasloe. The scheme includes a 7km link with the Loughrea bypass in addition to 32km of access roads. The scheme additionally entails 26 overpasses, 3 rail crossings, one crossing over the river Suck, 4 linking

334 332 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS roads, at Glennascaul, Athenry, Carrowkeel and West Ballinasloe and a toll plaza close to Cappataggle. Also in March, the consortium made up of Itínere, Global Vía and PJ Hegarty was selected preferred bidder in the tender for the design, build and management of the M-5 Dublin ring road. This 35-year concession entails total estimated investment of 4 million euros. This scheme spans 41km of roadway linking the north city and M1 junctions and N11 to the south city junctions. The project initiatives include the upgrade of approximately 24km of the existing two lane carriage-way to three lane standard between the Ballymount and Sandyford junctions. Somague, Portugal s leading construction company, was once again ranked the country s biggest winner of civil engineering contracts. It lifted significant contracts tendered by both the central Portuguese administration and by other public and private organisms, underpinning ongoing geographic expansion. Specifically, the main tenders won in Portugal were: Construction of the world s largest aquaculture facility for Pescanova. The budget for this project is million euros under an execution schedule of 27 months. The facility is located at the south of Playa de Mira and will have a surface area of 453,22m 2. The fish farm will be engaged in intensive fish fattening and will have annual output capacity of 7, tons, 99% of which will go to EU countries. Construction of a new cogeneration combined cycle plant for Sociedade Portuguesa de Cogeraçao Eléctrica, S.A. (SPCG). The winning consortium is a 5/5 joint venture between Somague and the MECI. This project, entailing estimated investment of 65 million euros, will be installed in the Portucel complex in Setúbal. It will enable capacity increases at the new paper factory of Portuguese group, Portucel Soporcel. The facility will be equipped with two gas and one steam turbine. Construction of a fast line in the city of Câmara de Lobos (Madeira Island) for a total budget of million euros. Rail link to the Aveiro port. With a 27.8 million euro budget, this project will link the port with the Gafanha bridge. This projects forms part of the Aveiro port authority s plan to upgrade the facility in light of annual cargo growth over the last ten years in excess of 4%. Construction of a new road link between Vasco Gil and Fundoa on Madeira Island. The budget is 2.98 million euros. Urban development of the Troia Resort complex with a budget of 2.56 million euros; this complex is located in Bahía de Troya (Costa de la Plata). With a surface area of 44 hectares, the complex will comprise 289 apartments, golf courses, a casino and a congress center. Civil engineering work for the Pego CCGT with a budget of 2.8 million euros. Design and construction of the sports stadium for Oporto Football Club, with a budget of million euros. Refurbishment of the Parque das Nações marina in Lisbon with a budget of 9.11 million euros. Outside Portugal, Somague continued to make significant contract wins in all countries where it has a presence, including Spain, Ireland, Angola and Cape Verde. Specifically, in 27, the company continued to grow in Ireland where it was awarded the following concessions: Design and construction of the N7 motorway between Castletown and Nenagh. This project, with a budget of 143 million euros has an execution timeframe of 14 months. The winning consortium is composed of Somague (6%) and local partner Bowen (4%). This 36.15km stretch of road crosses the Ollatrim river and the existing N7. Among other initiatives, this project entails 23 bridges, three river crossings, 16 overpasses and 17 underpasses. Construction of Line B1 of the Dublin light rail system (LUAS). The winning consortium is made up of Somague (75%), Sacyr (5%) and Bowen (2%). The budget for this 7.5km line running between the neighborhoods of

335 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 333 Sandyford and Cherrywood, in south country Dublin, is 71 million euros. The construction work will last 32 months. This is the first of seven planned extensions to the existing light rail network, which places Somague in a unique position vis-à-vis upcoming concessions expected to total around 5 million euros. Subsequently, through its associate Neopul, Somague was awarded additional contracts for the construction of platforms, installation of overhead wires and signaling, etc. for a further million euros. Construction of the M-5 ring road. Somague participates in the ICON consortium, made up of Itínere Infraestructuras, FCC, and local partner PJ Hegarty, for the construction of this ring road. Somague is also winning important contracts in Angola. A number of contracts are currently out to tender, notably infrastructure upgrade works. The country is working to rehabilitate the bulk of the main road network as well a numerous bridges and railroads. This oil and diamond rich nation is registering GDP growth rates among the highest in the world. Noteworthy contract wins in 27 include: Construction of the Institute of Scenic Arts for the Ministry for Culture in Luanda. The project has a 15.3 million euro budget and a schedule of 16 months. Construction of private school, also in Luanda, for million euros. Rehabilitation and construction of the water supply system for the city of Huambo for a total of million euros Extension of the contract to finish the Girassol Clinic for Sonangol. The contracted 9.85 million euros of works contracted will enable completion of this hospital, also built by Somague. Refurbishment work on the Angolan central bank s headquarters in Luanda with a budget of 6.59 million euros. Construction of 58 new homes in the Morro Bento Condominium, with a budget of 6.6 million euros. In Cape Verde, where Somague has a long-standing presence, the company won a few contracts, noteworthy among which is the Praia-Sto. Domingos relief road with a budget of 8.62 million euros. Somague is also present in Spain, through several consortia with Group companies set up to build rail infrastructure, homes, etc. The most important single contract won last year is the construction of the Dolce Vita shopping center in La Coruña. With a budget of 24.8 million euros, the project entails the construction of 18 shops over a 62,m 2 surface area. The complex will also have restaurants, swimming pools and a health club, among other facilities. Also last year, Neopul, Somague s subsidiary specialized in rail works, pre-qualified for the most important rail infrastructure project in Scotland, the Airdie-Bathgate Rail Link. The project entails the improvement of the line (double-tracking and catenary) running between Edinburgh and Glasgow and the reinforcement of energy supply. The project budget is 1 million euros and is considered the most ambitious project of the last 5 years. The work will be financed by governmental agency Transport of Scotland while Network Rail, the owner and operator of Britain s rail infrastructure, will supervise the entire process. Somague generated revenue of million euros and profit after tax of 7.51 million euros in 27. EBITDA was 41.4 million euros, an EBITDA margin of 5.7%. Yea-end assets totaled million euros while equity stood at million euros. Continued business momentum at Somague is underpinned for the coming years by a construction order book of million at year-end 27. Meanwhile Itínere Chile yet again consolidated its position as the leading concessionaire in the country. Total committed investment at year-end stood at over 1,6 million euros and it operated over 62 km of motorways. The following roads are already operational: Concesiones del Elqui ( km of roads between Los Vilos and La Serena), Concesión de Los Lagos (Río Bueno to Puerto Montt, 136 km), Ruta 68 motorway (between Santiago and Valparaíso, 19 km) and the

336 334 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS Central Coast Road Network (between Cartagena and Algarrobo, 72 km). At the beginning of 28 Itínere Chile inaugurated the first stretch (the Poniente stretch), 7.7 km in length, of the Northeast Santiago access motorway which runs from the Avenida El Valle in the Chicureo region to kilometer 21 of Ruta 5 Norte (Panamericana). This new road will become the fifth urban motorway in Santiago, Chile. When completed and fully open to traffic, at the end of 28, it will stretch 21.5km at total investment of over 16 million euros. It will enable faster communications between the east and northern regions of the city, benefiting a population of over 5,. It will also give a significant boost to the future development of the Chacabuco Valley, opening up new urban development areas for the city of Santiago. Noteworthy works completed include three tunnels built to cross the Manquehue I, Manquehue II and Montegorgo hills, five junctions and three river crossings: Quebrada El Salto, 21m in length on support pillars rising 15 and 19m tall, Bosques de Santiago 27m long on 2- and 46m tall pillars, and Las Canteras, running 15m long. Itínere Chile is also in the process of bidding for two new toll motorways. The first is the Vallenar-Caldera section of the Ruta 5 Norte motorway, an existing 411km motorway, for an estimated investment of 3 million dollars; the second is the 9km Coronel-Tres Pinos stretch of the Ruta 16 motorway entailing investment of 457 million dollars. Additional new motorway projects in Chile worth over 1 billion dollars are also under study. Two of these concessions correspond to initiatives proposed by Itínere to the Chilean government and which have been declared of public interest to the country: the concession for Ruta 5 South Puerto Montt- Pargua, a 54 km stretch with an estimated investment of 163 million dollars and the 73 km Concepción-Cabrero motorway with estimated investment of over 336 million dollars. The Itínere Chile Group ended 27 with revenue of 7.74 million euros and profit after tax of million euros. EBITDA was million euros, leaving an EBITDA margin of 87.8%. Total assets at year-end amounted to 1,35.84 million euros, while equity stood at million euros. Sacyr Vallehermoso plans to continue to expand abroad in the coming years, with a presence in all countries tendering major infrastructure works and other compelling concession projects. As described in detail in the section on the environment in the motorway concession sector, Itínere is currently awaiting the outcome of several tenders in Portugal, Italy, the US and Chile and plans to present bids in the multiple projects being out to tender in countries such as Brazil, Ireland and Canada. Sacyr will be at Itínere s side in all these countries as contractor for the concessions won by Itínere, in addition to continuing to seek new projects on a standalone basis or in partnership with its associates. This is the formula used to partake of the ambitious expansion project for the Panama Canal, one of the world s largest ever planned civil engineering projects. In December Sacyr, in a consortium comprising Somague, Jan de Nul, Impregilo and Panamanian local partner Cusa, was shortlisted for this tender for the construction of a third set of locks. With an estimated budget of 3,8 million euros, this project, expected to take 7 to 8 years, is slated for inauguration in 215. The four consortiums shortlisted during this initial phase will present their technical and economic bids for the project in summer 28 and the contract will be definitively awarded in December of this year. The Group also has high expectations for Libya. More specifically, in December, Sacyr Vallehermoso and local state company, the Libyan Company for Development and Investment, set up a joint venture to participate in the ambitious infrastructure program planned for this African nation. With an estimated spend of over 5 billion euros, this agreement places the Group in a unique situation for participating in this program which entails works for airports, ports, roads and hydraulic infrastructure, among other initiatives.

337 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS TREASURY SHARES At December 31, 27, the parent company held 1,459,743 treasury shares, equivalent to.5128% of its share capital. The average price paid was 36.4 euros per share. Having started the year with no treasury shares, throughout 27 it acquired 2,634,191 and sold 1,174,448. At the end of 27, Sacyr Vallehermoso s shares closed at 26.6 euros, 4.89% lower than the year-earlier figure. 4. ADDITIONAL INFORMATION: ARTICLE 116 OF THE SECURITIES MARKET LAW a) The structure of capital, including securities which are not admitted to trading on a regulated market in a Member State, where appropriate with an indication of the different classes of shares and, for each class of shares, the rights and obligations attaching to it and the percentage of total share capital that it represents In accordance with Article 5 of the company s bylaws, share capital amounts to 284,636,213 euros, represented by 284,636,213 ordinary shares with a nominal value of 1 euro each in a single class and series. All shares are fully paid in. The Company has no securities convertible into shares in issue. b) Any restriction on the transfer of securities The bylaws do not stipulate any restrictions on the transfer of shares, notwithstanding the regulations explained below. As a listed company, the acquisition of certain significant shareholdings must be disclosed to the issuer and to the CNMV, the Spanish securities market watchdog, under the terms of Article 53 of the Securities Market Law 24/1988, Royal Decree 1362/27 and CNMV Circular 2/27, which set the first disclosure threshold at 3% of the capital or voting rights. Again as a listed company, the acquisition of 3% or more of the company s capital or voting rights triggers the obligation to mount a takeover bid in accordance with Article 6 of the Securities Market Law 24/1988. c) Significant direct and indirect shareholdings Direct shareholdings Indirect shareholdings Total No. No. No. No. voting Shareholder shares % shares % shares % rights Juan Abelló Gallo ,465,284 (1) ,465, ,465,289 José Manuel Loureda Mantiñán ,426,82 (2) ,427,124 Sofip, Sociedades Gestora de Participacoes Sociais, S.A ,52,215 (3) ,52, ,52,215 Luis del Rivero Asensio ,129,28 (4) ,129, ,129,441 Manuel Manrique Cecilia ,995,772 (5) ,995, ,995,985 Juan Miguel Sanjuán Jover 2. 9,916,169 (6) ,916, ,916,369 Participaciones Agrupadas, S.R.L. 22,768, ,768, ,768,737 Corporación Caixa Galicia, S.A. 14,231, ,231, ,231,811 Mutua Madrileña Automovilista 14,25, ,25, ,25, Disa Corporación 17,2,566 6, ,2, ,2,566 (1) Mr. Juan Abelló s indirect shareholding is done through Nueva Compañía de Inversiones, S.A. (5 shares) and TORREAL, S.A. (28,465,284 shares). (2) Mr. José Manuel Loureda Mantiñán s indirect shareholding is done through PRILOU, S.L. (24,121,29 shares) and Prilomi, S.L. (14,35,512 shares). (3) Sofip s, Sociedades Gestora de Participacoes Sociais, S.A. indirect shareholding is done through Finavague, S.L. (4) Mr. Luis Fernando del Rivero Asensio s indirect shareholding is done through Actividades Inmobiliarias y Agrícolas, S.A. (17,251,586 shares) and Rimefor Nuevo Milenio, S.L. (21,877,694 shares). (5) Mr. Manuel Manrique Cecilia is done through Cymofag, S.L. (6) Mr. Juan Miguel Sanjuán Jover is done through Grupo Satocán, S.A.

338 336 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS d) Any restrictions on voting rights There are no bylaw stipulated restrictions on voting rights. e) Agreements between shareholders None at Sacyr Vallehermoso, S.A. f) Rules governing the appointment and replacement of board members and the amendment of the bylaws Appointment and removal of Directors 1. Appointment and reappointment: - Directors will be appointed at the General Shareholders Meeting or by the Board, in accordance with the Spanish Corporations Law. - The proposed appointments submitted by the Board to the General Shareholders Meeting and the decisions regarding appointments adopted by the Board by virtue of its powers of co-option must be preceded by the relevant report from the Appointments and Remuneration Committee. When the Board fails to follow the recommendations of the Appointments and Remuneration Committee it must state its reasons for so doing and record them in the minutes. - When appointing external directors, the Board and the Appointments and Remuneration Committee will ensure that the directors selected are of recognized solvency, skill and experience. - Directors will hold their post for a maximum of five years, and may be re-elected once or several times for the same tenure. - Directors appointed by co-option will remain in their posts until the date of the meeting of the first General Shareholders Meeting to which, where relevant, ratification of the appointment will be submitted. A director who terminates her/his mandate or for any other reason leaves her/his post may not work for another entity with a corporate purpose similar to that of the company for a period of two years when the Board of Directors is justified in believing that this might put the company s interests at risk. 2. Termination of appointment or removal: - Directors will leave their posts when the period for which they were appointed has expired, when they notify their resignation from the company and when the General Shareholders Meeting, under the powers granted to it by law and in the company s bylaws, so decides. - Directors must tender their resignation before the Board and formalize it, if deemed opportune, in the following cases: a) When they reach the age of 65, in the case of executive directors, although they may, in the event, continue as non-executive directors; b)when they leave the executive posts with which their appointment as a director was associated; c) When they are involved in any of the cases of conflict or prohibition provided for in applicable legislation; d)when they are seriously reprimanded by the Audit Committee for infringing their obligations as directors; and e) When their continuation on the Board could put the company s interests at risk or negatively affect the credit and reputation of the company or when the reasons for which they were appointed cease to exist (for example, when a proprietary director sells her/his stake in the company). Amendments to bylaws The procedure for amending the bylaws is governed by Article 144 of the Spanish Corporations Law, which is common to all limited companies, and requires any change to be approved by shareholders at the General Meeting with the majorities stated in Article 13 of the same law. The power to amend the bylaws is explicitly attributed to the shareholders in general meeting in Article 19 of the bylaws

339 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 337 and Article 3 of the Regulations of the Shareholders Meeting. The majorities required are those laid down by law. g) The powers of board members, and in particular the power to issue or buy back shares The Chairman and CEO of Sacyr Vallehermoso, S.A. have been delegated all powers by the Board of Directors except where such delegation is prohibited by law or under the company s bylaws and those which the Board retains under Article 38.3 of the bylaws. Shareholders voted at the General Shareholders Meeting of June 29, 27 to delegate to the Board, as permitted under Article 75 and the first additional provision of the Spanish Corporations Law, authorization for the derivative acquisition of shares of Sacyr Vallehermoso, S.A. These shares may be acquired either directly by Sacyr Vallehermoso, S.A. or indirectly through its subsidiaries by purchase, swap or any other transaction for consideration permitted by law. Shares acquired must be fully paid in. The nominal amount of shares acquired, plus any already held directly or indirectly, where appropriate, shall not exceed 5 per cent of the company s share capital at any time. The acquisition price per share shall be at least the nominal value and at most the price quoted on the Continuous Market of the Spanish Stock Exchanges at the date of acquisition. This authorization to acquire treasury shares shall last for 18 months. At the General Shareholders Meeting held on June 29, 27, the shareholders agreed to delegate in the Board the power to increase capital, currently set at 284,636,213 euros, in a nominal amount of 149,126,6 euros to 433,762,813 euros, through the issue of 149,126,6 new shares, each with a nominal value of one (1) euro, of the same class and series as those currently outstanding and represented by book entry, in order to finance the public takeover bid formulated for the acquisition of up to 62,136,83 ordinary shares of French builder EIFFAGE. To date, this agreement has not been executed by the Board. securities, including fixed-income securities convertible into existing and/or new shares in the company as well as promissory notes, preferential shares or warrants (options to subscribe for new or acquire existing shares in the company). These securities can be issued at one or several times, within a maximum period of five years from the date of the resolution s approval. At the Shareholders Meeting of June 25, 24, the Board of Directors was authorized to increase share capital in accordance with Article b) of the Spanish Corporations Law and to waive preferential subscription rights, in accordance with Article of the same law, revoking the unused portion of the authorization granted at the General Shareholders Meeting of May 1, 21. Share capital can be increased at one or several times within a maximum period of five years from the date of this Meeting. h) Significant agreements to which the company is a party and which take effect, alter or terminate upon a change of control of the company following a takeover bid and the effects thereof, except where disclosure would severely prejudice the company s interests. This exception shall not apply where the company is legally bound to disclose such information The company has no significant agreements outstanding that would take effect, be altered or terminate in the event of a change of control following a takeover. i) Agreements between the company and its board members, managers and employees providing for compensation if they are made redundant without valid reason or if the employment relationship is terminated following a takeover bid There are no agreements between the company and its corporate officers, management or employees that provide for compensation in the event of resignation or unfair dismissal or if the employment relationship is terminated following a takeover bid. At the General Shareholders Meeting of May 5, 26, the Board of Directors was authorized to issue fixed-income

340 338 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 5. MAIN RISKS AND UNCERTAINTIES FACING SACYR VALLEHERMOSO GROUP The Sacyr Vallehermoso Group is exposed to a number of risks and uncertainties. The main financial risks are as follows: Credit risk: credit risk is negligible in the Group s Construction, Infrastructure Concessions and Services divisions as the bulk of these businesses revenue comes directly from Spain s central, regional and local government bodies and those of other geographical markets where the Group is active. These public authorities pay punctually, in accordance with the terms set down in the contracts signed with them. All these entities enjoy excellent credit ratings. In the other divisions, Property Management and Property Development, credit risk is not material, as, in the case of the rental business, tenants are required to extend financial guarantees before lease agreements are executed, while in the house development business, revenues are collected in advance during the construction process, 3% of the total, while the remaining 7% is collected at delivery. Any breach of payment at that point is considered a breach of contract and the property is not delivered. For these reasons, the Group has no significant credit risk due to the high solvency of its clients and the short payment periods negotiated with them. Liquidity risk: liquidity risk, while prevailing across the Group s divisions, is negligible due to the nature and characteristics of the various collection and payment processes. Project financing is used pervasively in the case of infrastructure concessions and energy projects, whereby investment is guaranteed and financed by the cash flow generated by the projects themselves. In the construction business, the Group takes out credit lines to guarantee sufficient liquidity levels. In the rental business, liquidity it provided by the very nature of the investments undertaken and the high occupancy rates prevailing to date. Within the development business, the financing formulae used mitigate existing liquidity risk since land purchases are financed with bilateral long-term loans. Before actually building the housing developments, these bilateral loans convert into mortgages which, in turn, finance the construction process. Finally, these mortgages are assumed by the end home buyers. Occasional short-term cash surpluses are invested in highly liquid and risk-free deposits, provided this is in line with best financial management practice. Market risk: the main market risks to which the Group is exposed are: - Interest rate risk: this is the main risk to which the Group is exposed because of its borrowings from financial institutions as detailed in the notes to the financial statements A significant portion of the Group s interest-bearing loans and borrowings carry

341 ANNUAL Report 27 / CONSOLIDATED FINANCIAL STATEMENTS 339 fixed rates, mainly thanks to hedging arrangements in place such as interest rate swaps which reduce business exposure to rising interest rates. - Foreign exchange risk: it is Group policy to denominate borrowings in the same currency in which the business cash flows are denominated. This level of matching means that at present the Group is not exposed to significant exchange rate risk. One risk to note within this category is translation risk, i.e. risks arising from the translation of the financial statements of foreign operations whose functional currency is not the euro. The bulk of the company s direct foreign investment is in Chile, a country characterized by a high degree of economic, political and social stability. That said, the Group s rapid geographical expansion of recent years means that in the future it may encounter situations that give rise to foreign exchange risk. In these circumstances, it will consider how this risk can best be minimized through the use of hedging instruments under the umbrella of corporate policy. Other market risks to which the Group is exposed include: Slowdown in the real estate sector: the Group is well positioned to weather the slowdown in the real estate sector caused by weaker demand and tougher mortgage lending conditions, thanks to the property development business high level of pre-sales at year end (8,2 homes worth 2,36 million euros). Work currently in progress will enable the Group to meet the targets set for the next two years (28 and 29) even in the hypothetical instance that it does not begin work on a single other development. Risks associated with international expansion: this risk exists due to the Group s commitment to continue to enter new markets. Before making new investments, the Group conducts exhaustive and detailed analysis of the relevant target markets; these studies comprise on the ground research that can span several years. Regulatory risk: the Group s companies have to comply with several sets of regulations, general and sector specific (legal, accounting, environmental, employment, tax and data protection regulations, etc.), changes in which could either help or hurt the Group s businesses. Other risks to which the Group is exposed are: Environmental risks. Risks of damages caused by construction work. Risks related to workplace health and safety. Risks of loss of assets. The Group has adequate control systems to identify, quantify, evaluate and rectify all these risks, so as to minimize or eliminate the consequences.

342 ADDRESSES Spain International

343 AnNUAL report 27 / ADDRESSES 341