Ica 20F 2010 Annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

Commission file number: 001-11080

Empresas ICA, S.A.B. de C.V.

(Exact name of registrant as specified in its charter)


The ICA Corporation (Translation of registrant’s name into English)		United Mexican States (Jurisdiction of incorporation or organization)

Blvd. Manuel Avila Camacho 36
Col. Lomas de Chapultepec
Del. Miguel Hidalgo
11000 Mexico City
Mexico
(Address of principal executive offices)

Alonso Quintana
Blvd. Manuel Avila Camacho 36
Col. Lomas de Chapultepec
Del. Miguel Hidalgo
11000 Mexico City
Mexico
(5255) 5272 9991 x 3653
alonso.quintana@ica.com.mx
(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of each class:		Name of each exchange on which registered

Ordinary Shares Ordinary Participation Certificates, or CPOs, each representing one Ordinary Share American Depositary Shares, or ADSs, evidenced by American Depositary Receipts, each representing four CPOs		New York Stock Exchange, Inc.* New York Stock Exchange, Inc.* New York Stock Exchange, Inc.


*		Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:N/A

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:641,882,586 Ordinary Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yesþ Noo

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934.Yeso Noþ

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).YesoNoþ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filerþ		Accelerated filero		Non-accelerated filero

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAPo IFRSo Otherþ

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17o Item 18þ

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).Yeso Noþ

TABLE OF CONTENTS


	Page
Item 1. Identity of Directors, Senior Management and Advisors		3
Item 2. Offer Statistics and Expected Timetable		3
Item 3. Key Information		3
A. Selected Financial Data		3
B. Risk Factors		10
C. Forward-Looking Statements		24
Item 4. Information on the Company		25
A. History and Development of the Company		25
B. Business Overview		27
C. Organizational Structure		46
D. Property, Plant and Equipment		46
Item 4A. Unresolved Staff Comments		46
Item 5. Operating and Financial Review and Prospects		46
A. Operating Results		49
B. Liquidity and Capital Resources		70
C. Trend Information		81
D. Off-Balance Sheet Arrangements		81
E. Tabular Disclosure of Contractual Obligations		81
Item 6. Directors, Senior Management and Employees		82
A. Directors and Senior Management		82
B. Compensation		87
C. Board Practices		88
D. Employees		90
E. Share Ownership		90
Item 7. Major Shareholders and Related Party Transactions		90
A. Major Shareholders		90
B. Related Party Transactions		91
Item 8. Financial Information		92
A. Legal and Administrative Proceedings		92
B. Dividends		95
C. Significant Changes		95
Item 9. The Offer and Listing		95
A. Trading		95
Item 10. Additional Information		97
A. Memorandum and Articles of Incorporation		97
B. Exchange Controls		103
C. Taxation		103
D. Documents On Display		106
Item 11. Quantitative and Qualitative Disclosures about Market Risk		106
Item 12. Description of Securities Other than Equity Securities		108
Item 13. Defaults, Dividend Arrearages and Delinquencies		108
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds		109
Item 15. Controls and Procedures		109
Item 16. [Reserved]		111
Item 16A. Audit Committee Financial Expert		111
Item 16B. Code of Ethics		111
Item 16C. Principal Accountant Fees and Services		111
Item 16D. Exemptions from the Listing Standards for Audit Committees		112
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers		112
Item 16F. Changes in Registrant’s Certifying Accountant		112
Item 16G. Corporate Governance		112
Item 17. Financial Statements		116
Item 18. Financial Statements		116
Item 19. Exhibits		116
Index to Empresas ICA, S.A.B. de C.V. and Subsidiaries Consolidated Financial Statements		F-1
Index to Red de Carreteras de Occidente, S.A.P.I.B. de C.V. Financial Statements		G-1
EX-4.9
EX-8.1
EX-11.1
EX-12.1
EX-12.2
EX-13.1

PART I

Introduction

Empresas ICA, S.A.B. de C.V., or ICA, is a corporation (sociedad anonima bursatil de capital variable) organized under the laws of the United Mexican States, or Mexico. Our principal executive offices are located at Blvd. Manuel Avila Camacho 36, Col. Lomas de Chapultepec, Del. Miguel Hidalgo, 11000, Mexico City, Mexico. Unless the context otherwise requires, the terms “us,” “we” and “ICA” as used in this annual report refer to Empresas ICA, S.A.B. de C.V. and its consolidated subsidiaries. We are a holding company that conducts all of our operations through subsidiaries that perform civil and industrial construction and engineering, engage in real estate and home development activities and operate infrastructure facilities, including airports, toll roads and water treatment systems. The references herein to segments or sectors are to combinations of various subsidiaries that have been grouped together for management or financial reporting purposes.

Item 1.Identity of Directors, Senior Management and Advisors

Not applicable.

Item 2.Offer Statistics and Expected Timetable

Not applicable.

Item 3.Key Information

A. SELECTED FINANCIAL DATA

Our consolidated financial statements are prepared in accordance with Mexican Financial Reporting Standards, or MFRS (individually referred to as a Mexican Financial Information Standard(Norma de Informacion Financiera), or NIFs and Bulletins), which differ in certain significant respects from accounting principles generally accepted in the United States of America, or U.S. GAAP. Note 29 to our consolidated financial statements provides a description of the principal differences between MFRS and U.S. GAAP, as they relate to us, and a reconciliation to U.S. GAAP of our consolidated net income and consolidated equity.

We publish our consolidated financial statements in Mexican pesos.

References in this annual report to “dollars,” “U.S.$” or “U.S. dollars” are to United States dollars. References to “Ps.” or “pesos” are to Mexican pesos. This annual report contains translations of certain Mexican peso amounts into U.S. dollars at specified rates solely for your convenience. These translations should not be construed as representations that the Mexican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, U.S. dollar amounts have been translated from Mexican pesos at an exchange rate of Ps.12.38 to U.S.$1.00, the noon buying rate for Mexican pesos on December 31, 2010 as published by the Federal Reserve Bank of New York. On June 24, 2011, the Federal Reserve Bank of New York noon buying rate was Ps.11.88 to U.S.$1.00.

The term “billion” as used in this annual report means 1,000 million. Certain amounts in this annual report may not sum due to rounding.

Unless otherwise noted herein, all share, per share, ADS and per ADS data in this annual report have been adjusted for all periods presented to reflect the change in the ratio of ADSs to ordinary participation certificates, or CPOs, from 1:12 to 1:4 that we undertook in August 2007. In both cases, the ratio of ordinary shares and CPOs remained 1:1.

Our consolidated financial statements are prepared in accordance with MFRS. Significant changes in MFRS during 2010 are discussed below.

Adoption of International Financial Reporting Standards

In January 2009, the National Banking and Securities Commission (CNBV) published amendments to its Circular for Issuers to require the presentation of financial statements prepared in accordance with International Financial Reporting Standards, or IFRS, starting with the year ending December 31, 2012, but allowing for early adoption. The U.S. Securities and Exchange Commission, or the SEC, allows foreign issuers to eliminate the reconciliation of financial statements with U.S. GAAP, if the statements are prepared under IFRS.

Our Board of Directors approved the early adoption of IFRS for the year ending December 31, 2011, with January 1, 2010 as the “date of transition.” As a result, our financial statements for the year ended December 31, 2010 are our last public financial statements that will be prepared in accordance with MFRS.

The early adoption of IFRS is intended to meet international requirements in terms of disclosure and transparency of financial information, as well as to aid investors in their evaluation and comparisons with other companies in the same sector. For further information, see “Item 5. Operating and Financial Review and Prospects — Adoption of International Financial Reporting Standards.”

Cessation of Inflation Accounting under MFRS

Through the end of 2007, Bulletin B-10,Recognition of the Effects of Inflation on Financial Information, of MFRS required us to recognize certain effects of inflation in our consolidated financial statements, including by requiring us to restate financial statements from prior periods to constant pesos as of the end of the most recent period presented. The method of restatement required us to calculate a restatement factor using a weighted average rate based upon the Mexican National Consumer Price Index, or NCPI, and allowed us, under Bulletin B-15,Foreign Currency Transactions and Translation of Financial Statements of Foreign Operations, to use the inflation and foreign exchange rates of the countries in which we have foreign subsidiaries. The recognition of the effects of inflation through December 31, 2007 principally resulted in the recognition of gains and losses for inflation on non-monetary and monetary items, which were presented in the financial statements under the caption of “Restatement of inflation”. See Note 3c to our consolidated financial statements.

Effective January 1, 2008, NIF B-10,Effects of Inflation, of MFRS no longer permits us to recognize the effects of inflation unless the economic environment qualifies as “inflationary”. An environment is considered inflationary if the cumulative inflation rate equals or exceeds an aggregate of 26% over the three preceding years (equivalent to an average of approximately 8% in each year). Because of the relatively low level of Mexican inflation in recent years (4.4% in 2010, 3.6% in 2009 and 6.5% in 2008), the cumulative inflation rate in Mexico over the three-year periods preceding December 31, 2010, 2009 and 2008 did not qualify the economic environment as inflationary. Additionally, based on current forecasts, we do not expect the economic environment of Mexico or any other country where we have significant operations to qualify as inflationary in 2011. These expectations could change depending on actual economic performance.

As a result, we are presenting our 2010, 2009 and 2008 financial statements without inflation accounting. Financial information for dates and periods prior to 2008 continue to be expressed in constant pesos as of December 31, 2007. Inflationary effects included in “Excess (insufficiency) in restated stockholders’ equity” and “Monetary position result” were reclassified as retained earnings upon adoption of NIF B-10.

Effects of Inflation Accounting on U.S. GAAP Reconciliation

U.S. GAAP does not ordinarily contemplate the recognition of effects of inflation or the restatement of prior-period financial statements. However, in reconciling our net income and equity for periods prior to 2008 to U.S. GAAP, we have generally not reversed the effect of inflation accounting under MFRS, pursuant to an accommodation provided by the SEC, to permit the presentation of inflation in a company’s reconciliation from local principles to U.S. GAAP for companies in countries where local accounting principles require comprehensive price-level adjusted financial statements. There are two exceptions to this accommodation that apply specifically to us: (i) through 2007, we restated prior period financial statements using a weighted average re-expression factor that considered inflation and currency exchange rates in the countries where our foreign subsidiaries operate, in order to take into account our foreign operations, although the SEC requires that restatement of prior period financial statements be based solely on the NCPI; and (ii) through 2007, we restated our non-monetary assets of foreign origin using a specific index which represents the NCPI of the country of origin applied to the historical cost in the foreign currency, subsequently translated to Mexican pesos using the exchange rate in effect at the most recent balance sheet date; the SEC requires that restatement of non-monetary assets of foreign origin be based solely on the NCPI. The effects of both of these exceptions are included as reconciling items in our reconciliation to U.S. GAAP through December 31, 2007. See Note 29 to our consolidated financial statements.

Other Significant Changes to MFRS in 2010

Beginning January 1, 2010, we adopted Interpretation to Financial Information Standard (INIF) No. 17,Service Concession Agreements, which is a supplement to Bulletin D-7,Construction and Manufacturing Contracts for Certain Capital Assets. INIF 17 provides guidance with respect to the accounting treatment of infrastructure built by a concessionaire or acquired from a third party with the purpose of complying with a service concession contract, as well as to existing infrastructure to which an operator is provided access in order to comply with such contract. Prior to the enactment of INIF 17, we supplementally applied, pursuant to NIF A-8,Supplemental Standards, International Financial Reporting Interpretations Committee Interpretation (IFRIC) No.12,Service Concession Arrangements. As the guidance established in INIF 17 is substantially converged with that of IFRIC 12, there were no significant effects of adoption of INIF 17 on our consolidated financial statements.

Also effective January 1, 2010, we adopted the following standards, which had no material effect on our consolidated financial statements: NIF C-1,Cash and Cash Equivalents, Improvements to NIF 2010, including NIF B-1,Accounting Changes and Corrections, NIF B-2,Statement of Cash Flows, NIF B-7,Business Acquisitions, NIF C-6,Property, Plant and Equipment, NIF C-7,Investment In Associated Companies and Other Permanent Investments, and NIF C-13,Related Parties.

Financial Data

The following tables present our selected consolidated financial information for or as of each of the periods or dates indicated. This information should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated financial statements, including the notes to our consolidated financial statements.


	2010			2010			2009			2008			2007			2006
	(Millions of
	U.S. dollars)(1)			(Thousands of Mexican pesos, except per share, per ADS and inflation data)
Income Statement Data:
*MFRS:*
Total revenues	U.S.$	2,824		Ps.	34,965,264		Ps.	30,871,362		Ps.	22,751,022		Ps.	18,145,502		Ps.	18,584,221
Gross profit		405			5,013,815			4,544,343			3,877,748			3,090,758			2,833,186
Selling, general and administrative expense		202			2,502,524			2,098,924			2,091,648			1,800,191			1,400,666
Operating income		203			2,511,291			2,445,419			1,786,100			1,290,567			1,432,519
Other expense (income), net(2)		13			163,723			(687,423	)		(95,265	)		(36,207	)		18,873
Financing cost, net		77			958,964			767,454			540,957			451,827			208,108
Income tax expense(3)		22			264,469			1,367,500			302,026			1,883,470			337,641
Share in (income) loss of affiliated companies		(6	)		(79,432	)		114,256			432,607			(10,828	)		(22,438	)
Consolidated net income (loss)		97			1,203,567			883,632			605,775			(997,695	)		890,336
Net income (loss) of noncontrolling interest		24			294,748			288,299			211,670			(79,069	)		209,471
Net income (loss) of controlling interest		73			908,819			595,333			394,105			(918,626	)		680,864
Basic and diluted earnings (loss) per share of controlling interest(4)		0.11			1.40			1.05			0.79			(2.13	)		1.68
Basic and diluted earnings (loss) per ADS of controlling interest(4)		0.45			5.61			4.21			3.17			(8.50	)		6.74
Weighted average shares outstanding (000s):
Basic and diluted(4)		—			648,183			565,644			497,263			432,198			404,182
*U.S. GAAP:*
Total revenues		2,269			28,092,039			24,632,462			19,026,389			17,571,289			18,064,385
Operating income(5)		201			2,491,252			2,105,396			1,759,786			1,210,296			1,467,234
Consolidated net income (loss)		124			1,531,251			405,007			(1,306,658	)		(1,205,283	)		644,280
Net income (loss) of noncontrolling interest		24			292,806			294,280			(228,707	)		(204,695	)		160,090
Net income (loss) attributable to ICA		100			1,238,445			110,727			(1,077,951	)		(1,000,588	)		484,190
Basic earnings (loss) per share from net income of controlling interest		0.15			1.91			0.20			(2.17	)		(2.32	)		1.20
Basic earnings (loss) per ADS from net income of controlling interest(4)		0.62			7.64			0.80			(8.67	)		(9.26	)		4.79
Diluted earnings (loss) per share from net income of controlling interest		0.15			1.91			0.20			(2.17	)		(2.31	)		1.20

Diluted earnings (loss) per ADS from net income of controlling interest (4)		0.62			7.64			0.80			(8.67	)		(9.25	)		4.79


	2010		2010		2009		2008		2007		2006
	(Millions of
	U.S. dollars)(1)		(Thousands of Mexican pesos, except per share, per ADS and inflation data)
Weighted average shares outstanding (000s):
Basic(4)		648,183		648,183		565,644		497,263		432,198		404,182
Diluted(4)		648,187		648,187		565,691		497,598		432,849		404,997
Balance Sheet Data:
*MFRS:*
Total assets	U.S.$	6,056	Ps.	74,988,459	Ps.	64,745,305	Ps.	49,532,108	Ps.	33,945,802	Ps.	35,918,396
Long-term debt(6)		2,130		26,369,617		18,795,449		13,924,518		5,990,094		7,582,276
Capital stock and additional paid-in capital		1,295		16,036,332		15,950,988		12,956,267		13,772,959		7,889,373
Total stockholders’ equity		1,742		21,574,120		20,766,059		17,433,074		18,205,722		14,161,400
*U.S. GAAP:*
Total assets		5,516		68,305,311		59,432,236		44,511,933		34,446,645		34,738,561
Long-term debt(6)		1,937		23,987,037		17,508,404		13,469,371		5,990,094		7,546,634
Capital stock(7)		1,295		16,036,332		16,064,939		18,486,005		17,778,322		17,059,623
Total equity(7)		1,591		19,702,186		18,603,729		14,926,722		17,402,380		12,987,360
Other Data:
*MFRS:*
Capital expenditures		316		3,908,376		3,616,932		7,437,163		5,354,396		1,090,406
Depreciation and amortization		133		1,649,836		1,273,307		919,615		666,101		819,950
Inflation Data:
Change in consumer price index		—		4.40		3.57		6.52		3.75		4.05
Restatement factor		—		—		—		—		4.24		4.49


(1)		Except share, per share, per ADS and inflation data. Amounts stated in U.S. dollars as of and for the year ended December 31, 2010 have been translated at a rate of Ps.12.38 to U.S.$1.00 using the Federal Reserve Bank of New York noon buying rate on December 31, 2010. See “Exchange Rates.”

(2)		Includes for 2010 principally losses on sales of equipment of Ps.70.7 million, a provision for the restructuring of Rodio Kronsa of Ps.64.8 million and Ps.29.4 million of statutory employee profit sharing expense. Includes for 2009 principally the reversal of an impairment on long lived assets of Ps.681 million. Includes for 2008 principally gains on sales of equipment of Ps.10.6 million and a gain on contract settlement of Ps.40.5 million. Includes for 2007 Ps.68 million for the reversal of an uncollectible account receivable from the sale of an investment, Ps.20 million of statutory employee profit sharing expense and Ps.2 million of other expense related to value-added tax reversals net of gains on sales of investments. For 2006, includes Ps.37 million from reversals of taxes for unconsolidated entities, Ps.12 million of gains on sales of investments and Ps.11 million of other income, offset by Ps.147 million of statutory employee profit sharing expense.

(3)		In 2009, the Mexican Tax Authorities issued reforms to the Mexican Income Tax Law, which became effective on January 1, 2010. As a result of the enactment of these reforms, in 2009 we recognized tax liabilities of Ps.2,791 million, a deferred tax asset of Ps.1,615 million, a charge to results of Ps.332 million and a charge to accumulated results of Ps.844 million. During 2010, the Mexican Tax Authorities issued certain modifications to the original reforms establishing, among other things, that previously recognized obligations measured based on income tax equity accounts will become payable only upon the occurrence of certain triggering events. As a result of these modifications to the reform, we determined that a portion of the liability recognized in 2009 of Ps.844 million no longer required recognition. This liability was initially recognized in 2009 through retained earnings, as required by INIF 18. However, in 2010, reversal of the liability was recognized through results, as permitted by MFRS. During 2007, income tax expense includes the effect of a new business flat tax in Mexico. See Note 1 and Note 20 to our consolidated financial statements.

(4)		Basic earnings (loss) per share and per ADS are based on the weighted average number of shares outstanding during each period and are calculated assuming a ratio of four shares per ADS. Diluted earnings (loss) per share and per ADS are calculated by giving effect to all potentially dilutive common shares outstanding during the period. See Note 29 to our consolidated financial statements.

(5)		There are differences between MFRS and U.S. GAAP related to the classification of certain expenses recorded under “other expenses (income)” such as statutory employee profit sharing, the reversal of value-added taxes and gains and losses on sales of investments, as well as gains and losses on sale of equipment. Under MFRS, these expenses or income are treated as non-operating expenses or income and are not deducted or added back in calculating operating income, whereas under U.S. GAAP these amounts are treated as operating expenses and are deducted or added back in calculating operating income. Such amounts for 2010, 2009, 2008, 2007 and 2006 totaled Ps.164.9 million, Ps.12 million, Ps.(25) million, Ps.22 million and Ps.12 million, respectively. See Note 29 to our consolidated financial statements.


(6)		Excluding current portion of long-term debt.

(7)		From time to time, the stockholders of the Company approve the reclassification of accumulated losses (as well as a portion of the insufficiency from restatement of capital related to inflationary effects in prior years) against common stock. Such applications of losses against common stock are not appropriate under U.S. GAAP. Such difference between MFRS and U.S. GAAP does not affect total equity under U.S. GAAP, but rather reclassifies amounts among equity which are affected by such applications, including retained earnings, cumulative other comprehensive income, common stock, additional paid-in capital and the reserve for the repurchase of shares. See Note 29 to our consolidated financial statements.

The principal differences, other than inflation accounting, between MFRS and U.S. GAAP and their effects upon consolidated net income (loss) and consolidated equity are presented below. See Note 29 to our consolidated financial statements.


	Year Ended December 31,
	2010				2010			2009			2008			2007			2006
	(Millions of U.S.
	dollars)(1)			(Thousands of Mexican pesos)
Reconciliation of consolidated net income (loss):
Consolidated net income (loss) reported under MFRS	U.S.$	97			Ps.	1,203,567		Ps.	883,632		Ps.	605,775		Ps.	(997,695	)	Ps.	890,336
U.S. GAAP adjustments for:
Concession effect (IFRIC 12)		16				198,486			(237,767	)		(301,862	)		(64,070	)		(44,092	)
Bulletin B-15 effect		—				—			—			—			—			(3,160	)
Reversal of changes in income tax law recorded in equity		—				—			(844,076	)		—			—			—
Deferred income taxes		(8	)			(92,726	)		427,599			105,403			(161,351	)		(99,370	)
Deferred statutory employee profit sharing		(1	)			(15,945	)		—			—			3,441			(133,687	)
Capitalization of financing costs		(1	)			(12,019	)		8,870			(54,770	)		6,412			3,173
Restatement for inflation on foreign sourced fixed assets		—				—			—			—			—			(6,751	)
Accrual for severance payments		9				109,120			26,920			70,395			(16,452	)		11,426
Compensation cost on stock option plan		—				—			—			—			—			(1,483	)
Impairment reversal		2				24,138			(673,451	)		7,531			7,415			7,978
Reversal of compensation cost recognized in MFRS upon exercise of option		—				1,138			93			6,550			19,150			19,910
Amortization of intangible resulting from purchase method applied to acquisition of noncontrolling interest		—				(5,681	)		(5,681	)		(5,682	)		(2,133	)		—
Investment in associated companies (cost method)		—				—			(16,446	)		(9,671	)		—			—
Valuation of derivative financial instruments		1				11,011			10,752			—			—			—
Reversal of deferred gain (loss) or amortization of deferred loss on derivative financial instruments		7				87,411			824,562			(1,730,327	)		—			—
Debt issuance cost		2				22,751			—			—			—			—

Consolidated net income (loss) under U.S. GAAP	U.S.$	124			Ps.	1,531,251		Ps.	405,007		Ps.	(1,306,658	)	Ps.	(1,205,283	)	Ps.	644,280
Net income (loss) attributable to the noncontrolling interest	U.S.$	24			Ps.	292,806		Ps.	294,280		Ps.	(228,707	)	Ps.	(204,695	)	Ps.	160,090

Net income (loss) attributable to ICA	U.S.$	100			Ps.	1,238,445		Ps.	110,727		Ps.	(1,077,951	)	Ps.	(1,000,588	)	Ps.	484,190

Reconciliation of equity
Total equity reported under MFRS	U.S.$	1,742			Ps.	21,574,120		Ps.	20,766,059		Ps.	17,433,074		Ps.	18,205,722		Ps.	14,161,400
Concession effect (IFRIC 12)		(37	)			(463,813	)		(662,299	)		(424,532	)		(122,670	)		(58,600	)
Bulletin B-15 effect		—				—			—			—			—			(46,110	)
*U.S. GAAP adjustments for:*
Effect on retained earnings from:
Deferred income taxes		(161	)			(1,998,063	)		(1,905,337	)		(2,332,935	)		(2,438,338	)		(2,276,987	)
Deferred statutory employee profit sharing		(31	)			(387,749	)		(371,804	)		(371,804	)		(371,804	)		(375,245	)
Restatement for inflation on foreign sourced fixed assets		(19	)			(240,830	)		(240,830	)		(240,830	)		(240,830	)		(240,830	)
Capitalization of financing costs		(8	)			(103,887	)		(91,868	)		(100,738	)		(45,968	)		(52,380	)
Accrual for severance payments		10				118,108			8,988			(17,932	)		(88,327	)		(71,875	)
Gain on sale of foreign subsidiaries		22				270,715			270,715			270,715			270,715			270,715
Reversal of compensation cost recognized in MFRS upon exercise of option		4				51,087			49,949			49,856			43,307			24,157
Reversal of acquisition cost (gain) of noncontrolling interest		40				501,464			501,464			501,464			530,891			—
Amortization of intangible resulting from purchase method applied to acquisition of noncontrolling interest		(2	)			(19,177	)		(13,495	)		(7,815	)		(2,133	)		—


	Year Ended December 31,
	2010				2010			2009			2008			2007			2006
	(Millions of U.S.
	dollars)(1)			(Thousands of Mexican pesos)
Reversal of additional paid-in capital recognized in MFRS upon exercise of option		(4	)			(51,087	)		(49,949	)		(49,856	)		(43,307	)		(24,157	)
Impairment reversal		(66	)			(819,624	)		(843,762	)		(170,311	)		(177,842	)		(185,257	)
Investment in associated companies (cost method)		(2	)			(26,117	)		(26,117	)		(9,671	)		—			—
Debt issuance cost		2				22,751			—			—			—			—
Reversal of deferred loss on derivative financial instruments		(66	)			(818,354	)		(905,765	)		(1,730,327	)		—			—
Valuation of derivative financial instruments		11				131,273			27,715			—			—			—
Reclassification of redeemable noncontrolling interest to temporary equity		(12	)			(154,831	)		(129,895	)		(144,040	)		(162,542	)		(163,971	)
Valuation of redeemable noncontrolling interest to redemption price		(2	)			(15,676	)		(26,787	)		—			—			—
Effect on insufficiency from restatement of capital and accumulated other comprehensive income related to:
Deferred income taxes		181				2,235,643			2,235,643			2,235,643			2,235,643			2,233,892
Deferred statutory employee profit sharing		7				84,820			84,820			84,820			84,820			84,820
Restatement for inflation on foreign sourced fixed assets		18				227,554			227,554			227,554			227,554			227,554
Gain on sale of foreign subsidiaries		(22	)			(270,715	)		(270,715	)		(270,715	)		(270,715	)		(270,715	)
Adjustment for excess of additional minimum liability related to severance payments		—				4,299			4,299			4,299			4,299			17,267
Adjustment for retirement benefits, net of tax		(13	)			(149,725	)		(34,854	)		(9,197	)		(236,095	)		(266,318	)

Equity under U.S. GAAP	U.S.$	1,592			Ps.	19,702,186		Ps.	18,603,729		Ps.	14,926,722		Ps.	17,402,380		Ps.	12,987,360
Equity attributable to noncontrolling interest	U.S.$	257			Ps.	3,187,320		Ps.	3,040,550		Ps.	2,278,659		Ps.	3,278,933		Ps.	3,794,104

Equity attributable to ICA	U.S.$	1,335			Ps.	16,514,866		Ps.	15,563,179		Ps.	12,648,063		Ps.	14,123,447		Ps.	9,193,256


(1)		Amounts stated in U.S. dollars as of and for the year ended December 31, 2010 have been translated at a rate of Ps.12.38 to U.S.$1.00 using the Federal Reserve Bank of New York noon buying rate on December 31, 2010. See “Exchange Rates.”

Exchange Rates

The following table sets forth, for the periods indicated, the high, low, average and period-end, free-market exchange rate between the peso and the U.S. dollar, expressed in pesos per U.S. dollar. The average annual rates presented in the following table were calculated using the average of the exchange rates on the last day of each month during the relevant period. The data provided in this table is based on noon buying rates published by the Federal Reserve Bank of New York for cable transfers in Mexican pesos. We have not restated the rates in constant currency units. All amounts are stated in pesos. We make no representation that the Mexican peso amounts referred to in this annual report could have been or could be converted into U.S. dollars at any particular rate or at all.


	Exchange Rate
Year Ended December 31,	High		Low		Period End		Average(1)
2006		11.46		10.43		10.80		10.90
2007		11.27		10.67		10.92		10.93
2008		13.94		9.92		13.83		11.21
2009		15.41		12.63		13.06		13.58
2010:		13.19		12.16		12.38		12.62
December		12.47		12.33		12.38		12.39
2011:
January		12.25		12.04		12.15		12.13
February		12.18		11.97		12.11		12.06
March		12.11		11.92		11.92		12.00
April		11.86		11.52		11.52		11.71
May		11.77		11.51		11.58		11.65
June (through June 24)		11.97		11.64		11.88		11.81


(1)		Average of month-end rates or daily rates, as applicable.

Source: Federal Reserve Bank of New York.

In recent decades, the Mexican Central Bank has consistently made foreign currency available to Mexican private-sector entities (such as us) to meet their foreign currency obligations. Nevertheless, in the event of shortages of foreign currency, we cannot assure you that foreign currency would continue to be available to private-sector companies or that foreign currency needed by us to service foreign currency obligations or to import goods could be purchased in the open market without substantial additional cost.

Fluctuations in the exchange rate between the peso and the U.S. dollar will affect the U.S. dollar value of securities traded on the Mexican Stock Exchange (Bolsa Mexicana de Valores), and, as a result, will likely affect the market price of our American Depository Shares, or ADSs. Such fluctuations will also affect the U.S. dollar conversion by The Bank of New York, the depositary for our ADSs, of any cash dividends paid by us in pesos.

On December 31, 2010, the Federal Reserve Bank of New York’s noon buying rate was Ps.12.38 per U.S.$1.00. On June 24, 2011, the Federal Reserve Bank of New York’s noon buying rate was Ps.11.88 per U.S.$1.00.

For a discussion of the effects of fluctuations in the exchange rates between the Mexican peso and the U.S. dollar, see “Item 10. Additional Information — Exchange Controls.”

B. RISK FACTORS

Risks Related to Our Operations

Our performance is tied to Mexican public sector spending on infrastructure facilities.

Our performance historically has been tied to Mexican public sector spending on infrastructure facilities and to our ability to bid successfully for such contracts. Mexican public sector spending, in turn, generally has been dependent on the state of the Mexican economy. A decrease in public sector spending as a result of a deterioration of the Mexican economy, changes in Mexican governmental policy, or for other reasons can have an adverse effect on our financial condition and results of operations. Beginning in the second half of 2008 and due to the impact of the credit crisis and turmoil in the global financial system, the rate of awards of infrastructure projects in Mexico has been and continues to be slower than we anticipated. The Mexican government also extended the time period for certain bidding processes for the awards, in part because of the need to reevaluate the corresponding projects’ feasibility in the current economic environment. These and other delays, including of payment, can also result from changes in administration at the federal, state or local level reviewing the terms of project contracts granted by a previous administration or pursuing different priorities than the previous administration. Additionally, the Mexican government may face budget deficits that prohibit it from funding proposed and existing projects or that cause it to exercise its right to terminate our contracts with little or no prior notice. We cannot provide any assurances that economic and political developments in Mexico, over which we have no control, will not negatively affect our operations. See “— Risks Related to Mexico and Other Markets in Which We Operate — Economic and political developments in Mexico could affect Mexican economic policy and adversely affect us.”

The global credit crisis and unfavorable general economic and market conditions of recent years may negatively affect our liquidity, business and results of operations, and may affect a portion of our client base, subcontractors and suppliers.

The effect of a continued credit crisis and related turmoil in the global financial system on the economies in which we operate, our clients, our subcontractors, our suppliers and us cannot be predicted. It could lead to reduced demand and lower prices for construction projects, air travel and our related businesses. See “— Our performance is tied to Mexican public sector spending on infrastructure facilities.” In response to current market conditions, clients may choose to make fewer capital expenditures, to otherwise slow their spending on or cancel our services, to delay payments (which may in turn cause us to pay our providers more slowly) or to seek contract terms more favorable to them. Furthermore, any financial difficulties suffered by our subcontractors or suppliers could increase our costs or adversely impact project schedules.

Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers. Credit rating agencies have also become more stringent in their debt rating requirements. Continued disruption of the credit markets could adversely affect our clients’ (particularly our private sector clients’) and our own borrowing capacities, which could, in turn, adversely affect the continuation and expansion of our projects because of contract cancellations or suspensions, project delays (as delays in our supply chain can in turn affect our deliverables) or payment delays or defaults by our clients, which could result in the need to foreclose on our rights to collateral. See “—We may have difficulty obtaining the letters of credit and performance bonds that we require in the normal course of our operations.” Our ability to expand our business would be limited if, in the future, we were unable to access or increase our existing credit facilities on favorable terms or at all. These disruptions could negatively affect our liquidity, business and results of operations.

Competition from foreign and domestic construction companies may adversely affect our results of operations.

The market for construction services in Mexico is highly competitive. As a result of the integration of the Mexican economy into the global economy, we compete with foreign construction companies for most of the industrial and infrastructure projects on which we bid in Mexico and on certain civil construction projects as well. We believe that competition from foreign companies has reduced and may continue to reduce the Mexican construction industry’s operating margins, including our own, as foreign competition has driven down pricing. Furthermore, our foreign competitors may have better access to capital and greater financial and other resources, which would afford them a competitive advantage in bidding for such projects.

Foreign competition also allows sponsors such as government agencies for infrastructure construction and industrial construction projects to require contractors to provide construction on a “turnkey” basis, which increases our financial risks.

Our use of the percentage-of-completion method of accounting for construction contracts could result in a reduction of previously recorded profits.

Under our accounting policies, we measure and recognize a large portion of our revenues and profits under the percentage-of-completion accounting methodology for construction contracts. This methodology allows us to recognize revenues and profits ratably over the life of a construction contract, without regard to the timing of receipt of cash payments, by comparing the amount of the costs incurred to date against the total amount of costs expected to be incurred. The effect of revisions to estimated costs, and thus revenues, is recorded when the amounts are known and can be reasonably estimated. These revisions can occur at any time and could be material. On a historical basis, we believe that we have made reasonably reliable estimates of the progress towards completion on our long-term contracts. However, given the uncertainties associated with these types of contracts and inherent in the nature of our industry, it is possible for actual costs to vary from estimates previously made, which may result in reductions or reversals of previously recorded profits.

Our future revenues will depend on our ability to finance and bid for infrastructure projects.

In recent years we have been increasingly required to contribute equity to and arrange financing for construction projects. We believe that our ability to finance construction projects through various financial arrangements has enabled us to compete more effectively in obtaining such projects. We are currently undertaking various construction and infrastructure projects that involve significant funding commitments and minimum equity requirements. Our policy is not to bid for projects that have significant financing requirements without prior funding commitments from financial institutions. However, we cannot assure you that we will obtain financing on a timely basis or on favorable terms. The financing requirements for public construction contracts may range from a term of months to the total construction period of the project, which may last several years. Providing financing for construction projects, however, increases our capital requirements and exposes us to the risk of loss of our investment in the project. In particular, uncertainty and tightening in the global credit markets, including developments related to the global economic crisis, may adversely affect our ability to obtain financing. Our inability to obtain financing for any of these projects could have a material adverse effect on our financial condition and results of operation. Additionally, we have increasingly been required to give parent guarantees at the level of Empresas ICA, S.A.B. de C.V. as a form of credit enhancement for debt of our subsidiaries, as well as accept market disruption clauses which, if invoked, typically require a borrower to pay increased funding costs when the interest rate of a financing no longer adequately reflects the actual cost for the lender to obtain funds.

We have faced, and may continue to face, liquidity constraints.

In recent years we faced substantial constraints on our liquidity due to financing requirements for new projects. Our expected future sources of liquidity include cash flow from our construction activities, asset sales and third party financing or raising capital to fund our projects’ capital requirements. We cannot assure you that we will be able to continue to generate liquidity from any of these sources.

We continue to face large funding needs for new projects that require full or partial financing and guarantees in the form of letters of credit and continuing financing needs from our current projects. The demand for funding could adversely affect our liquidity. We cannot assure you that we will not face similar funding needs in the future. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.”

We may have difficulty raising additional capital in the future on favorable terms, or at all, which could impair our ability to operate our business or achieve our growth objectives.

In the event that our cash balances and cash flow from operations, together with borrowing capacity under our credit facilities, becomes insufficient to make investments, make acquisitions or provide needed additional working capital in the future, we could require additional financing from other sources. Our ability to obtain such additional financing will depend in part upon prevailing capital market conditions, as well as conditions in our business and our operating results, and those factors may affect our efforts to arrange additional financing on terms that are satisfactory to us. The market volatility in recent years has created downward pressure on stock prices and credit capacity for certain issuers, often without regard to those issuers’ underlying financial strength, and for financial market participants generally. We have increasingly been required to give parent guarantees at the level of Empresas ICA, S.A.B. de C.V. as a form of credit enhancement for debt of our subsidiaries, as well as accept market disruption clauses which, if invoked, typically require a borrower to pay increased funding costs when the interest rate of a financing no longer adequately reflects

the actual cost for the lender to obtain funds. If adequate funds are not available, or are not available on acceptable terms, as could be the case if current levels of market disruption and volatility continue or worsen, our ability to access the capital markets could be adversely affected, and we may not be able to make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges. We could also seek to partner with competitors with more access to cash or financing, which could build our competitors’ experience and weaken our competitive position relative to them.

Under our construction contracts, we are increasingly required to assume the risk of inflation, increases in the cost of raw materials and errors in contract specifications, which could jeopardize our profits and liquidity.

Historically, a majority of our construction business was conducted under unit price contracts, which contain an “escalation” clause that permits us to increase unit prices to reflect the impact of increases in the costs of labor, materials and certain other items due to inflation. These unit price contracts allow flexibility in adjusting the contract price to reflect work actually performed and the effects of inflation. In recent years, however, our construction contracts have been increasingly fixed price or not-to-exceed contracts, under which we are committed to provide materials or services at fixed unit prices, including our two major raw material requirements — cement and steel. Fixed price and not-to-exceed contracts shift the risk of any increase in our unit cost over our unit bid price to us. See “Item 4. Information on the Company — Business Overview — Description of Business Segments — Construction — Contracting Practices.”

In the past we experienced significant losses due to risks assumed by us in fixed price and not-to-exceed contracts, and we may face similar difficulties in the future. For example, a number of our construction contracts specify fixed prices for various raw materials and other inputs necessary for the construction business, including steel, asphalt, cement, construction aggregates, fuels and various metal products. Increased prices of these materials can negatively affect our results if we are unable to transfer the risk to the client. Under the terms of many of our fixed price contracts, we have been required to bear the cost of the increases in the cost of raw materials from the time we entered into the contracts, which has adversely affected our results of operations and liquidity. We have not entered into long-term purchase contracts for cement or steel; instead, we have relied on purchases from various suppliers. Prices for various steel products increased significantly between 2003 and 2008, we believe due in part to a decrease in production because of the global financial crisis, but stabilized beginning in 2009 and continuing through 2010. Although we seek to negotiate for the recovery of the increase in the cost of raw materials in our contracts whenever possible, we cannot assure you that we will be successful in recovering any portion of these cost increases, which will negatively affect our operating margins.

We may also experience other construction and administrative cost overruns, including as a result of incorrect contract specifications that we are unable to pass on to the customer. We expect that, because of conditions attendant to financing arrangements, future concession-related, infrastructure and industrial construction contracts may not permit an adjustment of the contract price for additional work done due to incorrect project specifications and, as a result, our operating margins and liquidity would be negatively affected. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Construction — Civil Construction.”

Our participation in projects outside Mexico involves greater risks than those typically faced in Mexican projects and could jeopardize our profits.

To date, our foreign projects in Latin America have generated mixed results. We have experienced significant losses on projects in Latin America in the past. As a result of these losses, we have sought to be more selective in our involvement in international operations. However, there can be no assurance we will be successful in these efforts. Based on the number of international contracts currently in place and past experience as well as our evaluation of new opportunities, there is a risk that future profits could be jeopardized.

Our operations in markets outside of Mexico expose us to several risks, including risks from changes in foreign currency exchange rates, interest rates, inflation, governmental spending, social instability and other political, economic or social developments that may materially reduce our net income.

Our hedging contracts may not effectively protect us from financial market risks and may negatively affect our cash flow.

Our activities are exposed to various financial market risks (such as risks related to interest rates, exchange rates and prices). One strategy we use to attempt to minimize the potential negative effects of these risks on our financial performance is to enter into

derivative financial instruments to hedge our exposure to such risks with respect to our recognized and forecasted transactions and our firm commitments. Our policy is not to enter into derivative transactions for speculative purposes.

We have entered into various types of hedges, including with respect to foreign currency exposures, and other trading derivative instruments for the terms of some of our long-term credit facilities with the objective of reducing the uncertainties resulting from interest rate and exchange rate fluctuations. To date, our derivative financial instruments have had mixed results. Their marked-to-market valuation as of December 31, 2010 increased our derivative liabilities by Ps.42 million and decreased our derivative assets by Ps.59 million. Because a portion of the derivative instruments classified as liabilities are related to construction projects that are in the construction phase, the fair value of such instruments, Ps.458 million in 2010, Ps.559 million in 2009, and Ps.1,730 million in 2008, have been accounted for as assets, to be amortized to results based on the percentage of completion of the project. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Critical Accounting Policies and Estimates — Derivative Financial Instruments.”

The contract amounts for our derivative financial instruments are generally based on our estimates of cash flows for a project as of the date we execute the derivative. As actual cash flows may differ from estimated cash flows, we cannot assure you that our derivative financial instruments will protect us from the adverse effects of financial market risks. See “— Risks Related to Mexico and Other Markets in Which We Operate — Appreciation or depreciation of the Mexican peso relative to the U.S. dollar, other currency fluctuations and foreign exchange controls could adversely affect our financial condition and results of operations.” The use of derivative financial instruments may also generate obligations for us to make additional cash payments, which would negatively affect our liquidity. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Derivative Financial Instruments”.

A substantial percentage of our cash and cash equivalents are held through less-than-wholly owned subsidiaries or joint ventures, or in reserves, that restrict our access to them.

As of December 31, 2010, we had total cash and cash equivalents of Ps.4,519 million, of which Ps.1,544 million was restricted. As of December 31, 2010, we had total cash, cash equivalents and restricted cash of Ps.4,376 million, as compared to Ps.4,097 million as of December 31, 2009. As of December 31, 2010, we held 51% of our consolidated cash, cash equivalents and restricted cash through less-than-wholly owned subsidiaries or in joint ventures (26% in the ICA-Fluor joint venture with Fluor Daniel Mexico, S.A., or Fluor, a subsidiary of the Fluor Corporation, 8% in the Airports segment, 11% in reserves to secure financing for projects like the Acueducto II water supply project, the Rio de los Remedios — Ecatepec toll highway project and the Nuevo Necaxa — Tihuatlan highway project, 2% in Grupo Rodio Kronsa, our Spanish construction subsidiary, which we refer to as Rodio Kronsa, and 2% in Los Portales). The remainder of our total cash, cash equivalents and restricted cash as of December 31, 2010 (Ps.2,296 million), was held in the parent company or in other operating subsidiaries.

Some uses of cash and cash equivalents by certain of our less than wholly-owned subsidiaries requires the consent of the other shareholders or partners, as applicable, of such subsidiary or joint venture, which is the Fluor Corporation, in the case of ICA-Fluor; Soletanche Bachy France S.A.S, in the case of Rodio Kronsa; FCC Construccion, S.A., in the case of both the Nuevo Necaxa — Tihuatlan highway and the Acueducto II water supply project; Fomento de Construcciones y Contratas S.A. and Constructora Meco S.A. in the case of the Panama Canal (PAC-4) expansion project; Aqualia Gestión Integral del Agua, S.A., Aqualia Infraestructuras, S.A. and Servicios de Agua Trident, S.A. de C.V. in case of our concessionaire for El Realito water supply system; and LP Holding, S.A., in the case of Los Portales, S.A. In the case of these entities, the consent of our partners or other shareholders is only required with respect to the use of cash and cash equivalents outside of normal budgeted operations. The budget for normal operations is set by the board of directors of each of these entities, which are comprised of equal numbers of members appointed by us and the other partner or shareholder. While the cash held in these entities is not destined for a specific use or set aside as a compensating balance, the requirements for its use could limit our access to liquid resources or limit us from freely deciding when to use cash and cash equivalents outside of normal operations. Additionally, a portion of our cash and cash equivalents are held in reserves established to secure financings. These resources form part of our restricted cash. At December 31, 2010, Ps.1,360 million, or 30%, of our cash and cash equivalents were held in reserves established to secure financings related to the Acapulco Tunnel, Corredor Sur, the Kantunil — Cancun tollroad, the Rio Verde — Ciudad Valles highway and the Nuevo Necaxa — Tihuatlan, Irapuato—Queretaro, Irapuato—La Piedad, and the La Piedad bypass highway projects. The reserve requirements of such financings could also limit our access to liquid resources and limit our ability to decide when to use our cash and cash equivalents.

Some of our assets are pledged under financing arrangements.

of America Merrill Lynch, Value Casa de Bolsa, S.A. de C.V., Banco Mercantil del Norte, S.A., Grupo Financiero Banorte, Banco Nacional de Mexico, S.A., Integrante del Grupo Financiero Banamex, Banco Espiritu Santo de Investimento, and Banco Nacional de Obras y Servicios Públicos, S.N.C., Institución de Banca de Desarrollo. The assets we have pledged include: (i) collection rights under the La Yesca hydroelectric construction contract; (ii) construction machinery and equipment owned by Ingenieros Civiles Asociados, S.A. de C.V. (a construction subsidiary); (iii) real property of ViveICA under various bridge loan agreements to finance real estate development; (iv) collection rights over the tolls for the Kantunil — Cancun highway, the Acapulco Tunnel and the Corredor Sur in Panama; (v) our collection rights under the construction contract of the El Yathe dam; (vi) our collection rights under the Mexico-Pachuca highway construction contract; and (vii) our toll collection rights on the Autovia Urbana Sur project, which is the construction of the second level of Periferico Sur highway in Mexico City. We generally pledge assets, such as collection or dividend rights, of each of our financed concession projects, including notably our shares of Autovia Necaxa—Tihuatlan, S.A. de C.V., or Auneti, our subsidiary that operates the Nuevo Necaxa—Tihuatlan highway, our shares in Red de Carreteras de Occidente, S.A.P.I.B. de C.V., or RCO, the operator of the first package of FARAC tollroads, Aguas Tratadas del Valle de Mexico, S.A. de C.V., our subsidiary that operates the Atotonilco water treatment project, our shares of Viabilis Infraestructura S.A.P.I. de C.V., or Viabilis, the contractor for the Rio de los Remedios—Ecatepec toll highway project, the collection rights of the Rio de Los Remedios project, our interest in Aquos El Realito, S.A. de C.V., our subsidiary that operates the El Realito aqueduct in San Luis Potosi, as well as our 50% interest in Los Portales, S.A., a real estate subsidiary located in Peru,. In general, assets securing credit arrangements will remain pledged until the arrangements secured by these assets expire. As a result of these arrangements, our ability to dispose of pledged assets requires the consent of these banks and our ability to incur further debt (whether secured or unsecured) is limited.

We may have difficulty obtaining the letters of credit and performance bonds that we require in the normal course of our operations.

Historically, our clients have required us to obtain bonds to secure, among other things, bids, advance payments and performance. In recent years, however, our clients, including the Mexican Federal Electricity Commission (Comision Federal de Electricidad), the Mexican Ministry of Communication and Transportation, and Petroleos Mexicanos, or Pemex, and foreign clients, have increasingly required letters of credit and other forms of guarantees to secure such bids, to advance payments and to guarantee performance. In the past we have found it difficult to obtain the performance bonds or letters of credit necessary to perform the large infrastructure projects in Mexico and abroad that historically have generated a substantial majority of our revenues. We cannot assure you that in the future we will not find it difficult to obtain performance bonds or letters of credit, particularly because, as a result of the credit crisis, many lenders and guarantors have reduced the amount of credit they extend and in some cases have stopped extending credit. Our ability to provide additional letters of credit and other forms of guarantees secured with assets is limited, which may impact our ability to participate in projects in the future.

The nature of our engineering and construction business exposes us to potential liability claims and contract disputes, which may reduce our profits.

We engage in engineering and construction activities for large facilities where design, construction or systems failures can result in substantial injury or damage to third parties or our clients. We have been and may in the future be named as a defendant in legal proceedings where third parties or our clients may make a claim for damages or other remedies with respect to our projects or other matters. These claims generally arise in the normal course of our business. When it is determined that we have a liability, we may not be covered by insurance or, if covered, the dollar amount of these liabilities may exceed our policy limits. In addition, even where insurance is maintained for such exposures, the policies have deductibles resulting in our assuming exposure for a layer of coverage with respect to any such claims. Any liability not covered by our insurance, in excess of our insurance limits or, if covered by insurance but subject to a high deductible, could result in a significant loss for us, which may reduce our profits and cash available for operations.

We have increasingly been required to meet minimum equity requirements, financial ratios or more stringent experience requirements and obtain transaction ratings in order to bid on large public infrastructure projects, which could reduce our ability to bid for potential projects.

In recent years, we have increasingly been required to meet minimum equity requirements, certain financial ratios or more stringent requirements and obtain transaction ratings on our financial proposals from a recognized rating agency in order to bid on large public infrastructure projects. For example, Pemex, Mexico’s state-owned oil company, has increasingly required that companies that submit bids for certain of its public projects meet minimum equity requirements. Similarly, Mexico City’s government has increasingly required that companies submitting bids for its public works projects meet minimum financial ratios. The levels and types of ratios vary substantially. Although we have historically been able to comply with such requirements, we cannot assure you that we will be able to do so in the future. If we do not meet such requirements, it could impair our ability to bid for potential projects, which would have an adverse effect on our financial condition and results of operations.

The success of our joint ventures depends on the satisfactory performance by our joint venture partners of their joint venture obligations. The failure of our joint venture partners to perform their joint venture obligations could impose on us additional financial and performance obligations that could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture.

We enter into various joint ventures as part of our engineering, procurement and construction businesses, including Red de Carreteras de Occidente, or RCO, ICA-Fluor, Rodio-Kronsa and project-specific joint ventures, including for Line 12 of the Mexico City metro system, the Eastern Discharge Tunnel, the Atotonilco water treatment project, the Los Portales real estate development project and, as of June 11, 2010, a joint venture with Prudential Investment Management, Inc. to develop low-income housing with Prudential Real Estate Investors, S. de R.L. de C.V., or PREI, under the Mexican government’s program for Sustainable Integrated Urban Development projects. The success of these and other joint ventures depends, in part, on the satisfactory performance by our joint venture partners of their joint venture obligations. If our joint venture partners fail to satisfactorily perform their joint venture obligations as a result of financial or other difficulties, the joint venture may be unable to adequately perform or deliver its contracted services. Under these circumstances, we may be required to make additional investments and provide additional services to ensure the adequate performance and delivery of the contracted services. These additional obligations could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture. We cannot assure you that our business partnerships or joint ventures will be successful in the future.

If we are unable to form teaming arrangements, our ability to compete for and win certain contracts may be negatively impacted, especially in bids located outside of Mexico.

In both the private and public sectors, either acting as a prime contractor, a subcontractor or as a member of team, we may join with other firms to form a team to compete for a single contract, especially in projects located outside of Mexico, where we may seek local experience, or involving a more complex technical and/or financial structure. Because a team can offer stronger combined qualifications than any firm standing alone, these teaming arrangements can be very important to the success of a particular contract bid process or proposal. The failure to maintain such relationships in certain markets, such as the government market, may impact our ability to win work.

Our backlog of construction contracts is not necessarily indicative of our future revenues.

The amount of backlog is not necessarily indicative of our future revenues related to the performance of such work. Although backlog represents only business that is considered to be firm, we cannot assure you that cancellations, failure to collect or scope adjustments will not occur. We cannot assure you that we will secure contracts equivalent in scope and duration to replace the current backlog or that the current backlog will perform as expected. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Construction — Construction Backlog.”

We face risks related to project performance requirements and completion schedules, which could jeopardize our profits.

In certain instances, we have guaranteed completion of a project by a scheduled acceptance date or achievement of certain acceptance and performance testing levels. However, there is a risk that adherence to these guarantees may not be possible. Additionally, under certain Mexican laws, public officials may be held personally liable for decisions made in their professional capacities, and as a result officials who oversee our projects may fail to make decisions, such as executing change orders, required for progress of our projects. The failure to meet any schedule or performance requirements for any reason could result in costs that exceed projected profit margins, including fixed-amount liquidated damages up to a certain percentage of the overall contract amount and/or guarantees for the entire contract amount. We cannot assure you that the financial penalties stemming from the failure to meet guaranteed acceptance dates or achievement of acceptance and performance testing levels would not have an adverse effect on our financial condition and results of operations.

Our return on our investment in a concession project may not meet the originally estimated returns.

Our return on any investment in a highway, bridge, tunnel or wastewater treatment plant concession is based on the duration of the concession and the amount of capital invested, in addition to the amount of usage revenues collected, debt service costs and other factors. For example traffic volumes, and thus toll revenues, are affected by a number of factors including toll rates, the quality and proximity of alternative free roads, fuel prices, taxation, environmental regulations, consumer purchasing power and general economic conditions. The level of traffic on a given highway also is influenced heavily by its integration into other road networks. Usually concession and Public/Private Partnership

(Proyecto para Prestacion de Servicios, or PPP) contracts provide that the grantor of the contract shall deliver the right-of-way to the project land in accordance with the construction schedule. If the grantor fails to deliver such rights-of-way on time, we may incur additional investments and delays at the start of operations, and therefore we may need to seek the modification of the concession or PPP contract. We cannot assure you that we will reach an agreement as to the amendment of any such contracts. Particularly for new projects, in which we take on construction risk, overruns of budgeted costs may create a higher capital investment base than expected, and therefore a lower return on capital. Given these factors, we cannot assure you that our return on any investment in a highway, bridge, tunnel or wastewater treatment plant concession will meet the estimates contemplated in the relevant concession or PPP contract.

Governments may terminate our concessions under various circumstances, some of which are beyond our control.

Our concessions are among our principal assets, and we would be unable to continue the operations of a particular concession without the concession right from the granting government. A concession may be revoked by a government for certain prescribed reasons pursuant to the particular title and the particular governing law, which may include failure to comply with development and/or maintenance programs, temporary or permanent halt in our operations, failure to pay damages resulting from our operations, exceeding our maximum rates or failure to comply with any other material term of a concession.

In particular, the Mexican government may also terminate a concession at any time through reversion, if, in accordance with applicable Mexican law, it determines that it is in the public interest to do so. The Mexican government may also assume the operation of a concession in the event of war, public disturbance or threat to national security. In addition, in the case of a force majeure event, the Mexican government may require us to implement certain changes in our operations. In the event of a reversion of the public domain assets that are the subject of our concessions, the Mexican government under Mexican law is generally required to compensate us for the value of the concessions or added costs. Similarly, in the event of an assumption of our operations, other than in the event of war, the government is required to compensate us and any other affected parties for any resulting damages. Other governments often have similar provisions in their concession contracts and applicable law. We cannot assure you that we would receive such compensation on a timely basis or in an amount equivalent to the value of our investment in a concession and lost profits.

Our failure to recover adequately on claims or change orders against project owners for payment could have a material adverse effect on us.

We occasionally bring claims against project owners for additional costs that exceed the contract price or for amounts not included in the original contract price, including change orders. These types of claims occur due to matters such as owner-caused delays, increased unit prices or changes from the initial project scope that result, both directly and indirectly, in additional costs. Often, these claims can be the subject of lengthy arbitration, litigation or third-party expert proceedings, and it can be difficult to accurately predict when these claims will be fully resolved. When these types of events occur and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. With respect to change orders in particular, we may agree on the scope of work to be completed with a client without agreeing on the price, and in this case we may be required to use a third-party expert to set the price for the change order. We do not have control over such third-party experts and they may make price determinations that are unfavorable to us. As of December 31, 2010, we had Ps.654 million of allowance for doubtful accounts related to contract and trade receivables, including an allowance for doubtful accounts of Ps.143 million in the Airports segment related to the bankruptcy filing by the airlines of Grupo Mexicana. A failure to promptly recover on these types of claims and change orders could have a material adverse effect on our liquidity and financial condition.

Our continued growth requires us to hire and retain qualified personnel.

Over the past years, the demand for employees who engage in and are experienced in the services we perform has continued to grow as our customers have increased their capital expenditures and the use of our services. The continued growth of our business is dependent upon being able to attract and retain personnel, including engineers, corporate management and craft employees, who have the necessary and required experience and expertise. Competition for this kind of personnel is intense. Difficulty in attracting and retaining these personnel could reduce our capacity to perform adequately in present projects and to bid for new ones.

We maintain a workforce based upon current and anticipated workloads. If we do not receive future contract awards or if these awards are delayed, we may incur significant costs.

Our estimates of future performance depend on, among other matters, whether and when we will receive certain new contract awards. While our estimates are based upon our good faith judgment, these estimates can be unreliable and may frequently change based on newly available information. In the case of large-scale domestic and international projects where timing is often uncertain, it is particularly difficult to predict whether and when we will receive a contract award. The uncertainty of contract award timing can present difficulties in matching our workforce size with our contract needs. If an expected contract award is delayed or not received, Mexican labor law requirements could cause us to incur costs resulting from reductions in workforce or redundancy of facilities that would have the effect of reducing our profits.

Risks Related to Our Airport Operations

Our operating income and net income are dependent on our subsidiary GACN, and GACN’s revenues are closely linked to passenger and cargo traffic volumes and the number of air traffic movements at its airports.

We operate 13 concessioned airports in Mexico through GACN. As of December 31, 2010, we controlled shares representing approximately 59% of GACN’s capital stock. Our interest in GACN exposes us to risks associated with airport operations.

In 2010, GACN represented 6% of our revenues and 20% of our operating income. GACN’s airport concessions from the Mexican government are essential to GACN’s contribution to revenues and operating income. Any adverse effect on GACN would have an adverse effect on our operating results.

Historically, a substantial majority of GACN’s revenues have been derived from aeronautical services, and GACN’s principal source of aeronautical services revenues is passenger charges. Passenger charges are payable for each passenger (other than diplomats, infants, transfer and transit passengers) departing from the airport terminals we operate, collected by the airlines and paid to GACN. In 2010, 2009 and 2008, passenger charges represented 48.6%, 46.9% and 49.7%, respectively, of GACN’s total revenues. GACN’s revenues are thus closely linked to passenger and cargo traffic volumes and the number of air traffic movements at its airports. These factors directly determine GACN’s revenues from aeronautical services and indirectly determine its revenues from non-aeronautical services. Passenger and cargo traffic volumes and air traffic movements depend in part on many factors beyond our control, including economic conditions in Mexico, the U.S. and the world, the political situation in Mexico and elsewhere in the world, high incidences of crime, particularly related to drug trafficking, throughout Mexico but especially in the northern cities, the attractiveness of GACN’s airports relative to that of other competing airports, fluctuations in petroleum prices (which can have a negative impact on traffic as a result of fuel surcharges or other measures adopted by airlines in response to increased fuel costs) and changes in regulatory policies applicable to the aviation industry. International conflicts and health epidemics, such as the 2009 Influenza A(H1N1) epidemic, have negatively affected the frequency and pattern of air travel worldwide. Despite the indefinite suspension of operations of Grupo Mexicana airlines since August 2010, total passenger traffic increased slightly as compared to 2009, thereby contributing to an overall increase in revenues in the Airports segment. The economic and financial crisis in Mexico adversely affected domestic traffic in 2009, which decreased substantially compared to 2008. Generally all of our airports were negatively affected during 2009 by reductions in the volume of passengers, the A(H1N1) virus and the exit from the Mexican market of five airlines in less than a year. Notwithstanding the mentioned increase, the following airports experienced decreases in terminal passenger traffic in 2010: Torreon (16%), Acapulco (13%), Zihuatanejo (9%), Reynosa (8%), Tampico (4%) and Culiacan (2%) airports (in each case, as compared to 2009). The occurrence or worsening of any of such developments going forward would adversely affect GACN’s business, and in turn, our business. Any decreases in passenger volume or air traffic to or from our airports as a result of factors such as these could adversely affect GACN’s business, results of operations, prospects and financial condition, thereby negatively affecting our overall results.

Terrorist attacks have had a severe impact on the international air travel industry, and terrorist attacks and other international events have adversely affected our business and may do so in the future.

As with all airport operators, we are subject to the threat of terrorist attack. Terrorist attacks may have a severe adverse impact on the air travel industry, including through precipitous declines in airline traffic. In the event of a terrorist attack involving one of GACN’s airports directly, airport operations would be disrupted or suspended during the time necessary to conduct rescue operations, investigate the incident and repair or rebuild damaged or destroyed facilities, and our future insurance premiums would likely increase. In addition, our insurance policies do not cover all losses and liabilities resulting from terrorism. Any future terrorist attacks, whether or not involving aircraft, will likely adversely affect our business, results of operations, prospects and financial condition.

Because a substantial majority of GACN’s international flights involve travel to the U.S., it may be required to comply with security directives of the U.S. Federal Aviation Authority, in addition to the directives of Mexican aviation authorities. Security measures taken to comply with future security directives or in response to a terrorist attack or threat could reduce passenger capacity at GACN’s airports due to increased passenger screening and slower security checkpoints, which would have an adverse effect on GACN’s results of operations.

Other international events such as the war in Iraq and public health crises such as the Severe Acute Respiratory Syndrome, or SARS, crisis and the Influenza A(H1N1) crisis have negatively affected the frequency and pattern of air travel worldwide. Because GACN’s revenues are largely dependent on the level of passenger traffic in its airports, any general increase of hostilities relating to reprisals against terrorist organizations, further conflict in the Middle East, outbreaks of health epidemics such as SARS or Influenza A(H1N1), or other events of general international concern (and any related economic impact of such events) could result in decreased passenger traffic and increased costs to the air travel industry and, as a result, could cause a material adverse effect on GACN’s business, results of operations, prospects and financial condition.

Increases in fuel prices could adversely affect GACN’s business and results from operations.

International prices of fuel, which represent a significant cost for airlines using GACN’s airports, have increased in recent years, reaching record highs in the second quarter of 2008. Such increases in airlines costs were among the factors leading to cancellations of routes, decreases in frequencies of flights, and in some cases even contributed to filings for bankruptcy by some airlines (such as Alma and Aladia). For other airlines, such as Avolar and Aerocalifornia, such increased costs may have led to cost reductions impacting quality of service, which may have contributed to the denial of extensions of their concessions by the Mexican regulatory authorities for failure to satisfy security, service, coverage and quality requirements. Fuel prices in 2010 were slightly higher than prices in 2009. The social and political crisis affecting the Middle East has caused a surge in oil prices that has forced sharp increases in the price of fuel in the first quarter of 2011. Fuel prices may be subject to further increases resulting from any future terrorist attacks, a general increase in international hostilities or a reduction in output of fuel, voluntary or otherwise, by oil-producing countries, and there can be no assurances that future air business would not be further affected by increased fuel prices.

GACN provides a public service regulated by the Mexican government and its flexibility in managing its aeronautical activities is limited by the regulatory environment in which it operates.

GACN operates its airports under concessions, the terms of which are regulated by the Mexican government. As with most airports in other countries, GACN’s aeronautical fees charged to airlines and passengers are regulated. In 2010, 2009 and 2008, approximately 62.3%, 60.2% and 65.2%, respectively, of GACN’s total revenues were earned from regulated services, which are subject to price regulation under our maximum rates. These regulations may limit our flexibility in operating GACN’s aeronautical activities, which could have a material adverse effect on GACN’s business, results of operations, prospects and financial condition. In addition, several of the regulations applicable to GACN’s operations and that affect its profitability are authorized (as in the case of its master development programs) or established (as in the case of its maximum rates) by the Ministry of Communications and Transportation for five-year terms. Except under limited circumstances, we generally do not have the ability to unilaterally change GACN’s obligations (such as the investment obligations under its master development programs or the obligation under its concessions to provide a public service) or increase its maximum rates applicable under those regulations should passenger traffic or other assumptions on which the regulations were based change during the applicable term. In addition, we cannot assure you that this price regulation system will not be amended in a manner that would cause additional sources of GACN’s revenues to be regulated, which could limit GACN’s flexibility in setting prices for additional sources of revenues that are not currently subject to any restriction.

We cannot predict how the regulations governing our Airports segment will be applied.

Many of the laws, regulations and instruments that regulate our airport business were adopted or became effective in 1999, and there is only a limited history that would allow us to predict the impact of these legal requirements on our future operations. In addition, although Mexican law establishes ranges of sanctions that might be imposed should we fail to comply with the terms of one of our concessions, the Mexican Airport Law (Ley de Aeropuertos) and its regulations or other applicable law, we cannot predict the sanctions that are likely to be assessed for a given violation within these ranges. We cannot assure you that we will not encounter difficulties in complying with these laws, regulations and instruments.

Morever, when determining our maximum rates for the next five-year period (covering 2016 through 2020), the Ministry of Communications and Transporation may be subject to significant pressure from different entities (such as, for example, the Mexican Federal Competition Commission (Comision Federal de Competencia) and the carriers operating at GACN’s airports) to modify GACN’s maximum rates, which may reduce the profitability of our airport business. We cannot assure you that the laws and regulations governing our airport business, including the rate-setting process and the Mexican Airport Law, will not change in the future or be applied or interpreted in a way that could have a material adverse effect on our results from operations.

The Mexican government could grant new or expanded concessions that compete with our airports and could have an adverse effect on our revenues.

The Mexican government could grant additional or expanded concessions to operate existing government managed airports or authorize the construction of new airports, which could compete directly with our airports. In the future, we also may face competition from Aeropuerto del Norte, an airport near Monterrey operated by a third party pursuant to a concession. Historically, Aeropuerto del Norte has been used solely for general aviation operations. The state of Nuevo Leon has requested in the past that the Ministry of Communications and Transportation amend Aeropuerto del Norte’s concession to allow it to serve commercial aviation flights. To date, the Ministry of Communications and Transportation has not amended Aeropuerto del Norte’s concession. However, we cannot assure you that the Ministry of Communications and Transportation will not authorize such an amendment and that commercial aviation flights will not operate from Aeropuerto del Norte in the future.

Any competition from other such airports could have a material adverse effect on our business and results of operations. Under certain circumstances, the grant of a concession for a new or existing airport must be made pursuant to a public bidding process. In the event that a competing concession is offered in a public bidding process, we cannot assure you that we would participate in such process, or that we would be successful if we did participate.

Our operations depend on certain key airline customers, and the loss of or suspension of operations of one or more of them could result in a loss of a significant amount of our revenues.

Of the total aeronautical revenues generated at our airports in 2010, Aerovias de Mexico, S.A. de C.V., or Aeromexico, and its affiliates accounted for 29.6%, Mexicana and its affiliates accounted for 10.5%, VivaAerobus represented 14.1% and Interjet represented 9.7%. In recent years, discount carriers, charter carriers, low-cost carriers and other new market entrants have represented a growing proportion of the Mexican commercial airline market. In 2010, passengers traveling on discount, charter and low-cost carriers, such as VivaAerobus, Interjet and Volaris accounted for approximately 36.2% of our commercial aviation passenger traffic. Avolar, Alma and Aladia ceased operations during the last quarter of 2008 for not satisfying security, service, coverage and quality requirements (in the case of Avolar), or because of bankruptcy (in the case of Alma and Aladia).

Our airports could be affected by the reduction in aeronautical and non-aeronautical revenues resulting from a merger between key airline customers. As of May 2011, we are not aware of any merger agreements between any key airline customers.

Grupo Mexicana, which comprises Mexicana de Aviacion, Click Mexicana, and Mexicana Link, operated at twelve of our thirteen airports. In July 2010, prior to the bankruptcy filing by Mexicana de Aviacion, the three airlines operated 24 routes at our airports, of which 18 were also operated by other airlines.

On August 3, 2010, Mexicana de Aviacion announced that it filed for bankruptcy protection (Concurso Mercantil) before the 11^th Federal judge in Mexico City and that it also sought bankruptcy protection in the United States. On August 27, 2010, Grupo Mexicana announced the indefinite suspension of operations of Mexicana de Aviacion, Click Mexicana, and Mexicana Link, while noting that it “will continue seeking out ways of securing the company’s long-term financial viability.” On September 7, 2010, Mexicana Click and Mexicana Link (subsidiaries of Grupo Mexicana) filed for bankruptcy protection before the 11^th Federal Court in Mexico. Click Mexicana and Mexicana Link’s insolvency petitions were accepted in conciliary phase on November 16, 2010.

During the first six months of 2010, Grupo Mexicana generated 16.6% of our total passenger traffic, of which 7.6% was accounted for solely by Mexicana de Aviacion. Grupo Mexicana generated 17.3% of our domestic passenger traffic, including 7.2% from Mexicana de Aviacion. In terms of international traffic, Grupo Mexicana generated 13.1% of traffic, of which Mexicana de Aviacion accounted for 9.3%.

Grupo Mexicana generated 12.2% of our revenues during the first six months of 2010, of which Mexicana de Aviacion accounted for 5.9%.

In November 2010, we filed a motion (incidente de separacion de bienes) against Grupo Mexicana to recover the passenger charges that Grupo Mexicana collected for us. As of December 31, 2010, the amount owed to us by Grupo Mexicana amounted to Ps.143.1 million, 93% of which represented passenger charges. This number increased to Ps.144.2 million as of March 31, 2011. We have reserved 100% of the total amount owed within the allowance for doubtful accounts. There can be no assurance that these amounts will be recovered.

None of our contracts with our airline customers obligate them to continue providing service from our airports, and we can offer no assurance that, if any of our key customers reduced their use of our airports, competing airlines would add flights to their schedules to replace any flights no longer handled by our principal airline customers. Our business and results of operations could be adversely affected if we do not continue to generate comparable portions of our revenue from our key customers.

Due to increased competition, higher fuel prices and the general decrease in the demand consequent to the global volatility in the financial and exchange markets and economic crisis, many airlines are operating in adverse conditions. Further increases in fuel prices or other adverse economic developments could cause one or more of our principal carriers to become insolvent, cancel routes, suspend operations or file for bankruptcy. All such events could have a material adverse effect on our results from operations.

The operations of GACN’s airports may be affected by the actions of third parties, which are beyond our control.

As is the case with most airports, the operation of GACN’s airports is largely dependent on the services of third parties, such as air traffic control authorities, airlines and providers of catering and baggage handling. GACN is also dependent upon the Mexican government or entities of the government for provision of services, such as electricity, supply of fuel to aircraft, air traffic control and immigration and customs services for international passengers. The disruption or stoppage of taxi or bus services at one or more of GACN’s airports could also adversely affect GACN’s operations. We are not responsible for and cannot control the services provided by these parties. Any disruption in, or adverse consequence resulting from, their services, including a work stoppage, financial difficulties or other similar event, may have a material adverse effect on the operation of GACN’s airports and on GACN’s results of operations.

Actions by parties purporting to be former owners of land comprising a portion of the Ciudad Juarez International Airport could cause our concession to operate the airport to be terminated.

Parties purporting to be former owners of land comprising a portion of GACN’s Ciudad Juarez International Airport initiated legal proceedings against the airport to reclaim the land, alleging that it was improperly transferred to the Mexican government. As an alternative to recovery of this land, the claimants sought monetary damages of U.S.$120 million. On May 18, 2005, a Mexican court ordered GACN to return the disputed land to the plaintiffs.

However, that decision and three subsequent constitutional claims (juicios de amparo) permitted the case to be reconsidered, and as a result of such constitutional claims, the original claimants must now include the Ministry of Communications and Transportation as a party to the litigation since the Ministry of Communications and Transportation is the grantor of the concession title to the Ciudad Juarez Airport. On August 28, 2009, the Mexican federal government filed its answer to the claim, in which it requested that the trial be moved to Mexican federal jurisdiction. In May 2010, the Court of Appeals granted the Federal Government’s request. In November 2010, the District Court in Chihuahua confirmed the Court of Appeals ruling granting the Federal Government’s request for removal of the claim to Federal Jurisdiction. The plaintiffs later filed a motion (recurso de revision) before the Federal Circuit Court against the District Court’s ruling. This petition is still pending.

In the event that any subsequent action results in a decision that is substantially similar to the May 18, 2005 court order or that is otherwise adverse to GACN, and the Mexican government does not subsequently exercise its power of eminent domain to retake possession of the land for GACN’s use, which we believe the terms of our concession would require, GACN’s concession to operate the Ciudad Juarez Airport would terminate. In 2010, 2009 and 2008, the Ciudad Juarez International Airport represented 5.2%, 4.8% and 5.9%, respectively, of GACN’s revenue. Although we believe and GACN has been advised by the Ministry of Communications and Transportation that, under the terms of GACN’s concessions, the termination of its Ciudad Juarez concession would not affect the validity of its remaining airport concessions and that the Mexican federal government would be obligated to indemnify GACN against any monetary or other damages resulting from the termination of its Ciudad Juarez concession or a definitive resolution of the matter in favor of the plaintiffs, we cannot assure you that GACN would be so indemnified.

Risks Related to Mexico and Other Markets in Which We Operate

Adverse economic conditions in Mexico may adversely affect our financial condition or results of operations.

A substantial portion of our operations is conducted in Mexico and is dependent upon the performance of the Mexican economy. As a result, our business, financial condition and results of operations may be affected by the general condition of the Mexican economy, over which we have no control. See “Item 4. Information on the Company — History and Development of the Company — Public Sector Spending and the Mexican Economy.” In the past, Mexico has experienced economic crises, caused by internal and external factors, characterized by exchange rate instability (including large devaluations), high inflation, high domestic interest rates, economic contraction, a reduction of international capital flows, a reduction of liquidity in the banking sector and high unemployment rates. We cannot assume that such conditions will not return or that such conditions will not have a material adverse effect on our business, financial condition or results of operations.

Mexico experienced a period of slow growth from 2001 through 2003, primarily as a result of the downturn in the U.S. economy. In 2006, gross domestic product, or GDP, grew by approximately 4.8% and inflation reached 4.1%. In 2007, GDP grew by approximately 3.3% and inflation declined to 3.8%. In 2008, GDP grew by approximately 1.8% and inflation reached 6.5%. Mexico entered into a recession beginning in the fourth quarter of 2008, and in 2009 GDP fell by approximately 6.5% and inflation grew 3.6%. In 2010, GDP grew 5.5% and inflation grew 4.4%.

Mexico also has, and is expected to continue to have, high real and nominal interest rates as compared to the United States. The annualized interest rates on 28-day Cetes averaged approximately 9.2%, 7.2%, 7.7%, 5.4% and 4.4% for 2006, 2007, 2008, 2009 and 2010, respectively. As of December 31, 2010, 61% of our debt is denominated in Mexican pesos, and we expect to continue incurring peso-denominated debt for our projects in Mexico for which the source of repayment of financing is in Mexican pesos. To the extent that we incur peso-denominated debt in the future, it could be at high interest rates.

If the Mexican economy experiences a further recession, if inflation or interest rates increase significantly or if the Mexican economy is otherwise adversely impacted, our business, financial condition or results of operations could be materially and adversely affected.

Appreciation or depreciation of the Mexican peso relative to the U.S. dollar, other currency fluctuations and foreign exchange controls could adversely affect our financial condition and results of operations.

A substantial portion of our construction revenues and a substantial portion of our debt, including U.S.$500 million of our 8.9% senior notes due 2021, are denominated in U.S. dollars, while the majority of our raw materials, a portion of our long-term indebtedness and a substantial portion of our purchases of machinery and day-to-day expenses, including employee compensation, are denominated in Mexican pesos. As a result, an appreciation of the Mexican peso relative to the U.S. dollar would decrease our dollar revenues when expressed in Mexican pesos. In addition, currency fluctuations may affect the comparability of our results of operations between financial periods, due to the translation of the financial results of our foreign subsidiaries, such as Rodio Kronsa and ICA Panama.

Beginning in the second half of 2008, the Mexican peso substantially depreciated against the U.S. dollar, falling from a Federal Reserve Bank of New York noon buying rate for Mexican pesos of Ps.10.37 on July 2, 2008 to Ps.13.83 on December 31, 2008 and Ps.14.21 on March 31, 2009, a decrease of approximately 37%. The Mexican peso has since stabilized and partially recovered, and the noon buying rate was Ps.12.38 per U.S.$1.00 on December 31, 2010 and Ps.11.92 per U.S.$1.00 on March 31, 2011. Fixed price and not-to-exceed contracts require us to bear the risk of fluctuation in the exchange rate between the Mexican peso and other currencies in which our contracts, such as financing agreements, are denominated or which we may use for purchases of supplies, machinery or raw materials, day-to-day expenses or other inputs. A severe devaluation or depreciation of the Mexican peso may also result in disruption of the international foreign exchange markets and may limit our ability to transfer or to convert Mexican pesos into U.S. dollars and other currencies for the purpose of making timely payments of interest and principal on our U.S. dollar-denominated indebtedness or obligations in other currencies. While the Mexican government does not currently restrict, and since 1982 has not restricted, the right or ability of Mexican or foreign persons or entities to convert Mexican pesos into U.S. dollars or to transfer other currencies out of Mexico, the Mexican government could institute restrictive exchange control policies in the future. We cannot assure you that the Mexican Central Bank will maintain its current policy with respect to the peso. Currency fluctuations may have an adverse effect on our financial condition, results of operations and cash flows in future periods. See “—Risks Related to Our Operations — Our hedging contracts may not effectively protect us from financial market risks and may negatively affect our cash flow.”

Economic and political developments in Mexico could affect Mexican economic policy and adversely affect us.

We are a Mexican corporation and a substantial majority of our operations and assets are located in Mexico. As a result, our business, financial condition and results of operations may be affected by the general condition of the Mexican economy, the devaluation of the Mexican peso as compared to the U.S. dollar, price instability, inflation, interest rates, regulation, taxation, social instability (including related to public safety) and other political, social and economic developments in or affecting Mexico over which we have no control.

The Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. Mexican governmental actions concerning the economy and state-owned enterprises could have a significant effect on Mexican private sector entities in general, and us in particular, as well as on market conditions, prices and returns on Mexican securities, including our securities. In the past, economic and other reforms have not been enacted because of strong congressional opposition to the president. However, in 2009, Mexico passed a new income tax law resulting in deferred income taxes to be paid with respect to consolidated companies for the period from 1999 to 2004. The Mexican congress has modified tax laws more frequently than other areas of the law. The timing and scope of such modifications are unpredictable, which can adversely affect our ability to manage our tax planning.

In the July 2009 Mexican federal elections, no party succeeded in securing a majority in either chamber of the Congress. This situation has resulted in partial government gridlock and political uncertainty due to the Mexican Congress’ partial inability to reach consensus, more importantly for us, on the structural reforms required to modernize certain sectors of the Mexican economy and on the National Infrastructure Program. Our performance historically has been tied to Mexican public sector spending on infrastructure facilities and Mexican public-sector spending is, in turn, generally dependent on the political climate in Mexico. Politicians are currently focused on the 2012 presidential elections. In the past, public sector spending has tended to decrease in election years, and we expect this will occur in 2012. As in previous presidential election cycles, we plan to partially counter this risk by bidding for projects abroad, although certain risks in other Latin American countries may adversely affect our opportunity to win awards or execute awarded projects in a profitable and timely manner. See “—Risks Related to Our Operations — Our participation in projects outside Mexico involves greater risks than those typically faced in Mexican projects and could jeopardize our profits.” We cannot provide any assurances that political developments in Mexico, over which we have no control, will not have an adverse effect on our business, financial condition or results of operations.

Security risks may negatively affect our business, including our housing division, as well as our user-number based projects located in regions with increased insecurity.

Home sales in our low-income housing division depend substantially on purchasers’ access to credit through the Institution for Worker’s Housing (Instituto Nacional de la Vivienda para los Trabajadores, or Infonavit), a public funding agency. An increase in drug-related offenses and other crime has led to higher vacancy rates in housing developments in the northern border states of Mexico. As a result, it is possible that Infonavit may restrict grants or disbursements of housing credit in northern cities.

Likewise, projects located in regions with recently increased insecurity may affect the revenues of projects based on number of users, such as our toll road, tunnel and airport concessions.

Developments in other countries could adversely affect the Mexican economy, our business, financial condition or results of operations and the market value of our securities.

The Mexican economy, the business, financial condition or results or operations of Mexican companies and the market value of securities of Mexican companies may be, to varying degrees, affected by economic and market conditions in other countries. Although economic conditions in other countries may differ significantly from economic conditions in Mexico, investors’ reactions to adverse developments in other countries may have an adverse effect on the market value of securities of Mexican issuers. In recent years, economic conditions in Mexico have become increasingly correlated with economic conditions in the United States as a result of NAFTA and increased economic activity between the two countries. In the second half of 2008, the prices of both Mexican debt and equity securities decreased substantially as a result of the prolonged decrease in the United States securities markets. This general correlation continued in 2009 and 2010 even as both securities markets trended upward. Adverse economic conditions in the United States, the termination of NAFTA or other related events could have a material adverse effect on the Mexican economy. The Mexican debt and equities markets also have been adversely affected by ongoing developments in the global credit markets. We cannot assure you that events in other emerging market countries, in the

United States or elsewhere will not materially adversely affect our business, financial condition or results of operations.

Corporate disclosure in Mexico may differ from disclosure regularly published by or about issuers of securities in other countries, including the United States.

A principal objective of the securities laws of the United States, Mexico, and other countries is to promote full and fair disclosure of all material corporate information, including accounting information. However, there may be different or less publicly available information about issuers of securities in Mexico than is regularly made available by public companies in countries with highly developed capital markets, including the United States.

In addition, accounting standards and disclosure requirements in Mexico differ from those of the United States. In particular, our consolidated financial statements are prepared in accordance with MFRS, which differ from U.S. GAAP and accounting principles adopted in other countries in a number of respects. Items on the financial statements of a company prepared in accordance with MFRS may not reflect its financial position or results of operations in the way they would be reflected had such financial statements been prepared in accordance with U.S. GAAP. Note 29 to our consolidated financial statements provides a description of the principal differences between MFRS and U.S. GAAP, as they relate to us, and a reconciliation to U.S. GAAP of consolidated net income (loss) and consolidated equity.

In 2009, our Board of Directors approved early adoption of IFRS for the year ending December 31, 2011. As a result, the financial statements for the year ended December 31, 2010 are our last public financial statements that will be prepared in accordance with MFRS.

Risks Related to our Securities and our Major Shareholders

You may not be entitled to participate in future preemptive rights offerings.

In a public offering, pursuant to Article 53 of the Mexican Securities Market Law, we are not required to grant preemptive rights to any holders of our ADSs, CPOs or shares. We are not required by law to undertake our capital increases using public offerings.

If we issue new shares for cash in a private offering, as part of a capital increase, we must grant our stockholders the right to purchase a sufficient number of shares to maintain their existing ownership percentage in our company. Rights to purchase shares in these circumstances are known as preemptive rights. However, we are not legally required to grant holders of ADSs, Ordinary Participation Certificates, or CPOs, or shares in the United States to exercise any preemptive rights in any future private offering.

To allow holders of ADSs in the United States to participate in a private preemptive rights offering, we would have to file a registration statement with the Securities and Exchange Commission or conduct an offering that qualified for an exemption from the registration requirements of the Securities Act of 1933, as amended. We cannot assure you that we would do so. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the Securities and Exchange Commission, as well as any other factors that we consider important to determine whether we will file such a registration statement. In addition, under current Mexican law, sales by the depository of preemptive rights and distribution of the proceeds from such sales to you, the ADS holders, is not possible.

The significant share ownership of our management and members of our Board of Directors, coupled with their rights under the bylaws, may have an adverse effect on the future market price of our ADSs and shares.

As of March 31, 2011, the total beneficial shareholding of our directors and executive officers (including shares held in a management trust) was approximately 52,155,193, or 8.13%, of our outstanding shares. This total included shares beneficially owned by the Chairman of our Board of Directors, Bernardo Quintana, or his family, including Alonso Quintana (our Chief Operating Officer designee and a member of our Board of Directors), Diego Quintana (responsible for investments in our Industrial Construction division and all partnerships and a member of our Board of Directors), and Rodrigo Quintana (our General Counsel), comprising approximately 5.61% of our outstanding shares. Additionally, the management trust held 4,033,151, or 0.63%, of our outstanding shares (including 36,020,907 shares included in the total of beneficial ownership by the Quintana family). Another trust controlled by our management, the foundation trust, held 8,293,356, or 1.29%, of our shares. See “Item 6. Directors and Senior Management — Share Ownership” and “Item 7. Major Shareholders and Related Party

Transactions — Major Shareholders.” These do not include shares newly deposited in our management trust based on management bonuses in 2011. See “Item 6. Directors, Senior Management and Employees — Management Bonuses.”

Actions by our management and Board of Directors with respect to the disposition of the shares and ADSs they beneficially own, or the perception that such action may occur, may adversely affect the trading price of the shares on the Mexican Stock Exchange or the ADSs on the New York Stock Exchange.

Holders of ADSs and CPOs are not entitled to vote.

Holders of ADSs and the underlying CPOs are not entitled to vote the shares underlying such ADSs or CPOs. Such voting rights are exercisable only by the CPO trustee, which is required to vote all such shares in the same manner as the holders of a majority of the shares that are not held in the CPO trust and that are voted at the relevant meeting. As a result, holders of ADSs or CPOs will not be entitled to exercise minority rights to protect their interests and are affected by decisions taken by significant holders of our shares that may have interests different from those of holders of ADSs and CPOs.

C. FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. We may from time to time make forward-looking statements in our periodic reports to the Securities and Exchange Commission on Forms 20-F and 6-K, in our annual report to shareholders, in offering circulars and prospectuses, in press releases and other written materials, and in oral statements made by our officers, directors or employees to analysts, institutional investors, representatives of the media and others. This annual report contains forward-looking statements. Examples of such forward-looking statements include:

	•		projections of operating revenues, net income (loss), earnings per share, capital expenditures, dividends, cash flow, capital structure or other financial items or ratios;

	•		statements of our plans, objectives or goals, including those related to anticipated trends, competition, regulation, government housing policy and rates;

	•		statements about our future performance or economic conditions in Mexico or other countries in which we operate; and

	•		statements of assumptions underlying such statements.

Words such as “believe,” “could,” “may,” “will,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “potential,” “predict,” “forecast,” “guideline,” “should” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors, some of which are discussed under “Risk Factors,” include cancellations of significant construction projects included in backlog, material changes in the performance or terms of our concessions, additional costs incurred in projects under construction, developments in legal proceedings, unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms, changes to our liquidity, economic and political conditions and government policies in Mexico or elsewhere, changes in capital markets in general that may affect policies or attitudes towards lending to Mexico or Mexican companies, changes in inflation rates, exchange rates, regulatory developments, customer demand, competition and tax and other laws affecting ICA’s businesses. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those in forward-looking statements.

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments.

Item 4.Information on the Company

A. HISTORY AND DEVELOPMENT OF THE COMPANY

We are asociedad anonima bursatil de capital variableincorporated as Empresas ICA, S.A.B. de C.V. under the laws of Mexico. Our business began in 1947 with the incorporation of Ingenieros Civiles Asociados, S.A., which provided construction services for infrastructure projects for the Mexican public sector. Our registered office is located at Blvd. Manuel Avila Camacho 36, Col. Lomas de Chapultepec, Del. Miguel Hidalgo, 11000 Mexico City, Mexico, telephone (52-55) 5272-9991.

Based on data from the Mexican Chamber of the Construction Industry (Camara Mexicana de la Industria de la Construccion) and the INEGI (Instituto Nacional de Estadistica, Geografia e Informatica), we are the largest engineering, procurement and construction company in Mexico based on our relative share of the total revenues of the formal construction sector in Mexico, and are the largest provider in Mexico of construction services to both public and private-sector clients. We are engaged in a full range of construction and related activities, involving the construction of infrastructure facilities, as well as industrial, urban, and housing construction. In addition, we are engaged in the development and marketing of real estate, the construction, maintenance and operation of airports, highways, bridges and tunnels and in the management and operation of water supply systems and solid waste disposal systems under concessions granted by governmental authorities.

Since 1947, we have expanded and diversified our construction and related businesses. In the past, our business strategy had been to strengthen and expand our core construction business, while diversifying our sources of revenue. The Mexican economic crisis triggered by the peso devaluation in 1994 led us to seek new growth opportunities in related businesses in Mexico and in construction businesses outside of Mexico, notably Latin America. After a protracted construction crisis in Mexico, in 1999 we started our non-core divestment program, under which we sold non-core assets, and used the proceeds from such sales to pay corporate debt. We concluded our non-core divestment program in 2006. In recent years, we have redefined our business focus to emphasize our construction business, which in 2010 and 2009 accounted for approximately 80% and 81%, respectively, of our revenues.

In recent years, we have also increased our participation in construction-related businesses both in Mexico and in foreign markets, such as infrastructure operations and housing development as part of our strategy to minimize the effect of business and macroeconomic cycles in the construction industry. The strategy to pursue projects in foreign markets will continue to be an ongoing practice in future years.

In February 2011, we began construction pursuant to two agreements to build and operate over a 22-year term two federal penitentiaries: one for Ps.3,796 million and one for Ps.3,748 million. Construction is expected to take 16 months and will be included in our backlog as of the first quarter of 2011. The infrastructure operations relate to non-penitentiary services.

Capital Spending and Divestitures

Our capital spending program is focused on the acquisition, upgrading and replacement of property, plant and equipment as well as investments in infrastructure concessions required for our projects.

The following table sets forth our capital spending for each year in the three-year period ended December 31, 2010. Capital spending for all years in the following table includes amounts invested for property, plant and equipment as well as for acquisitions of real estate inventories. Acquisitions of real estate inventories are included in operating activities in our consolidated statements of cash flows, for which reason the table below does not represent capital expenditures as reported in our consolidated statements of cash flows.


	Year Ended December 31,
	2010		2010		2009		2008
	(Millions of
	U.S. dollars)		(Millions of Mexican pesos)
Construction:
Civil	U.S. $	69	Ps.	850	Ps.	827	Ps.	964
Industrial		3		40		16		43
Rodio Kronsa		3		38		95		59

Total		75		928		938		1,066

Airports		51		626		943		2,332
Concessions		181		2,239		1,676		3,935
Housing Development		345		4,278		2,650		3,981
Corporate and Other		1		14		30		38

Total	U.S. $	653	Ps.	8,085	Ps.	6,237	Ps.	11,352

Aggregate capital spending increased 30% in 2010 as compared to 2009. The increase in aggregate capital spending in 2010 primarily reflected increased spending in our Concessions segment and Housing segment.

Aggregate capital spending decreased 45% in 2009 as compared to 2008. The decrease primarily reflected decreased spending in the Airports segment and the large investment in the Mayab concession in 2008.

Our principal capital expenditures currently in progress include Ps.2,239 million in investments in our Concessions segment. All of such principal expenditures are geographically located in Mexico and funded through third party financings, including proceeds from our 2011 notes offering and our 2009 equity offering. Third party financing, other than our 2011 notes offering and 2009 equity offering, is typically structured through project finance vehicles.

Capital expenditures related to our Housing Development segment include Ps.4,177 million of real estate inventories which include land and projects under construction. Capital spending related to our real estate inventories was Ps.2,620 million and Ps.3,915 million as of December 31, 2009 and 2008, respectively.

In March 2010, we were approached by the Government of Panama, which expressed its interest in purchasing our investment in the Corredur Sur tollroad for U.S.$420 million. Since such date, we have been in discussions with the Government of Panama regarding the potential sale. The negotiation of the definitive agreement is still in progress, and may include our continued participation as operator of the related tollroad. Should the Government of Panama ultimately decide not to purchase our investment in the Corredor Sur tollroad, we have no current intention to actively market its sale and we will continue operating the concession in the ordinary course of business. On December 31, 2010, the outstanding principal balance of the project’s debt was approximately U.S.$142 million. We intend to repay the project’s debt as a precedent to closing, in conjunction with the share purchase transaction. We have also been approached by a potential buyer to enter into a non-binding agreement to sell our Queretaro—Irapuato and Irapuato—La Piedad highway project, a public-private partnership, in exchange for an increased shareholding in our affiliate RCO and cash. Finally, in December 2010, our equity method investee Autopistas Concesionadas del Altiplano, S.A. de C.V. sold its assets used for the concession of the San Martin-Tlaxcala-El Molinito highway for Ps.609 million, of which we received Ps.120 million. Other than these potential divestitures, there are no significant divestitures in progress.

Our board of directors and management may from time to time engage in discussions regarding possible strategic transactions, including merger, acquisition or divestment transactions with third parties and other alternatives, for the purpose of strengthening our position. However, there can be no assurance that we will be able to successfully identify, negotiate and complete any such strategic transactions. In addition, if we complete a strategic transaction, the implementation of such transaction will involve risks, including the risks that we will not realize the expected benefits of such transaction, that we may be required to incur non-recurring costs or other charges and that such transaction may result in a change in control. In addition, certain strategic transactions must be approved by our stockholders or board of directors, depending upon their materiality, and may require, among other things, approval from governmental agencies.

Public Sector Spending and the Mexican Economy

Our performance and results of operations historically have been tied to Mexican public sector spending on infrastructure and industrial facilities. Mexican public sector spending, in turn, has generally been dependent on the state of the Mexican economy and accordingly has varied significantly in the past. Mexico’s gross domestic product grew 1.5% overall in 2008 and 3.3% in 2007. GDP fell by approximately 6.5% in 2009. During 2010, GDP grew 5.5%. The average interest rates on 28-day Mexican treasury notes were 4.4% in 2010, 5.4% in 2009 and 7.7% in 2008. Inflation was 4.4% in 2010, 3.6% in 2009 and 6.5% in 2008.

According to the INEGI, gross domestic product of the Mexican construction sector, in real terms as compared to the prior year, remained flat at 0.0% in 2010, decreased 6.4% in 2009 and increased 3.1% in 2008, and represented 6.3%, 6.6% and 6.7% of Mexico’s total gross domestic product in those years, respectively. In 2010, according to data published by the Mexican Central Bank, Mexican public sector spending on infrastructure projects increased 1.2% in real terms in comparison to 2009.

In 2007, President Felipe Calderon unveiled his National Infrastructure Program, which the government has announced is designed to expand Mexico’s infrastructure, accelerate Mexico’s economic growth and make the Mexican economy more internationally competitive. The National Infrastructure Program anticipates public and private investments totaling Ps.951 billion from 2007 to 2012 in highways, railroads, ports, airports, telecommunications, water and sanitation, irrigation and flood control

projects. In addition, the National Infrastructure Program calls for an additional Ps.1,581 billion in energy sector investments. In February 2008, the Mexican government announced the creation of the National Fund for Infrastructure within the Banco Nacional de Obras y Servicios Publicos, S.N.C., or Banobras, development bank. The government stated that it intends to use the National Fund for Infrastructure to counteract effects of the credit crisis and related turmoil in the global financial system by providing financing, including guarantees, for important projects. The initial funding of Ps.44,000 million for the National Fund for Infrastructure came from the privatization of the first package of tollroads offered by the Fideicomiso de Apoyo Rescate de Autopistas Concesionadas, or FARAC, in 2007. Through 2012, the National Fund for Infrastructure has stated that it expects to channel approximately Ps.270,000 million in resources into communications and transportation, environmental, water, and tourism development projects. Although the progress of the National Infrastructure Program has not been as rapid as originally announced, particularly in the areas of energy, ports, and railways, we have seen the rate of awards increase in water treatment and water supply and continued progress in highways. One of the beneficiaries of the National Fund for Infrastructure lending from Banobras development bank is our Rio de los Remedios highway project, which in February 2010 entered into a Ps.3,000 million facility with Banobras. As of August 2010, according to the Mexican Ministry of Finance and Public Credit, 40.3% of the public and private funds directed to the National Infrastructure Program had been used, leaving about U.S.$140 billion in available funds for transportation, water and energy projects for 2011 and 2012.

B. BUSINESS OVERVIEW

In previous years, we reported six segments, which included the aggregation of airport concessions and other concessions into one segment, the Infrastructure segment. After further review of internal financial information delivered to key management, the importance of the airport and other concessions individually, and review of the decision-making processes in relation to those reports, management determined that the airport concessions and other concessions should be presented as separate segments. Information presented herein has been restated to reflect these segments individually. Accordingly, currently our operations are divided into the following seven segments:

	•		Civil Construction,

	•		Industrial Construction,

	•		Rodio Kronsa,

	•		Concessions,

	•		Airports,

	•		Housing Development, and

	•		Corporate and Other.

Our construction business is comprised of Civil Construction, Industrial Construction and Rodio Kronsa segments. In all three construction segments, we provide a full range of services, including feasibility studies, conceptual design, engineering, procurement, project and construction management, construction, maintenance, technical site evaluations and other consulting services.

Historically, substantially all of our construction services were performed in connection with projects developed and financed by third parties. However, in recent years governments and government agencies, including the Mexican government and Mexican state-owned enterprises, have significantly reduced their spending on the development of infrastructure and industrial facilities and have sought, instead, to stimulate private investment in such facilities. Accordingly, we are increasingly required to participate in arranging the financing for the construction of infrastructure facilities and to invest equity or provide other financing for such projects. Competition has also increased due in part to the ability of many foreign competitors to obtain financing on more attractive terms. In recent years, we have experienced strong demand for infrastructure projects in which we are required to obtain financing, especially in projects for the construction of highways, railroads, power plants, hydroelectric projects, prisons, water storage facilities and oil drilling platforms and refineries, which is reflected in the higher volume of work we have recently undertaken on public sector projects.

Description of Business Segments

Construction

Our construction business is divided into the Civil Construction, Industrial Construction and Rodio Kronsa segments. In 2010, our construction business, comprised of the three construction segments, accounted for 80% of our revenues.

Contracting Practices

Historically, a majority of our construction business was conducted under unit price contracts, which contain an “escalation” clause that permits us to increase unit prices to reflect the impact of increases in the costs of labor, materials and certain other items due to inflation. Under this traditional form of contract, while a total price is quoted, the construction project is broken down into its various constituent elements, such as excavation volume, square footage of built-up area, footage of pipes to be laid, and a price per unit is established for each such element. Where the amount of work required to complete the contract (i.e., the amount of each constituent element) is greater than the amount quoted in the contract due to incorrect specifications or changes in specifications, we are entitled to an increase in the contract price on the basis of the quantity of each element actually performed, multiplied by its unit price. These unit price contracts allow flexibility in adjusting the contract price to reflect work actually performed and the effects of inflation. In January 2010, we were awarded a U.S.$268 million unit priced contract with the Panama Canal Authority for the construction of a 3 kilometer section of the new Pacific Access Channel for the Panama Canal Pacific locks.

In recent years, however, our construction contracts have been increasingly of the fixed price type or not to exceed type, which generally do not provide for adjustment of pricing except under certain circumstances for inflation or as a result of errors in the contract’s specifications, or mixed price contracts in which a portion of the contract is at fixed price and the rest at unit prices. Examples of mixed price projects in which we are currently involved include the La Yesca hydroelectric project in the Civil Construction segment and the clean fuels projects with Pemex in the Industrial Construction segment. Fixed price, not-to-exceed and mixed price contracts collectively accounted for approximately 86% of our construction backlog as of December 31, 2010, 75% of our construction backlog as of December 31, 2009 and 75% of our construction backlog as of December 31, 2008. We believe that fixed price contracts are more prevalent in the construction market and the contracts that we enter into in the future may reflect this shift to fixed price contracts. Additionally, we expect that, because of conditions attendant to financing arrangements, future concession-related, infrastructure and industrial construction contracts may restrict the adjustment of the contract price for additional work done due to incorrect contract specifications. In 2008, we entered into two large contracts for public sector works (Line 12 of the Mexico City metro system and the Eastern Discharge Tunnel of the Mexico City valley drainage system) under a traditional public works mechanism, in which the counterparty pays us periodically (often monthly) as our work is certified over the term of the contract and we do not finance the project. Traditional public works contracts, under Mexican law, provide for the price adjustment of certain components, regardless of whether the contract is fixed price (as with Line 12) or mixed price (as with The Eastern Discharge Tunnel, which involves unit prices for construction and fixed prices for management services).

We earn a significant portion of our construction revenues under contracts whose prices are denominated in currencies other than Mexican pesos, substantially all of which are of the fixed price, mixed price or not-to-exceed type. Approximately 27% of our contract awards in 2010 (based on the contract amount) were foreign currency denominated. Approximately 28% of our construction backlog as of December 31, 2010 was denominated in foreign currencies. Substantially all of our foreign currency denominated contracts are denominated in U.S. dollars, except for contracts entered into by our Rodio Kronsa segment and certain other foreign projects, which are denominated in other currencies, principally euros.

Our policy requires that a committee comprised of a number of our legal and finance executives review and approve all construction projects and concessions with construction components expected to generate material revenues. The committee supervises our decisions to bid on new construction projects based upon a number of criteria, including the availability of multilateral financing for potential projects, the availability of rights of way, the adequacy of project specifications, the customer’s financial condition and the political stability of the host country, if the project is outside of Mexico.

We obtain new contracts for new projects either through a process of competitive bidding or through negotiation. Generally, the Mexican government and its agencies may only award construction contracts through a public bidding process conducted in accordance with the Public Works and Related Services Law(Ley de Obras Publicas y Servicios Relacionados con las Mismas). However, public sector construction contracts may be awarded without a public bidding process under limited circumstances, such as where the amount involved is low, the project must be completed on an emergency basis, or technology or special patents are required. Pursuant to a reform in 2009 of the Public Works and Related Services Law, public sector construction contracts may also be awarded without a public bidding process when the contract is related to national security, the publicly-bid contract has been rescinded due to

breach by the winning contractor, the bidding process has been declared null due to economic insolvency or inconsistency with technical requirements (technical insolvency), provided the conditions of contracting are the same as those originally published, the contracting party will perform the contract to set off a debt against the government in compliance with Federal Treasury Services Law (Ley de Servicios de Tesoreria de la Federacion), there is a proven strategic alliance between the government and the contractor in order to improve and transfer technological innovation to national infrastructure, and the contract is to perform or complete planning of an infrastructure project provided that the price is complies with rules set by the Ministry of the Federal Audit (Auditoria Superior de la Federacion). The majority of the contracts for new projects awarded to us from Mexican public-sector clients are awarded through competitive bidding. Most contracts for new projects awarded to us by private sector and foreign government clients are also the result of a bidding process.

The competitive bidding process poses two basic risks: we may bid too high and lose the bid or bid too low and adversely affect our gross margins. The volume of work generally available in the market at the time of the bid, the size of our backlog at that time, the number and financial strength of potential bidders, whether the project requires the contractor to contribute equity or extend financing to the project, the availability of equipment and the complexity of the project under bid are all factors that may affect the competitiveness of a particular bidding process. Direct negotiation (as opposed to competitive bidding) generally tends to represent a more certain method of obtaining contracts and to result in better gross margins.

In addition to contracts for new projects, increases in the scope of work to be performed in connection with existing projects are an important source of revenue for us. In 2010, increases in scope of work accounted for Ps.10,065 million, or 29%, of our year-end backlog. Contracts for such work are not typically put up for bid, but are negotiated by the client with the existing contractor.

In determining whether to bid for a project, we take into account (apart from the cost, including the cost of financing, and potential profit) efficient usage of machinery, the relative ease or difficulty of obtaining financing, geographic location, project-specific risks, current and projected backlog of work to be performed, our particular areas of expertise and our relationship with the client.

As is customary in the construction business, from time to time we employ sub-contractors for particular projects, such as specialists in electrical, hydraulic and electromechanical installations. We are not dependent upon any particular sub-contractor or group of sub-contractors.

Construction Backlog

Backlog in the engineering and construction industry is a measure of our share of the total dollar value of accumulated signed contracts at a particular moment.

The following table sets forth, at the dates indicated, our backlog of construction contracts.


	As of December 31,
	2010		2010		2009		2008
	(Millions of
	U.S. dollars)		(Millions of Mexican pesos)
Construction
Civil	Ps.	2,106	Ps.	26,081	Ps.	28,013	Ps.	35,885
Industrial		683		8,455		6,320		3,075
Rodio Kronsa		35		438		400		563

Total	Ps.	2,824	Ps.	34,974	Ps.	34,733	Ps.	39,523

Total contract awards and net additions to existing contracts totaled Ps.28,090 million (approximately U.S.$2,269 million) in 2010. See Note 7 to our consolidated financial statements. Six projects represented approximately 68% of backlog in the Civil Construction segment, and 51% of total backlog, at December 31, 2010. The Mitla-Tehuantepec highway accounted for Ps.5,591 million, or 16%, of our total backlog as of December 31, 2010. We expect to complete this project in the fourth quarter of 2013. The La Yesca hydroelectric project accounted for Ps.3,385 million, or 10%, of our total backlog at December 31, 2010. We expect to complete this project in the fourth quarter of 2012. The Eastern Discharge Tunnel of the Mexico City valley drainage system, which we expect to complete in the first quarter of 2013, accounted for Ps.2,837 million, or 8%, of our total backlog as of December 31, 2010. The Agua Prieta Water Treatment Plant accounted for Ps.2,211 million, or 6%, of our total backlog as of December 31, 2010. We expect to complete this project in the fourth quarter of 2013. The Rio de los Remedios-Ecatepec highway, which we expect to complete in the second half of 2011, accounted for Ps.2,108 million, or 6%, of our total construction backlog as of December 31, 2010. The Atotonilco water treatment plant, which we expect to complete in November 2013, accounted for Ps.1,676 million, or 5%, of our total construction backlog as of December 31, 2010.

In the Industrial Construction segment, backlog was Ps.8,455 million as of December 31, 2010. The four contracts for clean fuels projects (Salina Cruz, Madero, Minatitlan and Cadereyta) for Mexico’s state-owned oil company, Pemex, together accounted for Ps.6,516 million, or 77% of industrial construction backlog or 19% of our total construction backlog as of December 31, 2010. We expect to complete the Cadereyta project in the third quarter of 2012 and Salina Cruz, Madero and Minatitlan in 2013.

As of December 31, 2010, approximately 5% of construction backlog was attributable to construction projects outside Mexico and public sector projects represented approximately 92% of our total backlog. At December 31, 2010, contracts with a value exceeding U.S.$250 million accounted for 26% of our total backlog, contracts with a value ranging from U.S.$50 million to U.S.$250 million accounted for 63% of our total backlog, and contracts with a value of less than U.S.$50 million accounted for 11% of our total backlog.

In certain instances, we have guaranteed completion by a scheduled acceptance date or achievement of certain acceptance and performance testing levels. Failure to meet any such schedule or performance requirements could result in costs that exceed projected profit margins, including penalties of up to 20% of the contract price. Fixed price, not-to-exceed and mixed price contracts collectively accounted for approximately 86% of our construction backlog as of December 31, 2010. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Construction — Construction Backlog.”

Competition

The principal competitive factors in each construction segment, in addition to price, are performance and the ability to provide the engineering, planning, financing and management skills necessary to complete a project in a timely fashion.

The market for construction services in Mexico and elsewhere is highly competitive. In the Civil Construction and Industrial Construction segments, competition is relatively more intense for infrastructure and industrial construction projects outside Mexico.

In our Civil Construction segment, in addition to the Mexican companies, we compete primarily with Spanish and Brazilian companies. Major competitors include Impulsora del Desarrollo y el Empleo en America Latina, or IDEAL, and Carso Infraestructura y Construcciones, S.A.B. de C.V., both related parties of Grupo Carso, Gutsa Construcciones, S.A. de C.V., Tradeco Infraestructura, S.A. de C.V., La Nacional Compañia Constructora S.A. de C.V. and La Peninsular Compañia Constructora S.A. de C.V. (both members of Grupo Hermes), Promotora y Desarrolladora Mexicana, S.A. de C.V., Azvi-Cointer de Mexico, S.A. de C.V., Fomento de Construcciones y Contratas, S.A., or FCC, ACS Actividades de Construcciones y Servicios, S.A. and Dragados S.A. (together, ACS), Constructora Norberto Odebrecht S.A. and Andrade Gutierrez S.A. This market is fragmented, with many small local participants in civil construction.

In our Industrial Construction segment, we compete with Mexican, Brazilian, Argentine, Korean and Japanese companies, including Odebrecht, Cobra Gestion de Infraestructuras, S.A. and Dragados Industrial and Dragados Offshore (each part of ACS), Techint S.A. de C.V., Duro Felguera Mexico, S.A. de C.V., Mitsubishi Corporation, Swecomex, S.A. de C.V. (a member of Grupo Carso), Transportacion Maritima Mexicana, S.A. de C.V., Samsung Ingenieria Manzanillo, S.A. de C.V., Grupo R S.A. de C.V., Korea Gas Corporation, Abengoa/Abener Energia, CELASA, Construcciones Mecanicas Monclova, Industrial Perforadora de Campeche, Inelectra, Samsung Engineering, Senermex, Snam/Saipam, Tecnicas Reunidas, Tradeco and TransCanada.

In our Concessions segment, we compete primarily with Mexican and Spanish companies, including Carso Infraestructuras, S.A. de C.V., OMEGA Construcciones Industriales, S.A. de C.V., Global Via Infraestructuras, S.A., OHL Concesiones S.A., Acciona Infraestructuras, S.A. or Acciona, Befesa, S.A. (a member of Grupo Abengoa), as well as other companies such as the Macquarie Infrastructure Group.

We believe that our proven track record in Mexico and our experience and know-how have allowed us to maintain our leadership position in the Mexican construction market. In recent years, the sponsors of many infrastructure construction and

industrial construction projects throughout the world, including in Mexico, have required contractors to provide construction on a “turnkey” basis. Many of our foreign competitors have better access to capital and greater financial and other resources and we have been increasingly experiencing significant competition in Mexico from Brazilian, Japanese, Spanish and, to a lesser extent, other European construction companies in recent years. The Rodio Kronsa segment faces substantial competition in Spain from large construction companies that operate in that market, as well as from smaller, specialized construction companies that provide the same services offered by Rodio Kronsa.

Raw Materials

The principal raw materials we require for our construction operations are cement, construction aggregates and steel. In our Civil Construction segment, raw materials accounted for Ps.4,549 million, or 15%, of our cost of sales in 2010, Ps.2,564 million, or 10%, of our cost of sales in 2009 and Ps.1,091 million, or 6%, of our costs of sales in 2008. In our Industrial Construction segment, raw materials accounted for Ps.2,000 million, or 7%, of our cost of sales in 2010, Ps.1,309 million, or 5%, of our cost of sales in 2009 and Ps.1,418 million, or 8%, of our cost of sales in 2008.

Civil Construction

Our Civil Construction segment focuses on infrastructure projects in Mexico, including the construction of roads, highways, transportation facilities (such as mass transit systems), bridges, dams, hydroelectric plants, prisons, tunnels, canals and airports, as well as on the construction, development and remodeling of large multi-storied urban buildings, including office buildings, multiple-dwelling housing developments and shopping centers. Our Civil Construction segment has also pursued opportunities in other parts of Latin America, the Caribbean, Asia and the United States, and in 2010 was pursuing select opportunities outside of Mexico and performing one construction project in Panama. Our Civil Construction segment performs activities such as demolition, clearing, excavation, de-watering, drainage, embankment fill, structural concrete construction, concrete and asphalt paving, and tunneling. In 2010, our Civil Construction segment accounted for approximately 63% of our total revenues.

The Civil Construction segment’s projects are usually large and complex and require the use of large construction equipment and sophisticated managerial and engineering techniques. Although our Civil Construction segment is engaged in a wide variety of projects, our projects generally involve contracts whose terms range from two to five years.

We have played an active role in the development of Mexico’s infrastructure and have completed large infrastructure facilities and constructed buildings throughout Mexico and Latin America. Among the facilities and buildings we have constructed from our incorporation in 1947 through 2010:

	•		the Apulco, Comedero, El Novillo, El Caracol, Cajon de Peña, Tomatlan, Infiernillo, Chicoasen, El Guineo, El Cobano, Jicalan, Falcon, Huites, Aguamilpa, Caruachi and El Cajon dams;

	•		the Guadalajara-Colima, Mazatlan-Culiacan, Leon-Lagos-Aguascalientes, Guadalajara-Tepic, Mexico City-Morelia-Guadalajara, Cuernavaca-Acapulco, Oaxaca-Sola de Vega and Torreon-Saltillo concessioned highways and the Tehuacan-Oaxaca federal highway;

	•		17 of the 58 existing airports in Mexico and two airports outside Mexico (the Tocumen Panama international airport in Panama and the Philip S.W. Goldson international airport in Belize) and Terminal 2 of the Mexico City International Airport;

	•		various hotels and office buildings, including the Maria Isabel Sheraton, Nikko, Paraiso Radisson Mexico City, Westin Regina Los Cabos and the Torre Mayor, among others;

	•		lines one through nine, A and part of B of the Mexico City metro system; and

	•		the Mexico City sewage system.

The most important projects under construction by the Civil Construction segment during 2010 included:

•

Line 12 of the Mexico City metro system;

	•		the La Yesca hydroelectric project;

	•		the Rio de los Remedios-Ecatepec highway; and

	•		the Eastern Discharge Tunnel of the Mexico City valley drainage system.

The Civil Construction segment’s contract awards in 2010 totaled approximately Ps.11,662 million (approximately U.S.$942 million), of which Ps.1,465 million were awarded outside Mexico.

Autovia Urbana Sur. We were awarded a 30-year concession by the Federal District of Mexico, as part of a consortium with IDEAL, a construction contract for the elevated toll section of the Autovia Urbana Sur expressway in Mexico City. The fixed price contract totals Ps.5,366 million and is expected to be executed over approximately 19 months. Due to execution of the construction agreement on March 8, 2011, the construction work will be included in ICA’s backlog as of the first quarter of 2011.

Eastern Discharge Tunnel. In November 2008, the Mexican National Water Commission (Comision Nacional de Aguas), the government of Mexico City and the government of the state of Mexico, acting together as a trust, awarded an ICA-led consortium a Ps.9,526 million (excluding value-added tax) contract for the construction of the Eastern Discharge Tunnel (Tunel Emisor Oriente) in the Mexico City valley. The tunnel will increase drainage capacity in the Mexico City region and prevent flooding during the rainy season. The ICA-led consortium, Constructora Mexicana de Infraestructura Subterranea, S.A. de C.V., is comprised of Ingenieros Civiles Asociados, S.A. de C.V., Carso Infraestructura y Construccion, S.A.B. de C.V., Construcciones y Trituraciones, S.A. de C.V., Constructora Estrella, S.A. de C.V. and Lombardo Construcciones, S.A. de C.V. We recognize 50% of the operations from this project (Ps.4,727 million of the total construction contract), an increase from the 40% participation we recognized before 2009 due to our acquisition of Construcciones y Trituraciones S.A. de C.V., or COTRISA, in September 2009. The fixed-term contract has both unit price and fixed price components, and scheduled completion of the project for January 2013. The construction contract is under a traditional public works mechanism, in which the counterparty pays us periodically (often monthly) as our work is certified over the term of the contract and we do not finance the project. The project includes the construction of a 62-kilometer tunnel and 24 related access shafts. The tunnel will start at the border of the Federal District and Ecatepec, run along one side of Lake Zumpango, and end in El Salto, Hidalgo.

Line 12 of the Mexico City Metro. In July 2008, the government of Mexico City through its Directorate General of Transportation Works awarded an ICA-led consortium a Ps.15,290 million (excluding value-added tax) construction contract for Line 12 of the Mexico City metro system. Our civil construction subsidiary Ingenieros Civiles Asociados, S.A. de C.V. holds a 53% interest in the consortium, while Carso Infraestructura y Construccion, S.A.B. de C.V., the construction partner, holds a 17% interest, and Alstom Mexicana, S.A. de C.V., the integrator for the electro-mechanical systems, holds a 30% interest. The construction contract is under a traditional public works mechanism, in which the counterparty pays us periodically (often monthly) as our work is certified over the term of the contract and we do not finance the project. After a modification agreement with the client, we expect to complete this fixed-price, fixed-term project in the second quarter of 2012. The project includes the construction of a new 24.7-kilometer metro line that will link the eastern and western parts of the city, from Tlahuac to Mixcoac. The construction contract divides the project into two phases and is expected to be placed into service by April 30, 2012. The terms of the construction contract require us to post a performance bond in the amount of 10% of the total contract value, to be canceled on completion of the works. Once completed, Line 12 is expected to have the capacity to serve up to 412,000 passengers per day. The Mexico City metro system is the fifth largest urban transport system in the world, today extending more than 200 kilometers on 11 lines. Once Line 12 is completed, the system will extend more than 225 kilometers.

La Yesca. In September 2007, the Mexican Federal Electricity Commission awarded a U.S.$768 million contract for the engineering, procurement and construction of the La Yesca hydroelectric project to our subsidiary Constructora de Proyectos Hidroelectricos S.A. de C.V., or CPH. The La Yesca hydroelectric project is located on the border between the states of Jalisco and Nayarit, and is comprised of civil construction, electromechanical and ancillary work including the procurement, engineering, construction, transportation, start-up, testing and commissioning of two 375-megawatt turbogenerating units. The terms of the La Yesca contract required that we secure financing for the project costs and limit disbursements during the construction phase to 90% of the cash cost of any certified work performed. CPH arranged financing of U.S.$910 million for a construction line of credit and U.S.$80 million at commencement for a revolving line of credit for the La Yesca hydroelectric project from WestLB AG, which also structured the financing for the El Cajon hydroelectric project. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — La Yesca.” Because the terms of the construction contract provide that the

Mexican Federal Electricity Commission will pay for the project upon completion and the financing obtained by CPH covers only the project’s cash costs, the project will not generate any significant cash flow to us until completion, which is scheduled to occur in the fourth quarter of 2012. However, because we recognize revenues from the La Yesca hydroelectric project based on the percentage-of-completion method of accounting, the project generated a substantial portion of our revenues in 2009 and 2010, and is expected to generate a substantial portion of our revenues in 2011. The La Yesca hydroelectric project generated Ps.3,793 million of revenue, or 11% of total revenues, in 2010. The La Yesca hydroelectric project represented a substantial portion of our receivables and our indebtedness in 2010 and is expected to continue to represent a substantial portion of our receivables and our indebtedness in the future. At December 31, 2010, we had Ps.9,503 million in contract receivables (including receivables recognized using the percentage-of-completion method of accounting) and Ps.8,519 million of debt in our consolidated financial statements relating to the La Yesca hydroelectric project.

El Cajon. In March 2003, the Mexican Federal Electricity Commission awarded a U.S.$748 million (subsequently increased to U.S.$871 million) contract for the engineering, procurement and construction of the El Cajon hydroelectric project to our subsidiary Constructora Internacional de Infraestructura, S.A. de C.V., or CIISA. The El Cajon hydroelectric project was Mexico’s first engineering, procurement and construction contract for the complete construction of a hydroelectric project under Mexico’s public works financing program. We completed construction of the project in August 2007 and the total payment received from the Mexican Federal Electricity Commission as of December 31, 2009 for the El Cajon hydroelectric project was U.S.$872.2 million. We are negotiating with the Mexican Federal Electricity Commission over certain items and prices, resulting in our recognition of an account receivable of U.S.$38.9 million. Because of the uncertainty of our receipt of the account receivable from the Mexican Federal Electricity Commission, we have created a provision for U.S.$8.7 million of this amount, which is our best estimation of what we may not receive. We cannot assure you that we will receive any part or all of the U.S.$38.9 million that remains unpaid.

In the past, our Civil Construction segment has pursued infrastructure projects in Central and South America and the Caribbean, and we expect to continue to do so, on a case-by-case basis in the future. Projects in these areas ranged from construction of a section of the subway system in Santiago, Chile to the construction of a natural gas pipeline system in Argentina and the Caruachi hydroelectric dam in Venezuela. In 2010, 2% of our revenues in the Civil Construction segment were attributable to construction activities outside Mexico. In January 2010, a consortium of ICA with 43%, Fomento de Construcciones y Contratas of Spain with 43%, and Constructora Meco of Costa Rica, with 14% was awarded, a contract with an approximate value of U.S.$268 million by the Panama Canal Authority for the construction of a 3 kilometer section of the new Pacific Access Channel (PAC-4) for the Panama Canal’s new Pacific locks, running parallel to the existing channel from the Pedro Miguel to the Miraflores locks. The unit price, fixed term public works contract was awarded through an international bidding process. The PAC-4 contract is part of the overall project to widen the Panama Canal.

Industrial Construction

Our Industrial Construction segment focuses on the engineering, procurement, construction, design and commissioning of large manufacturing facilities such as power plants, chemical plants, petrochemical plants, fertilizer plants, pharmaceutical plants, steel mills, paper mills, drilling platforms and automobile and cement factories. In 2010, our Industrial Construction segment accounted for 13% of our total revenues.

Relationship with ICA-Fluor.In 1993, we sold a 49% interest in our industrial construction subsidiary to Fluor Daniel Mexico, S.A., or Fluor, a subsidiary of The Fluor Corporation, forming the ICA-Fluor joint venture. Since 1993, we have owned 51% of the ICA-Fluor joint venture. Partner resolutions require the approval of a simple majority of ICA-Fluor’s partners’ interests, except for decisions relating to matters such as capital increases, changes to ICA-Fluor’s bylaws, dividend payments and a sale of all or substantially all of the assets of ICA-Fluor. We and Fluor are each entitled to appoint an equal number of members of ICA-Fluor’s board of directors and executive committee. Historically, we have designated the chief executive officer of ICA-Fluor. In addition, we and Fluor have agreed that ICA-Fluor will be the exclusive means for either party to provide construction, procurement, project management, start-up and maintenance services to the production and pipeline, power plant, petrochemical, industrial, environmental services, mining, chemicals and plastics and processing plants within Mexico, Central America, and the Caribbean. This agreement will terminate upon a sale by Fluor or us of any of our partnership interests in ICA-Fluor or, following a breach of any of the ICA-Fluor agreements, one year after payment of any damages due to the non-breaching party in respect of this breach. We believe that our alliance with Fluor provides us with a wider range of business opportunities in the industrial construction markets in and outside Mexico, as well as access to technology and know-how that give us a competitive advantage in these markets.

During 2010, 83% of the Industrial Construction segment’s revenues were derived from work performed for the public sector, as compared to 74% in 2009. The segment’s most important clients are Pemex Exploracion y Produccion, Pemex Refinacion and

Pemex Gas y Petroquimica Basica. In the private sector, the segment’s most important clients in 2010 were Altos Hornos de Mexico, S.A. de C.V. and Marathon Oil Company.

Typical Projects.Projects in our Industrial Construction segment typically involve sophisticated engineering techniques and require us to fulfill complicated technical and quality specifications. Our Industrial Construction segment contracts, as of December 31, 2010, were 44% peso-denominated and 56% dollar-denominated. 7% were unit-price, 49% were fixed price, 40% were mixed price and 4.0% were cost reimbursements, mainly from the contract for the Boleo mining project.

Among the principal projects we have completed in the Industrial Construction segment recently are:

	•		the Pemex Cayo Arcas offshore housing platform;

	•		the Pemex Reynosa V plant.

The Industrial Construction segment’s contract awards in 2010 totaled approximately Ps.5,303 million (approximately U.S.$428 million) and included projects such as:

The most important projects under construction by the Industrial Construction segment during 2010 included:

	•		the Pemex Tsimin offshore platform in Tampico;

	•		the engineering, procurement and construction management contract for the Boleo mining project in Baja California Sur;

	•		the Chicontepec II hydrocarbon deposit exploitation works;

	•		the AHMSA Phase II steel mill and plate line expansion;

	•		the four clean fuels low sulfur gasoline projects in Minatitlan, Cadereyta, Madero and Salina Cruz;

	•		the Minatitlan II refinery;

	•		the Terminal Dos Bocas tank repairs; and

	•		a cryogenic plant at the Poza Rica gas processing complex.

In 2010 and 2009, Mexico’s state-owned oil company, Pemex Refining, awarded contracts to us for the engineering, procurement and construction of four low sulfur gasoline projects in Mexico. The U.S.$1,291 million mixed price contracts are part of Pemex’s clean fuels program, and we consolidate the revenues of these contracts proportionally. ICA Fluor is additionally responsible for the engineering, procurement, construction, testing and start-up for the existing Hector R. Lara Sosa Refinery in Cadereyta, Nuevo Leon, the Francisco I. Madero Refinery in Ciudad Madero, Tamaulipas, the existing General Lazaro Cardenas del Rio refinery in Minatitlan, Veracruz and the Antonio Dovali Jaime refinery in Salina Cruz, Oaxaca.

Rodio Kronsa

The Rodio Kronsa segment consisted of our Spanish and Argentine operations through 2006, and consists of our Spanish operations since 2007. In 2010, the Rodio Kronsa segment accounted for 4% of our total revenues.

Through September 2008, our Spanish operations consisted of Rodio, (a sub-soil construction subsidiary) and Kronsa (a subsidiary that constructs specialized support piles). In October 2008, our subsidiaries Rodio Cimentaciones Especiales S.A. and Kronsa Internacional S.A. were merged to form a single entity, Grupo Rodio Kronsa S.L., or Rodio Kronsa. We own Grupo Rodio Kronsa through an intermediary holding company, Aps FRAMEX, or FRAMEX, which owns 100% of Grupo Rodio Kronsa. We own 50% of FRAMEX and Soletanche Bachy France owns the remaining 50% interest. Through September 2008, Rodio and Kronsa were each governed by a board of directors that was jointly appointed, in equal number, by Soletanche Bachy France and us, and we appointed the president of the board of each of Rodio and Kronsa. Since October 2008, one board of directors (appointed by us and

Soletanche Bachy France using the same procedures as when the entities were separate) governs Grupo Rodio Kronsa. The board appoints the officers that manage the day-to-day operations of Grupo Rodio Kronsa.

Rodio Kronsa was founded in the 1930s and specializes in all forms of sub-soil construction, including the construction of tunnels, underpasses and retaining walls. Most of Rodio’s contracts are of the unit price variety. Because of the nature of its work, Rodio Kronsa is often hired as a subcontractor. Sub-soil construction involves substantial risk due to the uncertainty of subsurface conditions and the possibility of flooding. We believe that these risks are mitigated by the fact that third parties develop the designs for most of Rodio Kronsa’s projects. Rodio Kronsa constructs retaining walls and specialized support piles for use in the construction industry. The principal market for Rodio Kronsa is Spain, although Rodio Kronsa has performed work in various foreign countries, including Russia, Morocco, and several Latin American countries and has subsidiaries in Portugal and Central America.

Among the principal projects Rodio Kronsa has completed between 1973 and 2010 are the following:

	•		sounding, drilling and various works for the Almendra dam in Salamanca, Spain, the Alcantara dam in Caceres, Spain, and the El Atazar Dam in Madrid, Spain;

	•		construction work for the MetroSur subway system in Madrid, Spain;

	•		sounding, drilling and various works for the Hatillo Dam in the Dominican Republic;

	•		the foundations for housing projects in Spain; and

	•		the M-30 freeway burial in Madrid.

In 2010, the most important projects under construction by Rodio Kronsa were:

	•		Porta Firal foundation work on the building to be the headquarters for Iberdrola, in Barcelona;

	•		Centro Penitenciario Norte/Besos, in Spain; and

	•		Line 12 of the Mexico City metro system;

Concessions

Our Concessions segment focuses on the construction, development, maintenance and operation of long-term concessions of tollroads, tunnels and water projects and accounted for 8% of our total revenues in 2010. The construction work we perform on our concessions is included in our Civil Construction segment. During 2009, we participated in six operating concessioned highways and one operating concessioned tunnel (the Acapulco tunnel) that we consolidate, and in the management and operation of a water treatment plant in Ciudad Acuña and other water supply systems, including the Aqueduct II water supply system that we began proportionally consolidating in 2008.

Contracting Practices

Mexican state and municipal governments and the governments of certain foreign countries award concessions for the construction, maintenance and operation of infrastructure facilities. The Mexican government actively pursues a policy of granting concessions to private parties for the construction, maintenance and operation of highways, bridges and tunnels to promote the development of Mexico’s infrastructure without burdening the public sector’s resources and to stimulate private-sector investment in the Mexican economy. A long-term concession is a license of specified duration (typically between 20 and 40 years), granted by a federal, state or municipal government to finance, build, establish, operate and maintain a public means of communication or transportation.

Our return on any investment in a concession is based on the duration of the concession, in addition to the amount of toll revenues collected or government payments based on operation volume, operation and maintenance costs, debt service costs and other factors. Recovery of our investment in highway concessions is typically accomplished through the collection of toll tariffs or, if under the Public/Private Partnership (PPP) contract structure, a fixed payment for highway availability (together with a smaller shadow tariff

based on traffic volume), or a combination of the two methods. Our return on investment in our water treatment concessions is generally based on the volume of water supplied or treated.

To finance the obligations of our projects, we typically provide a portion of the equity and the rest is arranged through third party financing in the form of loans and debt securities. Recourse on the indebtedness is typically limited to the subsidiary engaged in the project. Our investment of equity is returned over time once the project is completed. Generally, we contribute equity to a project by accepting deferred payment of a portion of its construction contract price. Depending on the requirements of each specific infrastructure concession project, we typically seek to form a consortium with entities that have expertise in different areas and that can assist us in obtaining financing from various sources.

Highway, Bridge and Tunnel Concessions

During 2010, we participated in seven operating concessions: six highways and one operating concessioned tunnel (the Acapulco tunnel) that we consolidate.

The following table sets forth certain information as of December 31, 2010, regarding the highway, bridge and tunnel concessions in which we currently participate, either through subsidiaries or affiliates. As of December 31, 2010, we had six highway, bridge and tunnel concessions in operation.


											Concessionaire’s
											Net Investment
					Concession						in Concession
			Date of		Term		% Ownership of		% Ownership of		(Millions of
Concession (highway, bridge, and tunnel)	Kilometers		Concession		(Years)		Concessionaire(1)		Construction		Mexican pesos)(2)
Acapulco tunnel(3)(4)		2.9		1994		40		100		100		1,279
Corredor Sur highway (Panama)(3)(4)(5)		19.8		1996		30		100		100		2,007
Irapuato—La Piedad highway(3)(4)(5)		74.32		2005		20		100		100		714
Queretaro—Irapuato highway(3)(4)(5)		92.98		2006		20		100		100		2,606
Nuevo Necaxa—Tihuatlan Highway(5)		85		2007		30		50		60		1,805
Rio Verde—Ciudad Valles Highway(5)		113.2		2007		20		100		100		2,002
RCO first package of tollroads(3)(4)(6)		558		2007		30		13.6		100		2,531
The Kantunil—Cancun Highway(3)(4)(5)		241.5		1990		30		100		100		2,558
The La Piedad Bypass(5)		67.5		2009		30		100		100		968
Mitla-Tehuantepec highway(5)		169		2010		20		100		60		1
Autovia Urbana Sur(6)		15.9		2010		30		30		100		—


(1)		Does not take into account the Mexican federal or local governments’ non-recoverable grants. Net investment does not reflect certain development costs or expenses associated with our negotiations with the Panamanian Ministry of Public Works and certain other costs. See “— Corredor Sur.”

(2)		Represents each concessionaire’s investment in the applicable concession, net of depreciation and revaluation of assets for inflation through 2007, except for RCO, in which it represents net investment in equity. For a description of the revaluation of assets for inflation through 2007, see Note 3 to our consolidated financial statements.

(3)		Concession in operation.

(4)		Concession fully consolidated in our financial statements.

(5)		Concession proportionally consolidated in our financial statements.

(6)		Concession accounted for using the equity method in our financial statements.

Acapulco Tunnel.In 1994, the government of the state of Guerrero granted our subsidiary Tuneles Concesionados de Acapulco, S.A. de C.V., or TUCA, a 25-year concession for the construction, operation and maintenance of a 2.9-kilometer tunnel connecting Acapulco and Las Cruces. The concession term started in June 1994. During the year ended December 31, 2001, we determined that the recovery value of the Acapulco tunnel was less than the accounting value then recorded for this concession, based on financial projections. For this reason, a loss from impairment was recorded for Ps.1,001 million (historical value). On November 25, 2002, the Congress of the State Government of Guerrero approved the extension of the concession term by 15 years because the actual volume of usage was lower than the amount foreseen by the terms of the concession agreement. During the year 2004, as a result of this extension of the concession period, we conducted a new analysis of the recovery value of the Acapulco tunnel and determined that a reversal of the loss from impairment should be recorded in the amount of Ps.161 million (historical value). In subsequent years, based on our policy for impairment of long-lived assets, we have continued evaluating the recovery value of this

concession with the assistance of independent experts. The market strategies we developed and the economic environment of the last few years have indicated a sustained recovery of cash flows from the Acapulco tunnel, for which reason as of December 31, 2009 we decided to further reverse the loss from impairment from 2001 in the amount of Ps.681 million (which amount includes inflation from 2001 through 2007), which has been recorded in the heading of Other (income) expenses, net in the 2009 consolidated statement of operations. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — Acapulco Tunnel” and Note 11 to our audited consolidated financial statements.

Corredor Sur.In 1995, the Panamanian Ministry of Public Works awarded ICA Panama, S.A., our wholly-owned subsidiary, a 30-year concession for the construction, operation and maintenance of the Corredor Sur highway, a four-lane, 19.8-kilometer highway in Panama. The first segment of the highway opened in August 1999 and the final segment opened in February 2000. In March 2010, we were approached by the Government of Panama, which expressed its interest in purchasing our investment in the Corredor Sur tollroad for U.S.$420 million. Since such date, we have been in discussions with the Government of Panama regarding the potential sale. The negotiation of the definitive agreement is still in progress. If the transaction occurs, we expect to continue to operate the tollroad through a services contract and expect to retain the right to expand the project through public works contracts to be agreed from time to time. If the transaction does not occur, we expect to operate the concession in the ordinary course of business. As of December 31, 2010, the outstanding principal balance of the project’s debt is approximately U.S.$142 million. We intend to repay this debt if the sale of ICA Panama takes place. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — Corredor Sur” and “Item 8. Financial Information — Legal and Administrative Proceedings — Legal Proceedings — Corredor Sur.”

The Irapuato-La Piedad Highway.In September 2005, the Ministry of Communications and Transportation awarded us a 20-year concession for the modernization, operation, conservation and maintenance of the Irapuato — La Piedad Highway. The 74.3 kilometer Irapuato — La Piedad highway will be a toll-free road under a Public/Private Partnership contract. Recovery of our investment will be accomplished through a two-part integrated quarterly payment made by the Ministry of Communications and Transportation. We will be paid a fixed payment for highway availability and a shadow tariff based on traffic volume. The improvements to the highway were completed and became fully operational in September 2009. In 2010, we were approached by a potential buyer to enter into a non-binding agreement to sell our Irapuato — La Piedad and Queretaro — Irapuato (described below) highway projects in exchange for an increased shareholding in our affiliate RCO and cash. If the sale is not consummated, we will continue to operate the concession in our regular course of business.

The Queretaro-Irapuato Highway.In June 2006, the Ministry of Communications and Transportation awarded us a 20-year concession for the modernization, operation, conservation and maintenance of the Queretaro — Irapuato Highway. The 108-kilometer Queretaro — Irapuato highway, of which 93 kilometers is under our concession, is a toll-free road under a Public/Private Partnership contract. Recovery of our investment is expected to be accomplished through a two-part integrated quarterly payment made by the Ministry of Communications and Transportation. We are to be paid (1) a fixed payment for highway availability and (2) a shadow tariff based on traffic volume. After delays in the acquisition of required rights of way, the improvements to the highway were completed in 2010 and the highway is now operational. We will report income as the segments are modernized and expanded and become available for use. In 2010, we were approached by a potential buyer to enter into a non-binding agreement to sell our Irapuato — La Piedad and Queretaro — Irapuato highway projects in exchange for an increased shareholding in our affiliate RCO and cash. If the sale is not consummated, we will continue to operate the concession in our regular course of business.

Nuevo Necaxa-Tihuatlan Highway.In June 2007, the Ministry of Communications and Transportation awarded us a 30-year concession for the construction, operation, maintenance and preservation of the Nuevo Necaxa — Tihuatlan highway. The 85-kilometer highway is located in the states of Puebla and Veracruz. The 30-year concession, with a total investment of approximately U.S.$631 million, includes: (i) construction, operation, maintenance, and preservation of the 36.6 kilometer Nuevo Necaxa — Avila Camacho segment; (ii) exploitation, operation, maintenance, and preservation of the 48.1 kilometer Avila Camacho — Tihuatlan segment; and (iii) a long-term service contract to sustain the capacity of the highway for the Nuevo Necaxa — Avila Camacho segment, in accordance with the exclusive rights provided by the concession. This is the final tranche to complete the highway that will connect Mexico City with the port of Tuxpan in Veracruz. In June 2008, we entered into a financing agreement in the amount of Ps.6,061 million to finance the construction of this project. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — Nuevo Necaxa — Tihuatlan.”

The Rio Verde-Ciudad Valles Highway.In July 2007, the Ministry of Communications and Transportation awarded the 20-year concession for a 113.2-kilometer highway between Rio Verde and Ciudad Valles in the state of San Luis Potosi to a consortium made up of our subsidiaries. The estimated total investment will be approximately U.S.$286 million. The scope of the concession includes:

(i) the operation, conservation, maintenance, modernization, and widening of a 36.6 kilometer tranche from Rio Verde — Rayon; (ii) the construction, operation, exploitation, conservation, and maintenance of an 68.6 kilometer tranche from Rayon — La Pitahaya; and (iii) the operation, conservation, maintenance, modernization, and widening of an 8.0 kilometer tranche from La Pitahaya — Ciudad Valles. This concession includes the exclusive right for the 20-year service contract with the Mexican federal government, acting through the Ministry of Communications and Transportation. On September 19, 2008, we finalized the financing of this project in the amount of Ps.2,550 million. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — Rio Verde-Ciudad Valles Highway.”

The First FARAC Package of Highways (RCO).On October 3, 2007, our affiliate RCO, of which we own 13.6%, paid the Mexican government Ps.44,051 million for the concession to operate the first package of FARAC tollroads, which was awarded on August 6, 2007. RCO assumed responsibility for construction, operation, conservation, and maintenance of four tollroads through 2037. The Maravatio — Zapotlanejo, Guadalajara — Zapotlanejo, Zapotlanejo — Lagos de Moreno, and Leon — Lagos — Aguascalientes tollroads have a total length of 558 kilometers in the states of Michoacan, Jalisco, Guanajuato, and Aguascalientes. The concession agreement also calls for the consortium to make investments of up to Ps.1.5 billion to expand the toll roads through 2010. In October 2009, RCO placed Ps.6,550 million in equity-linked structured notes with Mexican institutional investors on the Mexican Stock Exchange. RCO used the net proceeds of the capital increase primarily to pay down debt. After the transaction (including our purchase of additional Series A shares in RCO at the same price per share as the Series B shares underlying the equity-linked structured notes), we owned 13.6% of RCO and on September 9, 2010, we announced that we entered into a non-binding letter of intent with RCO to transfer to it 100% of ICA’s shares in CONIPSA and COVIQSA, in exchange for consideration in cash and, principally, additional shares in RCO, which would increase our ownership of RCO. As of April, 2011, we continue to negotiate the definitive documentation with RCO, including resolution of matters related to the Queretaro-Irapuato project. We have executed a final share purchase agreement with RCO, and are taking steps to obtain the required governmental and corporate approvals to close the purchase, as well as to meet such other conditions precedent that are standard for these kinds of transactions in Mexico. RCO’s payment to the Mexican government was financed by long-term bank loans incurred by RCO and capital contributed by RCO’s owners. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — RCO.” We record our investment in the consortium as a long-term investment in unconsolidated affiliates. The debt is not consolidated and income is recorded in the line item “share of income in unconsolidated affiliates.”

We are entitled to appoint two members of RCO’s ten-voting member board. GSIP appoints three members, RCO appoints one member, and there are four independent members. Most decisions by RCO’s board are taken by majority vote, although certain decisions, including hiring key management and entering into agreements with the shareholders, may only be taken after approval by the majority plus one of the voting members and certain other decisions, including calls for additional investments and entering into, modifying or terminating any arrangement in excess of U.S.$20 million, may only be taken after approval by 90% of the voting members.

The Kantunil-Cancun Highway (Mayab Consortium).On March 12, 2008, we acquired all the equity of the Mayab Consortium, which holds the concession for the Kantunil — Cancun tollroad. We paid Ps.912 million to acquire the Mayab Consortium, which holds the concession to construct, exploit, and maintain the 241.5-kilometer highway that connects the cities of Kantunil and Cancun in the states of Yucatan and Quintana Roo through December 2020. We consolidate the investment in our consolidated financial statements, including debt that, as of December 31, 2008, was equivalent to Ps.2,401 million. The long-term debt securities mature in 2019 and 2020, and are expected to be repaid from toll revenues generated by the concession. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness — The Kantunil-Cancun Highway (Mayab Consortium).”

The La Piedad Bypass.On March 24, 2009, through our wholly-owned subsidiary Libramiento ICA La Piedad, S.A. de C.V., we entered into a thirty-year concession for (i) the construction, operation, exploitation, conservation and maintenance of the 21.38 kilometer La Piedad Bypass, to alleviate congestion caused by long-haul traffic between the Bajio region and western Mexico, and (ii) the modernization of 38.8 kilometers of the toll-free Federal Highway 110 in the states of Guanajuato and Michoacan and 7.32 kilometers of Highway 90. Banco Santander and Banorte are financing the project.

The Mitla-Tehuantepec highway.On June 17, 2010, through our wholly-owned subsidiaries Caminos y Carreteras del Mayab, S.A.P.I. de CV, and Controladora de Operaciones de Infraestructura, S.A. de C.V., or CONOISA, we entered into a twenty-year PPP concession for the construction, operation and maintenance of the 169-kilometer Mitla-Tehuantepec federal highway in Oaxaca. The road includes three segments: Mitla-Entronque Tehuantepec II, Mitla-Santa Maria Albarradas and Lachiguiri-Entronque Tehuantepec II. The construction work is expected to take 40 months. The highway will link the city of Oaxaca with the Isthmus of Tehuantepec,

increasing the connectivity of the industrial port of Salina Cruz with central Oaxaca. The modernized highway is expected to promote the economic development of the region and the communities along its route. The engineering and design phase has begun and we expect to begin construction in the second quarter of 2011.

Autovia Urbana Sur. We were awarded by Mexico City, as part of a consortium with IDEAL, a 30-year design, construction, maintenance and operating concession for the elevated toll section of the Autovia Urbana Sur expressway in Mexico City. Recovery of our investment is expected through the collection of tolls. Due to execution of the construction agreement on March 8, 2011, we expect the construction work to be included in our backlog as of the first quarter of 2011.

Other Long-Term Investments

Concessionaire’s

Net Investment

Concession

in Concession

Date of

Term

% Ownership of

(Millions of

Long-term contract

Kilometers

Concession

(Years)

Concessionaire

Construction

Mexican pesos)

Rio de los Remedios(1)

2008

(Renewable)


(1)		Concession fully consolidated in our financial statements. In May 2007, the contract was amended and restated.

Rio de los Remedios — Ecatepec. In 2008, we began participating in the Rio de los Remedios — Ecatepec project with a 50% interest in Viabilis Infraestructura, the contractor for the construction and financing of public works. In June 2009, we obtained a controlling interest in Viabilis by purchase one additional share above our existing 50% interest, allowing us an additional seat on the board of directors of Viabilis. As of such date, we consolidate Viabilis in accordance with MFRS. The Ps.6,023 million project relates to covering a drainage canal and building a 25.5-kilometer toll highway in the Mexico City and state of Mexico metropolitan areas. The project calls for construction in three phases, with Phase 1 completed in July 2009 and Phase 2 and Phase 3 estimated to be completed in the second half of 2011. Viabilis was awarded the construction contract for the project on November 15, 2004 by the System of Highways, Airports, Related and Auxiliary Services of the government of the state of Mexico. The contract was amended and restated in May 2007. In June 2008, we obtained bridge loan financing for the project in the amount of U.S.$40 million structured by the Ahorro Corporacion of Spain with Caja de Ahorros Municipal de Burgos as agent for various lenders. We have repaid the bridge loan and subsequently became a lender to the project, and in February 2010 we entered into a long term financing agreement, subject to certain conditions precedent, in which Phases 2 and 3 of the project will receive a loan in the amount of Ps.3,000 million from Banobras development bank.

Water Distribution and Water Treatment Concessions

During 2010, we participated in one operating concessioned water treatment plant in Ciudad Acuña and the construction of other water supply systems, including the Aqueduct II water supply system that we began proportionally consolidating in 2008 and began operating in February 2011. The following table sets forth certain information as of December 31, 2010, regarding the water treatment plant and water supply system concessions in which we currently participate, either through subsidiaries or affiliates:


											Concessionaire’s
											Net Investment
					Concession						in Concession
	Capacity		Date of		Term		% Ownership of		% Ownership of		(Millions of
Concession	(m3mm)		Concession		(Years)		Concessionaire(1)		Construction		Mexican pesos)
Ciudad Acuña Water Treatment Plant(2) (3)		0.5		1998		22		100		100		307
Aqueducto II water supply system(4)		1.5		2007		20		42		50		1,142
El Realito water supply system(4)		1.0		2009		25		51		51		6
Agua Prieta water treatment plant(3)		8.5		2009		20		50		50		1
Atotonilco water treatment plant(5)		42		2010		25		10		25		—


(1)		Does not take into account the Mexican federal or local governments’ non-recoverable grants.

(2)		Concession in operation during 2010.

(3)		Concession fully consolidated in our financial statements.

(4)		Concession proportionally consolidated in our financial statements.


(5)		Concession accounted for using the equity method in our financial statements.

Ciudad Acuña Water Treatment Plant.We commenced construction of the Acuña water treatment plant in November 1998. The plant started commercial operations in October 2000, and we received our first payment in February 2001. The Acuña water treatment plant’s equipment has been upgraded, allowing the plant to operate more efficiently, lowering costs, and increasing its processing capacity to 500 liters per second (lps). During 2010, the concessionaire’s revenues were sufficient to cover its operating expenses. The indebtedness related to this project was repaid in full in September 2008. On August 17, 2009, we entered into an agreement under state law, which has allowed us to simplify the tariff scheme. As of December 2010, we receive approximately Ps.7.4377 per cubic meter of water we treat at the plant, and we treat approximately 320 lps.

Acueducto II Water Supply.In May 2007, a consortium we lead was granted a 20-year concession by the State Water Commission of Queretaro for the construction, operation, and maintenance of the Aqueduct II water supply and purification system in Queretaro state. The Aqueduct II is expected to bring water 108 kilometers from the Moctezuma River to the city of Queretaro. The required investment of Ps.2,854 million was financed by Banco Santander with HSBC and Banorte, among others, on October 5, 2007 in the amount of Ps.1,700 million for a 17-year period. Additionally, the National Fund for Infrastructure is contributing Ps.872 million directly to the new project. The construction of this project began in 2007. We initiated operations of the project in February 2011. The concessionaire Suministro de Agua de Queretaro, S.A. de C.V., or SAQSA, is made up of the following shareholders: ICA, as consortium leader (primarily through our subsidiary CONOISA) with 37%; Servicios de Agua Trident, S.A. de C.V., a subsidiary of Mitsui Corp with 26%; Fomento de Construcciones y Contratas (including two additional affiliates) with 26%; and PMA Mexico with 11%. Including our interest in PMA Mexico, which is our affiliate, our direct and indirect economic interest in SAQSA is 42.39%. We began proportionally consolidating this project beginning in 2008.

El Realito Aqueduct. In 2009, a consortium we lead signed a 25-year service contract with the State Water Commission of San Luis Potosi to build, operate and maintain the El Realito aqueduct water supply and purification system. The Mexican federal government’s National Fund for Infrastructure is expected to provide 49% of the financing. The balance of the financing will be provided by the consortium and a Ps.1,552 million facility granted by Banco Santander. The consortium is comprised of our subsidiary Controladora de Operaciones de Infraestructura, S.A. de C.V., or CONOISA, as consortium leader, with 51% and Fomento de Construcciones y Contratas, through a subsidiary, with 49%. We plan to proportionally consolidate 51% of the construction once construction begins.

Agua Prieta Water Treatment Plant. In 2009, a consortium we lead was granted a 20-year contract with the Jalisco State Water Commission for the construction and operation of the Agua Prieta wastewater treatment plant. The Ps.2,318 million (as of December 31, 2010) contract is a fixed price, fixed term contract with a 33-month term for construction and a subsequent 207-month term for operation. We will earn a portion of the total contract price based on our construction work, which will be set forth in a construction contract at a later date. We expect to finance the project with contributions from the Mexican federal government’s National Fund for Infrastructure, equity contributions from the consortium and commercial bank debt. The consortium is made of the following participants: ICA, as consortium leader, with 50%, ATLATEC, S.A. de C.V. with 34% and Servicios de Agua Trident S.A. de C.V. with 16%.

Atotonilco Water Treatment Plant.A consortium of which our subsidiary CONOISA holds 10.2% was awarded, through an international bidding process, the concession for the construction and operation of the Atotonilco water treatment plant in Tula, Hidalgo by the National Water Commission, or Conagua. On January 7, 2010 the consortium entered into a definitive contract with Conagua. The consortium will be responsible for the design, construction, electromechanical equipment and testing, as well as the operation, conservation and maintenance of the water treatment plant including electricity cogeneration and the removal and final disposition of all waste and biosolids that are produced, over the 25-year term of the agreement. Of the Ps.9.3 billion total contract value, we expect to record approximately Ps.1,743 million in construction backlog related to the project. The contract is a fixed price, fixed term agreement. The Atotonilco plant is expected to be largest of its kind in Mexico and one of the largest in the world, with a treatment capacity of up to 42 cubic meters of wastewater per second. The plant will be located at the outlet of the Eastern Discharge Tunnel, which we are also building. The consortium is comprised of Promotora del Desarrollo de America Latina, S.A. de C.V., a subsidiary of Grupo Carso, as leader with 40.8%, ACCIONA Agua S.A. with 24.26%, Atlatec, S.A. de C.V. (a subsidiary of Mitsui & Co., Ltd.) with 24.26%, our subsidiary CONOISA with 10.2% and other minority investors. The resources for the investment will be provided by the National Fund for Infrastructure for Ps.4.6 billion, representing 49% of the equity capital of the consortium, and commercial bank debt.

PMA Mexico. In January 2007, we signed an agreement to purchase an additional 39% of the shares of the environmental services company Proactiva Medio Ambiente Mexico, S.A. de C.V., or PMA Mexico. PMA Mexico operates municipal potable water treatment and supply, sewage, waste water treatment, sanitary landfills, solid waste management and hazardous waste management systems through service contracts and concessions. PMA Mexico was previously known as Consorcio Internacional del Medio Ambiente, S.A. de C.V., or CIMA, and was established as a 50%-50% joint venture with Proactiva Medio Ambiente. In 2006, we sold all but 10% of our interest in CIMA for Ps.319 million (U.S.$27 million). We repurchased a 39% interest in PMA Mexico from Proactiva Medio Ambiente in 2007 and as of such date, we hold 49% of PMA Mexico and Proactiva Medio Ambiente holds 51%.

Airports

Our Airports segment accounted for 6% of our total revenues.

As of December 31, 2010, we controlled an aggregate of 234,502,700 shares of our airport subsidiary GACN, representing 58.6% of GACN’s capital stock. Our investment in GACN was comprised of 167,702,700 series B shares that we owned directly through our wholly-owned subsidiary Aeroinvest, and 66,800,000 series B and BB shares that we controlled through our ownership of 74.5% of the capital stock of SETA. The remaining 25.5% of SETA was owned by Aeroports de Paris Management, or ADPM. The remaining shareholders in GACN held 41.4% of its outstanding capital stock and 0.2% of the shares are held in GACN’s treasury. GACN is listed on the Mexican Stock Exchange and the Nasdaq.

Aeroinvest and ADPM have agreed that:

	•		Aeroinvest will select two members of GACN’s audit committee; and

	•		Aeroinvest and ADPM will jointly select at least one member of GACN’s nominations committee and corporate practices committee.

The consortium agreement also requires the unanimous vote of Aeroinvest and ADPM to approve: (i) the pledging or creation of a security interest in any of GACN’s shares held by SETA or the shares issued by SETA; (ii) any amendments to SETA’s bylaws or the SETA shareholders’ agreement; (iii) a merger, split, dissolution or liquidation; (iv) the amendment or termination of GACN’s bylaws or the participation agreement, technical assistance agreement, and technology transfer agreement entered into at the time of GACN’s privatization; (v) changes in GACN’s capital structure; (vi) the conversion of GACN’s Series BB shares into Series B shares; and (vii) any sale or transfer of shares of SETA.

Under the consortium agreement, transfers by either Aeroinvest or ADPM of its shares in SETA to an unaffiliated third party are subject to limited rights of first refusal in favor of the non-transferring shareholder, and such transfers by Aeroinvest are subject, under certain conditions, to tag-along rights in favor of ADPM. In addition, the consortium agreement includes put and call options in respect of shares of SETA held by Aeroinvest, whereby, from June 14, 2009 through the later of June 14, 2015 and six months following the termination of the technical assistance agreement, under certain conditions,

	•		ADPM may require Aeroinvest and certain of its affiliates to purchase a portion of shares of SETA held by ADPM, which Aeroinvest has agreed to secure through a pledge (prenda bursatil) approximately 4% of the outstanding capital stock of GACN; and

	•		in the event of the parties’ inability to resolve definitively a matter to be decided by the board of directors or shareholders of SETA, Aeroinvest may require ADPM to sell to Aeroinvest a portion of shares of SETA held by ADPM.

Through GACN, we operate 13 airports in the Central North region of Mexico pursuant to concessions granted by the Mexican government, including the Monterrey airport, which accounted for approximately 41.8% of GACN’s revenues in 2010 and 45.3% in 2009. The airports serve a major metropolitan area (Monterrey), three tourist destinations (Acapulco, Mazatlan and Zihuatanejo), two border cities (Ciudad Juarez and Reynosa) and seven regional centers (Chihuahua, Culiacan, Durango, San Luis Potosi, Tampico, Torreon and Zacatecas). All of the airports are designated as international airports under Mexican law, meaning that they are all equipped to receive international flights and maintain customs, refueling and immigration services managed by the Mexican government.

In October 2008, GACN acquired 90% of the shares of Consorcio Grupo Hotelero T2, S.A. de C.V., which has the rights to develop and operate a 287-room hotel and approximately 5,000 square meters of commercial space inside the new Terminal 2 of the Mexico City International Airport under a 20-year contract with the Mexico City International Airport. NH Hoteles, S.A. of Spain owns the other 10%. As of December 31, 2010, total revenues of the hotel amounted to Ps.99.8 million, annual average occupancy increased to 62.0% and the annual average rate per room was Ps.1,157.5.

In 2010, the Airports segment accounted for 6% of our total revenues. The substantial majority of the Airports segment’s revenues are derived from providing tariff-regulated services, which generally are related to the use of airport facilities by airlines and passengers. For example, approximately 62.3% of GACN’s total revenues in 2010 were earned from aeronautical (tariff-regulated) services such as the provision of aircraft parking, passenger walkways and airport security services. Changes in revenues from aeronautical services are principally driven by the passenger and cargo volume at the airports. All of our revenues from aeronautical services are also affected by the “maximum rates” the subsidiary concessionaires are allowed to charge under the price regulation system established by the Ministry of Communications and Transportation. The “maximum rate” system of price regulation that applies to aeronautical revenues is linked to the traffic volume (measured in workload units) at each airport; thus, increases in passenger and cargo volume generally permit greater revenues from aeronautical services. In December 2010, the Ministry of Communications and Transportation approved the master development programs for each of our subsidiary concession holders for the 2011 to 2015 period. These programs will be in effect from January 1, 2011 until December 31, 2015.

The Airports segment also derives revenues from non-aeronautical activities, which principally relate to the commercial, non-aeronautical activities carried out at the airports, such as the leasing of space in terminal buildings to restaurants and retailers. Revenues from non-aeronautical activities are not subject to the system of price regulation established by the Ministry of Communications and Transportation. Thus, non-aeronautical revenues are principally affected by the passenger volume at the airports and the mix of commercial activities carried out at the airports. While we believe aeronautical revenues will continue to represent a substantial majority of future total revenues, we anticipate that the future growth of revenues from commercial activities will exceed the growth rate of this division’s aeronautical revenues.

In August 2010, Grupo Mexicana indefinitely suspended operations of three airlines (Mexicana Airlines, MexicanaClick and MexicanaLink). Grupo Mexicana and its affiliates accounted for 12.2% of GACN’s total revenues during the first six months of 2010 and 16.6% of GACN’s total passenger traffic during the same period.

The following table provides summary data for each of the airports for the year ended December 31, 2010:


	Year Ended December 31, 2010
									Revenues Per
	Terminal								Terminal
	Passengers				Revenues(1)				Passenger(2)
	(Number in				(Millions of
Airport	millions)		%		pesos)		%		(Pesos)
Metropolitan area:
Monterrey International Airport		5.4		46.4		1,109.4		43.3		206.2
Tourist destinations:
Acapulco International Airport		0.7		6.4		195.6		7.6		265.4
Mazatlan International Airport		0.8		6.5		214.5		8.4		283.7
Zihuatanejo International Airport		0.5		4.3		115.7		4.5		233.1

Total tourist destinations		2.0		17.2		525.8		20.5		264.3

Regional cities:
Chihuahua International Airport		0.8		7.1		179.9		7.0		217.2
Culiacan International Airport		1.1		9.1		206.9		8.1		195.2
Durango International Airport		0.2		1.9		50.4		2.0		231.8


	Year Ended December 31, 2010
									Revenues Per
	Terminal								Terminal
	Passengers				Revenues(1)				Passenger(2)
	(Number in				(Millions of
Airport	millions)		%		pesos)		%		(Pesos)
San Luis Potosi International Airport		0.2		1.9		60.3		2.4		270.4
Tampico International Airport		0.5		3.9		90.4		3.5		200.4
Torreon International Airport		0.3		2.9		69.5		2.7		205.5
Zacatecas International Airport		0.3		2.3		83.4		3.3		310.5

Total regional destinations		3.4		29.2		740.6		28.9		218.8

Border cities:
Ciudad Juarez International Airport		0.6		5.5		138.1		5.4		217.8
Reynosa International Airport		0.2		1.7		45.5		1.8		229.9

Total border city destinations		0.8		7.2		183.6		7.2		220.7

TOTAL:		11.6		100.0		2,559.5		100.0		220.9


(1)		Does not include eliminations of transactions among GACN’s subsidiaries.

(2)		Revenues per terminal passenger are calculated by dividing the total revenues for each airport by the number of terminal passengers for each airport.

Competition

The Acapulco, Mazatlan and Zihuatanejo International Airports are substantially dependent on tourists. These airports face competition from competing tourist destinations. We believe that the main competitors to these airports are those airports serving other vacation destinations in Mexico, such as Los Cabos, Cancun and Puerto Vallarta, and abroad, such as Puerto Rico, Florida, Cuba, Jamaica, the Dominican Republic, other Caribbean islands and Central America.

Excluding our airports servicing tourist destinations, our airports and other concessions currently do not face significant competition.

In the future, we may face competition from the Aeropuerto del Norte, an airport near Monterrey operated by a third party pursuant to a concession. Historically, Aeropuerto del Norte has been used solely for general aviation operations. In addition, the Mexican government could grant new concessions to operate existing government managed airports, roads and municipal services which could compete directly with our projects. See “Item 3. Key Information — Risk Factors — Risks Related to Our Airport Operations — The Mexican government could grant new or expanded concessions that compete with our airports and could have an adverse effect on our revenues.”

Housing Development

In 2010, our Housing Development segment accounted for 9% of our total revenues. Our Housing Development segment participates in all stages of the housing industry, including acquiring the land and the permits and licenses required to build on it, performing and procuring architectural and engineering design, facilitating buyer financing and constructing and marketing homes. We subcontract some construction services, such as urbanization.

The principal raw materials we require for our Housing Development operations are cement, steel, construction aggregates, doors, windows and other housing fixtures.

In 2010, we expanded our operations in the Housing Development segment by increasing our stake in Los Portales, a real estate development company in Peru, from 18% to 50%, and we participated in several new housing development projects in Mexico, including a joint venture with Prudential Investment Management, Inc. to develop social interest housing with PREI. During 2010, 2009 and 2008, we sold 7,116, 7,077 and 7,433 houses, respectively. As of December 31, 2010, our Housing Development segment owned 1,718 hectares of land reserved for the construction of 83,389 housing units, totaling 28 projects in 11 different states in Mexico.

In 2008, we entered the Monterrey market and began offering a new model of economical housing development with enhanced urban planning compared to that typically offered in economical housing developments. Additionally, we continue to develop our vertical residential property on Reforma Avenue in Mexico City.

New low income housing construction in Mexico has increased steadily in recent years due to several governmental initiatives that improved the conditions for both developers and prospective buyers of housing. In addition, the incorporation of the Mexican Federal Mortgage Corporation (Sociedad Hipotecaria Federal) has made it easier for people to finance purchases and construction of homes in Mexico. Nevertheless, due to the turmoil in the global financial systems, including Mexico’s, the number of mortgage credits granted under these initiatives decreased to approximately 80,000 housing units in 2010 from 82,000 housing units in 2009 and 128,380 housing units in 2008. The credit crisis and elevated safety concerns, particularly in Mexico’s northern border cities, have had a significant negative impact on development in the non-low income housing market. However, we plan to continue to increase our share of the housing market, particularly in the low-income sector, by implementing sustainable projects with a focus on quality of life, such as the “Ciudad Natura” projects, currently being executed through a joint venture with PREI and from which we expect sales and market share increases. In addition, we may, from time to time, explore the possibility of acquiring other housing construction businesses as opportunities present themselves.

The Housing Development segment competes primarily with large Mexican public housing developers such as Corporacion GEO, S.A.B. de C.V., Urbi Desarrollos Urbanos, S.A.B. de C.V., Desarroladora Homex, S.A.B. de C.V., Consorcio Ara S.A.B. de C.V., and Sare Holding, S.A.B. de C.V., as well as regional competitors.

Corporate and Other

Our Corporate and Other segment includes our real estate operations and, through our subsidiary Grupo ICA S.A. de C.V., our corporate operations. The results of operations in our Corporate and Other segment in 2010, 2009 and 2008 have not changed significantly.

Geographical Distribution of Revenues

Revenues from foreign operations accounted for approximately 8% of our revenues in 2010, 8% of our revenues in 2009 and 12% of our revenues in 2008.

The following table sets forth our revenues by geographic area for each of the years in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010						2009						2008
	(Millions of						(Millions of						(Millions of
	Mexican			(Percent of			Mexican			(Percent of			Mexican			(Percent of
	Pesos)			Total)			Pesos)			Total)			Pesos)			Total)
Mexico	Ps.	32,307			92	%	Ps.	28,572			92	%	Ps.	20,016			88	%
Spain		1,306			4			1,514			5			1,680			7
Other Latin American countries and the United States		1,494			4			838			3			1,059			5
Inter-segment eliminations		(142	)		—			(53	)		—			(4	)		0

Total	Ps.	34,965			100	%	Ps.	30,871			100	%	Ps.	22,751			100	%

Approximately 5% of our backlog as of December 31, 2010 is related to projects outside Mexico (as compared to approximately 2% as of December 31, 2009) and approximately 28% of our backlog as of December 31, 2010 was denominated in foreign currencies (principally U.S. dollars) (as compared to approximately 24% of our backlog as of December 31, 2009).

Foreign projects may be more difficult to supervise due to their greater distances from our principal operations. Foreign projects require familiarity with foreign legal requirements and business practices. In contrast to domestic infrastructure projects, foreign projects also typically do not allow us to benefit from our reputation and past experiences with Mexican government officials and private- sector individuals. Although we are active abroad, we have sought to be more selective than in the past when bidding for international projects. See “Item 5. Operating and Financial Review and Prospects — Operating Results.”

Environmental Matters

Our Mexican operations are subject to both Mexican federal and state laws and regulations relating to the protection of the environment. At the federal level, the most important of these environmental laws is the Mexican General Law of Ecological Balance and Environmental Protection, or the Ecological Law(Ley General de Equilibrio Ecologico y Proteccion al Ambiente). Under the Ecological Law, rules have been promulgated concerning water pollution, air pollution, noise pollution and hazardous substances. Additionally, the Mexican federal government has enacted regulations concerning the import, export and handling of hazardous materials and bio-hazardous wastes. The waste and water treatment plants that are operated by one of our equity investees are subject to certain waste regulations, including for bio-hazardous waste. The Mexican federal agency in charge of overseeing compliance with the federal environmental laws is the Ministry of the Environment and Natural Resources(Secretaria de Medio Ambiente y Recursos Naturales). The Ministry of the Environment and Natural Resources has the authority to enforce Mexican federal environmental laws. As part of its enforcement powers, the Ministry of the Environment and Natural Resources can bring administrative and criminal proceedings against companies that violate environmental laws, and has the power to close non-complying facilities. We believe that we are in substantial compliance with Mexican federal and state environmental laws. Changes in Mexican federal or state environmental laws could require us to make additional investments to remain in compliance with such environmental laws, and changes in the interpretation or enforcement of such laws could cause our operations to cease to be in compliance with such laws. Any such event could have an adverse effect on our financial condition and results of operations.

Since 1990, Mexican companies have been required to provide the Ministry of the Environment and Natural Resources with periodic reports regarding their production facilities’ compliance with the Ecological Law and the regulations thereunder. These reports are required to include information with respect to environmental protection controls and the disposal of industrial waste. We have provided the information required by these reports to the Ministry of the Environment and Natural Resources. There are currently no material legal or administrative proceedings pending against us with respect to any environmental matter in Mexico, and we do not believe that continued compliance with the Ecological Law or Mexican state environmental laws will have a material adverse effect on our financial condition or results of operations, or will result in material capital expenditures or materially adversely affect our competitive position. However, financing institutions providing credit for projects on a case- by-case basis now and in the future could require us to comply with international environmental regulations that may be more restrictive than Mexican environmental regulations.

In projects outside of Mexico, including within the Panama Canal zone, we are also required to comply with environmental laws by applicable authorities. We believe we are in substantial compliance with environmental laws to which we are subject.

Sustainable Development

In 2011, in an effort to measure and improve our sustainability performance, we began publishing an annual Sustainability Report providing a snapshot of our operations’ economic, environmental and social impacts. The report for 2010 expands upon and deepens our engagement with a diverse range of stakeholders—including investors, local communities in which we operate, employees and their families, suppliers and other business partners—by explaining how we respond to their expectations and interests.

Some of the sustainability mandates we have set out for ourselves include: the improvement of health, security and hygiene in all segments; emphasizing ethical conduct and a regime of anti-corruption; studying the diversity of our organization and determining methods for enhancing it to better reflect the communities in which we work and from which we draw talent; creating a forum for the expression of creative initiatives from our younger professionals, which we call “Tu Momento ICA” (“Your ICA Moment”); strategies for embedding human rights policies and goals across all our operations; and identifying areas of high biodiversity value to help us balance the needs of our organization and the natural resources available.

By creating and maintaining a culture of sustainability, we seek to achieve long-term business success that aligns with the interests and needs of other stakeholders.

C. ORGANIZATIONAL STRUCTURE

The following table sets forth our significant subsidiaries as of December 31, 2010, including the principal activity, domicile, our ownership interest and our voting power:

Ownership

Voting

Principal

Interest

Power Held

Subsidiary

Activity

Domicile

(%)

Constructoras ICA, S.A. de C.V.

Construction

Mexico

100

Controladora de Empresas de Vivienda, S.A. de C.V.

Housing development

Mexico

100

Controladora de Operaciones de Infraestructura, S.A. de C.V.

Concessions

Mexico

100

Ingenieros Civiles Asociados, S.A. de C.V.

Heavy urban and specialized construction

Mexico

100

ICA — Fluor Daniel, S. de R.L. de C.V. (A)

Industrial construction

Mexico

ICA Panama, S.A.

Highway construction concessionaire

Panama

100

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.

Airport operations

Mexico

(B)

Constructora de Proyectos Hidroelectricos, S.A. de C.V. /Constructora Hidroelectrica La Yesca, S.A. de C.V.

Consortia for the construction of the La Yesca hydroelectric project

Mexico


(A)		Proportionally consolidated.

(B)		Directly and through our interest in SETA.

D. PROPERTY, PLANT AND EQUIPMENT

Approximately 92% of our assets and properties, including concessions, are located in Mexico, with the balance in Europe and other Latin American countries. At December 31, 2010, the net book value of all land (excluding real estate inventories) and buildings, machinery and equipment and concessions was approximately Ps.30,212 million (approximately U.S.$2,440 million). We currently lease machinery from vendors. For information regarding property in our Housing Development segment, see “Item 4. Information on the Company—Business Overview—Description of Business Segments—Housing Development.”

Our principal executive offices, which we lease, are located at Blvd. Manuel Avila Camacho 36, Col. Lomas de Chapultepec, Del. Miguel Hidalgo, 11000 Mexico City, Mexico. We own the property where our executive offices were formerly located, at Mineria No. 145, 11800, Mexico City, Mexico.

We believe that all our facilities are adequate for our present needs and suitable for their intended purposes.

Item 4A.Unresolved Staff Comments

None.

Item 5.Operating and Financial Review and Prospects

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto. Our consolidated financial statements have been prepared in accordance with MFRS, which differ in significant respects from U.S. GAAP. Note 29 to our consolidated financial statements provides a description of the principal differences between MFRS and U.S. GAAP, as they relate to us, and a reconciliation to U.S. GAAP of consolidated net income (loss) and consolidated equity. Under Bulletin B-10, financial data for all periods prior to 2008 have been restated in constant Mexican pesos as of December 31, 2007 in our consolidated financial statements and throughout this annual report. Financial data for all periods after December 31, 2007 have not been restated to account for inflation, in accordance with NIF B-10.

Overview

We are a Mexican company principally engaged in construction, the operation of infrastructure projects under long-term concession or service agreements and homebuilding. Approximately 92% of our revenue in 2010 was generated in Mexico. As a result, our results of operations are substantially affected by developments in Mexico and Mexican public spending on large infrastructure projects. Our results of operations also vary from period to period based on the mix of projects under construction, the

contract terms relating to those projects, the volume of traffic on our highway concessions and in our airports, and conditions in the Mexican housing market, among other factors.

The construction, infrastructure operations, and homebuilding industries, and as a result, our results of operations, are substantially influenced by political and economic conditions in Mexico. The National Infrastructure Program in Mexico, which the Mexican government has announced is designed to expand Mexico’s infrastructure, accelerate Mexico’s economic growth and make the Mexican economy more internationally competitive, contemplates public and private investments totaling Ps.951 billion from 2007 to 2012 in highways, railroads, ports, airports, telecommunications, water and sanitation, irrigation, and flood control projects. In addition, the National Infrastructure Program calls for an additional Ps.1,581 billion in energy sector investments. As of June 30, 2010, 40.3% of the funds directed to the National Infrastructure Program had been used. Mexico entered into a recession beginning in the fourth quarter of 2008, and in 2009 GDP fell by approximately 6.5%. Due to the impact of the turmoil in the global financial system and the recession in Mexico, the rate of awards of infrastructure projects in Mexico was slower in 2009 than we anticipated, particularly in the areas of energy, ports and railways. Mexico’s economy has since expanded, with GDP posting positive growth of 4.5% in the first quarter of 2010 and 5.5% overall in 2010. The National Infrastructure Program remains in place and new projects continue to be awarded. The Mexican government has also extended the time period for certain bidding processes for the awards, in part because of the need to reevaluate the corresponding projects’ feasibility in the current economic environment. Beginning in the second half of 2009 and continuing through 2010, we have seen the rate of contracting increase under the National Infrastructure Program in water treatment and water supply and continued progress in highways.

National politicians are currently focused on the 2012 elections. In the past, public sector spending has tended to decrease in election years, and we expect this will occur in 2012 as well. As in previous presidential election cycles, we plan to minimize this trend by bidding for projects abroad, although certain risks in other Latin American countries may adversely affect our opportunity to win awards or execute awarded projects in a profitable and timely manner.

Our business strategy is to grow our construction business (composed of our Civil Construction, Industrial Construction and Rodio Kronsa segments) as well as to grow and diversify into construction-related activities, particularly infrastructure, which we believe offer opportunities for potentially higher growth, higher margins, and reduced volatility of operating results. Our goal is also to generate a greater portion of our consolidated revenues from our Concessions, Airports, and Housing Development segments over the medium term. In 2010 and 2009, these three segments in aggregate represented 23% and 21%, respectively, of our consolidated revenues. Our infrastructure and other investments represent an actively managed portfolio of investments; some may be held to maturity and others may be divested prior to maturity, based on market developments or opportunities to redeploy capital in new projects. In the first quarter of 2010, we were approached by the Government of Panama, which expressed its interest in purchasing our investment in the Corredor Sur tollroad. Since such date, we have been in discussions with the Government of Panama regarding the potential sale. We have also been approached by a potential buyer to sell two of our public-private partnership (PPP) highways in exchange for an increased shareholding in our affiliate RCO and cash. We have entered into a non-binding agreement with this potential buyer. Both of these transactions are pending.

Adoption of International Financial Reporting Standards

In January 2009, the CNBV published amendments to its Circular for Issuers to require the presentation of financial statements prepared in accordance with IFRS starting with the year ending December 31, 2012, but allowing for early adoption. The SEC allows foreign issuers to eliminate the reconciliation of financial statements with U.S. GAAP, if the statements are prepared under IFRS.

The early adoption of IFRS is intended to meet international requirements in terms of disclosure and transparency of financial information, as well as aid investors in their evaluation and comparisons with other companies in the same sector. Consequently, effective January 1, 2011, we suspended the application of MFRS in the preparation of our financial statements.

Below is a description of the main changes in accounting policies based on our initial assessment.

•

Effects of inflation — In conformity with IFRS, the effects of inflation are recognized when cumulative inflation of the

preceding three years is close to or greater than 100%. Given that the Mexican environment is no longer hyperinflationary since 1999, the effects of inflation recorded from 1999 to 2007 were reversed, except for the valuation of certain line items under property, plant and equipment, which were valued using the deemed cost exemption permitted by IFRS 1, First-Time Adoption of International Financial Reporting Standards.

•

Capitalizable comprehensive financing cost — In accordance with MFRS, we included the effect of derivative financial instruments directly related to construction contracts and concessions under capitalizable comprehensive financing cost. Upon the adoption of the IFRS, these effects are recorded in the statement of income.

•

Amortization of airport concessions—In conformity with IFRS, the amortization of a concession is determined by the term of the concession granted to us, which is 50 years. In accordance with MFRS, the amortization is determined based on the estimated useful lives of the various components of the concession investment.

•

Maintenance costs — According to the policy adopted in conformity with IFRS, the costs of maintenance of airports, which are approved in the Management Development Program (MDP), are recorded in the statement of income. In accordance with MFRS, these costs are capitalized as assets when the respective cost is incurred.

•

Income Taxes — We determined our deferred taxes in accordance with IFRS, based on the adjusted values of those assets and liabilities requiring adjustments as a result of the adoption of IFRS.

•

Deferred statutory employee profit sharing (PTU) – In conformity with MFRS, deferred PTU is recognized for temporary differences between the accounting and PTU value of assets and liabilities. IFRS does not contemplate the recognition of deferred PTU.

•

Employee benefits — According to IFRS, a provision for employee severance payments is only recorded when the obligation for payment arises or under the existence of formal retirement plans.

•

Employee bonuses — Bonuses on profits are recognized in the periods in which the employees provide services, when we have a legal or assumed obligation and the amounts of such bonuses can be adequately estimated. Under MFRS they are recorded in the statement of income when paid.

•

Debt discounts and expenses — In December 2010, the certain prior debt was exchanged for the current debt, which is substantially similar because the present value of the cash flows discounted under the new terms of the debt is 10% lower than the cash flows discounted under the previous debt; therefore, in accordance with MFRS it does not qualify as a new debt instrument and the debt discount and placement expenses continue to be amortized over the remaining life of the new debt. However, IFRS require the exchange of the debt with the same creditor, a condition that is not fulfilled.

As we will be adopting IFRS in 2011, our financial statements must comply with IFRS effective as of our December 31, 2011 reporting date. Accordingly, the estimated effects of adoption on certain significant line items of our consolidated financial statements as of and for the year ended December 31, 2010, detailed below, are based on assumptions our management has made about the standards and interpretations that are expected to become effective, and the accounting policies expected to be adopted, when we prepare our first complete set of IFRS financial statements as at December 31, 2011. Such standards and interpretations and, as a result, our accounting policies, will become final only when we prepare our first complete set of IFRS financial statements. Accordingly, the amounts prepared below may be subject to change until such date.


	December 31, 2010					December 31, 2010
	MFRS		Effect			IFRS
	(Thousands of Mexican pesos)
Statement of financial position

Real estate inventories	Ps.	4,360,671	Ps.	(92,008	)	Ps.	4,268,663
Investment in concessions, net		26,000,351		(2,384,853	)		23,615,498
Property, plant and equipment, net		4,211,574		93,861			4,305,435
Other assets, net		2,501,893		(945,484	)		1,556,409
Provisions		1,930,084		621,949			2,552,033
Income taxes		5,260,107		(666,984	)		4,593,123
Stockholders’ equity		21,574,120		(3,296,120	)		18,278,000

Statement of income

Revenues		34,965,264		11,453			34,976,717
Operating income		2,511,291		224,274			2,735,565
Net income		1,203,567		(111,064	)		1,092,503

A. OPERATING RESULTS

Certain U.S. dollar amounts have been translated from Mexican pesos for convenience purposes at an exchange rate of Ps.12.38 per U.S.$1.00, the noon buying rate for Mexican pesos on December 31, 2010, as published by the Federal Reserve Bank of New York.

In previous years, we reported our business segment data in six segments, which included the aggregation of airport concessions and other concessions into one segment, the Infrastructure segment. After further review of internal financial information delivered to key management, the importance of the airport and other concessions individually, and the review of the decision-making processes in relation to those reports, management determined that the airport concessions and other concessions should be presented as separate segments. Information presented herein has been restated to reflect these segments individually. Accordingly, currently our operations are divided into the following seven segments: (1) Civil Construction, (2) Industrial Construction, (3) Rodio Kronsa, (4) Concessions, (5) Airports, (6) Housing Development, and (7) Corporate and Other. The financial information presented herein conforms to the managerial approach required by NIF B-5,Financial Segment Information. See Note 28 to our audited consolidated financial statements.

Consolidated Results of Operations for the Three Years Ended December 31, 2010

Total Revenues

Total revenues increased 13.3% in 2010 from 2009. This increase was primarily attributable to an increased volume of work on projects in our Civil Construction segment and improved results in our Housing Development segment, principally because of the increased participation in the Los Portales home building and real estate business in Peru. These increases were partially offset by decreased revenues in our Rodio Kronsa segment.

The following table sets forth the revenues of each of our segments and divisions for each of the years in the three-year period ended December 31, 2010. See Note 28 to our consolidated financial statements.


	Year Ended December 31,
	2010						2009						2008
	(Millions of						(Millions of						(Millions of
	Mexican			(Percentage			Mexican			(Percentage			Mexican			(Percentage
	pesos)			of Total)			pesos)			of Total)			pesos)			of Total)
Revenues:
Construction:
Civil	Ps.	22,143			63	%	Ps.	19,604			63	%	Ps.	11,402			50	%
Industrial		4,401			13	%		3,974			13	%		4,152			18	%
Rodio Kronsa		1,306			4	%		1,514			5	%		1,680			8	%

Total		27,850			80	%		25,092			81	%		17,234			76	%
Concessions		2,677			7	%		2,231			7	%		1,852			8	%
Airports		2,144			6	%		1,896			6	%		1,988			9	%
Housing Development		3,048			9	%		2,271			7	%		2,151			9	%
Corporate and Other		32			—			20			0	%		50			0	%
Eliminations		(786	)		(2	%)		(639	)		(2	%)		(524	)		0	%

Total	Ps.	34,965			100	%	Ps.	30,871			100	%	Ps.	22,751			100	%

The 36% increase in total revenues in 2009 from 2008 was primarily attributable to increased revenues in our Civil Construction segment and Concessions segment, which were partially offset by decreased revenues in our Industrial Construction and Rodio Kronsa segments as well as our Airports segment.

Gross Profit

Consolidated gross profit increased 10.3% to Ps.5,014 million in 2010 compared to Ps.4,544 million in 2009, primarily due to gross profit increases in our Civil Construction and Housing segments and, to a lesser extent, our Concessions segment, which increases were primarily a result of higher profit margins of projects commenced in 2010, such as stage 2 of the Tepic federal prison, the La Caldera water pump and additional works in the Queretaro – Irapuato highway project, as well as recognizing the results of operation of the Los Portales real estate business.

Consolidated cost of sales increased 13.8% in 2010 compared 2009. During 2010, the Airports segment recorded an allowance in the cost of sales for doubtful accounts of Ps.143 million, related to the bankruptcy filing by the airlines of Grupo Mexicana. Cost of sales also included the financing costs related to our projects in the Concessions and Housing Development segments. Such financing costs increased as compared to 2009. The higher financing costs in 2010 resulted from increased financing requirements in the mix of our projects, as well as the prepayment of the La Yesca derivative liability. These financing costs are accounted for within costs of sales because their corresponding project contracts include as a component of their price the financing costs of the project, in addition to the performance of the work.

During 2009, cost of sales included financing costs related to our projects in the amounts of Ps.379 million in the Concessions segment, Ps.702 million in our construction business (composed of our Civil Construction, Industrial Construction and Rodio Kronsa segments), and Ps.60 million in the Housing Development segment. During 2008, costs of sales included financing costs related to our projects in the amounts of Ps.3 million in our Concessions segment, and Ps.271 million of cost of sales in the Civil Construction segment (related to the La Yesca hydroelectric project).

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 19.2% in 2010 from 2009, and remained steady in 2009 from 2008. The increase in 2010 was primarily due to the addition of new business units such as COTRISA and our increased participation in the Los Portales real estate business, from 18% to 50% beginning in May 2010, as well as from higher bidding and administration expenses.

Operating Income

The following table sets forth operating income or loss of each of our segments and divisions for each of the years in the three-year period ended December 31, 2010.


	Year Ended December 31
	2010			2009			2008
	(Millions of Mexican pesos)
Operating Income (Loss):
Construction:
Civil	Ps.	841		Ps.	702		Ps.	346
Industrial		213			228			114
Rodio Kronsa		13			43			13

Total		1,067			973			473
Airports		498			612			721
Concessions		588			707			542
Housing Development		276			165			144
Corporate and Other		(11	)		(13	)		(35	)
Eliminations		93			2			(59	)

Total	Ps.	2,511		Ps.	2,445		Ps.	1,786

Operating margin		7.2	%		7.9	%		7.9	%

Operating income increased 3% in 2010 from 2009, principally due to significantly increased operating income in the Civil Construction due to completion of construction projects, as well as an increase in the Housing Development segment resulting from consolidation of the Los Portales real estate business in Peru, which offset decreased operating income in the Concessions, Airports, Rodio Kronsa and Industrial Construction segments. The Concessions and Airports segments contributed 23% and 20% of total operating income, respectively. The Civil, Industrial and Rodio Kronsa construction segments contributed 42%, and 11% came from the Housing Development segment.

During 2010, the Airports segment’s cost of sales included an allowance for doubtful accounts of Ps.143 million in the Airports segment related to the bankruptcy filing by the airlines of Grupo Mexicana.

Construction

Civil Construction

The following table sets forth the revenues and operating income of the Civil Construction segment for each of the years in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
Revenues	Ps.	22,143		Ps.	19,604		Ps.	11,402
Operating income		841			702			346
Operating margin		3.8	%		3.6	%		3.0	%

Revenues.The 13% increase in the Civil Construction segment’s revenues in 2010 from 2009 was principally due to an increased volume of construction projects. The projects that contributed the most to revenues in 2010 were Line 12 of the Mexico City metro system with Ps.5,050 million, the La Yesca hydroelectric project with Ps.3,793 million, the Rio de los Remedios-Ecatepec highway with Ps.1,423 million, the Eastern Discharge Tunnel with Ps.1,235 million, and construction work on the RCO toll roads with Ps.1,037 million. The project that had the largest increase in its contribution to revenues in 2010 compared to 2009 was Line 12 of the Mexico City metro system, the revenues of which increased by 111% from 2009.

The 72% increase in the Civil Construction segment’s revenues in 2009 from 2008 was principally due to an increased volume of work from projects awarded in 2008 and 2007 and their start-up thereof. The projects that contributed the most to revenues in 2009 were the La Yesca hydroelectric project with Ps.3,836 million, Line 12 of the Mexico City metro system with Ps.2,396 million, the Rio de los Remedios-Ecatepec highway with Ps.1,273 million, and construction work on the RCO toll roads with Ps.1,342 million.

Operating Income.Operating income for the Civil Construction segment increased by 20% in 2010 from 2009 because of an increased volume of work and higher margins in the mix of projects under construction.

Operating income for the Civil Construction segment increased by 103% in 2009 from 2008. This increase was due to the recovery of claims and advances on certain projects with increased margins.

Financing costs related to the La Yesca hydroelectric project represented Ps.668 million and Ps.571 million of the cost of sales of the Civil Construction segment during 2010 and 2009, respectively, primarily due to the prepayment of certain derivative liabilities related to that project.

Industrial Construction

The following table sets forth the revenues and operating income of our Industrial Construction segment for each of the years in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
Revenues	Ps.	4,401		Ps.	3,974		Ps.	4,152
Operating income		213			228			114
Operating margin		4.8	%		5.7	%		2.7	%

Revenues.The Industrial Construction segment’s revenues increased by 11% in 2010 from 2009. This increase primarily reflected increased work on projects under construction including the Poza Rica cryogenic plant and the four clean fuels projects at the Salina Cruz, Madero, Cadereyta and Minatitlan refineries. The projects that contributed the most to revenues in 2010 were the Poza Rica cryogenic plant with a value of Ps.887 million, which represented an increase of Ps.208 million from 2009, the Madero clean gasoline plant with a value of Ps.558 million, which represented an increase of Ps.17 million from 2009, the Chicontepec II oil field project with a value of Ps.550 million, which represented a decrease of Ps.754 million from 2009, Package II of the Minatitlan refinery with a value of Ps.152 million, a new project which we commenced in 2010, the Cadereyta clean fuels project with a value of Ps.444 million, which represented an increase of Ps.15 million from 2009, and the Salina Cruz clean fuels project with a value of Ps.310 million, a new project which we commenced in 2010.

The Industrial Construction segment’s revenues decreased by 4% in 2009 from 2008, reflecting a decreased volume of work performed. The projects that contributed the most to revenues in 2009 were the Chicontepec II oil field project with a value of Ps.1,303 million, Package II of the Minatitlan refinery with a value of Ps.717 million, the Sempra Costa Azul nitrogen injection facility with a value of Ps.350 million and the AHMSA Phase II steel mill and plate line expansion with a value of Ps.358 million.

Operating Income.The Industrial Construction segment had a 7% decrease in operating income in 2010 from 2009 primarily due to lower margins in the mix of projects under construction.

The Industrial Construction segment had a 100% increase in operating income in 2009 from 2008 due to a contractual arrangement for the Barrick gold mine in the Dominican Republic, which had Ps.159 million in revenues and no costs, thus partially offsetting decreased revenues in the segment.

Rodio Kronsa

The following table sets forth the revenues and operating income of our Rodio Kronsa segment for each of the years in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
Revenues	Ps.	1,306		Ps.	1,514		Ps.	1,680
Operating income		13			43			13
Operating margin		1	%		2.9	%		0.8	%

Revenues.The Rodio Kronsa segment’s revenues decreased by 14% in 2010 from 2009. This decrease was primarily a result of a recession in the construction and real estate sectors in Spain and Portugal, and austerity measures taken by the Spanish government in 2010, which resulted in the delay of some projects and the cancellation of others. This was partially offset by increased revenues in Morocco, Mexico and Central America. The Rodio Kronsa segment’s revenues decreased by 10% in 2009 from 2008. This decrease was primarily a result of a recession in the construction and real estate sectors in Spain, which was partially offset by increased revenues in Mexico and Central America.

Operating Income.The Rodio Kronsa segment’s operating income decreased by 70% in 2010 from 2009. Operating income decreased disproportionately to revenues largely due to the impact of the recessions and the fixed base of selling, general and administrative expenses combined with the effect of the decrease in revenues.

The Rodio Kronsa segment’s operating income increased by 231% in 2009 from 2008. Operating income increased largely due to strict expense control and cost optimization programs that began in 2008, which decreased costs in a manner proportionately greater than the decrease in revenues in this segment. One of the principal differences results from a provision for severance payments of 4.9 million euros in 2008 versus salary reductions of 2.7 million euros in 2009.

Construction Backlog

The following table sets forth, at the dates indicated, our backlog of construction contracts.


	As of December 31,
	2010		2010		2009		2008
	(Millions of U.S. dollars)		(Millions of Mexican pesos)
Construction
Civil	U.S.$	2,106	Ps.	26,081	Ps.	28,013	Ps.	35,885
Industrial		683		8,455		6,320		3,075
Rodio Kronsa		35		438		400		563

Total	U.S.$	2,824	Ps.	34,974	Ps.	34,733	Ps.	39,523

Backlog at December 31, 2010 remained steady compared to December 31, 2009, primarily due to additions to existing contracts and new project awards replacing other projects as they are executed.

Backlog at December 31, 2009 decreased compared to December 31, 2008, primarily due to the execution of projects in backlog, including the La Yesca hydroelectric project and Line 12 of the Mexico City metro system.

Six projects represented approximately 68% of backlog in the Civil Construction segment, and 51% of total backlog, at December 31, 2010. The Mitla-Tehuantepec highway accounted for Ps.5,591 million, or 16%, of our total backlog as of December 31, 2010. We expect to complete this project in the fourth quarter of 2013. The La Yesca hydroelectric project accounted for Ps.3,385 million, or 10%, of our total backlog at December 31, 2010. We expect to complete this project in the fourth quarter of 2012. The Eastern Discharge Tunnel of the Mexico City valley drainage system, which we expect to complete in the first quarter of 2013, accounted for Ps.2,837 million, or 8%, of our total backlog as of December 31, 2010. The Agua Prieta Water Treatment Plant accounted for Ps.2,211 million, or 6%, of our total backlog as of December 31, 2010. We expect to complete this project in the fourth quarter of 2013. The Rio de los Remedios-Ecatepec highway, which we expect to complete in the second half of 2011, accounted for Ps.2,108, or 6%, of our total construction backlog as of December 31, 2010. The Atotonilco water treatment plant, which we expect to complete in November 2013, accounted for Ps.1,676 million, or 5%, of our total construction backlog as of December 31, 2010.

As of December 31, 2010, approximately 5% of construction backlog was attributable to construction projects outside Mexico, and public sector projects represented approximately 92% of our total backlog.

Our book and burn index (defined as the ratio of new contracts, plus net contract additions, to executed works) was 1.01 in 2010 compared to 0.81 in 2009, and 1.85 in 2008. The improvement of our book and burn index in 2010 from 2009 was due to a higher volume of new contract awards in 2010 as compared to 2009. The decrease of our book and burn index in 2009 from 2008 was primarily because of a lower level of new contract awards in 2009 at the same time that execution of contracts increased. Many of the projects being executed in 2008, 2009 and 2010 were originally entered into in 2007. Some of the projects contracts in 2007 include the Aqueduct II water supply, the Nuevo Necaxa—Tihuatlan highway, the Rio de Los Remedios—Ecatepec highway, the Reynosa 5 and 6 cryogenic plants, the Chicontepec II oil field, the La Yesca hydroelectric project and the expansion of the RCO tollroad network.

Concessions

The following table sets forth the revenues and operating results of our Concessions segment for each year in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
	(Millions of Mexican pesos)
Revenues	Ps.	2,677		Ps.	2,231		Ps.	1,852
Operating Income		589			707			542
Operating Margin		22	%		32	%		29	%

Revenues.The Concessions segment’s revenues was Ps.2,677 million in 2010. The segment’s revenues are principally derived from the collection of tolls on toll roads, fees for the availability and use of toll-free roads, and fees by volume of treated water delivered to the municipalities. The segment has 11 highways and five concessioned water projects as of December 31, 2010. Of these 16 concessions, seven were operational at year-end.

Revenues increased 20% in 2010 from 2009, reflecting increased revenues of Ps.446 million, primarily related to Ps.399 million in revenues generated by the concessionaire’s share of construction work executed in 2010, an increase of 87% over 2009, Ps.634 million in financial income revenue in 2010, an increase of 57% over 2009, and Ps.336 million in service revenue earned as operator of the RCO tollroads in 2010, an increase of 14% over 2009, which was partially offset by a 1% reduction in toll revenues.

The Concessions segment’s revenues increased 20% in 2009 from 2008, reflecting increased revenues of Ps.379 million, particularly related to revenue growth from the Corredor Sur highway and, to a lesser extent, revenues from the concessionaire’s share of construction work executed in 2009, which contributed approximately Ps.118 million of the increase in revenues.

Operating Income.The Concessions segment reported a 17% decrease in operating income for 2010 compared to 2009, mainly as a result of increased costs of some operating concessions in the amount of Ps.94 million and a 47% increase of the amortization of our investment in the Acapulco Tunnel project.

The Concessions segment’s operating income increased by 30% in 2009 from 2008 mainly as a result of (i) revenue growth from the Corredor Sur highway, which contributed Ps.389 million to operating income in 2009 compared to Ps.295 million in 2008, (ii) the cancellation of certain operating reserves in the amount of Ps.60 million, (iii) the Irapuato — La Piedad highway becoming an operating highway in 2009, during which it contributed Ps.45 million to operating income as compared to Ps.13 million in 2008, and (iv) a decrease in costs from Ps.1,847 million in 2008 to Ps.1,232 million in 2009.

Airports

The following table sets forth the revenues and operating results of our Airports segment for each year in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
	(Millions of Mexican pesos)
Revenues	Ps.	2,144		Ps.	1,896		Ps.	1,988
Operating Income		498			612			721
Operating Margin		23	%		32	%		36	%

Revenues.The Airports segment’s revenues increased by 13% in 2010 from 2009. Aeronautical revenues, principally passenger charges, increased 8%, and non-aeronautical revenues increased 11%, with the largest increases generated by the NH Terminal 2 Hotel at the Mexico City International Airport, leases (retailers, duty free and other leases), OMA Carga and advertising. An economic improvement in Mexico contributed to total passenger traffic remaining steady in 2010 from 2009, despite the indefinite suspension of operations of the Grupo Mexicana airlines since August 2010. Total terminal passenger traffic volume increased 1% in 2010 from

2009. Domestic terminal passenger traffic volume decreased 0.5%, while international terminal passenger traffic volume increased 6.7%. The main increases in total terminal passenger traffic volume in 2010 as compared to 2009 were at the Chihuahua (11%), San Luis Potosi (8%), Zacatecas (5%) and Monterrey (3%) airports. The main decreases in terminal passenger traffic in 2010 as compared to 2009 were at the Torreon (16%), Acapulco (13%) and Zihuatanejo (9%) airports.

The Airports segment recorded a 5% decrease in revenues in 2009 compared to 2008. Aeronautical revenues, principally passenger charges, decreased 6%, and non-aeronautical revenues were essentially unchanged. Non-aeronautical revenues were supported by the start of operations of the NH Terminal 2 Hotel at the Mexico City International Airport in August 2009. Total terminal passenger traffic volume decreased 18% in 2009 from 2008. Domestic terminal passenger traffic volume decreased 17%, while international terminal passenger traffic volume decreased 22%. The economic recession in Mexico adversely affected domestic traffic in 2009 compared to 2008, which itself had been adversely affected by the exit from the market of Aviacsa, one of GACN’s principal airline clients, during that year and significant reductions in capacity by several other carriers. Generally all of our airports were negatively affected during 2009 by reductions in the volume of passengers, the H1N1 flu virus outbreak and the exit from the Mexican market of five airlines in less than a year. The main decreases in terminal passenger traffic in 2009 as compared to 2008 were at the Ciudad Juarez (30%), Acapulco (23%), Monterrey (21%), San Luis Potosi (21%) and Tampico (19%) airports.

Operating Income.The Airports segment reported a 19% decrease in operating income for 2010 compared to 2009, mainly as a result of an allowance for doubtful accounts of Ps.143 million as a result of the bankruptcy filings by the companies of Grupo Mexicana, equivalent to 100% of Grupo Mexicana accounts receivable. This provision was recorded under cost of services. We have initiated legal proceedings to recover the Grupo Mexicana accounts receivable, but we cannot assure you that we will recover all or any portion of such receivables.

The Airports segment’s operating income decreased 15% in 2009 from 2008, principally because of the decrease in revenues in 2009.

Housing Development

The following table sets forth the revenues and results of operations of our Housing Development segment for each year in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
	(Millions of Mexican pesos)
Revenues	Ps.	3,048		Ps.	2,271		Ps.	2,151
Operating income		276			165			144
Operating margin		9.1	%		7.3	%		6.7	%

Revenues.The Housing Development segment’s total revenues increased by 34% in 2010 from 2009, principally due to our increased participation in the Los Portales homebuilding and real estate business (from an 18% equity interest to 50%) during the second quarter of 2010 and our proportional consolidation of such participation, including its revenues and costs, in 2010. The increase was also attributable to the sale of a parcel of land in Cancun and an increase in the number of housing units sold from 7,077 housing units in 2009 to 7,116 in 2010. The increase in housing units sold was principally due to new projects and projects that began construction and sales in 2010.

The Housing Development segment’s total revenues increased by 6% in 2009 from 2008 principally due to the mix of the economic strata of homes sold, which allowed us to sell homes with greater profit margins in 2009 as compared to 2008 despite a decrease in the total number of homes sold. The number of units sold decreased to 7,077 in 2009 from 7,433 units in 2008, principally due to the recession in Mexico and a slowdown in Mexican real estate. Through 2008, we considered a unit sold when we received a certificate of occupancy from an independent qualified entity and the client had a committed loan from a financial entity that provides mortgages. Beginning in 2009, we considered a unit sold when the deed of sale was registered in the public registry. This change in accounting policy was applied retroactively and thus did not affect the comparability of revenues from period to period. See Note 3a to our consolidated financial statements.

Operating Income.The Housing Development segment’s operating income increased by 67% in 2010 from 2009. The increase was primarily attributable to the proportional consolidation of our participation in the Los Portales real estate business and a reduction

in cost of sales (such reduction not including, however, the Los Portales real estate business) against revenues by 1% compared with 2009.

The Housing Development segment’s operating income increased by 15% in 2009 from 2008. The increase in 2009 from 2008 was primarily attributable to the increase in revenues coupled with decreased costs mainly resulting from a reduction in corporate expenses of Ps.55 million and head office expenses of Ps.8 million.

Corporate and Other

During the past several years, as part of our non-core asset divestiture program, we have sold substantially all of the operating assets in our Corporate and Other segment. The Corporate and Other segment contributed less than 0.1% of our total revenues in 2010.

The following table sets forth the revenues and operating loss of the Corporate and Other segment for each year in the three-year period ended December 31, 2010.


	Year Ended December 31,
	2010			2009			2008
	(Millions of Mexican pesos)
Revenues	Ps.	32		Ps.	20		Ps.	50
Operating loss		(11	)		(13	)		(35	)

Revenues. The Corporate and Other segment’s revenues increased by 58% in 2010 from 2009 primarily due to sales of real estate assets. The Corporate and Other segment’s revenues decreased 59% in 2009 from 2008 primarily due to a decrease in our sales of real estate assets.

Operating Loss.The Corporate and Other segment had a lower operating loss in 2010 compared to 2009, as well as in 2009 compared to 2008. The operating losses in each year were mainly due to the allocation of increases in maintenance and legal costs of real estate inventories.

Financing Cost, Net

The following table sets forth the components of our comprehensive financing costs for each year in the three-year period ended December 31, 2010.


	Year Ended December 31, 2010
	2010			2009			2008
	(Millions of Mexican pesos)
Interest expense	Ps.	1,277		Ps.	1,033		Ps.	1,023
Interest income		(383	)		(373	)		(395	)
Exchange gain (loss), net		(8	)		105			(116	)
Loss on financial instruments		73			2			29

Financing cost, net(1)	Ps.	959		Ps.	767		Ps.	541


(1)		Does not include net financing cost of Ps.1,566 million in 2010, Ps.1,140 million in 2009 and Ps.388 million in 2008 that are included in cost of sales. See Note 25 to our consolidated financial statements.

The 25% increase in net comprehensive financing costs in 2010 from 2009 was mainly due to increased costs from higher interest expense and derivatives, which were partially offset by a foreign exchange gain in 2010 compared to a loss in 2009 because of an appreciation of the Mexican peso relative to the U.S. dollar in 2010. The 42% increase in net comprehensive financing costs in 2009 from 2008 was mainly due to depreciation of the Mexican peso relative to the U.S. dollar, resulting in a foreign exchange loss.

Interest expense increased 24% in 2010 compared to 2009 primarily due to increased debt levels as a result of additional drawings on existing credit facilities and fees related to the restructuring of loans in the Airports segment. Interest expense increased less than 1% in 2009 compared to 2008.

Interest income increased 3% in 2010 from 2009. Interest income decreased 6% in 2009 from 2008 primarily because of lower cash reserves.

We reported a foreign exchange gain in 2010 compared to a foreign exchange loss in 2009, primarily due to the effect of the appreciation of the Mexican peso relative to the U.S. dollar on our dollar-denominated accounts payable. We reported increased foreign exchange losses in 2009 from 2008 due to the effect of the depreciation of the Mexican peso relative to the U.S. dollar on our dollar-denominated accounts payable.

Our total debt as of December 31, 2010 increased 40% compared to December 31, 2009, primarily as a result of drawings on existing and expanded credit facilities for construction of the La Yesca hydroelectric project, which were permitted as a result of approved certifications for completed work on the project, and other projects in our Concessions and Airports segments.

We issued U.S.$500 million of our 8.9% senior notes due 2021 in the first quarter of 2011; we used approximately half of the net proceeds to repay outstanding debt. The net effect of these transactions is not reflected in our debt at year-end. At December 31, 2010 and March 31, 2011, we had U.S.$107 million and U.S.$612 million, respectively, of debt issued or guaranteed as joint obligor by our parent company. Our total debt increased 30% at December 31, 2009 from December 31, 2008, as a result of drawings on existing credit facilities for the La Yesca hydroelectric project and other projects in our Concessions and Airports segments.

At December 31, 2010 and 2009, 39% and 37%, respectively, of our total debt was denominated in currencies other than Mexican pesos, principally U.S. dollars or, in the case of some debt related to projects of Rodio Kronsa, euros. We may in the future incur additional non-peso denominated indebtedness. Declines in the value of the Mexican peso relative to such other currencies could both increase our interest costs and result in foreign exchange losses. Conversely, an increase in the value of the Mexican peso relative to such other currencies could have the opposite effect.

Other Income and Expenses, Net

In 2010, our net other income was a loss of Ps.164 million, compared with net other income of Ps.687 million in the 2009. The decrease in 2010 was principally due to losses on sales of property, plant and equipment of Ps.71 million and a provision for restructuring Rodio Kronsa of Ps.65 million. In 2009, our net other income was Ps.687 million, compared with net other income of Ps.95 million in 2008. The increase in 2009 was principally due to the reversal of a previous impairment provision in the amount of Ps.681 million related to the Acapulco Tunnel project as a result of improved estimated future cash flows.

Income Tax

In 2010, we recorded a net tax provision of Ps.264 million, which reflected a change in estimates for deferred taxes for our subsidiaries based on their financial projections. In accordance with MFRS, taxpaying entities must register deferred taxes, either for income tax or for the Mexican business flat tax (IETU), based on financial projections as to which tax is expected to predominate in future periods. These new projections show that some subsidiaries are expected pay more income tax and less IETU during future periods. As of December 31, 2010, we had Ps.3,472 million in consolidated net loss carryforwards and Ps.1,177 million in consolidated asset tax credits available. See Note 20 to our consolidated financial statements.

Changes to Mexico’s income tax law were enacted on December 7, 2009 and went into effect on January 1, 2010. One of the most significant reforms requires companies to pay taxes on previous benefits taken resulting from tax loss carryforwards of subsidiaries that are consolidated for tax purposes. As a result of such reforms, we estimated that with respect to tax losses incurred by certain subsidiaries from 1999 to 2004, we will be required to pay Ps.281 million, of which Ps.70 million is payable in 2010 and Ps.211 million is payable from 2011 to 2014. A liability was recognized for such amount, with a corresponding charge to income tax expense in 2009. Additionally, for other specific consolidation benefits generated by certain subsidiaries from 2005 to 2009, we have estimated that additional taxes could amount to Ps.1,665 million, for which a liability has also been recognized, Ps.1,614 million of which we have been able to recognize as a deferred income tax asset while the remaining Ps.51 million was recognized in results of 2009. Accordingly, total income tax expense recognized in 2009 as a result of these reforms was Ps.332 million. Finally, income tax liabilities of Ps.844 million relating to other previous benefits outlined in the reforms were accrued as of 2009, which under INIF 18,Recognition of the Effects of the 2010 Tax Reform on Income Taxes, of MFRS permitted us to recognize such amount as a charge directly to retained earnings in 2009. However, modifications in 2010 to the original tax reforms established, among other things, that previously recognized obligations measured based on income tax equity accounts will become payable only upon the occurrence of certain triggering events. Companies must therefore analyze whether they continue to have a liability under the revised legislation

based on the probability that such triggering events will occur and resulting obligations will materialize, depending on their intentions regarding the application of the tax consolidation regime. As a result of these modifications to the reform, we determined that the liability we recognized in 2009 of Ps.844 million no longer required recognition. Accordingly, in 2010, we recognized a reversal of the liability in our results, as permitted by MFRS. This benefit was almost completely offset by a write-off of Ps.830 million, Ps.197.4 million of which related to prior year tax loss carryforwards that were canceled given that the period to apply such tax losses against taxable earnings expired and Ps.632.4 million of which related to prior year tax losses that were canceled based on our current year evaluation of the projections of the subsidiaries at which such losses were generated and our subsequent determination that such subsidiaries will not be able to produce sufficient taxable earnings over the permitted period of amortization of such losses to allow their related application.

In 2009, we recorded a net tax provision of Ps.1,368 million, reflecting the current and deferred income tax, the business flat tax, and the 2009 changes to Mexico’s income tax law. As of December 31, 2009, we had Ps.4,561 million in consolidated net loss carryforwards and Ps.1,589 million in consolidated asset tax credits available. See Note 20 to our consolidated financial statements.

In 2008, we recorded a net tax provision of Ps.302 million, which reflected the flat rate business income tax in Mexico and the Mexican income tax, as well as the change in the valuation allowance on net deferred tax assets.

The flat rate business tax applies to the sale of goods, the provision of independent services and the granting of use or enjoyment of goods, according to the terms of the law, less certain authorized deductions. The flat rate business tax payable is calculated by subtracting certain tax credits from the tax determined. Revenues, as well as deductions and certain tax credits, are determined based on cash flows generated beginning January 1, 2008. The law established that the flat rate business tax rate would be 17% in 2009 and 17.5% thereafter. Unlike income tax, a parent and its subsidiaries incur flat rate business tax on an individual basis. Upon enactment of the flat rate business tax law, the asset tax was eliminated; additionally, under certain circumstances, asset tax paid in the ten years prior to a year in which income tax is paid may be refunded. The flat rate business tax is assessed in addition to income tax.

We estimate that with respect to tax losses incurred by certain subsidiaries through 2005, we will be required to pay Ps.707 million, of which Ps.196 million was paid in March 2011 and Ps.511 million is payable from 2012 to 2015.

The statutory tax rate in Mexico was 28% for 2008 and 2009 and 30% for 2010. For 2011 and 2012 the statutory tax rate is expected to be 30%, for 2013 it is expected to be 29% and for 2014 it is expected to be 28%. Generally, the differences between effective tax rates and statutory tax rates are due to different rates for foreign subsidiaries, the effects of inflation and exchange rate fluctuations.

Share in Income and Loss of Unconsolidated Affiliated Companies

Our unconsolidated affiliates include, among others, RCO, our joint venture affiliate with GS Global Infrastructure Partners I, L.P., and PMA Mexico. Our share of income of unconsolidated affiliated companies was Ps.79 million in 2010, as compared to a loss of Ps.114 million in 2009. The improvement was principally due to the sale in November 2010 of our equity method investee Autopistas Concesionadas del Altiplano, S.A. de C.V.’s assets used for the concession of the San Martin-Tlaxcala-El Molinito highway for Ps.609 million, of which we received Ps.120 million in proportion to our investment. The improvement in participation in the loss of unconsolidated affiliated companies to Ps.114 million in 2009 from Ps.433 million in 2008 was mainly the result of a deferred tax benefit of Ps.238.2 million recognized at RCO for the reversal of its valuation allowance as well as lower financing costs incurred at RCO of Ps.489.2 million in 2009, as compared to approximately Ps.758.4 million in 2008.

Net Income

We reported consolidated net income of Ps.1,204 million in 2010, compared to consolidated net income of Ps.884 million in 2009. Despite decreased income before income taxes as a result of increased financial and other income resulting from the factors described above, we reported increased net income due to a decreased tax provision, mainly stemming from the reversal of a liability recorded in 2009 as a result of the 2009 tax reforms which, due to further modifications to such tax reforms in 2010, was no longer considered to be an obligation for us. We reported consolidated net income of Ps.884 million in 2009, compared to consolidated net income of Ps.606 million in 2008. The increase in 2009 was primarily attributable to higher operating income as a result of an increased volume of work and the reversal of the impairment provision for the Acapulco Tunnel recorded in net other income.

Net income of non-controlling interest was Ps.295 million in 2010, essentially unchanged from Ps.288 million in 2009. Net income of non-controlling interest was Ps.288 million in 2009 as compared to Ps.212 million in 2008, which increase primarily reflected the addition of our noncontrolling interest in Viabilis Infraestructura, the contractor for the Rio de los Remedios — Ecatepec toll highway project.

Net income of controlling interest was Ps.909 million in 2010, compared to Ps.595 million in 2009. This increase was due to a decrease in tax liabilities of Ps. 1,103 million.

U.S. GAAP Reconciliation

The principal differences between MFRS and U.S. GAAP that affect our net income and majority stockholders’ equity relate to the accounting treatment of the following items:

	•		Concession arrangements;

	•		Derivative financial instruments;

	•		Investments in associated companies;

	•		Capitalization of financing costs;

	•		Severance payments;

	•		Deferred income tax and effects of changes in tax laws; and

	•		Impairment reversal.

Pursuant to MFRS, through December 31, 2007 our consolidated financial statements recognize certain effects of inflation in accordance with Bulletin B-10, except for the restatement of foreign-sourced fixed assets from January 1, 1998. These effects have not been reversed in our reconciliation with U.S. GAAP. For a more detailed description of the differences between MFRS and U.S. GAAP as they affect our net consolidated income and consolidated equity, see Note 29 to our consolidated financial statements.

Critical Accounting Policies and Estimates

In January 2009, the National Banking and Securities Commission (CNBV) published amendments requiring the presentation of financial statements prepared in accordance with International Financial Reporting Standards, or IFRS, starting with the year ending December 31, 2012, but allowing for early adoption.

Our Board of Directors approved the early adoption of IFRS for the year ending December 31, 2011, with January 1, 2010 as “date of transition.” As a result, our financial statements for the year ended December 31, 2010 are the last statements that will be prepared in accordance with MFRS for public use.

The early adoption of IFRS is intended to meet international requirements in terms of disclosure and transparency of financial information, as well as to aid investors in their evaluation and comparisons with other companies in the same sector. Note 29 in our consolidated financial statements describes the effects of adoption of IFRS as of December 31, 2010, as well as a description of the changes in the main accounting policies.

As of December 31, 2010, we prepare our consolidated financial statements in accordance with MFRS. NIF A-8,Supplementary Standards to Financial Reporting Standards, requires that we apply other comprehensive bodies of accounting principles in cases where MFRS is silent on an issue, first applying IFRS, issued by the International Accounting Standard Board, or IASB, and subsequently any other standard or principle that is considered adequate, so long as it comes from a formal, recognized body of accounting principles which do not contravene the concepts of MFRS, such as U.S. GAAP. The SEC allows foreign private issuers to eliminate the reconciliation of financial statements with U.S. GAAP if the financial statements are prepared under IFRS.

MFRS requires us to make estimates that affect the amounts recorded for assets, liabilities, income and expenses in our consolidated financial statements. MFRS also requires us to make such estimates based on available information and on the best knowledge and judgment of management according to historical experience and current facts. Nevertheless, actual results could differ from these estimates. We have implemented control procedures to ensure that our accounting policies are timely and adequately

applied. The accounting policies that involve the use of estimates that substantially affect our consolidated financial statements for the year ended December 31, 2010, are as follows:

Accounting for Construction Contracts

As part of the planning process of a construction contract before commencing any project, we review the principal obligations and conditions of the specific contract for the purpose of (i) reasonably estimating the projected revenue, (ii) reasonably estimating the costs to be incurred in the project, (iii) reasonably estimating the gross profit of the project, and (iv) identifying the rights and obligations of the parties. Based on that analysis, and in conjunction with the legal and economic right to receive payment for the work performed as established in each contract, we utilize the percentage-of-completion method established in Bulletin D-7,Construction Contracts and Manufacturing Contracts for Capital Assets,to recognize revenues on our construction contracts.

The decision of whether or not to participate in a project is made collectively with representatives of the technical, legal, financial and administrative areas, which considers an analysis of the customer’s economic solvency and reputational standing, the legal framework, the availability of resources, the technological complexity of the project, the obligations and rights assumed, the economic, financial and geological risks, and the possibility of mitigation of risks, as well as the analysis of each contract. Our policy is to avoid contracts with material risks, unless such risks may be mitigated or transferred to the customers, suppliers and/or subcontractors.

In contracts involving performance guarantees related to the equipment on which the performance of the project depends, the decision to participate will depend on, among other factors, our ability to transfer the risks and penalties related to these guarantees to the suppliers and/or subcontractors.

In contracts involving guarantees related to timely delivery, we generally plan the project to take into consideration the risk of delay and allow sufficient time for the timely completion of the project in spite of unavoidable delays.

Projects are executed in accordance with a work program determined prior to commencement of the project, which is periodically updated. The work plan includes the description of the construction to be performed, the critical execution route, the allocation and timeliness of the resources required and the project’s cash flow forecast.

The construction contracts in which we participate are typically governed by civil law of various jurisdictions which recognizes a contractor’s right to receive payment for work performed. Under this body of law, the buyer is the legal owner of the works in execution while they are in-process, and the contractor is entitled to payment for work performed, even though payment may not occur until the completion of the contract. The typical terms of our contracts also provide for our right to receive payment for work performed.

The construction contracts into which we enter are generally either (i) unit price or (ii) fixed price (either lump sum or not-to-exceed). The evaluation of the risks related to inflation, exchange rates and price increases for each type of contract depends on if the contract is a public works contract or is with the private sector.

In unit price contracts in the private sector, the customer generally assumes the risks of inflation, exchange-rate and price increases for the materials used in the contracts. Under a unit price contract, once the contract is signed the parties agree upon the price for each unit of work. However, unit price contracts normally include escalation clauses whereby we retain the right to increase the unit price of such inputs as a result of inflation, exchange-rate variations or price increases for the materials, if any of these risks increases beyond a percentage specified in the contract.

For unit price contracts related to public works, in addition to escalation clauses, in Mexico the Public Works and Services Law establishes mechanisms to adjust the value of such public unit-price contracts for cost increases. The Public Works and Services Law provides the following mechanisms for the adjustment of unit prices in unit-price contracts: (i) a review of individual unit prices for which adjustment may be possible; (ii) review of unit prices by group where the estimated amount of work remaining to be performed represents at least 80% of the total amount of remaining work under the contract; and (iii) for those projects in which the relationship between the input and the total contract cost is established, an adjustment to reflect the increased cost may be made based on such proportion. The application of these mechanisms is required to be specified in the relevant contract.

In lump sum contracts, not-to-exceed contracts or contracts where there are no escalation clauses in which we undertake to provide materials or services at fixed unit prices required for a project in the private sector, we generally absorb the risk related to inflation, exchange-rate fluctuations or price increases for materials. However, we seek to mitigate these risks as follows: (i) when the

bid tender is prepared, such risks are included in determining the costs of the project based on the application of certain economic variables which are provided by recognized economic analysis firms; (ii) contractual arrangements are made with the principal suppliers, among which advance payments are made to ensure that the cost of the materials remains the same during the contract term; and (iii) the exchange-rate risk is mitigated by contracting suppliers and subcontractors in the same currency as that in which the contract is executed with the customer.

For those risks that cannot be mitigated or which surpass acceptable levels, we carry out a quantitative analysis in which we determine the probability of occurrence of the risk, measure the potential financial impact, and adjust the fixed price of the contract to an appropriate level, taking these risks into consideration.

For fixed price contracts in the public sector, in addition to that above, the Public Works and Services Law protects the contractors when adverse economic conditions arise that could not have been anticipated at the time of awarding the contract and thus were not considered in the initial contract bid. The Public Works and Services Law allows the Controller’s Office(Secretaria de la Funcion Publica)to issue guidelines through which public works contractors may recognize increases in their initial contract prices as a result of adverse economic changes.

In recent years, our construction contracts have been increasingly of the fixed price type or mixed price contracts in which a portion of the contract is at fixed price and the rest at unit prices. Fixed price, not-to-exceed and mixed price contracts collectively accounted for approximately 86% of our construction backlog as of December 31, 2010, 75% of our construction backlog as of December 31, 2009 and 75% of our construction backlog as of December 31, 2008. While we have entered into contracts with unit pricing in the last three years, we believe that fixed price contracts are more prevalent in the construction market and the contracts that we enter into in the future will reflect this shift to fixed price contracts.

Our construction contracts are recorded using the percentage-of-completion method established in Bulletin D-7, which is similar to that established in U.S. GAAP in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 605,Revenue Recognition. The percentage-of-completion method allows the timely recognition of the performance of the project and appropriately presents the legal and economic substance of the contracts. According to this method, revenue is recognized in periodic form according to the execution progress of the construction, as if it were a continuous sale.

In order to be able to apply percentage-of-completion, the following requirements must be met: (i) the contract must clearly specify the legal rights related to the goods or services to be provided and to be received by the parties, the consideration to be exchanged and the terms of the agreement; (ii) our legal and economic right to receive the payment for the work performed as the contract is executed must be specified; (iii) the expectation must be that both the contractor and the customer will fulfill their respective contractual obligations; and (iv) based on the construction budget and contract, the total amount of revenue, the total cost to be incurred and the estimated profit can be determined.

Income from construction contracts is recognized based on costs incurred, taking into account the total expected costs and revenues as the contract progresses. The estimations are based on the terms, conditions and specifications of each specific project, including assumptions made by management of the project in order to ensure that all costs attributable to the project were included.

The base revenue utilized to calculate percentage of profit as work progresses includes the following: (i) the initial amount established in the contract, (ii) additional work orders requested by the customer, (iii) changes in the considered yields, (iv) the value of any adjustments (for inflation, exchange rates or changes in prices, for example) agreed to in the contract, (v) the decrease in the original contract value and agreements in contracts (vi) claims and conventional penalties, and (vii) completion or performance bonuses, as of the date on which any revision takes place and is effectively approved by the customers.

The base cost utilized to calculate the profit percentage under the costs incurred method includes the following: (i) the costs directly related to the specific contract, (ii) indirect costs related to the general contract activity that can be matched to a specific contract; and (iii) any other costs that may be transferred to the customer under the contract terms. The costs directly related to the specific contract include all direct costs such as materials, labor, subcontracting costs, manufacturing and supply costs of equipment, start-up costs and depreciation. Indirect costs identified that are assignable to a contract include indirect labor, payroll of technical and administrative personnel, construction site camps and related expenses, quality control and inspection, internal and external contract supervision, insurance costs, bonds, depreciation and amortization, repairs and maintenance.

Costs which are not included within contract costs are: (i) any general administrative expenses not included under any form of reimbursement in the contract; (ii) selling expenses; (iii) any research and development costs and expenses not considered reimbursable under the contract; and (iv) the depreciation of machinery and equipment not used in the specific contract even though it is available on hand for a specific contract, when the contract does not allow revenue for such item. In addition, work performed in independent workshops and construction in-progress are also excluded costs and are recorded as assets when they are received or used under a specific project.

Costs incurred for change orders based on customers’ instructions which are still awaiting definition and price authorization are recognized as assets within the caption “cost and estimated earnings in excess of billings of uncompleted contracts”.

Periodically, we evaluate the reasonableness of the estimates used in the determination of the percentage of completion in any given project. Cost estimates are based on assumptions, which can differ from the actual cost over the life of the project. Accordingly, estimates are reviewed periodically, taking into account factors such as price increases for materials, the amount of work to be done, inflation, exchange-rate fluctuations, changes in contract specifications due to adverse conditions and provisions created based on the construction contracts over the project duration, including those related to penalties, termination and startup clauses of the project and the rejection of costs by customers, among others. If, as a result of this evaluation, there are modifications to the revenue or cost previously estimated, or if the total estimated cost of the project exceeds expected revenues, an adjustment is made in order to reflect the effect in results of the period in which the adjustment or loss is incurred. The estimated revenues and costs may be affected by future events. Any change in these estimates may affect our results.

We consider that the potential credit risk related to construction contracts is adequately covered because the construction projects in which we participate generally involve customers of recognized solvency. Billings received in advance of execution or certification of work are recognized as advances from customers. In addition we periodically evaluate the reasonableness of our accounts receivable. In cases when an indication of collection difficulty exists, allowances for bad debts are created and charged to results in the same period. Such allowance is determined based on management’s best judgment in accordance with prevailing circumstances at that time. Our policy is not to recognize an allowance for doubtful accounts on contracts that require the customer to pay for the work not as it is performed, but only when the project is completed unless there are sufficient indicators that such receivable will not be collectible.

For those projects in which financing revenue is included as part of the selling price, the contract costs also include the net comprehensive financing costs incurred with the financing obtained to perform the contract, except where the actual financing cost exceeds the original estimated financing cost. The financing cost, which also includes changes in the fair value of derivative financial instruments, is part of the contract cost, which is recognized in results as the project progresses. In these types of contracts, the collection of the contract amount from the client may take place at the completion of the project. However, periodic reports of the advance of the project to date are provided to and approved by the client, which serve as the basis so that we can continue to obtain financing for the project.

When a contract includes construction of various facilities, construction of each facility is treated as a separate profit center when: i) separate proposals for each facility have been presented; ii) each facility has been separately negotiated and has independent terms and conditions established in the contract; and iii) the revenue, costs and profit margin of each separate facility can be identified.

A group of contracts, whether with one or several clients, are treated together as one unique center of profit when: i) the group of contracts have been negotiated together as a unique package; ii) the contracts are so intimately related that they are effectively part of a unique project with a global profit; and iii) the contracts are executed simultaneously or in a continuous sequence.

The estimated profit of various profit centers cannot offset one another. We ensure that when several contracts integrate a profit center, its results are properly combined.

Construction backlog takes into account only those contracts in which we have control over such project. We consider ourselves to have control when we have a majority participation in the project and when we are assigned leadership of the project. In a case in which there is contractual joint control, the percentage of the contract is incorporated in the backlog according to our participation as provided in the contract.

Long-Lived Assets

We value our long-lived assets at their historical cost, and until December 31, 2007, we restated their value for inflation. We calculate depreciation on our fixed assets, such as buildings, furniture, office equipment and vehicles, over the useful life of the asset. The depreciation of machinery and equipment is calculated according to the units of production method (machine hours used in regard to total estimated usage hours of the assets during their useful lives, which range from 4 to 10 years). We calculate amortization, as in the case of our investment in concessions of highways and tunnels based on utilization rates during the concession term. For rights involving the use of airport facilities and concessions, amortization is based on the estimated useful life of the various components that make up the investment in the airport concession.

We periodically evaluate the impairment of long-lived assets, considering the cash-generating unit to which the asset belongs. If the carrying amounts of cash-generating units exceed their recoverable value, we write-down the cash-generating units to their recoverable value. The recoverable value is the greater of the net selling price of the cash-generating unit and its value in use, which is the present value of discounted future net cash flows.

Discount rates are determined using real rates (that is, excluding inflation) by calculating the weighted average cost of capital for each cash-generating unit, which in turn is calculated by estimating the cost of equity and the cost of debt incurred for each cash-generating unit. The cost of equity is calculated using the capital asset pricing model, which uses the beta coefficients of comparable public companies in local and international markets. The cost of incurred debt is calculated based on the terms of debt currently outstanding for projects in-process as well as existing financial market conditions. The method we use to calculate the recoverable value of our cash-generating units takes into account the particular circumstances of the assets, including the terms and conditions of each concession, machinery and equipment involved, and intangible assets.

As part of the process to determine the recoverable values of our cash-generating units, we make sensitivity analyses that measure the effect of key performance variables on projected net cash flows, considering the most probable outcomes of those variables. The critical variables used in our sensitivity analyses for the determination of recoverable value consider those variables that create value in each of our projects. These include (i) operating revenues, (ii) costs of operation and (iii) macroeconomic conditions, including foreseeable changes in interest rates. Our analyses also include contractually agreed-upon values related to maintenance and other investments when we are contractually bound to incur such investments in certain projects. Variations in discount rates are taken into account considering general changes in market interest rates and are applied to three possible scenarios with respect to projections of revenues: an optimistic case, a probable case (base case) and a pessimistic case. We believe that this range of outcomes is sufficiently broad to help us analyze the limits of the value of each critical variable and can also be broad enough for us to effectively consider projects that are in the maturity phase. Variations are considered with respect to individual variables as well as with respect to “cross variations” where we apply simultaneous changes to combined variables.

Types of Long-Lived Assets

Depending upon their operating status, projects related to long-lived assets or cash-generating units can either be in the construction phase or operating phase. Projects in the construction phase are composed of investments in the process of being executed (constructed), whereas projects in the operating phase involve operating risks.

In the case of highways, we participate in two main project types: concessions and public-private partnerships (PPS). The main difference between these categories is that revenues for PPS projects are paid directly by the government (not users) and include fixed revenues in addition to variable revenues, which we believe improves our revenue profile and risk exposure arising from our highways portfolio. Projected variable revenue scenarios are taken from studies that forecast traffic volume. These forecasts also take into account anticipated changes in toll levels and are prepared using statistical models based on historic behavior for each project. Operating expense projections are developed by the individuals in charge of the project operation. Projections for investment commitments are considered when such commitments are contractually required under the concession agreement. Projections are reviewed by operating committees and by the trusts in which both the governmental authorities and the project’s lenders participate. Our analyses as of December 31, 2010, using base case scenarios, indicate that a combined 19% decrease in variable revenues or 161% increase in operating costs would not result in impairment of our contractual obligations related to maintenance for these projects in the operating phase.

In water treatment and transmission projects, the structure of the project differs only in that the service is not provided directly to the public at large, but instead to governmental entities for water and drainage systems. In these types of projects, revenues and expenses are related both to the demand for the services by the population as a whole and the operating capacity of the project. Typically revenues include a fixed component to recover investment and fixed operating and maintenance costs, as well as a variable component that depends on the volume of water processed. The sensitivity analyses in these cases are based principally on population

increase, which is the most determinative factor for future demand for the service. Our analyses as of December 31, 2010, using base case scenarios, indicate that a 22% decrease in variable revenues or a 30% increase in operating costs, would not result in impairment of finished projects in the operating phase.

Our airport projects are regulated by five-year master plans negotiated with the Mexican government, in which our future investment commitments are established and in which the maximum tariff we can charge per passenger is set. These are high-volume projects in which the variable that most affects the value in use is revenue. The sensitivity analyses for these projects are based on different scenarios of passenger traffic and ability to recover the maximum tariff. Our analyses as of December 31, 2010, using base case scenarios, indicate that a 25.3% decrease in revenues, a 134.1% increase in operating costs, or a 220% increase in capital expenditures would not result in impairment of our airports our contractual obligations related to investments at our airports.

As of December 31, 2010, our pre-tax discount rates for highway projects average approximately 9.07% in real terms (excluding inflation), for water projects range from 6.5% to 10.2% in real terms, and for our airports average approximately 12.2%.

Our estimates for all projects may be based on assumptions that differ from, and may be adjusted according to, actual use.

Under U.S. GAAP, impairment is recognized when it is determined that a long-lived asset or asset group is not recoverable. An asset group is established by considering the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. A long-lived asset or asset group is not recoverable when the estimated future undiscounted cash flows expected to result from the use of the asset are less that the carrying value of the asset. We generally group our assets based on individual concessions or projects, depending on the nature of the assets in each case (similar to the concept of cash-generating units used in MFRS). If the asset or asset group is not recoverable, an impairment loss is recognized based on the difference between the carrying value of the asset or asset group and its fair value.

We determine fair value under U.S. GAAP in a manner similar to how we determine it under MFRS, which is through the use of discounted cash flow analyses, using the same inputs and assumptions as those discussed under MFRS above. However, with respect to the determination of recoverable value for purposes of determining if an impairment should be recognized, MFRS requires the use of discounted cash flows, while U.S. GAAP considers the use of cash flows on an undiscounted basis.

When the recoverable value improves, and such improvement is greater than the carrying value of the asset and appears to be permanent, we reverse the previously recorded impairment loss only under MFRS.

Income Tax

We determine and recognize current and deferred income tax. In the case of income tax, we are subject to the tax consolidation regime.

A provision or benefit for current income tax and business flat tax is recorded in the results of the year in which such tax expense or benefit is incurred. Deferred tax for both the income tax and the business flat tax is recognized using the assets and liabilities method, which considers temporary differences derived from comparing the accounting and tax values of assets and liabilities, plus any future benefits resulting from unrecognized tax losses and unused tax loss carryforwards. The temporary differences are assessed at the income tax rate enacted for the years in which the assets and liabilities are expected to be recovered or settled. Accordingly, the effect on deferred tax assets and liabilities resulting from a change in rates and tax laws is recognized in the income statement in the year of enactment. The resulting deferred tax provision or benefit is reflected in the income statement.

The calculation and recognition of deferred taxes and the related valuation allowance requires the use of estimates, which may be affected by the amount of our future taxable income, the assumptions relied on by our management and our results of operations. In determining the valuation allowance for deferred tax assets and tax loss carryforwards, we consider the facts and circumstances that may have an impact in subsequent years on financial projections of taxable income, together with our estimates of recovery of tax losses for concession projects during the concession term. Our concession terms range from 20 to 50 years.

A valuation allowance is recorded for any deferred tax assets that, in the opinion of our management, are not probable of being realized. Any change in our estimates may have an effect on our financial condition and results of operations.

The method we use to determine deferred taxes under MFRS is similar to that established in Accounting Standard Codification, or ASC, 740 (SFAS No. 109,Accounting for Income Taxes).

In connection with the new business flat tax, we also perform projections of future taxable income over the period during which our existing deferred taxes will reverse in order to determine whether during those years, we expect to pay the business flat tax or regular income tax. We record deferred taxes based on the tax we expect to pay. Such projections are based on our estimates of the taxable revenues that we expect to recognize in the future in the ordinary course of business, less tax deductions permitted by relevant law.

Derivative Financial Instruments

We enter into derivative financial instruments to hedge our exposure to interest rate and foreign currency exchange risk related to the financing for our construction projects. When the related transaction complies with all hedge accounting requirements, we designate the derivative as a hedging financial instrument (either as a cash flow hedge, a foreign currency hedge or a fair value hedge) at the time we enter into the contract. When we enter into a derivative for hedging purposes from an economic perspective, but such derivative does not comply with all the requirements established by financial reporting standards to be hedging instruments, we designate the derivative as a trading instrument. Our policy is not to enter into derivative instruments for purposes of speculation.

Per Bulletin C-10,Derivative Financial Instruments and Hedging Operations, we value and recognize all derivatives at fair value, regardless of the purpose for holding them. We base fair value on market prices for derivatives traded in recognized markets. If no active market exists, we value the derivative instrument using the valuation techniques carried out by a price provider authorized by the National Registry of Securities(Registro Nacional de Valores)and the valuations provided by valuation agents (counterparties). These valuations are based on methodologies recognized in the financial sector and are supported by sufficient and reliable information. Valuations are carried out monthly in order to review changes and impact on business units and consolidated results. Fair value is recognized in the consolidated statement of financial position as a derivative asset or derivative liability, in accordance with the rights and obligations of the derivative contract and in accordance with MFRS. For derivatives entered into in connection with the financing of a project that is in the construction phase, we capitalize the changes in the fair value of the derivative asset or liability within the consolidated statement of financial position as part of the cost of the project, which is then reclassified to results based on the percentage-of-completion of the related project.

For cash flow hedges (including interest rate swaps and interest rate options) and foreign currency hedges designated as foreign currency cash flow hedges and including exchange rate instruments, foreign currency swaps and foreign currency options, the effective portion is temporarily recognized in other comprehensive income within stockholders’ equity and is subsequently reclassified to results when the results are affected by the item being hedged. The ineffective portion is recognized immediately in results of the period. For fair value hedges, the fluctuation in the fair value of both the derivative and the open risk position is recognized in results of the period in which it takes place. We carry out tests of effectiveness for derivatives that qualify as hedging instruments from an accounting perspective at least every quarter and every month if material changes occur.

For those derivatives that do not comply with hedge accounting requirements, and are thus considered trading derivatives, the fluctuation in their fair value is recognized in results of the period when valued, except for the portion that is related to construction in-process and thus accounted for in the consolidated statement of financial position as part of the cost of a project.

See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Derivative Financial Instruments.”

Other Policies

Accounting for Low Income Housing Sales

We recognize revenues derived from sales of low income housing, residential environment, and real estate when the risks and benefits of the housing have been transferred to the buyer, which occurs upon passage of title to the buyer.

Our real estate inventories are divided into two large segments: land held for development and inventories in-progress (which include both houses under construction and unsold finished houses).

The valuation of inventory, the control of the cost of sales and the related profit are recognized through a cost budgeting system. The cost budgeting system is reviewed quarterly and updated periodically when modifications are made to sales price or cost estimates of construction and development of the home. Variations in the original cost budget that require a change in value of

inventory are applied to results in the period in which they are determined. Inventory costs include (i) the cost of land, (ii) rights, licenses, permits and other project costs, (iii) housing development costs, construction and infrastructure costs, (iv) comprehensive financing cost incurred during the construction period and (v) administration and supervision of real estate. The costs related to real estate projects that are capitalized during development of the project and are applied to cost of sales in the proportion in which revenues are recognized.

To determine any possible impairment of our land held for development, we carry out appraisals every two to three years or more frequently when events or changes in circumstances indicate that the carrying amounts may not be recoverable.

With respect to inventory in-progress, approximately 70% of homes under construction and unsold finished homes are within the low-income sector, while the remainder is within the moderate-income sector. With respect to homes in the low income sector, sales of such homes are generally financed by government-sponsored housing fund programs, which provide financial aid to customers to stimulate home purchases in this sector. Prices of homes in this sector are generally regulated by such government programs, thereby limiting our flexibility to establish sale prices. Sale prices in this sector are therefore sensitive to the availability of funding offered by the government under such programs as well as conditions prevailing in the Mexican economy, which in turn can be affected by global economic conditions. However, through 2010, we have not historically experienced significant fluctuations in sales in this sector and have been able to maintain a stable operating margin of between 14% and 16%. Despite the global financial crisis, Mexican governmental policies supporting housing development have continued, albeit at a slower pace. Although we expect that trend to continue, any strict price controls put in place by the Mexican federal government or inherent from adverse economic conditions in Mexico that exceed our current operating margin could cause an impairment with respect to housing in this sector.

With respect to homes in the moderate-income sector, on a quarterly basis, we perform a review of estimated revenues and costs for the projects in-progress to evaluate the sector’s operating margin. Additionally, on an annual basis, we perform formal impairment tests based on discounted cash flow projections and to determine the expected rates of returns of the project. Such cash flow projections incorporate actual revenues and costs through the date of the evaluation as well as estimated future investments we expect to incur to complete and sell the project. Revenues are projected based on the current selling price of the home, considering any discounts that we may offer. Selling prices for the moderate-income sector are based on market studies of what a willing buyer would pay, comparable prices for similar projects in the areas in which we develop and the general economic conditions in Mexico. We only offer discounts on sale prices of homes when sales prices have increased over time and the discount would not exceed the original sale price of the home. Our policy is not to grant discounts when the discounted sales price would result in a value lower than the carrying value of the inventory. Our management determines discounts on a home-by-home basis. Cost estimates are based on our cost budgeting system as discussed above. Impairment is recognized when the fair value less costs to sell is less than the carrying amount of the inventory. As in the low-income sector, we generally earn a margin of approximately 14% to 16% in this sector. Accordingly, we are only required to recognize impairment on inventories in the moderate-income sector if we offer discounts greater than our operating margin or otherwise significantly reduce our prices below our operating margin because of, for example, market forces or deteriorating economic factors. We have not historically recognized impairment on inventory in this sector, nor have our cash flow projections through 2010 indicated any impairment loss for the inventory of homes in this sector

In both the low- and moderate-income sectors, we have seen between a 7.5% decrease in the last quarter of 2010 and a 2.8% increase in the first quarter of 2011 in home sales, when compared to the same period in the prior year.

Effect of Application of the Critical Accounting Policies and Estimates on Results and Financial Position

Set forth below are the results derived from the application of the aforementioned policies and their effects on our consolidated financial statements as of and for the years ended December 31, 2010, 2009 and 2008:

Construction Contracts

Our consolidated financial statements as of December 31, 2010 included a provision for costs relating to project terminations amounting to Ps.680 million and a machinery lease provision of Ps.476 million related to rental payments due and payable, as well as a short-term provision of Ps.3 million for estimated losses upon project termination related to projects that we expect to be substantially complete during 2011. Our consolidated financial statements as of December 31, 2009 included a provision for costs relating to project terminations amounting to Ps.449 million and a machinery lease provision of Ps.357 million related to rental payments due and payable, as well as a short-term provision of Ps.13 million for estimated losses upon project termination related to projects that we expect to be substantially completed during 2010. Our consolidated financial statements as of December 31, 2008

included a provision for costs relating to project terminations amounting to Ps.280 million and a machinery lease provision of Ps.203 million related to rental payments due and payable, as well as a provision of Ps.10 million for estimated losses upon project termination related to projects expected to be substantially completed during 2009. As of December 31, 2010, 2009 and 2008, our consolidated financial statements include an allowance for doubtful accounts related to construction contracts of Ps.421 million, Ps.223 million and Ps.440 million, respectively. Allowances and provisions were recorded based on our best estimates and current circumstances. If these circumstances change, we may need to modify the amount of allowances and provisions we have recorded.

Income Tax

In 2010, we recorded a net tax provision of Ps.264 million, which reflected the following components:

	•		a current income tax expense of Ps.209 million,

	•		a deferred income tax expense of Ps.268 million,

	•		a current flat rate business tax expense of Ps.295 million, and

	•		a deferred flat rate business tax benefit of Ps.507 million.

As of December 31, 2010, we had a net deferred tax liability of Ps.1,607 million, including a net deferred tax liability of Ps.3,692 million and a tax loss carryforward of Ps.2,084 million, as well as a deferred tax asset of Ps.1,468 million. The deferred income tax liabilities as of December 31, 2010 include the deferred tax effects of Los Portales, which was proportionally consolidated in 2010, of Ps.70 million. We recorded a valuation allowance for asset tax credits of Ps.1,468 million because we believe that the term allowed by Mexican law for the recovery of such amounts may expire prior to their recuperation. If these circumstances were to change, we may be required to increase or decrease the valuation allowance. As of December 31, 2010, we had a net deferred flat rate business tax liability of Ps.938 million.

The financial projections determined as of December 31, 2010 reflect that some subsidiaries will pay more income tax and less business flat tax during the following years. The subsidiaries with significant changes in estimates are those in the Airports segment, due to the projections based on the maximum tariff rates set by the Mexican Ministry of Communications and Transporation for 2011-2015.

As of December 31, 2010, we do not have any valuation of allowance under deferred taxes on temporary differences because we took advantage of all of our consolidated tax losses. Tax losses are expected to be offset by deferred tax liabilities that will reverse in subsequent periods. Our existing level of backlog is expected to generate a greater volume of business in the future, resulting in increased taxable income that will compensate deferred tax assets recognized as of December 31, 2010.

In 2009, the Mexican Tax Authorities issued reforms to the Mexican Income Tax Law, which became effective on January 1, 2010. As a result of the enactment of these reforms, in 2009 we recognized tax liabilities of Ps.2,791 million, a deferred tax asset of Ps.1,615 million, a charge to results of Ps.332 million and a charge to accumulated results of Ps.844 million. During 2010, the Mexican Tax Authorities issued certain modifications to the original reforms establishing, among other things, that previously recognized obligations measured based on income tax equity accounts will become payable only upon the occurrence of certain triggering events. Companies must therefore analyze whether they continue to have a liability under the revised legislation based on the probability that such triggering events will occur and resulting obligations will materialize, depending on their intentions regarding the application of the tax consolidation regime. As a result of these modifications to the reform, we determined that a portion of the liability recognized in 2009 of Ps.844 million no longer required recognition. This liability was initially recognized in 2009 through retained earnings, as required by INIF 18. However, in 2010, we recognized a reversal of the liability through results, as permitted by MFRS. This reversal was almost fully offset by the write-off of Ps.830 million, Ps.197.4 million of which related to prior year tax loss carryforwards that were canceled given that the period to apply such tax losses against taxable earnings expired and Ps.632.4 million of which related to prior year tax losses that were canceled based on our current year evaluation of the projections of the subsidiaries at which such losses were generated and our subsequent determination that such subsidiaries will not be able to produce sufficient taxable earnings over the permitted period of amortization of such losses to allow their related application.

In 2009, we recorded a net tax provision of Ps.1,368 million, which reflected the following components:

	•		a current income tax expense of Ps.410 million,

	•		a deferred income tax expense of Ps.1,080 million,

	•		a decrease in the allowance related to asset tax and tax loss carryforwards of Ps.769 million,

	•		a current flat rate business tax expense of Ps.209 million, and

	•		a deferred flat rate business tax expense of Ps.438 million.

As of December 31, 2009, we had a net deferred tax liability of Ps.1,306 million, including a net deferred tax liability of Ps.4,260 million, an asset tax credit of Ps.1,872 million and tax loss carryforwards of Ps.2,954 million. Also, as of December 31, 2009, we recorded a valuation allowance for asset tax credits of Ps.1,872 million, because we believe that the term allowed by Mexican law for the recovery of such amounts may expire prior to their recuperation. If these circumstances were to change, we may be required to increase or decrease the valuation allowance. As of December 31, 2009, we had a net deferred flat rate business tax liability of Ps.1,445 million.

As of December 31, 2009, we do not have any valuation of allowance under deferred taxes on temporary differences because we took advantage of all of our consolidated tax losses. Tax losses are expected to be offset by deferred tax liabilities that will reverse in subsequent periods. Our existing level of backlog is expected to generate a greater volume of business in the future, resulting in increased taxable income that will compensate deferred tax assets recognized as of December 31, 2009.

In 2008, we recorded a net provision for income tax of Ps.302 million, which reflected the following components:

	•		a current income tax expense of Ps.93 million,

	•		a deferred income tax benefit of Ps.60 million,

	•		a current flat rate business tax expense of Ps.126 million,

	•		a deferred flat rate business tax expense of Ps.234 million, and

	•		a decrease in the allowance related to asset tax and tax loss carryforwards of Ps.91 million.

As of December 31, 2008, we had a deferred tax liability of Ps.2,617 million, an asset tax credit of Ps.2,307 million and tax loss carryforwards of Ps.2,556 million. Also, as of December 31, 2008, we recorded a valuation allowance for future tax losses and asset tax credits of Ps.3,076 million, because we believe that the term allowed by Mexican law for the recovery of such amounts may expire prior to their recuperation. If these circumstances were to change, we may be required to increase or decrease the valuation allowance. As of December 31, 2008, we had a net deferred flat rate business tax liability of Ps.1,979 million.

Derivative Financial Instruments

We have entered into interest rate swaps and options (designated as cash flow hedges), foreign currency swaps and options (designated as foreign currency cash flow hedges) and other derivative instruments (designated as trading derivatives as they do not meet hedge accounting requirements) for the terms of some of our long-term credit facilities with the objective of reducing the uncertainties resulting from interest rate and exchange rate fluctuations. To date, the results of our derivative financial instruments have been mixed. Their marked-to-market valuation as of December 31, 2010, increased our derivative liabilities by Ps.42 million and decreased our derivative assets by Ps.59 million. Those effects are reflected as capitalized costs within assets for Ps.458 million, Ps.339 million in our consolidated equity and Ps.384 million in our profit and loss statement for 2010. Their marked-to-market valuation as of December 31, 2009, decreased our derivative liabilities by Ps.1,238 million and increased our derivative assets by Ps.15 million. Those effects were reflected as capitalized costs within assets for Ps.559 million, Ps.169 million in our consolidated equity and Ps.477 million in our profit and loss statement for 2009.

Long-Lived Assets

As of December 31, 2010, we did not recognize any impairment of long-lived assets under MFRS or U.S. GAAP. However, as of December 31, 2009, we recorded a reversal of impairment on the Acapulco tunnel project of Ps.681 million under MFRS only.

Accounting for Low Income Housing Sales and Costs

As of December 31, 2009, there is no impairment in our real estate inventories or low income housing inventories.

Recently Issued Accounting Standards

Adoption of International Financial Reporting Standards

New International Financial Reporting Standards

On May 12, 2011, the IASB issued a package of five new and revised standards for consolidation, joint arrangements and disclosures and implications with other entities.

Each one of the five standards has an effective date for annual periods beginning on or after January 1, 2013, with early application permitted.

Each one of the standards is summarized as follows:

International Financial Reporting Standard 10,Consolidated Financial Statements, or IFRS 10, supersedes IAS 27,Consolidated and Separate Financial Statementsand SIC 12,Consolidation - Special Purpose Entities, and introduces a single consolidation model based on control for all entities, regardless of whether an entity is controlled through voting rights of investors or through other contractual arrangements as is commonly accomplished with special purpose entities. In accordance with IFRS 10, control is based on whether an investor has 1) authority over the investment, 2) exposure or rights of return on its investment in the entity, and 3) the ability to use its authority over the entity to influence the return on its investment.

International Financial Reporting Standard 11,Joint Arrangements, or IFRS 11, introduces new requirements for the accounting method for joint arrangements superseding IAS 31,Interests in Joint Ventures. The option of applying the proportionate consolidation method on jointly controlled entities is eliminated. Furthermore, IFRS 11 eliminates jointly controlled assets and requires entities to identify as a joint operation or joint venture. A joint operation is a joint arrangement whereby the parties with joint control have rights to the assets as well as obligations for the liabilities. A joint operator must account for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the IFRSs applicable to its particular assets, liabilities, revenues and expenses. A joint venture is a joint arrangement whereby the parties with joint control have rights to the net assets of the arrangement. A joint venture is accounted for using the equity method.

International Financial Reporting Standard 12,Disclosures of Involvement with Other Entities requires more disclosure on the consolidated and unconsolidated entities in which we have an interest. The objective is to present information to users of financial statements to evaluate the basis of control, restrictions on consolidated assets and liabilities, risk exposure implications arising from non-consolidated entities and the involvement of non-controlling interest holders in the activities of consolidated entities.

International Accounting Standard 27,Separate Financial Statements— The requirements related to separate financial statements retains the current guidance but also has been amended for the issuance of IFRS 10.

International Accounting Standard 28,Investments in Associates and Joint Ventureshas been amended for conforming changes based on the issuance of IFRS 10 and IFRS 11.

We are currently analyzing each of these standards to determine the effect on our financial statements arising from the application of this statement, particularly IFRS 11, which we believe is the most significant to our operations.

U.S. GAAP

Recently adopted accounting pronouncements

On January 1, 2010, we adopted FASB ASC 860-10, which eliminates the concept of a qualifying special purpose entity (“QSPE”). The new guidance also requires an entity to reconsider its previous consolidation conclusions, including (1) whether an entity is a variable interest entity, or VIE, (2) whether the enterprise is the VIE’s primary beneficiary, and (3) what type of financial statement disclosures are required. Additionally, the amendments eliminate the scope exception previously available to certain QSPE’s. FASB ASC 860-10 also requires additional disclosures which focus on the transferor’s continuing involvement with the transferred assets and related risks retained. The adoption of this guidance did not have an impact on our consolidated financial statements and related disclosures.

In January 2010, the FASB issued ASU No. 2010-06 — Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, or ASU 2010-06. ASU 2010-06 requires new and revised disclosures for recurring or non-recurring fair value measurements, specifically related to significant transfers into and out of Levels 1 and 2, and for purchases, sales, issuances, and settlements in the rollforward of activity for Level 3 fair value measurements. ASU 2010-06 also clarifies existing disclosures related to the level of disaggregation and the inputs and valuation techniques used for fair value measurements. The new disclosures and clarifications of existing disclosures about fair value measurements were effective January 1, 2010, except for the disclosures about activity in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this guidance did not have an impact on our consolidated financial statements and related disclosures.

In March 2010, the FASB issued ASU No. 2010-11 — Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. This update clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Only an embedded credit derivative that is related to the subordination of one financial instrument to another qualifies for the exemption. This guidance became effective for us beginning January 1, 2010, and did not have an impact on our consolidated financial statements and related disclosures.

Recently issued accounting pronouncements pending adoption

In April 2010, the FASB issued ASU 2010-13 —Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades—a consensus of the FASB Emerging Issues Task Force(ASU 2010-13. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Earlier application is permitted. We are currently evaluating the effects of adopting the guidance in the ASU.

B. LIQUIDITY AND CAPITAL RESOURCES

General

Our principal uses of funds in 2010 were:

	•		Ps.337 million for the Rio Verde—Ciudad Valles highway.

	•		Ps.192 million for the La Piedad bypass;

	•		Ps.151 million for increased participation in the Los Portales real estate business;

	•		Ps.133 million for the Nuevo Necaxa—Tihuatlan highway;

	•		Ps.85 million for the Queretaro—Irapuato highway;

•

Ps.44 million for the Aqueduct II water supply project;

Our principal sources of funds in 2010 were third party financing for our construction and housing development projects, proceeds from project execution and operating cash flow.

Our expected future sources of liquidity include cash flow from our Civil Construction and Industrial Construction segments, our Concessions and Airport segments and third party financing or raising capital for our construction and housing projects. Also, in February 2011, we raised U.S.$500 million from an offering of our 8.9% senior notes due 2021. We cannot assure you that we will be able to continue to generate liquidity from these sources. We expect our principal future commitments for capital expenditures to include capital requirements related to new and existing concessions. Each of the concessions we currently have under contract has long-term third party financing. Our policy and practice is to have arrangements in place for third party financing at the time we participate in a bid for a concession. It is also our policy and practice to have arrangements in place for third party financing at the time we participate in a bid for a construction project, if the construction project requires financing (such as the La Yesca hydroelectric project). Construction projects that require third party financing include those without traditional public works payment procedures, where we receive an initial payment in advance and we invoice the client periodically after making expenditures for the project. Our traditional public works contracts, on the other hand, require spending simultaneously with or after payment of invoices by the public project owner, thereby typically not requiring capital expenditures in excess of available funding. Because of our third-party financing policies and the procedures of our public works contracts, we expect our capital requirements related to concessions to vary less than our discretionary capital spending in areas such as the Housing Development segment or non-public works construction, which are more often sensitive to market conditions.

As of December 31, 2010, we had net working capital (current assets less current liabilities) of Ps.3,250 million, compared to Ps.2,632 million as of December 31, 2009 and Ps.5,263 million as of December 31, 2008. The increase in our total net working capital at December 31, 2010 from December 31, 2009 was primarily attributable to increases in cash flow from construction activities and asset sales, combined with increases in trade and contract receivables and inventory, outpacing increases in our accounts payable and bank debt, as well as a decrease in advances from customers. The decrease in net working capital at December 31, 2009 from December 31, 2008 was primarily attributable to (i) an increase in current liabilities to subcontractors and suppliers, (ii) accrued expenses and (iii) increased bank debt, each of which primarily resulted from an increase in number and volume of projects and additional work performed in 2009.

From 2008 through 2010, we saw a trend toward lower net working capital balances in the Company. While subsequent to 2008 we have been awarded and are carrying out projects of similar size to the El Cajon hydroelectric project, for which we received payment in 2007, El Cajon represented a much larger percentage of our construction work in 2007, when our backlog was Ps.24,870 million, than projects of similar size represented in subsequent years such as 2010, when our backlog was Ps.34,974 million. The large payments received from El Cajon in 2007 thus had a historically disproportionate impact on our net working capital. Another trend toward our greater working capital needs is the growth of our Concessions segment, in which we have seen a trend toward greater investment requirements in infrastructure projects. When we perform construction under concessions in our Concessions segment, we generally must wait for an extended period—until after the concession has completed construction and begun operating—to recover the costs of construction. Additionally, our accounts receivables reflect a particular contracting scheme used in our Chicontepec II oil field and Package II of the Minatitlan refinery projects for Pemex where the contractor is paid only on major milestones, adding Ps.1,679 million to our accounts receivable as of December 31, 2010, and requiring us to provide significant advance funding. Pemex is no longer entering into this particular contracting scheme in their subsequent projects with us. Finally, when constructing public works, we often experience a delay in payment of our invoices, particularly in the initial phases of a project. The impact of the turmoil in the global financial system and the recession in Mexico may result in delayed payment of monthly invoices for construction compared to what is historically typical. We believe that our working capital is sufficient to meet our requirements in connection with work we currently intend to carry out over both the short and long-term.

We are not experiencing and do not see a related trend toward increased current liabilities. Our liabilities have increased in line with increases in our volume of work and number of projects, which typically result in current liabilities to subcontractors and suppliers.

Our cash and cash equivalents (including restricted cash) were Ps.4,519 million as of December 31, 2010, as compared to Ps.4,511 million as of December 31, 2009 and Ps.5,232 million as of December 31, 2008. At December 31, 2010, we had a current ratio (current assets over current liabilities) of 1.17, as compared to a current ratio of 1.15 at December 31, 2009.

Cash and cash equivalents (including restricted cash) at year-end 2010 included:

	•		Ps.1,193 million, or 26%, of our cash, cash equivalents and restricted cash, held by ICA-Fluor, which are unrestricted;

	•		Ps.1,360 million, or 30%, of our cash, cash equivalents and restricted cash, held in reserves established to secure financings related to the Acapulco Tunnel, Corredor Sur highway, the Kantunil—Cancun toll road, the Rio Verde—Ciudad Valles, Nuevo Necaxa—Tihuatlan, Queretaro—Irapuato and Irapuato—La Piedad highway and La Piedad bypassprojects, all of which are restricted;

	•		Ps.501 million, or 11%, of our cash, cash equivalents and restricted cash, held in our Airports segment, which are restricted; and

	•		Ps.80 million, or 2%, of our cash, cash equivalents and restricted cash, held in our Rodio Kronsa segment.

Certain uses of cash and cash equivalents by certain of our less than wholly-owned subsidiaries require the consent of the other shareholders or partners, as applicable, of such subsidiary or joint venture, which are the Fluor Corporation, in the case of ICA-Fluor, Soletanche Bachy France S.A.S., in the case of Rodio Kronsa, and FCC Construccion, S.A., in the case of the Nuevo Necaxa—Tihuatlan highway and the Aqueduct II water supply project, LP Holding, S.A., in the case of Los Portales, S.A. Also, certain projects awarded in 2010 are managed jointly with Promotora del Desarrollo de America Latina, S.A. de C.V., such as the construction of the second level of Periferico Sur in Mexico City, or Autovia Urbana Sur. In the case of these entities, the consent of our partners or other shareholders is only required with respect to the use of cash and cash equivalents outside of normal budgeted operations. The budget for normal operations is set by the board of directors of the relevant subsidiary, which are comprised of members appointed by both us and the other partners or shareholders, depending on the terms of the bylaws of the entity. While the cash held in these entities is not destined for a specific use or set aside as a compensating balance, the requirements for its use could limit our access to liquid resources or limit us from freely deciding when to use cash and cash equivalents outside of normal operations. Additionally, a portion of our cash and cash equivalents are held in reserves established to secure financings and thus form part of our restricted cash balances. The reserve requirements of such financings could also limit our access to liquid resources and limit our ability to decide when to use our cash and cash equivalents. See “Item 3. Key Information — Risk Factors — A substantial percentage of our cash and cash equivalents are held through less-than-wholly owned subsidiaries or joint ventures, or in reserves, that restrict our access to them.”

We used a net Ps.4,108 million from operating activities during 2010, as compared to using a net Ps.2,167 million from operating activities during 2009 and a net Ps.1,508 million in 2008. The underlying drivers that led to changes in our operating cash flows in 2010 were (i) an increase in the number and volume of projects under execution, (ii) increased use of our cash reserves because of an increase in long-term accounts receivable owed by our clients (due to the payment structures of certain significant projects) and (iii) advance payments to suppliers.

Portions of our assets are pledged to a number of banks under credit arrangements, including: WestLB AG, Banco Santander (Mexico), S.A., Banco Inbursa, S.A. Institucion de Banca Multiple, Grupo Financiero Inbursa, BBVA Bancomer, BG Trust Inc., Bank of America Merrill Lynch, Value Casa de Bolsa, S.A. de C.V., Banco Mercantil del Norte, S.A., Grupo Financiero Banorte, Banco Nacional de Mexico, S.A., Integrante del Grupo Financiero Banamex, Banco Espiritu Santo de Investimento, and Banco Nacional de Obras y Servicios Públicos, S.N.C., Institucion de Banca de Desarrollo. The assets we have pledged include collection rights under construction contracts, concessions, construction machinery and equipment, real property, dividend rights and shares of each of our financed concession projects. Notably among these, we have pledged our shares in Autovia Necaxa—Tihuatlan, S.A. de C.V., or Auneti, our subsidiary that operates the Nuevo Necaxa—Tihuatlan highway, our 50% interest in Los Portales, S.A., a real estate subsidiary located in Peru, RCO, our Atotonilco water treatment project, our interest in the El Realito project, our interest in the Agua Prieta project, our shares of Viabilis Infraestructura S.A.P.I. de C.V., or Viabilis, the contractor for the Rio de los Remedios—Ecatepec toll highway project, as well as the collection rights of the Rio de Los Remedios project. In general, assets securing credit arrangements will remain pledged until the arrangement secured by these assets expire. As a result of these arrangements, our ability to dispose of pledged assets requires the consent of these banks and our ability to incur further debt (whether secured or unsecured) is limited. At December 31, 2010, we had unrestricted access to Ps.2,975 million of our cash and cash equivalents, compared to Ps.2,678 million at December 31, 2009. See Note 4 to our consolidated financial statements.

On December 22, 2010, we used proceeds of a new two-year bridge loan of approximately Ps.2,275 million with Bank of America, N.A. Cayman Branch to prepay Aeroinvest’s series 2007-1 Class A, Class B and Class C notes issued in 2007. The terms of

the new bridge loan are similar to the terms of the notes they replaced, except that the term of the bridge loan is 24 months, the repayment of the loan does not result in a penalty, and GACN’s financial flexibility is expanded.

Our debt agreements contain standard covenants and events of default applicable to us, including cross-defaults that permit our lenders to accelerate debt. Additionally, we have increasingly been required to accept market disruption clauses in our debt agreements, which, if invoked, typically require a borrower to pay a higher rate of interest when the interest rate under a loan agreement no longer adequately covers the actual cost to the lender of obtaining funds from whatever source it may reasonably select. Certain of our subsidiaries, such as the Constructora de Proyectos Hidroelectricos, S.A. de C.V. consortium, or CPH and ICA Panama, S.A., or ICA Panama, and unconsolidated affiliates have entered into debt and other agreements containing restrictive covenants that limit the ability of such subsidiaries and affiliates to pay us dividends. CPH’s financing for the La Yesca hydroelectric project contains various restrictive covenants typical in a project financing including, significantly, covenants limiting CPH’s access to additional cash other than what the project specifically requires until project completion and after final payment from the Mexican Federal Electricity Commission (Comision Federal de Electricidad) is received, as well as covenants limiting CPH’s ability to contract additional debt or guarantees. Our subsidiary Viabilis has contracted financing for the Rio de los Remedios-Ecatepec highway project that contains standard covenants and events of default applicable to Viabilis, significantly, reporting obligations, conduct of business, compliance with law, limitations on merger and acquisition transactions, limits on contracting additional debt or guarantees, limits on modification of construction contracts without the consent of the lenders and a prohibition on derivative transactions. The Viabilis financing agreement does not include covenants or events of default related to financial ratios. For our subsidiary ICA Panama, its bondholders, through a trustee they instruct, control the use of cash in excess of debt service and cash reserve requirements by the Corredor Sur project. Our unconsolidated affiliate RCO has financing with terms requiring a waterfall of payments that may restrict the cash available for distributions to shareholders until 2014. Restrictive covenants in our debt agreements restrict only the project contracting the financing agreement in which they are contained, and generally do not restrict our operating subsidiaries. See Note 18 to our consolidated financial statements and “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Indebtedness.” We are not currently, and are not reasonably likely to be, in breach of any of our material debt covenants, and we do not have any stated events of default or cross-defaults in our debt agreements that would allow our lenders to accelerate our debt if not cured within applicable grace periods.

In certain bidding processes we have also been required to demonstrate, at the level of the bidding subsidiary only, our debt ratios (total debt divided by total assets) and liquidity ratios (short-term assets divided by short-term debt). The requirements related to these ratios vary. In certain projects, we were required only to disclose the existing ratios to the potential client, without a minimum requirement, such as in the Atotonilco and El Realito water treatment projects and the PAC-4 project in Panama. In other bidding guidelines we have seen debt ratios required to be less than 0.7 or 0.8, and liquidity ratios required to be greater than 1.0 or 1.2. We have historically met or exceeded the debt and liquidity ratio requirements for the projects on which we have bid.

We have also been required to demonstrate minimum capital in order to participate in bids for construction contracts and concessions. The minimum capital requirements are not uniform across clients, and can also vary for the same client depending on a project’s type and magnitude. For example, in two recent bids with the Ministry of Communications and Transportation, we were required to have minimum capital of Ps.280 million and Ps.900 million, respectively. The state government of Jalisco, Mexico required minimum capital of Ps.386 million for the Agua Prieta project, while the Atotonilco project’s client, the National Water Commission, required Ps.1,000 million. We believe we will continue to be required to demonstrate minimum capital in order to participate in certain bids for construction contracts and concessions.

Project Financing

We use a number of project financing structures to raise the capital necessary to build projects. We historically financed our construction operations primarily through advances from customers. Increasingly, we have been required to arrange construction-phase financing. This has typically been done through bank financing under limited- or non-recourse structures. Our ability to arrange financing for the construction of infrastructure facilities is dependent on many factors, including the availability of financing in the credit market.

We typically provide a portion of the equity itself and our investment is returned over time once the project is completed. Generally, we contribute equity to a project by accepting deferred payment of a portion of its construction contract price. Concessions are an approach to financing public-sector projects through the private sector. In certain projects that are financed as part of the Mexico’s public works financing program (which is known in Mexico as the PIDIREGAS program), such as the La Yesca hydroelectric project, payment of the construction cost is deferred until the project is operational. Due to the nature of most

infrastructure projects, which typically involve long-term operations, we do not recover our equity or debt contribution or receive payment under the contract until the construction phase is completed. Depending on the requirements of each specific infrastructure project, we typically seek to form a consortium with entities that have expertise in different areas and that can assist us in obtaining financing from various sources. See “Item 3. Key Information — Business Overview — Infrastructure.” We anticipate that future revenues will depend significantly on our ability directly or indirectly to arrange financing for the construction of infrastructure projects.

In addition to providing equity capital to our project construction subsidiaries, we arrange third party financing in the form of loans and debt securities to finance the obligations of our projects. The revenues and receivables of the project are typically pledged to lenders and securityholders to secure the indebtedness of the project. Recourse on the indebtedness is typically limited to the subsidiary engaged in the project.

We believe that our ability to finance our projects has enabled us to compete more effectively in obtaining such projects. Providing financing for construction projects, however, increases our capital requirements and exposes us to the risk of loss of our investment in a project. We attempt to compensate for this risk by entering into financing arrangements on terms generally intended to provide us with a reasonable return on our investment. We have implemented a policy to be selective in choosing projects where we expect to recover our investment and earn a reasonable rate of return. However, we cannot assure you that we will be able to realize these objectives or continue financing construction projects as we have in the past.

Indebtedness

Our total debt to equity ratio was 1.5 to 1.0 at December 31, 2010, 1.12 to 1.0 at December 31, 2009 and 1.02 to 1.0 at December 31, 2008. The deterioration in the debt to equity ratio at December 31, 2010 from December 31, 2009 mainly reflected the incurrence of debt to finance the execution of projects, including concessions under construction and the La Yesca hydroelectric project; also, new working capital indebtedness outstanding at the parent company level at December 31, 2010 was Ps.1,060 million. Two of the loan agreements with include a parent company guarantee from Empresas ICA, S.A.B. de C.V. The deterioration in the debt to equity ratio at December 31, 2009 from December 31, 2008 mainly reflected the incurrence of debt for construction projects. The new debt in 2009 was principally incurred to finance the La Yesca hydroelectric project, the Aqueduct II water supply system and the Rio Verde — Ciudad Valles highway.

As of December 31, 2010, approximately 26% of our consolidated revenues and 39% of our indebtedness were denominated in foreign currencies, mainly U.S. dollars. Unless, as is our policy, we contract debt financing in the same currency as the source of its repayment, decreases in the value of the Mexican peso relative to the U.S. dollar may increase the cost in Mexican pesos of our debt service obligations with respect to our U.S. dollar denominated indebtedness and may also result in foreign exchange losses as the Mexican peso value of our foreign currency denominated indebtedness is increased. We have entered into cash flow hedges, including with respect to foreign currency cash flow, and other trading derivative instruments for the terms of some of our long-term credit facilities with the objective of reducing the uncertainties resulting from interest rate and exchange rate fluctuations. To date, the results of our derivative financial instruments have been mixed and have not substantially affected our cash flows. See “— Risks Related to Mexico and Other Markets in Which We Operate — Appreciation or depreciation of the Mexican peso relative to the U.S. dollar, other currency fluctuations and foreign exchange controls could adversely affect our financial condition and results of operations” and “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Derivative Financial Instruments.” Several of our subsidiaries have lesser exposure to foreign currency risk because a higher percentage of their revenues are denominated in U.S. dollars.

Certain of our subsidiaries, such as CPH and ICA Panama, and unconsolidated affiliates have entered into debt and other agreements containing restrictive covenants that limit the ability of such subsidiaries and affiliates to pay us dividends. These restrictive covenants generally do not restrict our operating subsidiaries such as Ingenieros Civiles Asociados and ViveICA. See Note 18 to our consolidated financial statements.

In 2010, our debt service obligations (principal and interest) totaled Ps.32,470 million for debt denominated in pesos and U.S. dollars, as compared to Ps.23,127 million in 2009 and Ps.17,828 in 2008. As of December 31, 2010, our net debt (interest paying debt less cash and cash equivalents) was Ps.27,951 million, as compared to Ps.18,617 million as of December 31, 2009. Our net debt increased in 2010 due to an increase in our debt, particularly in our Civil Construction division, Airports and Concessions segments and the La Yesca hydroelectric project. As of December 31, 2009, our net debt was Ps.18,617 million, as compared to net debt of Ps.12,596 million as of December 31, 2008. Our net debt increased in 2009 due to an increase in our debt,

particularly in our Civil Construction division, Airports and Concessions segments and the La Yesca hydroelectric project, as well as a reduction in our cash and cash equivalents.

Empresas ICA

In February 2011, we issued U.S.$500 million of 8.9% senior unsecured notes due 2021. The notes are guaranteed on a senior unsecured basis by our subsidiaries CICASA, CONOISA and CONEVISA. Approximately half of the net proceeds from of the notes was used to repay a bridge loan among our subsidiary Aeroinvest, as borrower, us, as guarantor, and Bank of America, N.A., acting through its Cayman Branch, as lender. The balance of the proceeds from the notes was used for general corporate purposes, including equity contributions for new and existing projects. We are obligated under the indenture relating to the notes to comply with certain covenants, including a limitation on our ability to restrict subsidiaries from paying dividends, and a limitation on the incurrence of debt by subsidiaries that are not guarantors, project companies or joint venture.

La Yesca

CPH is a special purpose subsidiary created to construct the La Yesca hydroelectric project. The terms of the La Yesca contract require that we secure financing for the project costs and limit disbursements during the construction phase to 90% of the cash cost of any certified work performed. We and the other shareholder of CPH have agreed to guarantee certain obligations of CPH under the project contracts, including the financing documents, subject to certain limitations, in the event of an early termination of the public works contract for the project. CPH obtained financing for the construction phase of the La Yesca hydroelectric project in the first quarter of 2008 from WestLB AG, which also structured the financing for the El Cajon hydroelectric project. The financing consists of a U.S.$910 million line of credit to be used to cover construction costs and a U.S.$140 million revolving line of credit to be used to finance monthly working capital requirements and to be repaid from the construction line of credit, both of which contain various restrictive covenants typical in a project financing including, significantly, covenants limiting CPH’s access to additional cash other than what the project specifically requires until project completion and after final payment from the Mexican Federal Electricity Commission (Comision Federal de Electricidad) is received, as well as covenants limiting CPH’s ability to contract additional debt or guarantees. The $910 million construction line of credit was syndicated and has a term that lasts the duration of the construction period, which ends in July 2012, subject to certain permissible extensions if the La Yesca project completion date is delayed. The repayment of the construction line of credit is scheduled to occur in two installments: (i) the first payment to be made on the date of provisional acceptance of the first turbine unit, currently expected to occur in January 2012, in the amount of 60% of the fixed-price and 100% of the unit-price construction works performed as of that date, and (ii) the balance to be repaid upon delivery of the second turbine unit, expected in the second half of 2012. West LB is the sole lender of the U.S.$140 million working capital line of credit, which has the same term as the construction line of credit. The working capital line of credit is expected to be repaid from the construction line of credit.

Because the terms of the construction contract provide that the Mexican Federal Electricity Commission will pay for the project upon completion, and the financing obtained by CPH covers only the project’s cash costs, the project will not generate any significant cash flow to us until completion, which is scheduled to occur in the second quarter of 2012. However, because we recognize revenues from the La Yesca hydroelectric project based on the percentage-of-completion method of accounting, the project is expected to generate a substantial portion of our revenues in 2011 and 2012. The La Yesca hydroelectric project generated Ps.3,793 million of revenue, or 11% of total revenues, in 2010. The La Yesca hydroelectric project represented a substantial portion of our receivables and indebtedness in 2010, and is expected to continue to represent a substantial portion of our receivables and our indebtedness in the future until the fourth quarter of 2012. At December 31, 2010, we had Ps.9,503 million in contract receivables (including receivables based on the percentage-of-completion method of accounting) and Ps.8,519 million of debt on our consolidated statement of financial position relating to the La Yesca hydroelectric project.

RCO

On August 6, 2007, the Ministry of Communications and Transportation awarded the first FARAC concession package to RCO, a consortium formed by two of our subsidiaries and GSIP in which we originally participated with 20% of the equity and GSIP originally held the remaining 80% of the equity. The FARAC concession consists of a 30-year concession to construct, operate, exploit, conserve, and maintain the 558-kilometer Maravatio — Zapotlanejo, Guadalajara — Zapotlanejo, Zapotlanejo — Lagos de Moreno, and Leon — Lagos — Aguascalientes toll roads in the states of Michoacan, Jalisco, Guanajuato and Aguascalientes, as well as extension or enlargement works as the Ministry of Communications and Transportation determines. RCO paid Ps.44,051 million for the assets. The concessionaire obtained a Ps.31,000 million long-term financing with Banco Santander Central Hispano, S.A. We have a minority interest in the concession, accounting for it as a non-consolidated affiliate, and were required to contribute Ps.3,118 million as equity capital. Our consortium partner GSIP and the long-term financing described above contributed the remaining

investment amount paid to the Mexican federal government under the concession. The terms of the financing required, among other conditions: (i) the pledge of our and GSIP’s shares of the consortium in favor of the creditors and (ii) a waterfall of payments that may restrict the cash available for distributions to shareholders until 2014. Because the investment is accounted for under the equity method, the debt is not consolidated on our balance sheet.

�� In October 2009, RCO placed Ps.6,550 million in equity-linked structured notes with Mexican institutional investors on the Mexican Stock Exchange. After the transaction (including our purchase of additional Series A shares in RCO at the same price per share as the Series B shares underlying the equity-linked structured notes), we owned 13.6% of RCO and GSIP owned 54.5%. The trust holding the Series B shares underlying the equity-linked structured notes owned the remaining 31.9% of RCO. RCO used the net proceeds of the capital increase together with the equity provided by the original shareholders primarily to pay down debt totaling Ps.5,666 million of the long-term financing with Banco Santander. After paying this debt reduction, the outstanding balance on the long-term financing with Banco Santander was Ps.27,291 million.

There are no parent company guarantees of these RCO financing arrangements.

Aeroinvest

On December 22, 2010, our subsidiary Aeroinvest entered into a Ps.2,275 million bridge loan with Bank of America, N.A. Cayman Branch to prepay Aeroinvest’s series 2007-1 Class A, Class B and Class C notes issued in 2007. In February 2011, we repaid this loan in its entirety with the funds obtained from the senior bonds issued by our company during that month.

ViveICA Credit Lines

On September 4, 2007, our housing subsidiary ViveICA entered into an uncommitted revolving debt facility funded by Deutsche Bank for the peso equivalent of U.S.$50 million to finance projects in several cities. The facility is denominated in pesos and has a maturity of six years, with a four-year revolving period during which ViveICA may draw on the funds. Because the facility is uncommitted, we did not pay a commitment fee to Deutsche Bank and Deutsche Bank will have discretion to cease advancing funds under the agreement. Since February 2010, we have been in the amortization period of the facility. As of March 31, 2011, we had drawn approximately Ps.537 million under the facility.

We used this facility to finance projects before project authorization documents were obtained and to recover the appraised value of the project land upon delivery of definitive project authorization, thus increasing the turnover and liquidity of projects. Under this facility, ViveICA must comply with certain affirmative and negative covenants including: (i) maintaining a ratio of earnings before interest taxes and depreciation to interest expense of greater than 2.0x (as of December 31, 2010, such ratio was 3.71x, and as of March 31, 2011, such ratio was 2.78x), and (ii) a financial debt to assets ratio of less than 0.6x (as of December 31, 2010, such ratio was 0.21x and as of March 31, 2011, such ratio was 0.21x). This facility also includes an event of default and a condition precedent to disbursement of funds under the facility requiring the debt of the facility to maintain a rating of at least “mxAAA” for S&P and “Aaa.mx” for Moody’s. In 2010, due to a downgrade in the rating of the facility as a result of changes in the methodology of the ratings agencies, we received a default notice from the trustee of the debt holders, which was later cured by renegotiating the terms of the agreement. As part of the renegotiation, the facility’s minimum rating requirement changed to “Baa2.mx” for Moody’s; in addition, the S&P rating requirement was eliminated. There was been no termination or acceleration of this facility. Our outstanding amount under this facility amounts to Ps.280 million.

On August 20, 2009, ViveICA entered into facility funded by IXE Banco for Ps.350 million. The facility is denominated in pesos and has a maturity of 2 years with interest at the 28-day Mexican Interbank Equilibrium Rate, or TIIE, plus 3.5%. ViveICA has received funds from the facility of Ps.350 million, which it used to repay short-term commercial paper. As of March 31, 2011, we have approximately Ps.173 million outstanding under this facility. We make monthly payments on the loan, which was expected to be fully paid upon expiration of its term on August 16, 2011. However, we have executed an agreement to reschedule the payments under this facility beginning in June 2010 to extend the repayment term for 36 months thereafter. We extended the repayment term in order to provide increased working capital for ViveICA. Under this agreement, ViveICA and Ingenieros Civiles Asociados, S.A. de C.V. have agreed not reduce our equity in ViveICA by more than 10% for the term of the loan. Ingenieros Civiles Asociados has provided a guarantee under the terms of this facility.

On March 22, 2011, ViveICA entered into a Ps.500 million 3-year term facility with Banorte, with an interest at the 28-day TIIE, plus a 4% spread. This facility has a parent company guarantee from Empresas ICA, S.A.B. de C.V.

Nuevo Necaxa — Tihuatlan

On June 2, 2008, our subsidiary Auneti, which operates the Nuevo Necaxa — Tihuatlan toll highway concession, entered into a guaranteed multi-tranche loan for the long-term financing of the construction of the Nuevo Necaxa — Avila Camacho segment of the Nuevo Necaxa — Tihuatlan highway in the amount of Ps.6,061 million. The loan agreement consists of two tranches: (1) Tranche A provides a Ps.5,510 million loan for a nine-year term to be used for the acquisition of the concession and its construction, and (2) Tranche B provides a Ps.551 million support facility at the completion of construction, for a nine-year term, to be used for the payment of interest on Tranche A. Both tranches of the loan are without recourse to Auneti’s shareholders and were provided by Banco Santander, HSBC Securities (USA) Inc. and Dexia S.A. There is no parent company guarantee of this Auneti loan.

Atotonilco

On August 16, 2010, we entered into an 18-year term loan agreement with Banobras development bank for Ps.4,790 million. This facility has an interest rate at the 28-day Mexican Interbank Equilibrium Rate, or TIIE, plus 2.75% to 3.5%, depending on the year in which the funds are effectively disbursed. The collateral for this loan includes a pledge on our shares of the project concessionaire.

Corredor Sur

On May 17, 2005, a trust organized by our subsidiary ICA Panama issued U.S.$150 million of 6.95% notes due 2025. Payments of principal and interest on the notes will be made from the Corredor Sur highway’s operations. The notes are recourse solely to the trust, which has been assigned the right to payment from the tolls. The net proceeds from the placement of the notes (approximately U.S.$134.9 million) were principally used to repay 100% of the project’s outstanding indebtedness (including a payment of U.S.$51.2 million in respect of outstanding indebtedness to the International Finance Corporation) and to fund certain reserve accounts as required under the terms of the concession’s financing. The balance of the proceeds from the placement of the notes was used to repay a portion of our parent company indebtedness and for other corporate purposes. The holders of these notes, through a trustee they instruct, control the use of cash in excess of debt service and cash reserve requirements by the Corredor Sur project. On March 25, 2010 the government of Panama and we announced that the government of Panama would acquire the concession for the Corredor Sur tollroad for U.S.$420 million. The outstanding principal balance of the project’s debt is approximately U.S.$143 million. The government of Panama, we and the project’s creditors will decide whether the debt will be assumed by the government as part of the transaction (reducing the purchase price), or be repaid. There is no parent company guarantee of this Corredor Sur financing arrangement.

Acapulco Tunnel (TUCA)

On June 30, 2005, a trust organized by our subsidiary Tuneles Concesionados de Acapulco, S.A. de C.V., or TUCA, issued and sold Ps.800 million (nominal value) in notes (Certificados Bursatiles) due 2022, which were listed on the Mexican Stock Exchange. These 2005 notes accrued interest at TIIE plus 2.95%. The 2005 notes were recourse solely to the trust, which has been assigned the Acapulco Tunnel’s tolls and toll collection rights. After repaying all outstanding debt of TUCA, Ps.66 million (nominal value) to Banco Nacional de Obras y Servicios Publicos, S.N.C. and Ps.206 million (nominal value) of TUCA’s ordinary participation certificates, we received approximately Ps.460 million (nominal value) from the sale of these notes, which was used for general corporate purposes.

In 2008, TUCA used the proceeds of a new note offering to repay the 2005 notes. TUCA issued the new notes in the amount of Ps.1,250 million, with a term of up to 26 years. The new notes accrue interest at the rate of TIIE plus up to 2.95% and are non-recourse.

There are no parent company guarantees of these Acapulco Tunnel financing arrangements.

Rio Verde — Ciudad Valles Highway

On September 19, 2008, our subsidiary ICA San Luis, S.A. de C.V., which operates the Rio Verde — Ciudad Valles highway concession entered into a long-term financing for the construction of a 113.2-kilometer highway in the state of San Luis Potosi, in the amount of Ps.2,550 million. The loan was structured by Banco Santander and has a term of 17 years. There is no parent company guarantee of this Rio Verde — Ciudad Valles highway financing arrangement.

The Kantunil-Cancun Highway (Mayab Consortium)

In 2008, as a consequence of our acquisition of the Mayab Consortium, which holds the concession for the Kantunil-Cancun highway, we assumed the Mayab Consortium’s long-term debt securities, which as of December 31, 2010 were equivalent to Ps.2,478 million. The debt is denominated inUnidades de Inversion, or UDIs, which are Mexican peso currency equivalent units of account that are indexed to Mexican inflation on a daily basis (as measured by the change in the Mexican National Consumer Price Index). As of December 31, 2010, one UDI was equal to approximately Ps.4.5263. The concession has a term through December 2020. The long-term debt matures in 2019 and 2020, and is expected to be repaid from toll revenues generated by the concession. We consolidate the investment in our consolidated financial statements. There is no parent company guarantee of this Kantunil-Cancun highway financing arrangement.

Viabilis

In February 2010, our subsidiary Viabilis entered into a long-term financing agreement for the Rio de los Remedios-Ecatepec highway project with Banobras development bank. The Ps.3,000 million line of credit is to be applied to Phase 1 of the highway project. On April 15, 2010, Viabilis made its first draw under this line of credit in the amount of Ps.1,136 million. As of December 31, 2010, we have Ps.2,097 million outstanding under this line of credit. Viabilis is expected to receive further disbursements under the credit facility as the project’s execution advances through October 2011. This credit facility matures in 2037 and has a fixed interest rate of 7.8% plus applicable margin, which varies between 295 and 370 basis points over the term of the loan. Repayment of the loan is expected to occur over the final 14 years of its term; 70% of the loan will be subject to a fixed payment calendar while 30% is payable only to the extent cash is available from the highway project after the fixed-calendar payments are made. The financing agreement includes standard covenants and events of default applicable to Viabilis, significantly, reporting obligations, conduct of business, compliance with law, limitations on merger and acquisition transactions, limits on contracting additional debt or guarantees, limits on modification of construction contracts without the consent of the lenders and a prohibition on derivative transactions. The financing agreement does not include covenants or events of default related to financial ratios.

The financing package with Banobras for the Viabilis credit facility includes a joint and several guarantee of Viabilis’ performance by Ingenieros Civiles Asociados, S.A. de C.V., our construction subsidiary, and a guarantee by our subsidiary Constructoras ICA, S.A. de C.V. of a percentage of Viabilis’ payment obligations corresponding to our subsidiary CONOISA’s percentage of ownership of Viabilis, which is currently 50%, until the beginning of Phase I operations of the highway. Additionally, our shares of Viabilis are pledged to Banobras as collateral.

Other Debt

As of December 31, 2010 we had no other material outstanding long-term debt.

Derivative Financial Instruments

We enter into derivative financial instruments to reduce uncertainty on the return of our projects. From an accounting perspective our derivative financial instruments can be classified as for hedging or for trading purposes. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Critical Accounting Policies and Estimates — Derivative Financial Instruments.” The decision to enter into a derivative financial instrument is linked, in most cases, to the financing for a project, because the uncertainties we seek to reduce result from fluctuations in interest rates and exchange rates relevant to the project’s financing. Our derivative financial instruments as of December 31, 2010 are composed of instruments that hedge interest rate and exchange rate fluctuations.

When financing for our projects is at a variable interest rate, we may enter into interest rate hedges. Our interest rate hedges can include swaps to reduce our exposure to volatility risks; these swaps convert the interest rate from variable to fixed. We may also enter into interest rate options that establish a maximum limit to the variable rate to cap financial costs. In 2010, we entered into interest rate swaps in connection with an Aeroinvest loan, the La Piedad bypass and the Atotonilco project.

We may enter into exchange rate hedges to reduce the foreign currency exchange rate risk where the currency used in the financing (and corresponding repayment) of the project is different from the currency in which we expect the project to incur labor,

supply or other costs. In 2010, we entered into foreign exchange hedges in connection with the AHMSA Phase II steel mill and plate line expansion in our Industrial Construction segment.

It is our policy to enter into financial instruments at the level of each project, by the subsidiaries carrying out such project. Accordingly, the counterparty for a derivative financial instrument is often the same institution (or an affiliate) that provides the financing for the project to which that instrument is linked. We generally execute our derivatives directly with the hedge provider. We believe we have diversified the credit risk of our derivative financial instruments by contracting them with different financial institutions.

It is our policy not to enter into, and we have not entered into, derivative instruments that have margin calls or similar mechanisms that might impose additional obligations on parent companies of our subsidiaries. Since we enter into all our derivative instruments at the level of each project, hedge providers on occasion require additional financial support for the project subsidiary’s obligations. In those cases, our policy is to limit such support to cash collateral or a standby letter of credit provided at the time we enter into the derivative, so that the amount of such collateral or letter of credit is defined without any provision that would permit increase thereof or margin calls. It is also our policy that such collateral or letter of credit only be payable to the hedge provider upon an event of default under the hedge agreement.

Our internal control policies state that entering into derivative financial instruments requires collaborative analysis by representatives from our Finance, Legal, Administration and Operations areas, prior to approval. Once this analysis has been concluded and documented, the responsibility for entering into derivatives belongs to the Finance and Administration areas, in accordance with our internal control policy. Our policies do not expressly require authorization by the Corporate Practices, Finance, Planning and Sustainability Committee or the Audit Committee for entry into derivative financial instruments. Our policies limit the authority of those who can execute derivative financial instruments in certain ways, the most important of which are the following:

	•		Our Board of Directors establishes limitations on the amounts and types of derivative transactions that our officers may enter into on our behalf.

	•		The Board has vested our Chief Executive Officer with the power to enter into derivative financial instruments subject to certain limits on amount and complexity. The CEO has delegated this power using powers of attorney, also subject to caps on amount and complexity, to our Vice President for Finance and Administration and appropriate Finance officers.

	•		In the event that the CEO, the Vice President for Finance and Administration or an appropriate Finance officer wishes to enter into a derivative financial instrument that exceeds or goes beyond the limitations set by the board, the board’s specific authorization is required.

When assessing the potential use of derivatives to hedge financial market risks, we perform sensitivity analyses of possible outcomes of alternative derivative instruments to help us evaluate the economic efficiency of each alternative available to us to hedge the risk. We compare the terms, obligations and conditions to choose which alternative best suits our strategy. Once we enter into a derivative, we conduct effectiveness tests with the help of expert appraisers to determine its accounting treatment. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Critical Accounting Policies and Estimates — Derivative Financial Instruments.”

La Yesca Derivatives

During 2008, we entered into foreign currency exchange options related to the La Yesca hydroelectric project to hedge our foreign exchange risk, because the financing and sources of payment (revenues) related to this project are in U.S. dollars while the majority of its project costs are in Mexican pesos. These options establish exchange rate levels that we expect will permit the U.S. dollars obtained from the La Yesca financing to cover the project’s costs and expenses in Mexican pesos. The four options we entered into established together an average exchange rate of Ps.11.33 per U.S. dollar, for the period from July 2008 to July 2010 for three of the options and to April 2011 for the fourth option. The notional amount fluctuated from U.S.$194.5 million to U.S.$499.3 million, based on the spot exchange rate compared to the exchange rate set forth in the derivative contract. We analyzed the effectiveness of these instruments with the assistance of external evaluators. The analysis concluded that the amount of the derivative covered the peso-denominated costs of the project, and any reduction in the market value of the instrument was expected to be offset by exchange gains on the value of the construction contract.

Nonetheless, due to changes in the La Yesca construction schedule and the increasing volatility of Mexican peso-U.S. dollar exchange rate fluctuations, on April 20, 2009, we and the provider of the La Yesca foreign currency exchange options restructured the options to (i) stabilize the notional amount so that it remains unchanged regardless of the difference between the spot exchange rate and the exchange rate set forth in the derivative contract, (ii) reduce the notional amount to Ps.2,083 million (approximately U.S.$183.5 million), corresponding to weekly transactions averaging Ps.16 million (approximately U.S.$1.4 million), to better fit the La Yesca hydroelectric project’s peso obligations, and (iii) reschedule the weekly settling of notional amounts to match the revised construction schedule and disbursement program. The options as restructured were effective for the period from April 22, 2009 through February 29, 2012. The cost of renegotiating the La Yesca options was U.S.$33 million, for which the provider required a letter of credit from Compañia Hidroelectrica La Yesca, or COHYSA, as a credit support document. The letter of credit accrued interest at the London Interbank Offered Rate, or LIBOR, plus 450 basis points. The cost of renegotiation, including interest, becomes due upon completion of the La Yesca hydroelectric project. On September 15, 2010, we entered into a U.S.$16 million credit agreement to replace the expiring letter of credit.

During 2007, we entered into two derivative contracts that establish a maximum interest rate of 5.5% (an interest rate cap). During 2008, we entered into a combination of a purchase of a cap option and a sale of a floor option (which establishes a minimum interest rate on the financing) on certain of our credit agreements related to the La Yesca project; this transaction was designated as a cash flow hedge. At December 31, 2009, the fair value of the combined cap and floor resulted in the recognition of a derivative liability of U.S.$25 million. At December 31, 2010, the fair value of the combined cap and floor resulted in the recognition of a derivative liability of U.S.$22 million.

RCO Derivative

RCO’s long-term financing has a floating interest rate. In order to hedge for fluctuations of the floating rate, RCO entered into six interest rate swaps; four of which swapped the floating rate for a fixed interest rate and the other two of which swapped the floating rate to a “real” (inflation-adjusted) interest rate. The real interest rate swaps are designed to hedge increases in the costs of RCO’s operating and capital expenditures because of inflation. Given that we recognize RCO as an equity method investment, the aggregate fair value to us of the six derivatives on December 31, 2010 was a loss of Ps.309 million, as compared to Ps.146 million on December 31, 2009, representing our share of the total value of the derivative. The cash flows derived from the four fixed rate swaps are paid or received on a monthly basis, while the cash flows derived from the two real rate swaps are paid on an annual basis. The aggregate notional amount for four fixed rate swaps is Ps.15,070 million, or approximately 58% of the total financing amount. The aggregate notional amount for the two real interest rate swaps is Ps.11,365 million. This derivative is classified as a hedging instrument.

Other Derivatives

In August 2006, we entered into a derivative financial instrument known as a “European style option,” which limits the interest rate on a notional amount of Ps.580 million of our debt securities. In August 2010, we renewed this financial instrument and changed the notional amount to Ps.490 million. At December 31, 2010, the fair value of the option was Ps.136 thousand, as compared to Ps.741 thousand on December 31, 2009. This option is classified as a hedge for accounting purposes.

Between November and December 2010, we entered into a series of foreign exchange forwards with varying maturities in order to mitigate foreign exchange exposure on the AHMSA Phase II steel mill and plate line expansion. These instruments have a fair value as of December 2010 of Ps.19 million. These instruments are classified as hedging contracts for accounting purposes.

In the second half of 2010, we entered into cross-currency swap transactions in order to mitigate our interest and exchange rate exposure in the Eastern Discharge Tunnel project to hedge prices of the tunnel boring machines used in this project. As of December 31, 2010, the fair value of these instruments is Ps.29 million. These instruments are classified as hedging contracts for accounting purposes.

In February 2011, we entered into four coupon-only swaps to hedge our foreign currency interest payment exposure related to our U.S.$500 million senior unsecured notes. For more information on our senior unsecured notes, see “Item 5. Liquidity and Capital Resources — Indebtedness — Empresas ICA.” The fair value as of March 31, 2011 of these swaps is Ps.15.2 million. These instruments are classified as hedging contracts for accounting purposes

Additional Sources and Uses of Funds

We may from time to time repurchase our outstanding equity securities if market conditions and other relevant considerations make such repurchases appropriate. The amount that we may use to repurchase our securities is authorized annually by our shareholders at our ordinary general meeting. See “Item 16E. Purchases of Equity Securities by the Issure and Affiliated Purchaser.”

Historically our clients have required us to issue bonds to secure, among other things, bids, advance payments and performance. In recent years, our clients have been increasingly requiring letters of credit and other forms of guarantees to secure such bids, advance payments and performance. We are currently in contact with issuers of letters of credit, but we cannot guarantee that we will be able to obtain all of the letters of credit required for our normal operations.

In recent years, our liquidity has also been adversely affected by the length of our average collection period for accounts receivable. Our average collection period for accounts receivable (including the La Yesca and El Cajon hydroelectric projects) considered net of value-added tax was 180 days as of December 31, 2010, which is a 33% increase from 136 days as of December 31, 2009, primarily as a result of the La Yesca hydroelectric project, from which we expect to collect payment at delivery.

C. TREND INFORMATION

Please see “Item 5. Operating and Financial Review and Prospects,” “Item 3. Key Information — Risk Factors” and “Item 4. Information on the Company” for trend information.

D. OFF-BALANCE SHEET ARRANGEMENTS

We do not engage in any off-balance sheet arrangements that have or that we believe are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

E. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Contractual Obligations

The following tables set forth our contractual obligations and commercial commitments by time remaining to maturity.

As of December 31, 2010, the scheduled maturities of our contractual obligations were as follows:


	Payments Due by Period
			Less Than						More Than
Contractual Obligations	Total		1 Year		1-3 Years		3-5 Years		5 Years
	(Millions of Mexican pesos)
Long-term debt obligations	Ps.	27,644	Ps.	1,275	Ps.	13,008	Ps.	1,531	Ps.	11,830
Notes payable		4,685		4,685		—		—		—
Fixed interest(1)		5,673		526		1,425		849		2,873
Variable interest(2)		8,785		1,090		1,999		1,052		4,644
Operating lease obligations		1,304		638		649		9		8
Master development programs(3)		762		762		—		—		—
Purchase obligations(4)		235		39		78		79		39
Seniority premiums		501		—		41		30		430

Total	Ps.	49,589	Ps.	9,015	Ps.	17,200	Ps.	3,550	Ps.	19,824


(1)		Fixed interest rates range from 6.95% to 9.5%.

(2)		Variable interest rate was estimated using the following ranges: 0.77% (LIBOR plus spread) to 5.11% (LIBOR plus spread); and 4.90% (TIIE plus spread) to 11.37% (TIIE plus spread). When calculating variable interest rates, we used LIBOR and TIIE as of December 31, 2010.


(3)		In 2015, the fifth year of our current master development program, we expect to conduct a negotiation with the Ministry of Communications and Transportation to determine the new master development program’s commitments for the subsequent five years.

(4)		Reflects a minimum fixed annual payment of U.S.$3 million required to be paid under GACN’s technical assistance agreement, assuming an average exchange rate of Ps.13.05 to U.S.$1.00 and an annual U.S. inflation rate of 3.8%. The amount ultimately to be paid in any year will depend on our profitability.

As of December 31, 2010, the scheduled maturities of other commercial commitments were as follows:

Amount of Commitment Expiration per Period

Total Amounts

Less Than

Over

Contractual Obligations

Committed

1 Year

1-3 Years

4-5 Years

5 Years

(Millions of Mexican pesos)

Standby letters of credit

Ps.

2,927

Ps.

1,668

Ps.

1,256

Ps.

—

Ps.

Guarantees(1)

16,651

16,073

—

574

Total commercial commitments

Ps.

19,578

Ps.

1,673

Ps.

17,329

Ps.

—

Ps.

576


(1)		Consist principally of bonds delivered to guarantee bids, advance payments and performance.

Item 6.Directors, Senior Management and Employees

A. DIRECTORS AND SENIOR MANAGEMENT

Management of our business is vested in our Board of Directors. Our bylaws provide that the Board of Directors will consist of the number of directors elected by our shareholders at the annual ordinary general meeting. In September 2006, our bylaws were amended to comply with the Mexican Securities Market Law in effect since June 2006. See “Item 6. Directors Senior Management and Employees— Board Practices.” Our current Board of Directors was elected on April 14, 2011 in three classes, with terms designed to provide a transition to the staggered term arrangement provided by the bylaws. The President of the Board of Directors must be a Mexican national. The Board of Directors currently consists of 17 members. As of April 14, 2011, ten of our directors are independent directors within the meaning of the Mexican Securities Market Law. The directors are as follows:


Name	Position	Years as Director	Age
Bernardo Quintana I.(1)	Chairman	33	69
Jose Luis Guerrero Alvarez(1)	Director	21	67
Alberto Mulas Alonso(3)(5)(6)	Director	5	50
Fernando Ruiz Sahagun(3)(5)	Director	5	67
Luis Rubio Friedberg(3)(5)(6)	Director	5	56
Francisco Javier Garza Zambrano(3)(5)(6)	Director	4	56
Diego Quintana Kawage(1)	Director	4	40
Alonso Quintana Kawage(1)	Director	3	37
Fernando Flores Perez(2)(5)(6)	Director	3	65
Elsa Beatriz Garcia Bojorges(3)(5)(6)(7)	Director	2	45
Aaron Dychter Poltolarek(2)(5)(6)	Director	2	58
Salvador Alva Gomez (2)(5)(6)	Director	1	60
Margarita Hugues Velez(2)(5)(6)	Director	1	40
Carlos Benjamin Mendez Bueno(2)	Director	1	58
Luis Horcasitas Manjarrez(3)(4)	Director	0	58
Ruben Lopez Barrera(4)	Director	0	42
Melissa Boisson Portillo(3)(4)(5)(6)	Director	0	33


(1)		Director whose term expires on April 30, 2012.

(2)		Director whose term expires on April 30, 2013.


(3)		Director whose term expires on April 30, 2014.

(4)		On March 23, 2011, the Board of Directors approved the retirement of Mr. Sergio F. Montaño Leon and Mr. Luis Fernando Zarate Rocha and accepted the resignation of Mr. Juan Claudio Salles Manuel. They were replaced by Mr. Luis Horcasitas Manjarrez, Mr. Ruben Lopez Barrera and Ms. Melissa Boisson Portillo, who will complete their unexpired terms. On May 5, 2011, the Board of Directors accepted the resignation of Dr. Alcocer due to his becoming an officer in the Mexican Ministry of Energy.

(5)		Independent directors within the meaning of the Mexican Securities Market Law.

(6)		Independent directors within the meaning of Rule 10A-3 under the Securities Exchange Act of 1934, as amended.

(7)		Audit committee financial expert, within the meaning of Section 407 of the Sarbanes-Oxley Act of 2002.

Listed below are the names, responsibilities and prior business of our directors and senior management:

Bernardo Quintana I.has been a member of our Board of Directors since 1978. Mr. Quintana was our President from December 1994 to December 2006 and has continued as our Chairman since that date. Previously, Mr. Quintana was the Director of Investments for Banco del Atlantico, Vice President of ICA Tourism and Urban Development and our Executive Vice President. Mr. Quintana is currently a board member of several Mexican companies including Banamex, Cementos Mexicanos and Grupo Maseca. Mr. Quintana is also a member of Mexico’s National Counsel of Businessmen, was the Chairman of the board of trustees of the Universidad Nacional Autonoma de Mexico until May 2009, and is the Chairman of the board of directors of Fundacion ICA. Mr. Quintana holds a degree in civil engineering from the Universidad Nacional Autonoma de Mexico and an MBA from the University of California at Los Angeles. He is the father of Mr. Alonso Quintana, Mr. Diego Quintana and Mr. Rodrigo Quintana.

Jose Luis Guerrero Alvarezhas been a member of our Board of Directors since 1990, and our Chief Executive Officer and Executive Vice President since January 2007. Dr. Guerrero was previously our Chief Financial Officer and Executive Vice President. Between 1972 and 1979, he held positions as Planning Director of Combinado Industrial Sahagun, Technical Director at Roca Fosforica Mexicana, and Technical Planning and Development Submanager at the Lazaro Cardenas Las Truchas steel plant. He also worked at Wichman Wimet, Conventry (United Kingdom), Fabricas Automex and Industria del Hierro. Dr. Guerrero holds an engineering degree in Mechanical and Electrical Engineering from the Universidad nacional Autonoma de Mexico (UNAM), a diploma D’Ingenieur from the Institut Superieur des Materiaux et de la Construction Mechanique of Paris, France, an M.S. and a Ph.D. in Engineering from the University of Illinois at Urbana-Champaign, and has attended various executive courses at Harvard University, Stanford University, the University of Pennsylvania, the Instituto Technologico Autonomo de Mexico (ITAM) and the Instituto Panamericano de Alta Direccion de Empresa (IPADE) Universities. Dr. Guerrero has been a professor in Materials Science in the Engineering School of UNAM and a professor of Finance at IPADE. In addition to being a member of our Board of Directors, Dr. Guerrero is also the Chairman of the Board of GACN and an independent member of the Board of Directors of the Mexican Stock Exchange. He is also a former member of the Board of Directors of Banco Nacional de Mexico, among other companies.

Alberto Mulas Alonsohas been a member of our Board of Directors since 2004. Mr. Mulas is the managing director of CReSE Consultores, S.C., a consulting firm that specializes in strategy, finance and corporate governance. Mr. Mulas’s experience derives from his work as an investment banker with Bankers Trust, J.P. Morgan, Lehman Brothers and Donaldson, Lufkin & Jenrette, having been responsible for the Mexican operations of the last two entities. Mr. Mulas has also worked for the administration of President Vicente Fox until December 2002 as Undersecretary of Urban Development and Housing, and then as the Commissioner of the National Housing Development Commission(Comisionado Nacional de Fomento a la Vivienda).Mr. Mulas is currently a director of the government development banks Bancomext and the Sociedad Hipotecaria Federal. He also serves on the boards of GACN, S.A.B. de C.V., URBI, S.A.B. de C.V., Grupo Comex and Organizacion Ramirez (owner of CINEPOLIS, a chain of movie theaters). Mr. Mulas holds a chemical engineering degree from Universidad Iberoamericana and has an M.B.A from Wharton Business School, University of Pennsylvania.

Francisco Garza Zambranohas been a member of our Board of Directors since 2006. After holding various senior management positions within CEMEX since 1988, Mr. Garza now serves as President of the North American Region & Trading at CEMEX. He is directly responsible for CEMEX’s operations in both Mexico and the United States, and for its trading unit. He holds a bachelors degree from the Tecnologico de Monterrey and an M.B.A. from Cornell University’s Johnson Graduate School of Management.

Fernando Ruiz Sahagunhas been a member of our Board of Directors since 2006. Mr. Ruiz is outside counsel for the tax consulting firm of Chevez, Ruiz Zamarripa y Cia of which he was founding partner. Currently he is president of the Tax Commission of the Business Coordinating Council (CCE). He is member of the board of directors of the following publicly traded companies: Grupo Mexico, Kimberly Clark de Mexico, San Luis Corporacion, Mexichem, Grupo Palacio de Hierro, Grupo Cementos de Chihuahua, Grupo Financiero Santander and Fresnillo PLC. He also serves on the board of directors of Bolsa Mexicana de Valores and Mittal Steel Lazaro Cardenas.

Luis Rubio Friedberghas been a member of our Board of Directors since 2006. Mr. Rubio is president of the Centro de Investigacion para el Desarrollo (CIDAC), an independent economic and political research institute in Mexico City. He is a fellow of the World Economic Forum and serves on the boards of several investment funds, including the Oppenheimer funds, the India Fund, and the Asia Tigers Fund. Dr. Rubio is a finance specialist and has a masters degree and doctorate in political science from Brandeis University.

Alonso Quintana Kawageis Chief Financial Officer, head of the Executive Committee and a member of our Board of Directors. Effective July 1, 2011, he will become our Chief Operating Officer. Since becoming CFO in January 2007, Mr. Quintana has led the effort to secure the financing for the most rapid growth in ICA’s history, including landmark projects such as the La Yesca hydroelectric project, the FARAC I tollroads, and the Nuevo Necaxa — Tihuatlán highway. In addition, he led two international equity offerings in 2007 and 2009 that raised over US$750 million in the international and domestic markets, and an international bond offering that raised US$500 million in 2011. Mr. Quintana originally joined ICA in 1994. In addition to his work in the finance group since 2002, he has served in our Industrial Construction and Civil Construction segments, as well as our Infrastructure divisions. He is a director of GACN, our publicly-listed airport subsidiary, and ICA Panama. Mr. Quintana is a civil engineering graduate of the Universidad Iberoamericana, and has an MBA from the Kellogg School of Management of Northwestern University in Chicago.

Diego Quintana Kawagehas been a member of our Board of Directors since 2008, and is our representative for the Industrial Construction segment, as well as responsible for our Airports and Housing Development segments and for strategic alliances. He joined ICA in 1995, and served as the Director General of ViveICA, ICA’s homebuilding company, from 2004 to 2009 and as Finance Director of ViveICA from 2000 to 2003. He is an economics graduate of the Universidad Anahuac and has a Master’s of Science in Management from Stanford University.

Fernando Flores Perezhas been a member of our Board of Directors since 2008. Mr. Flores is presently founding partner of EFE Consultores, S.C. Mr. Flores has also worked for the administration of President Vicente Fox until December 2006 as General Director and Chairman of the board of the Mexican Institute of Social Security(Instituto Mexicano del Seguro Social). He also was Undersecretary of the Minister of Labor, Safety and Preventative Social Planning. He was CEO for Aerovias de Mexico and CEO and Chairman of Compañia Mexicana de Aviacion (MEXICANA). He was President of the National Chamber of Air Transportation(Camara Nacional del Aerotransporte). Previously he held executive positions in MEXICANA, the Mexican Institute of Social Security, Grupo Industrial DINA, and Combinado Industrial Sahagun. Mr. Perez holds a law degree from the Universidad Iberomericana and studied business administration at the same university.

Elsa Beatriz Garcia Bojorgesis a Researcher and Member of the Mexican Council for the Research and Development of Financial Accounting Norms (Consejo Mexicano para la Investigacion y Desarrollo de Normas de Informacion Financiera, A.C.) or CINIF, the body that investigates, develops, and promulgates the principles and norms that regulate financial information in Mexico. Previously, she worked as an independent consultant in the area of financial information systems, with clients including Grupo Industrial Peñoles, the National Banking and Securities Commission, the National Insurance and Surety Commission, and Grupo Nacional Provincial. Previously, she was a partner in the accounting firm Bouzas, Reguera, Gonzalez y Asociados, S.C. She holds an accounting degree with honors from the Universidad Nacional Autonoma de Mexico (UNAM), as well a diploma in financial engineering from the Colegio de Contadores Publicos de Mexico, A.C. (CCPM). She has been certified by the Mexican Institute of Public Accountants (IMCP) since 1999.

Aaron Dychter Poltolarekis a consultant and advisor on infrastructure, transportation, and energy projects. He is also President of ADHOC Consultores Asociados, A.C., a consulting company that he founded in 2007. He was Undersecretary for Transportation in the Ministry of Communications and Transportation from 2004 to 2006. He led the privatization processes for the railways and airports in Mexico, as well as the creation of the first suburban train system for Mexico City. Previously he worked in the Ministry of Finance and Public Credit and the Ministry of Budget and Planning. Dr. Dychter is a graduate of the Universidad de las Americas and holds an M.A. and Ph.D. in economics from The George Washington University.

Salvador Alva Gomezhas been a member of our Board of Directors since April 2010. Mr. Alva holds a chemical engineering degree from the Universidad Nacional Autonoma de Mexico (UNAM) and an M.B.A. from the Universidad de las Americas (UDLA) in Puebla, Mexico. Over his 24 years at Pepsico, he was a member of its Executive Committee and was its President for Latin America. He currently sits on the boards of Porcelanite Lamosa, 7-Eleven, and Grupo Distribucion Chapa.

Margarita Hugues Velezhas been a member of our Board of Directors since April 2010. Ms. Velez holds a law degree from the Universidad Panamericana in Mexico City. She is the Vice President of Legal Affairs and Secretary to the board of directors of Grupo Modelo, S.A.B. de C.V. Prior to joining Grupo Modelo, Ms. Hugues was a project finance and corporate attorney at Galicia y Robles in Mexico City and at Hunton & Williams in Washington D.C.

Carlos Benjamin Mendez Buenohas been on our Board of Directors since April 2010, and has been the Divisional Director of our Concessions segment since January 2007. Mr. Mendez is a civil engineer with a bachelor’s degree from the Universidad Nacional Autonoma de Mexico (UNAM). He has participated in various post-graduate studies such as “Strategic Planning” at the University of Pennsylvania’s Wharton School and “Certification in Project Administration” from the International Institute of Learning. He has been with us since 1975 and has held various management and senior management positions within civil construction, international projects, and infrastructure. Mr. Mendez is a member of the alumni association of the Engineering School at the UNAM, and is currently Vice President for Industrial Relations, Representation, and Management of the Mexico City delegation to the Mexican Construction Industry Chamber. He is also a board member of the Mexican Road Association (AMC) and represents ICA before the International Road Federation Executive Officers.

Luis Horcasitas Manjarrezhas been elected to our Board of Directors beginning July 1, 2011. He has been our Vice President overseeing Civil Construction for ICA and a member of ICA’s Executive Committee. In his more than 30 years of experience in ICA, he has held a variety of positions including as divisional director of heavy construction, director of infrastructure operations, and director of international concessions, among others. Mr. Horcasitas was also the director of our El Cajón hydroelectric project. He studied engineering at the Escuela de Ingeniería Municipal and has taken specialized courses in road building. He previously served as the Vice President of Construction for the Mexican Association of Roadways, A.C. (AMIVT) and as alternate representative of the Communications and Transportation sector of the Mexican Construction Industry Chamber of Commerce. He is an active participant in several engineering related associations in Mexico.

Ruben Lopez Barrerahas been elected to our Board of Directors beginning July 1, 2011. He has been the Vice President and Director of Strategic Planning, Business Development, and International for ICA and a member of ICA’s Executive Committee. He previously served as Chief Executive Officer of ICA’s airport subsidiary MA, as also as OMA’s Director for Human Resources, Legal, and Communication, and as ICA’s Business Development Director and Project Finance Director. He has more than 17 years working in ICA. Mr. López received a degree in Civil Engineering from the Universidad Iberoamericana, a Master of Science in Management from the Stanford University Sloan Master’s Program, and a Master’s in Business Administration from the joint program of the Pontificia Universidad Católica de Chile and the University of Washington in Seattle, WA.

Melissa Boisson Portillohas been elected to our Board of Directors beginning July 1, 2011. She is the currently the Public Affairs Manager for the North Region of Latin America for The Dow Chemical Company based in Mexico City. Prior to her involvement with Dow, she held various public affairs positions in both, industry and government institutions as well as in the Interamerican Development Bank. She holds a Master of Science in Sustainable Development from the Instituto de Estudios Superiores de Monterrey, and studied at a research exchange and thesis program at Twente University in the Netherlands. She is a member of the International Network of Leaders in Environment and Development (LEAD); in addition, she holds a Bachelor’s degree in International Relations from theUniversidad Iberoamericana. Ms. Boisson participates in various corporate social-responsibility related groups and is Vice-Chair of the Social Responsibility Committee within the American Chamber of Commerce in Mexico and member of the board of a non-profit organization, INNOVEC, whose main focus is to promote science teaching and learning through innovative methodologies for Mexican children.

Our executive officers currently are as follows:


		Years as
		Executive
Name	Current Position	Officer
Jose Luis Guerrero Alvarez	Chief Executive Officer		21
Alonso Quintana Kawage (1)	Vice President, Chief Financial Officer		4
Sergio F. Montaño Leon (2)	Executive Vice President		21
Luis Fernando Zarate Rocha (2)	Executive Vice President		16
Diego Quintana Kawage	Executive Vice President, Industrial Construction, Airports, Homebuilding, Real Estate and Strategic Alliances		4
Carlos Benjamin Mendez Bueno	Vice President, Concessions		4
Ruben Lopez Barrera	Vice President, Strategic Planning, Business Development and International		1
Luis Horcasitas Manjarrez	Vice President, Civil Construction		1
Juan Carlos Santos	Divisional Director, Industrial Construction		4
Luis Urrutia Sodi	Divisional Director, Housing Development		2
Victor Bravo Martin (1)(3)	Divisional Director, Airports; Chief Executive Officer of GACN		2
Gonzalo Sanchez Diaz	Divisional Director, Rodio Kronsa		2
Rodrigo Quintana Kawage	General Counsel		2


(1)		Effective July 1, 2011, Mr. Alonso Quintana will be become Chief Operating Officer of the company. On that same date, Mr. Victor Bravo Martin will succeed Mr. Quintana as our Vice President and Chief Financial Officer.

(2)		Effective July 1, 2011, Mr. Sergio F. Montaño Leon and Mr. Luis Fernando Zarate Rocha will have retired as executive officers.

(3)		Effective July 1, 2011, Mr. Porfirio Gonzalez will succeed Victor Bravo Martin as our Divisional Director for the Airports segment.

Juan Carlos Santosis our Divisional Director of Industrial Construction. He first joined ICA in 1992, and has served as an alternate member of our Board of Directors, the Director of Projects for ICA-Fluor, and the Project Manager for the liquefied natural gas terminal in Altamira, Tamaulipas. Previously, he was the contracts and project control manager for the Cantarell nitrogen plant. He is a civil engineering graduate of theUniversidad Nacional Autonoma de Mexicoand holds a master’s degree in business administration from Georgetown University in Washington, D.C.

Luis Urrutia Sodihas been our Divisional Director of our Housing Development segment since April 2009. Mr. Urrutia entered our company in 1993 and has held various positions of increasing responsibility in the corporation and in various subsidiaries. Prior to his promotion to Divisional Director, he has held the position of Director of Operations of Housing Development since 2005. Mr. Urrutia holds an undergraduate degree in Industrial Engineering from theUniversidad Iberoamericana and an M.B.A. with a specialization in finance from the Boston University School of Management.

Victor Bravo Martinhas been our Divisional Director our Airports and Chief Executive Officer of GACN since July 2009. Effective July 1, 2011, Mr. Bravo will be our Chief Financial Officer. Mr. Bravo has more than 20 years of professional experience. He has served as GACN’s Chief Financial Officer since March 2006. Prior to joining GACN, he served in various capacities with us from 1986 to 2006, including Corporate Finance Director, Project Finance Director, Corporate Finance Analysis Manager and Corporate Economic Analysis Manager. Mr. Bravo holds a B.S. in economics from theInstituto Tecnologico y de Estudios Superiores de Monterrey, a diploma in finance from theInstituto Tecnologico Autonomo de Mexico, and an M.B.A. from the Leonard N. Stern School of Business at New York University and the Manchester University School of Business.

Gonzalo Sanchez Diazhas been our Divisional Director of Rodio Kronsa since 2009. He holds an engineering degree in highways, canals and ports from the Escuela E.T.S. Caminos in Madrid, Spain. He joined Rodio in 1977 and has held several positions of increasing responsibility since that time. Prior to becoming the divisional director, he was the General Director of Rodio for Spain and Portugal.

Rodrigo Quintana Kawagehas been our General Counsel since June 2010. Previously, Mr. Quintana worked as in-house counsel at Banco de Mexico, Mexico’s central bank, and as an associate in the finance practice of Mayer Brown LLP, a global law firm, in its Chicago and New York offices. Mr. Quintana joined our legal department in 2001, and then rejoined after leaving Mayer Brown LLP in January 2009. Mr. Quintana holds law degrees from the Instituto Tecnologico Autonomo de Mexico in Mexico City and from the University of Chicago Law School. He is the son of Mr. Bernardo Quintana and the brother of Mr. Alonso Quintana and Mr. Diego Quintana.

Porfirio Gonzalezhas more than 15 years professional experience in the airport industry. He has been GACN’s director of airports since 2006. In that position, he was responsible for the relationships of GACN and the airports with federal, state and local authorities. He also oversaw and coordinated the airport consultative councils of all 13 airports. These councils bring together airport managers, airlines, other airport service providers and governmental authorities to ensure effective airport operation. From 1998 to 2006, Mr. Gonzalez served as the director of the business division, subdirector of operations and development, and manager of the Monterrey International Airport.

Effective July 1, 2011, an Executive Committee headed by Mr. Alonso Quintana Kawage will coordinate our operations across our various business divisions. The members appointed to our Executive Committee are as follows:


Name		Current Position
Alonso Quintana Kawage(1)		President
Diego Quintana Kawage		Vice President, Industrial Construction division, Airports, Housing and Strategic Alliances
Carlos Benjamin Mendez Bueno		Vice President, Concessions
Luis Horcasitas Manjarrez		Vice President, Civil Construction
Ruben Lopez Barrera		Vice President, Strategic Planning, Business Development and International


(1)		Effective July 1, 2011, Mr. Alonso Quintana will be become Chief Operating Officer of the company. On that same date, Mr. Victor Bravo Martin will succeed Mr. Quintana as our Vice President and Chief Financial Officer.

B. COMPENSATION

For the year ended December 31, 2010, the aggregate compensation of our directors and executive officers paid or accrued in that year for services in all capacities was approximately Ps.210 million. In 2010, we paid management and non-management directors Ps.40 thousand net of taxes for each board meeting, Corporate Practices, Finance, Planning and Sustainability Committee meeting or Audit Committee meeting they attend. As of April 14, 2011, our shareholders approved the payment of Ps.44 thousand net of taxes to management and non-management directors for each board meeting. Additionally, we pay non-management directors U.S.$250 per hour for work related to their duties on our board or on either committee. We also paid the Chairman of the Board of Directors Ps.9 million net of taxes in 2010.

Management Bonuses

Generally members of senior and middle management currently become eligible for bonuses after five years of service. Cash performance bonuses are paid to eligible members of management by the subsidiaries that employ them.

Our Compensation Committee determines the bonuses for senior and middle management. The Corporate Practices, Finance, Planning and Sustainability Committee determines compensation for executive officers and the Chief Executive Officer. We have adopted the following policy regarding the calculation of the performance bonus:

•

in years in which our income (calculated as described below) is 4% or less of our net worth, no bonuses will be paid,

•

in years in which our income (calculated as described below) is greater than 4% of our net worth, up to 20% of the amount by which income exceeds 4% of net worth may be paid as bonuses.

Income for these purposes means income from all sources (including extraordinary items) before income taxes, employees’ statutory profit sharing and the bonus itself. Net worth for these purposes is our net worth as at the end of the year for which the bonus is being calculated, without giving effect to that bonus. This formula is subject to change by the Board of Directors, provided that all outside directors approve any such change.

A substantial portion of the shares beneficially owned by our directors and executive officers, along with other shares owned by our management, are owned through a trust, which we refer to as the management trust. The management trust is supervised by a technical committee consisting of members of our Board of Directors, and the Quintana family controls the vote of the management

trust. This technical committee has broad discretionary authority over the corpus of this trust, including voting power over the shares contained therein and the conditions governing withdrawal of such shares. The technical committee is authorized to modify the terms of the management trust.

Bonuses are paid into the management trust and may be used by the technical committee to purchase shares, for the account of the bonus recipient. All dividends paid with respect to shares in the management trust are also deposited in the management trust. Cash dividends are, at the discretion of the technical committee, distributed to participants in the management trust or used to purchase shares at prevailing market prices for the benefit of the participants. Upon leaving us, participants in the management trust are entitled to receive the shares representing such participant’s interest in periodic installments. The management trust may, but is not required to, purchase the shares constituting such installments. All dividends received with respect of the shares owned by any former employee are paid to such former employee.

As described above, members of management that leave us are entitled to receive, in annual installments, the shares credited to their accounts in the management trust. Certain exceptions may be made to these rules from time to time to permit employees leaving us to receive their shares on an accelerated basis.

Options to Purchase Securities from Registrant or Subsidiaries

On March 31, 2000, we adopted a stock option plan pursuant to which our officers and senior-management were entitled to annual stock options. Options were granted based on a percentage of the grantees’ annual base salary on April 29, 2003.

The stock option plan was terminated on April 16, 2004 and all options granted under the plan expired on April 29, 2010. We do not expect to grant stock options going forward.

Prior to their expiration on April 29, 2010, 113,485 options (on a post-reverse split basis) were exercised at a weighted average exercise price of Ps.22.50. As of December 31, 2010, we had no stock options outstanding.

Pension Plan

In 2006, we created a defined benefit pension plan covering all active employees aged more than 65 who are part of our Board of Directors and have a minimum of 10 years of service as members of the board prior to their retirement. Until 2008, these employees were entitled to benefits beginning at the age of 55, with gradual reductions of their salary taken into account for pension purposes. Beginning in 2008, the plan was revised to defer entitlement to benefits until the age of 57. See Note 27 to our consolidated financial statements.

For the year ended December 31, 2010, the aggregate amount that we have accrued to provide pension and retirement benefits is Ps.216 million.

In 2011, the existing defined benefit pension plan was replaced with a new voluntary retirement savings plan offered to senior and executive management employees. This plan offers a pretax savings component of up to 10% of the employee’s taxable income, and corporate matching of up to 2.5%.

C. BOARD PRACTICES

For a table setting forth our current directors and management, the expiration of their current terms of office and the period of time during which each has served in that office, see “Item 6. Directors, Senior Management and Employees — Directors and Senior Management.” We have no service contracts for our directors providing benefits upon termination of employment.

The Mexican Securities Market Law enacted by Mexico’s Federal Congress on December 30, 2005 (in effect since June 2006) altered the legal regime applicable to public companies in Mexico. In order to comply with the new law, our shareholders approved the amendment of our by-laws at an extraordinary general shareholders’ meeting on September 12, 2006.

Management Structure

Our management is vested in a Board of Directors and a chief executive officer. The duties of the Board of Directors are, among others, to set general strategy for the company, and for the legal entities controlled by it, and to appoint, supervise and, if and as necessary, remove the chief executive officer. In fulfillment of its duties and responsibilities, our bylaws, in accordance with the Mexican Securities Market Law, provide for our Board of Directors to be aided by one or more committees made up of independent directors.

Our bylaws provide for our Board of Directors to be comprised of no fewer than 5 and no more than 21 directors, of which at least 25% must be independent directors. Members of the Board of Directors are elected on a staggered basis. Each year, one-third of the members of the board are elected by our shareholders and, once elected, board members occupy their positions for the following three years without the need for shareholder ratification in the interim. Notwithstanding the foregoing, at any ordinary general shareholders’ meeting, any director can be removed by a 51% vote of our shareholders.

Any holder or group of holders of 10% of the voting capital stock of ICA may appoint a director. Shareholders that exercise such right may not participate in the appointment of remaining directors.

Our Board of Directors meets at least on a quarterly basis and has the duties and authority set forth in the company’s bylaws and in the Mexican Securities Market Law. The chairman of the Board of Directors is appointed by the shareholders at each annual ordinary general shareholders’ meeting, or by the Board of Directors itself, and has the authority to propose to the board the discussion and resolution of various matters, including proposals as to the independent directors that are to comprise the committee or committees that perform auditing and corporate practices duties, as well as the appointment and removal of the chief executive officer. The independent members of our board meet once per year with the chairman of our board. The chairman of our board may not be president of either the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee under Mexican law.

Our Board of Directors has the authority to establish special committees to assist the board in the performance of its duties. Our bylaws provide that audit and corporate practices duties may be delegated to one committee or to two separate committees at the discretion of the board.

Our chief executive officer is the main executive of the company, responsible for the management, direction and execution of our business, subject to the strategies set forth by the Board of Directors. The chief executive officer is also responsible for the fulfillment of resolutions approved by shareholders or the board. The chief executive officer is vested with broad agency authority. However, this authority is limited when it comes to exercising voting rights attached to the company’s shares in its subsidiaries. In regards thereto, the chief executive officer must act in accordance with instructions or policies provided by the board. Such authority is also limited in respect of sales of our real estate and equity holdings and in respect of transactions referred to in paragraph c), Section III of Article 28 of the Mexican Securities Market Law. In either such case, the chief executive officer may only act with the Board of Directors’ prior authorization. Furthermore, if the relevant transaction involves an amount equal to or exceeding 20% of the company’s net worth, the chief executive officer may only act with the prior authorization of our shareholders.

Board Practices

In response to the enactment of the Mexican Securities Market Law, our Board of Directors established a Corporate Practices and Sustainability Committee, which was replaced by the Corporate Practices, Finance, Planning and Sustainability Committee on April 24, 2009. The Corporate Practices and Sustainability Committee had and its replacement, the Corporate Practices, Finance, Planning and Sustainability Committee, has the duties set forth in Section I of Article 42 and other applicable provisions of the Mexican Securities Market Law. Such duties include providing an opinion on the nomination of the chief executive officer, assessing the performance of our senior management, providing an opinion on related-party transactions and compensation proposals for senior management and reviewing certain exemptive actions of the Board of Directors. The duties of the Corporate Practices, Finance, Planning and Sustainability Committee include, in addition, the duties of proposing general guidelines for creating and monitoring compliance with our strategic plan; providing an opinion on investment and financing policies proposed by our chief executive officer, providing an opinion on the assumptions in the annual budget and monitoring application of the budget and our control system; and evaluating risk factors that affect us and our mechanisms for controlling risk. As of December 31, 2010, the members of our Corporate Practices, Finance, Planning and Sustainability Committee are Fernando Flores Perez, as chairman, Alberto Mulas Alonso, Fernando Ruiz Sahagun and Aaron Dychter Poltolarek. Each member’s term on the Committee runs concurrently with such member’s term on our Board of Directors. All members of the Corporate Practices, Finance, Planning and Sustainability Committee are independent

directors as such term is defined in the Mexican Securities Market Law, and Mr. Mulas and Mr. Dychter are independent directors as such term is defined in Rule 10A-3 under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act.

The Mexican Securities Market Law required certain changes to the duties and functions of our Audit Committee, as established in our bylaws before the enactment of the current Mexican Securities Market Law. The Audit Committee is now responsible for the duties set forth in Section II of Article 42 and other applicable provisions of the Mexican Securities Market Law. Such duties include evaluating our independent auditor, reviewing the audit report, opinion, and other documents prepared annually by the independent auditor, informing the Board of Directors of the quality of and any deficiencies in the company’s internal control mechanisms and regarding internal audits of the company or entities controlled by the company. As of May 2, 2011, the members of the Audit Committee were Elsa Beatriz Garcia Bojorges, as chairman, and Margarita Hugues Velez and Fernando Flores Perez, each of whom were independent as such term is defined in the Mexican Securities Market Law and in Rule 10A-3 under the Exchange Act. Each member’s term on the Committee runs concurrently with such member’s term on our Board of Directors.

Both of the above committees are empowered to call shareholders’ meetings and hire independent counsel and other advisors, as they deem necessary to carry out their duties, including, in the case of the Corporate Practices, Finance, Planning and Sustainability Committee, the review of related-party transactions.

D. EMPLOYEES

As of each of the three years ended December 31, 2010, 2009 and 2008, we had approximately 29,647, 26,587 and 19,340 employees, respectively, approximately 26%, 38% and 32% of whom were permanent employees, respectively. The number of temporary employees employed by us varies significantly and is largely dependent on the level of our construction activities.

In Mexico, all of our employees, other than managerial and certain administrative employees, are currently affiliated with labor unions. Labor relations in each facility in Mexico are governed by a separate collective bargaining agreement, executed between the relevant subsidiary and a union selected by the employees of the relevant facility. Wages are renegotiated every year while other terms are renegotiated every two years. Labor relations for each construction project are governed by a separate collective bargaining agreement, which is coterminous with the project. Such agreements are reviewed once per year if the duration of the project so permits. Although, from time to time we have faced strikes at particular facilities or construction sites, we have never had a strike that materially affected our overall operations in Mexico. We believe that we have good relations with our employees.

E. SHARE OWNERSHIP

As of March 31, 2011, Mr. Bernardo Quintana and members of his immediate family, including our directors Alonso Quintana Kawage and Diego Quintana Kawage and our general counsel Rodrigo Antonio Quintana Kawage, may be deemed to have had beneficial ownership of 36,020,907 or 5.61% of our outstanding shares (excluding shares owned through the management trust). Through the management trust they hold 4,033,151 shares or 0.63%, for a total of 40,054,058 or 6.24% of our outstanding shares. Additionally, as of March 31, 2011, the following of our directors or officers each beneficially owned shares (other than shares owned through the management trust) totaling no more than 1% of any class of our capital stock: Jose Luis Guerrero Alvarez, Carlos Benjamin Mendez Bueno, Francisco Javier Garza Zambrano, Luis Urrutia Sodi, Salvador Alva Gomez, Luis Horcasitas Manjarrez and Luis Fernando Zarate Rocha. None of our directors or officers has voting rights different from other shareholders, other than, as applicable, rights as a participant in the management trust or fundacion trust described below and rights of the position of director and/or officer.

Item 7.Major Shareholders and Related Party Transactions

A. MAJOR SHAREHOLDERS

The following table sets forth certain information regarding the ownership of outstanding shares as of March 31, 2011.


Identity of Person or Group	Amount Owned		Percentage(1)
Bernardo Quintana I.(2)		36,020,907		5.6	%
Management Trust		16,134,286		2.5	%
Foundation Trust		8,293,356		1.3	%


(1)		For all percentages, based upon 641,882,586 shares outstanding as of March 31, 2011.

(2)		Reflects shares owned directly by Mr. Quintana and his family, including Alonso Quintana Kawage, Diego Quintana Kawage and Rodrigo Antonio Quintana Kawage, and not through the management trust.

The major shareholders, as set forth in the table above, do not have voting rights different from other shareholders, other than Mr. Quintana’s rights as a participant in the management trust and foundation trust described below and as a member of our Board of Directors. The significant changes in the percentage ownership held by our major shareholders since 2008 are as follows. In 2009, Mr. Quintana and his family purchased 3,305,000 shares during a public offering of newly issued shares and subsequently sold 6,220,100 shares.

Our shares are the only class of security we offer in Mexico. We have no information as to the number of record holders in Mexico. At March 31, 2011, 275,989,722 shares, or 43% of shares outstanding, were held in the form of CPOs, which have limited voting rights. See “Item 9. The Offer and Listing — Trading — Limitations affecting ADS Holders and CPO Holders.” As of March 31, 2011, 9.1% of our outstanding shares were represented by 14,643,875 ADSs representing four of our shares each, and such ADSs were held by 57 recordholders with registered addresses in the United States. Because certain of the ADSs are held by nominees, the number of recordholders may not be representative of the number of beneficial holders. See “Item 9. The Offer and Listing — Trading.”

Our directors and executive officers, as a group, beneficially own approximately 52,155,193 shares (8.13% of the shares outstanding). A portion of the shares beneficially owned by our directors and executive officers (collectively, approximately 2.51% of the shares outstanding), are owned through a trust, referred to as the management trust. The technical committee of the management trust, which consists of members of our Board of Directors, has broad discretionary authority over the corpus of this trust, including voting power over the shares contained therein and the conditions governing withdrawal of such shares.

In April 2011, pursuant to the Mexican Securities Market Law, the Company announced that it had acquired 7,545,300 of its shares using the reserve for share purchases, at an average price of Ps.26.47 per share, for an amount of Ps.199,705,967.01. As part of our employee stock plan, 3,781,275 of these shares were transferred to the management trust at an average price of Ps.28.05 per share.

The technical committee is authorized to modify the terms of the management trust. The technical committee, in its discretion, is authorized to distribute bonuses to participants in the form of cash and permit our current employees to withdraw shares held in the management trust. The technical committee generally has discretion over the sale of shares withdrawn from the management trust and generally has sought to conduct such sales in a manner that minimizes any adverse effect on the market price of the shares. Whenever an employee belonging to the management trust retires, his or her shares are released from the management trust so that such employee may dispose of his or her shares as he or she wishes.

In 1992, members of management donated 10% of their then-owned shares to Fundacion ICA, a non-profit organization formed to fund research and education activities in Mexico. In addition, certain former members of management donated 20% of their shares to Fundacion ICA. Fundacion ICA’s shares are held by a trust, which we refer to as the foundation trust. We are entitled to appoint two of the five members of the foundation trust’s technical committee, while the remaining members are independent from us. Any disposition of the shares held by the foundation trust requires the approval of more than a simple majority of such technical committee and, therefore, may require approval of our representatives on this committee. Under the terms of the fundacion trust, the shares held by Fundacion ICA, which, as of March 31, 2011, represented approximately 1.3% of the shares outstanding, are required to be voted in the manner specified by a majority of the technical committee. The Quintana family controls the vote of the foundation trust.

B. RELATED PARTY TRANSACTIONS

RCO Construction and Administrative Services

For a description of other related party transactions, see Note 26 to our consolidated financial statements.

Item 8.Financial Information

See “Item 18. Financial Statements” beginning on page F-1.

A. LEGAL AND ADMINISTRATIVE PROCEEDINGS

We are party to various legal proceedings in the ordinary course of business. Other than as disclosed in this annual report, we are not currently involved in any litigation or arbitration proceeding, including any proceeding that is pending or threatened of which we are aware, which we believe will have, or has had, a material adverse effect on us. Other legal proceedings pending against or involving us and our subsidiaries are incidental to the conduct of our and their business and we believe will be resolved in our favor or with an insignificant effect on our financial position, results of operations and cash flow. We believe that the ultimate disposition of such other proceedings individually or on an aggregate basis will not have a material adverse effect on our consolidated financial condition or results of operations.

Campeche Playa/Faros de Panama

We acted as the general contractor and lender for the Campeche Playa, Golf, Marina & Spa Resort project (Proyecto Esmeralda Resort, S.A. de C.V., Marina Esmeralda Resort, S.A. de C.V. and Campeche Golf, S.A. de C.V., together, the Development Companies). The financings are secured by 94% of the shares of the Development Companies and substantially all their assets.

At the August 18, 2010 general shareholders’ meeting, the shareholders of the Development Companies approved the dismissal of their boards of directors and our appointment as Sole Administrator of the Development Companies, which we announced in September 2010. We took this action in order to protect our investment in this tourism project in the state of Campeche, after continued failure by the Development Companies to meet their commitments.

Foreclosure on substantially all the property, which includes the buildings under construction, a golf course, and more than 289 hectares of prime beach front land, concluded in December 2010. Consequently, as of December 31, 2010, we reclassified Ps.1,447 million related to the project from accounts receivable to long-term inventory. Foreclosure on the remaining collateral is still in progress in order to collect on Ps.465 million related to the project that still remains in our accounts receivable. There is ongoing litigation and dispute resolution proceedings related to the foreclosure on the project, the control of the board of directors and the related construction contracts. While we believe that an adverse decision on these proceedings is unlikely, we can provide no assurance that litigation will not further affect our ability to collect on amounts owed to us related to the project.

In addition, we have accounts receivable totaling approximately U.S.$43 million with the companies developing the project for the construction work on the foundation of the Faros de Panama project, in Panama City, Panama. This receivable is secured by a mortgage on the land where the project is located. The process for foreclosing on this mortgage is advancing. The appraised value of the underlying property fully covers the amount of the receivable, but we can provide no assurance that foreclosure litigation will not further delay the collection on the amounts owed to us.

A material loss related to this legal proceeding is not probable.

Malla Vial

We were involved in litigation with the Institute for Urban Development, or IDU(Instituto de Desarrollo Urbano), an agency of the municipal government of Bogota, Colombia, in charge of public works projects. The litigation concerns the Malla Vial Project, a street network refurbishment project in Bogota that was awarded to us in 1997. In April 2002, an arbitration tribunal in Colombia issued an award in favor of the IDU for 5,093 million Colombian pesos as compensation for our alleged breach of contract, which after the IDU obtained a judicial recognition of the arbitration award in Mexico in 2007, was paid in full. On January 8, 2009, the Mexican court recognized the payment in full.

In a separate proceeding related to the same project, the IDU has filed a claim in a Colombian court against us for liquidated damages for breach of the contract in an amount of approximately U.S.$2.2 million, and has made a claim against the bonding company for the return of an advance payment that had not yet been amortized, which obligation, in addition to the U.S.$2.2 million, we will indemnify. We have counterclaimed and demanded indemnification and damages. In December 2004, an administrative tribunal ordered the consolidation of all of these claims into one case. Regarding the claim against the bonding company, the tribunal has ordered a suspension of any actions against the bonding company until the counterclaim filed

by ICA is resolved, provided that such suspension should not last more than three years (which three-year period will only commence upon the exhaustion of appeals related to the order of consolidation).

After negotiations between us and the IDU, on April 7, 2010, the director of the IDU announced that we had reached an agreement in principle with the IDU to resolve all matters related to the various Malla Vial litigation proceedings. This announcement was made through an open letter to the public and the mayor of Bogota and released through various media outlets.

While the IDU has announced that we would pay U.S.$1.5 million under an agreement in principle with the IDU, subsequent political developments have made this agreement invalid and the amount and possibility of settlement remain uncertain. We continue to be willing to amicably settle the matter at appropriate amounts and under appropriate terms. We do not believe a material loss is probable in this matter.

Puerto Rico Light Rail System

In 2004, the U.S. Department of Transportation’s Office of the Inspector General began to investigate the Puerto Rico light rail system. We understand that the U.S. Department of Transportation’s investigation extends to other contractors working on the light rail system. In connection with the investigation, on March 8, 2004, ICA Miramar received a subpoena for the production of documents from the U.S. Department of Transportation’s Office of the Inspector General. We cooperated with the U.S. Department of Transportation’s investigation and have received no further subpoenas. We cannot assure you as to the results of this investigation or that we will not be named a party to any proceedings.

On September 22, 2005, the Puerto Rico Highway and Transportation Authority, or the HTA, ICA Miramar’s client, filed a claim against ICA Miramar for indemnity in an ongoing litigation between the HTA and its principal contractor for the project. The principal contractor filed the underlying lawsuit on December 24, 2003, and HTA filed a countersuit on November 23, 2004. ICA Miramar estimates the indemnity and liquidated damages claims could result in liability in excess of U.S.$4 million. After an extended stay, the court appointed a special judge due to its declaration of the underlying matter and claim against ICA Miramar as complex litigation. The principal contractor subsequently amended its complaint against HTA and, in 2009, HTA filed its amended claim against ICA Miramar. The litigation remains in the discovery stage. On April 9, 2010, HTA and the principal contractor announced a settlement of the ongoing litigation against each other in court.

We do not believe a material loss is probable in this matter.

Corredor Sur

In 1995, the Panamanian Ministry of Public Works(Ministerio de Obras Publicas)awarded ICA Panama, a 30-year concession for the construction, operation and maintenance of the Corredor Sur highway, a four-lane, 19.8-kilometer highway. The concession was granted in August 1996.

The concession agreement provides for our compensation in part by the right to retain the revenue derived from the operation of the highway and in part by the development and sale of certain land and marine-fill areas received as part of our consideration from the Panamanian government. As of December 31, 2005, we had developed and sold 99% of the properties we have received from the Panamanian government, the proceeds of which were used to finance construction of the highway and repay loans incurred to finance the real estate portion of the project. Under the concession agreement, the estimated net revenues from the sale of these properties are U.S.$75 million.

On December 30, 2004, in response to a claim brought by a private citizen, the Supreme Court of Panama declared unconstitutional the final phrase and paragraph of Article 2 of Law No. 5 of 1988, which provides that one of the methods by which the government can compensate a concessionaire is by granting rights to a concessionaire to fill marine areas that become real estate assets which in turn the government transfers to the concessionaire, as private property. Specifically, the court ruled that under the Panamanian Constitution, the sea and seabed belong to the State, for public use, and therefore could not be privately appropriated. Under the concession contract, we were granted the right to create an additional 35 hectares of land by filling the shallow marine area located between the former Paitilla Airport and the Atlapa Convention Center for development and commercialization. The Supreme Court’s ruling may prevent us from reclaiming the remainder of the marine reclamation areas to be conveyed to us under the Concession Contract and any related indemnification rights. As of March 31, 2006, 11.6 hectares remained to be conveyed to us out of 35 hectares of fill-in rights granted to us as part of the Corredor Sur concession. However, on April 25, 2005, the Supreme Court of

Panama received a claim, filed by the same private citizen who brought the claim described in the preceding paragraph, requesting that certain provisions of the Corredor Sur concession relating to the transfer of real estate and marine fill-in rights by the Panamanian government to us be declared unconstitutional. The citizen claimed that the grant to us by the Panamanian government of the 29.5 hectares comprising the former Paitilla Airport and the 35 hectares of marine fill-in rights located between the former Paitilla Airport and the Atlapa Convention Center was unconstitutional and that such areas should not be appropriated for private use. The claimant requested that the Supreme Court of Panama rule that such provisions of the Corredor Sur concession were unconstitutional and that such ruling be given retroactive effect with respect to such transfers. On June 5, 2007, the Official Gazette of Panama published a judgment by the Panamanian Supreme Court dated December 11, 2006 in which the Court held that the clauses within the Corredor Sur concession at issue in this litigation were constitutionally permitted. Therefore, we believe the initial ruling regarding the unconstitutionality of the provisions related to appropriation of the sea and seabed will no longer affect us. We have requested from the Ministry of Public Works permission, pursuant to the specific declaration of constitutionality of the contract clauses, to recommence the filling of marine areas.

Certain constitutional claims by the same plaintiff remain pending before the Panamanian Supreme Court, against the resolutions from the Cabinet through which the State transferred to ICA Panama the filled lands, and against an Executive Decree by which an area of the former Paitilla Airport was disincorporated from the public domain and was later transferred to ICA Panama. The plaintiff seeks that these administrative acts be declared unconstitutional and that the unconstitutionality have retroactive effect on the transfers. We believe that, in accordance with the Panamanian judicial code and the preponderance of prior decisions of the Supreme Court of Panama, any such ruling should not apply retroactively. In the event of any adverse ruling that applies retroactively, the Panamanian civil code provides that third party transferees of property acquired in good faith from sellers with registered title which does not appear defective based on information recorded with the land registry may not have their title declared null and, therefore, such transferees would not suffer any damages attributable to us. The transfers from the Panamanian government to us and from us to the third party purchasers have been duly recorded in the appropriate land registry.

We do not believe a material loss is probable in this matter.

Ciudad Juarez Airport

However that decision, and three subsequent constitutional claims(juicios de amparo), permitted the case to be reconsidered, and as a result of such constitutional claims, the original claimants must now include the Ministry of Communications and Transportation as a party to the litigation since the Ministry of Communications and Transportation is the grantor of the concession title to the Ciudad Juarez Airport. On August 28, 2009, the Mexican federal government filed its answer to the claim, in which it requested that the trial be moved to Mexican federal jurisdiction. On November 10, 2010, the court of Chihuahua upheld the ruling to include the Ministry of Communications and Transportation. The plaintiffs filed a motion (recurso de revision) before the federal court on November 29, 2010, which appeal is pending. In the event that any subsequent action results in a decision substantially similar to the May 18, 2005 court order or otherwise adverse to GACN, and the Mexican government does not subsequently exercise its power of eminent domain to retake possession of the land for our use, which we believe the terms of its concessions would require, our concession to operate the Ciudad Juarez Airport would terminate. In 2010, the Ciudad Juarez International Airport represented 5.4% of GACN’s revenue. Although we believe and have been advised by the Ministry of Communications and Transportation that under the terms of GACN’s concessions the termination of its Ciudad Juarez concession would not affect the validity of its remaining airport concessions and that the Mexican federal government would be obligated to indemnify GACN against any monetary or other damages resulting from the termination of its Ciudad Juarez concession or a definitive resolution of the matter in favor of the plaintiffs, we cannot assure you that we would be so indemnified. For this reason, our financial statements do not include a provision for this litigation.

We do not believe a material loss is probable in this matter.

Environmental Matters

There are currently no material legal or administrative proceedings pending against us with respect to any environmental matter in Mexico or the United States.

B. DIVIDENDS

We did not pay dividends in respect of our ordinary shares in any year between 2000 and 2010 and do not anticipate paying dividends in 2011.

The declaration, amount and payment of dividends are approved by the shareholders, upon the recommendation of the Board of Directors, and may only be paid from retained earnings from accounts previously approved by our shareholders, provided that the legal reserves have been duly created and losses for prior fiscal years have been paid. If our shareholders approve the payment of dividends, the amount of the dividends will depend upon our operating results, financial condition and capital requirements, and upon general business conditions. A number of our loan agreements contain covenants that restrict the ability of certain of our subsidiaries to make capital distributions to us and, accordingly, may affect our ability to pay dividends.

C. SIGNIFICANT CHANGES

Except as identified in this annual report on Form 20-F, no significant change in our financial condition has occurred since the date of the most recent audited consolidated financial statements contained in this annual report.

Item 9.The Offer and Listing

A. TRADING

Since April 9, 1992, our shares and the ADSs have been listed on the Mexican Stock Exchange and the NYSE, respectively. The ADSs have been issued by The Bank of New York as depositary. Each ADS represents four CPOs, issued by Banamex as the CPO trustee for a Mexican CPO trust. Each CPO represents an interest in one share held in the CPO trust.

The following table sets forth, for the five most recent full financial years, the annual high and low market prices for the ADSs on the New York Stock Exchange and the shares on the Mexican Stock Exchange.


	Mexican Stock				New York Stock
	Exchange				Exchange
	Pesos per Share				U.S. dollars per ADS
	High		Low		High		Low
2006		42.63		25.54		15.75		9.80
2007(1)		75.48		38.65		28.04		13.90
2008		73.33		14.04		27.65		4.26
2009		35.49		14.49		10.85		4.79
2010		34.09		28.34		11.13		8.78


(1)		Trading prices of our ADSs in 2007 are stated after giving effect to the change in the ratio of CPOs to ADSs in August 2007. See “Item 3. Key Information.”

The following table sets forth, for the periods indicated, the reported high and low sales prices for our shares on the Mexican Stock Exchange and the reported high and low sales prices for the ADSs on the New York Stock Exchange.


	Mexican Stock				New York Stock
	Exchange				Exchange
	Pesos per Share				U.S. dollars per ADS
	High		Low		High		Low
2009:
First Quarter		26.47		18.80		7.47		4.79
Second Quarter		27.99		21.32		8.55		6.39
Third Quarter		31.99		20.60		9.75		5.95
Fourth Quarter		35.49		28.41		10.85		8.53
2010:
First Quarter		33.77		28.34		10.62		8.83
Second Quarter		33.32		28.86		10.93		8.78
Third Quarter		32.98		29.99		10.43		9.12
Fourth Quarter		34.09		30.76		11.13		9.71
December		33.04		31.30		10.71		10.06
2011:
First Quarter		32.42		25.92		10.82		8.78
January		32.07		30.07		10.44		9.85
February		32.42		27.84		10.82		9.22
March		27.64		25.92		9.23		8.58
Second Quarter
April		28.42		27.15		9.87		9.18
May		28.72		27.29		9.94		9.17
June (through June 7)		28.01		27.71		9.56		9.41

Our bylaws prohibit ownership of our shares by non-Mexican investors. As of March 31, 2011, 43% of our shares were represented by CPOs, and 9.1% of the CPOs were held by the depositary. According to our depositary bank, as of December 31, 2010, 9.2% of our outstanding shares were represented by ADSs, and such ADSs were held by 60 holders with registered addresses in the United States. As of December 31, 2010, there were 649,427,886 shares outstanding.

As permitted by the Mexican Securities Market Law and the Rules promulgated by the Mexican Banking and Securities Commission, we may create a reserve fund from which we may repurchase our shares on the Mexican Stock Exchange at prevailing prices to the extent of funds remaining in this reserve account. We created this reserve account beginning in 1992. Any shares so repurchased will not be deemed to be outstanding for purposes of calculating any quorum or voting at a shareholders’ meeting during the period in which we own such shares. As of December 31, 1999, 2,570,000 shares had been repurchased. After 1999, we did not make any repurchases until October 9, 2008. On April 3, 2008, our shareholders approved the use of Ps.750.5 million for the repurchase reserve for the year 2008. In 2008, we repurchased 4,978,000 shares in the nominal amount of Ps.69.0 million. On April 16, 2010, our shareholders approved the use of Ps.729.6 million for the repurchase reserve for the year 2009. In 2009, we repurchased 371,500 shares in the nominal amount of Ps.5.2 million. On April 16, 2010, our shareholders approved the use of Ps.726.8 million for the repurchase reserve for the year 2010. In 2010, we made no share repurchases. On April 14, 2011, our shareholders approved the use of Ps.1,000 million for the repurchase reserve for the year 2011. Since January 2011, we have repurchased 7,545,300 shares in the amount of Ps.199.7 million. See “Item 10. Additional Information — Purchase by the Company of its Shares.”

Trading on the Mexican Stock Exchange

The Mexican Stock Exchange, located in Mexico City, is the only stock exchange in Mexico. Founded in 1894, it ceased operations in the early 1900s, and was reestablished in 1907. The Mexican Stock Exchange is organized as a public company. Member firms are exclusively authorized to trade on the floor of the Exchange. Trading on the Mexican Stock Exchange takes place exclusively through an automated inter-dealer quotation system known as SENTRA, which is open between the hours of 8:30 a.m. and 3:00 p.m., Mexico City time, each business day. Trading is performed electronically and is continuous. Trades in securities listed on the Mexican Stock Exchange can, subject to certain requirements, also be effected off the Exchange. Due primarily to tax considerations, however, most transactions in listed Mexican securities are effected through the Exchange. The Mexican Stock Exchange operates a system of automatic suspension of trading in shares of a particular issuer as a means of controlling excessive price volatility. The suspension procedures will not apply to shares that are directly or indirectly (through ADSs or other equivalent instruments) quoted on a stock exchange outside Mexico. Settlement is effected two business days after a share transaction is effected on the Mexican Stock Exchange. Deferred settlement, even if by mutual agreement, is not permitted without the approval of the Mexican Banking and Securities Commission. Most securities traded on the Mexican Stock Exchange are on deposit with S.D. Indeval Institucion para el Deposito de Valores, S.A. de C.V., a privately owned central securities depositary that acts as a clearing house, depositary, custodian and registrar for Mexican Stock Exchange transactions, eliminating the need for the physical transfer of shares.

The Mexican Stock Exchange is one of Latin America’s largest exchanges in terms of market capitalization, but it remains relatively small and illiquid compared to major world markets, and therefore subject to greater volatility.

As of December 31, 2010, 133 Mexican companies, excluding mutual funds, had equity listed on the Mexican Stock Exchange. In 2010, the ten most actively traded equity issues (excluding banks) represented approximately 75% of the total volume of equity

issues traded on the Mexican Stock Exchange. Although the public participates in the trading of securities, a major part of the activity of the Mexican Stock Exchange reflects transactions by institutional investors. There is no formal over-the-counter market for securities in Mexico. The market value of securities of Mexican companies is, to varying degrees, affected by economic and market conditions in other emerging market countries.

Limitations Affecting ADS Holders and CPO Holders

Each of our ADSs represents four CPOs, and each CPO represents a financial interest in one share of common stock. Each share entitles the holder thereof to one vote at any of our shareholders’ meetings. Holders of CPOs are not entitled to vote the shares underlying such CPOs. Such voting rights are exercisable only by the CPO trustee, which is required to vote all such shares in the same manner as the holders of a majority of the shares that are not held in the CPO trust and that are voted at the relevant meeting.

Whenever a shareholders’ meeting approves a change of corporate purpose, change of nationality or restructuring from one type of corporate form to another, any shareholder who has voted against such change or restructuring has the right to withdraw from us and receive an amount equal to the book value of its shares (in accordance with our latest balance sheet approved by the annual ordinary general meeting), provided such shareholder exercises its right to withdraw during the 15-day period following the meeting at which such change or restructuring was approved. Because the CPO trustee is required to vote the shares held in the CPO trust in the same manner as the holders of a majority of the shares that are not held in the CPO trust and that are voted at the relevant meeting, appraisal rights will not be available to holders of CPOs.

Under Article 51 of the Mexican Securities Law, holders of at least 20% of our outstanding shares may have any resolution adopted by a shareholders’ meeting suspended by filing a complaint with a court of law within 15 days after the close of the meeting at which such action was taken by stating that the challenged action violates Mexican law or our corporate charter. To be entitled to relief, the holder (or the CPO trustee, in the case of CPOs) must not have attended the meeting or, if such holder attended, must have voted against the challenged action. Such relief will not be available to holders of CPOs or ADSs.

Item 10.Additional Information

A. MEMORANDUM AND ARTICLES OF INCORPORATION

Set forth below is a brief summary of certain significant provisions of our bylaws and Mexican law. This description does not purport to be complete and is qualified by reference to our bylaws, which have been filed as an exhibit to this annual report. For a description of the provisions of our bylaws relating to our Board of Directors and statutory auditors, see “Item 6. Directors, Senior Management and Employees.”

Organization and Register

We are asociedad anonima bursatil de capital variableorganized in Mexico under the Mexican Securities Market Law(Ley del Mercado de Valores)and the Mexican Companies Law(Ley General de Sociedades Mercantiles). We were registered in the Public Registry of Commerce of Mexico City on July 25, 1979, under folio number 8723. Our object and purpose according to Section 2 of our bylaws is (a) to hold an interest in the capital stock or equity of all types of legal persons; (b) to acquire any type of rights on all types of securities, of any type of legal person, as well as to dispose of and negotiate such securities; (c) to act as agent or representative of natural or legal persons; (d) to undertake all types of commercial or industrial activities allowed by law; (e) to obtain all types of loans or credit instruments; (f) to grant any type of financing or loan to companies, associations, trusts, and institutions in which the Company has an interest or holding; (g) to grant all types of personal and real guaranties, and guaranties for obligations or credit instruments to companies, associations, trusts, and institutions in which the Company has an interest or share; (h) to subscribe to and issue all types of credit instruments, as well as to endorse them; (i) to acquire, lease, usufruct, exploit, and sell chattels and real property required for its establishment, as well as to purchase and sell other things that are required to achieve its objectives; (j) to acquire, use and in general, dispose of industrial property rights, as well as copyrights, options thereon and preferences; and (k) to enter into, grant, and execute all acts, regardless of their legal nature, which it deems necessary or convenient for the realization of the aforementioned objectives, including associating with other national or foreign persons.

Voting Rights

Each share entitles the holder thereof to one vote at any meeting of our shareholders. Holders of CPOs are not entitled to vote the shares underlying such CPOs. Such voting rights are exercisable only by the CPO trustee, which is required to vote all such shares in the same manner as the holders of a majority of the shares that are not held in the CPO trust and that are voted at the relevant meeting. ADS holders are entitled only to the rights of CPO holders and thus are not entitled to exercise any voting rights with respect to the shares or to attend our stockholders’ meetings.

Under Mexican Law, holders of shares of any series are entitled to vote as a class on any action that would prejudice the rights of holders of shares of such series but not rights of holders of shares of other series, and a holder of shares of such series would be entitled to judicial relief against any such action taken without such a vote. The determination whether an action requires a class vote on these grounds would initially be made by our Board of Directors or other party calling for shareholder action. A negative determination would be subject to judicial challenge by an affected shareholder, and the necessity for a class vote would ultimately be determined by a court. There are no other procedures for determining whether a proposed shareholder action requires a class vote, and Mexican law does not provide extensive guidance on the criteria to be applied in making such a determination.

Under the Mexican Securities Market Law and the Mexican Companies Law, the shareholders are authorized to create voting agreements. However, shareholders must notify our company of any such agreements and make disclosure to the public. Our bylaws require that any voting agreement that involves more than 5% of our outstanding shares be authorized by our Board of Directors.

Shareholders’ Meetings

General shareholders’ meetings may be ordinary meetings or extraordinary meetings. Extraordinary general meetings are those called to consider certain matters specified in Article 182 of the Mexican Companies Law, including, principally, amendments of the bylaws, liquidation, merger, spin-off, change in nationality and transformation from one type of company to another. General meetings called to consider all other matters are ordinary meetings.

An ordinary general meeting must be held during the four months following the end of each fiscal year to consider the approval of the report of our Board of Directors regarding our performance and our consolidated financial statements and that of certain of our subsidiaries for the preceding fiscal year, to elect directors and to determine the allocation of the profits of the preceding year. At such ordinary general meeting, any shareholder or group of shareholders representing 10% or more of the outstanding shares has the right to appoint one director. The shareholders establish the number of directors at each annual ordinary general meeting.

The quorum for ordinary general meetings is 50% of the outstanding shares and action may be taken by a majority of the shares present. If a quorum is not present, a subsequent meeting may be called at which action may be taken by holders of a majority of the shares present regardless of the percentage of outstanding shares represented at such meeting. The quorum for extraordinary general meetings is 75% of the outstanding shares, but if a quorum is not present a subsequent meeting may be called. The quorum for each subsequent meeting is 50% of the outstanding shares. Action at any extraordinary general meeting may only be taken by holders of at least 50% of the outstanding shares provided, however, that a quorum of 85% and approval of at least 80% of the outstanding shares, will be required to approve the following (1) mergers, other than mergers with subsidiaries; and (2) amendment or deletion of the provision in the bylaws that regulate share ownership of the company, shareholders’ meetings and the Board of Directors.

Shareholders’ meetings may be called by the chairman of our Board of Directors, the chairman of Audit Committee or the chairman of the Corporate Practices, Finance, Planning and Sustainability Committee and must be called by any such chairman upon the written request of holders of at least 10% of our outstanding share capital. In addition, any such chairman shall call a shareholders’ meeting at the written request of any shareholder if no shareholders’ meeting has been held for two consecutive years or if the shareholders’ meetings held during such period have not considered the preceding year’s board of director’s report or our consolidated financial statements or have not the elected directors and determined their compensation. Notice of meetings must be published in a major newspaper in Mexico City. Meetings must be held in Mexico City. A proxy may represent a shareholder at a shareholders’ meeting.

Holders of 20% of our outstanding shares may oppose any resolution adopted at a shareholders’ meeting and file a petition for a court order to suspend the resolution temporarily within 15 days following the adjournment of the meeting at which the action was taken, provided that the challenged resolution violates Mexican law or our bylaws and the opposing shareholders neither attended the meeting nor voted in favor of the challenged resolution. In order to obtain such a court order, the opposing shareholder must deliver a bond to the court in order to secure payment of any damages that we may suffer as a result of suspending the resolution in the event that the court ultimately rules against the opposing shareholder. Shareholders representing at least 10% of the shares present at a

shareholders’ meeting may request to postpone a vote on a specific matter on which they consider themselves to be insufficiency informed.

Dividend Rights

At the annual ordinary general meeting, our Board of Directors submits to the shareholders for their approval our consolidated financial statements and of certain of our subsidiaries. Five percent of our net earnings must be allocated to a legal reserve fund, until such fund reaches an amount equal to at least 20% of our share capital. Additional amounts may be allocated to other reserve funds as the shareholders determine. The remaining balance, if any, of net earnings may be distributed as dividends on the shares. Cash dividends on the shares will be paid against surrender to us of the relevant dividend coupon registered in the name of the holder thereof.

Holders of CPOs are entitled to receive the economic benefits corresponding to the shares underlying the CPOs, at the time that we declare and pay dividends or make distributions to stockholders, and to receive the proceeds of the sale of such shares at the termination of the CPO trust agreement. The CPO trustee will distribute cash dividends and other cash distributions received by it in respect of the shares held in the CPO trust to the holders of the CPOs in proportion to their respective holdings, in each case in the same currency in which they were received. Dividends paid with respect to shares underlying the CPOs will be distributed to the holders (including the depositary) on the business day on which Indeval receives the funds on behalf of the CPO trustee.

If our distribution consists of a dividend in shares, such shares will be held in the CPO trust and the CPO trustee will distribute to the holders of outstanding CPOs, in proportion to their holdings, additional CPOs in an aggregate number equal to the aggregate number of shares received by the CPO trustee as such dividend. If the maximum amount of CPOs that may be delivered under the CPO deed would be exceeded as a result of a dividend in shares, a new CPO deed would need to be entered into setting forth that new CPOs (including those CPOs exceeding the number of CPOs authorized under the CPO deed) may be issued. In the event that the CPO trustee receives any distribution with respect to shares held in the CPO trust other than in the form of cash or additional shares, the CPO trustee will adopt such method as it may deem legal, equitable and practicable to effect the distribution of such property.

If we offer or cause to be offered to the holders of shares the right to subscribe for additional shares, subject to applicable law, the CPO trustee will offer to each holder of CPOs the right to instruct the CPO trustee to subscribe for such holder’s proportionate share of such additional shares (subject to such holder’s providing the CPO trustee with the funds necessary to subscribe for such additional shares). Neither the CPO trustee nor we are obligated to register such rights, or the related shares, under the Securities Act. If the offering of rights is possible, under applicable law and without registration under the Securities Act or otherwise, and CPO holders provide the CPO trustee with the necessary funds, the CPO trustee will subscribe for the corresponding number of shares, which will be placed in the CPO trust, and deliver additional CPOs through Indeval in respect of such shares to the applicable CPO holders pursuant to the CPO deed or, to the extent possible, pursuant to a new CPO deed.

According to Mexican law, dividends or other distributions and the proceeds from the sale of the shares held in the CPO trust that are not received or claimed by a CPO holder within three years from the receipt of such dividends or distributions or ten years from such sale will become the property of the estate of the Mexican Ministry of Health.

The Bank of New York as depository, is required to convert, as soon as possible, into U.S. dollars, all cash dividends and other cash distributions denominated in Mexican pesos (or any other currency other than U.S. dollars) that it receives in respect of the deposited CPOs, and to distribute the amount received to the holders of American Depositary Receipts, or ADRs, in proportion to the number of ADSs evidenced by such holder’s ADRs without regard to any distinctions among holders on account of exchange restrictions or the date of delivery of any ADR or ADRs or otherwise. The amount distributed will be reduced by any amounts to be withheld by us, the CPO trustee and the depositary, including amounts on account of any applicable taxes and certain other expenses. If the depositary determines that in its judgment any currency other than U.S. dollars received by it cannot be so converted on a reasonable basis and transferred, the depositary may distribute such foreign currency received by it or in its discretion hold such foreign currency (without liability for interest) for the respective accounts of the ADR holders entitled to receive the same.

If we declare a dividend in, or free distribution of, additional shares, upon receipt by or on behalf of the depositary of additional CPOs from the CPO trustee, the depositary may with our approval, and shall if we so request, distribute to the holders of outstanding ADRs, in proportion to the number of ADSs evidenced by their respective ADRs, additional ADRs evidencing an aggregate number of ADSs that represents the number of CPOs received as such dividend or free distribution. In lieu of delivering ADRs for fractional ADSs in the event of any such distribution, the depositary will sell the amount of CPOs represented by the

aggregate of such fractions and will distribute the net process to holders of ADRs in accordance with the deposit agreement. If additional ADRs (other than ADRs for fractional ADSs) are not so distributed, each ADS shall thereafter also represent the additional CPOs distributed in respect of the CPOs represented by such ADS prior to such dividend or free distribution.

Changes in Share Capital and Preemptive Rights

The fixed portion of our capital stock may only be increased or decreased by resolution of an extraordinary general meeting, whereas the variable portion of our capital stock may be increased or decreased by resolution of an ordinary general meeting.

In the event of a capital increase, each holder of existing shares has a preferential right to subscribe for a sufficient number of new shares to maintain the holder’s existing proportionate holding of shares. Preemptive rights must be exercised within 15 days after publication of a notice of the capital increase in the Official Gazette of the Federation(Diario Oficial de la Federacion) or they will lapse. Preemptive rights may not be waived in advance by a shareholder except under limited instances, and cannot be represented by an instrument that is negotiable separately from the corresponding share. Shares issued by us in connection with an increase in its variable capital, with respect to which preemptive rights have not been exercised, may be sold by us on terms previously approved by the shareholders’ meeting or the Board of Directors, but in no event below the price at which they had been offered to shareholders.

Holders of CPOs or ADSs that are U.S. persons or are located in the United States may be restricted in their ability to participate in the exercise of such pre-emptive rights.

Shares issued under Article 53 of the Mexican Securities Market Law (which are those held in treasury to be delivered upon their subscription) may be offered for subscription and payment by the Board of Directors without preemptive rights being applicable, provided that the issuance is made to effect a public offering in accordance with the Mexican Securities Market Law.

Limitations on Share Ownership

Our bylaws prohibit ownership of the shares by foreign investors. Any acquisition of shares in violation of such provision would be null and void under Mexican law and such shares would be canceled and our share capital accordingly reduced. Non-Mexican nationals may, however, hold financial interests in shares through the CPOs issued under the CPO trust.

Pursuant to our amended bylaws, significant acquisitions of shares of our capital stock and changes of control require prior approval of our Board of Directors. Our Board of Directors must authorize in advance any transfer of voting shares of our capital stock that would result in any person or group becoming a holder of 5% or more of our shares. Any acquisition of shares of our capital stock representing more than 15% of our capital stock by a person or group of persons requires the purchaser to make a public offer for the greater of:

	•		the percentage of shares sought, or

	•		10 percent of the total shares.

If the tender offer is oversubscribed, shares sold will be allocated on a pro rata basis among the selling shareholders. If the authorized purchase of shares is for the intent of acquiring control of us, the purchaser must make an offer to purchase 100 percent of the shares.

The public offer to purchase must be made at the same price for all shares. The offer price is required to be highest of:

	•		the book value of the shares,

	•		the highest closing price on the Mexican Stock exchange during the 365 days preceding the date of the authorization, or

	•		the highest price paid at any time by the persons intending to purchase the shares.

Notwithstanding the foregoing, the Board of Directors may authorize that the public offer be made at a different price, which may be based the prior approval of the Audit Committee and an independent valuation.

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These provisions shall not apply in cases of transfer of shares as a result of death, the repurchase or amortization of shares, subscription of shares in exercise of preferential rights, or by us and our subsidiaries, or by the person who maintains effective control of us.

Delisting

In the event that we decide to cancel the registration of our shares with the National Registry of Securities(Registro Nacional de Valores)or the CNBV, orders this deregistration, our shareholders who are deemed to have “control” will be required to make a tender offer to purchase the shares held by minority shareholders prior to such cancellation. Shareholders deemed to have “control” are those that own a majority of our common shares, have the ability to control our shareholders’ meetings, or have the ability to appoint a majority of the members of our Board of Directors. The price of the offer to purchase will generally be the higher of:

	•		the average trading price on the Mexican Stock Exchange during the last 30 days on which the shares were quoted prior to the date on which the tender offer is made; and

	•		the book value of the shares as reflected in our latest quarterly financial information filed with the CNBV and the Mexican Stock Exchange.

In accordance with the applicable regulations, in the event that our controlling shareholders are unable to purchase all of our outstanding shares pursuant to a tender offer, they must form a trust and contribute to it the amount required to secure payment of the purchase price offered pursuant to the tender offer to all of our shareholders that did not sell their shares pursuant to the tender offer. The trust must exist for a period of at least six months.

Controlling shareholders are not required to make a tender offer if the deregistration is approved by 95% of our shareholders. Nevertheless, the trust mechanism described in the previous paragraph still must be implemented.

Five business days prior to the commencement of the tender offer, our Board of Directors must make a determination with respect to the fairness of the terms of the offer, taking into account the rights of our minority shareholders, and disclose its opinion, which must refer to the justifications for the offer price. If the Board of Directors is precluded from making this determination as a result of a conflict of interest, the board’s resolution must be based on a fairness opinion issued by an expert selected by the Audit Committee.

Certain Minority Rights

Mexican law includes a number of minority shareholder protections. These minority protections include provisions that permit:

	•		holders of at least 10% of our outstanding share capital to vote (including in a limited or restricted manner) to call a shareholders’ meeting;

	•		holders of at least 10% of our outstanding share capital to appoint one member of our Board of Directors;

	•		holders of at least 5% of our outstanding share capital (represented by shares or CPOs) to bring an action against our directors, members of the Audit Committee and secretary of Board for violations of their duty of care or duty of loyalty, if

	•		the claim covers all of the damage alleged to have been caused by us and not merely the damage suffered by the plaintiff, and

	•		any recovery is for our benefit and not the benefit of the plaintiffs;

	•		holders of at least 10% of our shares who are entitled to vote (including in a limited or restricted manner) at any shareholders’ meeting to request that resolutions, with respect to any matter on which were not sufficiently informed, be postponed; and

	•		holders of at least 20% of our outstanding share capital to contest and suspend any shareholder resolution, subject to certain requirements under Mexican law.

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Other Provisions

Duration

Our corporate existence under our bylaws is unlimited, but may be terminated by resolution of an extraordinary general meeting of shareholders.

Conflict of Interest

A shareholder must abstain from voting in a shareholders’ meeting on a transaction in which the shareholder’s interest conflicts with our interest. If the shareholder nonetheless votes, such shareholder may be liable for damages, but only if the transaction would not have been approved without the vote of such shareholder. In addition, any director who has a conflict of interest with us relating to a proposed transaction must disclose the conflict and refrain from voting on the transaction or may be liable for damages.

Appraisal Rights

Whenever a shareholders’ meeting approves a change of corporate purpose, change of nationality or restructuring from one type of corporate form to another, any shareholder who has voted against such change or restructuring has the right to withdraw and receive an amount equal to the book value of its shares (in accordance with the latest balance sheet approved by the annual ordinary general meeting), provided such shareholder exercises its right to withdraw during the 15 day period following the meeting at which such change or restructuring was approved. Because the CPO trustee is required to vote the shares held in the CPO trust in the same manner as the holders of a majority of the shares that are not held in the CPO trust and that are voted at the relevant meeting, appraisal rights will not be available to holder of CPOs.

Purchase by the Company of its Shares

We may purchase shares for cancellation pursuant to a decision of our extraordinary general meeting of shareholders. We may also repurchase shares on the Mexican Stock Exchange at the then prevailing market prices. Any such repurchase must be approved by our Board of Directors, and must be paid for using shareholders’ equity. If, however, the repurchased shares will be converted into treasury shares, we may allocate our capital toward such repurchases. The corporate rights corresponding to such repurchased shares may not be exercised during the period in which such shares are owned by us, and such shares will not be deemed to be outstanding for purposes of calculating any quorum or vote at a shareholders’ meeting during such period. The repurchased shares (including any received as dividends) must be resold on the Mexican Stock Exchange.

Purchase of Shares by Subsidiaries of the Company

Companies or other entities controlled by us may not purchase, directly or indirectly, shares or shares of companies or entities that are our shareholders.

Rights of Shareholders

The protections afforded to minority shareholders under Mexican law are different from those in the United States and many other jurisdictions. The substantive law concerning fiduciary duties of directors has not been the subject of extensive judicial interpretation in Mexico, unlike many states in the United States where duties of care and loyalty elaborated by judicial decisions help to shape the rights of minority shareholders. Mexican civil procedure does not contemplate class actions or shareholder derivative actions, which permit shareholders in U.S. courts to bring actions on behalf of other shareholders or to enforce rights of the corporation itself. Shareholders cannot challenge corporate action taken at a shareholders’ meeting unless they meet certain procedural requirement, as described above under “Shareholders’ Meetings.”

As a result of these factors, in practice it may be more difficult for our minority shareholders to enforce rights against us or our directors or controlling shareholders than it would be for shareholders of a U.S. company.

In addition, under the U.S. securities laws, as a foreign private issuer we are exempt from certain rules that apply to domestic U.S. issuers with equity securities registered under the U.S. Securities Exchange Act of 1934, as amended, including the proxy

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solicitation rules, the rules requiring disclosure of share ownership by directors, officers and certain shareholders. We are also exempt from certain of the corporate governance requirements of the NYSE.

Enforceability of Civil Liabilities

We are organized under the laws of Mexico, and most of our directors, officers and controlling person reside outside the United States. In addition, all or a substantial portion of our subsidiaries and their assets are located in Mexico. As a result, it may be difficult for investors to effect service of process within the United States on such persons. It may also be difficult to enforce against them, either inside or outside the United States, judgments obtained against them in U.S. courts, or to enforce in U.S. courts judgments obtained against them in courts in jurisdictions outside the United States, in any action based on civil liabilities under the U.S. federal securities laws. There is doubt as to the enforceability against such persons in Mexico, whether in original actions or in actions to enforce judgments of U.S. courts, of liability based solely on the U.S. federal securities laws.

B. EXCHANGE CONTROLS

Mexico has had a free market for foreign exchange since 1991 and the government has allowed the Mexican peso to float freely against the U.S. dollar since December 1994. We cannot assure you that the government will maintain its current foreign exchange policies. See “Item 3. Key Information — Exchange Rates.”

C. TAXATION

The following summary contains a description of the principal U.S. federal income and Mexican federal tax consequences of the purchase, ownership and disposition of CPOs or ADSs by a holder that is a citizen or resident of the United States or a U.S. domestic corporation or that otherwise will be subject to U.S. federal income tax on a net income basis in respect of the CPOs or ADSs (a “U.S. holder”), but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase CPOs or ADSs. In particular, the summary deals only with U.S. holders that will hold CPOs or ADSs as capital assets and does not address the tax treatment of U.S. holders that own (or are deemed to own) 10% or more of our voting shares or that may be subject to special tax rules, such as banks, insurance companies, dealers in securities or currencies, persons that will hold CPOs or ADSs as a position in a “straddle” for tax purposes and persons that have a “functional currency” other than the U.S. dollar.

The summary is based on tax laws of the United States and the federal income tax laws of Mexico as in effect on the date of this annual report, including the provisions of the income tax treaty between the United States and Mexico (and the protocols thereto), or the Tax Treaty, which are subject to change. Holders of CPOs or ADSs should consult their own tax advisers as to the U.S., Mexican or other tax consequences of the purchase, ownership and disposition of CPOs or ADSs, including, in particular, the effect of any foreign, state or local tax laws.

For purposes of this summary, the term “non-resident holder” means a holder that is not a resident of Mexico and that will not hold CPOs or ADSs or a beneficial interest therein in connection with the conduct of a trade or business through a permanent establishment in Mexico.

For purposes of Mexican taxation, a natural person is a resident of Mexico, among other circumstances, if he has established his home or his vital interests in Mexico. Under Mexican law, individuals are considered to have their core of vital interests in Mexico if more than 50% of their income in any calendar year is from Mexican sources, or if their main center of professional activity is located in Mexico. Natural persons that are employed by the Mexican government will be deemed to be a resident of Mexico, even if their center of vital interests is in another country. A legal entity is a resident of Mexico either if it has its principal place of business or its place of effective management in Mexico. If a non-resident has a permanent establishment in Mexico for tax purposes, all income attributable to such permanent establishment will be subject to Mexican taxes, in accordance with applicable tax laws.

In general, for U.S. federal income tax purposes, holders of ADSs or CPOs will be treated as the beneficial owners of the shares represented by those ADSs or CPOs.

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Taxation of Dividends

Mexican Tax Considerations

Under Mexican income tax law, dividends, either in cash or in kind, paid to non-resident holders with respect to the shares represented by the ADSs or CPOs are not subject to any Mexican withholding or similar tax.

U.S. Tax Considerations

The gross amount of any dividends paid with respect to the shares represented by ADSs or CPOs generally will be includible in the gross income of a U.S. holder on the day on which the dividends are received by the CPO trustee (which will be the same date as the date of receipt by the Depositary) and will not be eligible for the dividends received deduction allowed to corporations under the Internal Revenue Code of 1986. Dividends, which will be paid in Mexican pesos, will be includible in the income of a U.S. holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day they are received by the CPO trustee. U.S. holders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any Mexican pesos received that are converted into U.S. dollars on a date subsequent to receipt. Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual prior to January 1, 2013 will be subject to taxation at a maximum rate of 15% if the dividends are “qualified dividends.” Dividends paid will be treated as qualified dividends if (1) the securities with respect to the which the dividends are received are readily tradable on an established securities market in the United States or we are eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service has approved for the purposes of the qualified dividend rules and (2) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company, or PFIC. The ADSs are listed on the New York Stock Exchange, and will qualify as readily tradable on an established securities market in the United States so long as they are so listed. The Tax Treaty has been approved for the purposes of the qualified dividend rules. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2010 taxable year. In addition, based on our audited financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our 2011 taxable year.

The U.S. Treasury has announced its intention to promulgate rules pursuant to which holders of ADSs or ordinary stock and intermediaries through whom such securities are held will be permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because such procedures have not yet been issued, it is not clear whether we will be able to comply with them. Holders of ADSs, CPOs and ordinary shares should consult their own tax advisers regarding the availability of the reduced dividend tax rate in the light of their own particular circumstances.

Dividends generally will constitute foreign source income for U.S. foreign tax credit purposes.

Distributions to holders of additional shares with respect to their ADSs or CPOs that are made as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

A holder of CPOs or ADSs that is a non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on dividends received , unless such income is effectively connected with the conduct by the non-U.S. holder of a trade or business in the United States.

Taxation of Dispositions of ADSs or CPOs

Mexican Tax Considerations

Gain on the sale or other disposition of ADSs by a non-resident holder will not be subject to Mexican tax. Deposits of CPOs in exchange for ADSs and withdrawals of CPOs in exchange for ADSs will not give rise to Mexican tax or transfer duties.

Gain on the sale of CPOs by a non-resident holder will not be subject to any Mexican tax so long as (i) the transaction is carried out through the Mexican Stock Exchange or a securities market approved by the Mexican Ministry of Finance and Public Credit and (ii) the holder does not beneficially own and, within 24 months of the transaction, dispose of 10% or more of the capital stock of the CPO issuer. If these requirements are not met, the gain on the sale of CPOs or shares by a non-resident holder entity will be subject to a 5% Mexican withholding tax on the price obtained without any deductions allowed, if the transaction is carried out through the Mexican Stock Exchange and provided certain requirements set forth by the Mexican income tax law are complied with.

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Alternatively, the non-resident holder can choose to be subject to a 20% withholding rate on the gain obtained which gain should be calculated pursuant to Mexican income tax law provisions.

Gain on sales or other dispositions of CPOs or shares made in other circumstances generally would be subject to Mexican tax, regardless of the nationality or residence of the transferor. However, under the Tax Treaty, a non-Mexican holder that is eligible to claim the benefits of the Tax Treaty will be exempt from Mexican tax on gains realized on a sale or other disposition of CPOs or shares in a transaction that is not carried out through the Mexican Stock Exchange or such other approved securities markets, so long as the holder did not own, directly or indirectly, 25% or more of our capital stock (including ADSs) within the 12-month period preceding such sale or other disposition.

U.S. Tax Considerations

Gain or loss realized by a U.S. holder on the sale or other disposition of ADSs or CPOs will be subject to U.S. federal income taxation as capital gain or loss in an amount equal to the difference between the amount realized on the disposition and such U.S. holder’s tax basis in the ADSs or the CPOs. Gain or loss realized by a U.S. holder on such sale, redemption or other disposition generally will be long-term capital gain or loss if, at the time of the disposition, the ADSs or the CPOs have been held for more than one year. The net amount of long-term capital gain recognized by an individual is taxed at reduced rate of tax. Deposits and withdrawals of CPOs by U.S. holders in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes.

Gain, if any, realized by a U.S. holder on the sale or other disposition of CPOs or ADSs will be treated as U.S. source income for U.S. foreign tax credit purposes. Consequently if a Mexican withholding tax is imposed on the sale or disposition of CPOs, a U.S. holder that does not receive significant foreign source income from other sources may not be able to derive effective U.S. foreign tax credit benefits in respect of these Mexican taxes. U.S. holders should consult their own tax advisors regarding the application of the foreign tax credit rules to their investment in, and disposition of CPOs.

A non-U.S. holder of CPOs or ADSs will not be subject to U.S. federal income or withholding tax on gain realized on the sale of CPOs or ADSs, unless:

	•		such gain is effectively connected with the conduct by the non-U.S. holder of a trade or business in the United States, or

	•		in the case of gain realized by an individual non-U.S. holder, the non-U.S. holder is present in the United States for 183 days or more in the taxable year of the sale and certain other conditions are met.

Other Mexican Taxes

There are no Mexican inheritance, gift, succession or value-added taxes applicable to the ownership, transfer or disposition of debentures, ADSs or CPOs by non-resident holders; provided, however, that gratuitous transfers of CPOs may in certain circumstances cause a Mexican federal income tax to be imposed upon the recipient. There are no Mexican stamp, issue, registration or similar taxes or duties payable by non-resident holders of debentures, ADSs or CPOs.

United States Backup Withholding and Information Reporting

A U.S. holder of ADSs or CPOs may, under certain circumstances, be subject to “backup withholding” with respect to certain payments to such U.S. holder, such as dividends, or the proceeds of a sale or disposition of ADSs or CPO unless such holder (1) is a corporation or comes within certain exempt categories, and demonstrates this fact when so required, or (2) provides a correct taxpayer identification number, certifies that it is not subject to backup withholding and otherwise complies with applicable requirements of the backup withholding rules. Any amount withheld under these rules does not constitute a separate tax and will be creditable against the holder’s U.S. federal income tax liability. While non-U.S. holders generally are exempt from backup withholding, a non-U.S. holder may, in certain circumstances, be required to comply with certain information and identification procedures in order to prove this exemption.

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D. DOCUMENTS ON DISPLAY

The materials included in this annual report on Form 20-F, and exhibits thereto, may be inspected and copied at the Securities and Exchange Commission’s public reference room in Washington, D.C. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference rooms. The Securities and Exchange Commission maintains a Web site at http://www.sec.gov that contains reports and information statements and other information regarding us. The reports and information statements and other information about us can be downloaded from the Securities and Exchange Commission’s Web site.

Item 11.Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk from changes in currency exchange rates and interest rates. From time to time, we assess our exposure and monitor our opportunities to manage these risks. We monitor our revenue and debt composition and perform market analysis to anticipate any interest rate changes.

Instruments for Trading Purposes and for Other-Than-Trading Purposes. At December 31, 2010, we had outstanding approximately Ps.31,847 million notional amount of derivative financial instruments for purposes other than trading and Ps.2,347 million notional amount of derivative financial instruments for trading (as classified according to financial reporting standards). We enter into derivative financial instruments to hedge our exposure to interest rate and foreign currency exchange risk related to the financing for our construction projects. When the related transaction complies with all hedge accounting requirements, we designate the derivative as a hedging financial instrument (either as a cash flow hedge, a foreign currency hedge or a fair value hedge) at the time we enter into the contract. When we enter into a derivative for hedging purposes from an economic perspective, but such derivative does not comply with all the requirements established by financial reporting standards to be hedging instruments, we designate the derivative as a trading instrument. Our policy is not to enter into derivative instruments for purposes of speculation. See “Item 5. Operating and Financial Review and Prospects — Operating Results — Critical Accounting Policies and Estimates.” There are no significant differences in the financial market risk to which our aggregated portfolios of instruments for trading purposes and those for other-than-trading purposes are exposed.

Interest Rate Risk

Interest Rate Sensitivity Analysis Disclosure

The sensitivity analyses below are based on the assumption of an unfavorable movement of basis points in interest rates, in the amounts indicated, applicable to each category of floating-rate financial liabilities. These sensitivity analyses cover all of our indebtedness and derivative financial instruments. We calculated our sensitivity by applying the hypothetical interest rate to our outstanding debt and adjusting accordingly for debt that is covered by our derivative financial instruments for such fluctuations.

At December 31, 2010, a hypothetical, instantaneous and unfavorable change of 100, 50 and 25 basis points in the interest rate applicable to floating-rate financial liabilities, including derivative financial instruments only if held for purposes other than trading, would have resulted in additional financing expense of approximately Ps.302 million, Ps.155 million and Ps.99 million per year, respectively. A hypothetical, instantaneous and unfavorable change of 100, 50 and 25 basis points in the interest rate applicable to floating-rate financial liabilities, including derivative financial instruments only if held for trading purposes, would have resulted in additional financing expense of approximately Ps.2 million, Ps.998,000 and Ps.542,000 per year, respectively.

Qualitative Information

Interest rate risk exists principally with respect to our indebtedness that bears interest at floating rates. At December 31, 2010, we had outstanding approximately Ps.32,470 million of indebtedness, of which 20% bore interest at fixed interest rates and 80% bore interest at floating rates of interest. At December 31, 2009, we had outstanding approximately Ps.23,214 million of indebtedness, of which 29% bore interest at fixed interest rates and 71% bore interest at floating rates of interest. The interest rate on our variable rate debt is determined by reference to the LIBOR and the TIIE rates.

We have entered into cash flow hedges, including with respect to foreign currency cash flow, and other trading derivative instruments for the terms of some of our long-term credit facilities with the objective of reducing the uncertainties resulting from interest rate fluctuations. See “—Risks Related to Our Operations — Our hedge contracts may not effectively protect us from financial market risks and may negatively affect our cash flow” and “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Derivative Financial Instruments.”

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Foreign Currency Risk

Foreign Currency Sensitivity Analysis Disclosure

The sensitivity analyses below assume an instantaneous unfavorable fluctuation in exchange rates affecting the foreign currencies in which our indebtedness is denominated. These sensitivity analyses cover all of our foreign currency assets and liabilities, as well our derivative financial instruments. We calculated our sensitivity by applying the hypothetical change in the exchange rate to our outstanding debt denominated in a foreign currency and adjusting accordingly for debt that is covered by our derivative financial instruments for such fluctuation.

At December 31, 2010, a hypothetical, instantaneous and unfavorable 16.16% change in the currency exchange rate applicable to our indebtedness, including derivative financial instruments only if held for purposes other than trading (and not including debt covered by trading instruments), would have resulted in an estimated foreign exchange loss of approximately Ps.185 million, reflecting the increased value in Mexican pesos of our foreign currency denominated indebtedness. We had no foreign currency derivatives classified as held for trading purposes at December 31, 2010.

Qualitative Information

Our principal exchange rate risk involves changes in the value of the Mexican peso relative to the dollar. As of December 31, 2010, approximately 26% of our consolidated revenues and 39% of our indebtedness were denominated in foreign currencies, mainly U.S. dollars. An appreciation of the Mexican peso relative to the U.S. dollar would decrease our dollar revenues when expressed in Mexican pesos. In addition, currency fluctuations may affect the comparability of our results of operations between financial periods, due to the translation of the financial results of our foreign subsidiaries, such as Rodio Kronsa. The majority of revenues and expenses of Rodio Kronsa are denominated in euros, so we believe we have a natural hedge for our exposure to exchange rate risk associated with our euro-denominated contracts. Several of our subsidiaries have lesser exposure to the foreign currency risk because a higher percentage of their revenues are denominated in U.S. dollars.

At December 31, 2010 and 2009, approximately 28% and 24% respectively, of our construction backlog was denominated in foreign currencies and approximately 46% and 58%, respectively, of our accounts receivable were denominated in foreign currencies. As of December 31, 2010 and 2009, approximately 22% and 18%, respectively, of our consolidated financial assets were denominated in foreign currencies, with the balance denominated in Mexican pesos. In addition, as of December 31, 2010 and 2009, approximately 39% and 37%, respectively, of our indebtedness was denominated in foreign currencies. Decreases in the value of the Mexican peso relative to the U.S. dollar could increase the cost in Mexican pesos of our foreign currency denominated costs and expenses and, unless contracted in the same currency as the source of repayment (as is our policy), of the debt service obligations with respect to our foreign currency denominated indebtedness. A depreciation of the Mexican peso relative to the dollar could also result in foreign exchange losses as the Mexican peso value of our foreign currency denominated indebtedness is increased, unless the source of repayment is in the same currency as the indebtedness (as is our policy). Beginning in the second half of 2008, the Mexican peso substantially depreciated against the U.S. dollar, falling 33% from July 2 to December 31, 2008. The Mexican peso stabilized in the first quarter of 2010, and continued to be stable throughout the remainder.

A severe devaluation or depreciation of the Mexican peso may also result in disruption of the international foreign exchange markets and may limit our ability to transfer or to convert Mexican pesos into U.S. dollars and other currencies for the purpose of making timely payments of interest and principal on our U.S. dollar-denominated indebtedness or obligations in other currencies. While the Mexican government does not currently restrict, and since 1982 has not restricted, the right or ability of Mexican or foreign persons or entities to convert Mexican pesos into U.S. dollars or to transfer other currencies out of Mexico, the Mexican government could institute restrictive exchange control policies in the future. We cannot assure you that the Mexican Central Bank will maintain its current policy with respect to the peso.

We have entered into cash flow hedges, including with respect to foreign currency cash flow, and other trading derivative instruments for the terms of some of our long-term credit facilities with the objective of reducing the uncertainties resulting from exchange rate fluctuations. See “—Risks Related to Our Operations — Our hedging contracts may not effectively protect us from financial market risks and may negatively affect our cash flow” and “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Derivative Financial Instruments.”

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Item 12.Description of Securities Other than Equity Securities

ADS Fees

The following table sets forth the fees and charges that a holder of our ADSs may have to pay, directly or indirectly.


	Fee or Charge Amount for ADS
	Holder depositing or
Service	withdrawing shares	Payee
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates Any cash distribution to ADS registered holders Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders	U.S.$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) U.S.$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) U.S.$.02 (or less) per ADS A fee equivalent to the fee that would be payable if securities distributed to the ADS holder had been shares and the shares had been deposited for issuance of ADSs	Bank of New York Mellon Bank of New York Mellon Bank of New York Mellon Bank of New York Mellon

Depositary services Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares	U.S.$.02 (or less) per ADSs per calendar year Registration or transfer fees	Bank of New York Mellon Bank of New York Mellon

Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) Converting foreign currency to U.S. dollars Other fees, as necessary Other fees, as necessary	Expenses of the depositary Expenses of the depositary Taxes and other governmental charges the Bank of New York Mellon or the custodian has to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes Any charges incurred by Bank of New York Mellon or its agents for servicing the deposited securities	Bank of New York Mellon Bank of New York Mellon Bank of New York Mellon Bank of New York Mellon

Fees incurred in past annual period

In 2010, we paid U.S.$11,360.58 to The Bank of New York Mellon for legal fees related to our equity offering in 2009. In January 2011, we received U.S.$92,575.2, net of tax withheld, from The Bank of New York Mellon, as depositary of our ADSs, in connection with the establishment, maintenance and operation of our ADS program. From January 2011 to April 2011, we did not receive any payments from the depository.

Fees to be paid in the future

The Bank of New York Mellon, as depositary of our ADSs, has agreed to pay the standard out-of-pocket maintenance costs for the ADSs, which consist of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, annual fees of related software programs, stationery, postage, facsimile, and telephone calls.

The depositary of our ADSs, The Bank of New York Mellon, collects its fees directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects these fees by deducting them from the amounts distributed or by selling a portion of distributable property to pay the fees. For example, the depositary may deduct from cash distributions, directly bill investors or charge the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for these services are paid.

PART II

Item 13.Defaults, Dividend Arrearages and Delinquencies

None.

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Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15.Controls and Procedures

(a) Disclosure Controls and Procedures

We have evaluated, with the participation of our chief executive officer and chief financial officer, the design and operation of our disclosure controls and procedures as of December 31, 2010.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that as of December 31, 2010, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate. Under the supervision of our Chief Executive Officer and Chief Financial Officer, our management assessed the design and effectiveness of our internal control over financial reporting as of December 31, 2010. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control — Integrated Framework.

Based on our assessment and those criteria, our management concluded that our company maintained effective internal control over financial reporting as of December 31, 2010.

Galaz, Yamazaki, Ruiz Urquiza, S.C. a member of Deloitte Touche Tohmatsu, the independent registered public accounting firm that has audited our consolidated financial statements, has issued an attestation report on the effectiveness of our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

109

To the Board of Directors and Stockholders of Empresas ICA, S.A.B. de C.V.

Mexico, Distrito Federal

We have audited the internal control over financial reporting of Empresas ICA, S.A.B. de C.V. and Subsidiaries (the “Company”), as of December 31, 2010, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2010 of the Company, and our report dated June 20, 2011 expressed an unqualified opinion on those financial statements and includes explanatory paragraphs regarding (1) Management’s decision to early adopt International Financial Reporting Standards (IFRS) for year ending December 31, 2011, considering January 1, 2010 as the Company’s “transition date”, for which reason the consolidated financial statements as of and for the year ended December 31, 2010 will be the last annual financial statements of the Company to be prepared in conformity with Mexican Financial Reporting Standards (MFRS) for public use; (2) the nature and effect of differences between accounting principles generally accepted in the United States of America and MFRS, (3) that our audit also comprehended the translation of Mexican peso amounts into U.S. dollar amounts in conformity with the basis stated in Note 2 to such consolidated financial statements and (4) that Note 28 to the financial statements was restated.

110

		Galaz, Yamazaki, Ruiz Urquiza, S.C. Member of Deloitte Touche Tohmatsu Limited

		/s/ C.P.C. Ramon Arturo Garcia Chavez C.P.C. Ramon Arturo Garcia Chavez

		Mexico City, Mexico

		June 20, 2011

(d) Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 16.[Reserved]

Item 16A.Audit Committee Financial Expert

We have determined that Ms. Elsa Beatriz Garcia Bojorges, a member of our Audit Committee, qualifies as an “audit committee financial expert” and as independent within the meaning of this Item 16A. On April 26, 2007, the shareholders affirmed in a resolution that Ms. Garcia Bojorgez is an independent member of our board. On April 14, 2011, the shareholders’ meeting appointed Ms. Bojorges as Chairman of the Audit Committee.

Item 16B.Code of Ethics

We have adopted a code of ethics, as defined in Item 16B of Form 20-F under the Securities Exchange Act of 1934, as amended. Our code of ethics applies to our chief executive officer, chief financial officer, chief accounting officer and persons performing similar functions as well as to our directors and other officers/employees. Our code of ethics is filed as an exhibit to this Form 20-F.

Item 16C.Principal Accountant Fees and Services

Audit and Non-Audit Fees

The following table sets forth the fees billed to us by our principal accounting firm, Galaz, Yamazaki, Ruiz Urquiza, S.C., member of Deloitte Touche Tohmatsu, and its affiliates, which we collectively refer to as Deloitte, during the fiscal years ended December 31, 2010 and 2009:


	Total Fees
	As of December 31,
	2010		2009
	(Millions of Mexican pesos)
Fees
Audit fees	Ps.	45.6	Ps.	39.9
Audit-related fees		4.9		5.5
Tax fees		3.4		2.3
All other fees		7.1		5.4

Total	Ps.	61.0	Ps.	53.1

The “audit fees” line item in the above table is the aggregate fees billed by Deloitte in 2010 and 2009 in connection with the audit of our annual consolidated financial statements, including an audit on our compliance with Section 404 of the Sarbanes-Oxley Act of 2002, the review of our quarterly financial statements, the review of the financial statements of certain subsidiaries and other statutory audit reports.

“Audit related fees” include other fees billed by Deloitte in 2010 and 2009 for assurance and related services that are reasonably related to the performance of the audit or review of our annual consolidated financial statements and are not reported under “audit fees”.

111

“Tax fees” include fees billed by Deloitte in 2010 and 2009 for services related to tax compliance.

The “all other fees” line item in the above table is the aggregate fees billed by Deloitte related to transfer pricing analysis, Mexican social security compliance and other advice.

Audit Committee Pre-Approval Policies and Procedures

Our Audit Committee approves all audit, audit-related services, tax services and other services provided by Deloitte. Any services provided by Deloitte that are not specifically included within the scope of the audit must be pre-approved by the Audit Committee prior to any engagement, subject to ade minimusexception allowing approval for certain services before completion of the engagement. In 2010, none of the fees paid to Deloitte was approved pursuant to thede minimus exception.

Item 16D.Exemptions from the Listing Standards for Audit Committees

None.

Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers

There were no purchases of equity securities by the issuer during 2010. The table below sets forth, for the periods indicated, the total number of shares of Empresas ICA, S.A.B. de C.V. purchased on our behalf, the average price paid per share and the total number of shares purchased in accordance with the rules and policies approved by our Board of Directors for the purchase of equity securities by the issuer. The total number of shares purchased in 2011 through March 31 during 2011 was 7,545,300 with an average price paid per share of Ps.26.47.


	Total Number of		Average Price
2011	Shares Purchased		Paid per Share
January 1-31		0	Ps.	0
February 1-28		53,000		28.03
March 1-31		7,492,300		26.46
April 1-30		0		0

Total		7,545,300	Ps.	26.47

The total number of shares repurchased by the issuer with an average price per share of Ps.26.47 represents a total amount of Ps.199,705,967.03, which amount was drawn from the repurchase reserve approved by our shareholders at our ordinary general meeting.

Item 16F.Changes in Registrant’s Certifying Accountant

Not applicable.

Item 16G.Corporate Governance

NYSE Corporate Governance Comparison

Pursuant to Section 303A.11 of the Listed Company Manual of the NYSE, we are required to provide a summary of the significant ways in which our corporate governance practices differ from those required for U.S. companies under the NYSE listing standards. We are a Mexican corporation with shares listed on the Mexican Stock Exchange. Our corporate governance practices are governed by our bylaws, the Mexican Securities Market Law and the regulations issued by the Mexican National Banking and Securities Commission. We also comply on a voluntary basis with the Mexican Code of Best Corporate Practices(Codigo de Mejores Practicas Corporativas)as indicated below, which was created in January 2001 by a group of Mexican business leaders and was endorsed by the Mexican Banking and Securities Commission. On an annual basis, we file a report with the Mexican Banking and Securities Commission and the Mexican Stock Exchange regarding our compliance with the Mexican Code of Best Corporate Practices.

The table below discloses the significant differences between our corporate governance practices and the NYSE standards.

112


NYSE Standards		Our Current Corporate Governance Practices
A majority of board of directors must be independent. §303A.01		Pursuant to the Mexican Securities Market Law and our bylaws, our shareholders are required to appoint a Board of Directors of between five and twenty-one members, 25% of whom must be independent within the meaning of the Mexican Securities Market Law, which differs from the definition of independent under the rules of the New York Stock Exchange.

		Our Board of Directors currently consists of seventeen members, of which ten are outside (i.e. non-management) directors. Ten of our directors are independent directors within the meaning of the Mexican Securities Market Law. Nine of our directors are independent directors within the meaning of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

A director is not independent if such director is:		Pursuant to our bylaws board members must be appointed based on their experience, ability and professional prestige. Our Board of Directors must meet at least every three months. Under Article 26 is of the Mexican Securities Market Law, a director is not independent if such director is:

(i) a person who the board determines has a material direct or indirect relationship with the listed company;		(i) or has been within the last year, an employee or officer of the company;

(ii) or has been within the last three years, an employee, or an immediate family member of an executive officer, of the listed company, other than employment as interim chairman or CEO;		(ii) a shareholder that, without being an employee or officer of the company, has influence or authority over the company’s officers;

(iii) or has been within the last three years, a person who receives, or whose immediate family member receives, more than $120,000 during any 12-month period in direct compensation from the listed company, other than director and committee fees and pension or other deferred compensation for prior service (and other than compensation for service as interim chairman or CEO or received by an immediate family member for service as a non-executive employee);		(iii) a partner or employee of a consultant or adviser, to the company or its affiliates, where the income from the company represents 10% or more of the overall income of such consultant or adviser;

(iv) a person who is, or whose immediate family member is, or has been within the last three years, a partner or employee of an internal or external auditor of the listed company, subject to limited exceptions for persons who did not personally work on the listed company’s audit in the last three years;		(iv) an important client, supplier, debtor or creditor (or a partner, director or employee thereof). A client and supplier is considered important when its sales to or purchases from the company represent more than 10% of the client’s or supplier’s total sales or purchases. A debtor or creditor is considered important whenever the aggregate amount of the relevant loan represents more than 15% of the debtor’s, creditor’s or the company’s aggregate assets;

(v) an executive officer, or an immediate family member of an executive officer, of another company where any of the listed company’s present executive officers at the same time serves or served on that company’s compensation committee; or

(vi) an executive officer or employee of a company, or an immediate family member of an executive officer of a company, that has made payments to, or has received payments from, the listed company, its parent or a consolidated subsidiary for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues (except for contributions to tax-exempt organizations provided that the listed company

113


NYSE Standards		Our Current Corporate Governance Practices
discloses such contributions in the company’s proxy statement or annual report)

“Immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law and anyone (other than domestic employees) who shares the person’s home. Individuals who are no longer immediate family members due to legal separation, divorce or death (or incapacity) are excluded. §303A.02(b)		(v) a “family member” related to any of the persons mentioned above in (i) through (iv). “Family member” includes a person’s spouse, concubine or other relative up to the fourth degree of consanguinity and affinity, as well as a spouse or concubine of the individuals mentioned above.

“Company” includes any parent or subsidiary in a consolidated group with the listed company.

Non-management directors must meet regularly in executive sessions without management. Independent directors should meet alone in an executive session at least once a year. §303A.03		There is no similar requirement under our bylaws or applicable Mexican law.

A listed company must have a nominating/corporate governance committee of independent directors. The committee must have a charter specifying the purpose, minimum duties and evaluation procedures of the committee. §303A.04		We are required to have a corporate practices committee pursuant to the provisions of the Mexican Securities Market Law and our bylaws. Our Corporate Practices, Finance, Planning and Sustainability Committee is composed of four directors, all of whom are independent within the meaning of the Mexican Securities Market Law and three of whom are independent within the meaning of Rule 10A-3 under the Exchange Act. The duties of our Corporate Practices, Finance, Planning and Sustainability Committee (which replaced our Corporate Practices and Sustainability Committee on April 24, 2009) include:

		• providing an opinion on the nomination of the chief executive officer,

		• assessing the performance of our senior management,

		• providing an opinion on related party transactions,

		• providing an opinion on compensation proposals for senior management,

		• reviewing certain exemptive actions of the Board of Directors,

		• proposing general guidelines for creating and monitoring compliance with our strategic plan,

		• providing an opinion on the investment and financing policies our chief executive officer proposes,

		• providing an opinion on the assumptions in the annual budget and monitoring application of the budget and our control system, and

		• evaluating risk factors that affect us and our mechanisms for controlling them.

A listed company must have a compensation committee composed entirely of independent directors, which must approve executive officer compensation. The committee must have a charter		The Corporate Practices, Finance, Planning and Sustainability Committee provides an opinion on compensation proposals for the Chief Executive Officer and other executive officers pursuant

114


NYSE Standards		Our Current Corporate Governance Practices
specifying the purpose, minimum duties and evaluation procedures of the committee. §303A.05		to the provisions of the Mexican Securities Market Law.

		Our Corporate Practices, Finance, Planning and Sustainability Committee makes recommendations as to compensation for senior and middle management to the Board of Directors, which must approve such recommendations.

A listed company must have an audit committee satisfying the independence and other requirements of Rule 10A-3 under the Exchange Act and the more stringent requirements under the NYSE standards. §§303A.06, 303A.07		We have a three-member Audit Committee, which is composed of independent directors appointed by our board. The Mexican Securities Market Law requires that our shareholders appoint the president of our Audit Committee. Currently all members of our Audit Committee are independent as such term is defined under the Mexican Securities Market Law and under Rule 10A-3 under the Exchange Act.

		However, the members of our Audit Committee are not required to satisfy the NYSE independence and other audit committee standards that are not prescribed by Rule 10A-3. Our Audit Committee complies with the requirements of the Mexican Securities Market Law and has the following attributes:

		• Our Audit Committee operates pursuant to a written charter adopted by the Audit Committee and approved by our Board of Directors.

		• Pursuant to our bylaws and Mexican law, our Audit Committee submits an annual report regarding its activities to our Board of Directors.

		• The duties of the Audit Committee include:

		• periodically evaluating our internal control to oversee our internal auditing and control systems;

		• periodically evaluating our internal control mechanisms;

		• recommending independent auditors to our Board of Directors;

		• establishing procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters controls;

		• hiring independent counsel and other advisors as it deems necessary to carry out its duties, including the review of related-party transactions; and

		• overseeing the performance of our outside auditor.

Equity compensation plans and material revisions thereto require shareholder approval, subject to limited exemptions. §303A.08		In accordance with Mexican law, our shareholders have approved our existing equity compensation plans at shareholder meetings, which plans are carried out by the board with respect to our executives.

A listed company must adopt and disclose corporate governance guidelines and a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waiver for		We have adopted a code of ethics, which has been accepted by all of our directors and executive officers and other personnel. We are required by Item 16B of this Form 20-F to disclose any

115


NYSE Standards		Our Current Corporate Governance Practices
directors or executive officers within four business days of such determination. §§303A.09, 303A.10		waivers granted to our chief executive officer, chief financial and accounting officer and persons performing similar functions.

The CEO must certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards and must promptly notify the NYSE in writing after any executive officer becomes aware of any non-compliance with the NYSE corporate governance listing standards. §303A.12		Our CEO will promptly notify the NYSE in writing if any executive officer becomes aware of any material noncompliance with any applicable provisions of the NYSE corporate governance rules.

PART III

Item 17.Financial Statements

The Registrant has responded to Item 18 in lieu of this Item.

Item 18.Financial Statements

Reference is made to pages F-1 to F-80 of this annual report.

Item 19.Exhibits


1.1		Amended and restated bylaws(estatutos sociales)of Empresas ICA, S.A.B. de C.V. (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2006) (File No. 1-11080).

1.2		Amended and restated bylaws(estatutos sociales)of ICA Fluor Daniel, S. de R.L. de C.V. (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2004) (File 1-11080).

2.1		Deposit Agreement dated April 1, 1992, as amended and restated as of June 30, 1997, among Empresas ICA Sociedad Controladora, S.A. de C.V. (currently Empresas ICA, S.A.B. de C.V.), the Bank of New York, as Depositary and Holders of American Depositary Receipts (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2004) (File No. 1-11080).

3.1		Management Trust Agreement dated April 8, 1992, as amended on April 30, 2000 (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2000) (File No. 1-11080).

3.2		CPO Trust Agreement dated May 28, 1997 (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 1996) (File No. 1-11080).

4.1		Participation Agreement dated as of June 14, 2000 thereto among Grupo Aeroportuario del Centro Norte, S.A. de C.V., the Mexican Federal Government through the Ministry of Communications and Transportation, Nacional Financiera, S.N.C., Bancomext, and Aeropuertos y Servicios Auxiliares (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2005) (File No. 1-11080).

4.2		Amendment No. 1 dated as of December 21, 2005 to the Participation Agreement dated as of June 14, 2000 thereto among Grupo Aeroportuario del Centro Norte, S.A. de C.V. (currently Grupo Aeroportuario Centro Norte, S.A.B. de C.V.), the Mexican Federal Government through the Ministry of Communications and Transportation, Nacional Financiera, S.N.C., Bancomext, and Aeropuertos y Servicios Auxiliares (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2005) (File No. 1-11080).

4.3		Amended and Restated Airport Concession Agreement relating to the Monterrey Airport dated June 29, 1998 (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2005) (File No. 1-11080).

4.4		Amended and Restated Consortium Agreement dated as of July 6, 2004 among Aeroports de Paris, Aeroinvest, S.A. de C.V. and VASA S.A. (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2005) (File No. 1-11080).

4.5		Amendment No. 1 dated as of December 13, 2005 to the Amended and Restated Consortium Agreement dated as of July 6, 2004 among Aeroports de Paris, Aeroinvest, S.A. de C.V. and VASA S.A. (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2005) (File No. 1-11080).

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4.6		Amendment No. 2 dated as of September 5, 2006 to the Amended and Restated Consortium Agreement dated as of July 6, 2004 (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2007) (File No. 1-11080).

4.7		Common Agreement dated as of October 19, 2007 among Constructora de Proyectos Hidroelectricos, S.A. de C.V., as borrower, WestLB AG, New York Branch, as intercreditor agent, the working capital facility lenders from time to time party thereto, the construction facility lenders from time to time party thereto, WestLB AG, New York Branch, as working capital administrative agent, WestLB AG, New York Branch, as construction facility administrative agent, Citibank N.A., as offshore collateral agent, Banco Nacional de Mexico, S.A., Integrante del Grupo Financiero Banamex, as onshore collateral agent, and the other lenders and lender representatives from time to time party thereto (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2007) (File No. 1-11080).

4.8		Construction Facility Credit Agreement dated as of October 19, 2007 among Constructora de Proyectos Hidroelectricos, S.A. de C.V., as borrower, the several construction facility lenders from time to time parties thereto and WestLB AG, New York Branch, as construction facility administrative agent (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2007) (File No. 1-11080).

4.9		Amended and Restated Working Capital Facility Credit Agreement dated as of October 13, 2010 among Constructora de Proyectos Hidroelectricos, S.A. de C.V., as borrower, the several Tranche A Lenders from time to time parties hereto, the several Tranche B Lenders from time to time parties hereto and WestLB AG, New York Branch, as working capital facility administrative agent.*

4.10		Lump-Sum Public Works Construction Contract (English translation) dated as of June 17, 2008 by and between the Government of the Federal District through the Directorate General of Transportation Works and Ingenieros Civiles Asociados, S.A. de C.V., as leader of a joint venture (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2008) (File No. 1-11080).

8.1		Significant subsidiaries.*

11.1		Code of Ethics (English translation) as amended on January 24, 2011*

12.1		Certification under Section 302 of the Sarbanes-Oxley Act of 2002.*

12.2		Certification under Section 302 of the Sarbanes-Oxley Act of 2002.*

13.1		Certification under Section 906 of the Sarbanes-Oxley Act of 2002.*


*		Filed herewith.

Omitted from the exhibits filed with this annual report are certain instruments and agreements with respect to our long-term debt, none of which authorizes securities or results in an incurrence of debt in a total amount that exceeds 10% of our total assets. We hereby agree to furnish to the SEC copies of any such omitted instruments or agreements as the SEC requests.

117

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.


Empresas ICA, S.A.B. de C.V.
By:	/s/ Jose Luis Guerrero Alvarez
	Name:	Jose Luis Guerrero Alvarez
	Title:	Chief Executive Officer

Date: June 29, 2011

118

INDEX TO FINANCIAL STATEMENTS
Consolidated Financial Statements of Empresas ICA, S.A.B. de C.V. and
Subsidiaries


Reports of Independent Registered Public Accounting Firms		F-2

Consolidated Statements of Financial Position as of December 31, 2010 and 2009		F-4

Consolidated Statements of Income for the Years Ended December 31, 2010, 2009 and 2008		F-6

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2010, 2009 and 2008		F-7

Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008		F-9

Notes to Consolidated Financial Statements		F-11

F-1

Report of Independent Registered Public Accounting Firm to the Board of Directors and Stockholders of Empresas ICA, S. A. B. de C. V.

We have audited the accompanying consolidated statements of financial position of Empresas ICA, S.A.B. de C.V. and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We did not audit the consolidated financial statements of ICA Fluor Daniel, S. de R.L. de C.V., a subsidiary of the Company, for the year then ended December 31, 2008, which statements reflect total revenues constituting 18% of consolidated total revenues for the year ended December 31, 2008. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for such company, is based solely on the report of the other auditors.

In our opinion, based on our audits and the report of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of Empresas ICA, S.A.B. de C.V. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with Mexican Financial Reporting Standards (“MFRS”).

As mentioned in Note 1 to the accompanying financial statements, the Directors of the Company decided to early adopt International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board for the year ending December 31, 2011.

MFRS vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 29 to the accompanying consolidated financial statements.

Our audits also comprehended the translation of Mexico peso amounts into U.S. dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 2. The translation of the financial statement amounts into U.S. dollars and the translation of the financial statements into English have been made solely for the convenience of readers in the United States of America.

Note 28 has been restated as discussed therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated June 20, 2011 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Galaz, Yamazaki, Ruiz Urquiza, S. C.
Member of Deloitte Touche Tohmatsu Limited

C. P. C. Ramón Arturo García Chávez
Mexico City, Mexico

June 20, 2011

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Partners of
ICA Fluor Daniel, S. de R.L. de C. V.

We have audited the consolidated balance sheet of ICA Fluor Daniel, S. de R.L. de C.V. and Subsidiaries as of December 31, 2008, and the related consolidated statements of income, changes in net worth and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ICA Fluor Daniel, S. de R.L. de C.V. and Subsidiaries at December 31, 2008, and the consolidated results of their operations, changes in their net worth and cash flows for the year then ended, in conformity with Mexican Financial Reporting Standards, which differ in certain respects from U.S. generally accepted accounting principles, as described in Note 23 to the consolidated financial statements.


	Mancera, S.C. A member practice of Ernst & Young Global

	Luis F. Ortega

Mexico City
April 24, 2009

F-3

EMPRESAS ICA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Thousands of Mexican pesos)


	Millions of
	U.S. Dollars
	(Convenience
	Translation Note 2)
	December 31,		December 31,
	2010		2010		2009
ASSETS:
Cash and cash equivalents (Note 4)	$	240	Ps.	2,975,384	Ps.	2,677,581
Restricted cash (Note 5)		113		1,401,090		1,419,572
Customers, net (Note 6)		722		8,936,835		8,352,364
Other receivables, net (Note 8)		209		2,591,106		2,196,396
Inventories, net (Note 9)		66		815,644		685,418
Real estate inventories (Note 10)		352		4,360,671		2,927,050
Advances to subcontractors and other		100		1,243,466		1,763,746

Current assets		1,802		22,324,196		20,022,127

Restricted cash (Note 5)		12		142,488		413,514
Customers, net (Note 6)		1,135		14,049,566		8,941,283
Non-current receivables, net		79		978,534		1,002,634
Real estate inventories (Note 10)		253		3,138,608		2,821,949
Investment in concessions, net (Note 11)		2,100		26,000,351		23,012,976
Property, plant and equipment, net (Note 12)		340		4,211,574		4,272,580
Other assets, net (Note 13)		202		2,501,893		2,643,398
Deferred income taxes and statutory employee-profit sharing (Notes 20 and 24)		133		1,641,249		1,614,844

Non-current assets		4,254		52,664,263		44,723,178

Total assets	$	6,056	Ps.	74,988,459	Ps.	64,745,305

(Continued)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

EMPRESAS ICA, S.A.B. DE C.V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Thousands of Mexican pesos)


	Millions of
	U.S. Dollars
	(Convenience
	Translation Note 2)
	December 31,			December 31,
	2010			2010			2009
LIABILITIES:
Notes payable (Note 14)	$	390		Ps.	4,826,087		Ps.	3,674,723
Current portion of long-term debt (Note 18)		103		��	1,274,644			657,349
Trade accounts payable		480			5,939,751			4,840,544
Income taxes and statutory employee profit sharing		30			369,945			321,531
Accrued expenses and other (Note 15)		312			3,863,164			4,023,059
Provisions (Note 16)		106			1,309,080			955,374
Advances from customers		120			1,491,905			2,917,237

Current liabilities		1,541			19,074,576			17,389,817

Long-term debt (Note 18)		2,130			26,369,617			18,795,449
Deferred income taxes (Note 20)		409			5,068,107			5,472,378
Derivative financial instruments (Note 17)		96			1,194,736			1,152,788
Other long-term liabilities (Note 16)		138			1,707,303			1,168,814

Non-current liabilities		2,773			34,339,763			26,589,429

Total liabilities		4,314			53,414,339			43,979,246

Commitments and contingencies (Note 21)

STOCKHOLDERS’ EQUITY (Note 22):
Common stock		723			8,950,796			8,925,990
Additional paid-in capital		572			7,085,536			7,024,998
Reserve for repurchase of shares		59			726,789			726,789
Retained earnings		141			1,749,041			806,810
Cumulative translation effects of foreign subsidiaries		(9	)		(105,225	)		(48,317	)
Valuation of financial instruments		(78	)		(966,823	)		(630,569	)

Controlling interest		1,408			17,440,114			16,805,701
Noncontrolling interest (Note 23)		334			4,134,006			3,960,358

Total stockholders’ equity		1,742			21,574,120			20,766,059

Total liabilities and stockholders’ equity	$	6,056		Ps.	74,988,459		Ps.	64,745,305

(Concluded)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

EMPRESAS ICA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Mexican pesos, except per share data)


	Millions of
	U.S. Dollars
	(Convenience
	Translation Note 2)
	Year Ended
	December 31,			Year Ended December 31,
	2010			2010			2009			2008
Revenues:
Construction	$	2,249		Ps.	27,849,781		Ps.	25,091,713		Ps.	17,234,013
Real estate, concessions and other		575			7,115,483			5,779,649			5,517,009

Total revenues		2,824			34,965,264			30,871,362			22,751,022

Costs:
Construction		1,986			24,591,557			22,785,700			15,904,243
Real estate, concessions and other		433			5,359,892			3,541,319			2,969,031

Total costs		2,419			29,951,449			26,327,019			18,873,274

Gross profit		405			5,013,815			4,544,343			3,877,748
Selling, general and administrative expenses		202			2,502,524			2,098,924			2,091,648

Operating income		203			2,511,291			2,445,419			1,786,100
Other expenses (income), net (Note 24)		13			163,723			(687,423	)		(95,265	)
Comprehensive financing cost, net (Note 25):
Interest expense		103			1,277,141			1,032,525			1,023,395
Interest income		(31	)		(382,534	)		(372,714	)		(395,007	)
Exchange (gain) loss, net		(1	)		(8,352	)		105,419			(115,976	)
Effects of valuation of financial instruments		6			72,709			2,224			28,545

		77			958,964			767,454			540,957
Share in (income) loss of associated companies		(6	)		(79,432	)		114,256			432,607

Income before income taxes		119			1,468,036			2,251,132			907,801
Income taxes (Note 20)		22			264,469			1,367,500			302,026

Consolidated net income	$	97		Ps.	1,203,567		Ps.	883,632		Ps.	605,775

Controlling interest	$	73		Ps.	908,819		Ps.	595,333		Ps.	394,105
Noncontrolling interest		24			294,748			288,299			211,670

Consolidated net income	$	97		Ps.	1,203,567		Ps.	883,632		Ps.	605,775

Earnings per common share:
Income of controlling interest	$	0.11		Ps.	1.40		Ps.	1.05		Ps.	0.79
Weighted average shares outstanding (000’s)		648,183			648,183			565,644			497,263

The accompanying notes are an integral part of these consolidated financial statements.

F-6

EMPRESAS ICA, S.A.B.DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands of Mexican pesos except for share data) (Notes 22 and 23)


	Common Stock									Additional			Reserve for
				Amount						Paid-in			Repurchase
	Shares			Value			Restatement for Inflation			Capital			of Shares
Balance at January 1, 2008		498,029,907		Ps.	6,901,841		Ps.	475,882		Ps.	6,345,236		Ps.	750,531
Application of earnings from prior years		—			—			(475,882	)		(231,801	)		—
Decrease in noncontrolling interest		—			—			—			—			—
Issuance of common stock		151,845			1,007			—			8,959			—
Repurchase of shares		(4,978,000	)		(68,975	)		—			—			(20,954	)
Effect from acquisition of noncontrolling interest		—			—			—			—			—
Comprehensive income (loss):
Net income for the year		—			—			—			—			—
Translation effects of foreign subsidiaries		—			—			—			—			—
Effect of valuation of derivative financial instruments of subsidiaries		—			—			—			—			—

Comprehensive income (loss)		—			—			—			—			—

Balance at December 31, 2008		493,203,752			6,833,873			—			6,122,394			729,577
Increase in noncontrolling interest (see Note 23)		—			—			—			—			—
Issuance of common stock		152,854,760			2,097,265			—			902,604			—
Repurchase of shares		(371,500	)		(5,148	)		—			—			(2,788	)
Effect from acquisition of noncontrolling interest		—			—			—			—			—
Effect of recording income tax liability as a result of the tax reform		—			—			—			—			—
Comprehensive income (loss):
Net income for the year		—			—			—			—			—
Translation effects of foreign subsidiaries		—			—			—			—			—
Effect of valuation of derivative financial instruments of subsidiaries and associated companies		—			—			—			—			—

Comprehensive income (loss)		—			—			—			—			—

Balance at December 31, 2009		645,687,012			8,925,990			—			7,024,998			726,789
Decrease in noncontrolling interest (see Note 23)		—			—			—			—			—
Issuance of common stock		3,740,874			24,806			—			60,538			—
Effect from acquisition of noncontrolling interest		—			—			—			—			—
Comprehensive income (loss):
Net income for the year		—			—			—			—			—
Translation effects of foreign subsidiaries		—			—			—			—			—
Effect of valuation of derivative financial instruments of subsidiaries and associated companies		—			—			—			—			—

Comprehensive income (loss)		—			—			—			—			—

Balance at December 31, 2010		649,427,886		Ps.	8,950,796		Ps.	—		Ps.	7,085,536		Ps.	726,789

(Continued)

F-7

EMPRESAS ICA, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Years Ended December 31, 2010, 2009 and 2008

(In thousands of Mexican pesos except for share data) (Notes 22 and 23)


				Cumulative
				Translation						Non-controlling
				Effects of			Valuation of			interest in			Total
	Retained			Foreign			Financial			Consolidated			Stockholders’
	Earnings			Subsidiaries			Instruments			Subsidiaries			Equity
Balance at January 1, 2008	Ps.	(84,992	)	Ps.	15,072		Ps.	5,160		Ps.	3,796,992		Ps.	18,205,722
Application of earnings from prior years		707,683			—			—			—			—
Decrease in noncontrolling interest		—			—			—			(680,647	)		(680,647	)
Issuance of common stock		—			—			—			—			9,966
Repurchase of shares		—			—			—			—			(89,929	)
Effect from acquisition of noncontrolling interest
Decrease in noncontrolling interest (Note 23)		28,958			—			—			—			28,958
Comprehensive income (loss):
Net income for the year		394,105			—			—			211,670			605,775
Translation effects of foreign subsidiaries		—			(67,497	)		—			—			(67,497	)
Effect of valuation of derivative financial instruments of subsidiaries		—			—			(469,852	)		(109,422	)		(579,274	)

Comprehensive income (loss)		394,105			(67,497	)		(469,852	)		102,248			(40,996	)

Balance at December 31, 2008		1,045,754			(52,425	)		(464,692	)		3,218,593			17,433,074
Increase in noncontrolling interest (see Note 23)		—			—			—			456,261			456,261
Issuance of common stock		—			—			—			—			2,999,869
Repurchase of shares		—			—			—			—			(7,936	)
Effect from acquisition of noncontrolling interest		9,799			—			—			—			9,799
Effect of recording income tax liability as a result of the tax reform		(844,076	)		—			—			—			(844,076	)
Comprehensive income (loss):
Net income for the year		595,333			—			—			288,299			883,632
Translation effects of foreign subsidiaries		—			4,108			—			—			4,108
Effect of valuation of derivative financial instruments of subsidiaries and associated companies		—			—			(165,877	)		(2,795	)		(168,672	)

Comprehensive income (loss)		595,333			4,108			(165,877	)		285,504			719,068

Balance at December 31, 2009		806,810			(48,317	)		(630,569	)		3,960,358			20,766,059
Decrease in noncontrolling interest (see Note 23)		—			—			—			(118,411	)		(118,411	)
Issuance of common stock		—			—			—			—			85,344
Effect from acquisition of noncontrolling interest		33,412			—			—			—			33,412
Comprehensive income (loss):
Net income for the year		908,819			—			—			294,748			1,203,567
Translation effects of foreign subsidiaries		—			(56,908	)		—			—			(56,908	)
Effect of valuation of derivative financial instruments of subsidiaries and associated companies		—			—			(336,254	)		(2,689	)		(338,943	)

Comprehensive income (loss)		908,819			(56,908	)		(336,254	)		292,059			807,716

Balance at December 31, 2010	Ps.	1,749,041		Ps.	(105,225	)	Ps.	(966,823	)	Ps.	4,134,006		Ps.	21,574,120

(Concluded)

The accompanying notes are an integral part of these consolidated financial statements.

F-8

EMPRESAS ICA, S.A.B. DE C.V. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2010, 2009 and 2008

(Indirect Method)
(Thousands of Mexican pesos)


	Millions of
	U.S. Dollars
	(Convenience
	Translation Note 2)
	Year Ended
	December 31,
	2010			2010			2009			2008
Operating activities:

Income before income taxes	$	119		Ps.	1,468,036		Ps.	2,251,132		Ps.	907,801
Items related to investing activities:
Depreciation and amortization		133			1,649,836			1,273,307			919,615
Loss (gain) on sale of property, plant and equipment		1			6,291			13,771			(10,611	)
Reversal of impairment of long lived assets		—			—			(680,554	)		—
Adjustment for valuation of long-term investment		(1	)		(10,654	)		11,571			—
Share in (income) loss of associated companies		(7	)		(79,432	)		114,256			432,607
Items related to financing activities:
Interest expense		170			2,103,627			1,363,497			1,201,817
Unrealized exchange rate fluctuation		(37	)		(460,025	)		(268,729	)		485,188
Valuation of derivative financial instruments		31			384,442			498,105			75,333
Others		7			90,786			6,620			—

		416			5,152,907			4,582,976			4,011,750

Changes in operating assets and liabilities:
Customers		(569	)		(7,050,159	)		(6,579,579	)		(4,036,375	)
Inventories and other assets		(10	)		(129,169	)		12,695			(1,872,151	)
Real estate inventories		(7	)		(87,880	)		(399,718	)		(2,062,634	)
Other receivables		(28	)		(348,564	)		(2,391,851	)		409,326
Trade accounts payable		18			229,669			1,689,256			308,793
Advances from customers		(115	)		(1,425,333	)		225,212			1,754,550
Income tax payments		(36	)		(442,954	)		(272,527	)		—
Other current liabilities		(1	)		(6,049	)		967,002			(21,025	)

Net cash used in operating activities		(332	)		(4,107,532	)		(2,166,534	)		(1,507,766	)


Investing activities:
Investment in machinery and equipment		(40	)		(492,040	)		(1,255,511	)		(1,855,176	)
Proceeds from sale of machinery and equipment		32			390,128			225,342			60,826
Business acquisitions		(21	)		(261,122	)		(193,668	)		(532,694	)
Investment in concessions and other long-term assets		(205	)		(2,524,145	)		(2,627,807	)		(2,059,593	)
Dividends received		1			5,319			8,140			2,826
Collections (grants) of loans		7			86,075			(1,007,195	)		(164,135	)

Net cash used in investing activities		(226	)		(2,795,785	)		(4,850,699	)		(4,547,946	)


Cash to be obtained from financing activities		(558	)		(6,903,317	)		(7,017,233	)		(6,055,712	)


Financing activities:
Proceeds from long-term debt		1,342			16,621,255			8,455,842			7,383,378
Payments of long-term debt		(558	)		(6,906,459	)		(2,714,444	)		(455,300	)
Payments under leasing agreements		(3	)		(36,728	)		(12,587	)		(25,324	)
Interest paid		(167	)		(2,073,881	)		(1,694,471	)		(1,127,059	)
Increase in common stock (2009 net of Ps.89,890 of issuance expenses)		1			3,728			2,979,279			9,966
Derivative financial instruments		(43	)		(534,570	)		(499,630	)		(92,702	)
Repurchase of shares		—			—			(7,936	)		(89,930	)
Decrease in noncontrolling interest		(8	)		(93,502	)		(249,463	)		(660,235	)

Net cash provided by financing activities		564			6,979,843			6,256,590			4,942,794

(Continued)

F-9


	Millions of
	U.S. Dollars
	(Convenience
	Translation Note 2)
	Year Ended
	December 31,
	2010			2010				2009			2008
Net increase (decrease) in cash and cash equivalents		6			76,526				(760,643	)		(1,112,918	)
							��
Effect of exchange rate changes on cash		(5	)		(68,231	)			39,385			(169,117	)

Cash and cash equivalents at beginning of period (restricted cash included of Ps.1,833,086)		364			4,510,667				5,231,925			6,513,960


Cash and cash equivalents at the end of period (restricted cash included of Ps.1,543,578)	$	365		Ps.	4,518,962			Ps.	4,510,667		Ps.	5,231,925

Additional information:

During the years ended December 31, 2009 acquired fixed assets through leasing agreements and other financing agreements for Ps.36,527.

Real estate inventories in the statement of financial position at December 31, 2010 include Ps.1,446,825 acquired from a trust that guaranteed outstanding receivables owed to the Company, mentioned in Note 21.a.

The accompanying notes are an integral part of these consolidated financial statements. (Concluded)

F-10

EMPRESAS ICA, S. A. B. DE C. V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2010, 2009 and 2008
(Thousands of Mexican pesos except as otherwise indicated, per share data and exchange rates in pesos)

1. Activities

Empresas ICA, S.A.B. de C.V. (“ICA” or, together with its subsidiaries, “the Company”) is a holding company, the subsidiaries of which are engaged in a wide range of construction and related activities including the construction of infrastructure facilities as well as industrial, urban and housing construction, for both the Mexican public and private sectors. ICA’s subsidiaries are also involved in the construction, maintenance and operation of highways, bridges and tunnels granted by the Mexican government and foreign governments under concessions. Through its subsidiaries and affiliates, the Company also manages and operates airports and municipal services under concession arrangements. In addition, some of ICA’s subsidiaries are engaged in real estate and housing development.

Significant events

Adoption of International Financial Reporting Standards— In January 2009, the National Banking and Securities Commission issued amendments to the Single Circular for Issuers to include the obligation to file financial statements based on the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) as of the year ending December 31, 2012, with the option of early adoption.

The Company’s management decided to early adopt IFRS as of the year ending December 31, 2011, considering January 1, 2010 as the Company’s “transition date”. Therefore, the accompanying consolidated financial statements for the year ended December 31, 2010 will be the last annual financial statements of the Company to be prepared in conformity with Mexican Financial Reporting Standards (“MFRS”) for public use.

The purpose of the early adoption is to align the Company’s financial information with international requirements in terms of disclosure and transparency of financial information, and to facilitate the assessment and comparison of the Company by the investing public to other entities in the same sector for purposes of their decisions regarding their investments in the Company. Consequently, as of January 1, 2011, the Company suspended the application of MFRS in the preparation of its financial statements for public use.

Note 31 describes the effects derived from the change in accounting standards as of and for the year ended December 31, 2010, as well as a description of the changes in significant accounting policies.

Agreement for the sale of Corredor Sur— In March 2010, the Company was approached by the Government of Panama, which expressed its interest in purchasing the Company’s investment in the Corredor Sur tollroad. Since such date, the Company has been in discussions with the Government of Panama regarding the potential sale. As of the date of the accompanying consolidated financial statements, the negotiation of the definitive agreement is still in process, and may include the continued participation of the Company as operator of the related toll road. Should the Government of Panama ultimately decide not to purchase the Company’s investment in the Corredur Sur, the Company has no current intention to actively market its sale.

Transferability of the Service Provision Project (“PPS”) of Irapuato La Piedad y Querétaro Irapuato to RCO —In September 2010, the Company reached a non-binding agreement with the shareholders of its affiliate Red de Carreteras de Occidente, S.A.P.I.B. de C.V. (“RCO”) to transfer it all of its shareholding in the Company’s subsidiaries Concesionaria Irapuato La Piedad, S.A. de C.V. (“CONIPSA”) and Concesionaria de Vías Irapuato Queretaro, S.A. de C.V. (“COVIQSA”). In exchange for the shareholding of the Company in both subsidiaries, ICA will receive cash consideration and additional shares in RCO that will increase the Company’s current participation in such affiliate. As of the date of the accompanying consolidated financial statements, ICA and RCO have continued to negotiate definitive documentation and obtain required governmental and corporate approvals as well as the work to comply with other conditions precedent common to this type of transaction. Should RCO ultimately decide not to purchase the Company’s investment in CONIPSA and COVIQSA, the Company has no current intention to actively market its sale.

F-11

Tax reform —In December 2009, modifications were published to the Income Tax Law (“LISR”) (“Tax Reform”), effective as of 2010, which establish that: a) the payment of income tax on benefits received from tax consolidation of subsidiaries, obtained in the years 1999 through 2004, must be made in partial installments from the year 2010 until 2014 and b) the tax on benefits obtained from the tax consolidation of subsidiaries for 2005 and subsequent years will be paid during the sixth through tenth years after that in which the benefit was obtained. The payment of the tax on the dividends distributed between companies that consolidate for tax purposes, made in years prior to 1999, could also be required in some cases, as established in tax provisions, such as upon sale of the shares of the controlled companies or at the time the Group eliminates the tax consolidation regime, among others.

In accordance with the Tax Reform and Interpretation to Financial Reporting Standards (“INIF”) 18,Recognition of the Effects of the 2010 Tax Reform on Income Taxes”, published by the Mexican Board for the Research and Development of Financial Reporting Standards (“CINIF”), ICA recognized, as of December 31, 2009, tax liabilities of Ps.2,791 million, a deferred tax asset of Ps.1,615 million, a charge to results of Ps.332 million and a charge to accumulated results of Ps.844 million. Ps. 844 million of this amount was reversed in 2010 as a result of certain modifications made by the tax authorities in 2010 to the original tax reforms (see Note 20).

Stockholders’ equity increase—In July 2009, ICA carried out a global primary placement of 150 million shares for a total amount of Ps.3,006 million (nominal value). 70% of these shares were placed with institutional investors abroad, through an offering that was registered under the U.S. Securities Act of 1933, while the remaining 30% were placed on the Mexican market.

2. Basis of Presentation and Principles of Consolidation

a.Basis of presentation

The accompanying consolidated financial statements of ICA and its subsidiaries are prepared in accordance with MFRS (individually referred to asNormas de Información Financieraor “NIFs”).

MFRS requires that management make certain estimates and use certain assumptions that affect the amounts reported in the financial statements and their related disclosures; however, actual results may differ from these estimates. The Company has implemented control procedures to ensure the correct, timely application of its accounting policies. Although actual results may differ from estimates, management considers that the estimates made and assumptions used were adequate under the circumstances.

Solely for convenience of readers, peso amounts included in the consolidated financial statements as of December 31, 2010 and for the year then ended have been translated into U.S. dollar amounts at the rate of 12.3825 pesos per U.S. dollar, the noon buying rate for pesos on December 31, 2010 as published by the Federal Reserve Bank of New York. Such translation should not be construed as a representation that the Mexican peso amounts have been, could have been or could, in the future, be converted into U.S. dollars at such rate or any other rate.

b.Classification of costs and expenses

Costs and expenses presented in the consolidated statements of income were classified according to their function due to the various business activities of the subsidiaries. Consequently, cost of sales is presented separately from other costs and expenses.

c.Income from operations

Income from operations is the result of subtracting cost of sales and general expenses from net sales. While NIF B-3,Statement of Income, does not require inclusion of this line item in the consolidated statements of income, it has been included for a better understanding of the Company’s economic and financial performance.

F-12

d.Comprehensive income (loss)

Comprehensive income (loss) presented in the accompanying consolidated statements of changes in stockholders’ equity represents the Company’s total activity during each year and is comprised of the net income (loss) for the year, plus other comprehensive income (loss) items for the same period which, in accordance with MFRS, are presented directly in stockholders’ equity without affecting the consolidated statements of income. Other comprehensive income (loss) is represented by the effects of translation of foreign operations and evaluation of derivative financial instruments of subsidiaries and associated companies. Upon realization of assets and settlement of liabilities giving rise to other comprehensive income (loss) items, the latter are recognized in the statement of operations.

e.Principles of consolidation

Financial statements of those companies in which ICA owns more than 50% of the capital stock or owns less than 50% of such capital stock but effectively controls such entity are consolidated within the financial statements. The assets, liabilities, revenues, costs and expenses of companies or associations subject to contractually agreed joint control are included in the consolidated financial statements using proportionate consolidation in accordance with International Accounting Standard No. 31,Interests in Joint Ventures, supplementally applied pursuant to NIF A-8,Supplemental Standards. All the intercompany balances and transactions have been eliminated in consolidation. The principal subsidiaries that are proportionately consolidated are: ICA Fluor Daniel, S. de R.L de C.V. and subsidiaries (“ICAFD”), Grupo Rodio Kronsa, S.A.; Suministro de Agua de Querétaro, S.A. de C.V., Constructora Nuevo Necaxa Tihuatlán, S.A. de C.V. and Autovía Nuevo Necaxa Tihuatlán, S.A. de C.V. The subsidiaries Viabilis Infraestructura, S.A.P.I. de C.V. and Autovía Urbana TT, S.A. de C.V., are fully consolidated beginning July 2009 as a result of obtaining control of such entities as of such date.

The financial statements of the companies that are included in these consolidated financial statements and have a fiscal year-end other than December 31 are converted to a December 31 year-end. During 2010, Grupo Rodio Kronsa, S.A. changed its fiscal year-end from October 31 to December 31, which is reflected in the accompanying 2010 consolidated statement of income by including 14 months of operations of the entity. The effects of the additional months are not considered material.

The principal consolidated subsidiaries are as follows:


	Direct and Indirect
	Ownership Percentage
Subsidiary	2010	2009	Activity
	%	%
Sub-Holding:
Constructoras ICA, S.A. de C.V. (“CICASA”)	100	100	Construction
Controladora de Empresas de Vivienda, S.A. de C.V. (“CONEVISA”)	100	100	Housing development
Controladora de Operaciones de Infraestructura, S.A. de C.V. (“CONOISA”)	100	100	Concessions
Operating:
Ingenieros Civiles Asociados, S.A. de C.V. (“ICASA”)	100	100	Heavy and urban construction
ICA Fluor Daniel, S. de R.L. de C.V. (“ICAFD”)	51	51	Industrial construction
ICA Panamá, S.A.	100	100	Highway concessions
Grupo Aeroportuario del Centro Norte, S.A.B. de C. V	59	59	Managing and operating airport concessions
Constructora Hidroeléctrica La Yesca, S.A. de C.V.	99	99	Construction of the La Yesca hydroelectric plant

F-13

f.Acquisition of subsidiaries

In April 2010, ICA provided equity of Ps.151 million to Los Portales, S. A. (a company with operations in the housing development segment), thereby increasing its shareholding in the entity from 18% to 50% and subsequently proportionally consolidating the entity as of the acquisition date. Previously, this investment was recognized using the equity method. Allocation of the purchase price is still in process as the Company continues to gather information regarding related intangibles acquired, if any. Accordingly, goodwill recognized (see Note 13) is preliminary and may change upon finalization of the allocation of the purchase price.

On September 30, 2009, ICA acquired, for Ps.193 million, 100% of the common stock shares of Construcciones y Trituraciones, S.A. de C.V. (“COTRISA”), a company which specializes in tunnels, underground construction works and water management projects. The statement of financial position of COTRISA is consolidated as of September 2009 and its income statement is consolidated as of October 1, 2009.

g.Translation of financial statements of foreign subsidiaries

To consolidate financial statements of foreign subsidiaries, the accounting policies of the foreign entity are converted to MFRS using the currency in which transactions are recorded except for the application of NIF B-10,Effects of Inflation,when the foreign entity operates in an inflationary environment, since this NIF applies to financial statements that have been measured using the functional currency. The financial statements of the subsidiaries are subsequently translated to Mexican pesos considering the following methodologies:

Non-inflationary economic environment

Foreign operations whose functional currency is the same as the currency in which transactions are recorded translate their financial statements using the following exchange rates: 1) the closing exchange rate in effect at the date of the statement of financial position for assets and liabilities; 2) historical exchange rates for stockholders’ equity, and 3) the rate on the date of accrual of revenues, costs and expenses. Translation effects are recorded in stockholders’ equity.

Inflationary economic environment

Foreign operations whose functional currency is the same as the currency in which transactions are recorded first restate their financial statements in currency of purchasing power as of the date of the statement of financial position, using the price index of the country of origin of the functional currency, and subsequently translate those amounts to Mexican pesos using the closing exchange rate in effect at the date of the statement of financial position for all items. Translation effects are recorded in stockholders’ equity.

3. Summary of Significant Accounting Policies

a.Accounting changes

Beginning January 1, 2010, the Company adopted INIF No. 17,Service Concession Agreements, issued by the CINIF. INIF 17 is a supplement to Bulletin D-7,Construction and Manufacturing Contracts for Certain Capital Assetsand provides guidance regarding the accounting for infrastructure in a service concession arrangement, that the operator constructs or acquires from a third party, who grants the operator access to such infrastructure in order to fulfill the objective of the concession contract. Prior to the enactment of INIF 17, the Company supplementally applied, pursuant to NIF A-8,Supplemental Standards, International Financial Reporting Interpretations Committee Interpretation (“IFRIC”) No.12,Service Concession Arrangements. As the guidance established in INIF 17 is substantially converged with that of IFRIC 12 previously applied by the Company, there were no significant effects of adoption of INIF 17 on the accompanying consolidated financial statements.

Also on January 1, 2010, the Company adopted the following new standards, which did not have a material effect on the accompanying consolidated financial information: NIF C-1,Cash and Cash Equivalents, Improvements to NIFS for 2010 including NIF B-1,Accounting Changes and Corrections of Errors, NIF B-2,Statement of Cash Flows, NIF B-7,Business Acquisitions, NIF C-6Property, Plant and Equipment, NIF C-7,Investments in Associated Companies and Other Permanent Investments, and NIF C-13,Related Parties.

F-14

b. Reclassifications

Through December 31, 2009, the Company presented provisions for machinery rentals within accrued expenses; additionally, the investment in shares of associated companies was presented as a separate line item in the statement of financial position. Given that the balance of the provision for machinery rentals increased over 30%, as of December 31, 2010 it is included within the provisions line item; additionally, the investment in shares of associated companies is not considered significant to the financial statements taken as a whole and is presented within other assets in 2010. These reclassifications were retrospectively applied in the statement of financial position as of December 31, 2009.

c. Recognition of the effects of inflation

Since the cumulative inflation for the three fiscal years prior to those ended December 31, 2010 and 2009, was 14.48% and 15.01%, respectively, the economic environment is considered non-inflationary in both years. Beginning on January 1, 2008, the Company discontinued recognition of the effects of inflation in its financial statements. The amounts presented in the accompanying consolidated financial statements at December 31, 2010 and 2009, are stated at nominal values. However, assets, liabilities and stockholders’ equity contain the effects of inflation recognized through December 31, 2007.

Inflation rates for the years ended 2010, 2009 and 2008 were 4.40%, 3.57% and 6.53%, respectively.

d. Cash and cash equivalents and restricted cash

Cash and cash equivalents consist mainly of bank deposits in checking accounts and short-term investments, highly liquid and easily convertible into cash, maturing within three months as of their acquisition date, which are subject to immaterial value change risks. Cash is stated at nominal value and cash equivalents are measured at fair value, with any fluctuation recognized in comprehensive financing result of the period. Cash equivalents are represented mainly by instruments in Treasury Certificates (“CETES”), investment funds and money market funds. Cash and cash equivalents subject to restrictions or intended for a specific purpose are presented separately under current or non-current assets as the case may be.

e. Inventories

Inventories are stated at the lower of cost, using average cost, or realizable value.

f. Real estate inventories

Development costs for low-income housing and other real estate developments are stated at the acquisition value of the land, the respective improvements and conditioning, permits and licenses, labor costs, materials and direct and indirect expenses. The net comprehensive financing result incurred during the construction period is capitalized.

Land to be developed over a period of more than 12 months is classified under non-current assets, recorded at its acquisition cost.

g. Property, plant and equipment

Expenditures for property, plant and equipment, including renewals and improvements which extend useful lives, are capitalized and valued at acquisition cost.

Depreciation of buildings, furniture, office equipment and vehicles is calculated using the straight-line method over the useful life of the asset. Depreciation begins in the month in which the asset is placed in service. The useful lives of assets are as follows:


	Useful
	lives
Buildings		20 to 50
Machinery and operating equipment		4 to 10
Furniture, office equipment and vehicles		4 to 10

F-15

The depreciation of machinery and equipment is calculated according to the units of production method (machine hours used in regard to total estimated usage hours of the assets during their useful lives, which range from 4 to 10 years). Financing costs incurred during the construction and installation of buildings and machinery and equipment are capitalized and through December 31, 2007, were adjusted for inflation as measured by the NCPI.

h. Investment in concessions

The Company classifies the assets derived from the construction, administration and operation of the service concession arrangements either as intangible assets, financial assets (accounts receivable) or a combination of both.

A financial asset results when an operator constructs or makes improvements to the infrastructure, in which the operator has an unconditional right to receive a specific amount of cash or other financial assets during the contract term. An intangible asset results when the operator constructs or makes improvements and is allowed to operate the infrastructure for a fixed period after construction is complete, in which the future cash flows of the operator have not been specified, because they may vary depending on the use of the asset, and are therefore considered contingent. Both a financial asset and an intangible asset may result when the return/gain for the operator is provided partially by a financial asset and partially by an intangible asset.

In both a financial and intangible asset situation, revenue and costs related to construction or improvements are recognized in income and costs during the construction phase.

The financial asset is recorded at its nominal value and is valued at fair value at the date of the financial statements based on the yield established in the concession contract. Investments in concessions resulting in the recognition of an intangible asset are recorded at acquisition value or construction cost. The cost of financing incurred during the construction period is capitalized.

Investments in concession projects are amortized over the concession period based on utilization rates (vehicle traffic during the concession period for toll roads; volume of water treated for water treatment plants). Revenues from the operation of concession projects are recognized as concession revenues.

i. Other assets

Other assets mainly consist of costs related to uncompleted construction contracts, bank commissions and fees, as well the deferred loss on derivative financial instruments, which are recorded at historical cost and amortized over the estimated useful life of the asset. Additionally, this caption includes investments in associated companies. Lastly, this caption includes the fair value of derivative financial instruments entered into by the Company.

j. Impairment of long-lived assets in use

Management periodically evaluates the impairment of long-lived assets as established by Bulletin C-15,Impairment in the Value of Long-LivedAssetsand Their Disposal. If there is any indication that values exceed the respective recovery values, assets are impaired to this recovery value by affecting the results of the year in which this difference arises. Impairment indicators considered for these purposes are, among others, 1) operating losses or negative cash flows in the period if they are combined with a history or projection of losses, 2) depreciation and amortization charged to results, which in percentage terms in relation to revenues are substantially higher than that of previous years, 3) obsolescence, 4) reduction in the demand for the services rendered, 5) competition and other legal and economic factors. The recovery value is determined as the greater of the net selling price of a cash-generating unit and its value in use, which is the net present value of discounted future net cash flows. The method used to calculate the recovery value considers the particular circumstances of concessions, property, plant and equipment and intangible items. In the case of concessions, revenue projections are used which consider assumptions and estimates concerning vehicle traffic, the growth of the population and economy along the concessioned highway, temporary passenger reductions due to tariff increases and commercial strategies designed to promote utilization, among others, which may differ and be adjusted according to the actual results obtained.

When the recovery value improves and such improvement is greater than the carrying value of the asset and appears to be permanent, the Company reverses the previously recorded impairment loss.

F-16

k. Business acquisition

All business acquisitions, are initially recognized and valued using the purchase method, which includes allocating the purchase price, represented by cash delivered or its fair value equivalent, over the fair value of the assets acquired and liabilities assumed, and, when appropriate, recognizing either goodwill or a non-ordinary gain.

l. Provisions

Provisions are recognized for obligations that result from a past event, that are probable to result in the use of economic resources and that can be reasonably estimated. In the event an obligation arises for which the Company believes required settlement is remote, such provision is disclosed but is not recognized in the consolidated financial statements.

m. Operating cycle

Assets related to construction contracts which may require more than one year to be completed and will be liquidated in the normal course of contract completion are reported as non-current assets. The amount of accounts receivable related to contracts financed by the Company which are not collected until the project is completed are presented within the caption Customers within non-current assets.

n. Accounting for construction contracts

Revenues from construction contracts are recognized using the percentage-of-completion method based on the costs incurred method or the units of work method, considering total costs and revenues estimated at the end of the project. Changes occurring during the progress of the contract, and the related yields, including those that may arise for awards resulting from the early completion of projects, contract penalties and modifications to contracts, are recognized as income in the periods in which any revisions take place and when such revisions are approved by the customers.

Based on the terms of the contracts, revenue recognized is not necessarily related to the actual amounts invoiced to customers. Management periodically evaluates the reasonableness of its accounts receivable. In cases when an indication of collection difficulty exists, allowances for bad debts are created and charged to results in the same period. The estimate for such reserve is determined based on management’s best judgment in accordance with prevailing circumstances at that time.

Contract costs include labor, direct material, subcontractor costs, start-up project costs and indirect costs. Periodically, the Company evaluates the reasonableness of the estimates used in the determination of the percentage completion in any given project. If as a result of this assessment, the total estimated cost of the project exceeds expected revenues, an adjustment is made in order to reflect the effect in results of the period in which the adjustment or loss is incurred. For those projects in which financing revenue is included as part of the selling price, the contract costs also include the net comprehensive financing result incurred with the financing obtained to perform the contract, except where the actual financing cost exceeds the original estimated financing cost. This financing cost including the changes in the fair value of derivative financial instruments, if any, is part of the contract cost, which is recognized in results as the project progresses. In certain contracts, the collection of the contract amount from the client may take place at the completion of the project. However, periodic reports of the advance of the project to date are provided to and approved by the client, which serve as a base so that the Company can continue to obtain financing for the project.

o. Accounting for real estate sales

Revenues derived from sales of low- and medium-income housing and real estate are recognized as revenue once the house or real estate development is completed and the rights, benefits and obligations related to the property have transferred to the buyer, which occurs upon formalization of the deed.

p. Sales of goods and services

Revenues from sales of goods and services are recognized as the goods are delivered or the services are performed.

F-17

q. Employee benefits from termination, retirement and other

Liabilities from seniority premiums, pension plans and severance payments are recognized as they accrue and are calculated by independent actuaries using nominal interest rates. Accordingly, the liability is being accrued which, at present value, will cover the obligation from benefits projected to the estimated retirement date of the Company’s employees.

r. Maintenance and repair expenses

Maintenance and repair expenses are recorded as costs and expenses in the period in which they accrue.

s. Statutory employee profit sharing

Statutory employee profit sharing (“PTU”) is recorded in the results of the year in which it is incurred and presented under other income and expenses in the accompanying consolidated statements of income. Deferred PTU is derived from temporary differences that result from comparing the accounting and tax basis of assets and liabilities and is recognized only when it can be reasonably assumed that such difference will generate a liability or benefit, and there is no indication that circumstances will change in such a way that the liabilities will not be paid or benefits will not be realized.

t. Income taxes

The Company files a consolidated tax return, as permitted by the tax laws of Mexico. The Business Flat Tax (“IETU”) is caused individually by the parent and its subsidiaries. To recognize deferred income taxes, based on its financial projections, the Company determines whether it expects to incur regular income tax (“ISR”) or IETU and, accordingly, recognizes deferred taxes based on the tax it expects to pay.

ISR and IETU are recorded in the results of the year they are incurred according to NIF D-4,Income Taxes. Deferred income tax assets and liabilities are recognized for the applicable temporary differences resulting from comparing the accounting and tax values of assets and liabilities plus any future benefits from tax loss carryforwards and unused tax credits. Management periodically evaluates its assumptions based on historical tax results and estimated tax profits. The resulting deferred tax provision or benefit related to the recognition of the deferred tax liability or asset is reflected in the consolidated statement of income. The calculation and recognition of deferred taxes requires the use of estimates that could be affected by the amount of future taxable income, the assumptions considered by management and actual results of operations. A deferred income tax asset is only recognized when there is a high probability that it can be recovered, periodically evaluating the probability based on the historical taxable results and the estimation of future taxable revenues. A valuation allowance is recorded for any deferred tax asset for which realizability is not highly probable. The assumptions used in forming the estimate of a valuation allowance may change based on various circumstances, which may result in the modification of such valuation allowance, thereby affecting the Company’s financial position and results of operations.

u. Tax on assets

Tax on assets (“IMPAC”) paid through 2007 that is expected to be recoverable, is recorded as an advance payment of ISR and is presented in the consolidated statements of financial position as a deferred tax asset.

v. Derivative financial instruments

i) Risk management

The Company is exposed to various economic risks including (i) financial market risks (interest rate, exchange rate and prices), (ii) credit risk, and (iii) liquidity risk.

The Company attempts to minimize the potential negative effects of these risks on its financial performance using different strategies. Derivative financial instruments are used to hedge exposure to the financial risks of transactions already recognized in the statement of financial position (recognized assets and liabilities), as well as firm commitments and forecasted transactions that are likely to occur.

F-18

The Company only enters into hedging instruments in order to reduce the uncertainty of the return on its projects. From an accounting perspective, derivative financial instruments can be classified as either hedging or trading instruments, which does not affect the objective of entering into the contract, which is to mitigate the risks to which the Company is exposed in its projects.

Interest rate hedges are entered into to cap the maximum financial costs to support the viability of the Company’s projects. Exchange rate hedges are entered into to reduce the exchange rate risk in projects where the labor and supply costs are incurred in a currency other than that of the source of the financing. The Company enters into its financings in the same currency as that of the source of repayment.

Entering into derivative financial instruments is linked, in most cases, to the financing of projects. Therefore, counterparties to derivative instruments are usually the same institution (or an affiliate of such institution) that granted the financing under the project. This is true for both instruments that hedge interest rate fluctuations and those that hedge exchange rate fluctuations. In both cases, the derivatives are entered into directly with the counterparties.

The Company’s internal control policy establishes that prior to entering into a loan, the risks inherent in the projects require collaborative analysis by representatives from the finance, legal, administration, and operation areas. This analysis also includes assessing the use of derivatives to hedge financing risks included in the potential loan. Based on the internal control policy of the Company, the finance and administration areas are responsible for contracting the derivatives upon completion of this analysis.

To assess the use of derivatives to hedge financing risks, sensitivity analyses are performed considering all possible outcomes of the relevant variables of alternative hedging instruments. This helps to define the economic efficiency of each of the alternatives available to cover the measured risk. The Company then compares the terms, obligations and conditions of each possible derivative instrument to determine which instrument best suits the Company’s hedging strategy. Effectiveness tests are also performed, with the help of expert appraisers, to determine the treatment given to the derivative financial instrument once it is contracted.

The Company’s policy is to enter into derivative financial instruments at the project level. The Company does not enter into instruments that involve margin calls or additional credit beyond those already approved by the respective committees; as such instruments are not considered additional liquidity sources for these types of requirements. In projects requiring collateral, the Company’s policy establishes that the deposits required must be made at the beginning or letters of credit (contingent) must be entered into upon contracting the project to reduce the project’s exposure.

ii) Accounting policy

The Company values all derivative financial instruments at fair value, regardless of the purpose for holding them. Fair value is determined through the use of valuations of counterparties (valuation agents), verified by a price provider authorized by the National Banking and Securities and Banking Commission (“CNBV”). These valuations are determined based on recognized methodologies in the financial sector, supported by sufficient, reliable, and verifiable information. Fair value is recognized in the consolidated statement of financial position as an asset or liability based on the rights or obligations established in the contracts executed.

When the transactions meet all hedge accounting requirements, the Company designates the derivatives as hedging financial instruments at the beginning of the relationship. For fair value hedges, the fluctuation in the fair value of both the derivative and the open risk position, are recognized in the results of the period in which they occur. For cash flow hedges, the effective portion is temporarily recognized in other comprehensive income (loss) within stockholders’ equity and subsequently reclassified to results when affected by the hedged item; the ineffective portion is recognized in results of the period.

When certain derivative financial instruments are entered into for hedging purposes from an economic perspective and thus do not meet all of the hedging requirements established by accounting standards, they are classified as derivatives for trading purposes. The fluctuation in the fair value of these derivatives is recognized immediately in the results of the period in which they are valued. For projects that are financed during the construction stage, the effect of the related derivative instrument is capitalized in other assets as part of the cost of the project (see Note 17).

w. Concentration of credit risk

The financial instruments that potentially expose the Company to credit risk are mainly composed of Contracts receivable and Cost and estimated earnings in excess of billings on uncompleted contracts (together, “construction instruments”), Other accounts receivable and Derivative financial instruments contracted to hedge risks.

F-19

The Company believes that the concentration of credit risk as it relates to construction instruments is limited due to the significant number of customers involved with the Company. Similarly, the Company believes that its potential credit risk is adequately covered because the construction projects in which it participates involve customers of known solvency. If the Company experiences collection issues, it generally suspends all work until the situation is resolved and payment is secured. When there are indications of recoverability issues, additional allowances for doubtful accounts are created.

Other accounts receivable are composed of amounts payable by associated companies and notes receivable. The Company does not believe that a significant credit risk concentration exists. In regard to derivative financial instruments, ICA has diversified its risk by contracting them with different institutions of the financial sector.

x. Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate in effect at the date of the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the exchange rate in effect at the date of the statement of financial position. Exchange fluctuations are recorded as a component of net comprehensive financing cost in the consolidated statements of income, except in those cases in which they can be capitalized.

y. Basic earnings per share

Basic earnings per share is computed by dividing income of the controlling interest available to common stockholders by the weighted average number of common shares outstanding during the year.

4. Cash and Cash Equivalents


	December 31,
	2010		2009
Cash	Ps.	879,872	Ps.	890,318
Cash equivalents		2,095,512		1,787,263

	Ps.	2,975,384	Ps.	2,677,581

As of December 31, 2010 and 2009, of the balance of cash and cash equivalents, Ps.1,193 million and Ps.668 million, respectively were held by ICAFD and Ps.501 million and Ps.340 million, respectively, were held in the Airports segment.

5. Restricted Cash


	December 31,
	2010			2009
Restricted cash and cash equivalents	Ps.	1,543,578		Ps.	1,833,086
Non-current		(142,488	)		(413,514	)

Current	Ps.	1,401,090		Ps.	1,419,572

Restricted cash is composed principally by trusts that have been created to administer the amounts received from tolls and other related services generated by the concessions, which guarantee and are primarily utilized to pay the debt contracted and the maintenance of the concessions.

F-20

6. Customers

As of December 31, 2010 and 2009, the caption of Customers is composed of the following:


	December 31,
	2010		2009
Trade accounts receivable (at December 31, 2010 and 2009, includes allowance for doubtful accounts for Ps.233 million and Ps.69 million, respectively)	Ps.	967,401	Ps.	774,609
Contract receivables		1,605,713		3,375,764
Cost and estimated earnings in excess of billings on uncompleted contracts		6,363,721		4,201,991

	Ps.	8,936,835	Ps.	8,352,364

Contract Receivables

Contract receivables are comprised of the following:


	December 31,
	2010			2009
Billings on contracts⁽¹⁾	Ps.	14,364,905		Ps.	10,797,440
Guarantee deposits		75,005			136,271
Less: advanced payments received on contracts		(2,409	)		—

		14,437,501			10,933,711
Less: allowance for doubtful accounts		(421,016	)		(275,447	)

		14,016,485			10,658,264
Less: Long-term contract receivables^{(3) (4)}		(12,410,772	)		(7,282,500	)

Current contract receivables	Ps.	1,605,713		Ps.	3,375,764

The allowance for doubtful accounts for the contract and trade receivables is as follows:


	December 31,
	2010		2009
Trade receivables⁽²⁾	Ps.	233,480	Ps.	69,109
Contract receivables		421,016		275,447

	Ps.	654,496	Ps.	344,556


(1)		At December 31, 2010 and 2009, there were retentions on billings on contracts for Ps.83 million and Ps.117 million, respectively.

(2)		In 2010, GACN increased its allowance for doubtful accounts by Ps.174 million, of which Ps.143 million have been recorded for the suspension of operations of Grupo Mexicana. This allowance includes Ps. 133 million of the Airport Usage Rate (“TUA”), Ps.7 million of airport services, and Ps.3 million of other services.

Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts


	December 31,
	2010			2009
Costs incurred on uncompleted contracts	Ps.	61,603,558		Ps.	53,654,453
Estimated earnings		2,591,957			3,608,898

Recognized revenues		64,195,515			57,263,351
Less: billings to date		(56,193,000	)		(51,402,577	)

Total cost and estimated earnings in excess of billings on uncompleted contracts		8,002,515			5,860,774
Less: Non-current cost and estimated earnings in excess of billings on uncompleted contracts^{(3) (4)}		(1,638,794	)		(1,658,783	)

Current portion of costs and estimated earnings in excess of billings on uncompleted contracts	Ps.	6,363,721		Ps.	4,201,991


(3)		As of December 31, 2010 and 2009, the non-current balance of Customers includes Ps.9,503 million and Ps.6,125 million, respectively, due from the La Yesca Hydroelectric Project, which such balance is composed of both contract receivables and costs and estimated earnings in excess of billings. In conformity with the financed public works mixed-price contract executed with theComisión Federal de Electricidad(“CFE”), the consideration will be settled in one lump sum upon completion of the

F-21


		construction, which is expected to occur in 2012. The contract receivables and the cost and estimated earnings in excess of billings on uncompleted contracts bear annual interest at an average 5.24% rate.

(4)		As of December 31, 2010 and 2009, the non-current balance of Customers includes Ps.4,117 million and Ps.2,522 million (of both contract receivables and costs and estimated earnings in excess of billings), respectively, of Viabilis Infraestructura, S.A.P.I, de C.V., a subsidiary of ICA, which has executed a contract for the construction of Río de los Remedios- Ecatepec Highway with Sistema de Autopistas, Aeropuertos, Servicios Conexos y Auxiliares del Estado de México (“SAASCAEM”). The payment and the return on investment, as well as the total financing and investment settlement guarantee, will be based on toll revenue made by the trust created for such purposes. Collection will be made at the time the investment plus an internal rate of return of 10% is earned, which is expected to be within an estimated 30-year term.

The changes in the allowance for doubtful accounts are as follows:


	December 31,
	2010			2009			2008
Beginning balance	Ps.	344,556		Ps.	545,758		Ps.	467,819
Increase of the period		350,187			70,449			154,176
Reversals due to subsequent collection and write-off of bad debts		(40,247	)		(271,651	)		(76,237	)

Ending balance	Ps.	654,496		Ps.	344,556		Ps.	545,758

7. Construction Backlog

A reconciliation of backlog representing executed construction contracts at December 31, 2010, 2009 and 2008 is as follows:


	Construction Segment
	Civil		Industrial		Rodio-Kronsa		Total
Balance at January 1, 2008	Ps.	19,897,839	Ps.	4,243,505	Ps.	729,127	Ps.	24,870,471
New contracts and changes 2008		27,389,641		2,983,136		1,513,479		31,886,256
Less: construction revenue earned 2008		11,402,252		4,151,970		1,679,791		17,234,013

Balance at December 31, 2008		35,885,228		3,074,671		562,815		39,522,714
New contracts and changes 2009		11,731,715		7,218,725		1,351,686		20,302,126
Less: construction revenue earned 2009		19,603,797		3,973,542		1,514,374		25,091,713

Balance at December 31, 2009		28,013,146		6,319,854		400,127		34,733,127
New contracts and changes 2010		20,210,154		6,536,735		1,343,549		28,090,438
Less: construction revenue earned 2010		22,142,600		4,401,358		1,305,823		27,849,781

Balance at December 31, 2010	Ps.	26,080,700	Ps.	8,455,231	Ps.	437,853	Ps.	34,973,784

From January 1 to February 28, 2011, the Company entered into contracts totaling Ps.13,209 million, which correspond to the Civil Construction segment.

8. Other Receivables

Other receivables consist of the following:


	December 31,
	2010		2009
Amounts receivable from related parties	Ps.	792,195	Ps.	769,650
Financial assets from investment in concessions (Note 11)		274,940		93,701
Recoverable income and value-added taxes		1,028,856		551,753
Notes receivable		73,310		74,420
Guarantee deposits		117,980		97,452
Other⁽¹⁾		303,825		609,420

	Ps.	2,591,106	Ps.	2,196,396


(1)		Net of allowance for doubtful accounts for Ps.39 million and Ps.34 million in 2010 and 2009, respectively.

F-22

9. Inventories

Inventories consist of the following:


	December 31,
	2010			2009
Materials, spare parts and other	Ps.	817,285		Ps.	692,826
Merchandise in-transit		9,153			19,560
Allowance for obsolete inventories		(10,794	)		(26,968	)

	Ps.	815,644		Ps.	685,418

The changes in the allowance for obsolete inventory are as follows:


	December 31,
	2010			2009			2008
Beginning balance	Ps.	26,968		Ps.	35,893		Ps.	55,728
Increase of the period		—			—			9,669
Uses		(16,174	)		(8,925	)		(29,504	)

Ending balance	Ps.	10,794		Ps.	26,968		Ps.	35,893

10. Real Estate Inventories

Real estate inventories consist of the following:


	December 31,
	2010			2009
Land held for sale	Ps.	718,211		Ps.	1,006,109
Land held for future development		1,130,322			1,301,001
Land under development		1,365,039			339,534
Real estate under construction		3,094,535			2,812,300
Real estate held for sale		1,172,986			203,914
Advances to subcontractors		18,186			86,141

		7,499,279			5,748,999
Long-term		(3,138,608	)		(2,821,949	)

	Ps.	4,360,671		Ps.	2,927,050

The capitalized comprehensive financing costs are Ps.376 million and Ps.274 million, as of December 31, 2010 and 2009, respectively.

As mentioned in Note 21.a, in December 2010, ICA activated the mechanism in a Trust established to guarantee receivables owed to ICA from the Esmeralda Resort Project of Ps.1,447 million (including interest), by which ICA awarded itself the current buildings under construction, golf course, and land of over 289 hectares in a first level beach area as payment on the overdue receivables. As of December 31, 2010, these assets had been classified as current and non-current real estate inventories of Ps.522 and Ps.925 million, respectively.

F-23

11. Investment in Concessions

a) The classification and integration of investment in concessions is as follows:

Financial asset:


		Ownership
	Date of	Percentage						Balance as of December 31,
Description of Project	Concession Agreement	2010			2009			2010		2009
Water treatment plant in Cd. Acuña⁽⁴⁾	September 1998		100	%		100	%	Ps.	267,485	Ps.	262,050
Irapuato — La Piedad Highway⁽¹⁾	August 2005		100	%		100	%		617,058		617,057
Querétaro — Irapuato Highway⁽¹⁾	June 2006		100	%		100	%		542,376		476,601
Nuevo Necaxa — Tihuatlán Highway^{(1) (2)}	June 2007		50	%		50	%		1,268,199		557,308
Río Verde — Cd. Valles Highway⁽¹⁾	July 2007		100	%		100	%		1,428,399		980,304
Acueducto II Querétaro — Water supply^{(1) (2)(3)}	May 2007		42	%		42	%		534,421		528,551
Acueducto San Luis Potosí — El Realito^{(1) (2)}	July 2009		51	%		51	%		3,785		756
Autopista Mitla Tehuantepec⁽¹⁾	Jun 2010		100	%		—			590		—

									4,662,313		3,422,627

*Intangible asset:*

		Ownership
	Date of	Percentage						Balance as of December 31,
Description of Project	Concession Agreement	2010			2009			2010		2009
Grupo Aeroportuario del Centro Norte	November 1998		59	%		59	%		7,015,587		6,973,450
Corredor Sur in Panamá	August 1996		100	%		100	%		2,007,155		2,178,896
Acapulco Tunnel	May 1994		100	%		100	%		1,278,722		1,311,549
Irapuato — La Piedad Highway⁽¹⁾	August 2005		100	%		100	%		96,484		101,237
Querétaro — Irapuato Highway⁽¹⁾	June 2006		100	%		100	%		2,063,455		1,405,870
Kantunil — Cancun Highway	October 1990		100	%		100	%		2,558,081		2,717,641
Nuevo Necaxa — Tihuatlán Highway^{(1) (2)}	June 2007		50	%		50	%		536,785		232,118
Rio Verde — Cd. Valles Highway⁽¹⁾	July 2007		100	%		100	%		773,382		461,612
Parking lots — Perú⁽²⁾	September 2008		50	%		50	%		75,627		13,544
Acueducto II Querétaro — Water supply^{(1) (2) (3)}	May 2007		42	%		42	%		607,258		379,068
Water treatment plant in Cd. Acuña⁽⁴⁾	September 1998		100	%		100	%		39,723		42,704
Libramiento La Piedad	January 2009		100	%		100	%		968,077		361,210
Acueducto San Luis Potosí — El Realito^{(1) (2)}	July 2009		51	%		51	%		2,028		430
Autopista Mitla Tehuantepec⁽¹⁾	Jun 2010		100	%		—			114		—
Planta de Tratamiento de Agua Prieta⁽²⁾	September 2009		50	%		50	%		1,213		—

									18,023,691		16,179,329

*Investment in associated companies:*

		Ownership
	Date of	Percentage						Balance as of December 31,
Investment	Concession Agreement	2010			2009			2010		2009
Red de Carreteras de Occidente, S.A.P.I.B. de C.V.	October 2007		13.63	%		13.63	%		2,530,638		2,783,937
Proactiva Medio Ambiente México, S.A. de C.V.	Various		49.00	%		49.00	%		613,275		577,241
Autopistas Concesionadas del Altiplano, S.A. de C.V.⁽⁵⁾	September 1991		19.38	%		19.38	%		146,127		31,822
Others	Various		—			—			24,307		18,020

									3,314,347		3,411,020

Total								Ps.	26,000,351	Ps	.23,012,976


(1)		Combination of both financial and intangible assets.

(2)		Proportionately consolidated.

(3)		Includes 5% indirect participation.

(4)		During 2009, partially renegotiated which such portion represents an intangible asset.

(5)		In December 2010, this associated company sold its concession asset obtaining a profit of Ps.609 million, of which Ps.120 million belongs to the Company.

F-24

An analysis of the concessions classified as intangible assets is as follows:

Airport Concessions

The investment and rights to use airport facilities and concessions is as follows:


	December 31,
Rights to use airport facilities	2010			2009
Runways, taxiways, platforms	Ps.	1,528,878		Ps.	1,528,878
Buildings		1,002,794			1,002,794
Infrastructure work		349,935			349,935
Land		2,043,447			2,043,447

		4,925,054			4,925,054
Accumulated depreciation		(1,302,128	)		(1,176,293	)

		3,622,926			3,748,761
Airport concessions		624,160			624,160
Accumulated amortization		(195,492	)		(177,720	)

		428,668			446,440
Improvements in concessioned assets		3,774,762			3,398,618
Accumulated amortization		(1,118,457	)		(855,927	)

		2,656,305			2,542,691
Construction of concessioned assets in-progress		307,688			235,558

		7,015,587			6,973,450

Highways and Tunnel


	December 31,
	2010			2009
Projects completed and in operation:
Construction cost		8,016,655			7,993,280
Total financing cost		316,930			336,624
Amortization		(1,842,217	)		(1,528,757	)
Allowance for impairment		(435,576	)		(435,576	)

		6,055,792			6,365,571
Construction in-progress:
Construction cost		4,952,312			2,840,308

		11,008,104			9,205,879

	Ps.	18,023,691		Ps.	16,179,329

Below is a description of the primary concessions held by the subsidiaries of the Company. Upon expiration of the concessions, the infrastructure and any related works will revert to the state or government in operating condition. Each concession requires compliance with various contract terms and obligations. As of December 31, 2010 and 2009, the companies were in compliance with such obligations.

Grupo Aeroportuario Centro Norte

GACN is engaged in administration, operation and, when applicable, construction and exploitation of airports under the concession granted by the Mexican Federal Government through the Communications and Transportation Ministry (“SCT”) for a 50-year period beginning on November 1, 1998. As these airports are state-owned, after the termination of the concession period, any improvements and additional installations permanently attached to the concessioned assets and created during the concession period will revert to the state. The concessioned airports are: Acapulco Airport, Ciudad Juárez Airport, Culiacán Airport, Chihuahua Airport, Durango Airport, Mazatlán Airport, Monterrey Airport, Reynosa Aiport, San Luis Potosí Airport, Tampico Airport, Torreón Airport, Zacatecas Airport and Zihuatanejo Airport.

F-25

GACN is obligated to make investments in and perform improvements to concessioned assets according to the five-year Management Development Program (“MDP”). The total amount required is Ps.2,745 million for the period from 2011 to 2015. The amount per year is as follows:


Year	Amount
2011	Ps.	536,290
2012		473,800

2013		726,245
2014		683,080
2015		325,798


	Ps.	2,745,213

At December 31, 2010, the estimated amount pending to be invested under MDP for the period 2005-2010, is Ps.220 million, which corresponds to checked baggage. The Company expects to conclude these investments in early 2011.

Corredor Sur- Highway

In August 1996, the Panamanian Ministry of Public Works formally awarded to ICA Panama, S.A. (“ICA Panama”) one of the Company’s subsidiaries, a concession for the construction, operation and maintenance of the Corredor Sur Highway, which extends for a distance of 19.5 kilometers. The term of the concession is for 30 years from the commencement of operations, which period may expire prior to or after this stated term as a result of the Company having reached the recoverable investment amount under the concession contract. The Company concluded the first and last stage of the highway in August 1999 and February 2000, respectively.

After the ninth year of the concession’s operation and within three months of the beginning of each fiscal year, the concessionaire is entitled to adjust the toll rates if it is proven that the toll revenues will be insufficient to obtain the return on investment originally projected in the concession. If the market conditions do not allow for toll rate adjustments, the concession contract contains a clause that the Ministry of Public Works may extend the term of the concession agreement, if agreed upon, in order to allow the Company to recover its investment.

Toll revenues provided by this concession guarantee a long-term debt agreement which matures in 2025 (see Note 18).

Acapulco Tunnel (“TUCA”)

On May 20, 1994, the Government of the State of Guerrero (the “State Government”) granted, to one of the Company’s subsidiaries, a 25-year concession for the construction, operation and maintenance of a 2,947, kilometer tunnel connecting Acapulco and Las Cruces. The concession term started in June 1994.

During the year ended December 31, 2001, the Company determined that the recovery value of the Acapulco Tunnel was less than the accounting value recorded for this concession as of that date, based on financial projections prepared by independent experts. For this reason, a loss from impairment was determined for Ps.1,001 million (historical value).

On November 25, 2002, the Congress of the State Government of Guerrero approved the extension of the concession term by 15 years because the actual volume of usage was lower than the amount foreseen by the terms of the concession agreement.

During the year 2004, as a result of the extension of the aforementioned concession period, the Company conducted a new analysis of the recovery value of the Acapulco Tunnel and determined a reversal of the loss from impairment described in the preceding paragraph for the amount of Ps.161 million (historical value).

In subsequent years, based on the evaluation policy for impairment of long-lived assets (see Note 3.j) the Company has been determining the recovery value of this concession with the support of independent experts.

F-26

The market strategies developed by the Company and the economic environment of the last few years have indicated a sustained recovery of the cash flows from the Acapulco Tunnel, for which reason the Company as of December 31, 2009 decided to reverse the loss from impairment recorded in the year 2001 for Ps.681 million (which includes inflation from 2001 through 2007), which has been recorded in the heading of Other (income) expenses, net in the accompanying consolidated statement of operations.

Toll revenues provided by this concession guarantee a long-term debt agreement which matures over 25 years (see Note 18).

Irapuato — La Piedad (“CONIPSA”)

In August 2005, the SCT granted the Company a 20-year concession and service contract for the upgrading, operation, conservation and maintenance of the highway between Irapuato and La Piedad in the state of Guanajuato, covering a length of 74.3 kilometers under the Service Provision Project (PPS) program. The investment is expected to be recovered through quarterly collections comprising: (1) a payment by the SCT for keeping the concessioned route available for its use; and (2) a payment by the SCT for which the amount is based upon the number of vehicles using the concessioned route in accordance with the established tariff. The modernization work was finished in 2008, at which time the Company began operation, preservation and maintenance of the concessioned route.

Toll revenues provided by this concession guarantee a long-term debt agreement with maturity in November 2019 (see Note 18).

Querétaro — Irapuato (“COVIQSA”)

In June 2006, the SCT granted a 20-year concession and services agreement to upgrade, extend and conserve the toll-free Querétaro-Irapuato highway in the states of Querétaro and Guanajuato. A total of 93 kilometers of the 108 kilometers will be upgraded under the PPS program and will be toll-free. The investment will be recovered through quarterly payments comprising: (1) the availability payment received from the SCT; and (2) the payment received from the SCT based on the number of vehicles using the concessioned highway according to the defined tariff. Date of completion of modernization and expansion was in September 2010, at which time the Company began operations.

At December 31, 2010 and 2009, accumulated comprehensive financing cost amounted to Ps.213 million and Ps.136 million, respectively. The annual average capitalization rate was 17% and 14%, respectively.

Nuevo Necaxa — Tihuatlán (“AUNETI”)

In June 2007, the SCT granted a 30-year concession for: (i) construction, operation, maintenance and conservation of the Nuevo Necaxa — Ávila Camacho highway of 36.6 kilometers; (ii) operation, maintenance and conservation of the Ávila Camacho — Tihuatlán highway of 48.1 kilometers; and (iii) long-term service contract for the Nuevo Necaxa — Ávila Camacho highway capacity service.

At December 31, 2010 and 2009, accumulated comprehensive financing cost amounted to Ps.86 million and Ps.29 million, respectively. The annual average capitalization rate was 5% and 4%, respectively.

Río Verde — Ciudad Valles (“RVCV”)

In July 2007, the SCT granted the Company a 20-year concession of the highway between Río Verde and Ciudad Valles covering a length of 113.2 kilometers for: (i) operation, maintenance upgrade, conservation and extension of the Río Verde — Rayón highway of 36.6 kilometers; (ii) construction, operation, maintenance and conservation of the Rayón — La Pitaya II highway of 68.6 kilometers; and (iii) operation, maintenance upgrade, conservation and extension of the La Pitaya — Ciudad Valles III highway of 8.0 kilometers.

At December 31, 2010 and 2009, accumulated comprehensive financing cost amounted to Ps.106 million and Ps.36 million, respectively. The annual average capitalization rate was 6% and 3%, respectively.

F-27

Acueducto II Water System in Queretaro (“SAQSA”)

Suministro de Agua de Querétaro, S.A. de C.V. was created on May 17, 2007, for the purpose of rendering water pipeline and purification services for the Acueducto II System. In May 2007, SAQSA signed the concession contract to provide the pipeline and purification service for the Acueducto II system, together with the respective operation and maintenance, to carry water from the El Infiernillo source on the Rio Moctezuma. The project includes the construction of a collection reservoir, two pumping plants, a tunnel 4,840 meters long through the mountain and an 84 kilometer section downwards, a purification plant and a storage tank. This system will supply 50 million of cubic meters of drinking water a year, equal to 75% of the current supply of water for the metropolitan zone of Querétaro. The Acueducto began operations in February 2011.

At December 31, 2010 and 2009, accumulated comprehensive financing cost amounted to Ps.30 million and Ps.20 million, respectively. The annual average capitalization rate was 5% and 4%, respectively.

Kantunil- Cancún- Highway

In March 2008, ICA acquired 100% of the stock of Consorcio del Mayab, S.A. de C.V., which holds the concession Kantunil- Cancun. The Ps.912 million paid, which includes direct expenses attributable to the acquisition, was lower than the fair value of the acquired net assets. The excess of the fair value over the cost of the acquired net assets generated in this transaction for Ps.131 million was applied by reducing the investment in concessions as established in Bulletin B-7,Business Acquisitions.

The concession was granted in 1990 to construct, exploit, and maintain the 241.5 kilometer highway that connects those cities in the states of Yucatán and Quintana Roo, respectively. The term of the concession is for 30 years and expires in December 2020.

Toll revenues provided by this concession guarantee the redeemable participation certificates that will be amortized over a 17-year period (see Note 18).

Libramiento La Piedad- Highway (“LIPSA”)

In March 2009, the SCT granted to the Company’s subsidiary, Libramiento ICA La Piedad, S.A. de C.V., the concession to construct, operate, exploit, conserve and maintain the Libramiento de La Piedad (La Piedad Bypass), which is 21.388 km long. The concession is for 30 years and includes the modernization of the federal highways 110 and 90, for a length of 38.8 km and 7.32 km, respectively, located in the States of Guanajuato and Michoacán. The Libramiento de La Piedad will form part of the major junction joining the highway corridors of Mexico City-Nogales and Querétaro-Ciudad Juárez and will free the city of La Piedad from the long-haul traffic moving between the Bajío region and Western Mexico. The construction period will be 22 months and is expected to conclude during 2011.

Mitla Tehuantepec- Highway

In June 2010, the SCT executed agreements for the construction and operation of the Mitla- Tehuantepec highway in Oaxaca for the next 20 years, under the PPS program, with the subsidiaries Caminos y Carreteras Del Mayab, S.A.P.I. de C.V. and CONOISA. Construction work is valued at Ps.9,318 million. The project includes the concession for the construction, operation, exploitation, maintenance and expansion, as well as the exclusive right to execute the PPS contract with the Federal Government for the 169 kilometers of the Mitla- Entronque Tehuantepec II, Mitla- Santa María Albarradas, and La Chiguiri- Entronque Tehuantepec II highways. The construction work will be performed over an approximate 40-month period.

El Realito- Aqueduct

In July 2009, theComisión Estatal del Agua(the State Water Commission) of San Luis Potosí awarded the rendering of services contract for the construction and operation of the El Realito aqueduct for 25 years to the association led by CONOISA, a subsidiary company, and Fomento de Construcciones y Contratas (“FCC”). The total contract amount is Ps.2,382 million.

Agua Prieta- Waste Water Treatment Plant

In September 2009, theComisión Estatal del Agua(the State Water Commission) of Jalisco signed a contract with Consorcio Renova Atlatec, (ICA, Renova and Mitsui) for the construction and operation of the Agua Prieta waste water treatment plant for 20 years. The total value of the contract is Ps.2,318 million, through a private and public resource investment scheme from the Fondo Nacional para el Desarrollo de Infraestructura (“FONADIN”).

F-28

Investments in concessions through associated companies are as follows:

Red de Carreteras de Occidente (“RCO”) — Highway

RCO, an associated company, was formed on August 13, 2007, with an initial participation of 20% by ICA of RCO’s capital stock. In October 2007, the SCT granted to RCO a 30-year concession for the construction, operation, maintenance and conservation of the Maravatío — Zapotlanejo and Guadalajara — Aguascalientes — León highways covering a length of 558 kilometers, in the states of Michoacán, Jalisco, Guanajuato and Aguascalientes. Additionally, the concession includes up to Ps.1,500 million of additional investments for extension of the four highways to be carried out in the future. At the end of the concession, the assets subject thereto will revert to the Mexican government.

Condensed financial information of RCO is as follows:


	December 31,
Statement of financial position:	2010			2009⁽¹⁾
Current assets	Ps	. 1,594,383		Ps	. 2,200,935
Investment in concession		44,973,580			44,825,682
Other non-current assets		2,992,391			2,432,800
Current liabilities		(508,371	)		(651,448	)
Long-term debt		(27,945,777	)		(27,181,002	)
Other non-current liabilities		(2,534,959	)		(1,196,891	)
Stockholders’ equity		(18,571,247	)		(20,430,076	)


	Year Ended December 31
Statement of operations:	2010			2009			2008
Revenues	Ps.	4,135,987		Ps.	4,309,340		Ps.	2,888,276
Operating income		1,496,849			1,549,541			1,574,463
Net loss		(660,520	)		(160,080	)		(2,282,552	)


(1)		RCO Administration made certain reclassifications to the 2009 financial statements to conform to the presentation used in 2010.

As of December 31, 2010 and 2009, the Company’s participation in accumulated losses have been recognized for Ps.(725) million and Ps.(635) million, respectively, of which Ps.(90) million and Ps.(128) million relate to the years ended December 31, 2010 and 2009, respectively. Also, in comprehensive loss, the amounts of Ps.(309) million and Ps.(145) million, respectively, have been recognized for the valuation effect of financial instruments classified as hedging instruments (see Note 17).

Long-term debt of RCO includes a loan received in September 2007 from financial institutions for Ps.31,000 million, which is guaranteed by the toll revenues provided by this concession. The loan has a seven-year term with the possibility to be extended by ten years, with monthly interest payments at the Mexican Interbank Equilibrium Offered rate (“TIIE”) plus 1.20% to 1.65% in the first year and gradually increasing in subsequent years up to a range of 1.80% to 2.25% in the sixth and seventh years. The loan includes additional credit lines for liquidity and capital expenditures for Ps.3,100 million and Ps.3,000 million, respectively.

The long-term credit entered into by RCO includes certain restrictive covenants which bar the acquisition of new bank loans, granting security, assuming obligations for payment of taxes, the sale of fixed assets and other noncurrent assets, making capital reimbursements, and require the maintenance of certain financial ratios. These financial ratios include a certain requirement of total liabilities to stockholders’ equity; current assets to current liabilities; current assets, less accounts receivable from affiliates, to current liabilities; and operating income plus depreciation to net expenses. As of December 31, 2010 and 2009, the Company has complied with these requirements.

F-29

In October 2009, the trust that that was created specifically for investing in the Series B share capital of RCO, placed Ps.6,550 million in Long-Term Infrastructure Development Equity Certificates (CKDes) with Mexican institutional investors. In November 2009, the stockholders of RCO owning the Series A shares made equity contributions of Ps.4,000 million; consequently, the equity percentage held by ICA as of December 31, 2010 is 13.63%, which maintains its significant influence.

Proactiva Medio Ambiente México (PMA)

Proactiva Medio Ambiente México (“PMA México”) is a consortium comprised of Constructoras ICA, S.A. de C.V. and Proactiva Medio Ambiente, S.A. de C.V. (“Proactiva”), whose principal activities are the operation of water supply distribution, treatment and management systems, as well as the disposal of solid waste to landfill sites, through concessions granted by governmental organizations.

Condensed financial information of PMA México at December 31, 2010 and 2009, and for each of the years ended December 31, 2010, 2009 and 2008 is as follows:


	December 31,
Statement of financial position:	2010			2009⁽¹⁾
Current assets	Ps.	1,364,445		Ps.	803,915
Investment in concession		838,226			863,926
Other non-current assets		167,773			233,591
Current liabilities		(876,286	)		(502,934	)
Long-term debt		(246,651	)		(144,835	)
Other non-current liabilities		(61,309	)		(181,184	)
Stockholders’ equity		(1,186,198	)		(1,072,479	)


	Year Ended December 31,
Statement of operations:	2010		2009		2008
Revenues	Ps.	1,410,825	Ps.	1,237,632	Ps.	1,180,182
Operating income		172,453		170,559		175,247
Net income		116,284		152,102		116,267


(1)		PMA Administration made certain reclassifications to the 2009 financial statements to conform to the presentation used in 2010.

At December 31, 2010 and 2009, ICA has recognized its participation in the cumulative earnings in PMA México of Ps.353 million and Ps.311 million, respectively, of which Ps.42 million and Ps.5 million related to the years ended December 31, 2010 and 2009, respectively. The results include amortization of the concession intangible of Ps.8 million and Ps.13 million, respectively.

Autopistas Concesionadas del Altiplano, S.A. de C.V. (AUCAL)

AUCAL was formed in March 1990 and ICA owns 19.38% of its capital stock. On March 15 and May 10, 1990, the SCT granted AUCAL a 10 year concession which, on March 22, 1994, was extended to 25.5 years, for the construction, operation, and conservation of the San Martin Texmelucan —Tlaxcala and Tlaxcala — el Molinito highways covering a length of 25.k km in the states of Puebla and Tlaxcala.

Condensed financial information of AUCAL as of December 31, 2010 and 2009, and for each of the years ended December 31, 2010, 2009 and 2008 is as follows:


	December 31,
Statements of financial position:	2010		2009
Current assets	Ps.	824,115	Ps.	153,263
Non-current assets		57,275		170,617
Current liabilities		130,785		75,580
Non- current liabilities		—		79,812
Stockholders’ equity		750,605		168,488

F-30


	Year Ended December 31,
Statements of operations:	2010		2009		2008
Revenues	Ps.	104,748	Ps.	109,253	Ps.	109,183
Operating income		61,526		50,271		49,348
Net income		609,566		31,915		30,213

Atotonilco- Waste Water Treatment Plant

This is a consortium comprised of Promotora del Desarrollo de América Latina, S.A. de C.V., as project leader with 40.8%, Acciona Agua, S.A. with 24.26%, Atlatec, S.A. de C.V. (a subsidiary of Mitsui & Co., Ltd.) with 24.26% , CONOISA with 10.2%, and other minority partners; in January 2010 it executed a contract with the Comisión Nacional del Agua (“CONAGUA”), for the construction and operation of the Atotonilco waste water treatment plant (“PTAR”) in Tula, Hidalgo. The total contract value is Ps.9,300 million and the term is for 25 years.

12. Property, Plant and Equipment

Property, plant and equipment consist of the following:


	December 31,
	2010			2009
Land	Ps.	2,030,408		Ps.	1,905,473
Buildings		1,001,661			692,126
Machinery and operating equipment		2,572,288			2,568,441
Furniture, office equipment and vehicles		594,165			578,049
Accumulated depreciation		(2,194,627	)		(2,120,979	)

		4,003,895			3,623,110
Machinery and equipment under lease		137,839			97,378
Accumulated depreciation		(69,831	)		(53,847	)

		4,071,903			3,666,641
Construction in-process		62,382			308,287
Machinery and equipment in-transit		77,289			297,652

	Ps.	4,211,574		Ps.	4,272,580

13. Other Assets

Other assets are comprised of the following:


	December 31,
	2010		2009
Other expenses related to uncompleted contracts, net⁽²⁾	Ps.	488,462	Ps.	581,652
Deferred loss on derivative financial instruments⁽¹⁾		458,163		558,743
Commissions and other financing costs^{(2) (3)}		758,157		717,202
Goodwill		71,152		34,339
Derivative financial instruments (see Note 17)		44,574		103,738
Insurance and bonding		172,985		236,257
Investment in associated companies		120,022		82,953
Other		388,378		328,514

	Ps.	2,501,893	Ps.	2,643,398


(1)		This amount represents losses on derivative financial instruments entered into for the La Yesca and AUNETI construction projects which, at December 31, 2010, totaled Ps.93 million and Ps.365 million, respectively, and at December 31, 2009, totaled Ps.388 million and Ps.171 million, respectively. The fluctuations in the fair value would generally form part of comprehensive financing cost. However, because these projects are still in the construction phase, MFRS permits the capitalization of comprehensive financing cost into project costs, which include these market-to-market adjustments (see Note 17).

F-31


(2)		Net of accumulated amounts recognized in results (through percentage of completion) of Ps.901 million and Ps.430 million with respect to expenses related to uncompleted contracts and accumulated amortization of Ps.558 million and Ps.320 million with respect to commissions and other financing costs, at December 31, 2010 and 2009, respectively.

(3)		Includes Ps.150 million in placement fees and discounts arising from an exchange of debt that is not substantially different from the original loan contract (see Notes 18 and 31).

14. Notes Payable

Notes payable consist of the following:


	December 31,
	2010		2009
Notes payable to banks⁽¹⁾	Ps.	3,235,066	Ps.	2,899,732
Notes payable to banks denominated in U.S. dollars⁽²⁾		1,021,355		774,965
Other denominations (mainly Euros)		569,666		26

	Ps.	4,826,087	Ps.	3,674,723

As of December 31, 2010 and 2009, approximately Ps.878 million and Ps.967 million, respectively, of the notes payable were used to finance low-income housing projects. The notes payable are secured by the real estate inventory of such projects. Additionally, certain subsidiaries have loans secured by the resources generated from construction projects.

The notes payable to banks consist of short-term notes with weighted average variable interest rates of 8.36% and 4.55% in 2010 and 8.09% and 3.92% in 2009, for notes denominated in Mexican pesos and U.S. dollars, respectively.

At December 31, 2010 the Company has available bank credit lines for Ps.13,438 million.

(1)

Includes Ps.119 million and Ps.94 million of accrued interest as of December 2010 and 2009, respectively.

(2)

Includes Ps.22 million and Ps.16 million of accrued interest as of December 31, 2010 and 2009, respectively.

15. Accrued Expenses and Other

Accrued expenses and other consist of the following:


	December 31,
	2010		2009
Accrued operating expenses	Ps.	1,739,685	Ps.	1,913,546
Services and other		1,271,260		1,462,644
Accounts payable due to related parties		467,143		334,862
Freight carriers and others		74,197		85,444
Taxes other than income tax		310,879		226,563

	Ps.	3,863,164	Ps.	4,023,059

16. Provisions

At December 31, 2010 the composition and changes of principal provisions is as follows:

Current:


					Provision
	December 31,				Used and						December 31,
	2009		Additions		Transfers			Reversals			2010
Costs expected to be incurred at the end of the project	Ps.	448,829	Ps.	291,618	Ps.	(41,740	)	Ps.	(18,251	)	Ps.	680,456
Machinery leasing		357,266		1,441,562		(1,299,164	)		(23,634	)		476,030
Estimated contract loss		12,854		—		(9,707	)		—			3,147
Claims		16,039		177		(3,082	)		—			13,134
Contingencies and warranty reserves for construction contracts (ICAFD)		120,386		68,949		(53,022	)		—			136,313

	Ps.	955,374	Ps.	1,802,306	Ps.	(1,406,715	)	Ps.	(41,885	)	Ps.	1,309,080

F-32

Provision

December 31,

Used and

December 31,

2008

Additions

Transfers

Reversals

2009

Current provisions

Ps.

633,810

Ps.

1,445,597

Ps.

(1,010,786

)

Ps.

(113,247

)

Ps.

955,374

Provision

December 31,

Used and

December 31,

2007

Additions

Transfers

Reversals

2008

Current provisions

Ps.

395,651

Ps.

386,674

(100,682

)

Ps.

(47,833

)

Ps.

633,810

F-33

Other long-term:

Other long-term liabilities include among other obligations, labor liabilities as of December 31, 2010 and 2009 of Ps.476 million and Ps.290 million, respectively, as well as the following provisions:

December 31,

Provision

December 31,

2009

Additions

Used

2010

Contingencies and warranty reserves for construction contracts

Ps.

23,542

.155,190

⁽¹⁾

. (33,492

)

Ps.

145,240

December 31,

Provision

December 31,

2008

Additions

Used

2009

Contingencies and warranty reserves for construction contracts

Ps.

37,658

Ps.

—

Ps.

(14,116

)

Ps.

23,542

December 31,

Provision

December 31,

2007

Additions

Used

2008

Contingencies and warranty reserves for construction contracts

Ps.

39,065

Ps.

11,991

Ps.

(13,398

)

Ps.

37,658


(1)		Ps.48 million relate to the incorporation of Los Portales.

The Company’s industry requires projects to be executed with particular specifications and guarantees, thus obligating the Company to create guarantee and contingency reserves that are reviewed and adjusted during project execution and until or after the conclusion of each specific project.

Additions, uses, transfers and reversals shown in the preceding table represent adjustments to the guarantee and contingency reserves derived from the aforementioned reviews, together with any adjustments derived from the expiration of guarantee and contingency reserves.

17. Derivative Financial Instruments

Derivative financial instruments as of December 31, 2010 and 2009 are composed of instruments that cover interest and exchange rate fluctuations.

a) Interest rate swaps

To mitigate the risk of interest rate fluctuations, ICA uses swaps and/or options to set variable rates to fixed rates. Transactions that fulfill the hedge accounting requirements have been designated as cash flow hedges.

The worldwide financial crisis has caused a general decrease in interest rates, resulting in decreased cash flows from financial instruments and increased liabilities resulting from such instruments.

The following table shows the most significant financial instruments that the Company has contracted as of December 31, 2010 and 2009 to cover interest rate fluctuations through interest rate swaps.


	Notional								Fair value (thousands of
	(thousands of		Contracting	Maturity					Mexican pesos)
Project	Mexican pesos)		date	date	Rate received	Rate paid			2010			2009
Hedging
RCO⁽¹⁾		15,070,000	Oct.07 / Mar.08	Dec 30, 23	TIIE28d (4.96%)		8.52	%		(170,867	)		(51,808	)
RCO⁽¹⁾		11,365,000	Oct.07 / Dec.07	Dec 30, 23	TIIE28d (4.96%)	4.33% + UDI				(155,586	)		(111,658	)
RVCV		2,550,000	Dec 3,08	Dec 28, 15	TIIE28d (4.88%)		9.66	%		(310,152	)		(223,089	)
AUNETI⁽¹⁾		5,510,000	Jun 11, 08	Dec 06, 27	TIIE28d (4.88%)		9.66	%		(365,873	)		(170,992	)
COVIQSA		1,096,711	Nov 30, 07	Nov 27, 12	TIIE91d (4.95%)		8.00	%		(11,634	)		(43,297	)
LIPSA		320,700	Jan 27, 10	May 25, 20	TIIE28d (4.88%)		8.59	%		(64,052	)		—
AEROINVEST		194,000	Feb 5, 10	Dec 16, 11	TIIE91d (4.95%)		6.40	%		(2,380	)		—

The values shown in the“Rate received”column are as of December 31, 2010.

(1) The fair value data shows the percentage of participation that ICA holds in these companies.

F-34

At February 28, 2011, the fair value of these instruments has not fluctuated significantly.

AUNETI

When financing for the AUNETI project was obtained, the bank charged the Company a one-time commission fee of 1.75% of the total debt amount of Ps.5,510 million. However, instead of discounting the debt by the commission fee, the Ps.96 million (Ps.48 million proportionate amount for ICA) was added to interest rate swap derivatives outstanding with the same bank. Accordingly, the fee will be settled through each exchange made on settlement of the interest rate swaps. Recognition of this transaction resulted in a deferred asset subject to amortization (representing the commission payment) and a derivative financial instrument liability at the beginning of the debt contract. As of December 2010 and 2009, the unamortized asset is Ps.36 million and Ps.40 million, respectively, as the difference was amortized to results by an amount of Ps.4 million and Ps.5 million, respectively.

These swaps are classified as trading instruments. Because the swaps are related to a project that is in the construction stage, the changes in the fair value derivative liability as of December 31, 2010 and 2009 of Ps.366 million and Ps.171 million, respectively, is capitalized in other assets as part of the cost of the project (see Note 13).

COVIQSA

When the interest rate swap was entered into, a payment of Ps.8 million was agreed upon to maintain a fixed 8.0% rate. This payment represented the fair value of the swap at the beginning of the contract. The swap establishes the option to extend the term at the financial agent’s discretion to November 27, 2012; because of this option, the derivative does not meet hedging requirements and thus is classified as a trading derivative. On November 27, 2010, the bank exercised its option to extend the derivative to November 27, 2012. When the option was exercised, an interest rate exchange derivative was executed with the same rate conditions; as of December 31, 2010, it is considered as a hedging derivative and fair value fluctuations are presented under other comprehensive income within equity.

RCO
(Variable rate to fixed rate)

In October 2007, four swaps that change the profile of variable rate financing to a weighted average fixed rate of 8.52% on a notional amount of Ps.15,070 million were entered into. These swaps were classified, as of May 2008, as cash flow hedges. At December 31 2010 and 2009, the fair value, which represents the percentage related to ICA based on its participation in RCO, was recognized in other comprehensive income within stockholders’ equity. In February 2010, there was a reduction in the notional amount of the derivative from Ps.15,500 million to Ps.15,070 million.

RCO
(Variable rate to fixed rate plus UDIS)

Revenues from a highway project are derived from rates charged to users that are indexed to inflation. In October and December 2007, two swaps were entered into to change the profile of variable rate financing to a weighted average rate of 4.33% plus UDIS. The notional amount of both swaps is Ps.11,365 million. These derivatives were classified in 2008 as derivatives for trading purposes and the fluctuations in fair value are recognized within comprehensive financing result in the financial statements of RCO and in the Company, under the heading of equity in the (losses) profits of associated companies. As of December 31, 2010 and 2009, these financial instruments have been designated as hedging instruments and their fair value was recognized, in the percentage of equity which ICA holds of this associated company, within other comprehensive income under stockholders’ equity.

On October 2, 2009, RCO’s stockholders placed long-term infrastructure development equity certificates with Mexican institutional investors, particularly Afores. The funds collected were used mainly to pre-pay part of the debt of RCO. As a result of this transaction, the notional amounts of the fixed rate swaps plus UDIs of Ps.12,975 million, were reduced to Ps.11,365 million.

F-35

LIPSA

In January 2010, an interest rate swap was contracted to set the project financing rate. With this instrument, a floating interest rate of the 28-day TIIE is received and a fixed interest rate of 8.59% is paid. As of December 31, 2010, it is considered as a hedging derivative and fair value fluctuations are presented under other comprehensive income within equity.

On February 16, 2011, the derivative was restructured to adjust to the project conditions.

AEROINVEST

In February 2010, a swap was entered into to cover the interest rate risk; the fixed rate paid by Aeroinvest under the swap is 6.40%. The derivative has a notional value of Ps.194 million under which Aeroinvest receives a floating 91-day TIIE rate.

b) Interest rate options

The Company enters into options to establish ceilings (CAPs) and floor (FLOORs) on the level of variable interest rates, which provides the Company the benefit of maintaining an adequate rate on financing for its projects. At December, 2010, the fair value of all contracted CAPs is lower than the premiums paid, for which reason, the CAPs do not generate unrealized profits to be recognized in equity. Accordingly, for all CAPs disclosed below, the fluctuations in fair value are recognized in comprehensive financing result.

The following table shows the most significant financial instruments that the Company has entered into as of December 31, 2010 and 2009 to cover interest rate fluctuations through interest rate options:

Fair value

Notional

(thousands

(thousands of

of Mexican

Mexican

Contracting

Maturity

pesos)

Project

pesos)

date

Rate received

Rate paid

2010

2009

Hedging

TUCA (CAP)

1,250,000

Jul 01, 08

Dec 30, 14

TIIE91d (4.95%)

11.00

2,473

15,754

La YESCA (CAP)

USD 703,612

Feb 01, 08 (renewal)

Jun 01, 12

LIBOR1M (0.26%)

4.50

685

36,382

La YESCA (FLOOR)

USD 703,612

Feb 01, 08

Jun 01, 12

LIBOR1M (0.26%)

2.95

(275,919

)

(363,886

)

Notional

Fair value

(thousands

(thousands of

of Mexican

Contracting

Maturity

Mexican pesos)

Project

pesos)

date

Rate received

Rate paid

2010

2009

Trading

CONIPSA (CAP)

522,000

Aug 26, 09

Aug 29, 11

TIIE91d (4.95%)

8.50

—

741

CONIPSA (CAP)

490,100

Aug 26, 10

Aug 27, 12

TIIE91d (4.95%)

7.50

136

—

SAQSA (CAP)

1,700,018

Jan 08, 08

Jan 20, 11

TIIE28d (4.88%)

9.00

—

SAQSA (CAP)

1,450,000

Oct 20, 10

Jul 20, 12

TIIE28d (4.88%)

6.50

543

—

At February 28, 2011, the fair value of these instruments had not fluctuated significantly.

The values shown in the“Rate received”column are as of December 31, 2010.

F-36

La YESCA
(CAP and FLOOR)

To protect the project from fluctuations in the London Interbank Offered rate (“LIBOR”) (because it is a financed project), two options were entered into in October 2007 establishing a CAP on that rate of 5.5% for a notional amount of up to U.S.$852 million, paying a premium of U.S.$7.33 million. On January 10, 2008, the Company agreed with the financial agent to substitute this CAP with the combination of the purchase of a CAP option and the sale of a FLOOR option, beginning February 1, 2008. The CAP establishes a ceiling of 4.5% on the LIBOR rate and the FLOOR establishes a floor of 2.95%. In order to guarantee its potential obligations under the FLOOR option, the Company was required to establish collateral through a letter of credit of U.S.$6 million. A commission of U.S.$1 million was paid as a result of this restructuring.

In October 2008, the CAP and FLOOR were designated as cash flow hedging instruments. During 2010 and 2009, the fluctuation in fair value of the FLOOR was recognized in other comprehensive income within stockholders’ equity for the amount of its intrinsic value of Ps.279 million and Ps.331 million, respectively (U.S.$21.3 million and U.S.$21.7 million, respectively), and the amount of Ps.7 million and Ps.84 million, respectively, were capitalized as part of the project cost. The intrinsic value in the case of options is determined by the difference between the exercise price and market price of the underlying security, provided that this difference is not negative.

c) Exchange rate instruments, FX swaps and options

The following table shows the most significant financial instruments that the Company has entered into as of December 31, 2010 to cover exchange rate fluctuations through FX swaps and options:

Notional

Fair Value (thousands of

(thousands of Mexican

Contracting

Maturity

Year

Mexican pesos)

Project

pesos)

date

Ref.

Level

2010

2009

Hedging

Túnel Río de la Compañía (CCS)

91,215 / EUR 5,835

Dec 24, 07

Jun 24, 15

Pesos/EUR

15.63

1,343

13,419

Interest on notional amount

EURLIBOR 6M (1.227%)

7.77

La YESCA (FX FWD)

USD 71,700

Jul 09, 10

Jul 06, 12

Pesos/USD

11.350

(85,533

)

(281,531

)

AHMSA

USD 30,600

May 20,10

Aug 11,11⁽²⁾

Pesos/USD

13.6309

19,091

—

USD 10,000

Nov 26,10

Oct 13, 11

12.6531

⁽¹⁾

Túnel Emisor Oriente

Ps.295,922 (EUR 17,944)

Jul 28, 10

Dec 30, 14⁽²⁾

Pesos/EUR

16.49

(19,362

)

—

Interest on notional amount

EURIBOR 6M (1.227%)

4.80

Túnel Emisor Oriente (EUR Put)

EUR 18,240

Jul 28, 10

Dec 30,14

Pesos/ EUR

15.20

3,541

—

Túnel Emisor Oriente (CCS)

460,381 (EUR 26,596)

Oct 22,10

Jun 17,19

Pesos/ EUR

17.31

(9,190

)

—

Interest on notional amount

EURIBOR 6M (1.227%)

6.99


⁽¹⁾		Price weighted by the amount of the FX forward.

⁽²⁾		The dates indicate the year of the last FX forward.

At February 28, 2011, the fair value of these instruments had not fluctuated significantly.

F-37

LA YESCA
(Foreign exchange FX FWD)

The La Yesca project’s financing and contract revenue are in U.S. dollars. However, most project costs are incurred in Mexican pesos. Therefore, the project must exchange the U.S. dollars received from the financing to Mexican pesos to cover its obligations in that currency; therefore, four foreign currency exchange options were entered into from May to August 2008.

The option schemes established an exchange rate level at which the project exchanged the U.S. dollars obtained from the financing necessary to cover costs and expenses in Mexican pesos at a weighted average exchange rate of Ps.11.33 per U.S. dollar for the period from July 2008 to July 2010 for the first three options and to April 2011 for the last option. The notional amount for the foreign currency exchange option is established at two levels, which are determined based on the spot exchange rate level compared to the weighted average exchange rate set in the foreign currency exchange options. Accordingly, for spot exchange rate levels lower than Ps.11.33 per U.S. dollar, the notional amount is limited to U.S.$194.5 million; for spot exchange rate levels higher than Ps.11.33 per U.S. dollar, the notional was set at U.S.$499.3 million (considering the period during which the exchange rate was below the preset level, the maximum notional value was U.S.$467 million). This notional amount was determined by the Company as the amount that would cover the project’s overall liabilities in Mexican pesos, based on management’s best estimate at those dates.

Due to changes in the La Yesca construction schedule and the increasing volatility of Mexican peso-U.S. dollar exchange rate fluctuations, in 2009, the Company and the provider of the La Yesca foreign currency exchange options restructured the options to (i) stabilize the notional amount so that it remains unchanged regardless of the difference between the spot exchange rate and the exchange rate set forth in the derivative contract, (ii) reduce the notional amount to U.S.$183.5 million, which reflects an average of U.S.$1.4 million in weekly operating expenses, to better fit the peso obligations of the La Yesca hydroelectric project, and (iii) reschedules the notional amounts every week so that they match the revised construction program and the payment program. This coverage scheme sets an exchange rate of Ps.11.35 to U.S.$1.00, rate at which the project exchanges the dollars needed to cover peso expenses and costs during the effective term of the instrument.

The renegotiation cost of the financial derivative was U.S.$33 million, which will be paid once the La Yesca project is terminated, and will accrue interest at the LIBOR rate plus 450 basis points, and is recorded within other long-term liabilities. In July 2010, the derivative was further restructured to adjust to the project conditions. This coverage scheme maintains an exchange rate of Ps.11.35 per US dollar during the term of the instrument, with a maximum exchange rate of Ps.17.00. As part of this restructuring, U.S.$16 million was prepaid, with a remnant as of December 31, 2010 of U.S.$17 million, which is included under other long-term liabilities.

Even though such options represent economic hedges, they are classified as trading. However, because the La Yesca project is in the construction stage, the fair value of the option of Ps.86 million and Ps.303 million as of December 31, 2010 and 2009, respectively, is capitalized within other assets as part of the project cost (see Note 13).

Altos Hornos de México (“AHMSA”) (ICAFD project)

U.S. dollar forwards with various maturities were entered into to eliminate the exchange rate risk associated with this project.

The fair value of these hedging derivatives is recorded in stockholders’ equity under other comprehensive income.

Túnel Emisor Oriente

In 2010, exchange and interest rate swaps were entered into to mitigate the respective risks. The primary position relates to loans for the acquisition of machinery related to the project. The fair value of these hedging derivatives is recorded in stockholders’ equity under other comprehensive income.

F-38

18. Long-Term Debt

Long-term debt consists of the following:


	December 31,
	2010		2009
Payable in U.S. dollars:

Secured bond, with a fixed annual interest rate of 6.95% and maturity in 2025, to refinance the debt contracted for Corredor Sur, which is guaranteed by toll revenues.	Ps.	1,764,641	Ps.	1,898,443

Syndicated loan of up to U.S.$910 million for the construction of the La Yesca Hydroelectric Project, maturing in the second quarter of 2012. To date, U.S.$586.3 million has been used. The contracted rate is LIBOR plus 50 basis points (as of December 31, 2010 and 2009, the rate is 0.7667% and 0.7467%, respectively). Similarly, the project has a revolving bridge loan for working capital of U.S.$140 million, which matures on the same date of the syndicated loan. As of December 2010, U.S.$101 million has been withdrawn. The interest rate on this line of credit is within a range of LIBOR plus 0.75% to 4.25% (as of December 31, 2010, the rates range between 1.0167% and 4.5167%). The financing is mainly guaranteed by the collection rights of the construction contract.		8,519,144		5,721,323

Credits granted to Los Portales (subsidiary included in the consolidated financial statements using proportionate consolidation beginning May 2010) for U.S.$7.5 million dollars and U.S.$2.5 million dollars. The loan matures in April 2012 and is redeemable quarterly at fixed rates of 4.25% and 10.5%, respectively.		178,400		—

Others		224,381		144,505

Payable in Euros:

Bank loan granted in Euros for import purchases, maturing in June 2015, payable in 16 semiannual installment beginning December 2007, bearing interest at EUROLIBOR plus a 0.45% margin (1.70% and 1.44% as of December 31, 2010 and 2009, respectively).		58,049		80,759

Payable in Mexican pesos:

TUCA performed a new issuance of securitization certificates, which is guaranteed by collection rights and toll revenues of the Acapulco Tunnel, by issuing a share certificate program trust with a term of up to 25 years. Principal and interest are paid semiannually and bear a rate of the 91-day TIIE plus 265 basis points (7.61% and 7.73% at December 31, 2010 and 2009, respectively) and the 91-day TIIE plus 295 basis points, respectively (7.91% and 8.03% at December 31, 2010 and 2009, respectively). The loan is also guaranteed by a letter of credit of Ps.75 million.		1,249,143		1,250,000

Loan granted for modernization and extension of the Irapuato — La Piedad highway, granted as a concession by the SCT to CONIPSA, maturing in November 2019, bearing interest at the 28-day TIIE plus 2.5% (7.62% and 7.43% as of December 31, 2010 and 2009, respectively). The loan is guaranteed with toll revenues.		520,378		539,400

In June 2007, Aeroinvest, S.A. de C.V., placed two discounted Europeso bonds for Ps.2,450 million with a ten-year term. The fixed interest rates on the remaining two bonds for the first seven years are 7.75% and 11.07%, to ten years. Payment of these bonds is guaranteed with the economic rights associated with equity in GACN, guaranteed by Aeroinvest and ICA. The discount paid in placing these bonds was Ps.215 million and is presented as a reduction of the debt at December 31, 2009. The effective rate, including the discount during 2009 was 23.58%. On December 22, 2010, this loan was pre-paid with resources obtained with a new credit. (1)		—		2,131,394

F-39


	December 31,
	2010		2009
Bridge loan of Ps.2,300 million (to settle the Aeroinvest bond discussed above) with an interest rate of the 28-day TIIE plus 3.5% for the first months and subsequently the 28-day TIIE plus 4.5%, maturing in April 2012. On February 11, 2011, the Company settled the total loan with the resources obtained from the bond discussed in Note 29. As a result of this payment, the financial restrictions that indirectly affected GACN (mainly cash flows and indebtedness) were no longer effective.		2,280,560		—

In June 2007, CONOISA obtained financing of Ps.430 million for the acquisition of 39% of shares of PMA México. The interest rate is the 91-day TIIE plus 0.45%, payable quarterly beginning in September 2008, maturing in 2012 (as of December 31, 2010 and 2009, the interest rate was 5.44% and 5.53%, respectively).		161,493		268,750

Consorcio del Mayab, holder of the Kantunil — Cancún highway concession, issued 78,858,900 redeemable participation certificates (CPOAs), each equivalent to one UDI, separated into three types. The CPOAs will be amortized over a 17-year period and are payable on February and August 7 of each year. They mature in 2019 and 2020 and bear interest at 9.50% and 9.25% at December 31, 2010 and 2009, respectively. This loan is guaranteed with toll revenues.		2,478,422		2,429,986

Loan granted to COVIQSA for modernization and further development of the highway. The loan matures in 2021, and is redeemable quarterly at a rate of the 91-day TIIE plus 2%, (as of December 31, 2010 and 2009, the interest rate was 7.20% and 7.03%, respectively). This loan is guaranteed with toll revenues.		1,249,463		968,653

Loan granted to ICA San Luis, S.A. de C.V. for the construction of the Río Verde — Ciudad Valles highway in San Luis Potosí. The loan is payable in 17 years, matures in 2025, and is redeemable quarterly at a rate of the 28-day TIIE plus 180 basis points, (as of December 31, 2010 and 2009, the interest rate was 6.38% and 6.73%, respectively). This loan is guaranteed with toll revenues.		1,883,692		1,094,596

Loan granted to SAQSA for the construction, operation and maintenance over a 20-year period of the Sistema Acueducto II (water system) of that city. The loan is payable in 17 years, matures in 2024, and is redeemable quarterly at a rate of the 28-day TIIE plus 200 basis points, (as of December 31, 2010 and 2009, the interest rate was 6.84% and 6.92%, respectively). This loan is secured with a pledge on the shares of this subsidiary.		614,655		516,784

Loan granted to AUNETI for the construction of the Nuevo Necaxa — Avila Camacho section of the highway in the states of Puebla and Veracruz. The loan matures in 2028 and is redeemable quarterly at a rate of 28-day TIIE plus 185 basis points, (as of December 31, 2010 and 2009, the interest rate was 6.63% and 6.78%, respectively). This loan is guaranteed with toll revenues.		1,651,864		770,261

Fiduciary loan granted to Viveica, S.A. de C.V. (“Viveica”) for working capital. The loan matures in 2012, bears interest at the 28-day TIIE plus 4.5% (as of December 31, 2010 and 2009, the interest rate was 9. 38% and 9.43%, respectively).		287,520		413,916

Viveica bridge loan granted for the development of a project, due in March 2012, bearing interest at the 28-day TIIE rate plus 1.5% (6.37% and 6.43% at December 31, 2010 and 2009, respectively).		236,152		149,042

Simple credit guarantee granted to Viveica for the development of several projects, bearing interest at the 28-day TIIE rate plus 3.5% percentage points (8.43% at December 31, 2009).		—		296,272

F-40


	December 31,
	2010			2009
Unsecured loan granted to ICASA for the construction of the Naval Specialty Hospital in Mexico City. The loan matures in 2011 and bears interest at a fixed 9% rate.		122,027			114,120

Credit granted to GACN to complete the construction of Terminal B at the Monterrey International Airport and the Terminal NH 2 of the Mexico City International Airport, maturing in September 2017, bearing interest at the 28-day TIIE rate 4.5% (9.38% and 9.43% at December 31, 2010 and 2009, respectively).		601,032			470,590

Loan granted to Viabilis for the Río de los Remedios highway project. The credit line has a maximum amount of Ps.3,000 million to be applied to stage I of the project (Puente de Vigas — México Pachuca highway project); the loan matures in 2024 and bears interest at a fixed 7.81% rate. As of December 31, 2010, Ps.2,097 million has been used. This loan is guaranteed with full corporate right shares of CONOISA.		2,143,528			—

Credit granted to GACN, maturing in April 2018, bearing interest at the 28-day TIIE rate plus 3.5% (7.90% at December 31, 2010).		405,009			—

Credit granted to ICASA, maturing in October 2019, bearing interest at EUROLIBOR plus a 0.3% (1.56% at December 31, 2010).		292,444			—

Loan granted to LIPSA for the Libramiento la Piedad project. The credit line has a maximum amount of Ps.900 million, to be applied in two tranches, guaranteed with the toll collected; the loan matures in 2024 and bears interest at a TIIE rate plus an applicable margin that varies between 275 and 350 basis points (7.63% and 8.37%, respectively, as of December 31, 2010).		229,685			—

Loans of Ps.192 million and Ps.105 million granted to Viveica, maturing on March 22, 2012 and May 25, 2013, respectively, bearing interest at a 28-day TIIE rate plus 4.5% for the former and 5.25% for the latter (9.37% and 10.12% as of December 31, 2010, respectively).		297,875			—

Credit granted to Aeroinvest maturing in December 2011, bearing interest at the 28-day TIIE plus 4.00% (8.4% and 8.93% at December 31, 2010 and 2009, respectively).		194,704			194,004

		27,644,261			19,452,798
Current portion		(1,274,644	)		(657,349	)


	Ps.	26,369,617		Ps.	18,795,449

The scheduled maturities of long-term debt as of December 31, 2010 are as follows:


Year Ending
December 31,
2012	Ps.	12,364,407
2013		643,892
2014		664,207
2015		867,082
2016 and thereafter		11,830,029

	Ps.	26,369,617

F-41

Long-term debt and other agreements of the Company’s subsidiaries mentioned in this note and in Note 14 above provide for various covenants that restrict the ability of certain subsidiaries of the Company to incur additional indebtedness and capital lease obligations, issue guarantees, sell fixed and other non-current assets and make capital distributions to ICA, as well as require compliance with certain other financial ratios. These financial ratios include: the ratio of total liabilities to equity; the ratio of current assets to current liabilities; the ratio of current assets less affiliated accounts receivable to current liabilities; and the ratio of operating earnings plus depreciation to net financing expenses. For the years ended December 31, 2010 and 2009, the Company and its subsidiaries were in compliance with such covenants.

(1)In December 2010, the prior debt was exchanged for the current debt, which is considered to be substantially similar as the present value of the cash flows discounted under the terms of the new debt differ by less than 10% from the discounted cash flows under the previous debt; therefore, in accordance with MFRS, the new debt does not qualify as a new debt instrument and the debt discount and placement expenses continue to be amortized over the remaining life of the new debt.

F-42

19. Foreign Currency Balances and Transactions

The monetary position in foreign currencies of the Company’s Mexican subsidiaries is as follows:


	December 31,
	2010						2009
	Foreign						Foreign
	Currency			Mexican Peso			Currency			Mexican Peso
Currency	Balances			Equivalent			Balances			Equivalent
	(Thousands)			(Thousands)			(Thousands)			(Thousands)
U.S. dollars:
Assets	$	1,102,686		Ps.	13,622,808		$	697,141		Ps.	9,099,449
Liabilities		(1,349,566	)		(16,697,277	)		(677,374	)		(8,876,322	)

Net (liability) asset position	$	(246,880	)	Ps.	(3,074,469	)	$	19,767		Ps.	223,127

The non-monetary assets purchased in foreign currencies by the Company’s Mexican subsidiaries are as follows:

December 31,

2010

2009

Foreign

Currency

Balances

Mexican Peso

Balances

Mexican Peso

(Thousands

Equivalent

(Thousands

Equivalent

of U.S. dollars)

(Thousands)

of U.S. dollars)

(Thousands)

Machinery and equipment

12,204

Ps.

150,804

18,590

Ps.

242,646

Machinery in-transit

—

22,363

287,351

Inventories

1,054

13,017

697

9,099

Condensed financial information of foreign subsidiaries expressed in thousands of U.S. dollars is as follows:


	December 31,
	2010			2009
Current assets	$	207,047		$	251,948
Non-current assets		359,441			318,341
Total liabilities		(413,201	)		(314,844	)

Net assets	$	153,287		$	255,445

Transactions in thousands of U.S. dollars are as follows:


	Year Ended December 31,
	2010		2009		2008
Exports	$	12,061	$	34,760	$	72,750
Purchases		220,453		190,236		185,420
Interest expense		41,173		5,265		8,390

Pertinent exchange rate information at the date of the consolidated statements of financial position is as follows:

December 31,

2010

2009

U.S. dollar currency exchange

Buy

Sell

Buy

Sell

Interbank rate

Ps.

12.3542

Ps.

12.3792

Ps.

13.0525

Ps.

13.1040

As of February 28, 2011, the interbank buy and sell exchange rates were Ps.12.0854 and Ps.12.1104, respectively.

F-43

20. Income and Asset Taxes

The ISR rate for 2010 and 2009 was 30% and 28%, respectively, and will remain at 30% until 2012, after which it will decrease to 29% for 2013 and 28% for 2014.

IETU — Revenues, as well as deductions and certain tax credits, are determined based on cash flows of each fiscal year. The IETU rate was 17.5% in 2010 and was 17% in 2009. The Asset Tax Law was repealed upon enactment of the IETU Law; however, under certain circumstances, IMPAC paid in the ten years prior to the year in which ISR is paid, may be recovered, according to the terms of the law. In addition, as opposed to ISR, the parent and its subsidiaries will incur IETU on an individual basis.

Income taxes expense and its effect on the statements of financial position and statements of operations is as follows:

Consolidated Statements of Financial Position:


	Year Ended December 31,
	2010			2009
Deferred income tax	Ps.	1,607,284		Ps.	1,306,358
Deferred flat tax		937,998			1,445,433
Effects of tax deconsolidation⁽¹⁾		2,718,290			2,790,962

		5,263,572			5,542,753
Current portion		(195,465	)		(70,375	)

Total long -term	Ps.	5,068,107		Ps.	5,472,378


(1)		Estimated additional taxes payable as a result of the tax reforms related to special consolidation benefits previously recognized through December 31, 2005, amounted to Ps.343 million, of which Ps.196 will be payable in 2011 and Ps.147 million will be payable over the period from 2012 to 2015. At December 31, 2009, this liability includes the effects of tax reforms related to tax losses of subsidiaries incurred for the years from 2005 to 2009 in the amount of Ps.1,665 million, of which Ps.1,615 million of the offsetting amount is recognized as a deferred income tax asset, as permitted by MFRS. This amount was increased to Ps.1,625 million at December 31, 2010.

Consolidated Statements of Income:


	Year ended December 31
	2010			2009			2008
Income tax:
Current	Ps.	223,256		Ps.	77,893		Ps.	102,012
Effect of tax reform related to the tax consolidation regimen		—			332,042			—


Total current income tax		223,256			409,935			102,012

Deferred income taxes realized during the year		266,198			1,052,387			(60,376	)
Effect of tax reform in 2010⁽¹⁾		(844,015	)		—			—
Cancelation of unrecoverable tax loss carryforwards of prior years⁽²⁾		829,889			—			—
Change in valuation allowance for unrecoverable deferred tax asset		—			(769,444	)		(91,126	)
Tax effect due to tax rate changes		—			27,436			—
Others		1,742			960			(9,344	)


Total income tax		477,070			721,274			(58,834	)

IETU:
Current		294,834			208,510			126,472
Deferred		(507,435	)		437,716			234,388


Total IETU		(212,601	)		646,226			360,860

	Ps.	264,469		Ps.	1,367,500		Ps.	302,026

F-44


(1)		As discussed in Note 1, during 2009 the Mexican Tax Authorities issued reforms to the Mexican Income Tax Law, which became effective on January 1, 2010. As a result of the enactment of these reforms, in 2009, the Company recognized tax liabilities of Ps.2,791 million, a deferred tax asset of Ps.1,615 million, a charge to results of Ps.332 million and a charge to accumulated results of Ps.844 million. During 2010, the Mexican Tax Authorities issued certain modifications to the original reforms establishing, among other things, that previously recognized obligations measured based on income tax equity accounts will become payable only upon the occurrence of certain triggering events. Companies must therefore analyze whether they continue to have a liability under the revised legislation based on the probability that such triggering events will occur and resulting obligations will materialize, depending on their intentions regarding the application of the tax consolidation regime. As a result of these modifications to the reform, the Company determined that a portion of the liability recognized in 2009 of Ps. 844 million no longer required recognition. This liability was initially recognized in 2009 through retained earnings, as required by INIF 18. However, in 2010, reversal of the liability was recognized through results, as permitted by MFRS.

(2)		During 2010, an amount of Ps.197.4 million of prior year tax loss carryforwards were canceled given that the period to apply such tax losses against taxable earnings expired. Additionally in 2010, Ps.632.4 million of prior year tax loss carryforwards were canceled based on the Company’s current year evaluation of the projections of the subsidiaries at which such losses were generated and its subsequent determination that such subsidiaries will not be able to produce sufficient taxable earnings over the permitted period of amortization of such losses to allow their related application.

The financial projections as of December 31, 2010 indicate that certain subsidiaries will pay more ISR and less IETU during the following years. The subsidiaries with significant changes in estimates are those in the Airport segment, due to the new projections based on the Management Development Program and the maximum rates approved for 2011-2015.

The reconciliation of the statutory income tax rate and the effective income tax rate as a percentage of net income before income tax is as follows:


	Year Ended December 31,
	2010			2009			2008
	%			%			%
Statutory rate		30.00			28.00			28.00
Foreign subsidiaries net operating results		2.41			2.62			4.18
Inflationary and monetary fluctuation effects		11.50			9.24			9.50
Tax effect due to rate changes		—			1.22			—
Effect of tax reform		(57.49	)		14.75			—
Permanent items		(10.44	)		10.63			(38.12	)
Cancelation of unrecoverable tax loss carryforwards		56.53
Change in valuation allowance					(34.18	)		(10.04	)
Other		—			(0.23	)		—

		32.51			32.05			(6.48	)
IETU		(14.49	)		28.70			39.75

Effective rate		18.02			60.75			33.27

F-45

As of December 2010 and 2009, the main items comprising the liability balance of deferred income taxes are as follows:


	December 31,
	2010			2009
Liabilities:
Customers	Ps.	(2,105,952	)	Ps.	(2,487,092	)
Inventories		52,227			(41,167	)
Property, plant and equipment		(41,212	)		(172,236	)
Real estate inventories		(980,685	)		(862,789	)
Investment in concessions		(2,090,193	)		(2,247,011	)

Total liability		(5,165,815	)		(5,810,295	)


Assets:

Accrued expenses and reserves		751,044			859,925
Advances from customers		723,178			690,129

		1,474,222			1,550,054

Deferred income tax liability		(3,691,593	)		(4,260,241	)


Tax loss carryforwards in consolidated tax reporting		1,041,581			1,368,263
Tax loss carryforwards in unconsolidated tax reporting		1,042,728			1,585,620

Deferred taxes from tax losses		2,084,309			2,953,883


Deferred income tax liability, net	Ps.	(1,607,284	)⁽¹⁾	Ps.	(1,306,358	)


Asset tax	Ps.	1,468,397		Ps.	1,871,892
Valuation allowance		(1,468,397	)		(1,871,892	)

Net deferred tax asset	Ps.	—		Ps.	—


(1)		The deferred income tax liabilities as of December 31, 2010 include the deferred tax effects related to the acquisition of Los Portales of Ps.70 million, which did not affect the results for the year.

F-46

The main items comprising the liability balance of deferred IETU at December 31, 2010 and 2009 are as follows:


	December 31,
	2010			2009
LIABILITIES:
Customers	Ps.	(2,031,679	)	Ps.	(1,890,231	)
Inventories, net		(178,650	)		(409,904	)
Real estate inventories		(31,408	)		(6,624	)
Investments in concessions		(447,058	)		(502,306	)
Property, plant and equipment, and others		(565,604	)		(933,844	)

Total liabilities		(3,254,399	)		(3,742,909	)


ASSETS:
Notes payable		249,199			1,043,995
Provisions		670,792			561,872
Tax credits permitted by IETU law		1,396,410			691,609

Total assets		2,316,401			2,297,476

Liability IETU	Ps.	(937,998	)	Ps.	(1,445,433	)

e. In accordance with Mexican tax law, tax losses restated by the NCPI may be carried forward for a period of ten years, from the year after they were generated. The amount of the Company’s consolidated asset tax credits and consolidated tax loss carryforwards and expiration dates as of December 31, 2010, are as follows:


Year of	Asset tax		Tax loss
Expiration	credits		carry forwards
2011	Ps.	390,773	Ps.	—
2012		144,481		380,796
2013		113,738		—
2014		89,330		976,902
2015		109,420		—
2016		67,390		1,298,323
2017		261,479		—
2018		—		641,479
2019		—		174,437

	Ps.	1,176,611	Ps.	3,471,937

f. The balances of stockholders’ equity tax accounts at December 31, 2010 and 2009 are as follows:


	December 31,
	2010		2009
Contributed capital account	Ps.	26,259,892	Ps.	25,147,903
Net consolidated tax profit account		13,334,186		13,002,867

Total	Ps.	39,594,038	Ps.	38,150,770

F-47

21. Commitments and Contingencies

Proyecto Esmeralda Resort— In 2010, an arbitration proceeding was filed against ICA by the companies Proyecto Esmeralda Resort, S.A. de C.V. (“PER”) and Marina Esmeralda Resort, S.A. de C.V. (“MER”), whereby these entities intended to rescind the two contracts for the construction of five buildings, the urbanization and electrification contract, and the contract for the construction of the Proyecto Esmeralda Resort marina in the State of Campeche. The claimants also requested a payment of Ps.268 million for alleged penalties, plus U.S.$439 million for alleged contractual, extra-contractual and non-pecuniary damages.

As of December 31, 2010, the plaintiffs had dismissed the arbitration proceeding; there is a discrepancy with respect to their final representation, however, ultimate of the proceeding is expected during 2011.

The Company’s legal counsel does not believe that an unfavorable outcome in this proceeding is probable.

In July, ICA legally convened a Stockholders’ General Meeting with the stockholders of PER, MER and Campeche Golf, S.A. de C.V. (“GOLF”) (together, the “companies”), which was held on August 18, 2010. During this meeting, the stockholders approved the revocation of the then current Board of Directors of the companies and in its place, appointed a Sole Administrator for the companies. This Sole Administrator has recognized the validity of the amounts owed by the companies to ICA. In August 2010, ICA filed a trust foreclosure procedure as provided in the trust agreement, which such trust assets guarantee the credit granted by ICA to the companies for Ps.920 million, as well as previous amounts owed to ICA for services performed of Ps.361 million, plus interest and other matters. During this process, the Sole Administrator of the companies recognized: (i) the existence of events of default and (ii) the legal basis of the execution procedure.

In December 2010, the trust foreclosure concluded. As a result, the pledged assets were transferred to ICA as a partial payment of the amounts still owed to ICA by the companies. As of December 31, 2010, the remaining amount owed by PER, MER and GOLF was approximately Ps.553 million, which is guaranteed.

Malla Vial de Colombia— In April 2002, an Arbitration Court ordered ICA to pay a damages to the Instituto de Desarrollo Urbano del Distrito Capital de Bogotá, Colombia (“IDU”) for noncompliance with the work contract of the “Malla Vial” project in Bogotá, of approximately US$2.2 million and set the criteria for the settlement of such contract. This ruling was recognized by the Mexican judicial authorities in January 2009 and ICA paid the required amount. At the same time, in separate but related proceeding, the IDU and ICA filed reciprocal legal claims against each other which in December 2004 were recognized by an administrative court.

The evidence is still in the first instance of evaluation in these processes and during 2010, ICA and the IDU continued negotiations. The Company’s management estimates that a settlement agreement between itself and the IDU will have an approximate value of US$1.5 million, which has been reserved.

Airports— A lawsuit was filed against Aeropuerto de Ciudad Juárez, S. A. de C. V. on November 15, 1995, claiming a portion of plots of land (240 hectares) where the Ciudad Juárez International Airport is located, because such plots were claimed are considered to have been incorrectly transferred to the Mexican government. The plaintiff sought a payment of US$120 million (approximately Ps.1,486 million) as on alternative to recovery of the land. In May 2005, an appeals court ruled that Aeropuerto de Ciudad Juárez, S. A. de C. V., had to return this land. The airport filed an Amparo (constitutional claim), which was granted requiring the appellate court to re-analyze the case and the related evidence. On November 8, 2007, the Appeals Court issued a ruling declaring the previous sentence null, after which the plaintiffs filed an Amparo, which was granted to them permitting them to continue the trial with the Mexican federal government as a party. The SCT filed an appearance in the case, responded to the complaint and requested removal to federal court due to lack of jurisdiction by the current court. On May 11, 2010, the court ruled in favor of the SCT’s motion and remanded the case to federal court. On June 2, 2010, the plaintiffs filed another Amparo (constitutional claim) with the First District Court of the State of Chihuahua, which on November 10, 2010 confirmed the ruling removing the case from state court. On November 29, 2010, the plaintiffs filed a motion for review of the November 10, 2010 ruling, which will be heard by a Circuit Court, and is still pending.

As of the date of these financial statements, the Company reports this matter as a contingency due to the fact that the substance of the claim has not been definitively ruled upon even though the SCT has now appeared in the case. The Company believes that in the event of an unfavorable ruling, the economic repercussions of the lawsuit will be borne by the Federal government, as established in the concession title. Accordingly, the Company has not recorded any provisions for this matter.

F-48

There are several administrative-law enforcement actions against the airports of Ciudad Juárez, Culiacán, Zihuatanejo, and Reynosa. In November 2009, the Municipality of Ciudad Juárez once again requested payment from the Ciudad Juárez airport, stating the existence of a debt of Ps.8 million. A new proceeding for annulment was filed by the Company and is still unresolved. In June 2010, the Municipality of Culiacán requested payment of property taxes from by the Company (Aeropuerto de Culiacán, S. A. de C. V.) for Ps.4 million. An action for annulment was filed against this request with the Administrative-Law Court of the State of Sinaloa, and is still unresolved. In October 2010, the Municipality of Zihuatanejo requested payment of Ps.2 million from the Zihuatanejo airport. An action for annulment was filed with the Tax Court of the State of Guerrero by the airport, which is still unresolved. In February 2011, the Municipality of Reynosa once again requested payment of property taxes of Ps.118 million from the Reynosa Airport (Aeropuerto de Reynosa, S.A. de C.V.). An action for annulment will again be filed by the airport. The Company does not believe that an unfavorable outcome is probable and thus, has not recognized any provisions related to these contingencies.

Puerto Rico Urban Train— In 2005, the Highway and Transportation Authority of Puerto Rico (“HTA”), (the client of ICA Miramar), filed a lawsuit against ICA Miramar for the indemnification in a lawsuit between the HTA and its main contractor in the Puerto Rico Urban Train project. The main contractor filed the lawsuit on December 24, 2003, and the HTA filed a counterclaim on November 23, 2004. ICA Miramar estimates that the lawsuit could result in a liability for the Company of approximately U.S.$4 million.

After a lengthy suspension, the court appointed a special judge given the complexity of the lawsuits against ICA Miramar. The main contractor subsequently modified its lawsuit against the HTA and in 2009, the HTA modified its lawsuit against ICA Miramar. The court ordered the parties to negotiate the appointment of an arbitrator. The lawsuit is currently in the information gathering stage. On April 9, 2010, the HTA and the main contractor notified the courts of a transaction regarding the lawsuits against each other. The Company does not believe that a significant loss is probable.

Performance guarantees— In the ordinary course of business, the Company is required to secure construction obligations, mainly related to the completion of construction contracts or the quality of its work, by granting letters of credit or bonds. At December 31, 2010, the Company had granted bonds to its customers for Ps.16,610 million and U.S.$146 million, respectively.

Additionally, the Company has issued letters of credit to guarantee its performance obligations under certain concession arrangements and construction contracts, in the amount of Ps.1,407 million and U.S.$138 million dollars.

GACN has commitments established in a leasing agreement with the Aeropuerto Internacional de la Ciudad de México (Mexico City International Airport or “AICM”) for a 20-year period to build, maintain and operate a hotel that began operations in August 2010, and make use of commercial areas in Terminal 2 of the AICM. The lease was set at the minimum guaranteed revenue (“IMG for its initials in Spanish”) of Ps.18 million per year, plus an annual 18% share of the hotel’s gross revenues. The IMG will be adjusted annually based on the Mexican Consumer Price Index (“NCPI”). As of December 31, 2010 this amount is Ps.22 million.

GACN receives revenues from leasing of commercial premises. The contracts for these leases are based on a monthly rental (which generally increases each year based on the NCPI), and the final rental is represented by the higher of a minimum guaranteed monthly rental and a percentage of the monthly revenues of the lessee. The monthly rental and the minimum guaranteed monthly rental are included in the Company’s consolidated statements of income under the line item “Real estate, concession and other”. At December 31, 2010, the future rent commitments under GACN’s leases are as follows:


	Amount
Year	(Thousands)
2011	Ps.	284,069
2012		146,943
2013		126,152
2014		100,815
Subsequent		139,545


Total	Ps.	797,524

The future rentals committed do not include increases in rentals related to increases based on the NCPI or

F-49

contingent rentals that may be collected by the Company in addition to the minimum guaranteed rental. The revenues from contingent rentals recorded during the years ended December 31, 2010, 2009 and 2008 were Ps.54 million, Ps.48 million and Ps.70 million, respectively.

Leasing of machinery— Some subsidiaries have executed contracts to lease machinery, equipment, and vehicles for terms of two to four years. The monthly rent is determined based on the hours of use of the assets. The amount charged to results under operating leases was Ps.1,092 million in 2010, Ps.935 million in 2009 and Ps.493 million in 2008. At December 31, 2010, the minimum payments of such contracts for the following years are as follows:


	Amount
Year	(Thousands)
2011	Ps.	1,239,537
2012		311,586
2013		136,034
2014		48,052


Total	Ps.	1,735,209

22. Stockholders’ Equity

a. At December 31, 2010, the authorized common stock of the Company is Ps.8,950,796 with a single class of common stock without par value, comprised of the following:


	Shares		Amount
Subscribed and paid shares		649,427,886	Ps.	8,950,796
Shares held in treasury		495,459		3,285

		649,923,345	Ps.	8,954,081

As part of the resolutions made at the Stockholders’ Ordinary General Meeting on April 24, 2009, the Board of Directors proposed to approve the number of shares that represent the Company’s minimum fixed capital at the end of 2008 as 34,693,284. The resulting average theoretical value of such shares derived from the consolidation regime was Ps.13.8560843641 per each subscribed and paid-in share. Consequently, the Company’s minimum fixed capital amounts to Ps.481 million. Variable capital is unlimited.

b. At the Stockholders’ Ordinary General Meeting on April 16, 2010, and April 24, 2009, the stockholders approved the results of operations for the years ended December 31, 2009 and 2008, respectively.

c. A Stockholders’ Special Meeting held on June 25, 2009, the following resolutions were adopted: i) cancel up to 5,349,500 of the Company’s own shares of variable capital, which were held in treasury, acquired under the share buyback program established in the Stock Market Law, ii) adjust the total number of shares representing authorized common stock of 499,923,345 shares to their theoretical value in effect at the acquisition date, and iii) increase the variable capital of the Company through the issuance and placement of up to 150 million unsubscribed shares, up to a maximum amount equivalent to U.S.$350 million through a public offering and over-allotment, both in the Mexican market (30%), and in foreign markets (70%), in the latter case through Nonredeemable Ordinary Participation Certificates (CPOs) or American Depositary Shares (ADSs), each one representing four CPOs, and each CPO with the underlying value of one share.

F-50

d. At the Ordinary General Stockholders’ meeting of March 31, 2000, the stockholders agreed to establish an employee stock option plan. The option plan will be effective for ten years. Under the option plan, ICA’s employees were able to acquire treasury shares at the quoted market price of the day before the grant date, which may not be lower than Ps.22.50 (pesos per share). The term for exercising the option is seven years. Shares obtained through options may only be sold in Mexico through the Mexican Stock Exchange, by following the provisions of the Mexican Law related to confidential information. The maximum annual amount of options for the purchase of shares that may be granted may not exceed 1.5% of the total amount of outstanding shares at December 31 of the previous year.

At the Stockholders’ Ordinary General Meeting of November 17, 2003, the issuance of 13,869,676 shares at no par value to comply with the commitments of the stock option plan and employee bonus plan was approved. On December 13, 2005, 166 treasury shares designated for the option plan were transferred to the share plan, to enable Company officers and employees to acquire shares.

At the Ordinary General Stockholders’ meeting held on April 16, 2004, the stockholders approved a resolution amending the Company’s employee stock option plan. The resolution terminated the issuance of future options under the plan and amended past grants to lower the exercise price on all grants to Ps.22.50 (pesos per share). Since inception of the plan, 4,160,307 shares held in the Company’s treasury were designated for subscription under the employee stock option plan. Through 2007, 3,256,789 options have been exercised. During 2010, 2009 and 2008, 113,485, 35,308 and 151,845 options were exercised, respectively, minus 231,887 and 166 shares transferred from the option to the share plan at 2009 and 2005, respectively.

e. At December 31, 2005, the number of shares held in treasury assigned to meet the Company’s obligation under the employee bonus plan was 9,648,065, of which at December 31, 2007, 1,088,917 shares were granted. During 2010, 2009 and 2008, 3,627,389, 2,819,452 and 2,219,396, respectively, of shares were issued to employees of ICA.

f. Based on the resolutions adopted at the stockholders’ special meeting of June 25, 2009, it was agreed: i) to transfer 231,887 shares held in treasury for purposes of the option plan, whose rights were not exercised within the respective deadlines as established in the assignment contract, to be used for the executive stock plan, ii) for subsequent years, transfer, for use in conjunction with the executive stock plan, the shares dedicated to the option plan, whose option rights were not exercised within the respective deadlines. Accordingly, during 2010, the 370,827 of treasury shares held to cover the option plan were transferred to be used for the employee bonus plan.

The balance at December 31, 2010 of shares in treasury for the employee stock plan is 495,459 shares.

g. During 2009, the Company repurchased from the stock market 371,500 of its own shares for Ps.5,148 (nominal value).

h. Stockholders’ equity, except restated paid-in capital and tax retained earnings, will be subject to income tax at the rate in effect when the dividend is distributed. Any tax paid on such distribution may be credited against the income tax payable of the year in which the tax on the dividend is paid and the two fiscal years following such payment.

23. Noncontrolling Interest in Consolidated Subsidiaries

Noncontrolling interest consists of the following:


	December 31,
	2010		2009
Common stock	Ps.	3,163,301	Ps.	3,103,224
Contributions for future capital increases		118,547		—
Retained earnings and others		852,158		857,134

	Ps.	4,134,006	Ps.	3,960,358

The fluctuation in the noncontrolling interest mainly occurs because of the effects of the dividends received and the effects of incorporation of subsidiaries.

F-51

24. Other Expense (Income), Net

a. Other expense (income), net, consists of the following:


	Year Ended December 31,
	2010			2009			2008
Loss (gain) on sales of property, plant and equipment	Ps.	70,700		Ps.	13,771		Ps.	(10,587	)
Reversal of impairment of long-lived assets (see Note 11c)		—			(680,554	)		—
Loss (gain) on sale of investments in shares		9,682			67			(6,760	)
Personnel settlement⁽¹⁾		64,826			—			—
Gain on contract settlement		—			—			(40,545	)
Other		(10,865	)		(18,823	)		(29,594	)

		134,343			(685,539	)		(87,486	)
Statutory employee profit sharing		29,380			(1,884	)		(7,779	)

	Ps.	163,723		Ps.	(687,423	)	Ps.	(95,265	)


(1)		Corresponds to an administrative restructuring that is taking place in Grupo Rodio- Kronsa.

b. Statutory employee profit sharing expense is as follows:


	Year Ended December 31,
	2010			2009			2008
Current	Ps.	63,946		Ps.	(13,332	)	Ps.	77,772
Deferred		(34,566	)		11,448			(85,551	)

	Ps.	29,380		Ps.	(1,884	)	Ps.	(7,779	)

c. The main items comprising the asset (liability) balance of deferred statutory employee profit sharing at December 31, 2010 and 2009 are as follows:


	December 31,
	2010		2009
Deferred PTU assets:
Inventory	Ps.	23,674	Ps.	9,587
Depreciation of property, plant and equipment		157		18
Provisions		75,527		43,388
Investment in concessions		4,630		295
Advances from customers		20,765		38,759

		124,753		92,047


Deferred PTU liability:
Cost and estimated earnings in excess of billings on uncompleted contracts		(107,373	)		(110,145	)
Other		(1,435	)		(523	)

		(108,808	)		(110,668	)

Total asset (liability)	Ps.	15,945		Ps.	(18,621	)

F-52

25. Comprehensive Financing Cost

Comprehensive financing cost is detailed as follows:


	December 31, 2010
				Financial Position
							Project
	Total			Capitalized			Financing			Results
Interest expense	Ps	3,503,577		Ps	943,173		Ps	1,283,263		Ps	1,277,141
Interest income		(426,157	)		(3,952	)		(39,671	)		(382,534	)
Exchange loss (gain)		10,040			7,831			10,561			(8,352	)
Valuation of derivative financial instruments		384,443			—			311,734			72,709

Total	Ps	3,471,903		Ps	947,052		Ps	1,565,887		Ps	958,964


	December 31, 2009
				Financial Position
							Project
	Total			Capitalized			Financing			Results
Interest expense	Ps	2,516,394		Ps	763,297		Ps	720,572		Ps	1,032,525
Interest income		(406,304	)		—			(33,590	)		(372,714	)
Exchange loss (gain)		75,440			(8,870	)		(21,109	)		105,419
Valuation of derivative financial instruments		476,840			—			474,616			2,224

Total	Ps	2,662,370		Ps	754,427		Ps	1,140,489		Ps	767,454


	December 31, 2008
				Financial Position
							Project
	Total			Capitalized			Financing			Results
Interest expense	Ps	1,354,262		Ps	175,251		Ps	155,616		Ps	1,023,395
Interest income		(404,595	)		(869	)		(8,719	)		(395,007	)
Exchange loss (gain)		90,767			12,785			193,958			(115,976	)
Valuation of derivative financial instruments		75,333			—			46,788			28,545

Total	Ps	1,115,767		Ps	187,167		Ps	387,643		Ps	540,957

26. Related Party Transactions

a. Transactions with related parties, carried out in the ordinary course of business, were as follows:


	Year Ended December 31,
	2010		2009		2008
Construction revenues	Ps.	1,195,836	Ps.	1,665,724	Ps.	413,260
Services rendered		383,162		250,749		220,708
Royalties		64,245		55,138		57,225
Equipment leasing expense		25,738		37,857		32,985
Cost and services expenses		35,163		40,026		32,292
Equipment leasing income and other		99,113		103,069		5,310

F-53

b. For the years ended December 31, 2010, 2009 and 2008, the aggregate compensation of our directors and executive officers paid or accrued for services in all capacities was approximately Ps.210 million, Ps.147 million and Ps.131 million, respectively. We pay non-management directors Ps.15 thousand (nominal value) net of taxes for each board meeting, corporate practices committee meeting or audit committee meeting they attend. Additionally we paid Ps.9 million and Ps.6 million net of taxes to the non-management directors and president of the Board of Directors as of December, 31 2010 and 2009, respectively.

27. Employee Benefits

In 2006, the Company created a defined benefit pension plan covering all active employees aged more than 65, who are part of the board of Empresas ICA, S.A.B. de C.V. and have a minimum of 10 years’ of service as a member of the board prior to their retirement. These employees are entitled to the benefits at the age of 55, with gradual reductions of the salaries considered for pension purposes. Beginning January 1, 2008, the plan deferred the early retirement age an additional two years, which was modified back to age 55 in 2010. During 2010, the Company amended its plan to extend the period over which a particular retiree would receive benefits by an additional five years.

The consolidated net cost of the period of obligations derived from the pension plan, severance payments and seniority premiums was Ps.216 million, Ps.121 million and Ps.114 million in 2010, 2009 and 2008, respectively, and is as follows:


	Year Ended December 31,
	2010			2009			2008
Labor cost	Ps.	46,487		Ps.	44,880		Ps.	30,137
Financial cost		30,477			28,219			19,927
Yield on plan assets		(1,346	)		(1,022	)		(486	)
Net actuarial loss		10,875			12,017			16,913
Amendments to the pension plan for executive officer board members		113,196			—			—
Amortization pending		16,149			36,745			47,147

Net cost of the period	Ps.	215,838		Ps.	120,839		Ps.	113,638

The current values of obligations and the rates used in the calculation of the pension plan and seniority premiums are as follows:


	December 31,
	2010			2009
Vested benefit obligation	Ps.	(223,713	)	Ps.	(85,973	)
Non vested benefit obligation		(359,273	)		(307,129	)

Defined benefit obligation		(582,986	)		(393,102	)
Plan assets at fair value		18,116			14,216

Underfunded status	Ps.	(564,870	)	Ps.	(378,886	)


Unrecognized items:
Initial transition liability	Ps.	27,521		Ps.	44,911
Prior services and plan modifications		11,605			7,756
Actuarial losses		52,054			37,663

	Ps.	91,180		Ps.	90,330


Net projected liability	Ps.	(473,690	)	Ps.	(288,556	)
Current net projected liability		4,550			—

Net projected liability	Ps.	(469,140	)	Ps.	(288,556	)

Actual rates used in actuarial calculations:


	2010			2009
	%			%
Discount rate of the projected benefit obligation at present value		8.50	%		8.50	%
Salary increase		5.50	%		5.50	%
Yield on plan assets		8.50	%		9.00	%

Unrecognized items are charged to results based on the average remaining service life of employees.

F-54

The present values of obligations of the pension plan and seniority premiums are as follows:


	2010			2009
Present values of obligations of the pension plan as of January 1	Ps.	393,102		Ps.	357,944
Actuarial service labor cost		46,487			44,880
Financial cost		30,477			28,219
Actuarial loss of the obligations		39,377			18,262
Loss on change in obligations		2,750			12,465
Amendments to the pension plan for executive officer board members		113,196			—
Benefit payments		(36,714	)		(68,668	)
Reduction and/or early settlement of obligations		(5,689	)		—


Present values of obligations of the pension plan as of December 31	Ps.	582,986		Ps.	393,102

28. Business Segment Data

In previous years, the Company reported six segments, which included the aggregation of airport concessions and other concessions into one segment, the Infrastructure segment. After further review of internal financial information delivered to key management, the importance of the airport and other concessions individually, and the economic characteristics of the airport concessions versus the other concessions, management determined that the airport concessions and other concessions were separate reportable segments. Accordingly, the 2009 and 2008 segment information has been restated to properly reflect the reportable segments.

For management purposes, the Company is organized into seven reportable segments, which are: Civil Construction, Industrial Construction, Rodio-Kronsa, Housing Development, Airports, Infrastructure and Corporate and Other. These segments are the basis on which the Company reports its primary segment information. Operating segment information is presented based on the management approach required by Bulletin B-5,Financial Information by Segment, issued by the “CINIF” in April 2003. The principal products for each of the operating segments are summarized below:


Operating Segment		Principal Products

Construction

Civil construction		Heavy construction projects such as highways, bridges, tunnels and dams, urban and housing construction, including transportation construction such as subway systems, shopping centers and automobile parking facilities.

Industrial construction		Industrial construction such as energy generating and petrochemical plants.

Rodio — Kronsa		Hydraulic construction projects, building, transportation and environmental infrastructure and geotechnology services.

Housing development		Development, trading, ownership, sale, assistance, operation and administration of housing development.

Airports		Operation and maintenance of concessioned airports.

Infrastructure		Operation and maintenance of concessioned highways, bridges and tunnels, water supply systems, and waste treatment.

Corporate and other		Corporate services.

F-55

A summary of certain segment information is as follows (amounts may not add or tie to other accompanying information due to rounding):


	Construction												Housing									Corporate									Total
	Civil			Industrial			Rodio-Kronsa			Subtotal			Development			Airports(3)			Infrastructure			and Other			Total Segments			Eliminations			Consolidated
2010:
External revenues	Ps.	22,142,600		Ps.	4,401,358		Ps.	1,305,823		Ps.	27,849,781		Ps.	3,047,533		Ps.	2,144,423		Ps.	2,677,294		Ps.	32,210		Ps.	35,751,241		Ps.	(785,977	)	Ps.	34,965,264
Intersegment revenues		10,547,124			419,943			(2,716	)		10,964,351			1,644,898			2,088,206			4,578,447			631,545			19,907,447			785,977			20,693,424
Operating (loss) income		840,895			212,939			13,069			1,066,903			276,086			498,087			588,729			(11,128	)		2,418,677			92,614			2,511,291
Financing cost (income)		71,870			788			5,365			78,023			(12,496	)		384,619			292,599			138,530			881,275			77,689			958,964
Income tax expense (benefit)		365,818			71,607			11,703			449,128			414,636			(192,810	)		186,840			(200,717	)		657,077			(392,608	)		264,469
Statutory employee profit sharing expense		1,245			22,882			—			24,127			—			3,501			—			1,752			29,380			—			29,380
Share in operations of associated companies		15			—			—			15			1,324			—			71,579			970,334			1,043,252			(963,820	)		79,432
Segment assets		32,170,144			2,837,518			980,696			35,988,358			9,119,467			10,700,703			25,386,357			25,259,203			106,454,088			(31,465,629	)		74,988,459
Investments in associated companies		933			—			—			933			117,832			—			(455	)		20,892,297			21,010,607			(20,890,585	)		120,022
Segment liabilities(1)		11,622,147			1,761,127			513,481			13,896,755			4,514,569			1,623,937			3,693,930			7,326,818			31,056,009			(10,784,192	)		20,271,817
Capital expenditures(2)		849,639			40,404			38,293			928,336			101,106			625,829			2,239,372			13,733			3,908,376			—			3,908,376
Depreciation and amortization		717,485			37,987			62,897			818,369			25,527			466,546			319,154			13,032			1,642,628			7,208			1,649,836
Net cash of operating activities		(4,956,488	)		946,412			(97,937	)		(4,108,013	)		408,554			395,179			(508,890	)		(1,108,096	)		(4,921,266	)		813,834			(4,107,532	)
Net cash of investing activities		(68,280	)		(22,174	)		35,208			(55,246	)		(139,037	)		(271,127	)		(1,530,688	)		(250,064	)		(2,246,162	)		(549,623	)		(2,795,785	)
Net cash of financing activities		5,018,502			(399,175	)		59,094			4,678,421			(312,227	)		(176,634	)		1,748,043			1,287,380			7,224,983			(245,140	)		6,979,843
							��
	Construction												Housing									Corporate									Total
	Civil			Industrial			Rodio-Kronsa			Subtotal			Development			Airports(3)			Infrastructure			and Other			Total Segments			Eliminations			Consolidated
2009:
External revenues	Ps.	19,603,797		Ps.	3,973,542		Ps.	1,514,374		Ps.	25,091,713		Ps.	2,271,199		Ps.	1,896,277		Ps.	2,230,695		Ps.	20,405		Ps.	31,510,289		Ps.	(638,927	)	Ps.	30,871,362
Intersegment revenues		8,079,056			462,210			846,625			9,387,891			(2,807	)		1,498,223			4,059,160			453,591			15,396,058			638,927			16,034,985
Operating (loss) income		701,529			227,753			43,385			972,667			165,034			611,985			707,053			(13,124	)		2,443,615			1,804			2,445,419
Financing cost (income)		(370,489	)		(18,732	)		15,898			(373,323	)		2,734			247,011			418,645			489,351			784,418			(16,964	)		767,454
Income tax expense (benefit)		568,930			92,378			9,732			671,040			18,126			87,649			327,509			(254,107	)		850,217			517,283			1,367,500
Statutory employee profit sharing benefit		(35,433	)		30,138			—			(5,295	)		—			1,321			20			2,070			(1,884	)		—			(1,884	)
Share in operations of associated companies		7,814			—			—			7,814			(638	)		—			(116,701	)		(4,731	)		(114,256	)		—			(114,256	)
Segment assets		25,850,847			2,880,675			1,226,641			29,958,163			6,009,074			10,498,026			20,980,265			19,549,852			86,995,380			(22,250,075	)		64,745,305
Investments in associated companies		920			—			—			920			1,123			—			5,791			16,679,770			16,687,604			(16,604,651	)		82,953
Segment liabilities(1)		11,312,297			1,579,548			739,092			13,630,937			1,873,529			1,881,171			3,821,885			3,309,223			24,516,745			(4,205,043	)		20,311,702
Capital expenditures(2)		826,907			16,515			95,267			938,689			29,602			943,162			1,675,790			29,689			3,616,932			—			3,616,932
Depreciation and amortization		468,598			34,552			66,835			569,985			5,039			402,113			280,452			223			1,257,812			15,495			1,273,307
Net cash of operating activities		(2,396,937	)		(291,183	)		98,832			(2,589,288	)		522,202			350,845			1,564,059			(744,402	)		(896,584	)		(1,269,950	)		(2,166,534	)
Net cash of investing activities		(1,766,998	)		6,561			(50,413	)		(1,810,850	)		(13,286	)		(565,293	)		(2,278,369	)		(2,069,781	)		(6,737,579	)		1,886,880			(4,850,699	)
Net cash of financing activities		3,363,099			187,911			(9,410	)		3,541,600			(520,615	)		167,233			894,579			2,790,727			6,873,524			(616,934	)		6,256,590

F-56


	Construction												Housing									Corporate									Total
	Civil			Industrial			Development			Subtotal			Development			Airports (3)			Infrastructure			and Other			Total Segments			Eliminations			Consolidated
2008:
External revenues	Ps.	11,402,252		Ps.	4,151,970		Ps.	1,679,791		Ps.	17,234,013		Ps.	2,151,041		Ps.	1,988,497		Ps.	1,851,693		Ps.	49,611		Ps.	23,274,855		Ps.	(523,833	)	Ps.	22,751,022
Intersegment revenues		3,279,424			669,576			454,858			4,403,858			26,117			1,434,757			2,127,205			461,365			8,453,302			523,833			8,977,135
Operating (loss) income		346,107			113,778			12,694			472,579			143,658			721,435			541,706			(34,557	)		1,844,821			(58,721	)		1,786,100
Financing cost (income)		(304,199	)		(70,303	)		13,656			(360,846	)		5,366			241,238			504,667			153,165			543,590			(2,633	)		540,957
Income tax expense (benefit)		159,442			50,483			546			210,471			(21	)		290,354			190,348			(366,111	)		325,041			(23,015	)		302,026
Statutory employee profit sharing expense		67,279			23,224			—			90,503			—			(101,604	)		1,141			2,181			(7,779	)		—			(7,779	)
Share in operations of associated companies		(20,336	)		—			—			(20,336	)		—			—			(416,760	)		5,436			(431,660	)		(947	)		(432,607	)
Segment assets		15,294,595			2,527,001			1,405,979			19,227,575			5,481,822			9,964,108			16,927,017			16,982,789			68,583,311			(19,051,203	)		49,532,108
Investments in associated companies		107,131			—			1,872			109,003			1,761			2			59,830			14,585,509			14,756,105			(14,509,814	)		246,291
Segment liabilities(1)		7,744,183			1,563,389			981,755			10,289,327			1,183,293			2,046,046			2,422,834			2,522,086			18,463,586			(4,621,276	)		13,842,310
Capital expenditures(2)		963,548			42,813			59,464			1,065,825			66,435			2,332,376			3,934,782			37,745			7,437,163						7,437,163
Depreciation and amortization		215,778			34,405			83,606			333,789			7,505			383,125			178,999			423			903,841			15,774			919,615
Net cash of operating activities		(1,939,533	)		58,448			(19,694	)		(1,900,779	)		(1,056,367	)		461,716			1,064,423			(890,218	)		(2,321,225	)		813,459			(1,507,766	)
Net cash of investing activities		(40,730	)		(175,715	)		(27,226	)		(243,671	)		67,927			(1,566,177	)		(2,114,843	)		285,822			(3,570,942	)		(977,004	)		(4,547,946	)
Net cash of financing activities		2,141,750			275,643			101			2,417,494			918,324			(314,029	)		1,837,502			(80,041	)		4,779,250			163,544			4,942,794


(1)		Segment liabilities include only the operating liabilities attributable to each segment.

(2)		Capital expenditures include purchases of property, plant and equipment, investments in concessions and other assets.

(3)		During 2010, airports became a separate segment. Prior periods were restated to reflect the change.

F-57

The Company’s principal consolidated net revenues are from construction contracts with various Mexican public and private sector entities, as well as foreign public and private sector entities, summarized as follows (amounts may not add or tie to other accompanying information due to rounding):


	Year Ended December 31,
	2010		2009			2008
National:

a. Public sector
Petróleos Mexicanos	Ps.	3,673,512	Ps.	2,939,680	��	Ps.	2,875,220
Comisión Federal de Electricidad		3,790,480		3,864,874			2,477,402
Secretaría de Comunicaciones y Transportes		3,043,900		44,271			202,998
Sistema de Transporte Metropolitano		—		2,395,789			232,549
Aeropuertos y Servicios Auxiliares		38,096		177,102			338,489
Instituto Mexicano del Seguro Social		120,759		430,225			115,630
Poder Judicial de la Federación		—		—			21,950
Instituto Nacional de Rehabilitación		174,426		129,525			—
Comisión Nacional del Agua		3,132,300		1,428,055			11,223
State Governments		1,130,477		2,043,663			2,751,751
Gobierno del Distrito Federal		5,270,741		861,657			173,999
Instituto de Seguridad Social al Servicio de Trabajadores del Estado		553,434		236,842			—
Fideicomiso 1928 (Río de la Compañía)		6,012		269,687			—
Sistema de Autopistas y Aeropuertos y Servicios Conexos y Auxiliares del Estado de México		1,044,895		1,273,426			—
Secretaría de Marina		—		47,639			632,145
Secretaría de Seguridad Pública de Nayarit		1,014,249		—			—
Centro Nacional de Evaluación para la Educación Superior, A.C.		10,352		—			—

b. Private sector
Terminal de Ling-Shell		—		21,223			—
Playa Paraiso Maya, S.A. de C.V.		—		52,708			—
Indelpro, S.A. de .C.V.		—		—			43,828
Fideicomiso de Autotransportes del Golfo		349,294		324,786			243,625
Minera y Metalúrgica del Boleo, S.A. de C.V.		50,145		—			—
Marathon Oil Company		118,917		—			—
Altos Hornos de México, S.A.		312,158		358,489			595,637
Energía Costa Azul, S. de R.L.		—		349,957			288,502
Aeropuerto de la Ciudad de México		71,012		11,933			216,769
Monterrey Airport		—		142,450			308,213
Proyecto Esmeralda		347,381		500,934			312,093
Red de Carreteras		1,036,994		1,342,057			213,701
Vista Serena S. de R.L.		17,966		307,910			346,703
Partes Relacionadas (ICA Fluor Daniel)		51,693		138,590			—
Estadio Chivas		38,196		267,499			760,751

	Year Ended December 31,
	2010		2009			2008
Foreign:
Public and private sector
Spain		1,305,823		1,514,373			1,679,791
Colombia		79,315		82,718			123,638
Venezuela		—		—			98,529
Panama		266,937		14,646			363,016

F-58

The Company’s segments operate in four principal geographical areas in the world: Mexico, its home country, Spain, United States and Latin America. The Company’s operations by geographic area were as follows (amounts may not add or tie to another balances due to rounding):


				Foreign
						United		Latin		Sub-			Intersegment
	Mexico			Spain		States		America		total			Eliminations			Total
2010:
Revenues:
Construction	Ps.	26,331,621		Ps.	1,305,823	Ps.	9,266	Ps.	344,887	Ps.	27,991,597		Ps.	(141,816	)	Ps.	27,849,781
Housing development		2,518,875			—		—		528,658		3,047,533			—			3,047,533
Infrastructure and airports		4,210,768			—		—		610,949		4,821,717			—			4,821,717
Corporate and other		(753,767	)		—		—		—		(753,767	)		—			(753,767	)
Total revenues		32,307,497			1,305,823		9,266		1,484,494		35,107,080			(141,816	)		34,965,264
Capital expenditures		3,682,592			38,293		—		187,491		3,908,376			—			3,908,376
Fixed assets		3,827,044			244,854		—		134,178		4,206,076			5,498			4,211,574
Total assets		69,904,190			1,029,323		1,223,759		4,567,383		76,724,655			(1,736,196	)		74,988,459

2009:
Revenues:
Construction	Ps.	23,535,720		Ps.	1,514,373	Ps.	—	Ps.	94,910	Ps.	25,145,003		Ps.	(53,290	)	Ps.	25,091,713
Housing development		2,271,199			—		—		—		2,271,199			—			2,271,199
Infrastructure and airports		3,384,114			—		—		742,858		4,126,972			—			4,126,972
Corporate and other		(618,522	)		—		—		—		(618,522	)		—			(618,522	)
Total revenues		28,572,511			1,514,373		—		837,768		30,924,652			(53,290	)		30,871,362
Capital expenditures		3,509,988			95,267		—		11,677		3,616,932			—			3,616,932
Fixed assets		3,941,429			323,493		—		7,658		4,272,580			—			4,272,580
Total assets		60,368,439			1,274,193		1,558,463		4,695,307		67,896,402			(3,151,097	)		64,745,305

2008:
Revenues:
Construction	Ps.	15,088,539		Ps.	1,679,791	Ps.	—	Ps.	470,099	Ps.	17,238,429		Ps.	(4,416	)	Ps.	17,234,013
Housing development		2,151,041			—		—		—		2,151,041			—			2,151,041
Infrastructure and airports		3,251,326			—		—		588,864		3,840,190			—			3,840,190
Corporate and other		(474,221	)		—		—		—		(474,221	)		—			(474,221	)
Total revenues		20,016,684			1,679,791		—		1,058,963		22,755,438			(4,416	)		22,751,022
Capital expenditures		7,311,814			59,464		—		65,885		7,437,163			—			7,437,163
Fixed assets		3,036,389			257,036		25		15,860		3,309,310			—			3,309,310
Total assets		44,868,623			1,443,991		1,497,520		4,029,322		51,839,456			(2,307,348	)		49,532,108

F-59

29. Differences Between Mexican Financial Reporting Standards and Accounting Principles Generally Accepted in the United States of America

Through December 31, 2007, the consolidated financial statements under MFRS included the effects of inflation as provided for under Bulletin B-10,Comprehensive Effects of Inflation on Financial Information, which also required the restatement of all financial statements to constant pesos as of the date of the most recent balance sheet presented. The Company restated financial statements to constant pesos by applying the alternative method provided by Bulletin B-15. Beginning January 1, 2008, the Company adopted NIF B-10, under which it discontinued the recognition of the effects of inflation in its MFRS financial statements, since the countries in which it operates are not considered inflationary, as defined by NIF B-10, and does not restate financial statements into constant pesos. Therefore, the consolidated financial statements as of and for the years ended December 31, 2010, 2009 and 2008 include balances and transactions denominated in Mexican pesos of different purchasing power.

U.S. GAAP requires financial statements to be presented on a historical cost basis. However, the application of Bulletin B-10 represented a comprehensive measure of the effects of price level changes in the Mexican economy during the time in which the country experienced high levels of inflation and, as such, was considered a more meaningful presentation than historical cost-based financial reporting, for which reason the following reconciliations to U.S. GAAP do not include the reversal of the inflation adjustments through December 31, 2007.

The principal differences between MFRS and U.S. GAAP and their effects on consolidated net income and consolidated equity are presented below with an explanation of such adjustments:


	Millions of
	U.S. Dollars
	(Convenience
	Translation)
	Year Ended
	December 31,			Years Ended December 31,
Reconciliation of Consolidated Net Income (Loss)	2010			2010			2009			2008
Consolidated net income reported under MFRS	$	97		Ps.	1,203,567		Ps.	883,632		Ps.	605,775
U.S. GAAP adjustments for:
Effect of concession accounting(d)		16			198,486			(237,767	)		(301,862	)
Reversal of changes in income tax law recorded in equity (e)		—			—			(844,076	)		—
Deferred income taxes(e)		(8	)		(92,726	)		427,599			105,403
Deferred statutory employee profit sharing asset (e)		(1	)		(15,945	)		—			—
Capitalization of financing costs(f)		(1	)		(12,019	)		8,870			(54,770	)
Accrual for severance payments(g)		9			109,120			26,920			70,395
Impairment reversal(h)		2			24,138			(673,451	)		7,531
Reversal of compensation cost recognized in MFRS upon exercise of option (m)(8)		—			1,138			93			6,550
Amortization of intangible resulting from purchase method applied to acquisition of noncontrolling interest (i)		—			(5,681	)		(5,681	)		(5,682	)
Investment in associated companies (cost method) (j)		—			—			(16,446	)		(9,671	)
Reversal of deferred (loss) gain or amortization of deferred loss on derivative financial instruments (k)		7			87,411			824,562			(1,730,327	)
Valuation of derivative financial instruments (k)		1			11,011			10,752			—
Debt issuance costs (l)		2			22,751			—			—


Consolidated net income (loss) under U.S. GAAP	$	124		Ps.	1,531,251		Ps.	405,007		Ps.	(1,306,658	)

Net income (loss) attributable to noncontrolling interest		24			292,806			294,280			(228,707	)

Net income (loss) attributable to ICA	$	100		Ps.	1,238,445		Ps.	110,727		Ps.	(1,077,951	)

F-60


	Millions of
	U.S. Dollars
	(Convenience
	Translation)
	December 31,			At December 31,
Reconciliation of Equity	2010			2010			2009			2008
Total equity reported under MFRS	$	1,742		Ps.	21,574,120		Ps.	20,766,059		Ps.	17,433,074
Effect of concession accounting (d)		(37	)		(463,813	)		(662,299	)		(424,532	)


		1,705			21,110,307			20,103,760			17,008,542

U.S. GAAP adjustments for:
Effect on retained earnings from:
Deferred income taxes(e)		(161	)		(1,998,063	)		(1,905,337	)		(2,332,935	)
Deferred statutory employee profit sharing(e)		(31	)		(387,749	)		(371,804	)		(371,804	)
Restatement for inflation on foreign sourced fixed assets		(19	)		(240,830	)		(240,830	)		(240,830	)
Capitalization of financing costs(f)		(8	)		(103,887	)		(91,868	)		(100,738	)
Accrual for severance payments(g)		10			118,108			8,988			(17,932	)
Gain on sale of foreign subsidiaries		22			270,715			270,715			270,715
Impairment reversal(h)		(66	)		(819,624	)		(843,762	)		(170,311	)
Reversal of compensation cost recognized in MFRS upon exercise of option(l)(8)		4			51,087			49,949			49,856
Reversal of acquisition cost (gain) of noncontrolling interest(i)		40			501,464			501,464			501,464
Amortization of intangible resulting from purchase method applied to acquisition of noncontrolling interest (i)		(2	)		(19,177	)		(13,495	)		(7,815	)
Reversal of additional paid-in capital recognized in MFRS upon exercise of option(m)(8)		(4	)		(51,087	)		(49,949	)		(49,856	)
Investment in associated companies (cost method) (j)		(2	)		(26,117	)		(26,117	)		(9,671	)
Debt issuance costs (l)		2			22,751			—			—	��
Reversal of deferred loss on derivative financial instruments (k)		(66	)		(818,354	)		(905,765	)		(1,730,327	)
Valuation of derivative financial instruments (k)		11			131,273			27,715			—
Reclass of redeemable noncontrolling interest to temporary equity (c)		(12	)		(154,831	)		(129,895	)		(144,040	)
Valuation of redeemable noncontrolling interest to redemption price (c)		(2	)		(15,676	)		(26,787	)		—
Effect on insufficiency from restatement for inflation of capital and accumulated other comprehensive income related to:
Deferred income taxes		181			2,235,643			2,235,643			2,235,643
Deferred statutory employee profit sharing		7			84,820			84,820			84,820
Restatement for inflation of foreign sourced fixed assets		18			227,554			227,554			227,554
Gain on sale of foreign subsidiaries		(22	)		(270,715	)		(270,715	)		(270,715	)
Adjustment for excess of additional minimum liability related to severance payments(g)		—			4,299			4,299			4,299
Adjustment for retirement benefits, net of tax(g)		(13	)		(149,725	)		(34,854	)		(9,197	)


Equity under U.S. GAAP	$	1,592		Ps.	19,702,186		Ps.	18,603,729		Ps.	14,926,722

Equity attributable to noncontrolling interest		257			3,187,320			3,040,550			2,278,659

Equity attributable to ICA	$	1,335		Ps.	16,514,866		Ps.	15,563,179		Ps.	12,648,063

F-61

A summary of changes in equity after giving effect to the U.S. GAAP adjustments described above is as follows:


	Years Ended December 31, 2010
	Attributable			Noncontrolling			Total equity under
	to ICA			Interest			U.S. GAAP
Equity under U.S. GAAP at January 1	Ps.	15,563,179		Ps.	3,040,550		Ps.	18,603,729
Issuance of common stock		84,206			—			84,206
Effect from acquisition of noncontrolling interest		33,412			—			33,412
Decrease in noncontrolling interest		—			(118,411	)		(118,411	)
Consolidated net income under U.S. GAAP		1,238,445			292,806			1,531,251
Reclassification of redeemable noncontrolling interest to temporary equity		—			(24,936	)		(24,936	)
Valuation of redeemable noncontrolling interest to redemption price		11,110			—			11,110
Accumulated other comprehensive income:

Adjustment for retirement benefits, net of tax of Ps.24,366		(114,870	)		—			(114,870	)
Foreign currency translation		(56,908	)		—			(56,908	)
Valuation of derivative financial instruments, net of taxes of Ps.27,395		(243,708	)		(2,689	)		(246,397	)

Equity under U.S. GAAP at December 31	Ps.	16,514,866		Ps.	3,187,320		Ps.	19,702,186


	Years Ended December 31, 2009
	Attributable			Noncontrolling			Total equity under
	to ICA			Interest			U.S. GAAP
Equity under U.S. GAAP at January 1	Ps.	12,648,063		Ps.	2,278,659		Ps.	14,926,722
Issuance of common stock		2,999,776			—			2,999,776
Repurchase of own shares		(7,936	)		—			(7,936	)
Effect from acquisition of noncontrolling interest		9,799			—			9,799
Increase in noncontrolling interest		—			456,261			456,261
Consolidated net income under U.S. GAAP		110,727			294,280			405,007
Reclassification of redeemable noncontrolling interest to temporary equity		—			14,145			14,145
Valuation of redeemable noncontrolling interest to redemption price		(26,787	)		—			(26,787	)
Accumulated other comprehensive income:

Adjustment for retirement benefits, net of tax of Ps.5,443		(25,657	)		—			(25,657	)
Foreign currency translation		4,108			—			4,108
Valuation of derivative financial instruments		(148,914	)		(2,795	)		(151,709	)

Equity under U.S. GAAP at December 31	Ps.	15,563,179		Ps.	3,040,550		Ps.	18,603,729


	Years Ended December 31, 2008
	Attributable			Noncontrolling			Total equity under
	to ICA			Interest			U.S. GAAP
Equity under U.S. GAAP at January 1	Ps.	14,123,447		Ps.	3,278,933		Ps.	17,402,380
Issuance of common stock		3,417			—			3,417
Repurchase of own shares		(89,929	)		—			(89,929	)
Decrease in noncontrolling interest		—			(680,646	)		(680,646	)
Consolidated net loss under U.S. GAAP		(1,077,951	)		(228,707	)		(1,306,658	)
Reclass of redeemable noncontrolling interest to temporary equity		—			18,502			18,502
Accumulated other comprehensive income:

Adjustment for retirement benefits, net of tax of Ps.44,839		226,898			—			226,898
Foreign currency translation		(67,967	)		—			(67,967	)
Valuation of derivative financial instruments		(469,852	)		(109,423	)		(579,275	)

Equity under U.S. GAAP at December 31	Ps.	12,648,063		Ps.	2,278,659		Ps.	14,926,722

F-62

(a) Application of Losses, Stock Issue Costs and Classification of Purchases of Noncontrolling Interest

In its MFRS financial statements, the Company recognizes the application of accumulated losses against common stock. This generally involves the reclassification of cumulative inflationary effects included within retained earnings, cumulative other comprehensive income, additional paid-in capital and the reserve for the repurchase of shares to common stock, and is done only upon approval of the stockholders of the Company. However, U.S. GAAP prohibits the reclassification of accumulated earnings against common stock except in certain circumstances.

In addition, when issuing common stock, under MFRS, offering costs in excess of additional paid-in capital are applied against retained earnings. U.S. GAAP requires that all offering costs in excess of additional paid-in capital be deducted against the value of common stock.

These differences do not affect total equity under U.S. GAAP, but rather represent reclassifications among the affected accounts within equity.

During 2010 and 2009, the Company did not apply any previous losses to common stock. In addition, the offering costs incurred on the issuance of common stock in 2009 did not exceed the additional paid-in capital from such issuance. Accordingly, the cumulative adjustments to items within equity to reverse these effects for purposes of U.S. GAAP are the same amounts accumulated through December 31, 2008.

However, during 2010, the Company purchased an additional 33% and 25% of the noncontrolling interest in Recursos Técnicos y de Administración la Yesca, S.A. de C.V. and Desarrolladora de Proyectos Hidroeléctricos, S.A. de C.V., respectively. In its MFRS financial statements, the excess of the amount paid over the carrying value of the investment was included within retained earnings. Under U.S. GAAP, such amount is included in additional paid-in capital. This reclassification of Ps.33.4 million is included in the cumulative adjustments below:


	Accumulated						Accumulated
	Adjustments for						Adjustments for
	Application of						Application of
	Losses and Offering						Losses and Offering
	Costs at December						Costs at December
	31, 2009			Adjustments			31, 2010
Common stock	Ps.	11,405,883		Ps.	—		Ps.	11,405,883
Additional paid-in capital		7,089,921			33,412			7,123,333
Reserve for repurchase of shares		(2,000,206	)		—			(2,000,206	)
Accumulated deficit		(4,076,255	)		(33,412	)		(4,109,667	)
Cumulative other comprehensive loss		(12,419,343	)		—			(12,419,343	)

(b) Proportionate Gross Consolidation Method

(i) Beginning January 1, 2009, the Company adopted NIF B-8,Consolidated and Combined Financial Statements, which resulted in the proportionate consolidation of ICAFD, a joint venture that was previously consolidated under MFRS given the Company’s 51% ownership in such entity. This change in accounting was recognized retrospectively in the Company’s MFRS financial statements. In prior years, given the more detailed guidance that existed in U.S. GAAP, the Company determined that for purposes of U.S. GAAP, it was always able to proportionately consolidated ICAFD. In making such determination, management performed an analysis of the U.S. GAAP treatment of this investment and determined that the Fluor Corporation, owner of the remaining 49% of ICAFD’s equity, has substantive participating rights over ICAFD, by virtue of its participation in the following: (i) selecting, terminating, and setting the compensation of management responsible for implementing the investee’s policies and procedures; and (ii) establishing operating and capital decisions of the investee, including budgets, in the ordinary course of business. Because of these substantive participating rights of the Fluor Corporation, management concluded that the Company does not exercise unilateral control of ICAFD and is unable to consolidate ICAFD for U.S. GAAP purposes.

F-63

Furthermore, given that ICAFD is in the construction industry and is an unincorporated entity, the Company applies the proportionate gross consolidation method to its investment in ICAFD as permitted by U.S. GAAP in certain limited circumstances. Under this method, the Company proportionately recognizes its 50% share of the revenues, costs and expenses in ICAFD in the consolidated statements of income as well as its 50% share of the assets and liabilities of ICAFD in the consolidated balance sheets.

ICAFD is a joint venture between the Company and the Fluor Corporation and is organized as asociedad de responsabilidad limitada(company with limited liability, or an “S. de R.L.”) in Mexico. An S. de R.L. is an unincorporated entity that is similar to a limited liability company (“LLC”) or limited liability partnership (“LLP”) under U.S. law.

S. de R.L.s have the following relevant characteristics:

	•		The capital stock of a S. de R.L. is divided into “participation units” that may not be freely transferable or publicity traded, as distinguished from shares of common stock in a corporation, which may be transferable and publicity traded;

	•		Significant control over management and operations of the entity may be maintained by participants of S. de R.L. in a manner that is similar to managing members of a limited liability company, as distinguished from a corporation where control is vested in a board of directors rather than the shareholders.

S. de R.L.s are treated similar to LLCs under U.S. tax regulations.

Although the adoption of NIF B-8 under MFRS eliminates the difference in accounting between MFRS and U.S. GAAP, further disclosures are required by U.S. GAAP given the significance of ICAFD to the Company’s consolidated information. Accordingly, a summarized balance sheet and income statement of ICAFD under MFRS as of December 31, 2010 and 2009 and for each of the three years in the period ended December 31, 2010, 2009 and 2008, on a 100% basis are presented as follows:


	December 31,
	2010			2009

Balance Sheet Data:
Current assets	Ps.	5,154,506		Ps.	5,388,125
Non-current assets		381,405			261,436
Current liabilities		(4,025,224	)		(4,163,880	)
Non-current liabilities		(205,158	)		(334,019	)
Investment of minority interest		(8	)		(5	)

Partners’ equity	Ps.	1,305,521		Ps.	1,151,657


	Years Ended December 31,
	2010		2009		2008
Statement of Income Data:
Total revenues	Ps.	8,802,819	Ps.	7,947,084	Ps.	8,303,939
Operating income		458,311		464,935		252,756
Other expense		45,433		57,528		48,750
Income before income tax on profits		411,304		444,286		343,961
Income tax		143,213		184,757		132,377
Minority interest in results of consolidated subsidiaries		3		2		67

Net income	Ps.	268,091	Ps.	259,529	Ps.	211,584

F-64

(ii) As discussed in Note 2.e to the consolidated financial statements under MFRS, the assets, liabilities, revenues, costs and expenses of companies or associations subject to contractually agreed joint control are included in the consolidated financial statements using the proportionate gross consolidation method, as permitted by MFRS through the supplemental application of IAS 31.

As mentioned above, U.S. GAAP only permits the use of the proportionate gross consolidation method of accounting under certain specific circumstances. This criteria is not met by several of the entities that are proportionately consolidated under MFRS, including, Suministros de Agua de Querétaro, S.A. de C.V., Constructora Nuevo Necaxa Tihuatlán, S.A. de C.V. and Autovía Nuevo Necaxa Tihuatlán, S.A. de C.V. and Los Portales, S.A. (as from April 2010). Accordingly, these entities are presented under the equity method for purposes of U.S. GAAP. This difference does not affect consolidated net income or consolidated equity, but rather affects individual asset, liability, revenue and cost accounts. Condensed, combined information for those entities that are proportionately consolidated under MFRS but accounted for under the equity method for U.S. GAAP as of and for the year ended December 31, 2010, 2009 and 2008 is as follows.


	December 31,
	2010		2009
Balance Sheet Data:
Current assets	Ps.	3,451,241	Ps.	2,204,304
Non-current assets		3,885,030		1,921,027
Current liabilities		2,786,046		1,631,129
Non-current liabilities		3,196,413		1,726,260


			Year Ended December,
	2010		2009		2008
Statement of Income Data:
Total revenues	Ps.	5,151,756	Ps.	3,515,212	Ps.	1,871,495
Operating income		231,048		123,588		46,900
Income before income tax expense		240,604		124,155		63,730
Income tax		83,159		51,185		54,015
Net income		157,445		72,970		9,715

(c) Redeemable Noncontrolling Interest

As disclosed in the MFRS financial statements, the Company holds an approximate 58.7% controlling interest in GACN, a subsidiary in the Infrastructure segment, involved in the operation of airports throughout Mexico. The Company’s investment in GACN is held directly through its investment in Aeroinvest as well as indirectly through Aeroinvest’s 74.5% investment in SETA. The remaining 25.5% of SETA is owned by Aeroports de Paris (“ADPM”). This noncontrolling interest in SETA held by ADPM is included in stockholders’ equity within the MFRS financial statements.

A consortium agreement between Aeroinvest and ADPM includes put and call options with respect to the shares of SETA held by Aeroinvest, whereby from June 14, 2009 through the later of June 14, 2015 or six months following the termination of a technical assistance agreement that SETA has entered into with GACN, (i) ADPM may require Aeroinvest and certain of its affiliates to purchase a portion of the shares of SETA held by ADPM, and (ii) in the event Aeroinvest and ADPM are unable to resolve definitively a matter to be decided by the board of directors or shareholders of SETA, Aeroinvest may require ADPM to sell to Aeroinvest a portion of the shares of SETA held by ADPM.

The Company has determined that the put and call options (the “options”) described above are not legally detachable or separately exercisable from the shares of SETA issued to ADPM, nor are they considered mandatorily redeemable shares, given that they do not represent an unconditional obligation requiring Aeroinvest to redeem the instrument at a specified or determinable date (or dates) or upon an event that is certain to occur. However, given that the options are redeemable on a conditional basis, they are considered voluntarily redeemable for which reason, under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480-10-S99 of U.S. GAAP, they must be presented as temporary equity and valued at the greater of their carrying value under the consolidation guidance of U.S. GAAP or their redemption value. Redemption value is determined by a specific calculation established by the agreement between Aeroinvest and ADPM and does not represent the fair value of the noncontrolling interest.

F-65

Accordingly, two adjustments have been included in the reconciliation of equity. First, Ps.154.8 million, Ps.129.9 million and Ps.144.0 million as of December 31, 2010, 2009 and 2008, respectively, have been deducted from consolidated equity under MFRS in order to reclassify the carrying value of the redeemable noncontrolling interest from consolidated equity to temporary equity.

Second, based upon its own valuations, the Company has determined that the redemption value of such shares is greater than the carrying value of the noncontrolling interest, for which reason U.S. GAAP requires that the redeemable noncontrolling interest be increased to its redemption value. Given that the redemption value is other than fair value, U.S. GAAP offers the option to record this adjustment through equity rather than through results, which such option the Company has elected. Accordingly, the reconciliation of equity to U.S. GAAP includes an adjustment of Ps.15.7 million and Ps.26.8 million as of December 31, 2010 and 2009, representing the cumulative increase in the redemption value of the redeemable noncontrolling interest recognized through equity.

Furthermore, when an entity elects the option to adjust the value of redeemable noncontrolling interests through equity, generally an adjustment must be made to the net income used to calculate earnings per share, in order to account for the additional value being offered to noncontrolling interest holders, akin to a dividend. U.S. GAAP offers another option with respect to that adjustment of net income used to calculate earnings per share such that entities need only adjust for the amount of the redemption value that is in excess of fair value as being akin to an actual dividend. Given that the redemption value of SETA’s noncontrolling interest is lower than its fair value, no adjustment to earnings per share is necessary in 2010 and 2009.

(d) Effects of Concession Accounting

For the consolidated financial statements under MFRS, beginning January 1, 2010, the Company adopted INIF 17; previously it applied IFRIC 12 on a supplemental basis. As INIF 17 is substantially converged with IFRIC 12, accounting under both of these standards is similar. Accordingly, under MFRS, the Company classifies the assets derived from the construction, administration and operation of the service concession arrangement as either an intangible asset, a financial asset or a combination of both. Additionally, MFRS requires the Company to recognize revenues for construction services performed during the construction phase in certain concessions. Generally, under U.S. GAAP, the concessions in which the Company is involved result in the recognition of intangible assets for amounts incurred to acquire the right to the concession or construct or improve infrastructure under the concession. Accordingly, no financial assets are recognized under U.S. GAAP, nor are construction revenues recorded. Accordingly, the adjustments included herein represent (i) the reversal of construction revenues recognized during the construction phase in certain concessions, (ii) the reclassification of financial assets to intangible assets, along with the reversal of the respective financial income recognized on those financial assets, offset by the additional amortization recognized on the related intangible asset, and (iii) the recognition of the toll revenues generated for concessions that under MFRS had recorded a financial asset and thus recognize financial income over the life of the concession until collection of the asset, as opposed to operating revenues generated from the collection of tolls. These adjustments resulted in an increase (decrease) in consolidated net income under U.S. GAAP in 2010, 2009 and 2008 of Ps.198.5 million, Ps.(237.8 million) and Ps.(301.9 million), respectively, and a decrease in consolidated equity under U.S. GAAP at December 31, 2010, 2009 and 2008 of Ps.463.8 million, Ps. 662.3 million and Ps. 424.5 million, respectively.

(e) Deferred Income Taxes and Statutory Employee Profit Sharing

Under MFRS, the Company accounts for deferred income taxes in accordance with NIF D-4,Income Taxes, and Bulletin D-4,Income Tax, Asset Tax and Statutory Employee Profit Sharing, which require a methodology similar to FASB ASC Topic 740,Income Taxes, which is applied by the Company for purposes of the U.S. GAAP reconciliation. However, deferred taxes are classified as non-current for MRFS purposes while they are based on the classification of the related asset or liability for U.S. GAAP purposes.

As discussed in Note 20, the Company is subject to both ISR and IETU, and therefore determines whether it will be subject to ISR or IETU, recognizing the deferred tax asset (liability) based on such determination. With respect to the MFRS financial statements, at those entities where, based on its projections, the Company will be subject to ISR in some years and IETU in others, the Company records either the larger deferred tax liability or the smaller deferred tax asset. For purposes of U.S. GAAP, in those entities where, based on its projections, the Company will be subject to ISR in some years and IETU in others, the Company schedules the reversal of temporary differences for each tax and determines by year whether the applicable reversing temporary differences should be those under ISR or IETU and applies the applicable rate to determine the appropriate amount of deferred taxes.

F-66

In addition, through December 31, 2007, the Company calculated a deferred PTU liability for purposes of MFRS based on the temporary differences between the accounting result and income for employee profit sharing purposes. Beginning January 1, 2008, the Company adopted NIF D-3,Employee Benefits, which changed the methodology for calculating deferred PTU, requiring that it be determined based on the temporary differences between the financial reporting basis and the statutory employee profit sharing basis of assets and liabilities. The new methodology under NIF D-3 is similar to that required by U.S. GAAP. However, as of December 31, 2010, based on temporary differences, a net deferred PTU asset was recognized under MFRS. U.S. GAAP prohibits the recognition of a net deferred PTU asset, which resulted in a reconciliation of the asset for Ps.15.9 million in 2010. No differences between MFRS and U.S. GAAP existed with respect to deferred PTU in 2009 or 2008.

As discussed in Note 1, in December 2009, modifications were published to the income tax law effective January 1, 2010. In accordance with INIF 18 under MFRS, the effects of these changes resulted in a charge of Ps.844 million, recognized within retained earnings. Under U.S. GAAP, the result of these changes are recognized in income of the year in which the change was enacted, resulting in a reconciling item in the 2009 reconciliation of consolidated net income. As discussed in Note 20, during 2010, the Mexican Tax Authorities issued certain modifications to the original reforms, based on which the Company concluded that the Ps. 844 million recognized in 2009 no longer required recognition. However, MFRS permitted the reversal of this liability through results of 2010, as opposed to through retained earnings where it was originally recognized in 2009. Accordingly, the reversal of the liability did not result in a difference between MFRS and U.S. GAAP in 2010.

A reconciliation of the net deferred income tax asset from MFRS to U.S. GAAP and the composition of the deferred income taxes under U.S. GAAP at December 31, 2010 and 2009 are as follows:


	December 31,
	2010			2009
Reconciliation of net deferred income tax liability:
Deferred income taxes under MFRS (see Note 20a, 20c and 20d)	Ps.	(2,545,282	)	Ps.	(2,751,791	)
Additional depreciation related to impairment reversal		113,630			117,854
Difference related to reversal debt expenses		(6,371	)		—
Difference related to derivative financial instruments		(1,748	)		—
Difference related to severance payments		(23,807	)		(4,711	)
Difference related to capitalized financing costs		551			(1,552	)
Difference related to effects of concession accounting		5,588			39,196
Difference related to purchase method for minority interest		1,988			994
Deferred income tax recorded in OCI		14,185			(5,443	)
Effect of subsidiaries consolidated proportionately under MFRS		147,769			178,525

Net deferred income tax liability under U.S. GAAP	Ps.	(2,293,497	)	Ps.	(2,426,928	)


Composition of deferred income taxes:
Current:
Liabilities	Ps.	(3,919,324	)	Ps.	(2,966,801	)
Assets		3,047,437			2,666,387

Net current deferred income tax liability before valuation allowance		(871,887	)		(300,414	)
Non-current:
Liabilities		(4,068,120	)		(3,461,957	)
Assets		4,114,907			3,207,335

Net non-current deferred tax asset before valuation allowance		46,787			(254,622	)
Valuation allowance		(1,468,397	)		(1,871,892	)

Net non-current deferred income tax liability		(1,421,610	)		(2,126,514	)

Net deferred income tax liability under U.S. GAAP	Ps.	(2,293,497	)	Ps.	(2,426,928	)

FASB ASC Topic 740 of U.S. GAAP provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. Such guidance requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will be sustained upon examination. If the tax position meets the more-likely-than-not recognition threshold, the tax effect is recognized at the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement. Any difference between the tax position taken in the tax return and the tax position recognized in the financial statements using the criteria above results in the recognition of a liability in the financial statements for the unrecognized benefit. Similarly, if a tax position fails to meet the more-likely-than-not recognition threshold, the benefit taken in the tax return will also result in the recognition of a liability in the financial statements for the full amount of the unrecognized benefit.

During 2010, 2009 and 2008, the Company did not have any uncertain tax positions that would have resulted in unrecognized tax benefits to be recognized as a liability or disclosed under U.S. GAAP.

F-67

(f) Capitalization of Financing Costs

Financing and other costs are subject to capitalization under MFRS, including foreign exchange gains and losses, interest income and expense, and gains and losses from monetary position. According to U.S. GAAP, for debt obligations denominated in U.S. dollars, only interest expense with explicit interest rates and interest expense related to capital lease obligations are eligible for capitalization on qualifying assets. Consequently, in 2010, 2009 and 2008, the non-eligible amounts for U.S. GAAP that were capitalized under MFRS have been reversed in the U.S. GAAP reconciliation and treated as income or expense as appropriate. Additionally, the related effects of depreciation on the amounts capitalized have been reversed. This has resulted in an increase (decrease) in consolidated net income under U.S. GAAP of Ps.(12.0 million), Ps.8.9 million and Ps.(54.8 million) in 2010, 2009 and 2008, respectively, and a decrease in consolidated equity under U.S. GAAP of Ps.103.9 million, Ps.91.9 million and Ps.100.7 million at December 31, 2010, 2009 and 2008, respectively.

Total interest capitalized for U.S. GAAP purposes was Ps.935.0 million, Ps.745.6 million and Ps. 132.4 million at December 31, 2010, 2009 and 2008, respectively.

(g) Liability for Severance Payments, Pension Plan and Seniority Premiums

Under MFRS, the Company recognized the provisions of Bulletin D-3,Employee Benefits, which required the recognition of a severance indemnity liability calculated based on actuarial computations. As a result of the adoption, a transition obligation was recognized, resulting in the recognition of an intangible asset. The same recognition criteria under U.S. GAAP is established in FASB ASC Topic 712,Nonretirement Postemployment Benefits, which requires that a liability for certain termination benefits provided under an ongoing benefit arrangement be recognized when the likelihood of future settlement is probable. However, this requirement for U.S. GAAP has been effective since 1994. Accordingly, in 2005, the Company recorded an adjustment in the 2005 reconciliation of net income and equity representing the reversal of the effects of the cumulative adoption of Bulletin D-3 and the removal of the intangible asset in the financial statements under MFRS.

In 2008, the Company adopted NIF D-3,Employee Benefits, which replaced Bulletin D-3 and resulted in the removal of the intangible asset and the decrease in the amortization lives of the transition liability and other unrecognized items to the shorter of five years or the employees’ average remaining labor life. Accordingly, the adjustment to the 2010, 2009 and 2008 U.S. GAAP reconciliation of net income represents the difference in service costs represented by the amortization of the transition obligation.

In addition, U.S. GAAP requires companies to recognize the funded status of defined benefit pension and other postretirement plans as a net asset or liability and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income to the extent those changes are not included in the net periodic cost. The funded status reported on the balance sheet as of December 31, 2010 and 2009 under U.S. GAAP was measured as the difference between the fair value of plan assets and the projected benefit obligation on a plan-by-plan basis. In 2010, this includes a significant adjustment related to the amendment to the pension plan for executive officer board members, as shown in Note 27. In 2008, the retirement age was deferred by an additional two years. During 2010, the Company amended its plan for a particular retiree, extending the period over which such individual will receive benefits for an additional five years. Under MFRS, the prior period service cost generated by the amendment was charged directly to results as the individual had already retired at the time of the amendment. U.S. GAAP permits the prior period service cost to be recognized in OCI and amortized over the retiree’s remaining life expectancy.

The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. Accordingly, the projected liability under U.S. GAAP is different from the liability recognized for MFRS purposes, resulting in an additional adjustment to the U.S. GAAP reconciliation.

F-68

Additional disclosures required by U.S. GAAP are as follows:


	December 31,
	2010			2009
At December 31:
Projected benefit obligation	Ps.	671,840		Ps.	471,806
Plan assets at fair value		(20,332	)		(16,615	)


Accrued benefit cost recognized in the balance sheet (underfunded status)	Ps.	651,308		Ps.	455,191


Accumulated benefit obligation	Ps.	339,168		Ps.	197,187

Change in benefit obligations:
Benefit obligation at beginning of year	Ps.	471,806		Ps.	428,508
Service cost		52,117			51,196
Interest cost		36,730			34,088
Actuarial loss		44,793			38,540
Benefits paid		(46,802	)		(82,930	)
Acquisition and others		113,196			2,404

Benefit obligation at end of year	Ps.	671,840		Ps.	471,806


Change in plan assets:
Fair value of plan assets at beginning of year	Ps.	16,615		Ps.	12,093
Employer contributions		4,391			4,442
Return on plan assets		882			764
Benefits paid		(1,556	)		(684	)

Fair value of plan assets at end of year	Ps.	20,332		Ps.	16,615


	December 31,
	2010			2009
Components of net periodic benefit cost:
Service cost	Ps.	52,117		Ps.	51,196
Interest cost		36,730			34,088
Expected return on assets		(1,521	)		(1,235	)
Amortization of unrecognized items		19,393			9,870

Net periodic benefit cost	Ps.	106,718		Ps.	93,919


Weighted-average assumption used to determine benefit obligations at December 31:
Discount rate		8.50	%		8.50	%
Rate of compensation increase		5.50	%		5.50	%
Weighted-average assumption used to determine net periodic benefit cost for years ended December 31:
Discount rate		7.97	%		8.50	%
Rate of compensation increase		5.50	%		5.50	%

Other comprehensive income:
Amounts recognized in other comprehensive income during the year:
Net loss	Ps.	(45,433	)	Ps.	—
Prior service cost	Ps.	(113,196	)	Ps.	(43,056	)

Amounts reclassified from other comprehensive income as a component of net periodic pension cost:
Net gain	Ps.	12,886		Ps.	4,020
Prior service cost	Ps.	7,417		Ps.	6,768
Transition obligation	Ps.	(910	)	Ps.	(918	)

Estimate to be recognized as a component of net periodic pension cost over the following fiscal year:
Net gain	Ps.	42,888		Ps.	12,886
Prior service cost	Ps.	165,958		Ps.	6,766
Transition obligation	Ps.	—		Ps.	(910	)

F-69

The Company’s weighted-average asset allocation for its pension and seniority premium plans at December 31, 2010 and 2009 is as follows:


	Plan assets at December 31,
	2010			2009
Asset category
Equity securities		20	%		12	%
Debt securities		80	%		88	%
Other		—	%		—	%

Total		100	%		100	%

Plan assets consist of liquid deposits held with financial institutions within Mexico, at market interest rates.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:


			Pension Plan
			and Termination
	Seniority		Indemnity upon		Dismissal and
	Premium		Dismissal at		Death
	Benefits		Retirement		Benefits
2011	Ps.	4,188	Ps.	42,574	Ps.	39,603
2012		3,499		19,795		33,642
2013		3,390		13,233		29,156
2014		3,650		21,994		25,722
2015		3,656		24,435		23,061
Thereafter		24,105		291,610		88,428

(h) Impairment Reversal

In 2001, the Company recorded an impairment charge related to a construction property, based on the fair value of the property as compared to its carrying value, due to the fact that the Company no longer had projects that would require the use of such property. During 2003, ICAFD was awarded certain projects that would require the use of this construction property. As such, under MFRS, the Company reversed Ps.22.7 million of the previously recorded impairment charge. Also, during 2004 and 2009 the Company’s management reviewed the estimate of the recoverable value of the Acapulco Tunnel concession, considering the present value of future cash flows. As a result of its analysis, the Company recognized a reversal of Ps.179.4 million in 2004 and Ps.681 million in 2009 of the impairment loss taken in previous years in its MFRS financial statements.

In accordance with U.S. GAAP, the reversal of a previously recorded loss for impairment is not permitted. Therefore, the effects of these impairment reversals taken in those years are included as reconciling items in the reconciliation of net income and equity. In addition, the reversal of additional depreciation expense of Ps.24.1 million, Ps.7.1 million and Ps.7.5 million is recognized in the reconciliation of net income for 2010, 2009 and 2008, respectively, given the higher asset value that exists under MFRS as a result of such impairment reversals.

(i) Acquisition of Noncontrolling Interest

During 2008 and 2007, the Company purchased a portion of the minority interest of two of its consolidated subsidiaries, GACN and AUCOVEN. In conformity with MFRS, given that the transactions were between stockholders of the same economic entity, the difference between the purchase price paid and the book value of the acquired shares was recorded as an equity contribution (distribution). Accordingly, the statements of changes in stockholders’ equity under MFRS show an increase for Ps.29.0 million in 2008, and reduction for Ps.530.9 million in 2007 representing the related contribution or distribution.

Under U.S. GAAP, through December 31, 2008, the excess of the purchase price was required to be distributed between the fair value of the assets acquired and liabilities assumed under the purchase method of accounting. Accordingly, the cumulative effect included in equity under MFRS in 2008 and 2007 has been removed in the reconciliation to U.S. GAAP, resulting in an increase to consolidated equity under U.S. GAAP in 2008 and 2007 of Ps. 501.5 million and Ps. 530.9 million, respectively. These amounts were instead allocated to the fair value of assets acquired for purposes of U.S. GAAP, which in the case of GACN resulted in an increase in the intangible concession asset, generating additional amortization for U.S. GAAP purposes of Ps.5.7 million in 2010, 2009 and 2008, as included in the accompanying reconciliation of consolidated net (loss) income. The excess related to AUCOVEN was assigned to goodwill.

Beginning January 1, 2009, the Company adopted the guidance in FASB ASC Topic 810 with respect to the presentation and

F-70

accounting of noncontrolling interests. Among other things, this new guidance modified the accounting for acquisitions of noncontrolling interest when control is retained, such that the accounting is similar to that of MFRS and any excess or deficit on such acquisitions are accounted for as equity transactions.

The new guidance with respect to the accounting for acquisitions of noncontrolling interests is required to be adopted prospectively, for which reason, the aforementioned adjustments related to GACN and AUCOVEN are recurring. However, no further adjustments to equity under U.S. GAAP are required for additional acquisitions of noncontrolling interest in 2010 or 2009, given that the accounting is similar under MFRS and U.S. GAAP beginning in 2009.

(j) Investment in Associated Companies (Cost Method)

Within the MFRS consolidated financial statements, the Company presented its investment in Los Portales, S.A. in which it held less than a 20% interest, under the equity method, as permitted by NIF B-8. As the Company did not otherwise exercise significant influence over such investment, it was accounted for under the cost method for U.S. GAAP purposes. Accordingly, the equity in participation in the net income of such investments of Ps.16.4 million and Ps. 9.7 million were reversed within the U.S. GAAP reconciliation for 2009 and 2008. As discussed in Note 2.f, in April 2010, ICA provided an equity contribution of Ps.151 million to Los Portales, S. A., thereby increasing its shareholding in the entity from 18% to 50% and, under MFRS, subsequently proportionally consolidating the entity as of the acquisition date. Proportionate consolidation for this entity as of the date of ICA’s increase in its equity participation has been reconciled according to Note 29(b).

(k) Deferred Loss on Derivative Financial Instruments

As discussed in Notes 13 and 17 of the MFRS financial statements, during 2008, the Company entered into various derivative instruments to mitigate the risk of interest rate and exchange rate fluctuations. Certain of the derivative instruments, while economic hedges, did not meet the criteria to be considered a hedge from an accounting perspective. Three of these trading derivative instruments are related to the financing under the La Yesca and AUNETI construction projects, which are still in the construction phase. MFRS permits capitalization of total comprehensive financing cost as part of the project cost, which includes not only interest, but the fluctuation in the fair value of these derivatives. Accordingly, as of December 31, 2008, Ps.1,730 million was capitalized within other assets, representing the loss on these three derivatives.

Under U.S. GAAP, FASB ASC Topic 815, Derivatives and Hedging, states that the gain or loss on a derivative instrument not designated as a hedging instrument shall be recognized currently in earnings. Based on this guidance, capitalization of changes in fair value is prohibited, regardless of whether the derivative is related to financing on a construction project in process. Accordingly, for U.S. GAAP purposes, Ps.1,730 million capitalized within other assets in MFRS in 2008 was recognized as a loss on valuation of derivative financial instruments within net income for U.S. GAAP purposes.

In 2009, as discussed in Note 17 to the MFRS financial statements, the derivative instrument related to the La Yesca project was renegotiated which resulted in a favorable adjustment to the derivative liability, recorded as a decrease to the derivative liability and a decrease to the related asset under MFRS. U.S. GAAP requires that the favorable adjustment to the liability be recognized within results. Additionally under MFRS, the Company amortized a portion of the related asset to results in line with the percentage-of-completion related to the La Yesca project. As this asset does not exist under U.S. GAAP and its amount instead was recognized in full in the 2007 results under U.S. GAAP, such amortization is reversed in the reconciliation of consolidated net income under U.S. GAAP. These two adjustments resulted in an increase to consolidated net income under U.S. GAAP of Ps.87.4 million and Ps. 824.6 million for 2010 and 2009, respectively. As well, the related asset recognized under MFRS of Ps.818.4 million, Ps.905.8 million and Ps. 1,730 million in 2010, 2009 and 2008, respectively, is reversed in the reconciliation of consolidated equity to U.S. GAAP.

Finally, FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires that when determining the fair value of financial assets and liabilities, an entity take into consideration its own credit risk or the credit risk of the counterparty, as the case may be. This is not considered in the determination of fair value under MFRS. The consideration of this factor in determining the fair value of the Company’s derivative financial instruments resulted in a decrease to the value of such instruments under U.S. GAAP, which has been recorded in the 2010 and 2009 reconciliation of consolidated net income and equity under U.S. GAAP.

(l) Debt issuance costs

MFRS requires that debt issuance cost related to a new debt instrument that replaces an old debt instrument and that has substantially similar conditions be expensed as incurred. For U.S. GAAP purposes, the fees paid to the creditor associated with a new instrument that replaces an old debt instrument with substantially similar conditions should be amortized over the term of the new debt instrument. Therefore the Company reversed an expense of Ps.22.7 million related to such costs in the reconciliation of net income for 2010.

F-71

(m)

Other Differences and Supplemental U.S. GAAP and Securities and Exchange Commission Disclosures

	(1)		Inventories— At December 31, 2010 and 2009, the Company classified Ps.18.2 million and Ps.86.1 million of advances to subcontractors within the caption “Real estate inventories” in its balance sheet under MFRS. Such amounts should be classified separately as prepaid expenses within the 2010 and 2009 balance sheet under U.S. GAAP.

	(2)		Property, plant and equipment— At December 31, 2010 and 2009, Ps.77.3 million and Ps.297.7 million, respectively, of machinery and equipment are in-transit for which the Company does not have title or bear risk, and thus, is classified as advances to suppliers for purposes of U.S. GAAP.

	(3)		Other (income) expense, net —The Company recorded the following amounts within other (income) expense, net in the accompanying MFRS financial statements: (i) in 2010, personnel expenses related to a restructuring at the Rodio-Kronsa segment of Ps. 64.8 million, (ii) in 2010, 2009 and 2008, current and deferred PTU benefit (expense) of Ps.29.4 million, Ps.(1.9 million) and Ps.(7.8 million), respectively and (iii) in 2010, 2009 and 2008, (gain) loss on the sale of property, plant and equipment of Ps.70.7 million, Ps.13.8 million and Ps.(10.6 million), respectively. Under U.S. GAAP, these expenses would be considered a component of operating income.

	(4)		Fair value of financial instruments —On January 1, 2008, the Company adopted FASB ASC Topic 820, which clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability (considered the “exit” price) in an orderly transaction between market participants at the measurement date. The statement requires the use of inputs in determining fair value, which are the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs can be observable, which are those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity, or unobservable, which are those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The statement requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and requires entities to categorize the inputs used in fair value measurements within the following hierarchy:

			Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

			Level 2 — inputs other than quoted prices in Level 1, that are observable for the asset or liability, either directly or indirectly.

			Level 3 — unobservable inputs for the asset or liability, which include instruments measured based on the best available information, which might include certain internally-developed data, and considers risk premiums that a market participant would require.

A description of the valuation methodologies used for instruments measured at fair value on a recurring basis, including the general classification of such instruments under the fair value hierarchy is presented below:

Derivative financial instruments

The Company enters into various interest rate swaps, cross currency swaps, options on interest rates and foreign exchanges and foreign exchange forwards. In general, given the nature of its derivative financial instruments, no quoted market prices are available. Accordingly, the Company values its derivative financial instruments using recognized valuation methodologies, which fall within the income approach technique. The fair values are either prepared by the valuation agents represented by the counterparties with whom it enters into these instruments, or by a Mexican price provider specialist authorized by the CNBV. Accordingly, all derivative instruments are classified within level 2 of the fair value hierarchy.

Inputs used in valuation methodologies for derivative financial instruments as provided by a price vendor authorized by CNBV mentioned above, refer to UDI prices, domestic and foreign interest rates (including 28-day and 91-day TIIE, LIBOR and EUROLIBOR), foreign exchange rates (including the Mexican peso to the U.S. dollar and Mexican peso to the euro) and volatility rates for foreign exchange rates and domestic and foreign interest rates.

F-72

Fair values of financial assets and liabilities, according to the level in the hierarchy into which they fall are detailed below:

Quoted Prices in Active Markets for

Identical

Significant Other Observable

Year Ended December 31,

Assets (Level 1)

Inputs (Level 2)

2010

2009

2010

2009

2010

2009

Assets

Derivative financial instruments — asset

Ps.

46,279

Ps.

66,718

Ps.

—

Ps.

—

Ps.

46,279

Ps.

66,718

Total assets at fair value

Ps.

46,279

Ps.

66,718

Ps.

—

Ps.

—

Ps.

46,279

Ps.

66,718

Liabilities

Derivative financial instruments — liability

Ps.

742,123

Ps.

922,425

Ps.

—

Ps.

—

Ps.

742,123

Ps.

922,425

Total liabilities at fair value

Ps.

742,123

Ps.

922,425

Ps.

—

Ps.

—

Ps.

742,123

Ps.

922,425

In January 2009, the Company adopted FASB ASC 815-10,Derivatives and Hedging, with respect to disclosure surrounding derivatives. Such guidance is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows.

The fair values of derivative instruments included within the consolidated balance sheet under U.S. GAAP as of December 31, 2010 and 2009 were as follows:


	Asset Derivatives
	Balance					Liability Derivatives
	Sheet	Fair Value				Balance Sheet	Fair Value
Instrument	Location	2010		2009		Location	2010			2009
Derivatives designated as hedging
Interest rate swaps	Other assets	Ps.	—	Ps.	768	Noncurrent liabilities	Ps.	(373,981	)	Ps.	(212,522	)
Interest rate options	Other assets		4,516		52,136	Noncurrent liabilities		(262,803	)		(363,886	)
Foreign exchange swaps and options	Other assets		41,648		13,388	Noncurrent liabilities		(105,339	)		—

Derivatives not designated as hedging
Interest rate options	Other assets		—		426	Noncurrent liabilities		—			(42,659	)
Interest rate swaps	Other assets		115		—	Noncurrent liabilities		—			—
Foreign exchange swaps and options		Ps.	—	Ps.	—	Noncurrent liabilities	Ps.	—		Ps.	(303,358	)

The effect of derivative instruments in the consolidated statement of income under U.S. GAAP for the year ended December 31, 2010 and 2009 were as follows:


	Amount of gain (loss) recognized in:
	Cost of sales					Interest expense
	2010			2009		2010			2009
Derivatives designated as hedging
Interest rate swaps	Ps.	(17,330	)	Ps.	2,624	Ps.	(34,767	)	Ps.	—
Interest rate options		—			213		49,335			(32,923	)

F-73


	Amount of gain (loss) recognized in:
	Cost of sales				Interest expense
	2010		2009		2010		2009
Foreign exchange swaps and options		332,013		—		43,541		—

Derivatives not designated as hedging
Interest rate option		1,107		—		—		—
Interest rate swaps		—		9,861		—		8,860

Foreign exchange swaps and options	Ps.	—	Ps.	408,533	Ps.	—	Ps.	17,800

The amounts recorded to and reclassified from accumulated other comprehensive income under U.S. GAAP for our cash flow hedges for the year ended December 31, 2010 and 2009 were as follows:


						Location of loss	Amount of gain
						reclassified	reclassified from
	Amount of gain recognized in OCI					from accumulated OCI	accumulated OCI
	2010		2009				2010		2009
Derivatives designated as hedging
Interest rate swaps	Ps.	1,104,733	Ps.	(151,620	)	Cost of sales	Ps.	785,440	Ps.	135,226
Interest rate swaps		—		—		Interest expense		—		(14,228	)
Interest rate options		—		—		Interest expense		326,659		(89,954	)
Interest rate options		13,154		—		Interest expense		13,281		—
Foreign exchange, swaps and options		543,317		71,032		Interest expense	Ps.	19,692	Ps.	—
Derivatives not designated as hedging
Foreign exchange, swaps and options	Ps.	—	Ps.	(71,121	)

Amounts included in accumulated other comprehensive income will be reclassified into earnings when the hedged items is recognized in earnings. The Company estimates that Ps.341.2 million in losses are expected to be reclassified into earnings within the next 12 months.

FASB ASC Topic 825,Financial Instruments, requires disclosure of fair value of financial instruments whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. These financial instruments include items such as trade accounts receivable, contract receivables, costs and estimated earnings in excess of billings on uncompleted contracts, accounts payable, provisions, notes payable and long-term debt.

The carrying amounts of trade accounts receivable, contract receivables, costs and estimated earnings in excess of billings on uncompleted contracts, accounts payable, provisions and notes payable are of a short-term nature and bear interest at rates tied to market indicators. Accordingly, the Company believes that their carrying amounts approximate their carrying value.

A portion of long-term debt also bears interest at rates tied to market indicators, thereby estimating the fair value of such debt. For debt that bears interest at fixed rates, fair value is estimated using discounted cash flows based on the current incremental borrowing rates for similar types of borrowing arrangements.

The following table provides information on the carrying value and estimated fair value of the Company’s long-term debt. Such estimates have been determined by the Company using available market information or other appropriate valuation techniques. The Company uses its best judgment in estimating the fair value of these financial instruments. The use of different market assumptions may have a material effect on the estimated fair value amounts.

F-74

December 31,

2010

2009

Carrying

Fair

Carrying

Fair

Value

Financial liabilities:

Long-term debt

Ps.

27,644,261

Ps.

28,292,437

Ps.

19,452,798

Ps.

20,026,971

(5)

Statement of cash flows -

Both MFRS (beginning in 2008) and U.S. GAAP require the presentation of a statement of cash flows. However, requirements regarding the presentation of the statement of cash flows under MFRS differ in certain respects from those set forth by U.S. GAAP. Among others, all payments for interest are financing cash flows under MFRS; under U.S. GAAP, if the interest can be capitalized as part of fixed assets, it is included within investing activities while all other interest payments are operating cash flows. In addition, MFRS includes restricted cash within the cash and cash equivalents balances while U.S. GAAP requires that changes in restricted cash be presented within the statement itself.

The information for the years ended December 31, 2010, 2009 and 2008 is presented below, represents supplemental cash flow information taking into effect the U.S. GAAP adjustments and differences between the presentations of the statements for each year, as discussed above. During 2010, the Company determined that the effect of changes in restricted cash in the 2009 U.S. GAAP statement of cash flows for an amount of P.s.316 million was incorrectly classified as part of operating activities rather than as part of the investing activities as required for U.S. GAAP. The Company believes that this misclassification does not materially affect the interpretation or analysis of the previously issued 2009 U.S GAAP statement of cash flows. However, the 2009 cash flow statement has been restated.


	Millions of
	U.S. Dollars
	(Convenience
	Translation)
	Year Ended
	December 31,			Year Ended December 31,
	2010			2010			2009			2008
OPERATING ACTIVITIES:
Consolidated net income under MFRS	$	97		Ps.	1,203,567		Ps.	883,632		Ps.	605,775
Effects of concession accounting		16			198,486			(237,767	)		(301,862	)
Reversal of asset impairment adjustment		—			—			(680,554	)		—
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		132			1,632,194			1,271,092			917,970
Deferred income tax expense (benefit)		(31	)		(388,874	)		605,754			188,424
Adjustment for valuation of long-term investment		(1	)		(10,654	)		11,571			—
Effect of change in participation in subsidiary		—			—			6,620			—
Provision for seniority premiums and severance payments		26			324,958			93,529			65,135
Loss (gain) on sale of property, plant and equipment		1			6,291			36,880			(2,765	)
Allowance for doubtful accounts		28			350,158			(201,202	)		72,447
Share in net loss of associated companies		(19	)		(236,877	)		19,157			417,656
Unrealized exchange (gain) loss		(37	)		(460,020	)		(268,728	)		485,188
Uncollected interest income (Unpaid interest expense)		(1	)		(12,019	)		8,870			(54,770	)
Gain from derivative financial instruments		39			482,864			314,684			44,368
Others		7			90,786			—			—

Changes in operating assets and liabilities (excluding acquisitions and disposals):
Customers		(536	)		(6,642,369	)		(5,647,729	)		(3,339,215	)
Other receivables		24			293,531			(2,078,764	)		(325,242	)
Inventories and others assets		(12	)		(154,660	)		93,071			(277,675	)
Real estate inventories		(6	)		(79,263	)		(690,699	)		(2,578,595	)
Trade accounts payable		11			135,861			1,605,863			229,519
Other current liabilities		(23	)		(283,396	)		598,042			732,659
Advances from customers		(116	)		(1,437,855	)		195,651			1,448,350
Dividends received		—			5,319			8,140			2,826

Net cash used in operating activities		(401	)		(4,981,972	)		(4,052,887	)		(1,669,807	)


INVESTING ACTIVITIES:
Acquisitions of property, plant and equipment		(40	)		(489,655	)		(1,251,022	)		(2,176,097	)
Investment in concessions and other long term assets		(206	)		(2,546,324	)		(2,303,837	)		(1,447,392	)
Proceeds from sale of property, plant and equipment		32			390,128			225,342			60,491

F-75


	Millions of
	U.S. Dollars
	(Convenience
	Translation)
	Year Ended
	December 31,				Year Ended December 31,
	2010				2010			2009			2008
Investment in associated companies		(44	)			(547,768	)		(193,668	)		(828,517	)
Collections (grants) of loans		7				86,075			(1,007,195	)		—
Deferred assets		—		��		1,652			(388	)		(539,698	)
Restricted cash and cash equivalents		23				283,422			315,944			(841,417	)

Net cash used in investing activities		(228	)			(2,822,470	)		(4,214,824	)		(5,772,630	)


FINANCING ACTIVITIES:
Payments of long-term debt		(635	)			(7,864,011	)		(2,727,031	)		(413,290	)
Proceeds from long-term debt		1,201				14,880,564			7,612,762			6,123,175
Proceeds from short-term debt		137				1,691,933			—			538,485
Repurchase of shares		—				—			(7,935	)		(89,930	)
Issuance of common stock		—				3,728			2,979,279			9,966
Decrease in noncontrolling interest		(8	)			(93,502	)		(249,464	)		(660,235	)
Derivative financial instruments		(43	)			(534,570	)		(316,209	)		(61,737	)

Net cash generated by financing activities		652				8,084,142			7,291,402			5,446,434
Effect of exchange rate changes on cash		(6	)			(68,231	)		40,496			(169,116	)

Net increase (decrease) in cash and cash equivalents		17				211,469			(935,813	)		(2,165,119	)
Cash and cash equivalents at beginning of the year		207				2,568,501			3,504,314			5,669,433

Cash and cash equivalents at the end of the year	$	224			Ps.	2,779,970		Ps.	2,568,501		Ps.	3,504,314

Cash paid for:

Interest	$	150			Ps.	1,856,178		Ps.	1,622,057		Ps.	1,127,059
Income taxes		33				408,692			221,341			273,503
Supplemental non-cash investing activity:
Acquisitions of fixed assets on account and through finance leases	$	—			Ps.	—		Ps.	36,257		Ps.	593,518

Cash and cash equivalents at the end of the year represent cash under U.S. GAAP, which differs from that included in the consolidated balance sheet under MFRS given that certain entities proportionately consolidated under MFRS are accounted for as equity method investments under U.S. GAAP.

(6)

Statement of comprehensive income- The Company’s statements of comprehensive income for the years ended December 31, 2010, 2009 and 2008, after giving effect to the U.S. GAAP adjustments described above, are set forth below:


	Millions of
	U.S. Dollars
	(Convenience
	Translation)
	Year Ended
	December 31,
	2010			2010			2009			2008
Consolidated net income (loss) under U.S. GAAP	$	124		Ps.	1,531,251		Ps.	405,007		Ps	. (1,306,658	)
Other comprehensive (loss) income:
Foreign currency translation		(5	)		(56,908	)		4,108			(67,967	)
Effect of the year for retirement benefits (net of tax of Ps.24,366, Ps.5,443 and Ps.44,839 for 2010, 2009 and 2008, respectively)		(9	)		(114,870	)		(25,657	)		226,898
Valuation of derivative financial instruments, net of tax in 2010 of Ps.27,395		(20	)		(246,397	)		(151,709	)		(579,275	)

Comprehensive income (loss) under U.S. GAAP	$	90		Ps.	1,113,076		Ps.	231,749		Ps.	(1,727,002	)

Comprehensive income (loss) attributable to noncontrolling interest		23			290,117			291,485			(338,130	)

Comprehensive income (loss) attributable to ICA	$	67		Ps.	822,959		Ps	. (59,736	)	Ps.	(1,388,872	)

(7)

Earnings per share in accordance with U.S. GAAP- Basic earnings per share is calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during the period. The computation of diluted earnings per share is adjusted to include any potential common shares. Potential common shares include the Company’s stock options under the 2000 stock option plan. The computation and reconciliation of basic and diluted earnings per share for the years ended December 31, 2010, 2009 and 2008, prepared in accordance with U.S. GAAP are as follows:

F-76


	Years Ended December 31,
	2010		2009		2008
Basic income (loss) earnings per share:	Ps.	1.91	Ps.	0.20	Ps.	(2.17	)

Diluted income (loss) earnings per share:	Ps.	1.91	Ps.	0.20	Ps.	(2.17	)

Weighted average shares outstanding (thousands)		648,183		565,644		497,263
Dilutive effects of stock option (thousands)		4		47		335

Total potential dilutive shares		648,187		565,691		497,598

	(8)		Stock option plan— As discussed in the MFRS disclosures, the Company established an employee stock option plan in March 2000. During 2004, the stockholders determined that no further grants would be made under the plan but that those awards outstanding would keep their original terms through the life of the award. Through December 31, 2005, for purposes of U.S. GAAP, the Company applied the intrinsic method in order to determine compensation cost related to the grant of stock options to employees. On January 1, 2006, the Company adopted the provisions of FASB ASC Topic 718,Compensation — Stock Compensation, with respect to the recognition of compensation cost for stock compensation.

			All awards granted were vested through 2005 except for the 2003 grant, which vested in April 2006.

Additionally, 113,485, 35,308 and 151,845 shares were exercised during 2010, 2009 and 2008 respectively, for which a cost (and corresponding additional paid-in capital) of Ps.1,138, Ps.93 and Ps. 6,550, respectively, was recognized under MFRS related to the difference between the market value of the stock and the exercise price on the date of exercise. For purposes of U.S. GAAP, as compensation cost is recognized over the service period of the employees, no additional compensation cost is recognized upon exercise of the options. Accordingly, such amount is reversed in the reconciliation of consolidated net income and equity in 2010, 2009 and 2008. Additional disclosures required by U.S. GAAP, are presented below.

The following table reflects the Company’s employee stock option activity from January 1, 2008 through December 31, 2010, and the weighted average exercise prices:


			Weighted Average
	Number of Shares		Exercise Price
Options outstanding and exercisable at January 1, 2008		903,352		22.50
Granted		—		—
Forfeited		231,887		22.50
Exercised		151,845		22.50

Options outstanding and exercisable at December 31, 2008		519,620		22.50
Granted		—		—
Expired		197,612		22.50
Exercised		35,308		22.50

Options outstanding and exercisable at December 31, 2009		286,700		22.50
Granted		—		—
Expired		172,215		22.50
Exercised		113,485		22.50

Options outstanding and exercisable at December 31, 2010		—		—

(9)

Valuation and qualifying accounts —Rollforward information for the years ended December 31, 2010, 2009 and 2008 for the following items are in included in the respective notes: (i) allowance for doubtful accounts on trade and contract receivables in Note 6; (ii) allowance for obsolete inventory in Note 9; and (iii) short-term and long-term provisions in Note 16. Changes in the Company’s valuation and qualifying accounts for impairment is as follows:

Additions

Balance at

Charged

Balance at

Beginning of

to Costs and

Inflation

End of

Description

Year

Expenses

Effects

Deductions

Year

Allowance for impairment(1):

Year ended December 31, 2008

Ps.

1,116,130

Ps.

—

Ps.

—

Ps.

—

Ps.

1,116,130

Year ended December 31, 2009

Ps.

1,116,130

Ps.

—

Ps.

—

Ps.

(680,554

)

Ps.

435,576

Year ended December 31, 2010

Ps.

435,576

Ps.

—

Ps.

—

Ps.

—

Ps.

435,576

F-77


(1)		Includes impairment losses related to the Company’s property, plant and equipment, investment in concessions and investments in associated companies.

30. New Accounting Principles

Adoption of IFRS

The financial statements for the year ended December 31, 2010 were prepared in accordance with MFRS. As of January 1, 2011, the Company discontinued applying MFRS in the preparation of its financial statements for public use, due to the early adoption of the IFRS discussed in Note 1.

United States of America

Recently adopted accounting pronouncements

On January 1, 2010, the Company adopted, the FASB issued ASC 860-10, which eliminates the concept of a qualifying special purpose entity (“QSPE”). The new guidance also requires an entity to reconsider its previous consolidation conclusions, including (1) whether an entity is a variable interest entity (VIE), (2) whether the enterprise is the VIE’s primary beneficiary, and (3) what type of financial statement disclosures are required. Additionally, the amendments eliminate the scope exception previously available to certain qualifying special-purpose entities (QSPE’s). FASB ASC 860-10 also requires additional disclosures which focus on the transferor’s continuing involvement with the transferred assets and the related risks retained. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosures.

In January 2010, the FASB issued ASU No. 2010-06 —Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. ASU 2010-06 requires new and revised disclosures for recurring or non-recurring fair value measurements, specifically related to significant transfers into and out of Levels 1 and 2, and for purchases, sales, issuances, and settlements in the rollforward of activity for Level 3 fair value measurements. ASU 2010-06 also clarifies existing disclosures related to the level of disaggregation and the inputs and valuation techniques used for fair value measurements. The new disclosures and clarifications of existing disclosures about fair value measurements were effective January 1, 2010, except for the disclosures about activity in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosures.

In March 2010, the FASB issued ASU No. 2010-11 —Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. This update clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Only an embedded credit derivative that is related to the subordination of one financial instrument to another qualifies for the exemption. This guidance became effective for the Company’s beginning January 1, 2010, did not have an impact on the Company’s consolidated financial statements and related disclosures.

31. Subsequent Events

Adoption of IFRS— The financial statements for the year ended December 31, 2010 were prepared in accordance with MFRS. As of January 1, 2011, the Company discontinued applying MFRS in the preparation of its financial statements for public use, due to the early adoption of the IFRS discussed in Note 1.

As the Company will be adopting IFRS in 2011, its first IFRS financial statements must comply with all IFRS effective as of our December 31, 2011 reporting date. Accordingly, the estimated effects of adoption on certain significant line items of our consolidated financial statements as of and for the year ended December 31, 2010, detailed below, is based on assumptions the Company’s management has made about the standards and interpretations that expected to be effective, and the accounting policies expected to be adopted, when it prepares

F-78

			its first complete set of IFRS financial statements as at December 31, 2011. Such standards and interpretations and as a result, the Company’s accounting policies, will become final only when it prepares its first complete set of IFRS financial statements. Accordingly, the amounts prepared below may be subject to change until that date.

			Below is a description of the main changes in accounting policies based on the Company’s initial assessment.

			Effects of inflation— In conformity with IFRS, the effects of inflation are recognized when cumulative inflation of the preceding three years is close to or greater than 100%. Given that the Mexican environment is no longer hyperinflationary since 1999, the effects of inflation recorded from 1999 to 2007 were reversed, except for the valuation of certain line items under property, plant and equipment, which were valued using the deemed cost exemption permitted by IFRS 1,First-Time Adoption of International Financial Reporting Standards.

			Capitalizable comprehensive financing cost— In accordance with MFRS, the Company included the effect of derivative financial instruments directly related to construction contracts and concessions under capitalizable comprehensive financing cost. Upon the adoption of the IFRS, these effects are recorded in the statement of income.

			Amortization of airport concessions— In conformity with IFRS, the amortization of concession is determined by the term of the concession granted to the Company, which is 50 years. In accordance with MFRS, the amortization is determined based on the estimated useful lives of the various components of the concession investment.

			Maintenance costs— According to the policy adopted in conformity with IFRS, the costs of maintenance of airports, which are approved in the Management Development Program (“MDP”), are recorded in the statement of income. In accordance with MFRS, these costs are capitalized as assets when the respective cost is incurred.

			Income Taxes— The Company determined its deferred taxes in accordance with IFRS, based on the adjusted values of those assets and liabilities requiring adjustments as a result of the adoption of IFRS.

			Employee benefits —According to IFRS, a provision for employee severance payments is only recorded when the obligation for payment arises or under the existence of formal retirement plans.

			Employee bonuses— Bonuses on profits are recognized in the periods in which the employees provide services, when the Company has a legal or assumed obligation and the amounts of such bonuses can be adequately estimated. Under MFRS they are recorded in the statement of income when paid.

			Debt discounts and expenses —In December 2010, the prior debt was exchanged for the current debt, which is considered to be substantially similar as the present value of the cash flows discounted under the terms of the new debt differ by less than 10% from the discounted cash flows under the previous debt; therefore, in accordance with MFRS, the new debt does not qualify as a new debt instrument and the debt discount and placement expenses continue to be amortized over the remaining life of the new debt. However, IFRS require the exchange of the debt with the same creditor, a condition that is not fulfilled.

			The estimated effects of adoption on the significant line items of the statements of financial position and of income are as follows:


	December 31, 2010					December 31, 2010
Statement of financial position	MFRS		Effect			IFRS
Real estate inventories	Ps	. 4,360,671	Ps.	(92,008	)	Ps	. 4,268,663
Investment in concessions, net		26,000,351		(2,384,853	)		23,615,498
Property, plant and equipment, net		4,211,574		93,861			4,305,435
Other assets, net		2,501,893		(945,484	)		1,556,409
Provisions		1,930,084		621,949			2,552,033
Income taxes		5,260,107		(666,984	)		4,593,123
Stockholders’ equity		21,574,120		(3,296,120	)		18,278,000

F-79


	December 31, 2010					December 31, 2010
Statement of financial position	MFRS		Effect			IFRS
Statement of income

Revenues		34,965,264		11,453			34,976,717
Operating income		2,511,291		224,274			2,735,565
Net income		1,203,567		(111,064	)		1,092,503

	b.		*Senior Notes*— On February 4, 2011, ICA placed senior notes in conformity with Rule 144-A and the S Regulations of the U.S. Securities Act of 1933, as amended (the “Securities Act”) for a principal amount of U.S.$500 million, a coupon of 8.90% and maturing in 2021. ICA issued these unsecured documents which are guaranteed by CICASA, CONOISA and CONEVISA.

			With these resources ICA early settled the securitized and bank debt of Ps.3,215 million (see Note 18) and covered the expenses and commissions related to the issuance. The remaining cash will be available for working capital and capital contributions for new and existing projects.

32. Authorization for Issuance of Financial Statements

On June 20, 2011, the issuance of these financial statements was authorized by Dr. José Luis Guerrero Álvarez, General Director of Empresas ICA, S.A.B. de C.V. and these consolidated financial statements are subject to approval at the general ordinary stockholders’ meeting, where they may be modified, based on provisions set forth in the Mexican General Corporate Law.

* * * * * *

F-80

INDEX TO FINANCIAL STATEMENTS
Financial Statements of Red de Carreteras de Occidente, S.A.P.I.B. de C.V


Report of Independent Registered Public Accounting Firm			G-2

Consolidated Statements of Financial Position as of December 31, 2010 and 2009			G-3

Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009 and 2008			G-4

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2010, 2009 and 2008			G-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008			G-6

Notes to Consolidated Financial Statements			G-7

G-1

Report of Independent Registered Public Accounting Firm to the Board of Directors and Stockholders of Red de Carreteras de Occidente, S.A.P.I.B. de C.V.

We have audited the accompanying consolidated statements of financial position of Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and subsidiaries(the “Company”, a subsidiary of Matador Infra B. V.) as of December 31, 2010 and 2009, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements assessing the financial reporting standards used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations, changes in their stockholders’ equity, and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with Mexican Financial Reporting Standards (“MFRS”).

MFRS vary in certain significant respects from accounting principles generally accepted in the United States of America (“U.S. GAAP”). Information relating to the nature and effect of such differences is presented in Note 17 to the accompanying consolidated financial statements.

As discussed in Note 17 to the accompanying consolidated financial statements, the 2009 reconciliation to U.S. GAAP has been restated.

Galaz, Yamazaki, Ruiz Urquiza, S. C.
Member of Deloitte Touche Tohmatsu Limited

C. P. C. Sergio Vargas Vargas
April 28, 2011

G-2

Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and Subsidiaries
(Subsidiary of Matador Infra B. V.)

Consolidated Statements of Financial Position
For the years ended December 31, 2010 and 2009
(Thousands of Mexican pesos (Ps.) and thousands of U.S. dollars ($))


	Convenience translation
	(see Note 2)
	December 31,			December 31,
	2010			2010			2009
Assets
Cash and cash equivalents (Note 4)	$	123,733		Ps.	1,532,130		Ps.	2,078,594
Accounts receivable, less allowance for doubtful accounts of Ps. 694 and Ps.7,276 as of December 31, 2010 and 2009, respectively		3,266			40,443			51,163
Recoverable taxes		893			11,062			27,367
Other accounts receivable and prepaid expenses		868			10,748			43,811

Current assets		128,760			1,594,383			2,200,935
Investment in concession — net (Note 5)		3,632,027			44,973,580			44,825,682
Furniture and equipment — net (Note 6)		423			5,232			3,585
Deferred income taxes (Note 13)		199,719			2,473,016			1,824,627
Other assets (Note 7)		41,522			514,143			604,588

Total assets	$	4,002,451		Ps.	49,560,354		Ps.	49,459,417

Liabilities
Trade accounts payable	$	623		Ps.	7,715		Ps.	115,605
Interest payable		9,493			117,554			111,483
Interest on derivative financial instruments payable		2,315			28,671			29,503
Other current liabilities		1,233			15,274			14,015
Provisions (Note 8)		14,057			174,073			19,073
Due to related parties (Note 15)		1,218			15,080			107,047
Direct employee benefits		976			12,086			9,804
Accounts payable for work executed, not yet approved (Note 15)		7,370			91,253			206,076
Taxes other than income tax		3,677			45,525			38,736
Employee profit sharing (Note 9)		35			437			106
Income taxes payable		57			703			—

Current liabilities		41,054			508,371			651,448
Long-term debt (Note 11)		2,256,877			27,945,777			27,181,002
Provisions for major maintenance		10,499			130,000			—
Employee benefits (Note 16)		796			9,852			—
Derivative financial instruments (Note 10)		193,427			2,395,107			1,196,798
Deferred business flat tax liability (Note 13)		—			—			93

		2,461,599			30,480,736			28,377,893

Total liabilities		2,502,653			30,989,107			29,029,341

Stockholders’ equity (Note 14):
Capital stock		1,949,426			24,138,768			24,138,768
Accumulated deficit		(266,641	)		(3,301,686	)		(2,641,166	)
Valuation of derivative financial instruments (Note 10)		(182,987	)		(2,265,835	)		(1,067,526	)

Controlling interest		1,499,798			18,571,247			20,430,076
Non-controlling interest		—			—			—

Total stockholders’ equity		1,499,798			18,571,247			20,430,076

Total liabilities and stockholders’ equity	$	4,002,451		Ps.	49,560,354		Ps.	49,459,417

See accompanying notes to consolidated financial statements.

G-3

Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and Subsidiaries
(Subsidiary of Matador Infra B. V.)

Consolidated Statements of Operations
For the years ended December 31, 2010, 2009 and 2008
(Thousands of Mexican pesos (Ps.) and thousands of U.S. dollars ($))


	Convenience
	translation (see Note 2)
	Year Ended December
	31, 2010			2010			2009			2008
Revenues:
Tolls	$	246,319		Ps.	3,050,042		Ps.	2,781,344		Ps.	2,627,602
Construction revenues from expansion and rehabilitation		87,566			1,084,284			1,527,819			260,065
Use right of way and other related revenues		134			1,661			177			609

Total revenues		334,019			4,135,987			4,309,340			2,888,276


Costs and expenses (Notes 5 and 15):
Amortization of intangible asset for concession		65,124			806,395			781,165			621,992
Operation and maintenance of concession		43,370			537,034			240,228			180,991
Other costs of toll concession		10,765			133,303			131,244			169,889
Construction costs from expansion and rehabilitation		87,566			1,084,284			1,527,819			260,065
General and administrative expenses		6,309			78,122			79,343			80,690

		213,134			2,639,138			2,759,799			1,313,627

Income from operations		120,885			1,496,849			1,549,541			1,574,649


Other income — Net		722			8,940			14,652			456


Comprehensive financing cost:
Interest expense		(234,232	)		(2,900,378	)		(3,589,103	)		(3,791,932	)
Interest income		6,391			79,140			107,505			143,175
Effects of valuation of derivative financial instruments		—			—			—			(208,126	)
Exchange gain (loss), net		607			7,518			9,544			(733	)

		(227,234	)		(2,813,720	)		(3,472,054	)		(3,857,616	)


Loss before income taxes		(105,627	)		(1,307,931	)		(1,907,861	)		(2,282,511	)

Income tax (benefit) expense (Note 13)		(52,284	)		(647,411	)		(1,747,781	)		41


Consolidated net loss	$	(53,343	)	Ps.	(660,520	)	Ps.	(160,080	)	Ps.	(2,282,552	)


Controlling interest	$	(53,343	)	Ps.	(660,520	)	Ps.	(160,080	)	Ps.	(2,282,552	)
Non-controlling interest		—			—			—			—


Consolidated net loss	$	(53,343	)	Ps.	(660,520	)	Ps.	(160,080	)	Ps.	(2,282,552	)

See accompanying notes to consolidated financial statements.

G-4

Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and Subsidiaries
(Subsidiary of Matador Infra B. V.)

Consolidated Statements of Changes in Stockholders’ Equity
For the years ended December 31, 2010, 2009 and 2008
(Thousands of Mexican pesos (Ps.))


	Capital Stock								Valuation of
	Amount					Accumulated			Derivative Financial			Total Stockholders’
	Value		Restatement			Deficit			Instruments			Equity

Balance at January 1, 2008	Ps.	15,589,150	Ps.	234,912		Ps.	(254,933	)	Ps.	—		Ps.	15,569,129

Application of losses		—		(234,912	)		234,912			—			—
Comprehensive loss:
Valuation of derivative financial instruments		—		—			—			(216,154	)		(216,154	)
Net loss for the year		—		—			(2,282,552	)		—			(2,282,552	)

Total comprehensive loss		—		—			(2,282,552	)		(216,154	)		(2,498,706	)


Balance at December 31, 2008		15,589,150		—			(2,302,573	)		(216,154	)		13,070,423

Additional capital contribution		8,549,618		—			—			—			8,549,618
Equity issuance costs, net of income tax of Ps.76,505		—		—			(178,513	)		—			(178,513	)
Comprehensive loss:
Valuation of derivative financial instruments		—		—			—			(851,372	)		(851,372	)
Net loss for the year		—		—			(160,080	)		—			(160,080	)

Total comprehensive loss		—		—			(160,080	)		(851,372	)		(1,011,452	)


Balance at December 31, 2009		24,138,768		—			(2,641,166	)		(1,067,526	)		20,430,076

Comprehensive loss:
Valuation of derivative financial instruments		—		—			—			(1,198,309	)		(1,198,309	)
Net loss for the year		—		—			(660,520	)		—			(660,520	)

Total comprehensive loss		—		—			(660,520	)		(1,198,309	)		(1,858,829	)


Balance at December 31, 2010	Ps.	24,138,768	Ps.	—		Ps.	(3,301,686	)	Ps.	(2,265,835	)	Ps.	18,571,247

See accompanying notes to consolidated financial statements.

G-5

Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and Subsidiaries
(Subsidiary of Matador Infra B. V.)

Consolidated Statements of Cash Flows
For the years ended December 31, 2010, 2009 and 2008
(Thousands of Mexican pesos (Ps.) and thousands of U.S. dollars ($))
(Indirect Method)


	Convenience translation
	(see Note 2) Year Ended
	December 31, 2010			2010			2009			2008
Operating activities:
Loss before income taxes	$	(105,627	)	Ps.	(1,307,931	)	Ps.	(1,907,861	)	Ps.	(2,282,511	)
Items related to investing activities:
Depreciation and amortization		65,203			807,376			781,203			621,992
Items related to financing activities:
Interest expense		146,566			1,814,853			2,686,565			3,285,224
Derivative financial instruments		80,149			992,441			732,198			594,494
Amortization of finance fees and expenses		7,517			93,084			243,429			120,340
Unpaid exchange loss		—			—			(53	)		733

		193,808			2,399,823			2,535,481			2,340,272
Decrease (increase) in:
Accounts receivable		866			10,720			3,711			(47,286	)
Recoverable taxes		1,317			16,305			(12,253	)		(10,387	)
Other accounts receivable and prepaid expenses		2,670			33,063			17,345			(14,091	)
Other assets		(10	)		(118	)		—			—
(Decrease) increase in:
Trade accounts payable		(8,713	)		(107,890	)		3,141			44,475
Other current liabilities		103			1,259			743			(4,048	)
Provisions		23,016			285,000			10,134			49,339
Due to related parties, net		(7,684	)		(95,149	)		55,234			(176,28	)
Taxes other than income tax		548			6,789			(9,989	)		12,959
Income taxes paid		(30	)		(367	)		(289	)		—
Employee profit sharing		27			331			89			17
Employee benefits		980			12,134			—			—

Net cash provided by operating activities		206,898			2,561,900			2,603,347			2,194,722

Investing activities:
Acquisition of furniture and equipment		(212	)		(2,628	)		(3,311	)		(312	)
Intangible asset for concession		(74,944	)		(927,995	)		(1,365,305	)		(360,327	)

Net cash used in investing activities		(75,156	)		(930,623	)		(1,368,616	)		(360,639	)

Financing activities:
Proceeds from long-term debt		89,481			1,108,000			1,897,000			1,844,500
Repayments of long-term debt		(27,719	)		(343,225	)		(7,666,498	)		—
Interest paid		(157,216	)		(1,946,722	)		(2,783,576	)		(3,258,839	)
Commissions and financing costs paid		(204	)		(2,521	)		(156,913	)		(152,279	)
Additional capital contribution		—			—			8,549,618			—
Costs paid for issuance of equity		—			—			(189,372	)		—
Derivative financial instruments		(80,216	)		(993,273	)		(702,694	)		(388,375	)

Net cash used in financing activities		(175,874	)		(2,177,741	)		(1,052,435	)		(1,954,993	)

(Decrease) increase in cash and cash equivalents		(44,132	)		(546,464	)		182,296			(120,910	)
Cash and cash equivalents at the beginning of period		167,865			2,078,594			1,896,298			2,017,208

Cash and cash equivalents at the end of period	$	123,733		Ps.	1,532,130		Ps.	2,078,594		Ps.	1,896,298

See accompanying notes to consolidated financial statements.

G-6

Red de Carreteras de Occidente, S.A.P.I.B. de C.V. and Subsidiaries
(Subsidiary of Matador Infra B. V.)

Notes to Consolidated Financial Statements
For the years ended December 31, 2010, 2009 and 2008
(Thousands of Mexican pesos (Ps.) and thousands of U.S. dollars ($))

1.		Nature of business

		Red de Carreteras de Occidente, S.A.P.I.B. de C.V. (“RCO”) and subsidiaries’ (collectively, the “Company”) main activity is to build, operate, conserve and maintain the concession highways Maravatío-Zapotlanejo and Guadalajara-Aguascalientes-León (the “Concessioned Highways”), as well as other expansion projects, via a concession granted to the Company on October 3, 2007, by the Mexican government, through the Secretary of Communications and Transportation (“SCT”). The concession term is 30 years. The Concessioned Highways have an overall length of 558.05 kilometers, in the States of Michoacán, Jalisco, Guanajuato and Aguascalientes.

		The Company has entered into an operation and maintenance services contract for the Concessioned Highways with ICA Infraestructura, S. A. de C. V., an associated company.

2.		Basis of presentation

	a.		*Basis of presentation and convenience translation —*The accompanying consolidated financial statements of the Company are prepared in accordance with Mexican Financial Reporting Standards (“MFRS”, individually referred to asNormas de Informacion Financieraor “NIFs”).

			MFRS requires that management make certain estimates and use certain assumptions that affect the amounts reported in the consolidated financial statements and their related disclosures; however, actual results may differ from these estimates. The Company has implemented control procedures to ensure the correct, timely application of its accounting policies. Although actual results may differ from estimates, management considers that the estimates made and assumptions used were adequate under the circumstances.

			Solely for convenience of readers, Mexican peso amounts included in the consolidated financial statements as of December 31, 2010 and for the year then ended have been translated into U.S. dollar amounts at the rate of 12.3825 pesos per U.S. dollar, the noon buying rate for pesos on December 30, 2010 as published by the Federal Reserve Bank of New York. Such translation should not be construed as a representation that the Mexican peso amounts have been, could have been or could, in the future, be converted into U.S. dollars at such rate or any other rate.

	b.		*Consolidation of financial statements —*The consolidated financial statements include the financial statements of RCO and those of its subsidiaries over which it exercises control. RCO’s shareholding percentage in their capital stock is shown below:


	Ownership Percentage									Ownership Percentage
Subsidiary name	2010			2009			2008			Activity

Prestadora de Servicios RCO, S. de R.L. de C.V.		99.97	%		99.97	%		99.97	%	Administrative services
RCO Carreteras, S. de R.L. de C.V. (1)		99.97	%		—			—		Holding

Significant intercompany balances and transactions have been eliminated.


(1)		As of December 31, 2010, this company does not carry out operations.

G-7

	c.		*Comprehensive loss —*Represents changes in stockholders’ equity during the year, for concepts other than capital contributions and reductions and distributions of equity, and is comprised of the net loss of the year plus other comprehensive loss items of the same period, which are presented directly in stockholders’ equity without affecting the consolidated statements of operations.

	d.		*Monetary unit of the financial statements —*The 2010, 2009 and 2008 consolidated financial statements and notes include balances and transactions denominated in Mexican pesos of different purchasing power.

	e.		*Classification of costs and expenses —*Costs and expenses presented in the consolidated statements of operations were classified according to their function due to the various business activities of the Company. Consequently, amortization of intangible asset for concession, operation and maintenance of concession and construction costs for expansion and rehabilitation are presented separately from other general and administrative expenses.

	f.		*Income from operations —Income from operations is the result of subtracting costs and general and administrative expenses from net sales. While NIF B-3,Statement of Income*, does not require inclusion of this line item in the consolidated statements of operations, it has been included for a better understanding of the Company’s economic and financial performance.

	g.		*Reclassifications —Certain amounts in the financial statements as of and for the years ended December 31, 2009 have been reclassified to conform to the 2010 presentation as follows: (i) The long-term restricted cash amount of Ps.722,493 was reclassified to enable its inclusion in cash and cash equivalents under current assets based on the adoption of NIF C-1,Cash and Cash Equivalents*; (ii) the amount of Ps.40,687 recorded for toll equipment was reclassified to intangible assets; (iii) the provision of Ps.9,804 created for administrative bonds granted to executives was reclassified to the employee benefits heading.

3.		Summary of significant accounting policies

		Beginning January 1, 2010, the Company adopted the following new NIFs and Interpretations to Financial Reporting Standards (INIFs):

		INIF 17Service Concession Contracts, which provides the accounting treatment for service concessions.Prior to the adoption of INIF 17, the Company applied Interpretation No.12 issued by the International Financial Reporting Interpretations Committee,Services Concessions Agreements, (“IFRIC”). Given the recent convergence of MFRS with International Financial Reporting Standards, the guidance contained in INIF 17 is similar to that of IFRIC 12, for which adoption of INIF 17 did not have a significant impact in the accompanying consolidated financial statements.

		In addition, beginning January 1, 2010, the Company adopted the following new guidance, which did not materially impact the accompanying consolidated financial statements: NIF C-1, Cash and Cash Equivalents;Improvements to NIF’s 2010, including NIF B-1Accounting Changes and Corrections of Errors, NIF B-2Statement of Cash Flows, NIF C-7Investments in Associated Companies and Other Permanent Investmentsand NIF C-13Related Parties.

Recognition of the effects of inflation —Since the cumulative inflation in Mexico for the three fiscal years prior to those ended December 31, 2010 and 2009 was 14.48% and 15.01%, respectively, the economic environment may be considered non-inflationary in both years. Inflation rates for the years ended 2010, 2009 and 2008 were 4.40%, 3.57% and 6.53%, respectively.

G-8

	b.		*Cash and cash equivalents —*Cash and cash equivalents consist mainly of bank deposits in checking accounts and short-term investments, highly liquid and easily convertible into cash, which are subject to insignificant value change risks. Cash is stated at nominal value and cash equivalents are valued at fair value; any fluctuations in value are recognized in comprehensive financing (cost) income of the period. Cash equivalents are primarily represented by investments in government or risk-free instruments. This line item also includes restricted cash.

	c.		*Furniture and equipment —*Furniture and equipment are recorded at acquisition cost. Depreciation is calculated using the straight-line method over the useful life of the asset. Depreciation begins in the following year in which the asset is placed in service. The useful lives of assets are as follows:


	Useful lives
Computer equipment and vehicles		4
Furniture and fixtures		10

	d.		*Investment in concession —In order to recognize concession contracts, the Company utilizes INIF 17,Service Concession Contracts*. This interpretation provides guidance for the recognition of concessions by private sector operators involved in providing infrastructure assets and services to the public sector and requires such investments to be classified as financial assets, intangible assets or a combination of both.

			A financial asset results when an operator constructs or makes improvements to the infrastructure, in which the operator has an unconditional right to receive a specific amount of cash or other financial asset during the contract term.

			An intangible asset results when the operator constructs or makes improvements and is allowed to operate the infrastructure for a fixed period after the construction is terminated, in which the future cash flows of the operator have not been specified, because they may vary depending on the use of the asset, and are therefore considered contingent.

			In the case of financial and intangible assets, the revenues and costs related to construction or leasehold improvements are recognized in the results of the period.

			The Company’s investment in concession is classified as an intangible asset and is recorded at acquisition cost. Through December 31, 2007, the asset was restated for the effects of inflation. Financial costs incurring during the construction period are capitalized as part of the intangible. The intangible asset is amortized based on vehicle capacity during the respective concession period. Revenues are recognized both for construction under the concession as well as from tolls collected during the operation of such concession. Toll equipment is amortized using the straight-line method over a period of ten years.

	e.		*Other assets —*Other assets are mainly comprised of commissions and other financing costs. Commissions and other financing costs are recorded at their original historical value and are amortized over the life of the related long-term debt.

	f.		*Impairment of long-lived assets —Management periodically evaluates the impairment of long-lived assets as established by Bulletin C-15,Impairment in the Value of Long-Lived Assets and their Disposal*. If there is any indication that values exceed the respective recoverable amounts, assets are written down to this recoverable amount through a charge to results of the period in which this difference arises. The recoverable amount is determined as the greater of the net selling price of a cash-generating unit and its value in use, which is the net present value of discounted future net cash flows, using an appropriate discount rate. The method used to calculate the recoverable amount considers the particular circumstances of the concession, machinery and equipment and other intangibles. With respect to the concession, revenue projections are used which consider assumptions and estimates concerning vehicle traffic, the growth of the population and economy along the Concessioned Highways, temporary passenger reductions due to tariff increases and commercial strategies designed to promote utilization, among others, which may differ and be adjusted according to the actual results obtained.

G-9

	g.		*Provisions —*When the Company has a present obligation as a result of a past event for which an outflow of economic resources is probable, a provision is recognized. When it is only reasonably possible that the Company will be required to settle an obligation, no provision is recognized but rather the nature of the obligation is disclosed in the notes. When such probability is remote, neither a provision nor disclosure is included in the consolidated financial statements.

	h.		*Toll revenues —*Toll revenues are recognized when the services are provided, determined based on the vehicle capacity of the toll road.

	i.		*Revenue and construction costs of expansion work and rehabilitation —*Revenues and costs of construction related to expansion work and rehabilitation are recognized based on the percentage-of-completion method.

	j.		*Employee benefits from termination, retirement and other —*Liabilities from seniority premiums, pension and severance payments are recognized as they accrue and are calculated by independent actuaries based on the projected unit credit method using nominal interest rates. Accordingly, the liability is being accrued which, at present value, will cover the obligation from benefits projected to the estimated retirement date of the Company’s employees.

	k.		*Repair and maintenance expenses —*Management of the Company recognizes a provision for repair and maintenance expenses for the best estimate of the expenditure that would be required to settle the maintenance or repair obligation at the end of each reporting period.

	l.		*Statutory employee profit sharing (PTU) —*PTU is recorded in the results of the year in which it is incurred and presented under other income and expenses in the accompanying consolidated statements of operations. Deferred PTU is derived from temporary differences that result from comparing the accounting and tax bases of assets and liabilities and is recognized only when it can be reasonably assumed that such difference will generate a liability or benefit, and there is no indication that circumstances will change in such a way that the liabilities will not be paid or benefits will not be realized.

	m.		*Income tax —*The Company is subject to Income Taxes (“ISR”) and Business Flat Tax (“IETU”) laws.

			ISR is recorded in the results of the year in which it is incurred and the provision for deferred income tax is determined in conformity with NIF D-4,Income Taxes. The Company must determine if, based on financial projections, it will pay ISR or IETU and accordingly, recognizes deferred income taxes based on the tax it expects to pay. Deferred income tax assets and liabilities are recognized for the applicable temporary differences resulting from comparing the accounting and tax values of assets and liabilities plus any future benefits from tax loss carry forwards. Deferred income tax assets are reduced by any tax benefits that are not expected to be realized. Management periodically evaluates its assumptions based on historical tax results and estimated tax profits. The resulting deferred tax provision or benefit related to the recognition of the deferred tax liability or asset is reflected in the statement of operations. The calculation and recognition of deferred taxes and the recognition of asset tax requires the use of estimates that could be affected by the amount of future taxable income, the assumptions considered by management and the results of operations. A deferred income tax asset is only recognized when there is a high probability that it can be recovered, periodically evaluating the probability based on the historical taxable results and the estimation of future taxable revenues. A valuation allowance is recorded for any deferred tax asset for which realizability is unlikely. The assumptions used in forming the estimate of a valuation allowance may change based on various circumstances, which may result in the modification of such valuation allowance, thereby affecting the Company’s financial position and results of operations.

G-10

Derivative financial instruments

	i)		Risk management

			The Company is exposed to various economic risks including (i) financial market risks (interest rate, exchange rate and prices), (ii) credit risk, and (iii) liquidity risk.

			The Company attempts to minimize the potential negative effects of these risks on its financial performance using different strategies. Derivative financial instruments are used to hedge exposure to the financial risks of transactions already recognized in the balance sheet (recognized assets and liabilities), as well as firm commitments and forecasted transactions that are likely to occur.

			The Company enters into hedging derivative instruments in order to reduce the uncertainty of the return on its projects. From an accounting perspective, derivative financial instruments can be classified as either hedging or trading instruments, which does not affect the objective of entering into the contract, which is to mitigate the risks to which the Company is exposed in its projects.

			Interest rate hedges are entered into to cap the maximum financial costs and to support the viability of the projects.

			Entering into derivative financial instruments is linked, in most cases, to the financing of projects. Therefore, counterparties to derivative instruments are usually the same institution (or an affiliate of such institution) that granted the financing under the project.

			The Company’s internal control policy establishes that prior to entering into a loan, the risks inherent in the project requires collaborative analysis by representatives from the finance, legal, administration, and operation areas. This analysis also includes assessing the use of derivatives to hedge financing risks included in the potential loan. Based on the internal control policy of the Company, the finance and administration areas are responsible for contracting the derivatives upon completion of this analysis.

			To assess the use of derivatives to hedge financing risks, sensitivity analyses are performed considering all possible outcomes of the relevant variables of alternative hedging instruments. This helps to define the economic efficiency of each of the alternatives available to cover the measured risk. The Company then compares the terms, obligations and conditions of each possible derivative instrument to determine which instrument best suits the Company’s hedging strategy. Effectiveness tests are also performed, with the help of expert appraisers, to determine the treatment given to the derivative financial instrument once it is contracted.

	ii)		Accounting policy

			The Company values all derivative financial instruments at fair value, regardless of the purpose for holding them. Fair value is determined through the use of valuations of counterparties (valuation agents), verified by a price provider authorized by the National Banking and Securities and Banking Commission (“CNBV”). These valuations are determined based on recognized methodologies in the financial sector, supported by sufficient, reliable, and verifiable information. Fair value is recognized in the balance sheet as an asset or liability based on the rights or obligations established in the contracts executed.

G-11

			When the transactions meet all hedge accounting requirements, the Company designates the derivatives as hedging financial instruments at the beginning of the relationship. For fair value hedges, the fluctuation in the fair value of both the derivative and the open risk position are recognized in the results of the period in which they occur. For cash flow hedges, the effective portion is temporarily recognized in other comprehensive income (loss) within stockholders’ equity and subsequently reclassified to results when affected by the hedged item; the ineffective portion is recognized in results of the period.

			Certain financial derivatives, although entered into for hedging purposes from an economic perspective, may not comply with all hedge accounting requirements established in applicable accounting standards, and thus are designated as trading hedges. The fluctuation in the fair value of such derivatives is recognized immediately in results of the year (see Note 10).

Foreign currency transactions —Foreign currency transactions are recorded at the applicable exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the applicable exchange rate in effect at the balance sheet date. Exchange fluctuations are recorded as a component of net comprehensive financing cost (income) in the consolidated statements of income, except in those cases in which they can be capitalized.

4.		Cash and cash equivalents

		Cash and cash equivalents consist of the following:


	December 31,
	2010		2009

Cash and cash equivalents	Ps.	53,798	Ps.	416,508
Restricted cash		1,478,332		1,662,086,


	Ps.	1,532,130	Ps.	2,078,594

		The Company entered into three administrative trust contracts; (i) the first trust No. 300195 (previously trust No. 881), was established for the collection of tolls and related services, which such amounts guarantee and are dedicated mainly for the payment of the debt entered into by the Company as well as for maintenance of the Concessioned Highways. Amounts held in this trust as of December 31, 2010 and 2009 are Ps.318,035 and Ps.597,539, respectively; (ii) the second trust No. 300209 (previously trust No. 882), was established for the construction of expansion projects. Amounts held in this trust as of December 31, 2010 and 2009 are Ps.1,126,151 and Ps.1,299,430, respectively; (iii) the third trust No. 661, was established for the issuance of Long-Term Infrastructure Development Equity Certificates (see Note 14 c). Amounts held in this trust as of December 31, 2010 and 2009 are Ps.34,146 and Ps.112,920, respectively.

		In order to comply with clause twenty-eight of the concession title, the Company has also created a Conservation and Maintenance Fund, which must be equal to three days’ annual expected gross revenue each year. At December 31, 2010 and 2009, the balance of this fund is Ps. 24,247, for both years, and forms part of trust No. 300195.

		Beginning May 17, 2010, the trustee of the trusts No. 300195 and No. 300209 is the financial institution HSBC México, S.A., and the trustee of trust 661 is The Bank of New York Mellon.

G-12

Investment in concession

The intangible asset related to the concession is as follows:


	December 31,
	2010			2009

Consideration paid to the federal government	Ps.	44,541,230		Ps.	44,541,230
Capitalized costs from construction of expansion and rehabilitation		2,720,530			1,774,185
Comprehensive financing capitalized (1)		203,380			65,441
SIMEX’s equipment		44,744			40,687
Advances to suppliers		27,704			161,752

		47,537,588			46,583,295

Accumulated amortization		(2,564,008	)		(1,757,613	)


	Ps.	44,973,580		Ps.	44,825,682


(1)		The interest expense relates to a credit line designated exclusively for the construction of the expansion works.

	b.		The Mexican government has created an economic policy in 2007, updated in 2009, the National Development Plan 2009-2012, whose objectives are to achieve greater levels of competitiveness, create more and better jobs for the population, establish a more dynamic internal market, and provide basic services for the benefit of the population as a whole.

			The actions established in the Mexican government’s plan for the development of infrastructure include, among others, allocating additional resources and incorporating best practices with respect to preparation, management and execution of infrastructure projects and providing greater legal assurance to encourage greater participation by the private sector in the development of infrastructure, as well as perfecting financing schemes to boost investment in the sector.

			As part of its economic policy, on October 3, 2007, the federal government, through the SCT, granted a concession title to the Company, to construct, operate, exploit, conserve and maintain for a 30-year period the Concessioned Highways, as well as the expansion work established in the concession title.

			The Company’s investment will be recovered through the collection of toll rates established by the SCT over the term established in the concession title. Such rates may be adjusted annually in accordance with the National Consumer Price Index (“NCPI”) or in the event of an increase of 5% or more, in relation to the index in effect at the date of the last adjustment. The toll road revenues guarantee long-term debt (see Note 11).

	c.		The principal requirements and conditions of the concession title are as follows:

			The concessionaire must carry out the expansion work associated with the highways currently in operation, which include the subsection junction of the highway León-Aguascalientes to the junction Desperdicio II of the highway Zapotlanejo-Lagos de Moreno, with an approximate length of 19.00 km; highway Zacapu — junction of the highway Maravatío-Zapotlanejo with an approximate length of 8.67 km in the state of Michoacán; modernization of six lanes (three in each direction) of the highway Guadalajara-Aguascalientes-León, in the section from Guadalajara-Zapotlanejo, with a length of 16.5 km in the state of Jalisco, including expansion and strengthening of six traffic lanes of the bridge named Ing. Fernando Espinosa; reconstruction of the traffic-bearing surface of the highway Guadalajara-Aguascalientes-León for the section from Zapotlanejo-Lagos de Moreno; subsection junction El Desperdicio at the junction with the Lagos de Moreno bypass, with a length of 27.8 km in the state of Jalisco, including improvement of horizontal and vertical signposting; reconstruction of the traffic-bearing surface of the highway Guadalajara-Aguascalientes-León, for the section León-Aguascalientes; subsection junction El Salvador to the border with the states of Jalisco and Aguascalientes, with a length of 4.34 km in the state of Jalisco, including improvements in horizontal and vertical signposting.

G-13

			The rights and obligations derived from the concession cannot be transferred by the concessionaire unless: (i) it has the prior written authorization of the SCT; (ii) it has complied with all its obligations derived from the title at the authorization request dates; (iii) a period of not less than three years has elapsed since the commencement date of the concession; (iv) the assignee fulfills the requirements established in applicable laws and regulations for the granting of the concession; and (v) the concessionaire and/or the assignee fulfills the provisions regarding concentration established in the Federal Antitrust Law.

			Neither the concessionaire nor its stockholders may transfer or pledge under any title their interests in the Company, or the rights derived from the concession without the prior written authorization of the SCT.

			The Company made an initial payment equal to Ps. 44,051,000 historical value (Ps. 44,541,230, value including inflation through December 31, 2007) to obtain the concession, based on the terms established with the SCT.

			The federal government retains the right to take back the concession in accordance with the terms established in article 19 of the General Law on State Property. In the event this should occur, the government must establish the general bases applicable to settle the amount of any compensation payable to the concessionaire, bearing in mind the duly substantiated investment made, as well as the depreciation of the assets, equipment and installations used directly for the purposes of the concession.

			On the termination date of the concession, the installations permanently attached to the highways as well as the operating, utilization, conservation and maintenance rights and other ancillary services rights will revert to the nation, in good condition, at no cost and free of any and all encumbrances.

			The Company must create a conservation fund to ensure compliance with the conservation and maintenance program which must be maintained for a minimum amount equal to three days of the annual expected gross revenue in the year in question. Such conservation fund may be used solely and exclusively for the conservation and maintenance of the highways.

			The Company will be obligated to pay consideration to the federal government each year equal to 0.5% of the gross toll rate revenues (excluding value-added tax), of the immediately prior year derived from the operation of the highways during the concession term. During 2010 and 2009, the consideration paid was Ps.15,250 and Ps. 13,908, respectively.

			As of December 31, 2010 and 2009, the Company is in compliance with the aforementioned conditions.

6.		Furniture and equipment

		Furniture and equipment consist of the following:


	December 31,
	2010			2009

Computer equipment	Ps.	3,621		Ps.	3,096
Furniture and fixtures		2,459			527
Vehicles		171			—

		6,251			3,623
Accumulated depreciation		(1,019	)		(38	)


Total	Ps.	5,232		Ps.	3,585

G-14

7.		Other assets

		Other assets consist of the following:


	December 31,
	2010			2009

Commissions and other financing costs	Ps.	993,107		Ps.	990,586
Accumulated amortization		(479,082	)		(385,998	)

		514,025			604,588

Guarantee deposits		118			—


Total	Ps.	514,143		Ps.	604,588

8.		Provisions

		At December 31, 2010 and 2009, the composition and changes of principal provisions are as follows:


	December 31,									December 31,
	2009		Provision Used			Additions		Reversals		2010

Provisions for major maintenance	Ps.	—	Ps.	—		Ps.	170,000	Ps.	—	Ps.	170,000
Costs expected to be incurred for damage repair		19,073		(19,000	)		—		—		73
Accrual for administrative expenses		—		—			4,000		—		4,000


	Ps.	19,073	Ps.	(19,000	)	Ps.	174,000	Ps.	—	Ps.	174,073


	December 31,									December 31,
	2008		Provision Used			Additions		Reversals		2009

Costs expected to be incurred for damage repair	Ps.	4,763	Ps.	—		Ps.	14,310	Ps.	—	Ps.	19,073
Accrual for operating expenses		13,980		(13,980	)		—		—		—


	Ps.	18,743	Ps.	(13,980	)	Ps.	14,310	Ps.	—	Ps.	19,073


	December 31,									December 31,
	2007		Provision Used		Additions		Reversals			2008

Costs expected to be incurred for damage repair	Ps.	—	Ps.	—	Ps.	10,000	Ps.	(5,237	)	Ps.	4,763
Accrual for operating expenses		—		—		44,958		(30,978	)		13,980


	Ps.	—	Ps.	—	Ps.	54,958	Ps.	(36,215	)	Ps.	18,743

G-15

Employee profit sharing

The balance of employee profit sharing of the administrative service subsidiary is as follows:


	December 31,
	2010		2009

Current	Ps.	382	Ps.	82
Deferred		55		24


	Ps.	437	Ps.	106

The main items giving rise to a deferred employee profit sharing liability are:


	December 31,
	2010			2009

Deferred employee profit sharing liability:
Deferred income	Ps.	(246	)	Ps.	(24	)
Prepaid expenses		(3	)		—
Employee benefits		194			—


Total liability	Ps.	(55	)	Ps.	(24	)

10.		Derivative financial instruments (interest rate swaps)

		To mitigate the risk of interest rate fluctuations, the Company uses swaps to set variable rates to fixed rates. Transactions that fulfill hedge accounting requirements have been designated as cash flow hedges.

		The worldwide financial crisis has caused a general decrease in interest rates, resulting in decreased cash flows from financial instruments and increased liabilities resulting from such instruments.

		The following table shows the financial instruments that the Company has entered into as of December 31, 2010 and 2009 to hedge interest rate fluctuations through interest rate swaps.


Notional amount		Contracting	Maturity	Rate				December 31,
Hedging		date	date	Received	Paid			2010			2009

	15,070,000	Oct. 2007 / Mar. 2008	Dec 30, 2023	TIIE28d (4.96%)		8.52	%	Ps.	(1,253,613	)	Ps.	(379,305	)
	11,365,000	Oct. 2007 / Dec. 2007	Dec 30, 2023	TIIE28d (4.96%)	4.33% + UDI				(1,141,494	)		(817,493	)


								Ps.	(2,395,107	)	Ps.	(1,196,798	)

		The values shown in the “Rate received” column are as of December 31, 2010.

		The fair value of derivative financial instruments is presented within long-term liabilities within the accompanying consolidated statement of financial position. Note 3(n) presents information on the Company’s purposes for entering into derivatives not designated as risk management strategies.

G-16

The following table presents the effects of derivative instruments not designated as hedges in the consolidated statements of operations for the year ended December 31, 2010, 2009 and 2008.

Derivatives not

designated as

Location of gain or (loss)

Amount of gain or (loss) recognized in income on derivative

Hedging

recognized in

For the year ended December 31,

instruments

income on derivative

2010

2009

2008

Swaps

Comprehensive financing cost

Ps.

—

Ps.

—

Ps.

(208,126

)

The following table presents the movements to and from other comprehensive income with respect to derivative financial instruments classified as cash flow hedges:

2010

Location of

gain or (loss)

Amount of gain or

recognized

(loss) recognized

in income on

derivative

income on

(ineffective

derivative

portion and

(ineffective

Location of loss

Amount of loss

amount

portion

Amount of loss

reclassified from

excluded

and amount

Derivatives in

recognized in OCI

accumulated OCI

from

excluded

cash flow hedge

on derivative

into income

effectiveness

from effectiveness

relationships

(effective portion)

testing)

Swaps

Ps.

(1,198,309

)

Comprehensive financing cost — Interest expense

Ps.

(993,273

)

Other income/(expense)

Ps.

—

Total

Ps.

(1,198,309

)

Ps.

(993,273

)

Ps.

—

2009

Location of

gain or (loss)

Amount of gain or

recognized

(loss) recognized

in income on

derivative

income on

(ineffective

derivative

portion and

(ineffective

Location of loss

Amount of loss

amount

portion

Amount of loss

reclassified from

excluded

and amount

Derivatives in

recognized in OCI

accumulated OCI

from

excluded

cash flow hedge

on derivative

into income

effectiveness

from effectiveness

relationships

(effective portion)

testing)

Swaps

Ps.

(851,372

)

Comprehensive financing cost — Interest expense

Ps.

(702,694

)

Other income/(expense)

Ps.

—

Total

Ps.

(851,372

)

Ps.

(702,694

)

Ps.

—

G-17

2008

Location of

gain or (loss)

Amount of gain or

recognized

(loss) recognized

in income on

derivative

income on

(ineffective

derivative

portion and

(ineffective

Location of loss

Amount of loss

amount

portion

Amount of loss

reclassified from

excluded

and amount

Derivatives in

recognized in OCI

accumulated OCI

from

excluded

cash flow hedge

on derivative

into income

effectiveness

from effectiveness

relationships

(effective portion)

testing)

Swaps

Ps.

(216,154

)

Comprehensive financing cost — Interest expense

Ps.

(388,375

)

Other income/(expense)

Ps.

—

Total

Ps.

(216,154

)

Ps.

(388,375

)

Ps.

—

		Variable rate to fixed rate

		In October 2007, the Company entered into four swaps that change the profile of a variable rate financing to a weighted average fixed rate of 8.52% on a notional amount of Ps.15,500,000. These swaps were classified, beginning May 2009, as cash flow hedges complying with the documentation requirements and the effectiveness assessment established by accounting regulations. Since the designation as a hedge, changes in fair value are recognized in comprehensive income within stockholders’ equity.

		In February 2010, the Company partially terminated its derivative financial transactions by reducing their notional value by Ps.430 million to reach a new notional amount of Ps.15,070,000, while also paying a termination cost of Ps.20 million, which was recognized as an interest expense in the statement of operations.

		As of December 31 there are no ineffective portions that must be recognized in results of the period.

		Variable rate to fixed rate plus investment units (“UDIS”)

		In October and December 2007, two swaps were entered into to change the profile of a variable rate financing to a weighted average rate of 4.33% plus UDIS. The notional amount of both swaps was Ps.12,975,000. In 2007, these derivatives were classified as derivatives for trading purposes and fluctuations in their fair value was recognized in comprehensive financing result due to the fact they did not comply with all hedge accounting requirements established in applicable accounting standards.

		However, in 2009, these derivatives have been formally designated as cash flow hedges, complying with the documentation requirements and the effectiveness assessment established by accounting regulations. Since their designation as hedges, changes in fair value is recognized in comprehensive income within stockholders’ equity.

		As of December 31, 2010, there are no ineffective portions that must be recognized in results of the period.

		Of the cumulative amount recorded in other comprehensive loss in equity for gains or losses derived from derivative financial instruments of Ps.2,265,835, the Company estimates Ps.881,200 will be recycled to results in 2011 related to its derivative instruments.

G-18

11.		Long-term debt

		Long-term debt consists of the following:


	December 31,
	2010		2009
Syndicated loan acquired with different Mexican and foreign financial institutions for Ps.31,000,000, plus additional lines of credit to be used for working capital and capital expenditures for up to Ps.3,100,000 and Ps.3,000,000, respectively. To guarantee payment of these credits, the Company assigned the collection rights from the highway tolls of the Concessioned Highways to a management trust (see Note 4). Additionally, certain shares with voting rights of the Company guarantee the debt.

The credit term is seven years, and may be extended an additional ten years, and bears interest at a rate resulting from applying the Mexican Equilibrium Interbank Offered Interest Rate (“TIIE”) plus basis points ranging from 120 to 165 basis points in the first year, and increasing gradually over the subsequent years until reaching a range of between 180 and 225 basis points in the sixth and seventh years. In December 2009, the Company extended the term of a portion of the syndicated loan; Ps. 3,911,223 of the original amount has an extended two-year term and Ps.9,424,037 of the original amount has an extended four-year term. Interest will be payable on a monthly basis, and principal is payable in a single payment at the end of the contract term.

In October 2009, the Company prepaid Ps.3,709,000 and Ps.1,957,500 of the acquired loan and line of credit, respectively; in addition, in the month of November 2009, the Company prepaid Ps.1,999,998 of the acquired loan. In December 2010, the Company prepaid Ps.343,225 of the line of credit. During 2010 and 2009, the Company obtained additional borrowings under the line of credit of Ps.1,108,000 Ps.1,897,000, respectively, to be used for capital expenditures.	Ps.	27,945,777	Ps.	27,181,002

		Terms of the long-term debt provide various covenants that restrict the ability to incur additional indebtedness, issue guarantees, sell fixed and other non-current assets and make capital distributions, as well as require compliance with certain financial ratios. For the year ended December 31, 2010 and 2009, the Company was in compliance with such covenants.

		The scheduled maturity of long-term debt as of December 31, 2010, taking into consideration the extended terms discussed above, is as follows:


Year	Amount
2014	Ps.	14,610,517
2016		3,911,223
2018		9,424,037


	Ps.	27,945,777

G-19

12.

Foreign currency balances and transactions

The monetary position in foreign currencies is as follows:


	December 31,
	2010						2009
	Foreign Currency			Mexican Peso			Foreign Currency			Mexican Peso
	Balances			Equivalent			Balances			Equivalent
Currency	(Thousands)						(Thousands)

U.S. dollars:
Assets	$	—		Ps.	—		$	—		Ps.	—
Liabilities		(30	)		(372	)		(666	)		(8,691	)


Net liability position	$	(30	)	Ps.	(372	)	$	(666	)	Ps.	(8,691	)

Transactions in thousands of U.S. dollars are as follows:


	For the year then ended December 31,
	2010		2009		2008

Fees		1,349		17,349		—
Administrative services		1,096		13,015		—
Financing expenses		—		—		1,041

Pertinent exchange rate information at the date of the financial statements is as follows:


			December 31,				February 4,
	2010		2009		2008		2010

U.S. dollar currency exchange Interbank rate	$	12.3817	$	13.0437	$	13.7738	$	12.0499

13.		Income tax

		The Company is subject to ISR and IETU.

		The ISR rate was 28% for 2009 and 2008 and was 30% for 2010, where it will remain until 2012, at which point it will be reduced to 29% for 2013 and 28% for 2014.

		IETU — Revenues, as well as deductions and certain tax credits, are determined based on cash flows of each fiscal year. Beginning in 2010, the IETU rate is 17.5%, 17% in 2009 and 16.5% in 2008.

		Income tax incurred will be the higher of ISR and IETU.

G-20

Based on its financial projections and according to INIF 8,Effects of the Business Flat Tax, the Company determined that it will basically pay ISR. Therefore, it only recognizes deferred ISR.

Income taxes in 2010, 2009 and 2008 are as follows:


	For the year ended December 31,
	2010			2009			2008
ISR:
Current	Ps.	1,070		Ps.	—		Ps.	41
Deferred		(648,481	)		(900,968	)		—
Cancellation of the valuation allowance for deferred ISR asset		—			(923,659	)		—

		(647,411	)		(1,824,627	)		41

Equity offering expenses recorded within stockholders’ equity		—			76,505			—

IETU:
Current		—			248			—
Deferred		—			93			—

		—			341			—

Total income tax (benefit) expense	Ps.	(467,411	)	Ps.	(1,747,781	)	Ps.	41

The reconciliation of the statutory and effective ISR rates expressed as a percentage of loss before income tax expense (benefit) is:


	For the year ended December 31,
	2010			2009		2008
	%			%		%

Statutory rate		30.00			28.00		28.00

Effects of inflation		26.60			15.20		12.40
Effect of changes in tax rates		(7.10	)		—		—
Effects of cancellation of the valuation allowance for deferred ISR asset		—			48.40		—
Valuation allowance for deferred ISR asset		—			—		(40.46	)


Total		49.50			91.60		—

G-21

The main items comprising the asset balance of deferred income taxes are as follows:


	December 31,
	2010			2009
Liabilities:
Commissions and other financing costs	Ps.	(148,581	)	Ps.	(181,376	)
Prepaid expenses and advances to suppliers		(2,508	)		(6,421	)

		(151,089	)		(187,797	)


Assets:
Furniture and equipment		285			26
Intangible assets for concession		984,978			745,024
Allowance for doubtful accounts		179			2,183
Employee benefits		542			—
Derivative financial instruments		47,295			38,693
Accrued fees to the federal government		4,575			4,172
Accrued liabilities and provisions		97,483			30,689


		1,135,337			820,787


Deferred net income tax asset, net		984,248			632,990

Tax loss carryforwards		1,488,768			1,191,637


Net deferred tax asset	Ps.	2,473,016		Ps.	1,824,627

			To determine deferred ISR at December 31, 2010 and 2009, the Company applies applicable tax rates to temporary differences based on their estimated reversal dates.

	d.		The main items originating a deferred IETU liability in 2009 are:


	December 31,
	2009
Liability:
Prepaid expenses	Ps.	(1,825	)

		(1,825	)

Asset:
Accounts and notes payable		1,732

Deferred IETU asset		1,732


Net deferred IETU liability	Ps.	93

	e.		Given the improved circumstances considered to assess the recovery of deferred income tax assets and tax loss carryforwards in 2009, the allowance for valuation of deferred income tax assets recognized through 2008 of Ps.923,659 was reversed with a credit to results for the year.

	f.		In accordance with rule I.3.3.2.5 of the omnibus tax ruling of June 11, 2010, taxpayers engaged in the exploitation of a concession, authorization or permit granted by the federal government may apply their tax losses until they are fully depleted, or the concession, authorization or permit expires or the Company is liquidated, whichever occurs first. As of December 31, 2010 and 2009 the amount of the restated tax loss are Ps.5,317,029 and Ps.4,255,846, respectively.

	g.		The balances of the contributed capital account at December 31, 2010 and 2009 are Ps. 27,221,209 and Ps.26,073,955, respectively.

G-22

14.

Stockholders’ equity

Common stock at par value as of December 31 is as follows:


					Amount
	Number of Shares				(Thousand)
	2010		2009		2010		2009

Fixed capital
Series A		50,000		50,000	Ps.	50	Ps.	50

Variable capital
Series A		18,186,499,503		18,186,499,503		17,589,098		17,589,098
Series B		8,506,000,000		8,506,000,000		6,549,620		6,549,620


Total		26,692,549,503		26,692,549,503	Ps.	24,138,768	Ps.	24,138,768

	b.		As part of the unanimous resolutions adopted at the stockholders’ meeting held on September 24, 2009, the stockholders approved an increase in the Company’s variable capital up to an amount of Ps.15,000,000 by issuing up to 4,000,000,000 common, nominal no-per-value Series “A” shares and up to 14,000,0000,000 common, nominal, no-par-value Series “B” shares.

	c.		In October 2009, Trust No. F/00661 placed Long-Term Infrastructure Development Capital Certificates (CKDes) for Ps.6,549,620 with Mexican institutional investors. The placement price was Ps.77 pesos per CKDe, which began to be traded on the Mexican Stock Exchange on October 2 under trading board code “RCOCB”. Each CKDe is backed by 100 Series B shares of RCO, which are deposited in the issuing trust.

	d.		As of October 2, 2009, 8,506,000 Series B shares where subscribed and paid by The Bank of New York Mellon, S.A. As of November 5, 2009, 2,597,400,000 Series A shares where subscribed and paid by the Company’s shareholders with exception of The Bank of New York Mellon, S.A.

	e.		At the Stockholders’ Ordinary General Meeting of April 26, 2010, the stockholders resolved to cancel 6,896,600,000 shares currently held in the Company’s Treasury because they were not paid-in and subscribed according to the Unanimous Resolutions of September 24, 2009.

	f.		At the Stockholders’ Ordinary General Meeting of April 26, 2010, and the Unanimous Resolutions approved by stockholders outside the meeting on May 14, 2009, the stockholders approved the results of the years ended December 31, 2009 and 2008, respectively.

	g.		At the Stockholders’ Extraordinary and Ordinary General Meeting of September 8, 2010, the stockholders approved an increase in the Company’s variable capital by the amount of Ps.3,155,573 by issuing ordinary, nominative shares at no par value, which will be offered at a subscription price of 0.89 cents per share.

			This issuance will cover up to 2,415,730,337 unsubscribed Series A and 1,129,857,109 Series B ordinary, nominative shares at no par value, which will be deposited with the Company’s Treasury until they are subscribed and paid-in.

	h.		Stockholders’ equity, except restated paid-in capital and tax retained earnings, will be subject to income tax at the rate in effect when the dividend is distributed. Any tax paid on such distribution may be credited against the income tax payable of the year in which the tax on the dividend is paid and the two fiscal years following such payment.

G-23

15.

Balances and transactions with related parties

Balances due to related parties are as follows:


	December 31,
	2010		2009

Ingenieros Civiles Asociados, S.A. de C.V.	Ps.	3,182	Ps.	102,317
ICA Infraestructura, S.A. de C.V.		11,898		4,730


	Ps.	15,080	Ps.	107,047


Accounts payable for work executed, not yet approved with Ingenieros Civiles Asociados, S.A. de C.V.	Ps.	91,253	Ps.	206,076

Transactions with related parties, carried out in the ordinary course of business, were as follows:


	For the year ended December 31,
	2010		2009		2008
Operation and maintenance expenses	Ps.	201,750	Ps.	204,704	Ps.	172,190
Administrative services expense		—		818		30,282
Capitalized costs of investment in concession		—		—		15,111
Construction cost		866,194		1,310,943		213,701
Executive administrative bonds		20,001		9,804		—

The Company has the following agreements with related parties:

	1)		Operating, administrative, conservation and maintenance services agreements with ICA Infraestructura, S. A. de C. V., which specifies payment of one twelfth of the approved annual operating and maintenance budget for operating services and 8% of certain administrative costs for administrative services. The term of the agreement is for five years, effective from September 26, 2007, and is renewable for one additional year.

	2)		Construction agreements with Ingenieros Civiles Asociados, S. A. de C. V. for several expansion projects, the terms of which depend on the execution of the work and are subject to annual reviews when material changes in the established prices are expected.

16.		Employee benefits

		Net period cost for obligations resulting from the pension plan and seniority premiums in the administrative services subsidiary was Ps. 1,937 for the year 2010. Other disclosures required by financial reporting standards are not considered material.

		Executive personnel have the right to an annual and deferred compensation paid in cash. As of December 31, 2010 and 2009, annual compensation was Ps.12,086 and Ps.9,804, respectively. Deferred compensation for the year 2010 was Ps.7,915.

G-24

17.		Differences Between MFRS and Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”)

		The Company’s consolidated financial statements are prepared in accordance with MFRS, which differ in certain significant respects from U.S. GAAP. The MFRS consolidated financial statements include the effects of inflation recognized through December 31, 2007, as required by MFRS through that date. Effective January 1, 2008, the Company adopted NIF B-10,Effects of Inflation, under which it suspended the recognition of the effects of inflation on its financial information and ceased the restatement of financial information to constant pesos. U.S. GAAP generally requires financial statements to be prepared on a nominal cost basis. However, the Company considers that the presentation of price-level is a more meaningful presentation than historical cost based financial reporting. Accordingly, the reconciliation to U.S. GAAP does not include the reversal of the inflation adjustments recognized through December 31, 2007, included in the balances of assets, liabilities and equity.

		*Restatment of prior year —*During preparation of the 2010 U.S. GAAP reconciliation, the Company’s management restated in 2009 the effects of deferred income taxes with respect to other comprehensive income within equity, generated by the effects of derivative financial instruments. As discussed in Note d. below, recognition of deferred income tax effects on derivative financial instruments within other comprehensive income are not required by MFRS, while they are required under U.S. GAAP. Consequently, the U.S. GAAP reconciliations of stockholders’ equity and net income have been restated. In 2008, the effects of the restatement resulted in the recognition of a deferred income tax asset of Ps. 60,523, recognized through other comprehensive income. However, given the Company’s projections at that time, a full valuation allowance was recognized in 2008 on the net deferred income tax asset. Accordingly, a valuation reserve of Ps. 60,523 was also recognized through other comprehensive income in 2008, resulting in a zero net effect to other comprehensive income and accordingly, stockholders’ equity under U.S. GAAP at December 31, 2008. In 2009, Company ´s projections resulted in the reversal of the valuation allowance on its net deferred income tax assets. Although the original reserve related to this adjustment, it was recognized in other comprehensive income in 2008, U.S. GAAP required the recognition of its reversal in 2009 through results. The effects of these adjustments on the 2009 reconciliations are shown below:


	As of and for the Year Ended December 31, 2009
	As presented			Adjustment			As Restated
Statement of financial position:
Net deferred income tax asset	Ps.	1,824,627		Ps.	285,768		Ps.	2,110,395
Valuation of derivative financial instruments in other comprehensive loss	Ps.	(804,447	)	Ps.	225,245		Ps.	(579,202	)
Comprehensive loss	Ps.	(964,527	)	Ps.	285,768		Ps.	(678,759	)
Total stockholders’ equity	Ps.	20,477,001		Ps.	285,768		Ps.	20,762,769

Statement of net income:
Cancellation of the valuation allowance for deferred ISR asset	Ps.	(923,659	)	Ps.	(60,523	)	Ps.	(984,182	)
Total income tax benefit	Ps.	(1,747,781	)	Ps.	(60,523	)	Ps.	(1,808,304	)
Net loss	Ps.	(160,080	)	Ps.	60,523		Ps.	(99,557	)

G-25

The principal differences between MFRS and U.S. GAAP and their effects on consolidated net loss and consolidated equity are presented below with an explanation of such adjustments:


	Convenience
	Translation
	(see Note 2)
	December 31,			For the year ended December 31,
	2010			2010			2009 (As restated)			2008
Reconciliation of Consolidated Net Loss

Net loss under MFRS	$	(53,343	)	Ps.	(660,520	)	Ps.	(160,080	)	Ps.	(2,282,552	)

U.S. GAAP adjustments for:
Reversal of construction revenues (c)		(87,566	)		(1,084,284	)		(1,527,819	)		(260,065	)
Reversal of construction costs (c)		87,566			1,084,284			1,527,819			260,065
Reversal of valuation allowance on deferred ISR asset (d)		—			—			60,523			—


Net loss under US. GAAP	$	(53,343	)	Ps.	(660,520	)	Ps.	(99,557	)	Ps.	(2,282,552	)


	Convenience
	Translation
	(see Note 2)
	December 31,		For the year ended December 31,
	2010		2010		2009 (As restated)		2008
Reconciliation of Consolidated Stockholders’ Equity

Total equity reported under MFRS	$	1,499,798	Ps.	18,571,247	Ps.	20,430,076	Ps.	13,070,423

U.S. GAAP adjustments for:
Valuation of derivative financial instruments (a)		26,212		324,572		46,925		—
Deferred income taxes on derivative financial instruments recorded through other comprehensive income (d)		43,897		543,553		285,768		—


Equity under U.S. GAAP	$	1,569,907	Ps.	19,439,372	Ps.	20,762,769	Ps.	13,070,423

	a.		*Fair value*

			Effective January 1, 2008, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820,Fair Value Measurements and Disclosures, for all financial instruments accounted for at fair value on a recurring basis; effective January 1, 2009, the guidance in FASB ASC 820 was adopted for all non-financial instruments accounted for at fair value on a non-recurring basis. The guidance in FASB ASC 820 establishes a new framework for measuring fair value and expands related disclosures. In general terms, the framework requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. It also establishes a three-level valuation hierarchy based upon observable and non-observable inputs.

G-26

			For financial assets and liabilities, the Company determines fair value through the use of inputs observable in the market for identical or similar assets or liabilities. In the absence of active markets for identical assets or liabilities, such measurements involve developing assumptions based on market-observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date.

			Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:

	•		Level 1 — Quoted prices for identical instruments in active markets.

	•		Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

	•		Level 3 — Significant inputs to valuation models which are unobservable in a market.

			The Company maintains policies and procedures to measure instruments using the best and most relevant data available.

			As part of its guidance, ASC 820 requires that the fair value measurement for a liability reflects its nonperformance risk, or the risk that the obligation will not be fulfilled, which includes the reporting entity’s own credit risk. Nonperformance risk is not contemplated for fair value measurements under MFRS, thus resulting in a difference between MFRS and U.S. GAAP. The effect of the Company’s own credit risk on the valuation of its derivative financial instrument liabilities resulted in a decrease to the value of the liability under U.S. GAAP for Ps.277,647 and Ps.46,925 as of December 2010 and 2009, respectively, recognized as a credit to other comprehensive income. The effect in 2008 was not considered material.

			Non-Recurring Fair Value Measurements

			Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances, such as through the recognition of impairment of a long-lived asset. The Company has not recorded any non-recurring fair value adjustments to its non-financial assets or liabilities.

			Assets and liabilities measured at fair value under U.S. GAAP at December 31, 2010 and 2009 are as follows:

Quoted prices in

active markets for

Significant other

Significant

identical assets

observable inputs

unobservable inputs

December 31, 2010

(Level 1)

(Level 2)

(Level 3)

Derivative financial instruments

Ps.

(2,146,131

)

Ps.

—

Ps.

(2,146,131

)

Ps.

—

Total

Ps.

(2,146,131

)

Ps.

—

Ps.

(2,146,131

)

Ps.

—

Quoted prices in

active markets for

Significant other

Significant

identical assets

observable inputs

unobservable inputs

December 31, 2009

(Level 1)

(Level 2)

(Level 3)

Derivative financial instruments

Ps.

(1,179,376

)

Ps.

—

Ps.

(1,179,376

)

Ps.

—

Total

Ps.

(1,179,376

)

Ps.

—

Ps.

(1,179,376

)

Ps.

—

G-27

			The Company enters into various interest rate swaps (see Note 10). In general, given the nature of its derivative financial instruments, no quoted market prices are available. Accordingly, the Company values its derivative financial instruments using recognized valuation methodologies, which fall within the income approach technique. The fair values are either prepared by valuation agents represented by the counterparties with whom it enters into these instruments, or by a Mexican price provider specialist authorized by the CNBV (Comisión Nacional Bancaria y de Valores). Accordingly, all derivative instruments are classified within level 2, of the fair value hierarchy.

			Inputs used in valuation methodologies for derivative financial instruments are provided by a price vendor authorized by CNBV.

			Other fair value disclosures

			FASB 820-10-50 also requires disclosure of the fair value of financial instruments whether or not recognized in the statement of financial position, for which it is practicable to estimate fair value. Those financial instruments include items such as trade accounts receivable, accounts payable, provisions and long-term debt. The estimated fair value amounts as discussed below have been determined by the Company using available market information or other appropriate valuation techniques. The Company uses its best judgment in estimating the fair value of these financial instruments. The use of different market assumptions may have a material effect on the estimated fair value amounts.

			Accounts receivable, accounts payable and provisions are of a short-term nature and bear interest at rates tied to market indicators. Accordingly, the Company believes that their carrying amounts approximate their carrying value.

			For long-term debt, fair value is estimated using discounted cash flows based on the current incremental borrowing rates for similar types of borrowing arrangements. The estimated fair value of the Company’s long-term debt is similar to its carrying value, given the variable interest rate nature of the debt.

			Investment in concession is measured at fair value when there is a determination that the asset is impaired. The determination of fair value is based on the best information available, including internal cash flow estimates discounted at an appropriate interest rate, quoted market prices when available, market prices for similar assets and independent appraisals, as appropriate. As of December 31, 2010 and 2009, there were no fair value adjustments with respect to the investment in concession.

	b.		*Application of losses and equity offering costs*

			In its MFRS financial statements, the Company recognizes the application of accumulated losses against capital stock, reclassifying amounts from other equity accounts to capital stock. Such applications are made only upon approval of the stockholders of the Company. U.S.GAAP prohibits the reclassification of accumulated losses against other capital accounts, except in certain circumstances, which are not applicable to the Company.

			Additionally, equity offering costs have been classified within accumulated deficit within the accompanying MFRS financial statements. U.S. GAAP requires such costs to be deducted from additional paid-in capital, with any excess applied against the capital stock issued.

			These differences do not affect total consolidated stockholders’ equity under U.S. GAAP, but rather represent reclassifications among certain individual accounts within stockholders’ equity.

G-28

During 2008, an application of Ps.234,912 was made, decreasing the balance of accumulated losses and decreasing the value of capital stock under MFRS. Additionally, during 2009, the Company applied Ps.178,513 of equity offering costs to accumulated deficit. No applications or reclassifications were recognized during 2010. The following table shows the balances of the individual stockholders’ equity accounts on a U.S. GAAP basis, taking into consideration the cumulative effect of these classification differences at December 31, 2010, and 2009, as well as considering the adjustment to the value of the derivative financial instruments at December 31, 2010 and 2009, as discussed in note a. above.


	2010
	Stockholders’						Stockholders’
	Equity Accounts			Cumulative U.S.			Equity Accounts
	Under MFRS at			GAAP			under U.S. GAAP at
	December 31, 2010			Adjustment			December 31, 2010
Capital stock	Ps.	24,138,768		Ps.	(178,513	)	Ps.	23,960,255
Restatement of capital stock		—			234,912			234,912
Accumulated deficit		(3,301,686	)		4,124			(3,297,562	)
Valuation of derivative financial instruments		(2,265,835	)		807,602			(1,458,233	)


Total stockholders’ equity	Ps.	18,571,247		Ps.	868,125		Ps.	19,439,372


	2009 (As restated)
	Stockholders’						Stockholders’
	Equity Accounts			Cumulative U.S.			Equity Accounts
	Under MFRS at			GAAP			under U.S. GAAP at
	December 31, 2009			Adjustment			December 31, 2009

Capital stock	Ps.	24,138,768		Ps.	(178,513	)	Ps.	23,960,255
Restatement of capital stock		—			234,912			234,912
Accumulated deficit		(2,641,166	)		4,124			(2,637,042	)
Valuation of derivative financial instruments		(1,067,526	)		272,170			(795,356	)


Total stockholders’ equity	Ps.	20,430,076		Ps.	332,693		Ps.	20,762,769

	c.		*Concession accounting under INIF 17*

			As discussed in Note 3d. to the consolidated financial statements under MFRS, beginning January, 2010, the Company adopted INIF 17. Accounting under INIF 17 is similar to the previous accounting requirements applied by the Company under IFRIC 12, both of which result in the recognition of an intangible asset related to the concession, as well as the recognition of construction revenues and costs, including those related to improvements to infrastructure of the concession during the construction phase. Although accounting for the concession under U.S. GAAP results in the recognition of an intangible asset recorded at the same value as that under MFRS, U.S. GAAP does not contemplate the recognition of construction costs and revenues related to construction or improvements under the concession. As there was no profit margin recognized on construction activities, the reversal of these amounts does not result in a reconciling adjustment to arrive at net loss under U.S. GAAP. Accordingly, under U.S. GAAP, the Company reversed construction revenues and construction costs in an equal amount of Ps.1,084,284, Ps.1,527,819 and Ps.260,065 recognized in MFRS in 2010, 2009 and 2008, respectively.

G-29

	d.		*Deferred income taxes*

			Under MFRS, the Company accounts for deferred income taxes in accordance with NIF D-4,Income Taxes, and Bulletin D-4,Income Tax, Asset Tax and Statutory Employee Profit Sharing, which require a methodology similar to FASB ASC 740, which is applied by the Company for purposes of the U.S. GAAP reconciliation. However, deferred taxes are classified as non-current for MFRS purposes while they are based on the classification of the related asset or liability for U.S. GAAP purposes.

			In addition, during 2007, the IETU Law was enacted and became effective in 2008. The Company determines, based on projections, whether it will be subject to ISR or IETU and records the deferred tax asset (liability) based on such determination. When an entity projects that it will be subject to IETU in some years and ISR in others, MFRS requires an entity to calculate its deferred taxes using temporary differences and rates pursuant to both IETU and ISR laws and record deferred taxes based on the law that yields the greater net deferred tax liability or, as it were, the smaller net deferred tax asset. Under U.S. GAAP, a hybrid approach is applied whereby the entity must recognize the deferred tax asset or liability based on the tax it expects to pay in each year in which its temporary differences reverse. For 2010, 2009 and 2008, the Company’s projections indicate that it will be an ISR payer, and as such, does not apply the hybrid approach.

			A reconciliation of the net deferred income tax asset from MFRS to U.S. GAAP and the composition of the deferred income taxes under U.S. GAAP at December 31, 2010 and 2009 are as follows:


	Convenience
	Translation
	(see Note 2)
	December 31,		As of December 31,
	2010		2010		2009 (As restated)
Reconciliation of net deferred income tax asset:
Deferred income taxes assets under MFRS (see Note 13)	$	199,719	Ps.	2,473,016	Ps.	1,824,627

Deferred income tax for valuation of derivative financial instruments recorded in other comprehensive income		43,897		543,553		285,768


Net deferred income tax assets under U.S. GAAP	$	243,616	Ps.	3,016,569	Ps.	2,110,395


	December 31,
	2010			2009 (As restated)
Composition of deferred income taxes:
Current:
Liabilities:
Prepaid expenses and advances to suppliers	Ps.	(2,508	)	Ps.	(6,421	)

		(2,508	)		(6,421	)
Assets:
Allowance for doubtful accounts		179			2,183
Accrued fees to the federal government		4,575			4,172
Accrued liabilities and provisions		58,483			30,689

		63,237			37,044

Net current deferred income tax asset (liability)		60,729			30,623

G-30


	December 31,
	2010			2009 (As restated)
Non-current:
Liabilities:
Commissions and other financing costs	Ps.	(148,581	)	Ps.	(181,376	)

		(148,581	)		(181,376	)
Assets:
Furniture and equipment		285			26
Intangible assets for concession		984,978			745,024
Employee benefits		542			—
Provisions		39,000			—
Derivative financial instruments		590,848			324,461

		1,615,653			1,069,511

Net non-current deferred tax asset		1,467,072			888,135

Tax loss carryforwards		1,488,768			1,191,637


Net non-current deferred income tax asset		2,955,840			2,079,772


Net deferred income tax asset under U.S. GAAP	Ps.	3,016,569		Ps.	2,110,395

The composition of the deferred IETU under U.S. GAAP at December 31, 2009 is as follows:


	2009
Current:
Assets:
Accounts and notes payable	Ps.	1,732

		1,732
Liabilities:
Prepaid expenses		(1,825	)

		(1,825	)


Net deferred IETU liability under U.S. GAAP	Ps.	93

			U.S. GAAP also provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements and requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will be sustained upon examination. If the tax position meets the more-likely-than-not recognition threshold, the tax effect is recognized at the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement. Any difference between the tax position taken in the tax return and the tax position recognized in the financial statements using the criteria above results in the recognition of a liability in the financial statements for the unrecognized benefit. Similarly, if a tax position fails to meet the more-likely-than-not recognition threshold, the benefit taken in the tax return will also result in the recognition of a liability in the financial statements for the full amount of the unrecognized benefit.

			As of December 31, 2010, 2009 and 2008, the Company does not have any unrecognized tax benefits that would require recognition in its U.S. GAAP statements of financial position.

	e.		*Other Differences and Supplemental U.S. GAAP and Securities and Exchange Commission Disclosures*

(1)

Statement of cash flows—Effective January 1, 2008, the Company adopted NIF B-2,Statement of Cash Flows, and thus presents a statement of cash flows under MFRS in 2010, 2009 and 2008.

G-31

			For 2010, 2009 and 2008, for U.S. GAAP purposes, the Company has provided a statement of cash flows in accordance with FASB ASC 230, which presents only cash movements, excluding the effects of inflation, and requires that additional information related to non-cash investing and financing transactions and other events be provided separately.

			Requirements regarding the presentation of the statement of cash flows under MFRS differ in certain respects from those set forth by U.S. GAAP. Among others, MFRS includes restricted cash within the cash and cash equivalents balances while under U.S. GAAP, changes in restricted cash are generally presented as cash flows from investing activities. In addition, payments of interest expense are financing cash flows for MFRS and are either operating cash flows or investing cash flows when capitalized as part of a qualifying asset under U.S. GAAP.

			The information for the year ended December 31, 2010 and 2009 and 2008 is presented below:

G-32


	Convenience translation
	(see Note 2)
	December 31,			For the year ended December 31,
	2010			2010			2009			2008
Operating activities:
Consolidated net loss under U.S. GAAP	$	(53,343	)	Ps.	(660,520	)	Ps.	(99,557	)	Ps.	(2,282,552	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		65,203			807,376			781,203			621,992
Allowance for doubtful		(532	)		(6,582	)		—			—
Provisions		23,016			285,000			10,134			49,339
Derivative financial instruments		80,149			992,441			732,198			130,606
Amortization of finance fees and expenses		7,517			93,084			243,429			120,340
Deferred income tax		(52,371	)		(648,481	)		(1,808,553	)		—
Unpaid exchange loss		—			—			(53	)		733

		67,639			862,318			(141,199	)		(1,359,542	)

Changes in operating assets and liabilities:
Accounts receivable		1,397			17,302			3,711			(47,286	)
Recoverable taxes		1,317			16,305			(12,253	)		(10,387	)
Other accounts receivable and prepaid expenses		2,670			33,063			17,345			(14,091	)
Other assets		(10	)		(118	)		—			—
Trade accounts payable		(8,713	)		(107,890	)		3,141			44,475
Other current liabilities		(10,547	)		(130,610	)		(96,268	)		22,337
Due to related parties, net		(7,684	)		(95,149	)		55,234			(176,528	)
Taxes other than income tax		634			7,859			(9,740	)		13,000
Income taxes paid		(30	)		(367	)		(289	)		—
Employee profit sharing		27			331			89			17
Employee benefits		980			12,134			—			—

Net cash provided by (used in) operating activities		49,680			615,178			(180,229	)		(1,562,411	)


Investing activities:
Acquisition of furniture and equipment		(212	)		(2,628	)		(3,311	)		(312	)
Intangible asset for concession		(74,944	)		(927,995	)		(1,365,305	)		(360,327	)
Restricted cash		14,840			183,754			155,117			39,340

Net cash used in investing activities		(60,316	)		(746,869	)		(1,213,499	)		(321,299	)


Financing activities:
Proceeds from long-term debt		89,481			1,108,000			1,897,000			1,844,500
Prepayment from long-term debt		(27,719	)		(343,225	)		(7,666,498	)		—
Commission and financing cost		(204	)		(2,521	)		(156,913	)		(152,279	)
Additional capital contribution		—			—			8,549,618			—
Equity offering costs		—			—			(189,372	)		—
Derivative financial instruments		(80,216	)		(993,273	)		(702,694	)		109,919

Net cash provided by financing activities		(18,658	)		(231,019	)		1,731,141			1,802,140


(Decrease) increase in cash and cash equivalents		(29,294	)		(362,710	)		337,413			(81,570	)
Cash and cash equivalents at the beginning of period		33,638			416,508			79,095			160,665


Cash and cash equivalents at the end of period	$	4,344		Ps.	53,798		Ps.	416,508		Ps.	79,095


Cash paid for:
Interest, net of interest capitalized	$	157,216		Ps.	(1,946,722	)	Ps.	2,783,576		Ps.	3,258,839

G-33

(2)

Statement of comprehensive income —The Company’s statements of comprehensive income for the year ended December 31, 2010, 2009 and 2008, are set forth below:


	Convenience
	Translation (see Note
	2) December 31,						For the year ended December 31,					��
	2010			2010			2009 (As restated)			2008

Net loss under U.S. GAAP	$	(53,343	)	Ps.	(660,520	)	Ps.	(99,557	)	Ps.	(2,282,552	)
Other comprehensive loss:
Valuation of derivative financial instruments, net of deferred income taxes of Ps. 257,785 and Ps. 225,245 in 2010 and 2009, respectively		(53,534	)		(662,877	)		(579,202	)		(216,154	)

Comprehensive loss under U.S. GAAP	$	(106,877	)	Ps.	(1,323,397	)	Ps.	(678,759	)	Ps.	(2,498,706	)

18.		New accounting principles

		MFRS

		As part of its efforts to converge Mexican standards with international standards, in 2010, the Mexican Board for Research and Development of Financial Information Standards (“CINIF”) issued the following NIFs, INIFs and improvements to NIFs applicable to the Company, which become effective on January 1, 2011:

B-9,Interim Financial Information
Improvements to Mexican Financial Reporting Standards 2011

Some of the most important changes established by these standards are:

NIF B-9,Interim Financial Information— Unlike Bulletin B-9, this standard requires a condensed presentation of the statement of changes in stockholders’ equity and cash flows as part of interim financial information. The standard also requires, for comparative purposes, information presented at the close of an interim period be presented together with information of the corresponding period in the previous year, and in the case of the statement of financial position, presentation of the closing statement of financial position of the immediately preceding year.

Improvements to Mexican Financial Reporting Standards 2011 —The main improvements generating accounting changes that should be recognized in fiscal years starting on January 1, 2011 are as follows:

NIF B-2,Statement of Cash Flows— The improvement to this standard eliminates the requirement to present a total, between investing activities and financing activities, of the excess cash to be applied in or obtained from financing activities. Presentation of this total is now only a recommendation.

NIF C-13,Related Parties —The improvement to this standard incorporates a close family member within the definition of a related party.

G-34

		At the date of issuance of these consolidated financial statements, the Company has not fully assessed the effects of adopting these new standards on its financial information.

		U.S. GAAP

		Recently adopted accounting pronouncements

		On January 21, 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06. The ASU amends ASC 820,Fair Value Measurements and Disclosuresto add new requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. The new disclosures and clarifications of existing disclosures about fair value measurements were effective January 1, 2010, except for the disclosures about activity in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

19.		International Financial Reporting Standards

		In January 2009, the National Banking and Securities Commissions published amendments to the Sole Circular for Issuing Entities, whereby financial statements prepared according to International Financial Reporting Standards (“IFRS”) must be presented as of 2012, although early adoption of this measure is permitted.

		The Company elected to early adopt IFRS in 2011. The most significant changes identified by the Company as regards its accounting policies derived from the adoption of IFRS and the estimated effects of these changes on stockholders’ equity at January 1 2010 (the transition date for comparative purposes) and December 31, 2010, and on its 2010 statement of operations, are detailed below:

		Effects of adoption on the statement of financial position:


			January 1,			December 31,
Adjustment		Description	2010			2010

		Stockholders’ equity under MFRS	Ps.	20,430,076		Ps.	18,571,247

	a.	Cancellation of the effects of inflation		(473,097	)		(464,586	)
	b.	Recognition of commissions and financing expenses using the effective interest method		126,524			111,417
	c.	Effect of deferred taxes		458,150			812,218
	d.	Cancellation of deferred PTU		24			55
	e.	Employee benefits		—			1,914


		Stockholders’ equity under IFRS	Ps.	20,541,677		Ps.	19,032,265

Effects of adoption on the statement of operations:


			For the year ended
			December 31,
Adjustment		Description	2010

		Net loss under MFRS	Ps.	(660,520	)

	a.	Effects of inflation on the amortization of intangible assets		8,511
	b.	Recognition of commissions and financing expenses using the effective interest method		(15,107	)
	c.	Effect of deferred taxes		(5,424	)
	d.	Cancellation of deferred PTU		31
	e.	Employee benefits		1,914


		Net loss under IFRS	Ps.	(670,595	)

G-35

Explanation of the main effects on the Company’s financial information derived from the adoption of IFRS:

	a.		Under International Accounting Standard (“IAS”) 29, Financial Reporting in Hyperinflationary Economies, inflationary effects may only be recognized in hyperinflationary economies. As the Mexican economy ceased to be classified as hyperinflationary in 1999, the inflationary effects recognized by the Company under MFRS from 1999 through December 31, 2007 are reversed.

	b.		IFRS require that costs incurred to issue debt instruments be capitalized and applied to results using the effective interest method. Under MFRS, the Company applied these costs by using the straight-line method.

	c.		The Company recalculated its deferred taxes according to IAS 12,Income Taxes, based on the values of assets and liabilities adjusted according to IFRS.

	d.		Under IAS 19,Employee Benefits, the Company eliminated the deferred PTU balance recognized according to MFRS.

	e.		The Company recognizes severance benefits under MFRS, which, based on the terms of the plans, are notconsideredliabilities under IFRS.

20.		Authorization for issuance of financial statements

		On April 28, 2011, the issuance of these consolidated financial statements was authorized by Lic. Demetrio Sodi, Chief Excutive Officer of the Company and Ing. Jorge Parra Palacios, Chief Financial Officer. These consolidated financial statements are subject to approval at the stockholders’ meeting, where they may be modified based on provisions set forth by the Mexican General Corporate Law.

21.		Subsequent events

		The Company has evaluated events subsequent to December 31, 2010 to assess the need for potential recognition or disclosure in the accompanying consolidated financial statements. Such events were evaluated through April 28, 2011, the date these consolidated financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or disclosure in the consolidated financial statements.

* * * * * *

G-36

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	H.S. freshman Avg

Ica (ICAYY) 20-F2010 FY Annual report (foreign)

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