Ica (ICAYY) 20-F 2013 FY Annual report (foreign)

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, 2013

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	United Mexican States
(Translation of registrant’s name into English)	(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)

Victor Bravo Martin

Blvd. Manuel Avila Camacho 36

Col. Lomas de Chapultepec

Del. Miguel Hidalgo

11000 Mexico City

Mexico

(5255) 5272 9991 x 3653

victor.bravo@ica.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 610,011,256 the annual report:610,011,256 Ordinary Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  þ    No  ¨

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.    Yes  ¨    No  þ

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.    Yes  þ    No  ¨

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).    Yes  ¨    No  þ

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 filer  þ                 Accelerated filer  ¨                 Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S. GAAP  ¨    IFRS  þ    Other  ¨

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 17  ¨    Item 18  ¨

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).    Yes  ¨    No  þ

TABLE OF CONTENTS

	Page
Item 1. Identity of Directors, Senior Management and Advisors		1
Item 2. Offer Statistics and Expected Timetable		1
Item 3. Key Information		1
A. Selected Financial Data		1
B. Risk Factors		4
C. Forward-Looking Statements		20
Item 4. Information on the Company		21
A. History and Development of The Company		21
B. Business Overview		24
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		48
B. Liquidity and Capital Resources		80
C. Research and Development, Patents and Licenses, Etc.		93
D. Trend Information		94
E. Off-Balance Sheet Arrangements		94
F. Tabular Disclosure of Contractual Obligations		94
Item 6. Directors, Senior Management and Employees		95
A. Directors and Senior Management		95
B. Compensation		99
C. Board Practices		101
D. Employees		102
E. Share Ownership		103
Item 7. Major Shareholders and Related Party Transactions		103
A. Major Shareholders		103
B. Related Party Transactions		104
Item 8. Financial Information		104
A. Legal and Administrative Proceedings		104
B. Dividends		108
C. Significant Changes		108
Item 9. The Offer and Listing		108
A. Trading		108
Item 10. Additional Information		110
A. Memorandum and Articles of Incorporation		110
B. Material Contracts		117
C. Exchange Controls		117
D. Taxation		117
E. Documents On Display		120
Item 11. Quantitative and Qualitative Disclosures about Market Risk		120
Item 12. Description of Securities Other than Equity Securities		122
Item 13. Defaults, Dividend Arrearages and Delinquencies		124
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds		124
Item 15. Controls and Procedures		124
Item 16. [Reserved]		126
Item 16A. Audit Committee Financial Expert		126
Item 16B. Code of Ethics		126
Item 16C. Principal Accountant Fees and Services		127
Item 16D. Exemptions from the Listing Standards for Audit Committees		127
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers		127
Item 16F. Changes in Registrant’s Certifying Accountant		128
Item 16G. Corporate Governance		128

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TABLE OF CONTENTS

(continued)

	Page
Item 16H. Mine Safety Disclosure		132
Item 17. Financial Statements		133
Item 18. Financial Statements		133
Item 19. Exhibits		133

ii

PART I

Introduction

Empresas ICA, S.A.B. de C.V. 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,” “our Company” and “ICA” as used in this annual report refer to Empresas ICA, S.A.B. de C.V. and its consolidated subsidiaries. The term “EMICA” as used in this annual report refers to Empresas ICA, S.A.B. de C.V. on a stand-alone basis. EMICA is a holding company that conducts all of its operations through subsidiaries that perform civil and industrial construction and engineering, engage in real estate, home development and mining services 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 included in this annual report are prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

We publish our consolidated financial statements in Mexican pesos. References in this annual report to “dollars,” “U.S.$” or “U.S. dollars” are to United States dollars. References to “Ps.” or “pesos” are to Mexican pesos. This annual report contains translations of certain Mexican peso amounts into U.S. dollars at specified rates solely for your convenience. These translations should not be construed as representations that the Mexican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, U.S. dollar amounts have been translated from Mexican pesos at an exchange rate of Ps. 13.06 to U.S.$ 1.00, the exchange rate determined by reference to the free market exchange rate as reported by Banco de Mexico, or Banxico, as of December 31, 2013.

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.

Financial Data

The following table presents our selected consolidated financial information for or as of each of the periods or dates indicated, and has been derived in part from our audited consolidated financial statements. 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. The consolidated financial statements of income and other comprehensive income for the years ended December 31, 2012, 2011 and 2010 have been adjusted to reflect (i) the reclassification of our affordable housing operations, which had been classified as discontinued operations, as a continuing operation reported in our Corporate and Other segment; (ii) the results of our social infrastructure projects, in which we agreed to sell 70% of our interest in January 2014, as a discontinued operation; and (iii) the impact of our adoption of two accounting standards issued by the IASB: (a) IFRS 11 (“Joint Arrangements”), pursuant to which the results of our joint ventures, which we previously accounted for using the proportional consolidation method of accounting, are now recognized using the equity method; and (b) amendments to IAS 19 “Employee Benefits”. See Notes 3b, 4 and 34 to our consolidated financial statements.

1

	As of and for the year ended December 31,
	2013			2013			2012			2011			2010
	(Millions of U.S. dollars)(1)			(Thousands of Mexican pesos, except share, per share and per ADS data)
Comprehensive Income Data:
Total revenues		2,262			29,556,198			38,122,121			34,258,849			28,229,235
Gross profit		466			6,083,386			4,923,899			5,281,040			3,958,119
General expenses		232			3,012,282			3,695,296			2,903,749			2,037,699
Other (income) expense, net (2)		(4	)		(61,467	)		(449,973	)		(490,143	)		38,188
Operating income		238			3,132,571			1,678,576			2,867,434			1,882,232
Financing cost, net		258			3,379,003			1,159,846			3,321,463			1,100,954
Share in results of joint ventures and associated companies		(27	)		(350,198	)		(409,051	)		(286,033	)		46,482
Income tax benefit (expenses)		(46	)		(595,905	)		(34,792	)		(337,683	)		102,840
Income from continuing operations		53			699,671			962,573			169,687			724,920
Income from discontinued operations, net		55			722,680			566,658			1,577,402			245,992
Consolidated net income for the year		108			1,422,351			1,529,231			1,747,089			970,912
Total other comprehensive income		49			641,451			(709,832	)		636,483			(346,971	)
Total comprehensive income		158			2,063,802			893,399			2,383,572			623,941
Consolidated net income attributable to noncontrolling interest		76			998,799			574,193			309,954			341,458
Consolidated net income attributable to controlling interest		32			423,552			955,038			1,437,135			629,454
Basic and diluted earnings per share of controlling interest from continuing operations		—			(0.49	)		(0.64	)		(0.22	)		(0.592	)
Basic and diluted earnings per share of controlling interest from discontinued operations		—			1.185			0.935			2.498			0.380
Basic and diluted earnings per share of controlling interest from consolidated net income(3)		—			0.695			1.575			2.275			0.971
Basic and diluted earnings per ADS of controlling interest from consolidated net income(3)		—			2.78			6.30			9.10			3.884
Weighted average shares outstanding (000s):
Basic and diluted(3)		—			609,690			606,233			631,588			648,183
Statement of Financial Position Data:
Total assets		7,770			101,507,144			98,269,924			90,548,366			65,995,942
Long-term debt(4)		2,206			28,815,544			36,161,067			26,727,486			23,627,569
Capital stock		644			8,407,533			8,370,958			8,334,043			8,950,798
Additional paid-in capital		547			7,140,502			7,043,377			7,091,318			7,085,535
Total stockholders’ equity		1,848			24,131,782			20,433,901			20,757,910			19,345,371
Other Data:
Capital expenditures		621			8,113,233			4,201,421			5,230,202			6,892,795
Depreciation and amortization		78			1,022,321			929,300			1,130,448			1,070,455

(1) Except share, per share, and per ADS data. Amounts stated in U.S. dollars as of and for the year ended December 31, 2013 have been translated at a rate of Ps. 13.06 to U.S.$ 1.00 using the Banxico free market exchange rate on December 31, 2013.

2

(2) For 2013, includes principally (i) Ps. 544 million for adjustments to contingent consideration for the acquisition of San Martin Contratistas Generales, S.A., or San Martin, (ii) Ps. 586 million in gain on sales of shares mainly related to Red de Carreteras de Occidente, S.A.B. de C.V., or RCO, and (iii) Ps. 12 million in gain on sales of property, plant and equipment. For 2012, includes principally (i) Ps. 436 million as a result of the revaluation of certain investment property, and (ii) Ps. 13 million in gain on sales of property, plant and equipment. For 2011, includes principally (i) Ps. 467 million in gain on sales of investments and (ii) Ps. 1 million in gain on sales of property, plant and equipment. For 2010, includes principally Ps. 9.7 million in gain on sale of investments related to Los Portales with the remainder related to the gain on sale in property, plant, and equipment.

(3) Basic earnings 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. The dilutive effect of our potential ordinary shares does not have a material effect on our determination of earnings per share; thus, diluted earnings per share approximates basic earnings per share for the years ended December 31, 2013, 2012, 2011 and 2010.

(4) Excluding current portion of long-term debt and is presented net of commissions.

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 data provided in this table is based on noon buying rates published by the U.S. Federal Reserve Board in its H.10 Weekly Release of Foreign Exchange Rates. 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. 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)
2009		15.41		12.63		13.06		13.58
2010		13.19		12.16		12.38		12.62
2011		14.25		11.51		13.95		12.43
2012		14.37		12.63		12.96		13.15
2013:		13.43		11.98		13.10		12.76
October		13.25		12.77		13.00		12.99
November		13.24		12.87		13.11		13.06
December		13.22		12.85		13.10		13.01
2014:
January		13.46		13.00		13.36		13.22
February		13.51		13.20		13.23		13.29
March		13.33		13.07		13.06		13.20
April (through April 25)		13.14		12.95		13.14		13.06

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

Source:  U.S. Federal Reserve Board.

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.

3

On April 25, 2014, the exchange rate was Ps. 13.14 per U.S.$ 1.00, according to the U.S. Federal Reserve Board. The above rates may differ from the actual rates used in the preparation of the financial statements and the other financial information appearing in this Form 20-F.

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 was slower than contemplated under the National Infrastructure Program, although we did see an increase in contracting in 2010 and 2011 for our company. Federal elections were held in Mexico on July 2, 2012. Enrique Peña Nieto of the political party known as the Partido Revolucionario Institucional, or PRI, obtained a plurality of the vote and assumed office on December 1, 2012. Although the PRI won a plurality of the seats in the Mexican Congress, no party succeeded in securing a majority in either chamber of the Mexican Congress. The absence of a clear majority by a single party is likely to continue at least until the Congressional election in 2015. In the period leading up to and following the change in presidential administration, the number of large public sector construction contracts the Mexican government offered for public bidding decreased. The rate of awards decreased in 2013 due to the change of administration as well as the new administration’s initial focus on structural reforms. Although we expect the rate of awards to begin to increase in 2014, we cannot provide any assurances that the rate of awards will increase. These and other delays, including delays in payment, can also result from any new administration at the federal, state or local level reviewing the terms of project contracts granted by the 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 have an adverse effect on our business, financial condition or results of operation. 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.”

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 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.

4

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.

Our indebtedness could adversely affect our financial condition and results of operations.

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

Our outstanding consolidated indebtedness to banks, financial institutions and others, excluding Ps. 9,840 million of debt related to our social infrastructure projects, or the SPC projects, now classified as assets as held for sale and liabilities directly associated with assets classified as held for sale, was Ps. 38,572 million as of December 31, 2013. This indebtedness may constrain our ability to raise incremental financing or increase the cost at which we could raise any such financing and increase our annual interest expense. We cannot assure you that our business will generate cash in an amount sufficient to enable it to service its debt or to fund its other liquidity needs, which may adversely affect our overall performance. We may need to refinance all or a portion of our debt, on or before maturity. We cannot assure you that we will be able to refinance any of our debt on commercially reasonable terms.

In addition, the indentures under which we issued U.S.$ 500 million and U.S.$ 350 million of notes at the holding company level in February 2011 and July 2012, respectively, and facility agreements with certain commercial banks contain, and any future indebtedness we incur may contain, various covenants and conditions that limit our ability and the ability of certain of our subsidiaries to, among other things: incur or guarantee additional debts; create liens; enter into transactions with affiliates; and merge or consolidate with other companies. As a result of these covenants, we are limited in the manner in which we conduct our business and may be unable to engage in certain business activities.

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, including under contracts like our construction contract for Line 12 of the Mexico City metro system. 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

5

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, EMICA (our parent company) has increasingly been required to give parent guarantees as a form of credit enhancement for debt of our subsidiaries, as well as to accept take-out financing clauses (where the debtor commits to either incur or cause the project company to incur permanent or long-term indebtedness in order to refinance short-term project indebtedness) and clauses which, if invoked, typically require EMICA to pay additional amounts under a loan agreement as may be necessary to compensate a lender for any increase in costs to such lender as a result of a change in law, regulation or directive.

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 or acquisitions or provide necessary 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. If adequate funds are not available, or are not available on acceptable terms, as could be the case if market disruptions occur, 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.

The global credit crisis and unfavorable general economic and market conditions 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 an economic 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 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 suppliers’, 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.

6

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, and construction contracts throughout the industry, 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. While we may enter into long term contracts with certain providers of cement and steel for the life of some of our larger projects, we have generally 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 2013. 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 backlog is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of our future revenue or earnings.

Our backlog is not necessarily indicative of our future operating revenues or earnings related to the performance of the underlying work. Our backlog, which represents our expected revenues under signed contracts, is often subject to revision over time. We cannot guarantee that our backlog will be realized or profitable or that we will secure contracts equivalent in scope and duration to replace current backlog. Project cancellations, scope adjustments or deferrals may occur, from time to time, due to various factors including but not limited to commercial issues, regulatory requirements and adverse weather. Such developments could have a material adverse effect on our business and our profits. See “Item 5. Operating and Financial Review and Prospects—Operating Results—Construction—Construction Backlog.”

Our increasing participation in projects and other operations, particularly including our participation in joint ventures and affiliates, outside Mexico involves greater and different risks than those typically faced in Mexican projects and could jeopardize our profits.

To date, our foreign projects and operations in Latin America and elsewhere have generated mixed results. We have experienced significant losses on projects in Latin America and elsewhere 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 increasing evaluation of new opportunities and new regions for expansion, there is a risk that future profits could be jeopardized.

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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.

We have entered into various types of hedges, including with respect to foreign currency exposure, and other trading derivative instruments for the terms of some of our 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, 2013 decreased our derivative liabilities by Ps. 131 million and increased our derivative assets by Ps. 280 million.

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 in reserves, that restrict our access to them.

As of December 31, 2013, we had total cash and cash equivalents of Ps. 5,417 million, of which Ps. 2,047 million was restricted, as compared to Ps. 2,453 million of restricted cash as of December 31, 2012. Restricted cash is presented as a separate line item in our statement of financial position. As of December 31, 2013, we held Ps. 1,957 million that represent 36.1% of our consolidated cash and cash equivalents (including restricted cash) through less-than-wholly owned subsidiaries (29% in the Airports segment and 5% in San Martin Contratistas Generales, S.A., or San Martin, our Peruvian construction business). Approximately Ps. 3,460 million, the remainder of our total cash and cash equivalents as of December 31, 2013, was held in our parent company EMICA or in other operating subsidiaries.

Some 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, which are Fomento de Construcciones y Contratas S.A. and Constructora Meco S.A. in the case of the Panama Canal (PAC-4) expansion project and the Domingo Diaz project in Panama. 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 designated 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 as presented in our statement of financial position. At December 31, 2013, Ps. 1,972 million, or 36%, of our cash and cash equivalents were held in reserves established to secure financings, including any related expenses, principally in connection with the following projects: the Acapulco Tunnel, the Kantunil–Cancun tollroad, and the La Piedad bypass. 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.

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A significant portion of our assets are pledged under financing arrangements.

Portions of our assets are pledged to a number of banks under credit arrangements, including: Banco Santander (Mexico), S.A. Institución de Banca Multiple, Grupo Financiero Santander; Banco Inbursa, S.A. Institución de Banca Multiple, Grupo Financiero Inbursa; BBVA Bancomer Institución de Banca Multiple, Grupo Financiero BBVA Bancomer; Banco Mercantil del Norte, S.A., Grupo Financiero Banorte; Banco Nacional de Mexico, S.A., Integrante del Grupo Financiero Banamex; Banco del Bajio, S.A.; Banco Nacional de Obras y Servicios Publicos, S.N.C.; Bancolombia, S.A.; Deutsche Bank AG, London Branch; Interamerican Credit Corporation; Sociedad Hipotecaria Federal; Banco Nacional de Comercio Exterior, S.N.C.; and Institución de Banca de Desarrollo. The assets we have pledged include: (i) construction machinery and equipment owned by Ingenieros Civiles Asociados, S.A. de C.V. (a construction subsidiary); (ii) real property of ViveICA under various bridge loan agreements to finance real estate development; (iii) collection rights over the tolls for the Kantunil—Cancun highway and the Acapulco Tunnel; (iv) our toll collection rights on the Mitla-Tehuantepec highway project in Oaxaca; (v) our collection rights from construction and non-penitentiary services under our two SPC contracts; (vi) certain of our shares with respect to such shares, in Aeroinvest S.A. de C.V., or Aeroinvest; and (vii) real property of our corporate campus to be constructed and developed 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, Aguas Tratadas del Valle de Mexico, S.A. de C.V., our subsidiary that operates the Atotonilco water treatment project, our shares of Autopista Naucalpan Ecatepec, S.A.P.I. de C.V., or ANESA, 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., or Los Portales, a real estate subsidiary located in Peru, as well and our shares in San Martin Contratistas Generales, S.A., or San Martin, a construction company also 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 collateralized guarantees 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 and result in reputational damage to us. 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. We are currently involved in litigation related to alleged defects in construction of Line 12 of the Mexico City metro system.

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See “Item 8. Financial Information—Legal and Administrative Proceedings—Line 12 of the Mexico City Metro.” 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 experience requirements (particularly in international biddings) 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.

We are subject to Mexico’s anti-corruption laws and the U.S. Foreign Corrupt Practices Act. Our failure to comply with these laws could result in penalties, which could harm our reputation and have an adverse effect on our business, results of operations and financial condition.

We are subject to Mexican and international anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, or the FCPA, which generally prohibits companies and anyone acting on their behalf from offering or making improper payments or providing benefits to government officials for the purpose of obtaining or keeping business. Transparency International, an international organization that reviews potential governmental and institutional corruption, has rated the construction industry and many of the countries in which we operate poorly in terms of corruption risk. As part of our construction business, we often bid for projects run by or related to government-owned enterprises or government ministries, departments and agencies, or require governmental authorizations to perform work. We are thus in frequent contact with persons who may be considered “foreign officials” under the FCPA, resulting in an elevated risk of potential FCPA violations.

We maintain policies and procedures that require our employees to comply with anti-corruption laws, including the FCPA, and our corporate standards of ethical conduct. However, we cannot ensure that these policies and procedures will always protect us from intentional, reckless or negligent acts committed by our employees or agents. If we are not in compliance with the FCPA and other applicable anti-corruption laws, we may be subject to criminal and civil penalties and other remedial measures, which could have an adverse impact on our business, financial condition, and results of operations. Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or other governmental authorities, including Mexican authorities, could adversely impact our reputation, cause us to lose or become disqualified from bids, and lead to other adverse impacts on our business, financial condition and results of operations.

Our business may evolve through foreign or domestic mergers, acquisitions or divestitures which may pose risks or challenges.

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.

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The success of our strategic alliances depends on the satisfactory performance by our alliance partners of their joint venture obligations. The failure of our alliance 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 alliance.

We enter into various joint ventures, associations and other strategic alliances and collaborations as part of our engineering, procurement, construction and infrastructure businesses, including ICA Fluor, Rodio Kronsa, Los Portales, and Actica Sistemas S. de R.L. de C.V., or Actica, as well as project-specific joint ventures, including the Eastern Discharge Tunnel and the Atotonilco water treatment project. 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 a 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 a firm standing alone, these teaming arrangements can be 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.

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 not make decisions, such as executing change orders, required for progress of our projects. We are currently involved in litigation with the Mexico City government related to alleged defects in construction of Line 12 of the Mexico City metro system. See “Item 8. Financial Information—Legal and Administrative Proceedings—Line 12 of the Mexico City Metro.” 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 reputation, 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 any concession (including highway, social infrastructure, tunnel or wastewater treatment concessions) 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, 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

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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 or that the grantor will honor its obligations thereunder. 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 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 authorized 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, 2013, we had Ps. 897 million of allowance for doubtful accounts related to contract and trade receivables, including an allowance for doubtful accounts in the Civil Construction segment related to the Line 12 of the Mexico City metro system project. See “Item 8. Financial Information—Legal and Administrative Proceedings—Line 12 of the Mexico City Metro.” 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.

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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 Airport segment’s 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, 2013, we controlled shares representing approximately 41.38% of GACN’s capital stock. Our interest in GACN exposes us to risks associated with airport operations.

In 2013, GACN represented 12% of our consolidated revenues and 37% 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 2013, 2012 and 2011, passenger charges represented 54.2%, 55.8% and 54.4%, 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 Influenza A(H1N1) epidemic, have negatively affected the frequency and pattern of air travel worldwide. The future 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 and cargo traffic volumes and the number of air traffic movements to or from our airports as a result of these factors 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 GACN’s business and may do so in the future.

As with all airport operators, GACN is subject to the threat of terrorist attack. The terrorist attacks on the United States on September 11, 2001 had a severe adverse impact on the air travel industry, particularly on U.S. carriers and on carriers operating international service to and from the United States. Airline traffic in the United

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States fell precipitously after the attacks. GACN’s terminal passenger volumes declined 5.8% in 2002 as compared to 2001. Any future terrorist attacks involving one of GACN’s airports, whether or not involving aircraft, will likely adversely affect our business, results of operations, prospects and financial condition. Among other consequences, 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, GACN’s 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 GACN’s 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. The International Civil Aviation Organization, an agency of the United Nations Organization, established security guidelines requiring checked baggage on all international commercial flights as of January 2006, and all domestic commercial flights as of July 2006, to undergo a comprehensive screening process for the detection of explosives; on March 29, 2013, the Mexican Bureau of Civil Aviation published similar guidelines. 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, as well as increase our operating costs, which would have an adverse effect on GACN’s business, results of operations, prospects and financial condition.

Other international events such as the conflicts in the Middle East and public health crises such as the Severe Acute Respiratory Syndrome, or SARS, crisis and the Influenza A(H1N1) crisis have, in the past, 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 international events of general 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 fuel prices, which represent a significant cost for airlines using GACN’s airports, have increased in recent years. Increases in previous years 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 contributed to the denial of extensions of their concessions by the Mexican regulatory authorities for failure to satisfy security, service, coverage and quality requirements.

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 2013, 2012 and 2011, approximately 66.4%, 67.8% and 67.0%, respectively, of GACN’s total revenues were earned from aeronautical services, which are subject to price regulation under its maximum rates. These regulations may limit GACN’s flexibility in operating its aeronautical activities, which could have a material adverse effect on its business, results of operations, prospects or 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. 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.

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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 GACN to predict the impact of these legal requirements on GACN’s future operations. In addition, although Mexican law establishes ranges of sanctions that might be imposed should GACN fail to comply with the terms of one of its 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 GACN will not encounter difficulties in complying with these laws, regulations and instruments.

When determining GACN’s maximum rates for the next five-year period (covering 2016 through 2020), the Ministry of Communications and Transportation may be subject to significant pressure from different entities (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 GACN’s business, results of operations, prospects and financial condition.

Additionally, the Ministry of Communications and Transportation has announced that it intends to establish a new, independent regulatory agency, the Federal Agency of Civil Aviation, that is expected to serve a role similar to that of the Mexican Bureau of Civil Aviation (Dirección General de Aeronáutica Civil) of establishing, coordinating, overseeing and controlling international and national air transportation, as well as overseeing the airports, complementary services and generally all activities related to civil aviation. We cannot predict whether or when this new agency will be organized, the scope of its authority, the actions that it will take in the future or the effect of any such actions on our business.

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

The Mexican government could grant additional concessions to operate existing government managed airports or authorize the construction of new airports, which could compete directly with our airports. Any competition from other such airports could have a material adverse effect on GACN’s 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 GACN’s airports in 2013, Aerovias de Mexico, S.A. de C.V., or Aeromexico, and its affiliates accounted for 31.5%, VivaAerobus represented 17.7% and Interjet represented 15.9%. 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 2013, passengers traveling on discount, charter and low-cost carriers, such as VivaAerobus, Interjet and Volaris accounted for approximately 51.9% of GACN’s commercial aviation passenger traffic.

Grupo Mexicana, which comprises Mexicana de Aviacion, ClickMexicana, and MexicanaLink, operated 24 routes at 12 of GACN’s 13 airports in July 2010, prior to the bankruptcy filing by Mexicana de Aviacion. On August 3, 2010, Mexicana de Aviacion announced that it filed for bankruptcy protection (concurso mercantil) before the 11th Federal District Court 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, ClickMexicana and MexicanaLink. During the first six months of 2010, Grupo Mexicana generated 16.6% of GACN’s total passenger traffic, of which 7.6% was accounted for solely by Mexicana de Aviacion. Grupo Mexicana generated 17.3% of GACN’s domestic passenger traffic, including 7.2% from Mexicana de Aviacion. In terms of international traffic, Grupo Mexicana generated 13.1% of GACN’s traffic, of which Mexicana de Aviacion accounted for 9.3%. Grupo Mexicana generated 12.2% of GACN’s revenues during the first six months of 2010, of which Mexicana de Aviacion accounted for 5.9%.

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As of April 15, 2014, the total amount owed to us by Grupo Mexicana amounted to approximately Ps. 146 million, which has been fully reserved since 2010. We have not charged any further amount or generated any interest on the amount owed ever since. In subsequent bankruptcy proceedings, Mexican courts have ordered the separation of a total of approximately Ps. 133 million in passenger charges in our favor from the bankruptcy proceedings of Mexicana de Aviacion, ClickMexicana and MexicanaLink and ordered the airlines to pay us or to declare it legally impossible to execute the payment. On April 4, 2014, a federal judge declared Grupo Mexicana bankrupt. Grupo Mexicana will have to sell its remaining assets and pay creditors with the proceeds from such sale. The union representing Grupo Mexicana flight attendants has declared that it will appeal the decision. To date, we have not received any portion of the amount due to us. There can be no assurance that these amounts will be recovered from Grupo Mexicana, representing a cash flow risk.

None of GACN’s contracts with its airline customers obligate them to continue providing service from GACN’s airports, and we can offer no assurance that, if any of GACN’s key customers reduced their use of GACN’s airports, competing airlines would add flights to their schedules to replace any flights no longer handled by GACN’s 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.

In addition, Mexican law prohibits an international airline from transporting passengers from one Mexican location to another (unless the flight originated outside Mexico), which limits the number of airlines providing domestic service in Mexico. Accordingly, GACN expects to continue to generate a significant portion of its revenues from domestic travel from a limited number of airlines.

Due to increased competition, higher fuel prices and the general decrease in 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 GACN’s principal carriers to become insolvent, cancel routes, suspend operations or file for bankruptcy. All such events could have a material adverse effect on GACN’s results of 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.

Risks Related to Mexico and Other Markets in Which We Operate

Adverse economic conditions in Mexico may adversely affect our business, 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

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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 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 was 3.6%. In 2010, GDP grew 5.5% and inflation reached 4.4%. In 2011, GDP grew by 3.9% and inflation declined to 3.8%. In 2012, GDP grew by 3.9% and inflation decreased to 3.6%. In 2013, GDP growth fell to 1.1% and inflation reached 3.97%.

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 5.4%, 4.4%, 4.2%, 4.2% and 3.7 % for 2009, 2010, 2011, 2012 and 2013 respectively. As of December 31, 2013, 57 % of our debt is denominated in Mexican pesos, and we may continue to incur 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 another 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 senior notes due 2021 and U.S.$ 350 million of our senior notes due 2017, 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.

After depreciating substantially against the U.S. dollar in 2008 and 2009, the Mexican peso stabilized and partially recovered in 2010, when the noon buying rate was Ps. 12.30 per U.S.$ 1.00 on March 31, 2010 and Ps. 12.38 per U.S.$ 1.00 on December 31, 2010. In 2011, there was a significant depreciation in the Mexican peso against the U.S. dollar, and the noon buying rate increased to Ps. 13.95 on December 30, 2011, representing a depreciation of approximately 13%. The Mexican peso has since partially recovered, and the noon buying rate was Ps. 13.14 per U.S.$ 1.00 on April 25, 2014. 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. Such effects include foreign exchange gains and losses on assets and liabilities denominated in U.S. dollars, fair value gains and losses on derivative financial instruments, and changes in interest income and interest expense. These effects can be more volatile than our operating performance and our cash flows from operations. 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.”

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

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 due to legislative gridlock. Because no single party obtained a clear majority in the July 1, 2012 congressional election, governmental gridlock and political uncertainty may continue.

In 2012, Mexico passed a new labor law for the first time since 1991, which resulted in certain important changes, including the creation of new models for contracting employees and new protections on part time wages, revisions to currently existing profit sharing rules and an expansion of justifiable reasons for terminating employees for cause, including for sexual harassment and other abuses. Historically, the Mexican congress has modified tax laws more frequently than other areas of the law. In December 2013, reforms to the Mexican Income Tax Law were approved for fiscal year 2014, resulting in several changes, including the elimination of the Mexican business flat tax (Impuesto Empresarial a la Tasa Unica or IETU) and the consolidation regime. See “Item 5. Operating and Financial Review and Prospects—Tax.”

In July 2013, the Federal Law for the Prevention and Identification of Transactions with Proceeds of Illicit Origin was enacted as part of the Mexican government’s strategies to combat criminal organizations and activity, including money laundering.

The law incorporates recommendations by the Financial Action Task Force on the prevention of money laundering and terrorism financing. Effective November 2013, certain of our subsidiaries, including our newly created subsidiary ICA Planeación y Financiamiento, S.A. de C.V., SOFOM E.N.R., or ICAPLAN, are subject to additional reporting and other procedural requirements to comply with the law and implementing regulations, in particular with regard to our operations related to intercompany loans, real estate sales, and real estate leasing.

Compliance with these regulations may be burdensome and could result in increased costs. Additionally, if as a result of the more stringent requirements under the new law we are associated with, or accused of being associated with, or become a party to, money laundering and/or terrorism financing, then our reputation could suffer and/or we could become subject to fines, sanctions and/or legal enforcement, any one of which could have a material adverse effect on our operating results, financial condition and prospects.

The timing and scope of modifications such as the above are unpredictable, which can adversely affect our ability to manage our tax or other planning and, as a result, negatively affect our business, financial condition and results of operation.

Security risks may negatively affect our business, specifically with regards to our user-number based projects located in regions with increased security risk.

We have projects located in regions with recently increased security risks that may affect the revenues of projects based on number of users, such as our toll road, tunnel and airport concessions.

Additionally, home sales in our low-income housing division depend substantially on purchasers’ access to credit through the Institution for Worker’s Housing (Instituto del Fondo 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.

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 of operations of Mexican companies and the market value of securities of Mexican companies may be, to varying degrees, affected by economic, geopolitical and market conditions in other countries. Although economic conditions in other countries may differ significantly

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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 2011, 2012 and 2013 even as both securities markets trended upward. Adverse economic conditions in the United States, the termination of NAFTA or other related events or geopolitical events with global repercussions 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.

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, Ordinary Participation Certificates, or 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, CPOs or shares in the United States 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 December 31, 2013, the total beneficial shareholding of our directors and executive officers (including shares held in a management trust) was approximately 63,186,084 or 10.4%, of our outstanding shares. This total included shares beneficially owned by the Chairman of our Board of Directors, Bernardo Quintana Isaac, or his family, including Alonso Quintana (our Chief Executive Officer, and a member of our Board of Directors), Diego Quintana (responsible for investments in our industrial construction operations and all partnerships, member of our Board of Directors and Chairman of GACN’s Board of Directors), and Rodrigo Quintana (our General Counsel), comprising approximately 6.5% of our outstanding shares. Additionally, the management trust held 23,319,562 or 3.8%, of our outstanding shares (including 1.0% shares included in the total of beneficial ownership by the Quintana family). Another trust controlled by our management, the foundation trust, held 8,336,440 or 1.4%, of our shares. See “Item 6. Directors and Senior Management—Share Ownership,” “—Compensation—Management Bonuses” and “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders.”

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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, taxes and projections related to our business and results of operation;

• statements of our plans, objectives or goals, including those related to anticipated trends, competition, regulation, financing, key management personnel, subsidiaries and subcontractors, government housing policy and rates;

• statements about anticipated changes to our accounting policies;

• statements about exchange controls and fluctuations in interest rates;

• statements about our future performance or economic conditions in Mexico (including any depreciation or appreciation of the peso) or other countries in which we operate;

• statements about anticipated political events in Mexico;

• statements about changes in Mexican federal government policies, legislation or regulation; 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, failure to comply with covenants contained in our debt agreements, developments in legal proceedings, unanticipated

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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. de C.V., 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, social infrastructure 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 that non-core divestment program in 2006. Subsequently, we redefined our business focus to emphasize our construction business, which in 2013, 2012 and 2011 accounted for approximately 74%, 80% and 79%, respectively, of our revenues. We are active in every stage of the infrastructure development cycle, from engineering and financing to construction and operation. Recently, we have strategically divested certain assets that are in the operational stage, such as concessions. We expect to continue to undertake divestments in the short term in order to reinvest capital in new projects and pay down certain indebtedness. In the medium term, we plan to maintain an actively managed portfolio of investments in infrastructure and other projects, some of which will be held to maturity and others will be divested prior to maturity based on market developments.

We have also increased our participation in construction-related businesses both in Mexico and in foreign markets, such as infrastructure operations and, as of 2012, mining services, 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.

Capital Spending

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.

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The following table sets forth our capital spending for each year in the three-year period ended December 31, 2013. Capital spending 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,
	2013		2013		2012		2011
	(Millions of U.S. dollars)		(Millions of Mexican pesos)
Civil Construction	U.S.$	37		Ps. 487		Ps. 594		Ps. 834
Airports		37		489		199		387
Concessions		449		5,861		1,492		1,217
Corporate and Other		98		1,276		1,916		2,792
Total	U.S.$	621		Ps. 8,113		Ps. 4,201		Ps. 5,230

Aggregate capital spending increased 93% in 2013 as compared to 2012. The increase in aggregate capital spending in 2013 primarily reflected increased spending in our Concession and Airports segments. The increased spending in our Concession segment was primarily due to investments in the Palmillas – Apaseo El Grande tollroad, the Barranca Larga–Ventanilla concession, and the Kantunill-Cancun highway. In our Airport segment the increase in spending primarily resulted from the acquisition of new airport machinery, terminals, paved surface, equipment, land, baggage screening systems, and other expenditures related to infrastructure in the amount of Ps. 397 million.

Our principal capital expenditures currently in progress include Ps. 5,861 million in investments in our Concessions segment. Most of our principal expenditures are in Mexico and funded through third party financings, including proceeds from our 2011 and 2012 notes offerings and our 2009 equity offering. Third party financing, other than our 2011 and 2012 senior notes offerings and 2009 equity offering, is typically structured through project finance vehicles and, to a lesser extent, through corporate term loan financing.

On May 24, 2012, we entered into an agreement to acquire a 51% share in Peru’s leading mining sector construction company, San Martin. The purchase price of the acquisition was determined by using a complex earn out formula, which includes San Martin’s EBITDA from 2012 through 2014 as one of the factors. The purchase price is payable over a five year period and could range from U.S.$ 18 million, including the initial payment and the payment to be made at the end of the earn out period, to U.S.$ 123 million. The estimated range is between U.S.$ 80 and U.S.$ 110 million, based on our reasonable projections of our future performance. In 2013, we paid Ps. 84 million under the earn out formula.

Divestitures

On December 3, 2012, we announced that we signed an agreement with Servicios Corporativos Javer S.A.P.I. de C.V., or Javer, for Javer to acquire the assets and operating liabilities related to 20 affordable housing development projects being developed through our ViveICA subsidiary for a purchase price of approximately U.S.$ 110 million. As of December 31, 2012, these housing assets and liabilities were classified as held for sale, valued at their fair value, in our consolidated statement of financial position. Their results of operations were classified as discontinued operations. Subsequently, on May 31, 2013, we and Javer announced that we had terminated the agreement due to a failure to reach agreement on the conditions for closing. As of December 31, 2013, these housing results werere-classified from discontinued to continuing operations. In our consolidated statement of financial position, these assets and liabilities are no longer classified as available for sale and we include the results of operations in our Corporate and Other segment.

In January 2014, we announced that we had signed an agreement with CGL Management Group, LLC, or CGL, a subsidiary of the Hunt Corporation, to form a joint venture for managing and developing additional social infrastructure facilities in Mexico. Under the agreement, we will sell to CGL a 70% equity interest in the holding company of our two SPC contracts to provide future ongoing non-penitentiary services at the federal detention centers in Sonora

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and Guanajuato for a purchase price of approximately U.S.$ 116 million. We had previously held two contracts to build and operate the two federal penitentiaries, for which construction was completed in 2012. We will retain a 30% interest in the contracts and expect to cease consolidating the two services provider companies after closing. The transaction is expected to close in the second quarter of 2014 upon receipt of all required consents. This transaction complies with the held for sale and discontinued operation criteria as of December 31, 2013 for which reason the related assets and liabilities have been presented as assets held for sale and liabilities directly associated with assets held for sale in our consolidated statement of financial position as of December 31, 2013 and the results of their operations are presented as discontinued operations in our consolidated statements of income and other income for the years ended December 31, 2013, 2012 and 2011. See Note 34 to our consolidated financial statements.

On July 12, 2013, our subsidiary Aeroinvest, which held approximately 41.38% of the outstanding capital stock of GACN, sold approximately 17.25% of the capital stock, or 69 million shares, of GACN in an underwritten global public offering at a price of Ps. 40.00 per Series B share and U.S.$24.76 per ADS. The aggregate sale price was approximately Ps. 2,760 million. As a result, Aeroinvest currently directly retains 98,702,700 shares or 24.7% of the outstanding capital stock of GACN.

In August 2013, we completed the sale of our 18.7% stake in Red de Carreteras de Occidente, S.A.B. de C.V., or RCO, the concessionaire for approximately 760 kilometers of highways in Mexico, to funds managed by Goldman Sachs for approximately Ps. 5,073 million. The gain on sale in this investment was Ps. 491 million.

In the fourth quarter of 2013, we completed the sale of our Ciudad Acuña water treatment plant to Suministros Termoelectronicos, S.A. de C.V. and Promotora ELJA, S.A. de C.V. for a purchase price of approximately Ps. 145 million. We will no longer operate and maintain this water treatment plant.

In December 2013, we entered into an agreement with Promotora del Desarrollo de America Latina, S.A. de C.V., for the sale of our interest in the Atotonilco water treatment plant concession. This transaction is expected to close in the second quarter of 2014 for a purchase price of approximately Ps. 38 million.

In December 2013, we completed the sale of our interest in the Panamanian company Compania Insular Americana, S.A., a company created to perform the real estate development of previously existing fill-in rights from our prior Corredor Sur concession, to Ocean Reef Islands Inc. for a purchase price of Ps. 225 million.

On March 31, 2014, we completed the sale to Promotora del Desarrollo de America Latina, S.A. de C.V. of our interest in the concession for the Autovia Urbana Sur expressway for a purchase price of approximately U.S.$ 77 million. We will no longer operate and maintain this expressway. See Note 34 to our consolidated financial statements.

The divestitures of RCO, Ciudad Acuña, Atotonilco, Compania Insular Americana, S.A. and Autovia Urbana Sur do not meet the criteria for assets held for sale or discontinued operations; the sales of those projects are or are expected to be accounted for as divestitures of assets.

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 fell by approximately 6.5% in 2009 and grew 5.5% in 2010. In both 2011 and 2012, GDP grew by 3.9%, and in 2013, GDP growth fell to 1.1%. The average interest rates on 28-day Mexican treasury notes were 3.7% in 2013, 4.2% in 2012, and 4.2% in 2011. Inflation was 3.9% in 2013, 3.6% in 2012 and 3.8% in 2011.

According to the INEGI, GDP of the Mexican construction sector, in real terms as compared to the prior year, decreased 4.5 % in 2013, decreased 3.3% in 2012 and increased 4.6% in 2011, and represented 7.4%, 7.8% and 7.9% of Mexico’s total gross domestic product in those years, respectively. According to data published by the Mexican Ministry of Finance and Public Credit, the average annual budgetary investment in infrastructure was 7.2% of GDP during 2013, and 5.5% during the period between 2008 and 2012.

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In 2007, former President Felipe Calderon unveiled his National Infrastructure Program for 2007 to 2012, which was designed to expand Mexico’s infrastructure, accelerate Mexico’s economic growth and make the Mexican economy more internationally competitive.

In February 2008, the Federal Government announced the creation of the National Infrastructure Fund (Fondo Nacional de Infraestructura) within the National Public Works and Services Bank (Banco Nacional de Obras y Servicios Publicios, S.N.C., or Banobras). The government stated that it intended 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 billion for the National Fund for Infrastructure came from the privatization of the first package of tollroads offered by the Fideicomiso de Apoyo y Rescate de Autopistas Concesionadas, or FARAC, in 2007. In 2012, Banobras extended a historic record volume of credit totaling Ps. 67.5 billion under this program, almost 20% higher than the credit granted in 2011. In December 2013, Banobras announced that the investments made throughout the year represented 87% progress on the national plan investment goal, which was set at Ps. 1 billion for 2013 by Mexican President Enrique Peña Nieto. 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 Barranca Larga-Ventanilla project, which in November 2012 was the recipient of a Ps. 1,213 million loan under this program.

In June 2013, Mexican President Enrique Peña Nieto announced the National Development Plan for the period 2013 to 2018. The new program contemplates investments of approximately U.S.$ 415 billion, representing 5.7% of Mexico’s gross domestic product, in over 1,000 projects in the transportation, water management, energy and urban development sectors. The majority of the budget (approximately 64%) is expected to be allocated to the energy sector, and investment in highways is expected to represent approximately U.S.$ 17 billion, or 4.1% of the proposed new program. The program is expected to generate 3.9 million jobs and to contribute to Mexico’s economic development.

In December 2013, the Mexican government enacted constitutional amendments designed to reform Mexico’s energy industry in order to allow greater economic development. These reforms are expected to stimulate public and private investment in Mexico’s energy industry, including infrastructure development. As of the date of this filing, the Mexican government has yet to approve legislation required under the constitutional amendments; thus, the full scope of the reforms and their economic impact cannot be predicted with certainty. We believe that we are well positioned to take advantage of these developments and the expected economic growth given our experience in construction and construction-related services in the Mexican energy industry.

On April 29, 2014, Mexican President Enrique Peña Nieto announced the National Infrastructure Plan for the period 2014 – 2018. The new program contemplates investments of approximately Ps. 7,750 million (U.S.$ 593 million) in: (i) transportation and communication; (ii) energy; (iii) hydraulic development; (iv) health facilities; (v) urban development and housing; and (vi) tourism development.

B. BUSINESS OVERVIEW

In 2013, our operations were divided into the following four business segments under IFRS:

• Civil Construction,

• Concessions,

• Airports, and

• Corporate and Other.

Until December 31, 2012, for management purposes, we were organized into six reportable segments which were: Civil Construction, Industrial Construction, Airports, Concessions, Housing and Corporate and Other. In 2013, we implemented certain organizational and accounting changes that impacted the composition and number of our reportable segments under IFRS. During 2013, subsequent to the termination of our agreement to sell our horizontal housing business line to Javer, we reclassified to continuing operations our horizontal housing operations,

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which had previously been classified as discontinued operations; the assets and liabilities of that business were also moved from assets and liabilities held for sale to their respective line items within our consolidated statements of financial position. Subsequent to this reclassification, our housing operations, previously reported in a separate Housing segment, have been integrated into the Corporate and Other segment as they do not qualify for separate segment reporting due to size.

Additionally, pursuant to new IFRS accounting requirements for joint arrangements, all of our joint ventures previously accounted for under proportionate consolidation, and comprising the Industrial Construction segment, are now treated as equity method investments. In addition to these changes, the composition of our Board of Directors changed in the second half of 2012. As a result, from the first quarter of 2013, the operations of Industrial Construction were not presented to the Executive Committee and our Board of Directors as an operating segment, for which reason, we concluded that the Industrial Construction segment no longer qualified as a reportable segment. We have included our equity method investment in ICA Fluor within our Civil Construction segment; the other equity method investments are included in our Concessions and Corporate and Other segments. As a result, we only present the aforementioned reportable segments. This change was presented retrospectively for all years presented in our consolidated financial statements and therefore, within the discussion of our financial information within this annual report. See Note 4 to our consolidated financial statements.

Our construction business is represented in our Civil Construction segment, through which 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, the current industry trend is that governments and government agencies, including the Mexican government and Mexican state-owned enterprises, have significantly changed their spending practices on traditional 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. We have experienced strong demand (and expect to continue experiencing 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 Operations

Construction

Our construction business includes our civil construction business and the results of our industrial construction affiliate, ICA Fluor, which we account for using the equity method of accounting. See “Item 4. Business Overview—Description of Business Operations—Construction—Civil Construction” and “—Industrial Construction”.

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.

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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 Eastern Discharge Tunnel. Fixed price, not-to-exceed and mixed price contracts collectively accounted for approximately 56% of our civil construction backlog as of December 31, 2013, 34% of our construction backlog as of December 31, 2012, 82% of our Civil Construction backlog as of December 31, 2011. 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.

However, under Mexican law, traditional public works contracts provide for the price adjustment of certain components, regardless of whether the contract is fixed price or mixed price. Under a traditional public works mechanism, 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.

We earn a portion of our Civil 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 6% of our contract awards in 2013 (based on the contract amount) were foreign-currency denominated. Approximately 12% of our civil construction backlog as of December 31, 2013 was denominated in foreign currencies. Our foreign currency denominated contracts are denominated in U.S. dollars, euros, Peruvian soles, Costa Rica colones and Colombian pesos.

Our policy requires that a committee 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 Federal Public Administration 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: (i) in response to certain emergencies, including those relating to public health and safety as well as environmental disasters; (ii) when the project to be executed will be performed exclusively for military purposes or if the bidding process could jeopardize national security; (iii) when a publicly-bid contract has been rescinded due to breach by the winning contractor; (iv) when a public bidding process is declared void due to a lack of offers that comply with the bidding guidelines or prices or inputs are unacceptable, provided that the conditions of contracting are the same as those originally published; or (v) when there is a proven strategic alliance between the government and the contractor in order to promote technological innovation in projects. 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 construction 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 2013, increases in scope of work accounted for Ps. 3,678 million. Construction contracts for such work are not typically put up for bid, but are negotiated by the client with the existing contractor.

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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.

Backlog

Backlog in the engineering and construction industry is a measure of the amount of revenue that we expect to realize from future work under long-term contracts at a particular reporting period. These estimates include revenues that we reasonably expect to realize from contracted work not yet completed at the beginning of the period, new contracts, firm orders, work scope modifications authorized by our clients, change orders authorized by our clients under conditions specified in the original contract and certain documented claims and termination or redemption fees presented to our clients. Backlog does not reflect operating margins earned from contract completion.

Backlog for each reporting period is calculated based on backlog from the prior reporting period, to which we (i) add estimated revenue from future uncompleted contracts, firm orders and other expected income streams and (ii) deduct revenue from contracts that have been canceled or fully completed during the reporting period. For each reporting period, we determine on a contract-by-contract basis as of the date of determination, the fair value of consideration billed or to be billed representing goods delivered and services to be delivered or performed over the course of the contract. Pursuant to the “percentage of completion” methodology, the contract amount for these purposes is estimated based on costs to be incurred through the end of the project and the estimated profit margin therein in accordance with IAS 11 “Construction Contracts.” Actual revenues earned from the contract during the reporting period are also determined based on the percentage-of-completion method. See note 4(cc) to our consolidated financial statements.

Consolidated backlog includes contracts pursuant to which we control a project, such as when we hold a majority interest, a leadership role and decision-making power regarding key project areas. Our consolidated backlog is comprised of Civil Construction backlog, backlog from our mining services contracts, which we report in our Civil Construction segment and backlog from other services. Our mining services backlog principally reflects the contracts in our San Martin subsidiary in Peru. For internal reporting purposes, we group our mining services business within our Civil Construction segment due to the similarity between our mining services and certain services provided by our traditional construction business, which leads us to review and manage our mining activities within the scope of our Civil Construction segment’s performance metrics. As of December 31, 2013, 2012 and 2011, respectively, we are not estimating any losses upon completion upon any of the contracts in our consolidated backlog.

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The following table sets forth, at the dates indicated, our backlog of Civil Construction, mining services and other services contracts. See Note 8 to our consolidated financial statements.

	Civil Construction		Mining Services			Other Services
	(Millions of Mexican pesos)
Backlog at January 1, 2012		Ps. 19,814		—			—
New contracts in 2012		24,835		Ps. 7,064	(1)		Ps. 1,543
Changes and adjustments in 2012(2)		11,152		863			—
Less: Construction revenue earned in 2012		28,614		1,432			413
Backlog as of December 31, 2012		27,187		7,035			1,130
New contracts in 2013		18,417		105			—
Changes and adjustments in 2013(2)		3,678		549			—
Less: Construction revenue earned in 2013		18,624		2,740			379
Backlog as of December 31, 2013		Ps. 30,658		Ps. 4,949			Ps. 751

(1) Corresponds to our acquisition of San Martin.

(2) Adjustments include change orders and additional work.

Total Civil Construction contract awards and net additions to existing contracts totaled Ps. 22,095 million (approximately U.S.$ 1,691 million) in 2013. Seven projects represented approximately 80% of backlog in the Civil Construction segment, and 67% of total consolidated backlog, at December 31, 2013. The following table sets forth certain information relating to these seven projects.

	Amount		Estimated Completion Date	% of Total Civil Construction Backlog
	(Millions of Mexican pesos)
Civil Construction Backlog
Mitla-Tehuantepec highway		Ps. 7,635	Fourth quarter of 2015		25%
Palmillas – Apaseo El Grande tollroad		5,407	Third quarter of 2015		18%
Barranca Larga-Ventanilla Highway		3,953	Third quarter of 2014		13%
Package Highway Sonora State		2,029	Second quarter of 2019		7%
Lazaro Cardenas TEC II Container Terminal		1,999	Third quarter of 2014		7%
Tepic Bypass		1,864	Second quarter of 2014		6%
Domingo Diaz Avenue Panama		1,498	Third quarter of 2014		5%

As of December 31, 2013, approximately 12% of Civil Construction backlog was attributable to construction projects outside of Mexico. Public sector projects represented approximately 83% of our total Civil Construction backlog. At December 31, 2013, construction contracts with a value exceeding U.S.$ 400 million accounted for 43% of our total Civil Construction backlog, construction contracts with a value ranging from U.S.$ 200 million to U.S.$ 400 million accounted for 13% and construction contracts with a value of less than U.S.$ 200 million accounted for 44% of our total Civil Construction backlog. These seven projects had no adjustments to margins in 2013.

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In the case of joint ventures in which we share control, as well as associated companies, we include in unconsolidated backlog a share of expected contract revenues that corresponds to our percentage interest in the joint venture or associated company.

The following table sets forth, at the dates indicated, our unconsolidated backlog of joint venture and associated company contracts.

	As of December 31,
	2013		2013		2012		2011
	(Millions of U.S. dollars)		(Millions of Mexican pesos)
Joint Venture and Associated Company Backlog	U.S. $	832		Ps. 10,864		Ps. 21,737		Ps. 8,911

Joint venture and associated company backlog decreased 50% from 2013 over 2012 principally due to the addition to our Civil Construction backlog, pursuant to the agreement with our joint-venture partner, of the Mitla-Tehuantepec highway, which had previously been included in associated company backlog. See “Item 4. Information on the Company—Business Overview—Description of Business Segments—Construction—Civil Construction”. Joint venture and associated company backlog increased 144% from 2012 over 2011 principally due to the inclusion of the Mitla-Tehuantepec highway in associated company backlog.

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 or scope adjustments will not occur. We do not currently expect our backlog to fail to move forward as originally planned. However, margin trends are primarily influenced by the mix of projects in backlog, competition on awarded contracts, overall industry trends, force majeure, delay in delivery of or obtaining rights-of-way, change orders and alleged breaches of contract, many of which are difficult to predict. In the period leading up to and following the change in presidential administration, the number of large public sector construction contracts the Mexican government offered for public bidding decreased. We experienced a significant decrease in the rate of awards in 2013 due to the change of administration as well as the new administration’s initial focus on structural reforms, rather than a focus on its infrastructure projects. We have continued to experience a slowdown in contract awards through the first quarter of 2014. However, based on the new administration’s announced plans for infrastructure over the next five years, we are optimistic that the new administration will make infrastructure a priority, which should result in an increase in the rate of awards in the latter half of 2014, although we cannot provide any assurance of such increases.

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 substantial penalties fixed as a percentage of a contract price. Fixed price, not-to-exceed and mixed price contracts collectively accounted for approximately 56% of our Civil Construction backlog as of December 31, 2013. See “Item 5. Operating and Financial Review and Prospects—Operating Results—Backlog.”

Competition

The main competitive factors in our Civil 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 segment, 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 IDEAL and Carso Infraestructura y Construcciones, S.A. de C.V., both related parties of Grupo Carso, Tradeco Infraestructura, S.A. de C.V., La Peninsular Compañia Constructora S.A. de C.V. (a member of Grupo Hermes), Promotora y Desarrolladora Mexicana, S.A. de C.V.,

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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 Concessions segment, we compete primarily with Mexican and Spanish companies, including IDEAL, Globalvia Infraestructuras, S.A. de C.V., Compañia Contratistas Nacional, S.A. de C.V., La Peninsular Compañia Constructora, S.A. de C.V., OHL Mexico, S.A.B. de C.V., Promotora y Operadora de Infraestructura, S.A.B. de C.V., Tradeco Infraestructura, S.A. de C.V., Fomento de Construcciones y Contratas, S.A., FCC Aqualia, S.A., Acciona Agua, S.A., Abengoa Mexico, S.A. de C.V. and Impulsa Infraestructura, S.A. de C.V.

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 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. As a result, we have been increasingly experiencing significant competition in Mexico from Brazilian, Chinese, Japanese, Spanish and, to a lesser extent, other European construction companies. Our Rodio Kronsa subsidiary faces substantial competition in Spain from large construction companies that operate in that market, as well as from smaller, more specialized construction companies that provide the same services offered by Rodio Kronsa.

Raw Materials

The main raw materials we require for our construction operations are cement, construction aggregates and steel. In our Civil Construction segment, raw materials accounted for Ps. 3,806 million, or 16%, of our consolidated cost of sales in 2013, Ps. 6,721 million, or 20%, of our consolidated cost of sales in 2012, Ps. 5,384 million, or 19% and of our consolidated cost of sales in 2011.

Civil Construction

Our civil construction business focuses on infrastructure projects in Mexico, including the construction of roads, highways, transportation facilities (such as mass transit systems), bridges, dams, ports, 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 shopping centers. Our Civil Construction segment has also pursued opportunities in other parts of Latin America, the Caribbean, Asia and the United States, and is currently pursuing select opportunities outside of Mexico and performing three construction projects in Panama, three in Colombia, one in Costa Rica, one in Chile and, through our San Martin subsidiary, certain projects in Peru. Our civil construction business performs activities such as demolition, clearing, excavation, de-watering, drainage, embankment fill, structural concrete construction, concrete and asphalt paving, mining services and tunneling.

In addition to construction for third parties, our civil construction business also includes revenues earned by our construction subsidiaries for construction work on our concessions performed under Engineering, Procurement and Construction (“EPC”) contracts with our concessionaire subsidiaries. These are eliminated upon consolidation but are presented within the civil construction business’ individual financial information.

In 2013, our civil construction business accounted for approximately 74% of our total revenues.

The civil construction business 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 2013:

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• the Apulco, Comedero, El Novillo, El Caracol, Cajon de Peña, Tomatlan, Infiernillo, Chicoasen, El Guineo, El Cobano, Jicalan, Falcon, Huites, Aguamilpa, Caruachi, El Cajon and the La Yesca 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, Hyatt Regency (formerly Hotel 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 2013 included:

• Mitla – Tehuantepec highway

• the La Yesca hydroelectric project;

• Barranca Larga – Ventanilla highway;

• Domingo Diaz Avenue, Panama; and

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

The civil construction business’ contract awards and additions in 2013 totaled approximately Ps. 22,095 million (approximately U.S.$ 1,691 million), of which Ps. 2,570 million were awarded outside Mexico.

Mitla-Tehuantepec Highway.In June 2010, through our wholly-owned subsidiaries, Caminos y Carreteras del Mayab, S.A.P.I. de C.V. and CONOISA, we entered into a 20-year PPP concession for the construction, operation and maintenance of the 169-kilometer Mitla-Tehuantepec federal highway, which is expected to link the city of Oaxaca with the Isthmus of Tehuantepec, Mexico, thereby increasing connectivity between the industrial port of Salina Cruz and Oaxaca. The construction contract has a value of approximately Ps. 9,318 million. Construction of the highway, which includes three segments—Mitla-Entronque Tehuantepec II, Mitla-Santa Maria Albarradas and Lachiguiri-Entronque Tehuantepec II—is expected to be completed in December 2015. In January 2012, we completed the transfer of a 40% interest in this concession to IDEAL and now hold a 60% interest. In 2013, we entered into an agreement with IDEAL in this project, whereby we gained control of the construction contract.

Barranca Larga – Ventanilla—Highway. In August 2012, our construction company Ingenieros Civiles Asociados, S.A. de C.V.was awarded a contract to perform the construction work under the Barranca Larga – Ventanilla concession. This concession was awarded on April 16, 2012, by the Ministry of Communications and Transportation to our concession subsidiary Desarrolladora de Infraestructura Puerto Escondido, S.A. de C.V., or DIPESA. It is a 30-year concession for the construction, operation and maintenance of the 104-kilometer Barranca Larga-Ventanilla tollroad in the state of Oaxaca. The construction work is expected to be completed in May 2014 and has been included in our civil construction backlog since the second quarter of 2012. Total investment in the project is expected to be approximately Ps. 5,255 million.

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Domingo Diaz Avenue, Panama. In April 2011, through an ICA-led consortium, we signed a U.S.$ 238 million fixed-price construction contract with the Ministry of Public Works of Panama to rebuild and widen Domingo Diaz Avenue in Panama City, as part of the Panamanian government’s plan to improve the city’s surface road network. The construction project, which was awarded through an international bidding process, is being executed by a consortium comprised of ICA, which holds a 70% interest, and Constructora MECO, S. A., which holds a 30% interest. ICA’s share of the contract, which totals approximately U.S.$ 166.3 million, has been included in our civil construction backlog since the first quarter of 2012. The work is scheduled to be completed in July 2014. The Domingo Diaz Avenue project includes the study, detail design and construction work for improving 12.3 kilometers of the road from the interchange with the Corredor Sur expressway near Tocumen International Airport to the intersection with Simon Bolivar Avenue and Ricardo J. Alfaro Avenue in the San Miguelito district of Panama City. The road and existing bridges and viaducts are expected to be completely rebuilt and widened from two to three lanes in each direction, together with other improvements, such as the relocation of drainage works and other public utilities.

Eastern Discharge Tunnel. In November 2008, the Mexican National Water Commission (Comision Nacional del Agua), 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. 9,595 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. 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, or Ps. 4,797 million of the total construction contract. In 2011, we entered into an agreement increasing our share of the total contract value to Ps. 7,062 million. In 2012 and 2013 we received an additional contract increase of Ps. 230 million, for a total value of Ps. 7,292 million. The fixed-term contract has both unit price and fixed price components, and scheduled completion of the project in the second quarter of 2014. 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.

Guanajuato and Chiapas Hospitals. In 2013, we were awarded two hospital construction contracts with a total value of approximately Ps. 1,157 million. The Mexican Institute of Social Security awarded us a contract for a 250-bed regional general hospital in Leon, Guanajuato. The contract, which has a value of approximately Ps. 780 million, includes the construction, equipment, installation, testing and initiation of operations of the hospital. Construction of the hospital is expected to be completed in October 2015. The Institute for Social Services of State Employees awarded us a contract for a new 120-bed hospital in Tuxtla Gutierrez, Chiapas. The contract, which has a value of approximately Ps. 377 million, includes the construction of seven buildings ranging in size from one to four stories. Construction is expected to be completed in August 2015.

Our Civil Construction segment has pursued infrastructure projects in Central, America, South America and the Caribbean, and we expect to continue to do so in the future. In the past, projects in these areas have 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 2013, 35% of our revenues in the Civil Construction segment were attributable to construction activities outside Mexico. In January 2010, a consortium comprised of ICA, with a 43% interest; Fomento de Construcciones y Contratas of Spain, with a 43% interest; and Constructora Meco of Costa Rica, with a 14% interest, was awarded a contract with an approximate value of U.S.$ 268 million by the Panama Canal Authority for the construction of a three-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. In 2011, we were awarded contracts to (i) build the Northern Interceptor Tunnel in Medellin, Colombia, (ii) extend the Avenida Domingo Diaz and the Corredor Norte highways, both in Panama City, Panama, and (iii) expand the Atlantic petroleum terminal in Limon, Costa Rica. In 2013, Ecopetrol, S.A. awarded a multi-year contract with an approximate value of U.S.$ 272 million to the Pipeline Maintenance Alliance, a consortium of which we hold a 30% interest, for the maintenance of approximately 990 kilometers of oil pipelines in southern Colombia. Work on the pipelines began in December 2013. In November 2012, the San Carlos Consortium, comprised of ICA, with a 70% interest; ALCA Ingenieria S.A.S., with a 15% interest; and NOARCO, S.A., with a 15% interest, was awarded a construction project with an approximate value of U.S.$ 40 million for the maintenance and rehabilitation of the Florencia Altamira Highway in Colombia.

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Mining Services and Other Services

Additionally, in our Civil Construction segment we report our mining services and other services contracts, which have a backlog of Ps. 5,700 million at December 31, 2013. These projects principally reflect the contracts held by our San Martin subsidiary in Peru.

Industrial Construction

As previously discussed, our industrial construction business, which we operate through ICA Fluor, is no longer a reportable segment. Previously, we accounted for the entities within this segment using proportionate consolidation; upon adoption of IFRS 11, we retrospectively account for the entities that comprise this business using the equity method. ICA Fluor, one of the most significant entities within this business, reported within our Civil Construction segment and the other investments are presented within our Concessions and Corporate and Other segments. We include backlog for our industrial construction business within joint venture and associated company backlog.

Industrial construction projects focus 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.

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, and portions of 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. Beginning in 2013, we no longer proportionately consolidate the revenues of ICA Fluor. See Note 4 to our consolidated financial statements.

Typical Projects.Projects in our industrial construction business typically involve sophisticated engineering techniques and require us to fulfill complicated technical and quality specifications. Our industrial construction backlog, as of December 31, 2013, was 57% peso-denominated and 43% dollar-denominated. 18% was unit-price, 8% was fixed price, 45% was mixed price and 30% was cost reimbursements.

As of March 2014, recent contract awards and additions in our industrial construction business totaled approximately Ps. 10,474 million (approximately U.S.$ 802 million) at 57% and included projects such as:

• engineering, procurement, construction and start-up services related to the construction of an onshore gas compression system to service the Dos Bocas Marine Terminal in the Gulf of Mexico under a contract with Pemex;

• engineering for the first phase of a new refinery in Tula, Hidalgo under a contract with Pemex;

• engineering, procurement, construction, maintenance and commissioning services for a revamp of a vinyl chloride monomer plant in the Pajaritos petrochemical complex in Veracruz in the Gulf of Mexico;

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• construction of a new titanium dioxide train to be built in an E.I. du Pont de Nemours and Company, or DuPont, complex in Altamira, Tamaulipas on the Gulf of Mexico; and

• engineering, procurement, construction, testing, commissioning and start-up services related to the construction of the 1.42 billion cubic feet per day capacity Los Ramones Sur gas pipeline.

The most important projects under construction in our industrial construction business during 2013 included:

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

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

• the Boleo copper mine; and

• the design and construction of the Etileno XXI grass roots petrochemical complex.

Concessions

Our Concessions segment focuses on the construction, development, maintenance and operation of long-term concessions of tollroads, tunnels, social infrastructure and water projects and accounted for 13% of our total revenues in 2013. The construction work we perform on our concessions is included in our Civil Construction segment when, pursuant to an EPC contract, we sub-contract one of our construction subsidiaries to perform the work. If the construction work is contracted with a third party, as is the case of construction of rights of way and environmentally-related construction such as environmental impact assessment, our construction subsidiaries do not perform any construction services. In these cases, the construction revenues are recognized within the Concessions segment rather than the Civil Construction segment. Our concessionaire subsidiaries also recognize financing income, which stems from the (i) reimbursement of the cost of financing obtained to build infrastructure assets granted under concession arrangements and (ii) interest income earned on concession assets accounted for as long-term accounts receivable.

We participate in all stages of infrastructure project development, including formulation, engineering, structuring and financing, construction, operation and management as part of a portfolio of assets. We monetize assets that are in the operating stage and arrange new projects under development.

During 2013, we participated in four concessioned highways operating in whole or in part and one operating concessioned tunnel (the Acapulco tunnel) that we consolidate, and in the management and operation of water supply systems such as the Aqueduct II water supply system.

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 design, construction, financing, maintenance and operation of highways, prisons, 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 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.

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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 or through direct capital contributions. 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 and Tunnel Concessions

The following table sets forth certain information as of December 31, 2013, regarding the eight highway and two tunnels concessions in which we currently participate, either through subsidiaries unconsolidated joint ventures or associated companies. As of December 31, 2013, we had four highway and one tunnel concessions in operation.

Concession (highway and tunnels)	Kilometers		Date of Concession		Concession Term (Years)		% Ownership of Concessionaire		% Ownership of Construction		Concessionaire’s Net Investment in Concession (Millions of Mexican pesos)(1)		Balance of Investment (Millions of Mexican pesos)
The Kantunil-Cancun Highway(2)(3)		296		1990		30		100		100		3,386		3,386
Acapulco tunnel(2)(3)		2.9		1994		40		100		100		799		799
Acapulco Scenic Bypass(3)		8		2012		30		100		—		221		221
Rio Verde-Ciudad Valles Highway(2)(3)		113.2		2007		20		100		100		5,045		5,045
The La Piedad Bypass(2)(3)		21		2009		30		100		100		2,530		2,530
Barranca Larga-Ventanilla(3)		104		2012		27		100		100		1,945		1,945
Palmillas – Apaseo El Grande(3)				2012				100		—		3,058		3,058
Mitla-Tehuantepec highway(4)		169		2010		20		60		100		1,792		358
Nuevo Necaxa-Tihuatlan Highway(4)		85		2007		30		50		60		8,346		469
Autovia Urbana Sur(5)		15.9		2010		30		30		100		5,783		882

(1) Represents each concessionaire’s investment in the applicable concession as of December 31, 2013, net of depreciation and revaluation of assets for inflation through 2007.

(2) Concession in operation, including the extension, if any, of the tollroad.

(3) Concession fully consolidated in our financial statements.

(4) Proportionate consolidation for our joint ventures was eliminated in 2013, based on changes in financial reporting standards that became effective on January 1, 2013. These investments are now accounted for using the equity method, applied retrospectively. See Note 4 to our consolidated financial statements.

(5) Concession accounted for using the equity method in our financial statements. We completed the sale of our interest in this concession on March 31, 2014.

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, operate, and maintain the 241.5-kilometer highway that connects the cities of Kantunil and Cancun in the states of Yucatan and Quintana Roo through

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December 2020. In August 2011, we signed an amendment to our concession agreement with the Ministry of Communications and Transportation to construct an extension of the tollroad. The amendment includes the construction, operation, conservation and maintenance of a 54-kilometer expansion of the Kantunil-Cancun highway to Playa del Carmen and extends the term of the concession to 2050. The expansion of the highway will require an estimated investment of approximately Ps. 5,370 million. We consolidate the investment in our consolidated financial statements, including long term debt that, as of December 31, 2013, was equivalent to Ps. 4,661 million. This long-term debt matures in 2034, and is 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).”

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. 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. See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness—Acapulco Tunnel” and Note 13 to our audited consolidated financial statements.

Acapulco Scenic Bypass. In November 2012, the State of Guerrero awarded us with a 30-year concession for a toll tunnel and highway in Acapulco. The project includes a 3.3-kilometer tunnel from the Brisamar interchange to Cayao – Puerto Marques and a 4.7-kilometer highway from the tunnel entrance to the Zona Diamante section of Acapulco.

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, 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 procured the financing for 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 concession began full operations in July 2013.

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, 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. This concession began full operations in November 2012.

Barranca Larga-Ventanilla Highway. On April 16, 2012, the Ministry of Communications and Transportation awarded us a 30-year concession for the construction, operation and maintenance of the 104-kilometer Barranca Larga-Ventanilla tollroad in the state of Oaxaca. The construction work is expected to take 24 months and was included in our backlog as of the second quarter of 2012. We entered into long term financing for the project on June 15, 2012.

Palmillas-Apaseo El Grande Tollroad. We were awarded a 30-year concession for the Palmillas-Apaseo El Grande tollroad by the Ministry of Communications and Transportation in November 2012. The concession was title was signed in February 2013 and we entered into an approximately Ps. 5,450 million agreement on September 19, 2013 for a total investment of Ps. 9,552 million. The 86-kilometer, 4-lane, high specification tollroad in the states of Queretaro and Guanajuato will create a new link between the Mexico City metropolitan region, the Central Mexican region and the Northern Mexican region. The concession includes nine interchanges, 29 vehicular overpasses and underpasses and calls for the construction of 15 major bridges, and is expected to start operations in 2016.

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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. We began the construction of this project in July 2012. In January 2012, we completed the transfer of 40% of this concession to IDEAL and now hold 60%.

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) 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 project is expected to be completed during the second quarter of 2014.

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. On March 31, 2014, we completed the sale of our interest in this concession to IDEAL.

Other Long-Term Investments

Long-term contract

Kilometers/ Volume

Date of Concession

Concession Term (Years)

% Ownership of Concessionaire

% Ownership of Construction

Concessionaire’s Net Investment in Concession (Millions of Mexican pesos)

Rio de los Remedios(1)

25.5 km

2008

5 (Renewable)

100

100

—

(2)

(1) Fully consolidated in our financial statements. In May 2007, the contract was amended and restated. In the third quarter of 2011, the contract was amended to increase the value of the contract for the construction of the highway.

(2) Presented in the financial statements for Ps. 11,784 in long-term accounts receivables for construction.

Rio de los Remedios—Ecatepec. We participate in the Rio de los Remedios—Ecatepec project with a 100% interest in ANESA (formerly known as Viabilis Infraestructura S.A.P.I. de C.V., or Viabilis). In 2008, we began participating in this project with a 50% interest in Viabilis, 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 ANESA. In May 2012, we completed the acquisition of the 50% interest we did not own in Viabilis, and as a result we now wholly own the company and changed its name to ANESA. The Ps. 6,568 million project relates to isolating 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, Phase 2 completed in March 2013, and Phase 3 is estimated to be completed in 2014. ANESA 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 in the amount of Ps. 3,000 million with Banobras development bank. Phases 1 and 2 have been operational since March 2013.

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Port Concessions

Lazaro Cardenas Port Terminal. In 2012, our affiliate APM Terminals Lazaro Cardenas, S.A. de C.V., or APMT-Lazaro Cardenas, of which we own 5%, signed a thirty-year agreement to design, finance, construct, operate and maintain the new “TEC II” container terminal in Lazaro Cardenas port, located on Mexico’s Pacific coast. There will be three separate stages of investment and construction. Phase I is expected to be completed in 2015 and is expected to require an investment of approximately Ps. 7,682 million. ICA is expected to perform 100% of the construction of Phase I.

Water Distribution and Water Treatment Concessions

During 2013, we participated in two water treatment plants, one currently under construction and in one water supply system in operation and in one additional water supply system currently under construction. The following table sets forth certain information as of December 31, 2013, regarding the water treatment plant and water supply system concessions in which we currently participate, either through subsidiaries or affiliates. We account for all of our water projects using the equity method in our consolidated financial statements as we either consider that we have joint control over the joint venture investment, or when we have the ability to significantly influence the key operating and financial decisions of the venture.

Concession	Capacity (m3mm)		Date of Concession		Concession Term (Years)		% Ownership of Concessionaire(1)		% of Construction Work		Concessionaire’s Net Investment in Concession (Millions of Mexican pesos)(1)		Balance of  the investment (Millions of Mexican pesos)
Aqueducto II water supply system(2)(3)		1.5		2007		20		42		50		2,056		274
El Realito water supply system(3)		1		2009		25		51		51		1,574		243
Agua Prieta water treatment plant(3)		8.5		2009		20		50		100		2,408		189
Atotonilco water treatment plant(4)		42		2010		25		10		42.5		5,297		38

(1) Represents each concessionaire’s investment in the applicable concession, net of depreciation and revaluation of assets for inflation through 2007.

(2) Concession in operation.

(3) Proportionate consolidation for our joint ventures was eliminated in 2013, based on changes in financial reporting standards that became effective on January 1, 2013. These investments are now accounted for using the equity method, applied retrospectively. See Note 4 to our consolidated financial statements.

(4) Concession accounted for using the equity method in our financial statements. We completed the sale of our interest in this concession on March 31, 2014.

Aqueduct 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 brings 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 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 Proactiva Medio Ambiente Mexico, S.A. de C.V., or 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 account for this investment using the equity method.

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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. In March 2011, our subsidiary Aquos el Realito S.A. de C.V. entered into an 18-year term financing agreement for the construction of the El Realito Aqueduct project, to which it holds a long-term service agreement, in an amount up to Ps. 1,319 million. 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 account for this investment using the equity method. See Note 4 to our consolidated financial statements.

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. 2,211 million (as of December 31, 2012) 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. In addition to ICA, which is consortium leader and holds a 50% interest, the consortium also includes ATLATEC, S.A. de C.V. with a 34% interest and Servicios de Agua Trident S.A. de C.V. with a 16% interest, both of which are subsidiaries of Mitsui & Co, Ltd. We account for this investment using the equity method.

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 the 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. We account for this investment, in which we hold an approximately 10% interest, using the equity method due to our participation on the board of directors and our ability to influence key operating and financial decisions. In December 2013, we entered into an agreement to sell our share of the concession to Promotora del Desarrollo de America Latina, S.A. de C.V. The transaction is expected to close in the second quarter of 2014, subject to customary consents.

Discontinued concessions

Long-term contract

Kilometers/ volume

Date of Concession

Concession Term (Years)

% Ownership of Concessionaire

% Ownership of Construction

Concessionaire’s Net  Investment in Concession (Millions of Mexican pesos)

SPC projects(1)

N/A

2010

22

100

100

9,386

SPC Projects.In 2011, we entered into two agreements to build and operate over a 22-year term two federal penitentiaries for a total investment of Ps. 9,890 million. Construction for the projects was completed in 2012 and the projects are now operational. The infrastructure operations relate to non-penitentiary services. In January 2014,

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we announced that we had signed an agreement to sell CGL a 70% equity interest in our two SPC contracts. We will retain a 30% equity stake in the contracts and expect to cease consolidating the two services provider companies after closing. This investment is reported as a discontinued operation. See Note 34 to our consolidated financial statements.

Airports

Our Airports segment accounted for 12% of our total revenues in 2013.

In July 2013, our subsidiary Aeroinvest sold 69,000,000 of its shares in our airport concessionaire subsidiary, GACN, representing approximately 17.25% of GACN’s total capital stock, in an underwritten global public offering. As of December 31, 2013, we controlled the vote of of 165,502,700 shares of GACN, representing 41.38% of GACN’s capital stock. Our investment in GACN was comprised of 98,702,700 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, which BB shares in turn control GACN. The remaining 25.5% of SETA was owned by Aeroports de Paris Management, or ADPM. The remaining shareholders in GACN held 58.26% of its outstanding capital stock and 0.36% of the shares are held in GACN’s treasury. Because of the decrease in our interest in GACN in 2013, we reassessed our effective control over GACN and concluded that we retain effective control based on our substantive rights as majority shareholder, ability to appoint directors and executives of GACN, administration of the relevant activities of GACN and other factors. See Note 17 to our consolidated financial statements. GACN is listed on the Mexican Stock Exchange and the Nasdaq.

Aeroinvest and ADPM have agreed that:

• The GACN Corporate Practices Committee and Audit Committee shall be comprised of at least three independent members; and

• Aeroinvest and ADPM shall have the right to propose at least one of the members of each 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 42% of GACN’s revenues in 2013 and 42% in 2012. The airports serve a major metropolitan area (Monterrey), three tourist

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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 lease agreement with the Mexico City International Airport. NH Hoteles, S.A. de C.V., a Spanish company, owns the other 10%. For the year ended December 31, 2013, total revenues of the hotel amounted to Ps. 176.5 million, annual average occupancy increased to 82.5% from 79.3% in 2012. In 2013, the annual average rate per room was Ps. 1,619.

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 66.4% of GACN’s total revenues in 2013 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.

The airports are also focusing their business strategy on generating new services and products to diversify our revenue, such as hotel services, air cargo logistics services and real estate services. They plan to develop land not needed for aeronautical operations at all of the airports for industrial, logistical or commercial uses that are directly or indirectly related to airport activities in order to strengthen the airports’ role as focal points of economic development in the cities where they are located. As a result of such efforts, revenues from diversification activities increased by 18.2% in 2013 as compared to 2012.

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.

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The following table provides summary data for each of the airports for the year ended December 31, 2013:

	Year Ended December 31, 2013
	Terminal Passengers				Revenues(1)				Revenues  Per Terminal Passenger(2)
Airport	(Number in millions)		%		(Millions of pesos)		%		(Pesos)
Metropolitan area:
Monterrey International Airport		6.4		48.3		1,367.4		48.3		213.1
Tourist destinations:
Acapulco International Airport		0.6		4.6		128.7		4.5		208.5
Mazatlan International Airport		0.7		5.5		170.8		6.0		233.5
Zihuatanejo International Airport		0.5		3.5		109.0		3.9		237.2
Total tourist destinations		1.8		13.6		408.5		15.4		225.9
Regional cities:
Chihuahua International Airport		0.9		6.7		178.5		6.3		201.5
Culiacan International Airport		1.3		9.4		244.1		8.6		194.9
Durango International Airport		0.2		1.8		51.5		1.8		218.2
San Luis Potosi International Airport		0.3		2.0		80.1		2.8		306.1
Tampico International Airport		0.6		4.6		123.8		4.4		203.4
Torreon International Airport		0.5		3.5		101.4		3.6		217.0
Zacatecas International Airport		0.3		2.0		58.4		2.1		225.0
Total regional destinations		4.0		29.9		837.9		29.6		211.0
Border cities:
Ciudad Juarez International Airport		0.7		5.3		135.2		4.8		192.3
Reynosa International Airport		0.4		3.0		79.3		2.8		202.3
Total border city destinations		1.1		8.2		214.5		7.6		195.9
Total		13.3		100		2,828.3		100		212.8

(1) Does not include eliminations of transactions among GACN’s subsidiaries or revenues from construction services.

(2) Revenues per terminal passenger are calculated by dividing the total revenues for each airport by the number of terminal passengers for each airport. The result has been rounded to the decimal.

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.

In the future, we 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 operations. To date, the Ministry of Communications and Transportation has not amended Aeropuerto del Norte’s concession. However, there can be no assurance that the Ministry of Communications and Transportation will not authorize such amendment and that commercial aviation flights will not operate from Aeropuerto del Norte in the future.

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

Corporate and Other

Our Corporate and Other segment includes all of our real estate operations, including our affordable entry-level housing operations as well as our corporate operations through our subsidiary Grupo ICA S.A. de C.V. See “Item 4. Information on the Company—History and Development of the Company—Divestitures.” In 2013, our Corporate and Other segment accounted for 3% of our total revenues.

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Our housing operations during 2013 covered all stages of the housing industry, performing and procuring architectural and engineering design, facilitating buyer financing and constructing and marketing homes. We subcontracted some construction services, such as urbanization.

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

In 2010, we expanded our operations in the housing operations 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 Prudential Real Estate Investors, S. de R.L. de C.V. During 2013, 2012 and 2011 we sold 1,513, 6,677 and 6,797 homes, respectively.

Additionally, we continue to develop our vertical residential properties on both Reforma Avenue and Marina Nacional Avenue in Mexico City, and other selected mid-rise and high-rise properties that together make up our vertical housing business.

New low income housing construction in Mexico increased steadily after the year 2000 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) made it easier for people to finance purchases and construction of homes in Mexico.

Since 2013, the Mexican government has begun to revise its housing agenda. Its program emphasizes; (i) the purchase of existing housing stock; (ii) urban instead of exurban development, and (iii) housing subsidy program coordination among the federal and local governments.

Our housing operations compete primarily with large and mid size Mexican public housing developers such as Corporacion GEO, S.A.B. de C.V., Grupo Javer, S.A. de C.V., Grupo Sadasi, S.A. de C.V., Inmobiliaria Ruba, S.A. de C.V., and Consorcio Ara S.A.B. de C.V., as well as regional competitors.

Recently, the industry has been affected by instability due to changes in government housing policies and access to sources of funding has become increasingly limited. Several of our competitors in the industry recently entered into reorganization proceedings (Concurso mercantil), which has contributed to instability among other companies in the industry. The outlook of the housing sector remains uncertain.

Geographical Distribution of Revenues

Revenues from foreign operations accounted for approximately 27% of our revenues in 2013, 10% of our revenues in 2012 and 2% of our revenues in 2011. The increase in 2013 over 2012 of the percentage of our revenue derived from foreign operations principally reflected a decrease in revenues from Mexican operations and an increase in revenues from foreign operations.

The following table sets forth our revenues for Mexico and abroad for each of the years in the three-year period ended December 31, 2013.

	Year Ended December 31,
	2013				2012				2011
	(Millions of Mexican pesos)		(Percent of Total)		(Millions of Mexican pesos)		(Percent of Total)		(Millions of Mexican pesos)		(Percent of Total)
Mexico		Ps. 21,651		73%		Ps. 34,147		90%		Ps. 33,450		98%
Other countries		7,905		27%		3,975		10%		809		2%
Total		Ps. 29,556		100%		Ps. 38,122		100%		Ps. 34,259		100%

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Approximately 12% of our Civil Construction backlog as of December 31, 2013 is related to projects outside Mexico (as compared to approximately 22% as of December 31, 2012) and approximately 12% of our Civil Construction backlog as of December 31, 2013 was denominated in foreign currencies (principally U.S. dollars) (as compared to approximately 26% of our backlog as of December 31, 2012).

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.

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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. Our annual report 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.

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. In the recent years we have sought to redouble our efforts related to our zero-tolerance policy towards corruption. We have developed an anticorruption program that involves training of our employees, testing employees about conflicts of interest, as well as specific training and follow-up in our procurement area. In January 2013, our Board of Directors approved our first Code of Ethics and Conduct for Providers, Contractors and Business Partners. In September 2013, we were selected to be a part of the Dow Jones Sustainability Emerging Markets Index for 2013-2014.

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C. ORGANIZATIONAL STRUCTURE

The following table sets forth our significant subsidiaries as of December 31, 2013, including the principal activity, domicile and our ownership interest:

Subsidiary	Principal Activity	Domicile		Ownership Interest (%)
Constructoras ICA, S.A. de C.V.	Construction		Mexico	100
Controladora de Empresas de Vivienda, S.A. de C.V.	Housing		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
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.	Airport operations		Mexico	41.4(1)
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	99

(1) Directly and through our interest in SETA.

D. PROPERTY, PLANT AND EQUIPMENT

At December 31, 2013, approximately 94% of our assets and properties, including concessions, are located in Mexico. At December 31, 2013, the net book value of all land (excluding real estate inventories) and buildings, machinery and equipment, and investment properties and concessions was approximately Ps. 26,797 million (approximately U.S.$ 2,051 million). We currently lease machinery from vendors primarily under operating leases. For information regarding property in our Corporate and Other segment, see “Item 4. Information on the Company—Business Overview—Description of BusinessOperations—Corporate and Other.”

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 IFRS. The consolidated statements of income and other comprehensive income for the years ended December 31, 2012 and 2011 have been retroactively adjusted to reflect (i) the reclassification of our low income housing operations, which had been classified as discontinued operations, as a continuing operation reported in our Corporate and Other segment; (ii) the results of our social infrastructure projects, in which we agreed to sell 70% of our interest in January 2014, as a discontinued operation; and (iii) the impact of our adoption of two accounting standards issued by the IASB: (a) IFRS 11 (“Joint Arrangements”), pursuant to which the results of our joint ventures, which we previously accounted for using the proportional consolidation method of accounting, are now recognized using the equity method; and (b) amendments to IAS 19 “Employee Benefits”. See Notes 3b, 4 and 34 to our consolidated financial statements.

Until December 31, 2012, for management purposes, we were organized into six reportable segments which were: Civil Construction, Industrial Construction, Airports, Concessions, Housing Development and Corporate and other. In 2013, we implemented certain organizational and accounting changes that impacted the composition and number of our reportable segments under IFRS. During 2013, subsequent to the termination of our agreement to sell

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our horizontal housing business line as discussed above, we reclassified as continued operations our horizontal housing assets. Subsequent to this reclassification, our housing operations, previously reported in a separate Housing segment, have been integrated into the Corporate and Other segment as they do not qualify for separate segment reporting due to size.

Additionally, pursuant to new IFRS accounting requirements for joint arrangements, all of our joint ventures previously accounted for under proportionate consolidation, and comprising the Industrial Construction segment, are now treated as equity method investments. In addition to this change, the composition of our Board of Directors changed in the second half of 2012. As a result, from the first quarter of 2013, the operations of Industrial Construction were not presented to our Executive Committee and Board of Directors as an operating segment, for which reason, we concluded that the Industrial Construction segment no longer qualified as a reportable segment. We have included our equity method investment in ICA Fluor within our Civil Construction segment; the other equity method investments, including Los Portales, S.A. and PMA Mexico, are included in the Concessions and Corporate and Other segments. See Note 4 to our consolidated financial statements. As a result, we only present the aforementioned reportable segments. This change was presented retrospectively for all years presented in our consolidated financial statements and therefore, within the following management’s discussion and analysis of our financial and operating results.

Overview

We are a Mexican company principally engaged in construction and the operation of infrastructure projects under long-term concession or service agreements. Approximately 73% of our revenue in 2013 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. In 2013, our results were affected by a reduction of activity in the Mexican construction sector and a slowdown in the rate of awards of new projects, partially offset by the continuing growth of our concessions business, in which several concessions entered operations in 2013. The rate of awards decreased in 2013 due to the change of administration as well as the new administration’s initial focus on structural reforms.

The construction and infrastructure operations, and as a result, our results of operations, are substantially influenced by political and economic conditions in Mexico. In June 2013, Mexican President Enrique Peña Nieto announced the National Development Plan for the period 2013 to 2018. The new program contemplates investments of approximately U.S.$ 415 billion, representing 5.7% of Mexico’s gross domestic product, in over 1,000 projects in the transportation, water management, energy and urban development sectors. The majority of the budget (approximately 64%) is expected to be allocated to the energy sector, and investment in highways is expected to represent approximately U.S.$ 17 billion, or 4.1% of the proposed new program. The program is expected to generate 3.9 million jobs and to contribute to Mexico’s economic development. 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 5.5% in 2010, 3.9% in 2011, 3.9% in 2012 and to a lesser extent 1.1% in 2013. 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.

On April 29, 2014, Mexican President Enrique Peña Nieto announced the National Infrastructure Plan for the period 2014 – 2018. The new program contemplates investments of approximately Ps. 7,750 million (U.S.$ 593 million) in: (i) transportation and communication; (ii) energy; (iii) hydraulic development; (iv) health facilities; (v) urban development and housing; and (vi) tourism development.

Our business strategy is to grow our construction business 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 and Airports segments over the medium term. These two segments in aggregate represented 25% and 14% of our consolidated revenues in 2013 and 2012, respectively. 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, according to our strategic plan.

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A. OPERATING RESULTS

Certain U.S. dollar amounts have been translated from Mexican pesos for convenience purposes at an exchange rate of Ps. 13.06 per U.S.$ 1.00, the free market exchange rate for Mexican pesos on December 31, 2013, as reported by Banxico.

Our operations are divided into the following four segments: (1) Civil Construction, (2) Concessions, (3) Airports, and (4) Corporate and Other.

Consolidated Results of Operations for the Three Years Ended December 31, 2013

Total Revenues

Total revenues decreased 22% in 2013 from 2012. This decrease was primarily due to a reduction in the number of public works contracts in Mexico generally and a decrease in our Corporate and Other segment revenues related to housing sales, partially offset by an increase in revenues in our Airports and Concessions segments.

Total revenues increased 11% in 2012 from 2011. This increase was primarily due to the completion of construction of several major medium term projects, including the construction work in the SPC projects, which became operational in 2012, and the Autovia Urbana Sur expressway. All of the business segments reported growth in total revenues, after eliminations.

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, 2013. See Note 41 to our consolidated financial statements.

	Year Ended December 31,
	2013						2012						2011
	(Millions of Mexican pesos)			(Percentage of Total)			(Millions of Mexican pesos)			(Percentage of Total)			(Millions of Mexican pesos)			(Percentage of Total)
Revenues:
Civil Construction		Ps. 21,744			74%			Ps. 30,458			80%			Ps. 27,169			79%
Concessions		3,965			13%			2,402			6%			2,254			7%
Airports		3,420			12%			3,098			8%			2,776			8%
Corporate and Other		872			3%			2,556			7%			2,470			7%
Eliminations		(445	)		(2%	)		(392	)		(1%	)		(410	)		(1%	)
Total		Ps. 29,556			100%			Ps. 38,122			100%			Ps. 34,259			100%

Gross Profit

Gross profit increased 24% to Ps. 6,083 million in 2013 compared to Ps. 4,924 million in 2012. Gross profit as a percentage of total revenue increased to 21% compared to 13% in 2012, primarily due to the absence of capitalized interest included within cost of sales during construction of concessions as a result of the concessions entering into the operating phase and the absence in 2013 of adjustments made in 2012 for the impairment of certain of our housing assets and recognition of provisions made related to projects in 2012. Our greatest gross profit increases were in our concessions segment.

Gross profit decreased 7% to Ps. 4.924 million in 2012 compared to Ps. 5,281 million in 2011. Gross profit as a percentage of total revenue decreased to 13% compared to 15% in 2011, primarily due to adjustments made in 2012 for the impairment of certain of our housing assets and recognition of provisions for projects during the year. Our greatest gross profit increases were in our Airports and Civil Construction segments.

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General Expenses

Selling, general and administrative expenses decreased 18% to Ps. 3,012 million in 2013 compared to Ps. 3,695 million in 2012, in line with the 21% decrease in our revenues in 2013 from 2012. The decrease in 2013 was primarily due to a reduction in salaries and benefits in accordance with the decreased volume of activities, as well as a reduction in our provision for employee bonuses. Additionally, our real estate business within the Corporate and Other segment focused on cost reduction due to the significant reduction in its business during the year, leading to a reduction in expenses of 39%. Selling, general and administrative expenses as a percentage of total revenue increased to 10.2% in 2013 compared to 9.7% in 2012. The increase as a percentage of total revenue was due primarily to the difference in time required to implement the reduction of certain fixed expenses compared with the direct effect on revenues of decreased activity in the sector, partially offset by the focus on cost reduction in the real estate business within our Corporate and Other segment.

Selling, general and administrative expenses increased 27% to Ps. 3,695 million in 2012 compared to Ps. 2,904 million in 2011. The increase in 2012 was primarily due to a comparable growth in our total revenues at 11%. The primary factors underlying this growth in expenses are several fold, and include our acquisition of San Martin, a mining services construction company in Peru, which made up 16% of the overall increase in general expenses, an increase in expenses related to a ramp-up in our Panamanian operations (that is, the Corredor Norte Highway, the Avenida Domingo Diaz extension and the PAC-4 project), which made up 13% of the overall increase in general expenses, an increase in expenses related to promotion and bidding processes, which made up 11% of the overall increase in general expenses, and an increase in employee salaries and benefits, which made up 11% of the overall increase in general expenses. Such increases in expenses amounted to Ps. 257 million, representing 51% of the overall increase in general expenses. Selling, general and administrative expenses as a percentage of total revenue generally remained flat at 9.7% in 2012 compared to 8.5% in 2011.

Other Income and Expenses, Net

In 2013, our net other income was Ps. 61 million, compared to Ps. 450 million in 2012. The decrease was principally due to the recognition of an additional payment due of Ps. 544 million for the purchase of the San Martin subsidiary based on its financial performance. Other income in 2013 was mainly comprised of such additional payment, offset by a Ps. 586 million gain on sales of shares in certain investments, mainly RCO.

In 2012, our net other income was Ps. 450 million, compared to Ps. 490 million in 2011, and included in 2012 principally Ps. 436 million related to the revaluation of our investment property, and a Ps. 13 million gain in sales of property, plant and equipment.

Operating Income

The following table sets forth operating income or loss of each of our segments for each of the years in the three-year period ended December 31, 2013.

	Year Ended December 31
	2013			2012			2011
	(Millions of Mexican pesos)
Operating Income:
Civil Construction		Ps. 891			Ps. 833			Ps 990
Airports		1,145			1,148			917
Concessions		1,577			98			822
Corporate and Other		(291	)		(629	)		176
Eliminations		(189	)		229			(38	)
Total		Ps. 3,133			Ps 1,679			Ps. 2,867
Operating margin		11%			4%			8%

Operating income increased 87% in 2013 from 2012. This increase was driven primarily by the absence of capitalized interest classified within cost of sales (as is done during the construction phase) in certain concessions that entered into operations in 2013 as well as the absence in 2013 of an impairment of housing assets that we reported in 2012. Operating income decreased 41% in 2012 from 2011. This decrease was principally due to profit associated with certain sales in 2011 in the Concessions segment, namely the Corredor Sur and the two PPS

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projects, Irapuato –La Piedad and Queretaro – Irapuato, as well as the recognition of impairment of housing assets in the Corporate and Other segment in 2012 related to instability in the housing industry caused by the entrance into reorganization proceedings (Concurso mercantil) of several of our competitors.

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, 2013.

	Year Ended December 31,
	2013		2012		2011
	(Millions of Mexican pesos)
Revenues		Ps 21,744		Ps. 30,458		Ps. 27,169
Operating income		891		833		990
Operating margin		4%		3%		4%

Revenues.The 29% decrease in the Civil Construction segment’s revenues in 2013 from 2012 principally reflected a lower volume of work as a result of the completion of several large projects in 2012 such as the Autovia Urbana Sur, construction work for the SPC projects and Phase 3 of the Rio de los Remedios-Ecatepec highway, as well as an overall decrease in 2013 in the rate of execution of projects in backlog in 2013. The following projects together contributed 43% of revenues in 2013: Mitla-Tehuantepec, La Yesca, Barranca LargaVentanilla, Avenida Domingo Diaz and certain projects in the San Martin subsidiary. The 12% increase in the Civil Construction segment’s revenues in 2012 from 2011 was principally due to the high volume and pace of work on the construction of the SPC projects, which increased by 248% for the Sonora SPC project and by 344% for the Guanajuato SPC project, as well as the consolidation of San Martin (Ps. 2,024 million), our acquired mining sector construction company in Peru. These projects together contributed 23% to revenues in 2012.

Operating Income.Operating income for the Civil Construction segment increased by 7% in 2013 from 2012, primarily due to the reserves made in 2012 for doubtful accounts in Line 12 of the Mexico City Metro as well as in other projects entered into in accordance with our policies, and a reduction in expenses, as well as the margins of projects under construction during 2013. Operating income for the Civil Construction segment decreased by 16% in 2012 from 2011, primarily due to the reduction in revenues.

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, 2013.

	Year Ended December 31,
	2013		2012		2011
	(Millions of Mexican pesos)
Revenues		Ps. 3,965		Ps. 2,402		Ps 2,254
Operating Income		1,577		98		822
Operating Margin		40%		4%		36%

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The following table sets forth the material revenue streams in our Concessions segment for each year in the three-year period ended December 31, 2013:

	Year Ended December 31,
	2013				2012				2011
	(Millions of Mexican pesos)		(Percent of Total)		(Millions  of Mexican pesos)		(Percent of Total)		(Millions of Mexican pesos)		(Percent of Total)
Tolls		Ps. 834		21%		Ps. 664		28%		Ps. 1,058		47%
Construction		941		24		603		25		348		15
Financing		1,504		38		451		19		508		23
Other		686		17		684		29		340		15
Total		Ps. 3,965		100%		Ps. 2,402		100%		Ps. 2,254		100%

Revenues in the Concessions segment are generated from various sources, as noted in the table above. Tolls represent the collection of fees from the operation of our concessions, which generally stems from use of toll roads, fees for the availability and use of toll-free roads and fees by volume of treated water delivered to municipalities. Construction revenues are comprised of construction on our concession assets pursuant to IFRS Interpretations Committee Interpretation No. 12 (“IFRIC 12”),Concession Arrangements. The first phase of development of a concession is the construction or rehabilitation of the asset, following which the operation and maintenance phase takes place over a specified period. To carry out the construction phase of a project, our respective concessionaire subsidiary subcontracts construction, entering into an EPC contract with a construction company. If such construction company is a related party that we consolidate, those construction revenues are recognized by our construction subsidiary in the Civil Construction segment. In addition, because our concessionaire subsidiary has entered into a construction and operating agreement with the grantor of the concession, it also recognizes construction revenues within the Concession segment pursuant to IFRIC 12. Upon consolidation, the construction revenues recognized by our concessionaire subsidiary are eliminated from the concession segment such that solely construction revenues recognized pursuant to IFRIC 12 are recognized only in the Civil Construction segment. However, segment results of both the Civil Construction and Concession segments include the related construction revenues. For the year ended December 31, 2013, 2012 and 2011, intersegment revenues as a result of the above accounting treatment for construction services accounted for Ps.2,349 million, or 59%, Ps.6,908 million, or 288%, and Ps. 3,992 million, or 177%, respectively, of our Concessions segment revenues. The decrease in intersegment revenues in 2013 was principally due to a decrease in intersegment contracts between our construction company and our concession companies, principally due to the completion of construction work under the SPC contracts in 2012.

Our concessionaire subsidiary may also enter into an EPC contract with a third party, as is the case of construction of rights of way and environmentally related construction such as environmental impact assessments. In such cases, our construction subsidiary does not perform any construction services, and therefore does not recognize any construction revenues; our concessionaire subsidiary, however, continues to recognize construction revenues pursuant to the guidance in IFRIC 12, which are disclosed in the table above.

The Concessions segment also contains financing income and other income. Financing income is composed of two sources: (i) the reimbursement of the cost of financing obtained to build infrastructure assets granted under concession arrangements and (ii) interest income earned on concession assets accounted for as long-term accounts receivable. Income from other sources is composed primarily of conservation and maintenance of highways and construction income related to construction by third parties.

Revenues.The Concessions segment’s revenue was Ps. 3,965 million in 2013. The 65% increase in revenue over 2012 was due primarily to financing income from the Rio de los Remedios project and, to a lesser extent, to the commencement of operations of the La Piedad bypass, Rio Verde-Ciudad Valles highway and Rio de los Remedios – Ecatepec Phase 2. The segment had 11 highways, four concessioned water projects and one port as of December 31, 2013. Of these 18 concessions, seven were operational at year-end, and two (the Rio de los Remedios – Ecatepec highway and the Kantunil-Cancun highway) were in partial operation. The Concessions segment’s revenue was Ps. 2,402 million in 2012. The 7% increase in revenue over 2011 was due primarily to construction revenues and an increase in the revenues from the operation of the Corredor Sur expressway in Panama, although traditionally the segment’s revenues are principally derived from the collection of tolls on toll roads, fees for the

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availability and use of toll-free roads and fees by volume of treated water delivered to the municipalities. The segment had 9 highways, four concessioned water projects, two SPC projects and one port as of December 31,2013. Of these 18 concessions, 11 were operational at year-end, and two (the Rio de los Remedios – Ecatepec highway and the Rio Verde – Ciudad Valle) were in partial operation. The source of revenues in the Concessions segment depends on the mix of concessions under construction versus in operation and the nature of those concessions (financial versus intangible) as well as our active management of our investments in the segment, including whether we hold them to the end of the term or sell all or part of our interest in them. Therefore, revenue streams may vary from year to year. For example we have recently experienced a trend of increased construction revenues and financial income in this segment, as we enter into new concessions in the construction phase, which are classified as financial, as opposed to intangible, assets. This trend may change as a result of the foregoing factors.

Operating Income.The Concessions segment reported a fifteen-fold increase in operating income for 2013 compared to 2012, principally due to the commencement of operations in the La Piedad bypass, the Rio Verde-Ciudad Valles highway, and the Rio de los Remedios-Ecatepec Phase 2 and the gain on sales of certain of our concessions in 2013, an increase in operating income from the Kantunil-Cancun tollroad, and finance and construction income during the construction phase in the Barranca Larga – Ventanilla concession and Palmillas – Apaseo El Grande projects which contributed Ps. 587 million to profit. The Concessions segment reported an 88% decrease in operating income for 2012 compared to 2011, principally due to the gain on sale of the Queretaro-Irapuato and Irapuato-La Piedad PPP highways in the third quarter of 2011 for approximately Ps. 441 million, which did not recur in 2012.

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, 2013.

	Year Ended December 31,
	2013			2012			2011
	(Millions of Mexican pesos)
Revenues		Ps. 3,420			Ps. 3,098			Ps. 2,776
Operating Income		1,145			1,147			917
Operating Margin		33	%		37	%		33	%

Revenues.The Airports segment’s revenues increased by 10.4% in 2013 from 2012, primarily as a result of an increase in both aeronautical and non-aeronautical revenues . The sum of aeronautical and non-aeronautical revenues in 2013 increased by 8.7% as compared to 2012.

Aeronautical revenues, principally from passenger charges, increased by 6.5% in 2013 from 2012. The increase in passenger charges was attributable to an increase in revenues from passenger charges from Ps. 1,752 million in 2012 to Ps. 1,854 million in 2013. This increase in passenger charges was attributable to a 5.5% increase in passenger traffic from 12.5 million in 2012 to 13.3 million in 2013.

Non-aeronautical revenues increased 15.6% in 2013 from 2012, primarily due to revenues from our checked baggage-screening service, which increased by 149.3% to Ps. 64 million in 2013, as well as revenues from hotel services, which increased by 11% to Ps. 177 million in 2013 from Ps. 159 million in 2012, OMA Carga operations, which increased by 38% to Ps. 43 million in 2013 from Ps. 31 million in 2012, car rental services, which increased by 22% to Ps. 46 million in 2013 from Ps. 37 million in 2012, and food and beverage services, which increased by 13% to Ps. 46 million in 2013 from Ps. 41 million in 2012. Total terminal passenger traffic volume increased 6% in 2013 compared to 2012. Domestic terminal passenger traffic volume increased 6.4%, while international terminal passenger traffic volume increased 0.4%. The main percentage increases in total terminal passenger traffic volume (excluding transit passengers) in 2013 as compared to 2012 were at the Reynosa (with a 29% increase), Acapulco (with a 13% increase), Torreón (with a 13% increase) and Mazatlán (with a 9% increase) airports, while the Monterrey airport had the greatest absolute increase in total terminal passenger traffic volume. The main percentage decreases in total terminal passenger traffic (excluding transit passengers) in 2013 as compared to 2012 were at the San Luis Potosí (with a 3% decrease), Durango (with a 2% decrease) and Zacatecas (with a 2% decrease) airports.

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The Airports segment’s revenues increased by 12% in 2012 from 2011, primarily as a result of an increase in both aeronautical and non-aeronautical revenues. The sum of aeronautical and non-aeronautical revenues in 2012 increased by 15% as compared to 2011.

Aeronautical revenues, principally from passenger charges, increased 14% in 2012 from 2011 in 2012 from 2011. The increase in passenger charges was attributable a 7% increase in passenger traffic from 12.0 million in 2011 to 12.8 million in 2012.

Non-aeronautical revenues increased 17% in 2012 from 2011, primarily due to revenues from our checked baggage-screening service, which has been operating since March 1, 2012 and amounted to approximately Ps. 26 million in 2012, as well as revenues from hotel services, which increased by 12% to Ps. 158 million in 2012 from Ps. 142 million in 2011, car parking services, which increased by 10% to Ps. 124 million in 2012 from Ps. 113 million in 2011, the leasing of space, which increased by 15% to Ps. 59 million in 2012 from Ps. 51 million in 2011, and advertising, which increased by 9% to Ps. 82 million in 2012 from Ps. 75 million in 2011. Total terminal passenger traffic volume increased 7% in 2012 compared to 2011. Domestic terminal passenger traffic volume increased 8%, while international terminal passenger traffic volume increased 2%. The main percentage increases in total terminal passenger traffic volume (excluding transit passengers) in 2012 as compared to 2011 were at the Reynosa (with a 39.9% increase), Torreon (with a 10.5% increase), Monterrey (with a 9.4% increase) and Chihuahua (with a 9.3% increase) airports, while the Monterrey airport had the greatest absolute increase in total terminal passenger traffic volume. The main percentage decreases in total terminal passenger traffic (excluding transit passengers) in 2012 as compared to 2011 were at the Acapulco (with a 8.2% decrease) and Mazatlan (with a 7.3% decrease) airports.

Operating Income.The Airports segment reported a 0.2% decrease in operating income for 2013 compared to 2012, mainly as a result of the increase in total revenues.

The Airports segment reported a 25% increase in operating income for 2012 compared to 2011, mainly as a result of the growth in revenues and heightened control of costs and expenses.

Corporate and Other

The Corporate and Other segment includes our housing assets, including our horizontal housing assets, which have been reverted to operating assets but, due to their relative size, are no longer presented as a stand-along segment. The segment also includes the administrative operations of our holding and subholding companies, including functions that are not directly managed by our other business segments. The following table sets forth the revenues and operating income of the Corporate and Other segment for each year in the three-year period ended December 31, 2013.

	Year Ended December 31,
	2013			2012			2011
	(Millions of Mexican pesos)
Revenues		Ps. 872			Ps. 2,556			Ps. 2,470
Operating (loss) income		(291	)		(629	)		177
%Margin		(33%	)		(25%	)		7%

Revenues.The Corporate and Other segment’s revenues decreased by 66 % in 2013 from 2012, principally due to a decrease in housing sales.

The Corporate and Other segment’s total revenues increased by 3% in 2012 from 2011, principally due to a 77% increase in residential unit sales by ViveICA, which represented 100% of the Corporate and Other segment’s total revenue increase.

Operating Income.The Corporate and Other segment’s operating loss decreased to Ps. 291 million in 2013 from a loss of Ps. 629 million in 2012, which is due to an impairment recognized in our housing business assets in 2012.

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The Corporate and Other segment’s operating income decreased to a loss of Ps. 629 million in 2012 from a gain of Ps. 177 million in 2011, which is primarily due to an impairment recognized in our housing business assets in 2012. See Note 10 to our consolidated financial statements.

Backlog

The following table sets forth, at the dates indicated, our backlog of Civil Construction, mining services and other services contracts, which are consolidated, and joint venture and associated company contracts, which are unconsolidated.

	As of December 31,
	2013		2013		2012		2011
	(Millions of U.S. dollars)		(Millions of Mexican pesos)
Civil Construction Backlog	U.S.$	2,346		Ps. 30,658		Ps. 27,187		Ps. 19,814
Mining Services Backlog		379		4,949		7,035		—
Other Services Backlog		57		751		1,130		—
Joint Venture and Associated Company Backlog		832		10,864		21,737		8,911

Civil Construction Backlog

Total Civil Construction segment backlog at December 31, 2013 increased compared to December 31, 2012, reaching Ps. 30,658 million primarily due to the new Palmillas-Apaseo El Grande tollroad project and the Mitla-Tehuantepec highway.

Total Civil Construction segment backlog at December 31, 2012 increased compared to December 31, 2011, reaching Ps. 27,187 million primarily due to the addition of new project awards replacing other executed projects, primarily the Barranca Larga – Ventanilla project in the Civil Construction segment for Ps. 5,255 million.

The table below sets forth the seven projects that represented approximately 80% of backlog in the Civil Construction segment December 31, 2013.

	Amount		Estimated Completion Date	% of Civil  Construction Backlog
	(Millions of Mexican pesos)
Civil Construction Backlog
Mitla-Tehuantepec highway		Ps. 7,635	Fourth quarter of 2015		25	%
Barranca Larga Ventanilla highway		3,953	Third quarter of 2014		13	%
Sonora Highway		2,029	Second quarter of 2019		7	%
Domingo Diaz Avenue		1,498	Third quarter of 2014		5	%
Lazaro Cardenas TEC II Container Terminal		1,999	Third quarter of 2014		7	%
Tepic Bypass		1,864	Second quarter of 2014		6	%
Palmillas – Apaseo El Grande tollroad		5,407	Third quarter of 2015		18	%

As of December 31, 2013, approximately 12% of Civil Construction segment backlog was attributable to construction projects outside Mexico, and public sector projects represented approximately 83% of our total backlog.

Our book and burn index (defined as the ratio of new Civil Construction contracts, plus net Civil Construction contract additions, to executed Civil Construction works) was 1.2 in 2012 compared to 1.2 in 2013. New contract awards and net increases to existing contracts during 2013 offset the execution of projects during the year, primarily due to the inclusion of the Mitla-Tehuantepec project in Civil Construction backlog. Absent the inclusion of that contract, we have seen a trend of a decreasing book and burn index as result of the abovementioned decrease in sector activity. This trend continued in the first quarter when our book and burn index decreased to 0.5. Based on the Mexican administration’s announced plans for infrastructure over the next five years, we are optimistic that the new administration will make infrastructure a priority, which should result in the increase in the rate of awards in the latter half of 2014, although we cannot provide any assurance of such increases.

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Mining and Other Services Backlog

As of December 31, 2013, our backlog of long-term mining and other services contracts, which relate primarily to San Martin, our mining construction company in Peru, totaled Ps. 5,700 million.

Total mining services and other backlog at December 31, 2013 decreased compared to December 31, 2012, primarily because the rate of completion of projects was higher than the rate of our acquisition of new contracts.

Joint Venture and Associated Company Backlog

As of December 31, 2013, our backlog of unconsolidated joint venture and associated company contracts, which relate primarily to the industrial construction operations of our unconsolidated joint venture, ICA Fluor, totaled Ps. 10,864 million.

Our total joint venture and associated company backlog at December 31, 2013 decreased compared to December 31, 2012, reaching Ps. 10,864 million, primarily due to the inclusion of the Mitla-Tehuantepec project in Civil Construction backlog instead of in joint venture and associated company backlog, as it was classified in 2012.

Our total joint venture and associated company backlog at December 31, 2012 increased compared to December 31, 2011, reaching Ps. 21,737 million, primarily due to ICA Fluor’s increased activity in 2012.

Financing Cost, Net

The following table sets forth the components of our net financing costs for each year in the three-year period ended December 31, 2013.

	Year Ended December 31,
	2013			2012			2011
	(Millions of Mexican pesos)
Interest expense		Ps. 2,966			Ps. 2,434			Ps 1,731
Interest income		(270	)		(303	)		(213	)
Exchange (gain) loss, net		357			(1,126	)		1,485
Loss on financial instruments		326			155			318
Financing cost, net(1)		Ps. 3,379			Ps. 1,160			Ps. 3,321

(1) Does not include net financing costs of Ps. 616 million, Ps. 1,061 million and Ps. 940 million in 2013, 2012 and 2011, respectively, that are included in cost of sales. See Note 37 to our consolidated financial statements.

Net financing costs in 2013 reached Ps. 3,379 million. The 191% increase in net financing costs in 2013 from 2012 was mainly due to an exchange loss caused by an appreciation in 2012 of the Mexican peso relative to the U.S. dollar and the effect it had on us primarily due to our senior notes due 2021 and 2017, which were issued in U.S. dollars; the slight depreciation of the peso in 2013 resulted in an exchange loss as compared to the gain in 2012.

Net financing costs in 2012 reached Ps. 1,160 million. The 65% decrease in net financing costs in 2012 from 2011 was mainly due to exchange gains (related to the appreciation of the Mexican peso relative to the U.S. dollar) offsetting increased interest expenses, which in turn increased 41% primarily due to higher average debt levels.

Interest expense increased 22% in 2013 compared to 2012, primarily due to the entrance of several concessions into operations, which caused us to include interest expense in concessions in operation instead of capitalizing it in cost of sales for concessions in the construction phase.

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Interest expense increased 41% in 2012 compared to 2011, primarily due to an increase in debt. See Note 37 to our consolidated financial statements.

Interest income decreased 11% in 2013 due to greater use of cash.

Interest income increased 42% in 2012 due to an increase in average invested cash balances.

Our total debt as of December 31, 2013 decreased 18% compared to December 31, 2012, representing primarily the final payment of the La Yesca debt along with other loans, as well as a decrease in our consolidated debt due to the classification of the SPC projects as assets held for sale.

Our total debt as of December 31, 2012 increased 0.8% compared to December 31, 2011, representing the net effect of contracting new indebtedness primarily for concessioned projects even as we repaid most of the indebtedness associated with the La Yesca hydroelectric project.

At December 31, 2013 and March 31, 2014, we had U.S.$ 1,210 million and U.S.$ 1,414 million, respectively, of debt issued or guaranteed as joint obligor or guarantor by our parent company.

At December 31, 2012 and March 31, 2013, we had U.S.$ 1,043 million and U.S.$ 1,058 million, respectively, of debt issued or guaranteed as joint obligor or guarantor by our parent company.

At December 31, 2013, 2012 and 2011, 43%, 36% and 50%, respectively, of our total debt was denominated in currencies other than Mexican pesos, principally U.S. dollars. 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.

Share in Results of Joint Ventures and Associated Companies

Our share in joint ventures and associated companies includes the operations of our industrial construction affiliate ICA Fluor; our environmental services affiliate PMA Mexico, which operates municipal potable water treatment and supply, sewage, waste water treatment and other waste management systems; our real estate affiliate Los Portales S.A.; and our affiliate Actica, among others. Our industrial construction operations through ICA Fluor accounted for 62%, 61% and 67% of our total share in results of joint ventures and associated companies as of December 31, 2013, 2012 and 2011, respectively.

The following table sets forth our share in results of unconsolidated joint ventures and associated companies by segment for each year in the three-year period ended December 31, 2013.

	Year Ended December 31,
	2013		2012			2011
	(Millions of Mexican pesos)
Civil Construction		Ps. 210		Ps. 338			Ps. 252
Concessions		21		(93	)		(44	)
Corporate and Other		119		164			78
Total		Ps. 350		Ps. 409			Ps. 286

We include the results of our investments in the following associated companies and joint ventures in our Civil Construction segment ICA Fluor, Grupo Radio Kronsa, Constructoras de Infraestructura de Agua del Potosí, Infraestructura y Saneamiento Atotonilco, Aquos El Realito, Administracíon y Servicios, the Atotonilco water treatment plant and the Acapulco Scenic Bypass.

We include our share of the results of the following associated companies and alliances in the Concessions segment: PMA Mexico, Autovia Nuevo Necaxa – Tihuatlan, Autovia Mitla – Tehuantepec, Renova – Atlatec, Suministro de Agua de Queretaro and Aguas Tratadas del Valle de Mexico.

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We include the results of our investments in the following companies in the Corporate and Other segment: Los Portales, Fideicomiso Banco Invex, S.A. and Actica.

Our share of income of unconsolidated associated companies represented a gain of Ps. 409 million in 2012 as compared to a gain of Ps. 286 million in 2011, which primarily reflected an increase in ICA Fluor revenues of Ps. 55 million, as well as an increase in income from the El Realito Aqueduct and the Atotonilco water treatment plant in an amount of Ps. 50 million and an improvement in corporate results and other revenues from Los Portales, the Fideicomiso Banco Invex, S.A. and Actica.

Tax

In December 2013, the Mexican Congress approved a tax reform that was enacted in 2013 and became effective on January 1, 2014. The previous fiscal consolidation regime, which had permitted a parent company to report taxes on a consolidated basis, including those of majority-owned subsidiaries, was eliminated. Additionally, the tax reform eliminated the IETU regime and planned reductions in the statutory income tax rate were eliminated, such that the tax rate will continue at 30%.

Tax liabilities due to the effects of deconsolidation as of December 31, 2013 will continue to be paid under the terms of the previous tax law. As of December 31, 2012, we had recorded a Ps. 4,901 million liability for deconsolidation, of which amount Ps. 274 million were recorded as short-term and Ps. 4,627 million were recorded as a long-term liability. As of December 31, 2013 our estimated total liability for tax deconsolidation was Ps. 3,913 million, of which amount we have recorded Ps. 260 million as short-term and Ps. 3,653 million as a long-term liability. See Note 28 to our consolidated financial statements.

We do not expect to make additional provisions for IETU. As a result of the repeal of the IETU, the deferred IETU tax liability that we had recognized of Ps. 512 million in 2013 was cancelled for accounting purposes as of the date of the promulgation of the tax reform. See Note 28 to our consolidated financial statements.

In 2013, we recorded consolidated net tax benefits of Ps. 596 million, which included ISR benefits and asset tax of Ps. 105 million and IETU benefits of Ps. 491 million. As of December 31, 2013, we recorded a deferred ISR asset of Ps. 4,546 million comprised of net deductible temporary differences of Ps. 4,199 million, Ps. 250 million related to tax credits for foreign taxes paid and IMPAC recoverable of 97 million. Additionally, we recorded a net deferred ISR liability of Ps. 1,641 million mainly of Ps. 1,693 of taxable temporary differences and Ps. 51 million of benefit of taxable temporary difference on items included in other comprehensive income. Our effective tax rate was (574)% in 2013. The (570)% decrease over 2012 was due primarily to the recovery of Ps. 145 million in taxes on assets (140%) (Asset tax, or IMPAC), and the cancelation of Ps.512 million of deferred IETU tax liability (494%).

In 2012, we recorded consolidated net tax benefits of Ps. 35 million, which included ISR benefits of Ps. 51 million and an IETU expense of Ps. 16 million. As of December 31, 2012, we recorded a net deferred ISR asset of Ps. 7,696 million related to tax losses generated by our subsidiaries of Ps. 7,115 million, as well as a deferred IETU asset of Ps. 200 million and Ps. 381 million related to tax credits for foreign taxes paid. Additionally, we recorded a net deferred ISR liability of Ps. 4,773 million comprised mainly of Ps. 4,641million of temporary taxable differences, Ps. 581 million benefit of taxable temporary differences on items included in other comprehensive income and a deferred IETU liability of Ps. 713 million. Our effective tax rate was (3.75) % in 2012. The 205% decrease over 2011 was due primarily to tax credits from foreign taxes paid. See Note 28 to our consolidated financial statements.

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In 2011, we recorded a consolidated net tax benefit of Ps. 338 million, which included ISR benefits of Ps. 44 million and IETU benefits of Ps. 294 million. See Note 28 to our consolidated financial statements. As of December 31, 2011, we had a deferred ISR asset of Ps. 3,177 million related to tax losses generated by our subsidiaries, as well as a net deferred ISR liability of Ps. 1,073 million related to other net taxable temporary differences and a net IETU liability of Ps. 526 million. Our effective tax rate was 201% in 2011, which corresponded to 259% of cancellation of deferred IETU partially offset by the effects of permanent differences.

The statutory tax rate in Mexico is 30%. 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.

Income from Continuing Operations

We reported consolidated income from continuing operations of Ps. 700 million in 2013, compared to Ps. 963 million in 2012. The decrease was primarily due to an exchange loss related to the depreciation of the Mexican peso relative to the U.S. dollar compared to a significant exchange gain in 2012 and an increase in our financial expense due to an increase in interest expense in 2013 because we no longer capitalized interest in cost of sales related to certain concessions that entered into operation in 2013, offset by an increase in our operating income and deferred income tax benefits recognized in 2013 as a result of the new tax law. See “Item 5. Operating and Financial Review and Prospects—Tax.”

We reported consolidated income from continuing operations of Ps. 963 million in 2012, compared to Ps. 170 million in 2011. The increase was primarily due to exchange gains related to the appreciation of the Mexican peso relative to the U.S. dollar, which added to the slight increase in our total operating income as described above.

Discontinued Operations

We reported income from discontinued operations of Ps. 723 million in 2013, which reflected the revenues from our SPC projects, which have been reclassified as discontinued operations due to the share purchase agreement with CGL that we announced in January 2014. Pursuant to such agreement, CGL is expected to acquire 70% of our interest in the SPC projects through the acquisition of shares in the projects’ holding company. Through this transaction, we expect to deconsolidate all SPC debt upon closing, which remains subject to customary approvals.

We reported income from discontinued operations of Ps. 567 million in 2012, which primarily reflected SPC construction revenues and financing income during the construction phase.

Net Income

We reported consolidated net income of Ps. 1,422 million in 2013, compared to consolidated net income of Ps. 1,529 million in 2012, representing a decrease of 7%.

We reported consolidated net income of Ps. 1,529.million in 2012, compared to consolidated net income of Ps. 1,747 million in 2011, representing a decrease of 12%.

Net income of non-controlling interest was Ps. 999 million in 2013 and Ps. 574 million in 2012. Net income of controlling interest was Ps. 424 million in 2013 and Ps. 955 million in 2012.

Net income of non-controlling interest was Ps. 574 million in 2012 and Ps. 310 million in 2011. Net income of controlling interest was Ps. 955 million in 2012 and Ps. 1,437 million in 2011.

Critical Accounting Policies and Estimates

Below is a description of the principal critical accounting policies which require the significant use of estimates and the judgment of management based on their experience and current events, as well as a description of the respective accounting internal control.

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Accounting for Construction Contracts

Accounting Policy

Revenue is recognized to the extent that it is probable that the economic benefits associated with the transaction will flow to the company. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of activities.

For accounting purposes, we recognize revenue from construction contracts using the percentage of completion method, considering total costs and revenues estimated at the end of the project, established in International Accounting Standard 11 “Construction Contracts” (IAS 11). The percentage of completion method requires us to timely ascertain the performance of the project and appropriately present the legal and economic substance of the contract. Under this method, the revenues from the contract are matched with the costs incurred in reaching the stage of completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed.

The base revenue utilized to calculate percentage of profit 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.

In order to determine the basis for costs used to calculate the percentage of completion in accordance with the costs incurred method, we consider 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 the 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, 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-process are also excluded costs and are recorded as assets when they are received or used under a specific project.

Variations in the scope of construction works may arise due to several factors, including: improvements in the construction process due to reduced supplies or runtime, local regulatory changes and changes in the conditions for the execution of the project or its implementation, design changes requested by the customer and the geological conditions not included in the original plan. Additionally, and in order to identify possible changes in contracts, we have implemented a method whereby these changes can be identified and reported, and whereby the amounts can be quantified and approved and the changes implemented efficiently on projects. A variation in contract revenue is recognized when (a) it is probable that the changes will be approved and the amount of revenue resulting from the change, (b) the amount of revenue can be reliably measured and c) it is probable that the economic benefits flow to the entity. Claims or incentives for early completion are recognized as part of the revenue of a contract, provided that there is sufficient evidence that the customer will authorize payment for these items. Consequently, claims and incentives are included in contract revenue only when (a) negotiations have reached an advanced stage such that it is probable that the customer will accept the claim, and (b) the probable amount to be accepted by the customer can be reliably determined. With respect to incentive payments, revenues are recognized only when the execution of the contract is significantly advanced to conclude that the specified standards of performance will be achieved or exceeded and the amount of the incentive payment can be reliably measured.

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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 on uncompleted contracts.”

For those funded projects in which financing revenue are included as part of the selling price, only borrowing costs directly related to the acquisition or construction of the asset, less the realized yields by the temporary investment of such funds and the exchange loss, to the extent it is an adjustment to interest costs, are attributed to the contract costs. The borrowing costs that exceed the estimates and cannot be passed on to the customers are not part of contract costs. 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 have been submitted for each facility; (ii) each facility has been subject to separate negotiation and we and the customer have been able to accept or reject that part of the contract relating to each asset; (iii) the costs, revenues and profit margin of each asset 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 closely interrelated that they are effectively part of a single project with an overall profit margin; 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.

Under the terms of various contracts, revenue recognized is not necessarily related to the amounts billable to customers.

The line item “Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts” included in the heading of “Customers”, originates from construction contracts and represents the difference between the costs incurred plus recognized profit (or less any recognized losses) and less certifications made for all contracts in progress, in excess of the amount of the certificates of work performed and invoiced. Any amounts received before work has been performed are included in the consolidated statement of financial position as a liability, as advances from customers. Amounts invoiced from the performed work but not yet paid by the customer are included in the consolidated statement of financial position as trade and other receivables.

Internal Control

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 reasonably estimating (i) the projected revenue, (ii) the costs to be incurred in the project, (iii) the gross profit of the project, and (iv) identify the rights and obligations of the parties based on this analysis and in conjunction with the legal and economic rights to receive payment for the work performed, as specified in each contract.

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.

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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.

For fixed price contracts in the public sector, 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.

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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. 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.

Furthermore, we expect that due to the financing trends, future contracts related to concessions, infrastructure construction and industrial construction will restrict adjustments to the contract price for additional work performed as a result of incorrect contract specifications.

In order to be able to apply percentage-of-completion method, 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.

The estimations are based on the terms, conditions and specifications of each specific contract, including assumptions made by management of the project in order to ensure that all costs attributable to the project were included.

Periodically, we evaluate the reasonableness of the estimates used in the determination of the percentage of completion. 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. The allowance is determined based on management’s best judgment in accordance with prevailing circumstances at that time, modified by changes in circumstances. Usually, we show a period between 30 and 60 days of “cost and estimated earnings in excess of billings on uncompleted contracts.” 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.

Construction backlog takes into account only those projects over which we have control. We consider ourselves to have control when we have a majority participation in the project, when we are assigned leadership and we have the power to make decisions over the relevant operating and financial decisions of the entity that holds the construction 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 in the association and our rights regarding liabilities and obligations regarding liabilities, as defined in IFRS 11 “Joint Arrangements.” For disclosure purposes only and separately, we include the backlog of joint ventures and associated companies, which are accounted for using the equity method. See Note 8(b) to our consolidated financial statements.

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Long-Lived Assets

The long-lived assets that we have refer to property, plant and equipment and concessions granted by the Mexican government and foreign governments for the construction, operation and maintenance of highways, bridges and tunnels, airport administration and municipal services.

The investment in concessions is classified either as an intangible asset, a financial asset (account receivable) or a combination of both based on the terms of service concession agreements.

A financial asset is originated when an operator constructs or makes improvements to the infrastructure and the operator has an unconditional right to receive a specific amount of cash or other financial asset during the contract term. An intangible asset is originated when the operator constructs or makes improvements and is allowed to operate the infrastructure for a fixed period after the construction ends. In this case the operator’s future cash flows have not been specified, because they may vary depending on the use of the asset and they are therefore considered contingent.

A combination of both – a financial asset and an intangible asset – is originated when the return/profit for the operator is partially provided by a financial asset and partially by an intangible asset.

We recognize and measure contractual obligations for major maintenance of infrastructure in accordance with IAS 37. We believe that periodic maintenance plans for infrastructure, whose cost is recorded in expenses in the period in which the obligation arises, are sufficient to maintain the concession in good operating condition, in accordance with the obligations specified by the grantor and to ensure the delivery of the related infrastructure in good operating use at the end of the term of the concession, ensuring that no additional significant maintenance costs will arise as a result of the reversion to the grantor.

When the effect of the time value of money is material, the amount of the provision equals the present value of the expenditures expected to be required to settle the obligation. Where discounting is used, the carrying amount of the provision increases in each period to reflect the passage of time and this increase is recognized as a borrowing cost. After initial recognition, we review provisions at the end of each reporting period and we adjust them to reflect current best estimates.

Adjustments to provisions arise from three sources: (i) revisions to estimated cash flows (both in amount and timing); (ii) changes to present value due to the passage of time; and (iii) revisions of discount rates to reflect prevailing current market conditions. In periods following the initial recognition and measurement of the maintenance provision at its present value, the provision is revised to reflect estimated cash flows being closer to the measurement date. The unwinding of the discount relating to the passage of time is recognized as a financing cost and the revision of estimates of the amount and timing of cash flows is a reassessment of the provision and charged or credited as an operating item within the consolidated statements of income and other comprehensive income.

Accounting Policy

Upon transition to IFRS, we utilized the deemed cost exception in IFRS with respect to certain of our long-lived assets. We elected to value certain land, buildings and major machinery and equipment at their fair value, using values calculated by appraisers duly recognized by the Mexican National Banking and Securities Commission, representing deemed cost for those assets. Additionally, for the remaining items of property, plant and equipment, we decided to utilize the indexed cost balance existing under Mexican Financial Reporting Standards, thereby maintaining inflation adjustments through 2007, such amounts also representing the deemed cost of those assets. Inflation was removed from our intangible assets under concession, such that their recognition was based on their historical cost. Subsequent to initial adoption of IFRS, we apply a historical cost model, which consists of recording acquisitions at their acquisition or construction cost, or at fair value in the case of goods acquired through contributions, donations or in payment of debt. The expenses incurred for improvements which increase the value of the asset are capitalized and are valued at their acquisition cost.

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For certain investments in concessions, a financial asset is recorded at fair value and is subsequently valued at amortized cost by calculating interest through the effective interest method at the date of the financial statements, based on the yields determined for each of the concession contracts. For other concessions, an intangible asset, are recorded at their acquisition or construction cost. The comprehensive cost of financing accrued during the construction period is capitalized.

Expenditures for property, plant and equipment, including renewals and improvements which extend useful lives, acquired subsequent to the transition date to IFRS, are capitalized and valued at acquisition cost.

Depreciation is recognized so as to write off the cost or deemed cost of assets (other than freehold land and properties under construction).

We calculate depreciation on our fixed assets, such as buildings, furniture, office equipment and vehicles, over the useful life of the asset, taking into consideration the related asset’s residual value. Depreciation begins in the month in which the asset is available for use. 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). Depreciation begins in the month in which the asset is placed in service. In investment in concessions, amortization as in the case of our investment in highways and tunnel concessions involving the use of facilities over the period of the concession is calculated by the units of production method. In the case of water treatment plants we consider treated water volumes. At the airport concessions, amortization is determined by considering the term of the concession, which is 50 years.

Financing costs incurred during the construction and installation of buildings and machinery and equipment are capitalized.

We review residual values, useful lives and depreciation methods at the end of each year and adjusted prospectively if applicable. If the depreciation method is changed, this is recognized in retrospectively.

The depreciation of property, plant and equipment is recorded in results. Land is not depreciated.

We periodically evaluate the impairment of long-lived assets, in order to determine whether there is evidence that those assets have suffered an impairment loss. If impairment indicators exist, the recoverable amount of assets is determined, with the help of independent experts, to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, we estimate recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, we reduce the carrying amount of the asset (or cash-generating unit) to its recoverable amount. An impairment loss is recognized immediately in profit or loss. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

The maintenance costs of airports, which are approved in the master development plan, are provisioned with a charge to results of the year; in the other concessions, the provision is created with a charge to results of the year for the amount which is expected to be disbursed.

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Internal Control

Discount rates used to determine the value in use, which is the present value of discounted future net cash flows, are determined in real terms 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.

We evaluate indicators of impairment as part of the process to determine the recoverable values of cash-generating units. The indicators of impairment considered for these purposes include, among others, 1) the 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 those of previous years, 3) the effects of obsolescence, 4) reduced demand for the services rendered, 5) competition and other economic and legal factors. The mechanism to calculate the recovery value is based on the specific circumstances of the concessions, plant and machinery and intangibles. In the case of the concessioned routes, the projected revenues consider the projected vehicle flows, and assumptions and estimates are used relative to population growth and the peripheral economy of the concessioned route, temporary reductions in vehicle flows due to rate increases, commercial strategies to boost their use, among others, which may be determined and adjusted depending on the actual results obtained.

In addition, as part of the process to determine the recoverable values of our cash-generating units, when there are indicators of impairment, we perform 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 consider 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 their mature 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 (PPPs). The main difference between these categories is that revenues for PPP 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.

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In water treatment and transportation 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.

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

Income Tax

Accounting Policy

We determine and recognize the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of income and other comprehensive income because of items of income or expense that are taxable or deductible in periods different from when they are recognized in accounting profit or for items that are never taxable or deductible.

In December 2013, the Mexican government enacted a package of tax reforms, which includes several significant changes to income tax laws included the elimination of the Business Flat Tax (“IETU”) and the tax consolidation regime. Because the IETU law was eliminated, the deferred IETU that we had recorded for accounting purposes was canceled on the date of enactment of the tax reform. With respect to tax deconsolidation, three alternatives are offered to companies to deconsolidate from a tax perspective and thus determine the deferred tax at December 31, 2013, including a deferred payment scheme over the next five fiscal years for the impact of deconsolidation.

A new optional tax regime “fiscal integration regime” was introduced for groups of companies that meet certain conditions and requirements similar to the previous consolidation regime. The principal aspects of this regime are: (i) a minimum holding of 80% is required in the shares entitled to vote in the integrated companies, by the integrating company, (ii) allows the deferral of a portion of income tax for up to three years, requiring strict controls of current income tax expense and payments made at the individual level, iii) tax loss carry forwards generated in prior years of the integrated companies or the integrating company may not be considered and only tax loss carry forwards generated after the date from which the regime is effective may be considered, (iv) an integrating factor is required to be calculated, which is applied by all companies in the group, individually, to determine the income tax payable and deferred for three years.

We determine the tax provisions of foreign subsidiaries based on taxable income of each individual company.

We recognize the deferred income taxes from the applicable temporary differences resulting from comparing the accounting and tax values of assets and liabilities plus any future benefits from tax loss carryforwards. Except as mentioned in the following paragraph, we recognize deferred tax liabilities for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences and the expected benefit of tax losses. We review the carrying amount of deferred tax assets at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

We recognize deferred tax liabilities for taxable temporary differences associated with investments in subsidiaries, except where we are able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible

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temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

We measure our deferred tax assets and liabilities at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which we expect, at the end of the reporting period, to recover or settle the carrying amount of our assets and liabilities.

We recognize current and deferred taxes as income or expense in profit or loss, except when it relates to items recognized outside of profit or loss, as in the case of other comprehensive income, stockholders’ equity items, or when the tax arises from the initial recognition of a business combination, in which case we recognize the tax in other comprehensive income as part of the equity item in question or, in the recognition of the business combination, respectively.

We presume that for the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties, will be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. We reviewed our investment property portfolios and concluded that none of our investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, we have determined that the “sale” presumption set out in the amendments to IAS 12 is not rebutted.

Deferred tax assets and liabilities are offset when a legal right to offset assets with liabilities exists and when they relate to income taxes relating to the same tax authorities and we intend to liquidate its assets and liabilities on a net basis.

Derivative Financial Instruments

We enter into derivative financial instruments to hedge our exposure to interest rate and foreign currency exchange risk including foreign currency forward contracts, interest rate swaps and combined interest rate and foreign exchange swaps (cross currency swaps), related to the financing for our construction and concessions projects.

Accounting Policy

We recognize initially the derivatives at fair value at the date the derivative contract is entered into and subsequently, we remeasure them at fair value at the end of each reporting period. Fair value is determined based on recognized market prices. When the derivative is not listed on a market, fair value is based on valuation techniques accepted in the financial sector. Valuations are conducted quarterly in order to review the changes and impacts on the consolidated results.

We recognize the resulting gain or loss from remeasurement to fair value in profit or loss unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is greater than 12 months and it is not expected to be realized or settled within 12 months. We present other derivatives as current assets or current liabilities.

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Hedge accounting

At the inception of the hedge relationship, we document the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, we document whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

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. The decision to apply hedge accounting depends on economic or market conditions and economic expectations in the national or international markets. 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 IFRS to be considered as hedging instruments, the gains or losses from the derivative financial instrument are recorded in the results of the period. Our policy is not to enter into derivative instruments for purposes of speculation but certain instruments that we contract do not qualify to be accounted for as hedging instruments and are considered for accounting purposes as negociation.

Per IAS 39, “Financial Instruments: Recognition and Measurement,” 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 IFRS.

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, we recognize the effective portion within statement of comprehensive income as a component of other comprehensive income. We recognize the ineffective portion immediately in the interest income or expense of the period.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to results in the periods when the hedged item is recognized in results, in the same line item in the statement of income and other comprehensive income where the hedged item is recognized. However, when a forecasted transaction that is hedged gives rise to the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset or non-financial liability.

For fair value hedges, the change in the fair value of the hedging instruments and the change in the hedged item attributable to the hedged risk are recognized in the line item in the statement of income and other comprehensive income relating to the hedged item.

Interruption of hedge accounting

Hedge accounting is discontinued when we revoke the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any accumulated gain or loss on the hedging instrument recognized in other comprehensive income remains there until the hedged item affects results. When a forecasted transaction is no longer expected to occur, the accumulated gain or loss is reclassified immediately to results.

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.

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For those derivatives that do not comply with hedge accounting requirements, the fluctuation in their fair value is recognized in profit or loss of the period when valued.

Internal Control

Our activities are exposed to different economic risks which include (i) market financial risks (interest rate, foreign currency and pricing), (ii) credit risk, and (iii) liquidity risk.

We try to minimize the potential negative effects of the aforementioned risks in financial performance through different strategies. We use financial derivatives to hedge those exposures to the financial risks of operations recognized in the statement of financial position (recognized assets and liabilities), as well as firm commitments and forecast transactions which are probable to occur.

We only contract hedge financial derivatives to reduce uncertainty in the returns on projects. The financial derivatives which we enter into may be designated for accounting purposes as hedging instruments or as trading instruments, without affecting our objective of mitigating the risks to which we are exposed in the projects.

In interest rate hedges we enter into the instruments in order to fix interest rates and thus make the projects more feasible. We enter into exchange rate hedge instruments to reduce the exchange rate risk in projects whose labor costs and inputs are incurred in a currency different from that of their financing source. We enter into the financing in the same currency as that of the payment source.

The contracting of financial derivatives is in most cases related to project financing, for which reason it is quite common that the same institution (or its affiliates) which provided the financing also acts as the counterparty. This includes instruments which cover fluctuations in the interest rate and the exchange rate. In both cases, the derivatives are contracted directly with the counterparties.

Our internal control policy establishes that the contracting of credit and of the risks involved in the projects requires a collective analysis by representatives from the finance, legal, administration and operations departments, before they can be authorized. As part of such analysis we also evaluate the use of derivatives to hedge financing risks. Based on internal control policy, the contracting of derivatives is the responsibility of the finance and administration departments once the aforementioned analysis is concluded.

When evaluating the use of derivatives to hedge financing risks, we conduct sensitivity analyses of the different possible levels of the relevant variables, in order to define the economic efficiency of each of the different alternatives available to hedge the risk measured. We compare each alternative in order to define the best one. Furthermore, we conduct effectiveness tests with the support of an appraisal expert to determine the treatment applicable to the financial instrument once it is entered into.

We maintain a policy of entering into financial instruments at the project level, and we do not enter into instruments involving margin calls or additional credit contracts to those authorized by our committees responsible for their performance, as no additional sources of liquidity are designated for those types of instruments. In those projects requiring collateral, the policy is that the necessary deposits are made initially or letters of credit are established at the time they are entered into, in order to limit project exposure.

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

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Other Policies

Accounting for Real Estate Sales

Accounting Policy

We recognize revenues derived from sales of low income housing, residential environment, and real estate in accordance with International Financial Reporting Interpretations Committee “Agreements for the Construction of Real Estate” (or IFRIC 15) and IAS 18, the house or real estate development is completed and, when the risks and benefits of the housing have been transferred to the buyer, which occurs upon passage of title to the buyer.

For sales of developments in which financial resources are obtained from financial institutions, revenue is recognized only when the properties are completed, the respective financing is received and the deed had been finalized. When we provide financing, revenue is recognized upon the execution of the deed of delivery-receipt, which is the moment upon which the risks, benefits, rights and obligations of the property have been transferred to the buyer and only when is probable that the economic benefits associated with the transaction will flow to us. We retain neither ongoing management involvement in the property sold in the degree to which usually is associated with an owner, except for the reservation of title, which is released at the time the price has been paid in full and the deed is ultimately processed.

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

Housing and housing development costs comprise at the cost of the acquisition of land, improvements and condition thereof, permits and licenses, labor costs, materials and direct and indirect costs. Borrowing costs incurred during the construction period are capitalized.

Land to be developed over a period of more than 12 months is classified under non-current assets and is recorded at acquisition cost.

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) financial 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.

Internal Control

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. If the valuation is less than the carrying value of the inventory, an impairment loss is recorded in results of the period in which the impairment was determined.

With respect to inventory in-process, approximately 81% 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 2013, we have not historically experienced significant fluctuations in sales

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in this sector and have been able to maintain a stable gross margin of between 30% and 35%. 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-process 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 gross margin of approximately 28% to 30% in this sector. Accordingly, we are only 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 2013 indicated any impairment loss for the inventory of homes in this sector.

In both the low- and moderate-income sectors, we have seen a 74.5% decrease in the last quarter of 2013 compared to the last quarter of 2012 and a 23.5% increase in the first quarter of 2014 in home sales, when compared to the same period in the prior year.

See Note 5 to our consolidated financial statements for further information regarding additional critical accounting policies.

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, 2013, 2012 and 2011.

Construction Contracts

Our consolidated financial statements for the year ended December 31, 2013 included a provision for costs relating to project terminations amounting to Ps. 743 million and a machinery lease provision of Ps. 387 million. Our consolidated financial statements for the year ended December 31, 2012 included a provision for costs relating to project terminations amounting to Ps. 1,106 million and a machinery lease provision of Ps. 575 million. Our consolidated financial statements as of December 31, 2011 included a provision for costs relating to project terminations amounting to Ps. 407 million and the repair and maintenance of machinery under lease agreements amounting to Ps. 610 million. As of December 31, 2013, 2012 and 2011, our consolidated financial statements include an allowance for doubtful accounts related to construction contracts of Ps. 897, Ps. 1,401 million and Ps. 1,332 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.

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Below is a table of relevant projects of civil construction with either upward and downward changes in gross profit and their corresponding accounting effect due to favorable or unfavorable adjustments to contracts based on the percentage-of-completion method. The net changes in project profitability from revisions in estimates, both increases and decreases, were a net increase of Ps. 51 million, a decrease of Ps. 1,412 million and an increase of Ps. 438 million for the years ended December 31, 2013, 2012 and 2011, respectively. The projects are summarized as follows:

Number of Projects

Ranges of changes in gross profit(1)

Adjustments to contracts

Range of increase in projects with upward changes

Range of decrease in projects with downward changes

Upward changes

Downward changes

From

To

From

To

Favorable

Unfavorable

Year ended December 31, 2013

2

2

Ps 104

Ps. 298

Ps. (139)

Ps. (212)

Ps. 402

Ps. (351)

Year ended December 31, 2012

1

5

Ps. 88

Ps. 88

(2)

Ps. (96)

Ps. (686)

Ps. 88

Ps. (1,500)

Year ended December 31, 2011

4

2

Ps. 230

Ps. 365

Ps. (189)

Ps. (517)

Ps. 1,144

Ps. (706)

(1) Contract amounts were selected whose variation in gross margin was higher than Ps. 91 million, Ps. 86 million and Ps. 71 million for the years ended December 31, 2013, 2012 and 2011, respectively.

(2) No range since it is one project.

Income Tax

In 2013, we recorded a net tax of Ps.(596) million, which reflected the following components:

• a current ISR and asset tax expense of Ps. 182 million,

• a deferred ISR benefit of Ps. 287 million,

• a current IETU expense of Ps. 22 million, and

• a deferred IETU benefit of Ps. 512 million.

As of December 31, 2013, we recorded a deferred ISR asset of Ps. 4,546 million comprised of net deductible temporary differences of Ps. 4,199, Ps. 250 million related to tax credits for foreign taxes paid and IMPAC recoverable of 97 million. Additionally, we recorded a net deferred ISR liability of Ps. 1,641 million mainly related to net taxable temporary differences, primarily of Ps. 1,693 million of taxable temporary differences and Ps. 151 million of benefit of taxable temporary differences on items included in other comprehensive income.

Tax losses as of December 31, 2013 have been recognized, as we believe we will be able to recover such losses based on our projections and business plan. 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, 2013.

In 2012, we recorded a net tax of Ps. 35 million, which reflected the following components:

• a current ISR expense of Ps. 101 million,

• a deferred ISR benefit of Ps. 152 million,

• a current IETU expense of Ps. 116 million, and

• a deferred IETU benefit of Ps. 100 million.

As of December 31, 2012, we recorded a net deferred ISR asset of Ps. 7,696 million comprised of net deductible temporary differences of Ps. 7,115 million, as well as a deferred IETU asset of Ps. 200 million and Ps. 381 million related to tax credits for foreign taxes paid. Additionally, we recorded a net deferred ISR liability of Ps. 4,773 million comprised mainly of Ps. 4,641 million of temporary taxable differences, Ps. 581 million of taxable temporary differences on items included in other comprehensive income and a deferred IETU liability of Ps. 713 million.

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Tax losses as of December 31, 2012 have been recognized, as we believe we will be able to recover such losses based on projections of future taxable income and various operating strategies with favorable tax effects, rather than through our deferred tax liabilities. 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, 2012.

In 2011, we recorded a net tax benefit of Ps. 338 million, which reflected the following components:

• a current ISR expense of Ps. 190 million,

• a deferred ISR benefit of Ps. 234 million,

• a current IETU benefit of Ps. 24 million, and

• a deferred IETU benefit of Ps. 270 million.

As of December 31, 2011, we recorded a deferred ISR asset of Ps. 338 million comprised of net deductible temporary differences of Ps. 3,177 million, as well as a net deferred ISR liability of Ps. 1,073 million related to other net taxable temporary differences and a net IETU liability of Ps. 526 million. Tax losses as of December 31, 2011 have been recognized, as we believe we will be able to recover such losses either by offset of deferred tax liabilities that will reverse in subsequent periods or projections of future taxable income. 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, 2011.

At December 31, 2013, 2012 and 2011, we also had an asset tax credit carry forwards of Ps. 6,485, Ps. 3,493 million and Ps. 2,084 million, respectively.

The tax payable for deconsolidation and IMPAC is Ps.4,690 million, payable as follows: Ps.286 million pesos in 2014 (reflected in current liabilities at December 31, 2013) and Ps.1,808 million from 2015 to 2018 and the remaining amount from 2019 to 2023. The estimate that is reflected in the financial statements was determined based on the terms of the Mexican Income Tax Law.

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 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 mark-to-market valuation as of December 31, 2013, decreased our derivative liabilities by Ps. 131 million and increased our derivative assets by Ps. 280 million. Those effects are reflected in our consolidated equity by Ps. 207 million and Ps. 326 million in our consolidated statement of comprehensive income for 2013. Their mark-to-market valuation as of December 31, 2012, increased our derivative liabilities by Ps. 7 million and increased our derivative assets by Ps. 160 million. Those effects are reflected in our consolidated equity by Ps. 922 million and Ps. 155 million in our consolidated statement of comprehensive income for 2012.

Long-Lived Assets

As of December 31, 2013, we did not recognize any impairment of long-lived assets.

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Accounting for Low Income Housing Sales and Costs

As of December 31, 2013, we did not recognize an impairment in our real estate inventories or low income housing inventories.

Recently Issued Accounting Standards

New International Financial Reporting Standards

Effective January 1, 2013, we adopted the following International Financial Reporting Standards and interpretations on the consolidated financial statements:

• Amendments to IFRS 7 Disclosures- Offsetting Financial/Assets and Financial/Liabilities.

• IFRS 13, Fair Value Measurement

• IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements, IFRS 12, Disclosure of Interests in Other Entities, IAS 27 (as revised in 2011) Separate Financial Statements and IAS 28 (as revised in 2011) Investments in Associates and Joint Ventures

• Amendments to lAS 1,Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009 - 2011 Cycle issued in May 2012)

• IAS 19,Employee Benefits (as revised in 2011)

The impact of these new standards on our financial statements is described as follows:

Amendments to IFRS 7 Disclosures- Offsetting Financial/ Assets and Financial/ Liabilities

We have applied the amendments to IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities for the first time in the current year. The amendments to IFRS 7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.

The amendments have been applied retrospectively. As the Group does not have any offsetting arrangements in place, the application of the amendments has had no material impact on the disclosures or on the amounts recognized in the consolidated financial statements.

Impact of the application of IFRS 10

IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements and SIC-12 Consolidation - Special Purpose Entities. IFRS 10 changes the definition of control such that an investor has control over an investee when a) it has power over the investee; b) it is exposed, or has rights, to variable returns from its involvement with the investee and c) has the ability to use its power to affect its returns. All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to determine the financial and operating policies of an entity so as to obtain benefits from its activities. Additional guidance has been included in IFRS 10 to explain when an investor has control over an investee. Some guidance included in IFRS 10 that deals with whether or not an investor that owns less than 50% of the voting rights in an investee has control over the investee is relevant to us.

We made an assessment as at the date of initial application of IFRS 10 (i.e. 1 January 2013) as to whether or not we have control over our investments in accordance with the new definition of control and the related guidance set out in IFRS 10 identified the investments in which we have control.

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Impact of the application of IFRS 11

IFRS 11 replaces lAS 31 lnterests in Joint Ventures, and the guidance contained in a related interpretation, SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers, has been incorporated in lAS 28 (as revised in 2011). IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for; joint control exists only when decision about the relevant activities require the unanimous consent of the parties sharing control. Under IFRS 11, there are only two types of joint arrangements - joint operations and joint ventures. The classification of joint arrangements under IFRS 11 is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement. Previously, lAS 31 contemplated three types of joint arrangements - jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under lAS 31 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was accounted for as a jointly controlled entity).

The initial and subsequent accounting of joint ventures and joint operations is different. Investments in joint ventures are accounted for using the equity method (proportionate consolidation is no longer allowed). lnvestments in joint operations are accounted for such that each joint operator recognizes its assets (including its share of any assets jointly held), its liabilities (including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable Standards.

We reviewed and assessed the classification of our investments in joint arrangements in accordance with the requirements of IFRS 11, concluding that our investment listed below, which was classified as a jointly controlled entities under lAS 31 and was accounted for using the proportionate consolidation method, should be classified as a joint venture under IFRS 11 and accounted for using the equity method.

The change in accounting of our investment in Autovia Necaxa Tihuatlan, S.A. de C.V., ICA Fluor, S. de R.L. de C.V. Rodio Kronsa, S.A., Los Portales, S.A., Suministro de Agua de Queretaro, S.A. de C.V., Aquos El Realito, S.A. de C.V., Renova Atlatec, S.A. de C.V., Mitla Tehuantepec, S.A. de C.V., Constructora de Infraestructura de Aguas Potosi, S.A. de C.V., Actica Sistemas, S. de R.L. de C.V., C7AI Servicios Industriales Especializados, S.A. de C.V., Infraestructura y Saneamiento de Atotonilco, S.A. de C.V. and Administracion y Servicios Atotonilco, S.A. de C.V. has been applied in accordance with the relevant transitional provisions set out in IFRS 11. Comparative amounts for 2011 have been restated to reflect the change in accounting for our investments. The initial investment as of January 1, 2012 for the purposes of applying the equity method is measured as the aggregate of the carrying amounts of the assets and liabilities that we had previously proportionately consolidated (see the tables below for details). Also, we have performed an impairment assessment on the initial investment as at 1 January 2012 and concluded that no impairment loss is required.

Impact of the application of IFRS 12

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the application of IFRS 12 has resulted in more extensive disclosures in the consolidated financial statements (see notes 17, 18 and 19 for details).

Impact of the application of IFRS 13 Fair Value Measurement

We have applied IFRS 13 for the first time in the current year. IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The scope of IFRS 13 is broad; the fair value measurement requirements of IFRS 13 apply to both financial instrument items and non-financial instrument items for which other IFRSs require or permit fair value measurements and disclosures about fair value

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measurements, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of lAS 17 leases, and measurements that have some similarities to fair value but are not fair value (e.g. net realizable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under IFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, IFRS 13 includes extensive disclosure requirements.

IFRS 13 requires prospective application from January 1, 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, we have not made any new disclosures required by IFRS 13 for the 2012 comparative period (please see note 30 for the 2013 disclosures). Other than the additional disclosures, the application of IFRS 13 has not had any material impact on the amounts recognized in the consolidated financial statements.

Impact of the application of Amendments to lAS 1 Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009 - 2011 Cycle issued in May 2012)

The Annual Improvements to IFRSs 2009 - 2011 have made a number of amendments to IFRSs. The amendments that are relevant to us are the amendments to lAS 1 regarding when a statement of financial position as at the beginning of the preceding period (third statement of financial position) and the related notes are required to be presented. The amendments specify that a third statement of financial position is required when a) an entity applies an accounting policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial statements, and b) the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position. The amendments specify that related notes are not required to accompany the third statement of financial position.

In the current year, we have applied a number of new and revised IFRSs (see the discussion above), which has resulted in material effects on the information in the consolidated statement of financial position as of January 1, 2012. In accordance with the amendments to lAS 1, we have presented a third statement of financial position as of January 1, 2012 without the related notes except for the disclosure requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors as detailed below.

Impact of the application of IAS 19 Employee Benefits (as revised in 2011)

In the current year, we have applied IAS 19 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time. IAS 19 (as revised in 2011) changes the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminate the “corridor approach” permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. All actuarial gains and losses are recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a “net interest” amount under IAS 19 (as revised in 2011), which is calculated by applying the discount rate to the net defined benefit liability or asset. These changes have had an impact on the amounts recognized in profit or loss and other comprehensive income in prior years (see the tables below for details). In addition, IAS 19 (as revised in 2011) introduces certain changes in the presentation of the defined benefit cost including more extensive disclosures.

Specific transitional provisions are applicable to first-time application of IAS 19 (as revised in 2011). We have applied the relevant transitional provisions and restated the comparative amounts on a retrospective basis (see the tables below for details).

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Quantification of the financial effects of the implementation of new and revised standards in the preceding paragraph:

Effects of the application of IFRS 11

Investments in joint ventures are no longer proportionately consolidated and are valued using the equity method.

	Year ended December 31,
Consolidated Statements of Income:	2012			2011
Decrease in revenue		Ps. 9,420,717			Ps. 6,222,271
Decrease in cost of sales		7,522,022			5,424,927
Decrease in gross profit		1,898,715			797,344
Decrease in other expenses		10,521			4,549
Decrease in operating income		1,751,842			566,143
(Decrease) increase in financing cost		(111,835	)		138,319
Decrease in net income for the year		2,766			14,773
Decrease in income for the year attributable to:
Controlling interest		(660	)		14,727
Non-controlling interest		3,426			46

Effects of the application of IAS 19 (as revised in 2011)

	Year ended December 31,
Consolidated Statements of Income:	2012			2011
Increase in administration expenses		Ps 250,724			Ps. 40,610
Decrease in income tax		(75,217	)		(12,183	)
Decrease in net income for the year		175,507			28,427
Decrease in income for the year attributable to:
Controlling interest		175,261			28,427
Non-controlling interest		246			—

Consolidated Statements of Financial Position

	December 31, 2011 (as previously reported)		IFRS 11 adjustments			IAS 19 adjustments		January 1, 2012 (as adjusted)
Cash and cash equivalents		Ps. 10,899,714		Ps. (2,018,082	)		Ps. —		Ps. 8,881,632
Customers and other receivables		38,212,821		(977,130	)		—		37,235,691
Construction materials inventory and real state inventories		9,306,921		(1,099,038	)		—		8,207,883
Advances to subcontractors and others		2,218,125		(393,111	)		—		1,825,014
Financial assets from concessions		8,488,478		(3,154,401	)		—		5,334,077
Intangible assets from concessions		14,768,140		(1,640,410	)		—		13,127,730
Property, plant and equipment, net		4,565,736		(713,429	)		—		3,852,307
Investment properties		55,898					—		55,898
Investment in associated companies		5,485,563		224,236			—		5,709,799
Investment in joint venture		—		1,932,861			—		1,932,861

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	December 31, 2011 (as previously reported)			IFRS 11 adjustments			IAS 19 adjustments			January 1, 2012 (as restated)
Prepaid expenses and other assets, net		1,515,621			(306,934	)		—			1,208,687
Notes payable Current portion of long-term debt		(19,714,473	)		75,287			—			(19,639,186	)
Trade accounts payable and other payable accounts		(15,965,079	)		3,226,150			—			(12,738,929	)
Advances from customers		(3,921,824	)		755,033			—			(3,166,791	)
Long-term debt		(30,320,024	)		3,592,538			—			(26,727,486	)
Labor obligations		(607,306	)		88,912			(40,610	)		(559,004	)
Other long-term liabilities		(5,755,185	)		395,335			—			(5,359,850	)
Deferred income taxes		1,590,976			(25,582	)		12,183			1,577,577
Total effect on net assets		Ps. 20,824,102			Ps. (37,766	)		Ps. (28,427	)		Ps. 20,757,910
Total effect on equity		Ps. (20,824,102	)		Ps. 37,766			Ps. (28,427	)		Ps. (20,757,910	)

	December 31, 2012 (as previously reported)			Reversal of discontinued operations presented in 2012			IFRS 11 adjustments			IAS 19 adjustments			December 31, 2012 (as adjusted)
Cash and cash equivalents		Ps. 8,412,601			Ps. 38,823			Ps. (1,848,436	)		Ps. —			Ps. 6,602,988
Customers and other receivables		34,630,811			288,253			(2,111,599	)		—			32,807,465
Construction materials inventory and real state inventories		5,996,776			2,369,562			(1,306,518	)		—			7,059,820
Advances to subcontractors and others		1,752,029			—			(202,621	)		—			1,549,408
Assets classified as held for sale		3,041,845			(2,996,697	)		(45,148	)		—			—
Investment in Trust		—			243,943			(243,943	)		—			—
Financial assets from concessions		15,596,174			—			(4,588,146	)		—			11,008,028
Intangible assets from concessions		16,872,452			—			(1,725,277	)		—			15,147,175
Property, plant and equipment, net		6,028,327			—	��		(722,365	)		—			5,305,962
Investment properties		491,579			—			—			—			491,579
Investment in associated companies		5,844,933			—			246,512			—			6,091,445
Investment in joint venture		—			—			2,323,677			—			2,323,677
Prepaid expenses and other assets, net		2,206,290			56,116			(75,939	)		—			2,186,467
Notes payable Current portion of long-term debt		(10,925,346	)		—			330,711			—			(10,594,635	)
Trade accounts payable and other payable accounts		(17,482,321	)		(385,042	)		3,743,611			—			(14,123,752	)
Advances from customers		(4,088,014	)		(108,289	)		682,838			—			(3,513,465	)
Liabilities directly associated with assets classified as held for sale		(673,168	)		673,168			—			—			—
Long-term debt		(40,841,672	)		—			4,680,605			—			(36,161,067	)
Labor obligations		(670,880	)		—			105,713			(291,334	)		(856,501	)
Other long-term liabilities		(8,479,961	)		(4,526	)		671,097			—			(7,813,390	)
Deferred income taxes		2,949,255			(175,311	)		61,353			87,400			2,922,697
Total effect on net assets		Ps. 20,661,710			Ps. —			Ps. (23,875	)		Ps. (203,934	)		Ps. 20,433,901
Total effect on equity		Ps. (20,661,710	)		Ps. —			Ps. 23,875			Ps. 203,934			Ps. (20,433,901	)

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Impact on cash flows for the year ended 31 December 2012 on the application of the above new and revised Standards

	IAS 19 Adjustments		IFRS 11 Adjustments			Total
Net cash inflow (outflow) from operating activities		Ps. 203,934		Ps. (1,190,162	)		Ps. (986,228	)
Net cash outflow from investing activities		—		(585,284	)		(585,284	)
Net cash inflow from financing activities		—		1,363,043			1,363,043
Net cash inflow		Ps. 203,934		Ps. (412,403	)		Ps. (208,469	)

Impact on cash flows for the year ended 31 December 2011 on the application of the above new and revised Standards

	IAS 19 Adjustments		IFRS 11 Adjustments			Total
Net cash inflow (outflow) from operating activities		Ps. 28,427		Ps. (144,327	)		Ps. (115,900	)
Net cash outflow from investing activities		—		(422,718	)		(422,718	)
Net cash inflow from financing activities		—		959,151			959,151
Net cash inflow		Ps. 28,427		Ps. 392,106			Ps. 420,533

The impact of the application of the new and revised Standards on basic and diluted earnings per share

Changes in our accounting policies during the year as described in detail above affected only our continuing operations. To the extent that those changes have had an impact on results reported for 2012 and 2011, they have had an impact on the amounts reported for earnings per share.

The following table summarizes that effect on both basic and diluted earnings per share.

	Increase (decrease) in profit for the year attributable to  the controlling interest					Increase (decrease) in  basic and diluted earnings per share
	Year ended December 31					Year ended December 31
	2012			2011		2012			2011
	Thousands of Mexican pesos					Pesos per share
Application of IFRS 11		Ps. (660	)		Ps. 14,727		Ps. (0.001	)		Ps. 0.024
Application of IAS 19		175,261			28,427		0.289			0.045
		Ps. 174,601			Ps. 43,154		Ps. 0.278			Ps. 0.069

We have not applied the following new and revised IFRSs that have been issued but that are not effective until January 1, 2014 or a later date:

• IFRS 9, Financial Instruments (“IFRS 9”)⁽²⁾

• Amendments to IFRS 9 and IFRS 7, Mandatory Effective Date of IFRS 9 and Transition Disclosures⁽²⁾

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• Amendments to IFRS 10, IFRS 12 and IAS 27, Investment Entities⁽¹⁾

• Amendments to IAS 32, Offsetting Financial) Assets and Financial) Liabilities⁽¹⁾

(1) Effective for annual periods beginning on or after 1 January 2014, with earlier application permitted.

(2) Effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.

B. LIQUIDITY AND CAPITAL RESOURCES

General

Our principal uses of funds in 2013 were:

• Ps. 2,865 million for Palmillas–Apaseo El Grande tollroad;

• Ps. 306 million for ICA Fluor;

• Ps. 262 million for the Rio Verde–Ciudad Valles highway;

• Ps. 223 million for the Rio de los Remedios-Ecatepec project;

• Ps. 129 million for Los Portales;

• Ps. 107 million for the Autovia Urbana Sur expressway;

• Ps. 97 million for the Nuevo Necaxa Tihuatlan expressway;

• Ps. 135 million for the El Realito water treatment project;

• Ps. 211 million for the Mitla- Tehuantepec highway;

• Ps. 62 million for the Agua Prieta water treatment plant; and

• Ps. 124 million for the Acapulco Scenic Bypass.

Our principal sources of funds in 2013 were third party financing for our construction and concessions, proceeds from project execution, operating cash flow and asset sales such as the sales of our stakes in RCO and GACN.

Our expected future sources of liquidity include cash flow from our Civil Construction, Concessions and Airport segments as well as from third party debt and equity for our construction and real estate projects. 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 indicative 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. 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 other areas such as in non-public works construction, which are more often sensitive to market conditions, although there can be no assurance that our capital requirements related to concessions will not vary.

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As of December 31, 2013 we had net working capital (current assets less current liabilities) of Ps. 4,146 compared to Ps. 5,234 as of December 31, 2012 and Ps. 8,027 million as of December 31, 2011. The decrease in our total net working capital at December 31, 2013 from December 31, 2012 was primarily attributable mainly to two concessions entering into their operating stage together with the slowdown on the collection cycle during the year. The decrease in our total net working capital at December 31, 2012 from December 31, 2011 was primarily attributable to the use of cash for the construction of the SPC projects.

Although from 2008 through 2010 we saw a trend toward lower net working capital balances in our Company, that trend was due in part to large payments made on a smaller volume of projects towards the end of 2007 than we currently have. From 2010 to 2013, we continued to experience the trend towards lower net working capital due in part to a larger portion of our concessions entering into their operating stage. During the construction phase of concession projects, we tend to experience higher working capital balances as a result of higher cash balances from the financing obtained for the concession project. During the operational phase of a concession, our cash balances may not be as high, as cash was utilized in the construction phase of the concession, and what remains is cash generated from the operation of the concession, as well as current payables related to the operations of concessions. We expect this trend to continue as more of our concessions move from the construction phase to the operational phase.

There can be no assurance, however, that the trend toward lower net working capital balances will not recur due to changes in the mix of projects under execution at any given time and their completion dates. 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, 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 was paid only on major milestones, adding Ps. 334 million, Ps. 927 million and Ps. 1,241 million to our accounts receivable as of December 31, 2013, 2012 and 2011, respectively, and requiring us to provide significant advance funding. 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, 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.

The increase in 2013 in current liabilities was primarily due to the slowdown in the collection cycle and its corresponding impact on the timing of our payments to providers. The decrease in 2012 in current liabilities was primarily due to the payment of bank debt related to the La Yesca project. The increase in 2011 in current liabilities was primarily due to the reclassification of the debt related to the La Yesca hydroelectric project to current liabilities and, to a lesser extent, the incurrence of bridge loan financing while we finalize long-term financing arrangements. 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. 5,417 million as of December 31, 2013, as compared to Ps. 6,603 million as of December 31, 2012 and Ps. 8,882 million as of December 31, 2011. At December 31, 2013, we had a current ratio (current assets over current liabilities) of 1.11, as compared to a current ratio of 1.19 at December 31, 2012. At December 31, 2012, we had a current ratio (current assets over current liabilities) of 1.19, as compared to a current ratio of 1.23 at December 31, 2011.

Cash and cash equivalents (including restricted cash) at year-end 2013 included:

• Ps. 1,972 million, or 36.4% of our cash and cash equivalents, held in reserves established to secure financings, including any related expenses, in connection with the Acapulco Tunnel, the Kantunil-Cancun toll road, the Rio Verde-Ciudad Valles, the La Piedad bypass project, and the Palmillas project, all of which are restricted; and

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• Ps. 1,550 million, or 28.6% of our cash and cash equivalents, held in our Airports segment, which is unrestricted.

Some 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, which are Fomento de Construcciones y Contratas S.A. and Constructora Meco S.A. in the case of the Panama Canal (PAC-4) expansion project and the Domingo Diaz project in Panama. 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 designated 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 as presented in our statement of financial position. At December 31, 2013, Ps. 1,972 million, or 36%, of our cash and cash equivalents were held in reserves established to secure financings, including any related expenses, in connection with the following projects: the Acapulco Tunnel, the Kantunil–Cancun tollroad, and the La Piedad bypass. 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. Also, certain projects under construction in 2012 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, and the Mitla-Tehuantepec highway. 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 generated a net Ps. 168 million in operating activities during 2013, as compared to generating a net Ps. 6,430 million in operating activities during 2012. This decrease can mainly be attributed to La Yesca collections during 2012 and the completion of the social infrastructure projects, which we no longer report in construction revenues effective 2013. The underlying drivers that led to changes in our operating cash flows in 2013 were (i) a decrease in the number and volume of projects under execution, and (ii) increased use of our cash reserves because of an increase in long-term accounts receivable owed by our clients (due to payment structures of certain significant projects). We generated a net Ps. 6,430 million in operating activities during 2012, as compared to using a net Ps. 10,039 million in operating activities during 2011. This increase can be attributed to the collection on the accounts receivables related to the La Yesca hydroelectric project.

Portions of our assets are pledged to a number of banks under credit arrangements, including: Banco Santander (Mexico), S.A. Institución de Banca Multiple, Grupo Financiero Santander; Banco Inbursa, S.A. Institución de Banca Multiple, Grupo Financiero Inbursa; BBVA Bancomer Institución de Banca Multiple, Grupo Financiero BBVA Bancomer; Banco Mercantil del Norte, S.A., Grupo Financiero Banorte; Banco Nacional de Mexico, S.A., Integrante del Grupo Financiero Banamex; Banco del Bajio, S.A.; Banco Nacional de Obras y Servicios Publicos, S.N.C.; Bancolombia, S.A.; Deutsche Bank AG, London Branch; Interamerican Credit Corporation; Sociedad Hipotecaria Federal; Banco Nacional de Comercio Exterior, S.N.C.; and 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 the Autovia Urbana Sur highway concession, Autovia Necaxa-Tihuatlan, S.A. de C.V., or Auneti, our associate that operates the Nuevo Necaxa-Tihuatlan highway, our 50% interest in Los Portales, S.A., a real estate associate located in Peru, 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

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the collection rights of the Rio de Los Remedios-Ecatepec project and Palmillas-Apaseo El Grande tollroad. 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, 2013, we had unrestricted access to Ps. 3,370 million of our cash and cash equivalents, as compared to Ps. 4,150 million as of December 31, 2012 and Ps. 3,106 million at December 31, 2011. See Note 6 to our consolidated financial statements.

Our debt agreements contain standard covenants and events of default applicable to us, including cross-defaults that permit our lenders to accelerate debt. In addition, the indenture under which we issued U.S.$ 500 million and U.S.$ 350 million of notes at the holding company level in February 2011 and July 2012, respectively, contain various covenants and conditions that limit our ability to, among other things: incur or guarantee additional debts; create liens; enter into transactions with affiliates; and merge or consolidate with other companies. As a result of these covenants, we are limited in the manner in which we conduct our business and may be unable to engage in certain business activities. We believe we are currently in compliance with all our restrictive covenants. Additionally, we have increasingly been required to accept clauses which, if invoked, typically require a borrower to pay additional amounts under a loan agreement as may be necessary to compensate a lender for any increase in costs to such lender as a result of a change in law, regulation or directive. Certain of our subsidiaries, 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. 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 22 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 prove, typically at the bidding level, 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. 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. Our experience shows that these requirements can vary greatly from client to client and country to country. 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 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 for our 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.

In our Concessions segment, we typically provide a portion of the equity itself and our investment is returned over time once the project is completed. Concessions are an approach to financing public-sector projects through the private sector. In certain non-concession projects that are financed as part of Mexico’s public works financing program, payment of the contract price is deferred until the project is operational. Due to the nature of most

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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, whether such project is a concession or not, 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 security holders 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 consolidated debt to equity ratio was 1.6 to 1.0 at December 31, 2013 and 2.3 to 1.0 at December 31, 2012. This improvement in the debt to equity ratio at December 31, 2013 from December 31, 2012 mainly reflected a decrease in our overall debt, including payment of the La Yesca loan, the reclassification of the SPC projects as discontinued operations, and the use of proceeds from the secondary public offering by Aeroinvest of 69,000,000 of its Series B shares in GACN as well as from the sale of RCO to pay down debt. As a result of the sale to CGL of our 70% equity interest in the holding company of our two SPC contracts, we classified the liabilities associated with the SPC contracts including Ps. 9.8 million of debt held within these projects, in a separate line item as of December 31, 2013. Accordingly the debt held of those projects is not included in the debt to equity ratio as of December 31, 2013. Our total consolidated debt to equity ratio was 2.3 to 1.0 at December 31, 2012 and 2.2 to 1.0 at December 31, 2011. The deterioration in the debt to equity ratio at December 31, 2012 from December 31, 2011 mainly reflected the incurrence of debt to finance the execution of projects including concessions under construction as well as our issuance of the 2017 Senior Notes.

As of December 31, 2013, approximately 31% of our consolidated revenues and 43% 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 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 “Item 3. Risk Factors—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 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. See Note 21 to our consolidated financial statements.

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In 2013, our debt service obligations (principal and interest before commission expenses) totaled Ps. 39,986 million for debt denominated in pesos and U.S. dollars, as compared to Ps. 48,191 million in 2012. As of December 31, 2013, our consolidated net debt (interest paying debt less cash and cash equivalents of our consolidated subsidiaries) was Ps. 33,155 million, as compared to Ps. 40,153 million as of December 31, 2012. Our net debt decreased in 2013 due to the payment of the La Yesca debt and a decrease in the debt related to the SPC projects as a result of their classification as liabilities directly associated with assets held for sale in 2013. Although not an IFRS measure, we believe that consolidated net debt is a measure that provides useful information to our investors because we review net debt as part of our management of our overall liquidity, financial flexibility, capital structure and leverage. Consolidated net debt is composed of total debt (current debt and current portion of long-term debt plus long term debt) less cash and cash equivalents, each of which appears in our consolidated financial statements.

For a quantitative reconciliation of consolidated net debt, please see the table below, which sets forth, at the dates indicated, our total debt, debt services obligations and consolidated net debt.

	As of December 31,
	2013		2012		2011
	(Millions of Mexican pesos)
Short term debt		Ps. 9,756		Ps. 10,595		Ps. 19,639
Long term		28,816		36,161		26,727
Total Debt		38,572		46,756		46,367
Payable interest		573		480		194
Debt cost		842		955		664
Debt service obligations		39,986		48,191		47,225
Total debt		38,572		46,756		46,367
Total cash		5,417		6,603		8,882
Net debt		33,155		40,153		37,485

Empresas ICA

In February 2011, we issued U.S.$ 500 million of 8.9% senior unsecured notes due 2021, or the 2021 Notes. The notes are guaranteed on a senior unsecured basis by our subsidiaries Constructoras ICA, S.A. de C.V., or CICASA, Controladora de Empresas de Vivienda, or CONEVISA, and CONOISA. Approximately half of the net proceeds from the sale 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. In July 2012, we issued U.S.$ 350 million of 8.375% senior unsecured notes due 2017, or the 2017 Notes. The new issuance was also guaranteed on a senior unsecured basis by our subsidiaries CICASA, CONOISA and CONEVISA. The net proceeds from the sale of the notes were used to prepay short—and long-term debt.

We have entered into cross currency swaps for interest payments on the 2021 Notes and 2017 Notes through 2017 and the first half of 2015, respectively.

During 2013, we entered into certain bridge facilities at our parent company level. As of March 31, 2014, total unsecured corporate debt guaranteed by CONOISA, CICASA, ICASA, CONEVISA and EMICA totaled U.S.$ 1,414. See Note 21 to our consolidated financial statements.

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

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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 consisted 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, subject to certain permissible extensions if the La Yesca project completion date is delayed. The repayment of the construction line of credit has occurred in three installments: (i) the first payment of U.S.$ 700 million was made on the date of provisional acceptance of the first turbine unit, (ii) the second payment of U.S.$ 342 million was paid on December 20, 2012 upon delivery of the second turbine unit in 2012 and (iii) an additional payment of U.S.$ 147 million, which represented partial settlement for additional work undertaken on the project, was paid on December 23, 2013.

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, or Bank of America, 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 our issuance of U.S.$ 500 million of 8.9% senior notes that month.

On November 30, 2012, Aeroinvest prepaid its U.S.$ 45 million credit with Bank of America, which was backed by a pledge of shares. On that same day, Aeroinvest entered into a credit agreement with Inbursa in the amount of Ps. 750 million, which was subsequently increased by Ps. 350 million for a total of Ps. 1,100 million, which was to mature November 2015. A total of 53,473,020 Series B shares of GACN held by Aeroinvest were pledged to the bank through a trust agreement. There were no additional guarantees or collateral. This loan also required compliance with a leverage ratio of less than 3 and a GACN earnings before depreciation and amortization, or EBDA, to debt service ratio of no less than 3.0. As of December 31, 2012, we were in compliance with these requirements, with a leverage ratio of 2.18 and an EBDA to debt service ratio of 10.90. We have entered into an interest rate swap for the original Ps. 750 million under this loan for the term of the loan.

In 2012, Aeroinvest entered into a credit agreement with Banamex in the amount of Ps. 385 million due to mature in December 2014. Aeroinvest pledged 22,168,028 of its Series B shares in GACN to the lender. There were no additional guarantees or collateral.

In 2013, Aeroinvest prepaid both the Inbursa and Banamex credit agreements, thereby releasing all associated share pledges, by entering into a U.S. $125 million bridge loan with Bank of America NA. This bridge loan was guaranteed by a pledge of 100 million Series B shares in GACN. On July 12, 2013, Aeroinvest sold 69,000,000 of its Series B shares in GACN through a secondary public offering at a price of Ps. 40 per share. Aeroinvest prepaid its U.S.$125 million bridge loan with the proceeds of this offering.

On April 4, 2014 Aeroinvest pledged 26 million shares in GACN to Inbursa as a guarantee for a loan to CONOISA in the amount of Ps. 700 million due to mature on July 4, 2014.

Grupo Aeroportuario del Centro Norte

On July 15, 2011, our indirect subsidiary GACN placed Ps. 1,300 million in 5-year peso-denominated notes (certificados bursatiles) with local investors in the Mexican market. The interest rate on the notes is the 28-day Mexican Interbank Equilibrium Rate, or TIIE, plus 70 basis points. GACN used the net proceeds of the offering to prepay Ps. 1,011.3 million in existing debt. The balance of the net proceeds was used to fund committed investments under GACN’s Master Development Program for its 13 airports, as well as to make strategic investments.

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On May 15, 2013, GACN filed a shelf registration statement on Form F-3 with the SEC, which permits GACN or Aeroinvest, to offer, from time to time, up to 100,000,000 Series B shares, directly or in the form of ADSs. On July 12, 2013, Aeroinvest sold 69,000,000 shares, representing approximately 17.25% of GACN’s total capital stock, in an underwritten global public offering at a price of Ps. 40.00 per Series B share and U.S.$24.76 per ADS.

On March 26, 2013, GACN issued Ps. 1,500 million in 10-year peso-denominated notes (certificados bursátiles) with local investors in the Mexican market pursuant to an indenture into which it entered in 2011. The notes have a fixed annual interest rate of 6.47%. In connection with the issuance of these notes, a pledge was established on the Acapulco, Ciudad Juárez, Culiacan, Chihuahua, Mazatlan, Monterrey, Tampico, Torréon and Zihuatanejo airports. The net proceeds from the placement were used to prepay existing GACN debt and are being used to fund committed investments under GACN’s Master Development Program for its 13 airports, as well as to make strategic investments. The notes received ratings of mx AA+ by Standard and Poor’s and AA+ (mex) by Fitch Ratings.

SPC Projects

In September 2011, two of our special purpose subsidiaries placed Ps. 7,100 million in bonds in two tranches—one Mexican peso tranche in the amount of Ps. 5,323 million at a fixed annual rate of 10.1% and one UDI tranche in the amount of Ps. 1,777 million with a real annual rate of 5.65%—in the Mexican market with a term of 20.8 years to finance two social infrastructure projects consisting of the construction of, and provision of non-penitentiary services to, two federal penitentiaries. Our obligations under these debt securities are secured by a pledge of the collection rights under the SPC contracts. We began making quarterly principal and interest payments on the bonds in July, 2013 according to their amortization schedule. In 2012, we reopened the bonds and issued Ps. 160 million in the Mexican market under substantially similar terms as the Mexican peso tranche. In the same year we also issued a series of subordinated notes for Ps. 1,699 million (in UDI-denominated notes) in the Mexican market at a real annual rate of 8%. As of December 31, 2013, the outstanding balances for the senior bonds and follow on issuances were Ps. 6,230.33 million for PASACB 11, Ps. 2,089.69 million for PASACB 11U, Ps. 179.25 million for PASACB 12 for the subordinated bonds was Ps. 1,460.82 million for Ps. PSBCB 12U, or U.S.$ 762.64 million in the aggregate .

In January 2014, CONOISA entered into a share purchase agreement with a subsidiary of the Hunt Corporation under which Hunt will acquire 70% of ICA’s interests in the SPC projects through the acquisition of shares in the projects’ holding company. As a result, the assets and liabilities of the SPC projects are included in assets held for sale and liabilities directly associated with assets held for sale, for which reason, these loans do not form part of the consolidated debt of the entity as of December 31, 2013.

ViveICA Credit Lines

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 EMICA. As of December 31, 2013, we had approximately Ps. 168 million outstanding under this facility.

In November 2013, we entered into a revolving line of credit with Sociedad Hipotecaria Federal for Ps. 250 million. This facility, which includes a mortgage on real property, is available for drawing for a period of five years and has athree-year amortization period. We made our first disbursement under this line in January 2014 in the amount of approximately Ps. 26 million.

On July 7, 2011, ViveICA entered into a Ps. 350 million four-year loan agreement with Banco Bajío, with an interest rate at the 28-day TIIE plus a 4% spread for the Marina Nacional project. This loan is granted by Arrendadora ViveICA and CONEVISA and includes a pledge over the Marina Nacional property and two other properties in Ciudad Juarez and Quintana Roo.

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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 due 2017for 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, Scotiabank, Caixabank, S.A., Banobras, HSBC Securities (USA) Inc. and Dexia S.A. There is no parent company guarantee under this loan. We have entered into an interest rate swap in connection with this facility.

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 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. We have an interest rate swap in connection with this facility. In December 2013 we entered into an agreement to sell our share of the Atotonilco water treatment plant to Promotora del Desarrollo de America Latina, S.A. de C.V. Under the terms of the transaction, which is expected to close in the second quarter of 2014, Promotora del Desarrollo de America Latina, S.A. de C.V. would acquire our rights and obligations under the loan agreement.

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 its new notes 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 due in 2033. The new notes accrue interest at the rate of TIIE plus up to 2.95% and are non-recourse.

In November 2013, the company repurchased Ps. 270 million of its 2033 notes. During the annual meeting of bond holders a new amortization schedule was approved reducing the anticipated maturity date to 2031.

There are no parent company guarantees of these Acapulco Tunnel financing arrangements. We have entered into interest rate options in connection with this project.

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. We have entered into an interest rate swap in connection with this facility.

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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, 2011 were equivalent to Ps. 2,446 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, 2013, one UDI was equal to approximately Ps. 5.06. The long-term debt matures in 2019 and 2020, and is expected to be repaid from toll revenues generated by the concession. Currently, 241.5 kilometers are operational and toll revenues in 2013 were Ps. 504 million. We consolidate the investment in our consolidated financial statements. There is no parent company guarantee of this Kantunil-Cancun highway financing arrangement. In August 2011, we signed an amendment to our concession agreement with the Ministry of Communications and Transportation to construct an extension of the tollroad. The amendment includes the construction, operation, conservation and maintenance of a 54-kilometer expansion of the Kantunil-Cancun highway to Playa del Carmen and extends the term of the concession to 2050. The expansion of the highway will require an estimated investment of approximately Ps. 1,900 million.

In 2012, the Mayab Consortium placed Ps. 4,500 million in notes (certificados bursátiles) with a maturity of 22 years in the Mexican market in two trenches. The first tranche was in the amount of Ps. 1,195 million with a fixed interest rate of 9.67%, and the second tranche was denominated in UDIs in an amount equivalent to Ps. 3,305 million at a fixed interest rate of 5.80%. At December 31, 2013, the UDI-denominated notes were equivalent to Ps. 3,467 million. Interest on these notes is paid semi-annually. We used approximately Ps. 2,339 million of the net proceeds from the issuance of these notes to prepay the earlier notes assumed in 2008. We expect to apply Ps. 1,909 million to the construction of the 54-kilometer expansion of the Kantunil-Cancun highway. The notes are to be repaid with the proceeds from the operation of the project.

In October 2012, with the proceeds from the offering of the new notes we prepaid the entirety of the Mayab Consortium’s long-term debt securities at a premium of Ps. 161 million.

Rio de los Remedios-Ecatepec

In February 2010, our subsidiary ANESA (then known as Viabilis) entered into a long-term financing agreement for the Rio de los Remedios-Ecatepec highway project with Banobras development bank. Currently, 25.5 kilometers are operational and toll revenues in 2013 were Ps. 44 million. The Ps. 3,000 million line of credit was applied to Phase 1 of the highway project. On April 15, 2010, ANESA made its first draw under this line of credit in the amount of Ps. 1,136 million. As of December 31, 2013, we have Ps. 2,798 million outstanding under this line of credit. This credit facility matures in 2027 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 ANESA, significantly, reporting obligations, conduct of business, compliance with laws, 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. We are in compliance with the terms of this contract.

The financing package with Banobras for the ANESA credit facility includes a joint and several guarantee of ANESA’s performance by Ingenieros Civiles Asociados, S.A. de C.V., our construction subsidiary, as well as a payment guarantee by our subsidiary CICASA, until operations of various phases of the highway begin. Additionally, our shares of ANESA are pledged to Banobras as collateral.

El Realito

In March 2011, our affiliate Aquos el Realito S.A. de C.V. entered into a 18-year term financing agreement for the construction of the El Realito Aqueduct project, to which it holds a long-term service agreement, in an amount up to Ps. 1,319 million. As of December 31, 2013, our portion of the outstanding debt for the project was Ps. 1,130 million. This credit arrangement also contains certain financial ratios which will be required to be met beginning upon operation of the project. A debt service coverage ratio less than 1.2 but greater than 1.18 will require us to increase our debt service reserve account. As of December 31, 2013, we have not yet measured our compliance, given that the project is still under construction. We have entered into an interest rate swap in connection with this agreement and our effective rate is 7.81%.

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Agua Prieta

In March 2011, our affiliate Renova Atlatec S.A. de C.V., or Renova Atlatec, the holder of the long-term service agreement with the Jalisco State Water Comission (CEA) for the construction and operation of the Agua Prieta Waste Water Treatment Plant, entered into a 16-year term financing agreement for the construction of this project in the amount of Ps. 1,175 million. As of December 31, 2013, our portion of the outstanding debt for this project was Ps. 1,155 million. This loan is guaranteed by the shares of CONOISA in Renova Atlatec. The agreement also provides that the debtor must maintain a debt service coverage ratio of at least 1.02 to 1 during the operation phase. As of December 31, 2013, we have not yet measured our compliance, given that the project is still under construction. We have entered into an interest rate swap in connection and this agreement with our effective rate is 8.17%.

Autovia Urbana Sur

In May 2011, our affiliate Concesionaria Vial San Jeronimo-Muyuguarda, S.A., which holds the concession for the second level of a section of the Periferico Sur expressway in Mexico City, entered into a long term financing agreement for the project’s construction in the amount of Ps. 2,957 million. The loan has a term of 10 years and is secured by a pledge over our shares in the concessionaire. We have also entered into an interest rate swap in connection with this agreement. As of December 31, 2013, the outstanding amount of this loan was Ps. 2,825 million. On March 31, 2014, we completed the sale of our interest in this concession to IDEAL. Under the terms of the sale, IDEAL acquired our rights under the associated credit agreement. and interest rate swap

Mitla-Tehuantepec

In September 2012, Autovía Mitla Tehuantepec entered into a Ps. 6,320 million facility for the expansion and modernization of the Mitla-Tehuantepec highway. This facility has an interest rate at the 91-day TIIE plus 2.95%. The source of repayment for this facility is the revenue generated from the toll fees paid by users of the highway. As of December 31, 2013, the amount outstanding on this long term facility was Ps. 1,252 million and the subordinated debt was Ps. 312 million.The facility also includes a debt service coverage ratio requirement of not less than 1.2 which will be required to be met beginning upon operation of the project. As of December 31, 2013, we have not yet measured our compliance, given that the project is still under construction.

Barranca Larga—Ventanilla

During 2012, our subsidiary Desarolladora de Infraestructura Puerto Escondido, S.A. de C.V., or DIPESA, entered into a facility in the amount of Ps. 1,368 million, which matures in November 2032. This facility is intended to be used to cover wholly or partially interest earned during the disposition period, the payment of fiduciary fees during the construction period, payment of credit fees as well as the hedging of the interest rates if generated, the payment of toll roads and the expenses associated therewith in the proportion to the loan, an advance on construction, the establishment of funds and the payment of the VAT. The facility bears interest at the 28-day TIIE plus 3%. All of our shares in DIPESA are pledged under this facility. As of December 31, 2013 the amount outstanding under this facility was Ps. 507 million and the subordinated debt was Ps. 455 millon.

Campus ICA

On December 20, 2013 , our subsidiaries Promotora e Inversora ADISA, S.A. de C.V. and ICA Propiedades Inmuebles, S.A. de C.V. entered into a term facility with Deutsche Bank AB, London Branch to finance the renovation and construction of our corporate campus in Mexico City. The facility, which is divided into one U.S.$ 50 million tranche with a 3.5 -year term and one Ps. 520 million tranche with a five- year term, bears interest at rates based on LIBOR. The facility is guaranteed by a parent company guarantee by the transfer of the real property associated with the corporate campus to a guarantee trust.

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Aak-Bal

On January 9, 2014 , our subsidiary Promoción Inmobiliaria y Turística Champotón, S.A.P.I de C.V. entered into a term facility with Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo to finance 19% of the initial development of a resort in Champotón,Campeche. The U.S.$ 23 million has a 10-year term and bears interest at rates based on LIBOR. The facility is guaranteed by a parent company guarantee and a pledge on the real property associated with the resort development through a guarantee trust.

Other Debt

As of December 31, 2013, 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, 2013 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 2013, we had interest rate swaps in connection with an Aeroinvest loan, the Rio Verde-Ciudad Valles highway, the La Piedad bypass and the Plamillas-Apaseo El Grande tollroad.

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 2013, 2012 and 2011, we entered into foreign exchanges hedges and options in connection with our senior notes and loans of CICASA, ICASA, San Martin, Aeroinvest and ICAPLAN.

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:

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• 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.”

Other Derivatives

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, 2013, the fair value of these instruments is Ps. 3.5 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 December 31, 2013 of these swaps is Ps. 0.18 million. These instruments are classified as hedging contracts for accounting purposes.

In August 2012, we entered into three coupon-only swaps to hedge our foreign currency interest payment exposure related to our U.S.$ 350 million senior unsecured notes. The fair value as of December 31, 2013 of these swaps is Ps. 137 million. These instruments are classified as hedging contracts for accounting purposes.

In 2012, EMICA also entered into a forward contract settled in cash on 22,280,100 of its shares, from May 22 to August 21, 2013 in non-consecutive periods, for a weighted average strike price of Ps.24.99 per share and equivalent to an amount of Ps.556.8 million, with maturity in one year. The total amount of shares represented 3.67% of shares outstanding. These instruments were restructured, modifying their maturity and strike price. As a result of the restructuring, the weighted average strike price was of Ps. 23.93 per share. In November – December 2013, and January and February 2014 we exercised our rights under these instruments, which we accounted for in the reserve for the acquisition of shares.

During 2012 and 2013 we entered into a series of cross currency swaps, forwards and options in connection with certain indebtedness incurred by CICASA, our Civil Construction subholding company, ICASA, Aeroinvest, San Martin, with combined notional amounts of U.S.$ 130 million, 136 million Peruvian New Soles and Ps. 3.1 million. See Note 22 to our consolidated financial statements.

During 2013 we entered into two interest rate swaps (exchanging variable or floating rates for fixed rates): in our Concessions segment in connection with the project Pamillas with a notional amount of Ps.1,006 million, and Aeroinvest loan with a notional amount of Ps. 750 million.

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In December 2013, our subsidiary ICAPLAN entered into a cross currency swap in order to mitigate the fluctuations in exchange rates and interest rates related to a dollar-denominated, variable rate bridge loan. The fixed exchange rate is Ps.12.877 per U.S. dollar with a floating rate at the 28-day TIIE, plus a 6.32% spread. The primary position related to this instrument is dollar-denominated debt bearing interest at LIBOR. As part of the same transaction, ICAPLAN entered into an existing derivative financial instrument, which gives an affiliate of the lender the right to purchase 11.9 million shares of EMICA at a fixed price, through a novation with CICASA. This instrument was classified as a trading instrument.

In February 2014, ICAPLAN entered into a second cross currency swap in order to mitigate the fluctuation in exchange rates and interest rates related to a dollar-denominated, variable rate bridge loan. The fixed exchange rate is Ps. 13.327 per US dollar with a floating rate at the 28-day TIIE, plus a 6.32% spread. The primary position related to this instrument is dollar-denominated debt bearing interest at LIBOR.

Additional Sources and Uses of Funds

We may from time to time repurchase or sell our outstanding equity securities if market conditions and other relevant considerations make such repurchases or sales 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 Issuer 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 considered net of value-added tax was 301 days as of December 31, 2013, which is a 21% increase from 249 days as of December 31, 2012, primarily as a result of the delay in the collection related to certain construction projects. See note 7(b) to our consolidated financial statements.

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

None.

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  D. 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.

        E. OFF-BALANCE SHEET ARRANGEMENTS

Except as disclosed by the contractual obligations and other commitments tables below, 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.

        F. 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, 2013, the scheduled maturities of our contractual obligations were as follows:

	Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(Millions of Mexican pesos)
Long-term debt obligations(1)		Ps. 30,469		Ps. 854		Ps. 3,090		Ps. 6,122		Ps. 20,403
Notes payable		8,902		8,902		—		—		—
Fixed interest(2)		15,484		1,602		3,104		2,518		8,260
Variable interest(3)		5,914		820		1,116		851		3,127
Operating and financial leases obligations		3,149		1,302		1,339		262		246
Master development programs(4)		1,552		1,180		372		—		—
Seniority premiums		729		170		69		91		400
Total		Ps. 66,199		Ps. 14,830		Ps. 9,089		Ps. 9,844		Ps. 32,436

(1) Amounts before commission and issuance cost for Ps. 799.

(2) Fixed interest rates range from 5.65% to 9.67%.

(3) Variable interest rate was estimated using the following ranges: 1.22% (LIBOR plus spread) to 9.15% (LIBOR plus spread); and 3.74% (TIIE plus spread) to 9.32% (TIIE plus spread). When calculating variable interest rates, we used LIBOR and TIIE as of December 31, 2013.

(4) 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.

As of December 31, 2013, the scheduled maturities of other commercial commitments were as follows:

	Amount of Commitment Expiration per Period
Contractual Obligations	Total Amounts Committed		Less Than 1 Year		1-3 Years		4-5 Years		Over 5 Years
	(Millions of Mexican pesos)
Standby letters of credit		Ps. 4,828		Ps. 3,018		Ps. 1,810		Ps. —		Ps. —
Guarantees(1)		22,382		8,035		14,313		34		—
Total commercial commitments		Ps. 27,210		Ps. 11,053		Ps. 16,123		Ps. 34		Ps. —

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

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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 9, 2014 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 11 members. As of April 9, 2014, six 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		37		73
Jose Luis Guerrero Alvarez(2)		Director		25		71
Diego Quintana Kawage(3)		Director		8		44
Alonso Quintana Kawage(1)		Director		7		41
Fernando Flores y Perez(3)(4)(5)		Director		7		69
Elsa Beatriz Garcia Bojorges(1)(4)(5)(6)		Director		6		48
Salvador Alva Gomez(2)(4)(5)		Director		5		64
Margarita Hugues Velez(1)(4)(5)		Director		5		49
Ricardo Gutierrez Munoz(2)(4)(5)		Director		2		72
Carlos Guzman Bofill(3)(4)(5)		Director		2		65
Eduardo Revilla Martinez(2)		Director		2		53

(1) Director whose term expires on April 30, 2015.

(2) Director whose term expires on April 30, 2016.

(3) Director whose term expires on April 30, 2017

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

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

(6) 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 Isaac has been a member of our Board of Directors since 1978. Mr. Quintana was appointed Chairman of our Board of Directors in 1994. He also acted as our CEO from December 1994 through 2006. Mr. Quintana currently sits on the board of directors of Cementos Mexicanos and of Banamex. He is a member of the Mexican Council of Businessmen and is active in various philanthropic organizations in the Mexican community including the ICA Foundation and the Letras Mexicanas Foundation. He was previously Chairman for the Mexican Energy Conservation Trust, or FIDE, until 2012 and also was the Chairman of the Board of Trustees of the National University of Mexico, or UNAM, until 2009. He also sits on the Board of the National College for Professional Technical Education, or CONALEP. In the United States, he is a member of the Board of Trustees of the Culver Educational Foundation in Indiana and the Board of Visitors of the Anderson School of Management at the University of California at Los Angeles, or UCLA. Mr. Quintana holds a degree in civil engineering from the UNAM and an MBA from UCLA. He has been distinguished by France’s National Order of the Legion of Honor (Legion d’honneur), the highest decoration from the Republic of France. Likewise, in 2007, in recognition of his career in business, the Mexico-U.S. Chamber of Commerce in Washington, D.C. awarded Mr. Quintana the “Good Neighbor Award,” a recognition given to both public and private sector leaders. In 2009, he was honored as a Commander in the Order of Leopold II from the Government of Belgium. In 2011, Mr. Quintana awarded the National Engineering Price from the Mexican Association of Engineers and Architects. In 2012, he received the degree of Doctor Honoris Causa in Civil Engineering from Indiana Institute of Technology. He is the father of Mr. Alonso Quintana, Mr. Diego Quintana and Mr. Rodrigo Quintana.

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Dr. Jose Luis Guerrero Alvarezhas been a member of our Board of Directors since 1990, and was our Chief Executive Officer and Executive Vice President from January 2007 to June 2012. 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 degree in mechanical and electrical engineering from the Universidad Nacional Autonoma de Mexico, or 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 Tecnologico Autonomo de Mexico, or ITAM, and the Instituto Panamericano de Alta Direccion de Empresa, or IPADE. 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, an independent member of the Board of Directors of the Mexican Stock Exchange, as well as the Chairman of its Supervisory Committee, and a member of the board of directors of Enova Endevour. He is also a former member of the board of directors of Banco Nacional de Mexico.

Alonso Quintana Kawage is Chief Executive Officer, head of the Executive Committee, and a member of our Board of Directors. From January 2007 through June 2011, he was ICA’s Chief Financial Officer, where he led the efforts 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, and has also served in ICA’s Civil Construction and legacy Industrial Construction and Infrastructure divisions. Mr. Quintana is a civil engineering graduate of the Universidad Iberoamericana, and has an M.B.A. from the Kellogg School of Management of Northwestern University.

Diego Quintana Kawagehas been a member of our Board of Directors since 2008. He also holds the position of Chairman of the Board of GACN and Chairman of the Board of SETA. He is also member of the Board of Directors and Executive Committee of Empresas ICA and member of the Board of Directors of Maseca. Mr. Quintana has been our Executive Vice President since 2008 and since 2010 he has been responsible for our joint ventures, including ICA Fluor, Grupo Rodio Kronsa and Los Portales in Peru. He is also in charge of our housing and real estate development operations and head of Fundación ICA. Mr. Quintana joined the company in 1995, in the project financing department. From 2004 to 2009, he held the position of CFO and CEO of ViveICA. Mr. Quintana holds an Economics degree from the Universidad Anahuac and a Master of Science in Management. 

Fernando Flores y Perezhas been a member of our Board of Directors since 2008. Mr. Flores is presently founding partner of EFE Consultores, S.C. Mr. Flores 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 Ministry 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. Flores holds a law degree from theUniversidad Iberoamericana and studied business administration at the same university.

Elsa Beatriz Garcia Bojorgeshas been a member of our Board of Directors since 2009. She is a Researcher and Board Member of the Mexican Financial Reporting Standards Board (Consejo Mexicano de Normas de Informacion Financiera, A.C.), or CINIF, which is the accounting standard setting body in Mexico. She is the president of our audit committee and GACN’S audit committee, and a member of the corporate governance practices committee, of RCO. In 2010, 2011 and 2012, she participated on behalf of Mexico in the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting hosted by the United Nations Conference on Trade and Development. Previously, she worked as an independent financial consultant. Previously, she was a partner in the accounting firm Bouzas, Reguera, Gonzalez y Asociados, S.C. She is a lecturer at several universities, accounting associations and companies in Mexico and is a columnist for the Public Accountancy Journal. She holds an accounting degree with honors from UNAM, as well a diploma in financial engineering. She has been certified by the Mexican Institute of Public Accountants, or IMCP, since 1999. In 2012, she received from the IMCP her certification as an accounting specialist.

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Salvador Alva Gomezhas been a member of our Board of Directors since April 2010. Mr. Alva holds a chemical engineering degree from UNAM and an MBA. from the Universidad de las Americas, or 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. Currently he is President of Tecnologico de Monterrey System. He currently sits on the boards of Endeavor and Tecnologico de Monterrey.

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. Until 2013 she was the Vice President of Legal and Corporate Affairs and Secretary to the board of directors of Grupo Modelo, S.A.B. de C.V., or Grupo Modelo, the leading beer manufacturer in Mexico and the seventh largest in the world. Prior to joining Grupo Modelo, Ms. Hugues was a project finance and corporate attorney at Galicia y Robles, S.C. in Mexico City and at Hunton & Williams in Washington D.C.

Ricardo Gutierrez Munoz joined our Board of Directors in April 2013. Mr. Gutierrez holds an accounting degree from the Instituto Politecnico Nacional as well as a master’s degree in finance from the Universidad LaSalle, both in Mexico. Since 2011 he has held the position of chairman of the executive committee of Mexichem, S.A.B. de C.V., or Mexichem. He previously served as Mexichem’s CEO, overseeing 75 different companies in the chemical and petrochemical industry in Mexico, the Americas, the U.K., Japan and Taiwan. Mr. Gutierrez has also been the CEO and member of the board of directors for Grupo Industrial Camesa, Vice President of Corporate Development for Empresas Lazagorta, CEO and member of the board of directors of Industrias Synkro and Finance Director for Indetel/Alcatel.

Carlos Guzman Bofill joined our Board of Directors in April 2013. Mr. Guzman holds a degree in chemical engineering from the Universidad Iberoamericana in Mexico. Additionally, he has a M.SC. in chemical engineering from Massachusetts Institute of Technology as well as an MBA from Stanford University. From 2010 to 2012 he was the CEO of Pro-Mexico. From 2000 to 2010 Mr. Guzman was the CEO of HP Mexico. He has been the National President for the Mexican Association for the Information Technology Industry, Director of Market Development for HP Mexico and the Director of Strategic Planning for Alfa Division Acero.

Eduardo Revilla Martinez joined our Board of Directors in April 2013. Mr. Revilla holds a law degree from the Escuela Libre de Derecho. He is a partner in the law firm Revilla y Alvarez Alcala S.C. He previously served in various legal capacities at Mexico’s Ministry of Finance and Public Credit, including legal director, liaison representative to Washington, D.C., tax prosecutor for constitutional claims and director of international tax affairs. He is a professor of tax law at ITAM, in the Escuela Libre de Derecho, the Universidad Iberoamericana and the Centro de Investigacion y Docencia Economica. He is a member of the International Fiscal Association and beginning in 2012 has been an independent member of the governing board of the Taxpayers Public Defender (Procuraduría de la Defensa del Contribuyente). Mr. Revilla was also a member of the Committee on Tax Affairs of the Organisation for Economic Co-operation and Development, or OECD.

Our executive officers currently are as follows:

Name	Current Position	Years as Executive Officer
Alonso Quintana Kawage	Chief Executive Officer	8
Diego Quintana Kawage	Executive Vice President, Airports, Homebuilding, Real Estate and Strategic Alliances	8
Victor Bravo Martin	Chief Financial Officer	6
Rodrigo Quintana Kawage	General Counsel	6
Porfirio Gonzalez	Divisional Director, Airports; Chief Executive Officer of GACN	4
Carlos Benjamin Mendez Bueno	Vice President, Concessions	8
Ruben Lopez Barrera	Vice President, Strategic Planning, Business Development and International	5
Luis Horcasitas Manjarrez	Vice President, Civil Construction	5

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Ruben Lopez Barrera is Vice President and our Director of Strategic Planning, Business Development and International for ICA and a member of ICA’s Executive Committee. He previously served as GACN’s Chief Executive Officer and Director for Human Resources, Legal, and Communication, and as ICA’s Business Development Director and Project Finance Director. He has more than 18 years working at ICA. Mr. Lopez received a degree in civil engineering from the Universidad Iberoamericana, a Master of Science in management from the Sloan Master’s Program at the Stanford Graduate School of Business, and a master’s degree in business administration from the joint program of the Pontificia Universidad Catolica de Chile and the University of Washington in Seattle, WA.

Luis Horcasitas Manjarrez is the Vice President overseeing Civil Construction for ICA and a member of ICA’s Executive Committee. In his more than 30 years of experience at 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 Cajon hydroelectric project. He studied engineering at the Escuela de Ingenieria 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., or 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.

Carlos Benjamin Mendez Bueno has been the Divisional Director of our Concessions segment since January 2007.Currently, he is Vice President of the Concessions segment and of Grupo ICA. Mr. Mendez is a civil engineer with a bachelor’s degree from UNAM. He has participated in various post-graduate studies such as “Strategic Planning” at the University of Pennsylvania’s Wharton School, “Certification in Project Administration” from the International Institute of Learning and “Advanced Management Program (AD2)” from IPADE. 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 UNAM, and was the Vice President for Industrial Relations, Representation, and Management of the Mexico City delegation to the Mexican Construction Industry Chamber until 2008. He was also a board member of the Mexican Road Association, or AMC, and represented ICA before the International Road Federation’s Executive Officers. He now represents Mexico before the World Road Association, or PIARC, in the field of Road Tunnels Operation.

Victor Bravo Martinhas been our Chief Financial Officer since July 1, 2011. He previously served as Divisional Director of our Airports segment and Chief Executive Officer of GACN. Mr. Bravo has more than 27 years of professional experience at ICA. Additionally, he served as GACN’s Chief Financial Officer from March 2006 to July 2009. Prior to joining GACN, he served in various capacities with us from 1987 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 the Instituto Tecnologico y de Estudios Superiores de Monterrey, a diploma in finance from the Instituto 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. Mr. Bravo also has a degree from the Advance Direction of Companies program at the IPADE Business School, where his coursework included human resources, operations and strategic planning.

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 Chief Executive Officer since July 2011. From 2006 through June 2011, he was GACN’s director of airports. 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. Prior to joining us he served in various capacities in the Mexican federal government and the state government of Nuevo Leon,

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including as General Director of Tourism. Mr. Gonzalez holds a B.S. in civil engineering from theUniversidad Autonoma de Nuevo Leon. He has also completed various specialization courses in the areas of airports, safety and security, finance, management and human resources.

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

Name	Current Position
Alonso Quintana Kawage	President
Diego Quintana Kawage	Executive Vice President, Airports 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

B. COMPENSATION

For the year ended December 31, 2013, the aggregate compensation of our directors and executive officers paid or accrued in that year for services in all capacities was approximately Ps. 262 million. In 2013, we paid management and non-management directors Ps. 50 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 9, 2014, we pay Ps. 50 thousand net of taxes to management and non-management directors for each board meeting. Additionally, we pay non-management directors Ps. 5,000 per hour for work related to their duties on our board or on either committee. We also paid the Chairman of our Board of Directors approximately Ps. 38 million net of taxes in 2013.

Management Bonuses

Performance bonuses are paid to eligible members of management by the subsidiaries that employ them.

Our Corporate Practices Committee determines the bonuses for senior and middle management. Through April 16, 2013 the Corporate Practices, Finance, Planning and Sustainability Committee determined compensation for executive officers and the Chief Executive Officer. As of April 16, 2013, our shareholders approved the restructuring of the Corporate Practices, Finance, Planning and Sustainability Committee, dividing its responsibilities into two committees, the Corporate Practices Committee and the Finance, Planning and Sustainability Committee. The Corporate Practices Committee will determine the compensation of executive officers and the Chief Executive Officer. We have adopted the following policies 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.

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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.

Additionally, and only for our executive management, we have a performance bonus plan, directly linked to the overall performance of the company and on a secondary basis to the performance of certain business units and the satisfaction of personal objectives. This bonus is payable in cash.

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, 2013, 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 January 1, 2008, the plan was revised to defer the early retirement age an additional two years, which such deferral ended in 2010. In 2012, the pension plan was further modified to provide lifelong benefits for executives as well as to establish an early retirement age of 60 for all employees, provided that they have 10 years of service with our Company. See Note 39 to our consolidated financial statements.

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

For the year ended December 31, 2013, the aggregate liability amount required to provide pension and retirement benefits is Ps. 1,096 million.

In 2013 we also established a voluntary retirement plan for personnel over 60 with more than 10 years of service to the company.

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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. Under Mexican law, the chairman of our board may not be president of any of the Audit Committee, the Corporate Practices Committee or the Finance, Planning and Sustainability Committee.

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.

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Board Practices

In response to the enactment of the Mexican Securities Market Law, our Board of Directors established a Corporate Practices Committee, which was replaced by the Corporate Practices, Finance, Planning and Sustainability Committee on April 24, 2009. On April 16, 2013, the annual shareholders meeting approved the division of the Corporate Practices, Finance, Planning and Sustainability Committee into two Board committees: the Corporate Practices Committee, with its duties set forth in Section I of Article 42 and other applicable provisions of the Mexican Securities Market Law, and the Finance, Planning and Sustainability Committee. The duties of the Corporate Practices Committee 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 exempted actions of the Board of Directors. The duties of the Finance, Planning and Sustainability Committee include 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 April 9, 2014, Fernando Flores y Perez is chairman of both the Corporate Practices Committee and the Finance, Planning and Sustainability Committee. Each member’s term on either committee runs concurrently with such member’s term on our Board of Directors. All members of either committee are independent directors as such term is defined in the Mexican Securities Market Law, and Mrs. Margarita Hugues and Mr. Salvador Alva 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 requires that the Audit Committee be 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 April 9, 2014, 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 Audit 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 Committee, the review of related-party transactions.

D. EMPLOYEES

As of each of the three years ended December 31, 2013, 2012 and 2011, we had approximately 31,982, 34,363 and 40,003 employees, respectively, approximately 39%, 33% and 30% 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.

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E. SHARE OWNERSHIP

As of December 31, 2013, 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 39,447,614, or 6.5%, of our outstanding shares (excluding shares owned through the management trust). Through the management trust they hold 6,264,093 shares, or 1.0%, for a total of 45,711,707, or 7.5%, of our outstanding shares. Additionally, as of December 31, 2013, 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, Victor Bravo Martin, and Salvador Alva Gomez. 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 December 31, 2012.

Identity of Person or Group	Amount Owned		Percentage(1)
Bernardo Quintana I(2)		39,447,614		6.5%
Management Trust		23,319,562		3.8%
Foundation Trust		8,336,440		1.4%

(1) For all percentages, based upon 610,011,256 shares outstanding as of December 31, 2013.

(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.

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 December 31, 2013, 203,269,797 shares, or 33.3% 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 December 31, 2013, 7.04% of our outstanding shares were represented by 10,731,989 ADSs representing four of our shares each, and such ADSs were held by 55 record holders with registered addresses in the United States. Because certain of the ADSs are held by nominees, the number of record holders 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 63,186,084 shares (10.4% of the shares outstanding). A portion of the shares beneficially owned by our directors and executive officers (collectively, approximately 3.9% 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, we announced that we had acquired 7,545,300 of our shares outstanding 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.

In May 2012, pursuant to the Mexican Securities Market Law, we announced that we had acquired 4,207,000 of our outstanding shares using the reserve for share repurchases at an average price of Ps. 23.93 per share and at a total purchase price of Ps. 100,694,464. As part of our employee stock plan, 6,885,385 of these shares were transferred to the management trust at an average price of Ps. 20.65 per share.

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In May 2012, we entered into one-year forward contracts to acquire 22,280,100 shares of EMICA in a series of nonconsecutive transactions between May 22, 2012 and August 21, 2012 at a weighted average strike price of Ps. 24.99 per share, equivalent to Ps. 556.8 million. The total amount of shares represented 3.67% of EMICA’s shares outstanding. These instruments were restructured, modifying their maturity and the strike price to Ps. 23.93, equivalent to Ps. 533.2 million. Other contractual conditions were not modified. As a result of the restructuring, the weighted- averge strike price was Ps. 23.93 per share. In November – December 2013 and January 2014, we exercised our rights under these instruments which we account for in the reserve on the acquisitions of shares.

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 foundation trust, the shares held by Fundacion ICA, which, as of December 31, 2013, represented approximately1.4% 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

For a description of our related party transactions, see Note 38 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.

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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 by us as lender 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 for us to collect on Ps. 553 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. On February 9, 2012 we received Ps. 104 million of the outstanding balance. 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. Pursuant to the same lawsuit, on October 20, 2011, we obtained as accord and satisfaction, the title to the land in an amount of Ps. 151.5 million, thus reducing the amount payable by the Development Companies to us.

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 with recourse and secured by a mortgage on the land where the project is located. We believe 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. We do not believe a material loss related to this legal proceeding is probable.

Malla Vial

We are 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 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 made a claim against the bonding company, for the return of an advance payment that had not yet been amortized. We 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 ordered a suspension of any actions against the bonding company until our counterclaim was resolved, provided that such suspension should not last more than three years.

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 was released through various media outlets. The IDU announced that we would pay U.S.$ 1.5 million to the IDU.

Subsequent to the IDU’s announcement, political developments made this alleged agreement invalid. In June 2011, the suspension order blocking actions against the bonding company expired, raising the risk that, notwithstanding the unresolved counterclaims, the bond may be executed in an amount equal to U.S.$ 17 million plus interest, although such execution may be appealed. Nevertheless, we reached a second settlement agreement in principle with the IDU on all claims, and in December 2011 we filed a joint motion for the court to supervise and

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approve the conciliation procedure under Colombian law. On September 26, 2012, the parties signed a Conciliation Agreement and filed it for final review and approval by the tribunal. In order to decide on the matter, the tribunal requested that the attorney general to provide an opinion on the Conciliation Agreement.

On February 28, 2013, the trial level tribunal approved in part and denied in part the Conciliation Agreement. On March 8, 2013, we filed an appeal. In April 2013, we were granted a stay pending appeal and on October 24, 2013, the appellate court fully approved the Conciliation Agreement we had reached with the IDU.

Pursuant to the terms of the Conciliation Agreement, we paid the equivalent of U.S.$ 5.8 million in Colombian Pesos to the IDU on March 28, 2014, and expect full dismissal, which remains pending as of the date of this filing, of all related proceedings, including the proceeding related to the bond foreclosures.

Ciudad Juarez Airport

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 removed to federal court. In May 2010, the Court of Appeals granted the federal government’s request, giving the Federal Courts jurisdiction to hear the lawsuit. The plaintiffs filed a constitutional claim against this ruling before the Federal District Court in Chihuaha and on November 29, 2010, the District Court in Chihuaha confirmed the Court of Appeals’ ruling. Against this ruling, the plaintiffs filed an appeal (recurso de revision) before the Federal District Circuit Court, and on July 7, 2011, the Federal Circuit Court ruled that the plaintiffs’ constitutional claim should be heard by a District Court in Ciudad Juarez. In October 2011, the District Court in Ciudad Juarez denied the plaintiffs’ constitutional claim, against which, in November 2011, the plaintiffs filed a new appeal (recurso de revision) before the Federal Circuit Court. On January 7, 2012, the Federal Circuit Court confirmed that the District Court in Ciudad Juarez had jurisdiction to hear the claim. On April 30, 2012, the Federal District Court in Ciudad Juarez ruled that it did not have jurisdiction to hear the claim, and the determination of jurisdiction was sent to the Supreme Court. However, after the Federal District Court denied jurisdiction, a conflict arose that has been resolved by the Circuit Court. The Federal Circuit Court ruled on January 13, 2013 that a state or local court must hear the lawsuit rather than a federal court. The lawsuit is still underway at this time. . As of April 15, 2014, the final resolution of this dispute remains 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 2013, the Ciudad Juarez International Airport represented 4.2% of GACN’s consolidated revenues. 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.

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Claims against the Panama Canal Authority

We filed a claim against the Panama Canal Authority, or ACP, regarding monetary damages from additional work outside the scope of the original contract that the consortium was required to perform as a result of unforeseen geological conditions found during the execution of the PAC-4 project. The amount of the claim is approximately U.S.$ 23 million. On July 19, 2013, we filed an arbitration demand before the Panamanian Conciliation and Arbitration Center. The panel was constituted in August 2013 and preliminary hearings were held. As of the date of this filing, the arbitration has been stayed to allow the parties to negotiate.

We do not believe a material loss is probable in this matter. For this reason, our financial statements do not include a provision for this arbitration.

Separately, we also filed a request for arbitration regarding monetary damages suffered by the consortium as a result of an increase in the minimum wage for workers in the Panama Canal’s area. The amount of the claim was approximately U.S.$ 1.2 million. On October 25, 2013, the arbitration panel issued a decision in favor of theACP denying our claim.

Line 12 of the Mexico City Metro

We are involved in litigation and ongoing investigations and negotiations with the government of Mexico City related to work performed by a consortium we led from 2008 to 2012 under a government construction contract for Line 12 of the Mexico City metro system. Our construction subsidiary, Ingenieros Civiles Asociados, S.A. de C.V., or ICASA, holds a 53% interest in the consortium, while Carso Infraestructura y Construccion, S.A. de C.V., our 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.

In December 2012, the consortium filed a claim against Mexico City’s government, its Ministry of Works and Services and Mexico City’s Subway Project Office. The consortium claimed a payment for additional and extraordinary work performed outside the scope of the original agreement as well as fees and financial expenses. The amount of the claim is Ps. 3,835 million, of which approximately Ps. 3,186 million is due to us. On April 23, 2013, the judge ordered, without reviewing the merits of the case, that the parties engage in a non-judicial contractual conciliation process without prejudice to the parties’ rights to re-file the claims.

On December 13, 2013, the parties agreed in the conciliation process in a joint proposal presented to the Mexico City Internal Control Authority, that both sides would be bound by an expert opinion on all technical and administrative matters. The expert was jointly nominated by our consortium and the client. On January 16, 2014, an expert opinion was issued confirming that additional and extraordinary work outside the scope of the contract had been performed.

Notwithstanding the expert’s opinion, the conciliation process concluded without compliance with the agreed resolution, allowing each party to enforce its claims before competent courts located in Mexico City. We believe that a favorable resolution is likely, as we have sufficient evidence as well as the expert opinion supporting the validity of the claim.

Separately, on March 11, 2014, the Mexico City Government partially suspended operation of Line 12 alleging a risk of derailment due to defects in construction. Due to the Mexico City Government’s public announcement that it would call the quality and latent defects bond, on March 28, 2014, our consortium filed a constitutional claim (amparo) seeking relief from the bonding company, a private party involved in a public act, to defend ourselves against possible execution of the bond in civil court in Mexico City seeking to prohibit its eventual execution. The original judge has declared the court incompetent to hear this cause of action, and referred the matter to a Federal Administrative Court. Additionally our consortium filed an action in the Administrative Court of Mexico City to nullify an official communication from the Mexico City Government declaring our consortium responsible for the alleged latent defects in Line 12.

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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 2013 and do not anticipate paying dividends in 2014.

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 Exchange				New York Stock Exchange
	Pesos per Share				U.S. dollars per ADS
	High		Low		High		Low
2009		35.49		14.49		10.85		4.79
2010		34.09		28.34		11.13		8.78
2011		32.42		14.47		10.82		4.08
2012		33.26		16.60		10.44		4.81
2013		42.05		21.20		13.53		6.57

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.

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	Mexican Stock Exchange				New York Stock Exchange
	Pesos per Share				U.S. dollars per ADS
	High		Low		High		Low
2012:
First Quarter		25.44		16.60		7.93		4.81
Second Quarter		24.37		19.60		7.63		5.62
Third Quarter		24.94		22.13		7.79		6.69
Fourth Quarter		33.26		26.22		10.44		8.16
2013:
First Quarter		42.05		32.85		13.51		10.28
Second Quarter		40.73		21.20		13.53		6.57
Third Quarter		30.42		23.20		9.55		7.22
Fourth Quarter		29.53		23.09		9.16		7.02
October		29.53		24.53		9.16		7.53
November		24.81		23.09		7.59		7.02
December		27.48		24.69		8.47		7.54
2014:
First Quarter		27.18		27.22		8.33		6.07
January		27.18		25.44		8.33		7.62
February		25.71		21.45		7.76		6.50
March		24.14		20.22		7.40		6.07
April (through April 28)		23.70		22.35		7.25		6.76

Our bylaws prohibit ownership of our shares by non-Mexican investors. As of December 31, 2013, 26.29% of our shares were represented by CPOs, and 21.1% of the CPOs were held by the depositary. According to our depositary bank, as of December 31, 2013, 7.04% of our outstanding shares were represented by ADSs, and such ADSs were held by 55 holders with registered addresses in the United States. As of December 31, 2013, there were 610,011,256 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 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 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. 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, and on November 17, 2011, our shareholders voted to increase such amount to Ps. 1,850 million and authorized management to carry out repurchases up to that amount in accordance with the Policy for the Acquisition and Placement of Own Shares. In addition, the November 17, 2011 shareholders’ meeting approved the cancellation of up to 32,748,689 repurchased shares, equivalent to approximately 5% of the shares outstanding as of December 31, 2010. In 2011, we repurchased 48,534,300 shares in the nominal amount of Ps. 996.6 million. In 2012, we repurchased 4,207,000 shares in the nominal amount of Ps. 100 million. On April 18, 2012, our shareholders approved the setting of Ps. 1,850 million as the maximum amount to be used for share repurchases. See “Item 10. Additional Information—Purchase by the Company of its Shares.”

On April 16, 2013 our shareholders approved the use of up to Ps 2,192 million for the repurchase reserve and we repurchased 6,409,430 shares in the nominal amount of Ps. 139 million.

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

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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, 2013, 142 Mexican companies, excluding mutual funds, had equity listed on the Mexican Stock Exchange. In 2013, the ten most actively traded equity issues in the IPC Index (Indice de Precios y Cotizaciones) (excluding banks) represented approximately 89% of the total volume of equity issues in the IPC 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.”

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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.

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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.

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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.

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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.

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:

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• 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.

Other Provisions

Duration

Our corporate existence under our bylaws is unlimited, but may be terminated by resolution of an extraordinary general meeting of shareholders.

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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 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.

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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. MATERIAL CONTRACTS

We have not entered into any material contracts, other than in the ordinary course of business for the two years immediately preceding the date of this annual report on Form 20-F.

C. 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.”

D. 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. Further, this summary does not address the alternative minimum tax, the Medicare tax on net investment income or other aspects of U.S. federal income or state and local taxation that may be relevant to you in light of your particular circumstances.

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 center of vital interests in Mexico. Under Mexican law, individuals are considered to have their center 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

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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.

Taxation of Dividends

Mexican Tax Considerations

Under Mexican income tax law, dividends, either in cash or in kind, paid to Mexican individuals and non-resident holders with respect to the shares represented by the ADSs or CPOs are subject to a 10% Mexican tax withholding (provided that no Mexican withholding tax will apply to distributions of net taxable profits generated before 2014). Non-resident holders may be subject to withholding tax at reduced rates if they are eligible for benefits under an applicable tax treaty with Mexico.

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 will be subject to taxation at a maximum rate of 20% 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 2013 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 2014 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.

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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

Subject to applicable tax treaties, gain on the sale of CPOs by a non-resident holder will be subject to a 10% 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 (including the NYSE) 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, a non-resident holder generally will be subject to Mexican tax on the sale of CPOs at a 25% rate on the gross proceeds from sale or other disposition. Alternatively, subject to certain requirements, a non-resident holder may elect to pay Mexican tax at a 35% rate on the net gain realized on the sale or disposition of its CPOs, which gain should be calculated pursuant to Mexican income tax law provisions.

Gain from the sale or disposition of ADSs (as opposed to directly held shares) by a non-resident holder generally should not be subject to Mexican withholding tax, provided that the transaction is carried out through an approved stock exchange (including the NYSE).

Under the Tax Treaty, a non-resident 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 ASDs 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 a reduced rate. 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 or ADSs, 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 or ADSs.

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.

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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.

U.S. 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 CPOs 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.

E. 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, 2013, we had outstanding approximately Ps. 17,722 million notional amount of derivative financial instruments for purposes other than trading and Ps. 2,395 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.

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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, 2013, 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. 169 million, Ps. 87 million and Ps. 43 million per year, respectively.

Qualitative Information

Interest rate risk exists principally with respect to our indebtedness that bears interest at floating rates. At December 31, 2013, we had outstanding approximately Ps. 39,413 million of indebtedness, of which 52% bore interest at fixed interest rates and 48% bore interest at floating rates of interest. At December 31, 2012, we had outstanding approximately Ps. 47,711 million of indebtedness, of which 64% bore interest at fixed interest rates and 36% bore interest at floating rates of interest. At December 31, 2011, we had outstanding approximately Ps. 46,884 million of indebtedness, of which 22% bore interest at fixed interest rates and 78% 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 interest rate swaps (not for trading purposes), and other trading derivative instruments for the terms of some of our credit facilities with the objective of reducing the uncertainties resulting from interest rate fluctuations. See “Risk Factors—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.”

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, except for the principal of our senior notes and loans of ICAPLAN. 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.

As of December 31, 2013, a hypothetical, instantaneous and unfavorable change in the exchange rate of 100 Mexican cents to the exchange rate applicable to our receivables, payables and debt, including derivative financial instruments not held for trading purposes (and excluding the debt hedged by instruments held for trading purposes), would have resulted in an estimated exchange loss of approximately Ps. 1.3 million, based on the highest value in pesos of the debt expressed in foreign currency.

Qualitative Information

Our principal exchange rate risk involves changes in the value of the Mexican peso relative to the dollar. As of December 31, 2013, approximately 32% of our consolidated revenues and 43% 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

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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, Los Portales, San Martin and the projects under construction in Panama. 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, 2013 and 2012, approximately 12% and 26% respectively, of our construction backlog was denominated in foreign currencies and approximately 15% and 14%, respectively, of our accounts receivable were denominated in foreign currencies. As of December 31, 2013 and 2012, approximately 6% and 6%, respectively, of our consolidated financial assets were denominated in foreign currencies, with the balance denominated in Mexican pesos. In addition, as of December 31, 2013 and 2012, approximately 43% and 36%, 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 revenue on the related contracts. 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 of the year. In 2011, there was a significant depreciation in the Mexican peso against the U.S. dollar, and the noon buying rate increased to Ps. 13.95 on December 30, 2011, representing a depreciation of approximately 13%. The Mexican peso has since partially recovered, and the noon buying rate was Ps. 13.14 per U.S.$ 1.00 on April 25, 2014.

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, for the terms of some of our long-term credit facilities with the objective of reducing the uncertainties resulting from exchange rate fluctuations. See “Risk Factors—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.”

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.

Service	Fee or Charge Amount for ADS Holder depositing or withdrawing shares	Payee
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property	U.S.$ 5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	Bank of New York Mellon
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates	U.S.$ 5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	Bank of New York Mellon

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Service	Fee or Charge Amount for ADS Holder depositing or withdrawing shares	Payee
Any cash distribution to ADS registered holders	U.S.$.02 (or less) per ADS	Bank of New York Mellon
Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders	A fee equivalent to the fee that would be payable if securities distributed to the ADS holder had been shares and the shares had been deposited for issuance of ADSs	Bank of New York Mellon
Depositary services	U.S.$.02 (or less) per ADSs per calendar year	Bank of New York Mellon
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	Registration or transfer fees	Bank of New York Mellon
Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)	Expenses of the depositary	Bank of New York Mellon
Converting foreign currency to U.S. dollars	Expenses of the depositary	Bank of New York Mellon
Other fees, as necessary	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	Bank of New York Mellon
Other fees, as necessary	Any charges incurred by Bank of New York Mellon or its agents for servicing the deposited securities	Bank of New York Mellon

Fees incurred in past annual period

In November 2011, we received U.S. $ 84,860.60, 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. In April 2013, we received U.S. $ 70,000.00, 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. In December 2013, we received U.S. $ 82,540.70, 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.

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.

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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.

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, 2013.

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, 2013, 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. For the year ended December 31, 2013, our financial statements were prepared in accordance with the International Financial Reporting Standards, or IFRS, issued by the International Accounting Standards Board. 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 IFRS, 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.

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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, 2013. 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 (1992).

Based on our assessment and those criteria, our management concluded that our company maintained effective internal control over financial reporting as of December 31, 2013.

Galaz, Yamazaki, Ruiz Urquiza, S.C. a member of Deloitte Touche Tohmatsu Limited, 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.

(c) Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

To the Board of Directors and Stockholders of Empresas ICA, S.A.B. de C.V.

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, 2013, based on the criteria established inInternal Control — Integrated Framework(1992) 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 International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. 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 IFRS, 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.

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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, 2013, based on the criteria established inInternal Control — Integrated Framework (1992) 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, 2013 of the Company, and our report dated April 29, 2014 expressed an unqualified opinion on those financial statements and includes explanatory paragraphs regarding (i) reference to Note 4 where the impacts of International Financial Reporting Standard No. 11 Joint Arrangements (IFRS) and International Accounting Standard No. 19 Employee Benefits (IAS 19) are disclosed and (ii) the translation of Mexican peso amounts into U.S. dollar amounts in conformity with the basis stated in Note 3(d) to such consolidated financial statements.

Galaz, Yamazaki, Ruiz Urquiza, S.C.

Member of Deloitte Touche Tohmatsu Limited

/s/ Ramon Arturo Garcia Chavez

Ramon Arturo Garcia Chavez

Mexico City, Mexico

April 29, 2014

(d) Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during 2013 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 Bojorges is an independent member of our board. On April 14, 2011, the shareholders’ meeting appointed Ms. Garcia 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.

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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 Limited, and its affiliates, which we collectively refer to as Deloitte, during the fiscal years ended December 31, 2013 and 2012:

	Total Fees
	As of December 31,
	2013		2012
	(Millions of Mexican pesos)
Fees
Audit fees		Ps. 48.0		Ps. 45.4
Audit-related fees		0.4		3.9
Tax fees		5.7		8.8
All other fees		6.1		8.0
Total		Ps. 60.2		Ps. 66.1

The “audit fees” line item in the above table is the aggregate fees billed by Deloitte in 2013 and 2012 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 2013 and 2012 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.”

“Tax fees” include fees billed by Deloitte in 2013 and 2012 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 2013, none of the fees paid to Deloitte was approved pursuant to thede minimusexception.

Item 16D. Exemptions from the Listing Standards for Audit Committees

None.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

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.

2013	Total Number of Shares Purchased(1)		Average Price Paid per Share
January 1-31		—		—
February 1-28		—		—
March 1-31		—		—
April 1-30		—		—
May 1-31		—		—
June 1-30		—		—
July 1-31		140,430		24.77
August 1-31		—		—
September 1-30		—		—
October 1-31		—		—
November 1-30		3,018,000		22.48
December 1-31		3,251,000		21.05
2014
January 1-31		14,620,000		22.83
February 1-28		11,240,000		24.63
March 1-31		664,661		22.53
April 1-30		—		—
Total		Ps. 22,818,091		Ps. 22.622

(1) We do not repurchase our shares other than through the share repurchase program.

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The total number of shares repurchased by the issuer with an average price per share of Ps. 21.83 represents a total amount of Ps. 39,745,646 million, which amount was drawn from the repurchase reserve approved by our shareholders at our ordinary general meeting.

At an ordinary meeting held on April 9, 2014, our shareholders approved a share purchase reserve to Ps. 2,140 million and authorized management to carry out repurchases up to that amount in accordance with the Policy for the Acquisition and Placement of Own Shares. This reserve will provide us with the flexibility to continue purchasing shares in the market in the coming years, depending on management’s evaluation of market conditions, the price of our stock, our liquidity position and other factors.

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.

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.

128

NYSE Standards	Our Current Corporate Governance Practices
	Our Board of Directors currently consists of eleven members, of which nine are outside (i.e. non-management) directors. Six of our directors are independent directors within the meaning of the Mexican Securities Market Law and within the meaning of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
	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.
A director is not independent if such director is:	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 discloses such contributions in the company’s proxy statement or annual report)

129

“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 bylaws require that the Corporate Practices Committee be composed of independent directors within the meaning of the Mexican Securities Market Law. The duties of our Corporate Practices Committee 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, and
	•      reviewing certain exempted actions of the Board of Directors.
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 specifying the purpose, minimum duties and evaluation procedures of the committee. §303A.05	The Corporate Practices Committee provides an opinion on compensation proposals for the Chief Executive Officer and other executive officers pursuant to the provisions of the Mexican Securities Market Law.
	Our Corporate Practices Committee makes recommendations as to compensation for senior and middle management to the Board of Directors, which must approve such recommendations.

130

NYSE Standards	Our Current Corporate Governance Practices
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.

131

NYSE Standards	Our Current Corporate Governance Practices
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 directors or executive officers within four business days of such determination. §§303A.09, 303A.10	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 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.

Item 16H.Mine Safety Disclosure

Not applicable.

132

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-143 and G-1 to G-69 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, and as further amended and restated as of August 30, 2007, among Empresas ICA Sociedad Controladora, S.A.B. de C.V. (f/k/a Empresas ICA, S.A. de C.V.), the Bank of New York, as Depositary, and Holders of American Depositary Receipts (incorporated by reference to our Form F-6 (File No. 333-07064) filed on August 30, 2007) (effective as of August 30, 2007).
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).

133

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).
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, 2006) (File No. 1-11080).
4.7	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 (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2010) (File No. 1-11080).
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.

134

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/ Alonso Quintana Kawage
	Name: Alonso Quintana Kawage
	Title: Chief Executive Officer

Date: April 30, 2014

135

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

Consolidated Financial Statements at December 31, 2013 and 2012 and January 1, 2012 and for the Years Ended December 31, 2013, 2012 and 2011, and Report of Independent Registered Public Accounting Firm Dated April 29, 2014

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

Financial Statements for the Years Ended December 31, 2013 and 2012 and January 1, 2012 and

Report of Independent Registered Public Accounting Firm

Table of contents

	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Statements of Financial Position	F-2
Consolidated Statements of Income and Other Comprehensive Income	F-3
Consolidated Statements of Changes in Stockholders’ Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-9

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, 2013 and 2012, and the related consolidated statements of income and other comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2013. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles 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 Empresas ICA, S.A.B. de C.V. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 2013, in conformity with International Financial Reporting Standards, as issued by the International Accounting Standards Board.

We direct your attention to the information included in Note 4 of the accompanying consolidated financial statements, where the impacts of the adoption of International Financial Reporting Standard No. 11,Joint Arrangements (IFRS 11) and International Accounting Standard No. 19,Employee Benefits (IAS 19) are disclosed.

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 3d. 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.

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, 2013, based on the criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 29, 2014 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

Ramón Arturo García Chávez                    

Mexico City, Mexico

April 29, 2014

F-1

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

Consolidated Statements of Financial Position

(Thousands of Mexican pesos and millions of U.S. dollars)

	Millions of U.S. dollars (Convenience Translation Note 3.d) December 31,			December 31,						January 1,
	2013			2013			2012			2012
							(As Adjusted)			(As Adjusted)
Current assets:
Cash and cash equivalents (Note 6)	U.S.$	258			Ps. 3,369,782			Ps. 4,149,508			Ps. 3,106,007
Restricted cash (Note 6)		154			2,009,979			1,950,231			5,704,038
Customers, net (Note 7)		1,229			16,060,223			16,533,546			25,003,891
Other receivables, net (Note 11)		308			4,028,405			4,853,277			3,997,559
Construction materials inventory, net (Note 9)		72			937,627			743,110			995,056
Real estate inventories (Note 10)		159			2,075,582			3,686,928			2,940,357
Advances to subcontractors and other (Note 12)		122			1,595,113			1,549,408			1,825,014
Assets classified as held for sale (Note 34)		971			12,690,082			—			—
Current assets		3,273			42,766,793			33,466,008			43,571,922
Non-current assets:
Restricted cash (Note 6)		3			37,047			503,249			71,587
Customers, net (Note 7)		1,014			13,244,812			11,420,642			8,234,241
Real estate inventories (Note 10)		322			4,202,358			2,629,782			4,272,470
Financial assets from concessions (Note 13)		224			2,932,921			11,008,028			5,334,077
Intangible assets from concessions, net (Note 13)		1,604			20,950,173			15,147,175			13,127,730
Property, plant and equipment, net (Note 14)		410			5,355,626			5,305,962			3,852,307
Investment properties (Note 15)		38			491,579			491,579			55,898
Other assets, net (Note 16)		103			1,343,548			1,259,617			159,051
Prepaid expenses		35			459,493			444,934			732,319
Investment in associated companies (Note 18)		89			1,167,914			6,091,445			5,709,799
Investment in joint ventures (Note 19)		271			3,544,224			2,323,677			1,932,861
Derivative financial instruments (Note 26)		36			465,053			481,916			317,317
Deferred income taxes (Note 28)		348			4,545,603			7,695,910			3,176,787
Non-current assets		4,497			58,740,351			64,803,916			46,976,444
Total assets	U.S.$	7,770			Ps.101,507,144			Ps.98,269,924			Ps.90,548,366
	Millions of U.S. dollars (Convenience Translation Note 3.d) December 31,			December 31,						January 1,
	2013			2013			2012			2012
							(As Adjusted)			(As Adjusted)
Current liabilities :
Notes payable (Note 21)	U.S.$	681			Ps. 8,901,699			Ps. 9,571,363			Ps. 5,814,724
Current portion of long-term debt (Note 27)		65			854,374			1,023,272			13,824,462
Trade accounts payable		493			6,439,800			6,237,084			4,546,472
Income taxes (Note 28)		26			345,994			386,204			369,282
Accrued expenses and other (Note 22)		565			7,376,592			5,501,969			5,928,178
Provisions (Note 23)		122			1,589,138			1,998,495			1,894,997
Advances from customers		195			2,552,505			3,513,465			3,166,791
Liabilities directly associated with assets classified as held for sale (Note 34)		808			10,560,228			—			—
Current liabilities		2,955			38,620,330			28,231,852			35,544,906
Non-current liabilities:
Long-term debt (Note 27)		2,206			28,815,544			36,161,067			26,727,486
Taxes payable associated with tax deconsolidation (Note 28)		280			3,653,287			4,627,165			3,219,355
Deferred income taxes (Note 28)		126			1,641,482			4,773,213			1,599,210
Derivative financial instruments (Note 26)		25			325,020			379,738			345,895
Labor obligations (Note 39)		72			946,009			856,501			559,004
Provisions (Note 23)		38			499,999			528,719			454,153
Other long-term liabilities (Note 24)		220			2,873,691			2,277,768			1,340,447
Non-current liabilities		2,967			38,755,032			49,604,171			34,245,550
Total liabilities		5,922			77,375,362			77,836,023			69,790,456
Contingencies (Note 29)
Stockholders’ equity (Note 31):
Contributed capital:
Common stock		644			8,407,533			8,370,958			8,334,043
Additional paid-in capital		547			7,140,502			7,043,377			7,091,318
		1,191			15,548,035			15,414,335			15,425,361
Earned capital:
Reserve for repurchase of shares		164			2,140,268			1,850,000			1,850,000
Retained earnings (accumulated deficit)		89			1,162,063			64,348			(476,669	)
Cumulative translation effects of foreign subsidiaries		5			68,228			141,228			337,180
Valuation of derivative financial instruments		(16	)		(207,052	)		(921,553	)		(482,925	)
Labor obligations and others		(10	)		(135,122	)		(148,554	)		(82,632	)
Controlling interest		1,423			18,576,420			16,399,804			16,570,315
Non-controlling interest (Note 33)		425			5,555,362			4,034,097			4,187,595
Total stockholders’ equity		1,848			24,131,782			20,433,901			20,757,910
Total liabilities and stockholders’ equity	U.S.$	7,770			Ps. 101,507,144			Ps. 98,269,924			Ps. 90,548,366

The accompanying notes are an integral part of these consolidated financial statements.

F-2

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

Consolidated Statements of Income and Other Comprehensive Income

(Thousands of Mexican pesos and millions of U.S. dollars, except per share data)

	Millions of U.S. dollars (Convenience Translation Note 3.d) December 31,			Year ended December 31,
	2013			2013			2012			2011
							(As Adjusted)			(As Adjusted)
Continuing operations:
Revenues:
Construction	U.S.$	1,664		Ps.	21,744,299		Ps.	30,458,434		Ps.	27,168,997
Concessions		304			3,965,464			2,402,313			2,254,428
Sales of goods and other (Note 13.f)		294			3,846,435			5,261,374			4,835,424
Total revenues		2,262			29,556,198			38,122,121			34,258,849
Costs:
Construction		1,433			18,725,945			27,601,617			24,787,842
Concessions		178			2,332,000			1,718,279			1,421,420
Sales of goods and other		185			2,414,867			3,878,326			2,768,547
Total costs (Note 35)		1,796			23,472,812			33,198,222			28,977,809
Gross profit		466			6,083,386			4,923,899			5,281,040
General expenses		232			3,012,282			3,695,296			2,903,749
Other income, net (Note 36)		(4	)		(61,467	)		(449,973	)		(490,143	)
Operating income		238			3,132,571			1,678,576			2,867,434
Interest expense		227			2,965,788			2,433,572			1,731,024
Interest income		(21	)		(270,179	)		(302,650	)		(213,199	)
Exchange loss (gain), net		27			357,319			(1,126,268	)		1,485,156
Effects of valuation of derivative financial instruments		25			326,075			155,192			318,482
		258			3,379,003			1,159,846			3,321,463
Share in results of associated companies and joint ventures		(27	)		(350,198	)		(409,051	)		(286,033	)
Income (loss) before income discontinued operations and income taxes		7			103,766			927,781			(167,996	)
Income tax benefit (Note 28)		(46	)		(595,905	)		(34,792	)		(337,683	)
Income from continuing operations		53			699,671			962,573			169,687
Discontinued operations:
Income from discontinued operations, net (Note 34)		55			722,680			566,658			1,577,402
Consolidated net income for the year		108			1,422,351			1,529,231			1,747,089

(Continued)

F-3

	Millions of U.S. Dollars (Convenience Translation Note 3.d) December 31,			Year ended December 31,
	2013			2013			2012			2011
							(As Adjusted)			(As Adjusted)
Other comprehensive income:
Items that will not be subsequently reclassified to profit or loss:
Actuarial gains (losses) on labor obligations		2			28,760			(104,929	)		(150,247	)
Income tax relating to items that will not be subsequently reclassified to profit or loss (Note 28.j)		(1	)		(15,020	)		32,877			35,414
		1			13,740			(72,052	)		(114,833	)
Items that may be subsequently reclassified subsequently to profit or loss:
Translation effects of foreign subsidiaries		(6	)		(82,914	)		(203,478	)		651,086
Valuation effects of derivative financial instruments		(23	)		(302,330	)		(197,457	)		101,822
Valuation effects of derivative financial instruments of associated companies and joint ventures		(20	)		(263,300	)		(1,007,790	)		(391,355	)
Reclassification adjustments for amounts recognized in results for foreign operations disposed of in the year		—			—			—			(73,000	)
Reclassification adjustments for amounts recognized in results for cash flow hedges		24			308,173			177,735			346,655
Reclassification adjustments for amounts recognized in results for cash flow hedges of associated companies and joint ventures		82			1,074,577			365,932			219,444
Income tax relating to reclassification adjustments for amounts recognized in results for cash flow hedges (Note 28.j)		(7	)		(92,452	)		(53,027	)		(133,869	)
Income tax relating to reclassification adjustments for amounts recognized in results for cash flow hedges of associated companies and joint ventures (Note 28.j)		(25	)		(324,366	)		(110,246	)		(65,833	)
Income tax relating to items that valuation effects of derivative financial instruments of associated companies and joint ventures (Note 28.j)		17			219,624			327,365			129,967
Income tax relating to items that valuation effects of derivative financial instruments (Note 28.j)		7			90,699			63,186			(33,601	)
		49			627,711			(637,780	)		751,316
Total other comprehensive income		50			641,451			(709,832	)		636,483
Total comprehensive income for the year	U.S.$	158		Ps.	2,063,802		Ps.	819,399		Ps.	2,383,572

(Continued)

F-4

			Year ended December 31,
			2013			2012		2011
						(As Adjusted)		(As Adjusted)
Consolidated net income attributable to:
Controlling interest	U.S.$	32	Ps.	423,552		Ps.	955,038	Ps.	1,437,135
Non-controlling interest		76		998,799			574,193		309,954
Consolidated net income for the year	U.S.$	108	Ps.	1,422,351		Ps.	1,529,231	Ps.	1,747,089
Total comprehensive income attributable to:
Controlling interest	U.S.$	83	Ps.	1,078,485		Ps.	254,536	Ps.	2,069,717
Non-controlling interest		75		985,317			564,863		313,855
Total comprehensive income for the year	U.S.$	158	Ps.	2,063,802		Ps.	819,399	Ps.	2,383,572
Basic and diluted earnings per common share of controlling interest from:
Continuing operations			Ps.	(0.490	)	Ps.	0.640	Ps.	(0.223	)
Discontinued operations			Ps.	1.185		Ps.	0.935	Ps.	2.498
Consolidated net income			Ps.	0.695		Ps.	1.575	Ps.	2.275
Weighted average shares outstanding (000’s)				609,690			606,233		631,588

(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 Changes in Stockholders’ Equity

(Thousands of Mexican pesos except for share data (Note 31))

				Contributed capital						Earned capital						Other comprehensive income
	Shares			Common stock			Addi- tional paid-in capital			Reserve for repur- chase of shares			Retained earnings (accumu- lated deficit)			Cumulative translation effects of foreign subsidia- ries			Valuation of financial derivative financial instruments			Labor obliga- tions			Controlling interest			Non- controlling interest			Total stockholders’ equity
Balance at January 1, 2011 (as previously reported)		649,427,886			Ps. 8,950,796			Ps. 7,085,536			Ps. 726,789			Ps. (316,720	)		Ps. (238,328	)		Ps. (654,832	)		Ps. 32,201			Ps. 15,585,442			Ps. 3,744,509			Ps. 19,329,951
Adjustments for adoption of new accounting policies		—			—			—			—			—			—			—			—			—			(27,874	)		(27,874	)
Balance at January 1, 2011 (as adjusted)		649,427,886			8,950,796			7,085,536			726,789			(316,720	)		(238,328	)		(654,832	)		32,201			15,585,442			3,716,635			19,302,077
Application of earnings from prior years		—			—			—			1,402,637			(1,402,637	)		—			—			—			—			—			—
Issuance of common stock		3,785,611			52,175			5,782			48,236						—			—			—			106,193			—			106,193
Decrease in non-controlling interest (Note 33)		—			—			—			—			—			—			—			—			—			(55,331	)		(55,331	)
Repurchase of shares		(48,534,300	)		(668,928	)		—			(327,662	)		—			—			—			—			(996,590	)		—			(996,590	)
Others		—			—			—			—			(194,447	)		—			—			—			(194,447	)		212,436			17,989
Consolidated comprehensive income:
Net income for the year		—			—			—			—			1,437,135			—			—			—			1,437,135			309,954			1,747,089
Translation effects of foreign subsidiaries		—			—			—			—			—			575,508			—			—			575,508			2,578			578,086
Effect of valuation of derivative financial instruments, including associated companies and joint ventures		—			—			—			—			—			—			171,907			—			171,907			1,323			173,230
Labor obligations		—			—			—			—			—			—			—			(114,833	)		(114,833	)		—			(114,833	)
Comprehensive income for the year		—			—			—			—			1,437,135			575,508			171,907			(114,833	)		2,069,717			313,855			2,383,572
Balance at December 31, 2011 (as adjusted)		604,679,197			8,334,043			7,091,318			1,850,000			(476,669	)		337,180			(482,925	)		(82,632	)		16,570,315			4,187,595			20,757,910
Issuance of common stock		6,885,385			94,898			—			47,285			—			—			—			—			142,183			—			142,183
Decrease in non-controlling interest (Note 33)		—			—			—			—			—			—			—			—			—			(229,584	)		(229,584	)
Repurchase of shares		(4,207,000	)		(57,983	)		4,574			(47,285	)		—			—			—			—			(100,694	)		—			(100,694	)
Excess of the price paid over the carrying value ofnon-controlling interest		—			—			—			—			(414,021	)		—			—			—			(414,021	)		(488,777	)		(902,798	)
Equity forward		—			—			(52,515	)		—			—			—			—			—			(52,515	)		—			(52,515	)
Consolidated comprehensive income:
Net income for the year		—			—			—			—			955,038			—			—			—			955,038			574,193			1,529,231
Translation effects of foreign subsidiaries		—			—			—			—			—			(195,952	)		—			—			(195,952	)		(7,526	)		(203,478	)
Effect of valuation of derivative financial instruments, including associated companies and joint ventures		—			—			—			—			—			—			(438,628	)		—			(438,628	)		4,326			(434,302	)
Labor obligations		—			—			—			—			—			—			—			(65,922	)		(65,922	)		(6,130	)		(72,052	)
Comprehensive income for the year		—			—			—			—			955,038			(195,952	)		(438,628	)		(65,922	)		254,536			564,863			819,399
Balance at December 31, 2012 (As adjusted)		607,357,582			8,370,958			7,043,377			1,850,000			64,348			141,228			(921,553	)		(148,554	)		16,399,804			4,034,097			20,433,901
Application of earnings from prior years		—			—			—			341,674			(341,674	)		—			—			—			—			—			—
Issuance of common stock		9,063,104			124,914			84,436			—			—			—			—			—			209,350			7,920			217,270
Reimbursement of capital (Note 33)		—			—			—			—			—			—			—			—			—			(496,492	)		(496,492	)
Sale of non-controlling interest (Note 33)		—			—			—			—			1,015,837			—			—			—			1,015,837			1,024,520			2,040,357
Repurchase of shares		(6,409,430	)		(88,339	)		—			(51,406	)		—			—			—			—			(139,745	)		—			(139,745	)
Equity forward		—			—			12,689			—			—			—			—			—			12,689			—			12,689
Consolidated comprehensive income:
Net income from year		—			—			—			—			423,552			—			—			—			423,552			998,799			1,422,351
Translation effects of foreign subsidiaries		—			—			—			—			—			(73,000	)		—			—			(73,000	)		(9,914	)		(82,914	)
Effect of valuation of derivative financial instruments, including associated companies and joint ventures		—			—			—			—			—			—			714,501			—			714,501			(3,876	)		710,625
Labor obligations		—			—			—			—			—			—			—			13,432			13,432			308			13,740
Comprehensive income for the year		—			—			—			—			423,552			(73,000	)		714,501			13,432			1,078,485			985,317			2,063,802
Balance at December 31, 2013		610,011,256			Ps. 8,407,533			Ps. 7,140,502			Ps. 2,140,268			Ps. 1,162,063			Ps. 68,228			Ps. (207,052	)		Ps. (135,122	)		Ps. 18,576,420			Ps. 5,555,362			Ps. 24,131,782

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 Cash Flows

(Thousands of Mexican pesos and millions of U.S. dollars)

	Millions of U.S. dollars (Convenience Translation Note 3.d) December 31, 2013			Year ended December 31,
				2013			2012			2011
							(As Adjusted)			(As Adjusted)
Cash flows from operating activities:
Consolidated net income	U.S.$	108			Ps. 1,422,351			Ps. 1,529,231			Ps. 1,747,089
Adjustments for:
Income taxes		(46	)		(595,905	)		(34,792	)		(337,683	)
Allowance for doubtful accounts		(23	)		(296,213	)		118,028			745,385
Provisions		14			178,449			689,006			2,910,228
Depreciation and amortization		78			1,022,321			929,300			1,130,448
Gain on sale of property, plant and equipment		(1	)		(12,387	)		(13,051	)		(976	)
Adjustment for valuation of long-term investment		2			22,038			275,587			—
Gain on sale of investment in shares		(45	)		(586,472	)		—			(1,950,676	)
Equity in results of non-consolidated associated companies		(27	)		(350,198	)		(409,051	)		(286,033	)
Interest expense		295			3,856,951			3,344,660			1,779,092
Amortization of issuance costs and financing commissions		19			245,524			25,251			89,201
Unrealized exchange rate fluctuation		20			262,956			(982,506	)		2,577,166
Valuation of derivative financial instruments		25			326,075			155,192			318,482
Discount on long-term liabilities		(56	)		(735,991	)		—			—
Effects of discontinued operations		91			1,191,588			1,092,673			292,967
Others		17			209,350			142,183			146,812
		471			6,160,437			6,861,711			9,161,502
Customers, net		(116	)		(1,521,239	)		7,294,916			(11,860,386	)
Inventories and other assets		(19	)		(241,832	)		376,165			(249,167	)
Real estate inventories		3			38,770			589,678			(822,477	)
Other receivables		(43	)		(561,983	)		478,176			(2,136,451	)
Financial assets from concessions		(4	)		(46,966	)		328,434			(802,350	)
Interest accrued on financial concession asset		(51	)		(672,028	)		(219,377	)		(582,523	)
Trade accounts payable		15			192,080			730,139			(558,936	)
Advances from customers		(81	)		(1,058,633	)		(1,018,484	)		1,662,255
Other current liabilities		(11	)		(144,318	)		(1,613,022	)		41,577
Income tax payments		(37	)		(476,933	)		(747,636	)		(910,630	)
Activities of discontinued operations		(115	)		(1,498,888	)		(6,630,999	)		(2,981,677	)
Net cash provided by (used in) operating activities		12			168,467			6,429,701			(10,039,263	)
Cash flows from investing activities:
Investment in machinery and equipment		(27	)		(356,780	)		(256,626	)		(284,533	)
Dividends received		49			639,665			147,247			619,166
Other long term assets		(9	)		(117,454	)		(82,100	)		(80,902	)
Investment in concessions		(379	)		(4,360,217	)		(1,967,713	)		(1, 176,092	)

(Continued)

F-7

	Millions of U.S. dollars (Convenience Translation Note 3.d) December 31, 2013			Year ended December 31,
				2013			2012			2011
							(As Adjusted)			(As Adjusted)
Sale of property, plant and equipment		11			149,157			69,083			79,416
Loans paid		—			—			(540	)		(126,593	)
Business acquisitions, net of cash received		—			—			(558,887	)		(142,979	)
Investment in associates and joint ventures					(596,569	)		(450,917	)		(426,027	)
Sale of investment in shares		417			5,442,874
Activities of discontinued operations		—			—			—			2,851,393
Net cash provided by (used in) investing activities		62			800,676			(3,100,453	)		1,312,849
Cash flows from financing activities:
Proceeds from long-term debt		1,348			17,608,505			20,087,352			18,313,376
Payments of long-term debt		(1,280	)		(16,719,110	)		(20,811,349	)		(7,506,727	)
Payments of issuance costs and financing commissions		(21	)		(279,065	)		(1,037,051	)		(18,511	)
Derivative financial instruments		(26	)		(334,555	)		(807,011	)		—
Payments under leasing agreements		6			72,047			13,751			—
Interest paid		(289	)		(3,780,702	)		(4,026,616	)		(2,135,485	)
Repurchase of shares		(11	)		(139,745	)		(100,694	)		(996,590	)
Cash received from sale of noncontrolling interest (net of issuance costs of Ps.197.2 million pesos)		196			2,562,730			—
Decrease in noncontrolling interest		(29	)		(379,624	)		(1,330,337	)		(15,390	)
Increase in common stock		—			—			—			(220,580	)
Activities of discontinued operations		(58	)		(762,758	)		2,430,110			7,193,290
Net cash (used in) provided by financing activities		(164	)		(2,152,277	)		(5,581,845	)		14,613,383
Effects of exchange rate changes on cash		—			(3,046	)		(26,047	)		73,250
(Decrease) increase in cash, cash equivalents and restricted cash		(90	)		(1,186,180	)		(2,278,644	)		5,960,219
Cash, cash equivalents and restricted cash at beginning of period		505			6,602,988			8,881,632			2,921,413
Cash, cash equivalents and restricted cash at the end of period	U.S.$	415			Ps. 5,416,808			Ps. 6,602,988			Ps. 8,881,632

(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

Notes to Consolidated Financial Statements

For the years ended December 31, 2013, 2012 and 2011

(Thousands of Mexican pesos, except as otherwise indicated)

1. Nature of business

Empresas ICA, S.A.B. de C.V. and subsidiaries (“ICA” or, together with its subsidiaries, “the Company”) is a holding company incorporated in Mexico with over 66 years experience, 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. In 2012, ICA began its incursion into providing mining related services, such as exploration and exploitation of deposits for others, transportation and other mining-related activities. ICA’s shares are traded on the Mexican Stock Exchange and the New York Stock Exchange. Its registered address is 36 Boulevard Manuel Avila Camacho, Piso 15, Lomas de Chapultepec, 11000 Mexico, D. F.

2. Significant events

Sale of shareholding in associate

In August 2013, the Company sold the Series “A” shares which it held in Red de Carreteras de Occidente, S. A. B. de C.V. (“RCO”) (associated company). The sale price was Ps.5,073 million and obtained a gain of Ps.491 million which is presented in other income and expenses in the consolidated income statement and other comprehensive income.

Sale of participation in a subsidiary through Secondary Public Offering

In July 2013, Aeroinvest, S.A. de C.V. (direct subsidiary of ICA) placed, in a public secondary offering, shares it held in Grupo Aeroportuario del Centro Norte, S.A.B de C.V. (“GACN”) (indirect subsidiary of ICA) for the amount of Ps.2,760 million. A total of 69 million shares were sold in the secondary offering.

With respect to the sale of shares of GACN, the excess of the consideration received over the carrying value of the non-controlling interest obtained of Ps.1,073 million, net of income tax (“ISR”) has been recorded in accumulated results within stockholders’ equity of the controlling interest, as it represents an equity transaction between shareholders.

For accounting purposes, management has reassessed if the Company maintained effective control over GACN. Based on its assessment, management concluded that, considering participation in the voting rights of GACN and the size of such participation relative to the dispersion of shares owned by the other shareholders, as well as potential voting rights it has and other rights arising from other contractual arrangements, the Company has the current ability to direct the relevant activities at the time decisions need to be made, including voting patterns in shareholders’ meetings, and has concluded that it maintains effective control over GACN. Therefore, the Company continues to consolidate GACN in its consolidated financial statements at December 31, 2013 (see Note 17). Nevertheless, the decrease in the percentage of participation of ICA in GACN resulted in the deconsolidation of GACN by ICA for tax purposes during 2013, as required by Mexican Income Tax Law.

F-9

2014 Fiscal Reform

In December 2013, the Mexican Government enacted a package of tax reforms, which includes several significant changes to income tax laws included the elimination of the Business Flat Tax (“IETU”) and the tax consolidation regime. Because the IETU law was eliminated, the deferred IETU that the Company had recorded for accounting purposes was canceled on the date of enactment of the tax reform. With respect to tax deconsolidation, three alternatives are offered to companies to deconsolidate from a tax perspective and thus determine the deferred tax at December 31, 2013, including a deferred payment scheme over the next five fiscal years for the impact of deconsolidation.

A new optional tax regime “fiscal integration regime” was introduced for groups of companies that meet certain conditions and requirements similar to the previous consolidation regime. The principal aspects of this regime are: (i) a minimum holding of 80% is required in the shares entitled to vote in the integrated companies, by the integrating company, (ii) allows the deferral of a portion of income tax for up to three years, requiring strict controls of current income tax expense and payments made at the individual level, iii) tax loss carryforwards generated in prior years of the integrated companies or the integrating company may not be considered and only tax loss carryforwards generated after the date from which the regime is effective may be considered, (iv) an integrating factor is required to be calculated, which is applied by all companies in the group, individually, to determine the income tax payable and deferred for three years (see Notes 4.z and 28).

Assets classified as held for sale

In 2013, a letter of intent was signed between Controladora de Operaciones de Infraestructura, S.A. de C.V. (“CONOISA”) and Hunt Development Group, LLC (“Hunt”), where Hunt made a proposal for the possible acquisition of the shareholding of CONOISA in Sarre Infraestructura y Servicios, S.A. de C.V. (“Sarre”) and Papagos Servicios Para la Sociedad, S.A. de C.V. (“Papagos”). Sare and Papagos each entered into a service agreement (“CPSs” for its acronym in Spanish) to construct federal social infrastructure projects in Mexico related to penitentiary services, which such contracts explicitly exempt the Company from performing the public service functions related to the facilities; the contracts are for a term of 22 years.

On January 22, 2014, the aforementioned transaction formalized between the parties, whereby a subsidiary of Hunt Companies, Inc., American Company, acquired the 70% shareholding of CONOISA in Desarrollo, Diseño, Infraestructura y Operacion, S.A.P.I de C.V. (“DDIO”), a subsidiary of CONOISA, which is the owner of shares of Sarre and Papagos. The consideration for the sale of the shares was Ps.1,511 million, which will be paid on the closing date, and is subject to the fulfillment of the terms and conditions of the agreement.

As a result of the foregoing, the assets and liabilities of Sarre y Papagos are presented as assets held for sale and liabilities directly associated with assets held for sale, in the consolidated statement of financial position as of December 31, 2013; the results of Sarre and Papagos are also presented within discontinued operations in the consolidated statements of income and other comprehensive income and cash flows, which were retrospectively adjusted to reflect the discontinued operation (see Note 34).

Reversal of discontinued operations presented in 2012

On November 30, 2012, Viveica, S.A. de C.V. (“Viveica”), a subsidiary of ICA, in its capacity as seller, entered into a purchase-sale agreement (the “Agreement”) with Corporate Services Javer, S.A.P.I. de C.V. (“Javer”), in its capacity as buyer, for assets that belong to the horizontal housing business. The price set forth in the Agreement was Ps.1,441 million. The Agreement included several clauses of compliance which after not having been fulfilled in May 2013, resulted in the cancellation of the Agreement by the Company and Javer. After the withdrawal of the buyer, the Company’s management had continued carry out actions with the intention to sell the assets of Viveica. Failing to have a formal proposal to purchase such assets, the Company’s management decided to forego its intention to sell the horizontal housing business. Accordingly, at December 31, 2013, the operations of the horizontal housing business, which were classified as discontinued operations in 2012 and 2011, were reclassified to continuing operations in the consolidated statements of income and other comprehensive income and cash flows for the years ended December 31, 2012 and 2011. Additionally, the assets and liabilities that were classified as held for sale in the consolidated statement of financial position at December 31, 2012 were reclassified into their respective line items in such statement (see note 4.a.ii).

F-10

Business acquisitions

During 2012, ICA acquired Desarrolladora de Infraestructura Puerto Escondido, S.A. de C.V. (“DIPESA”) and San Martin Contratistas Generales, S.A. (“San Martin”), see details in Note 3.h.

Acquisition of non-controlling interest

In March 2012, ICA acquired the remaining 50% of the capital of Autopista Naucalpan Ecatepec, S.A. de C.V. (formerly Viabilis Infrastructura, S.A.P.I. de C.V.), which corresponded to the non-controlling interest as of that date. As a result of this purchase, ICA holds 100% of the project Rio de los Remedios Highway. The acquisition price was Ps.1.071 million, which was in excess of the carrying value of the non-controlling interest by Ps.414 million, which has been recorded in accumulated results in within stockholders’ equity of the controlling interest, as it represents an equity transaction between shareholders.

Agreement for the sale of Corredor Sur

On August 24, 2011, the sale of the Corredor Sur concession to Empresa Nacional de Autopistas, S.A. de C.V. (“ENA”), a company owned by the Government of Panama was completed. The price established for the transaction was U.S.$420 million dollars. Simultaneously with the closing of the sale, ICA Panama paid approximately U.S.$154 million dollars of outstanding bonds that were used to finance the construction of the Corredor Sur, which were originally issued in 2005, paying a premium to holders of U.S.$37 million dollars. ICA received approximately U.S.$125 million dollars, net, after expenses related to the transaction. Taxes incurred in Panama and the United States related to the sale are included in the consolidated statement of income and other comprehensive income as part of discontinued operations (see Note 34).

Sale of the Service Provision Project (“PPS”) of Irapuato La Piedad y Queretaro Irapuato to RCO

In September 2011, the Company executed a contract for the sale of shares (the “Transaction”) with Red de Carreteras de Occidente, S.A.B., de C.V. (“RCO”) (affiliate company) to transfer to RCO all of the Company’s shareholdings in its subsidiaries Concesionaria Irapuato La Piedad, S.A. de C.V. (“CONIPSA”) and Concesionaria de Vias Irapuato Queretaro, S.A. de C.V. (“COVIQSA”).

The total cost of the Transaction was Ps.2,150 million, liquidated through Ps.1,550 million in additional shares issued by RCO and Ps.250 million in cash. As a result of this transaction, ICA recognized a gain of Ps.441 million that was recognized in other income in the consolidated statement of income and other comprehensive income. Additionally, ICA increased its share capital in RCO to 18.73%. The price of the Transaction was determined using discounted cash flows.

Acquisition and sale of subsidiaries

Through November 2011, ICA was a joint venture partner with Geoedificaciones, S.A.B. de C.V. (“GEO”), each participating 50% in the equity of Geoicasa, S.A. de CV (“Geoicasa”). In December 2011, ICA sold to GEO its participation in Geoicasa, which generated a profit of Ps.26 million, presented in other (income) expense, within operating income in the consolidated statement of income and other comprehensive income.

3. Basis of presentation and consolidation

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with IFRS, including its amendments and interpretations, as issued by the International Accounting Standards Board (“IASB”).

b. Restatement of financial statements

As result of the application of the new IFRS 11 and IAS 19 (revised 2011), the financial statements of prior periods presented for comparative purposes were reformulated.

F-11

c. Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the revaluation of investment property and financial instruments at fair value.

i. Historical cost

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

ii. Fair value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transactions that are within the scope of lAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in lAS 2 or value in use in lAS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

d. Convenience translation

Solely for convenience of readers, peso amounts included in the consolidated financial statements as of December 31, 2013 and for the year then ended have been translated into U.S. dollar amounts at exchange rate of Ps.13.0652 pesos per U.S. dollar, as published by Banco de Mexico, S.A. 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.

e. Reporting currency

The Mexican peso, legal currency of the United Mexican States is the currency in which the consolidated financial statements are presented. Transactions in currencies other than the peso are recorded in accordance with established policies described in Note 4.c. and t.

f. Consolidated statements of income and other comprehensive income

The Company chose to present the consolidated statement of income and other comprehensive income in a single statement, including separate lines for gross profit and operating income, in accordance with practices of the industry. Costs and expenses were classified according to their function due to different economic activities and businesses of the Company. Additional information regarding depreciation expense, amortization expense and employee benefits are presented in Note 35.c.

g. Principles of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

• has power over the investee;

F-12

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Company, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

The non-controlling interests in equity of subsidiaries are presented separately as non-controlling interests in the consolidated statements of financial position, within the stockholders’ equity section, and the consolidated statements of income and other comprehensive income.

If is necessary, adjustments to the financial statements of subsidiaries are made to align its accounting policies in accordance with the accounting policies of the Company.

The financial statements of companies that are included in the consolidation are prepared as of December 31 of each year.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation

Note 44 includes the subsidiaries consolidated by ICA as well as information related thereto.

Changes in ICA’s ownership interests in existing subsidiaries

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

F-13

When ICA loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (i.e. they are reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39,Financial Instruments: Recognition and Measurement (“IAS 39”) or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

The results of subsidiaries acquired or divested during the year are included in the consolidated statement of income and comprehensive income from the acquisition date or the date of divestiture, as applicable.

h. Business combination

During 2012, ICA acquired businesses which were recorded using the acquisition method. The results of the acquired businesses were included in the consolidated financial statements from the acquisition date. Businesses acquired are as follows:

2012	Principal activity	Date of acquisition	Proportion of voting equity interest acquired	Consideration transferred
San Martin Contratistas Generales, S.A. de C.V. (1)	Construction services and mining operations	May 24, 2012	51%	Ps.	957,946
DIPESA (formerly Concesionaria Omega Oaxaca, S.A. de C.V.) (2)	Concessionary	April 16, 2012	100%		414,184
				Ps.	1,372,130

(1) Company located in Peru. The acquisition price includes a payment formula that considers several factors, including certain EBITDA margin levels of San Martin for the years 2012 to 2014, which if achieved, the amounts will be paid over the next five years. The purchase price is estimated to be between U.S.$18 million, the initial amount payable at closing and a maximum of U.S.$123 million, with an expected range between U.S.$80 million and U.S.$110 million, according to projections made by the Company.

(2) DIPESA is the concession holder for the construction and operation of the Barranca Larga- Ventanilla highway located in the state of Oaxaca, Mexico.

Consideration transferred

December 31, 2012	San Martin		DIPESA
Cash		Ps. 255,871	Ps.	414,184
Contingent consideration		702,075		—
Total		Ps. 957,946	Ps.	414,184

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Contingent consideration

During the year ending December 31, 2013, the contingent consideration generated on the acquisition of San Martin, was adjusted as follows:

	Total
Balance at December 31, 2012	Ps.	702,075
Effect of translation		(84,248	)
Payment made in 2013		(84,371	)
Adjustment to consideration		544,393
Balance at December 31, 2013	Ps.	1,077,849

Business acquisition costs

The acquisition-related costs have been excluded from the consideration transferred and have been recorded within general expenses for the period in the consolidated statement of income and other comprehensive income.

The fair values of the acquired non-monetary assets are determined using valuations prepared by independent experts, and in the case of monetary assets, were valued based on discounted cash flows.

The information presented at December 31, 2012 included provisional amounts of the acquisitions, considering the measurement period available from the acquisition date until final information about the facts and circumstances that existed at the acquisition date was obtained, which such period was up to one year from the acquisition date.

The measurement period ended in 2013; accordingly, the data included below reflects the final amounts related to the acquisitions. The amounts of 2012 were retroactively adjusted to include the effects of the final adjustments. Adjusments that originated from the recognition of final values of business combination made in 2012 were as follows:

	San Martin			DIPESA
Preliminary goodwill	Ps.	890,436		Ps.	49,090
Intangible asset		(409,286	)		(49,090	)
Final goodwill	Ps.	481,150	(1)	Ps.	—

(1) Amount of goodwill as of acquistion date differs from amount recognized at December 31, 2012 as a result of the effects of translation of foreign operations.

Assets acquired and liabilities recognized at the date of acquisition (final amounts):

December 31, 2012	San Martin		DIPESA		Total
Assets:
Cash and cash equivalents		Ps. 51,837		Ps. 14,280		Ps. 66,117
Customers		541,623		—		541,623
Other current assets		111,206		11,242		122,448
Property, plant and equipment		305,523		—		305,523
Intangible asset from backlog		409,286		—		409,286
Intangible asset from concession		—		509,781		509,781
Deferred income taxes		8,726		—		8,726
		1,428,201		535,303		1,963,504

F-15

December 31, 2012	San Martin		DIPESA		Total
Liabilities:
Current notes payable		119,123		—		119,123
Trade accounts payable		445,700		—		445,700
Other current liabilities		264,779		347		265,126
Long-term debt		91,884		—		91,884
Other long-term liabilities		28,186		—		28,186
Deferred income taxes		—		120,772		120,772
		949,672		121,119		1,070,791
Total net assets		Ps. 478,529		Ps. 414,184		Ps. 892,713

The receivables acquired (which are principally comprised by trade receivables) in these acquisitions have an estimated fair value of Ps.542 million (San Martin), which is similar to their carrying amounts.

Goodwill arising on acquisition

December 31, 2012	Fair value of total  identifiable net assets		Non-controlling interests		��	Fair value  of identifiable net assets acquired		Consideration transferred		Goodwill after period valuation December 31, 2012		Goodwill arising on acquisition (preliminary)
San Martin	Ps.	938,292	Ps.	(459,763)		Ps.	478,529	Ps.	957,946	Ps.	481,150	Ps.	890,436
DIPESA		414,184-					414,184		414,184		—		49,090
	Ps.	1,352,476	Ps.	(459,763)		Ps.	954,533	Ps.	1,372,130	Ps.	481,150	Ps.	939,526

(1) Amount of goodwill as of acquistion date differs from amount recognized at December 31, 2012 as a result of the effects of translation of foreign operations.

Appraisals of machinery and equipment were performed as of the acquisition date of San Martin, and the related values obtained were substantially equal to the carrying amounts of the related assets.

Net cash outflow on acquisition of subsidiaries

	December 31, 2012
	San Martin		DIPESA
Consideration paid in cash		Ps. 255,871		Ps. 414,184
Less:
Cash and cash equivalents balances acquired		51,837		14,280
Net flow		Ps. 204,034		Ps. 399,904

Included in consolidated net income for the year ended December 31, 2012, Ps.99 million of income attributable to San Martin since its acquisition date and Ps.7 million of loss attributable to the addition of DIPESA. Revenue for the year ended December 31, 2012 includes Ps. 2,032 million in respect of San Martin and Ps.122 million in espect of DIPESA, since their respective acquisition dates.

Impact of acquisitions on the financial information of the Company

Below is consolidated pro forma financial information of ICA, considering the financial results of acquisitions as if they had occurred on January, 2012. This pro-forma information does not necessarily represent the actual results of operation of ICA if the acquisitions had been made as of such date. ICA’s Management consider these pro forma numbers to represent an approximate measure of the performance of the combined group on an annualized basis and to provide a reference point for comparison in future periods. Condensed financial information is as follows:

F-16

	Year ended December 31, 2012
Consolidated statements of income and other comprehensive income:
Revenues		Ps. 49,745,349
Operating income		3,669,881
Consolidated net income		1,694,363

In determining the pro forma’ revenue and profit of ICA, had DIPESA and San Martín been acquired at the beginning of January 1, 2012, the Company has:

• Calculated depreciation of plant and equipment acquired on the basis of the fair values arising in the initial accounting for the business combination rather than the carrying amounts recognized in the pre-acquisition financial statements;

• Calculated borrowing costs on the funding levels, credit ratings and debt/equity position of the Company after the business combination.

4. Significant accounting policies

The consolidated financial statements are prepared in accordance with IFRS. Preparation of financial statements under IFRS requires management of the Company to make certain estimates and use assumptions to value certain of the items in the consolidated financial statements as well as their related disclosures required therein. The areas with a high degree of judgment and complexity or areas where assumptions and estimates are significant in the consolidated financial statements are described in Note 5. The estimates are based on information available at the time the estimates are made, as well as the best knowledge and judgment of management based on experience and current events. However, actual results could differ from those estimates. The Company has implemented control procedures to ensure that its accounting policies are appropriate and are properly applied. Although actual results may differ from those estimates, the Company’s management believes that the estimates and assumptions used were adequate under the circumstances.

The consolidation requirements, accounting policies and valuation methods used in preparing the consolidated financial statements as of and for the year ended December 31, 2013 are the same as those applied in the consolidated financial statements for 2012 and 2011, including the adoption of new standards and interpretations described in paragraph a) (i) included below, which are effective in 2013.

a. Application of new and revised IFRS

i) Effective January 1, 2013, the Company adopted the following International Financial Reporting Standards and interpretations in its consolidated financial statements:

– Amendments to IFRS 7 Disclosures- Offsetting Financial/ Assets and Financial/ Liabilities.

– IFRS 13,Fair Value Measurement

– IFRS 10,Consolidated Financial Statements, IFRS 11,Joint Arrangements, IFRS 12,Disclosure of Interests in Other Entities, IAS 27 (as revised in 2011)Separate Financial Statements and IAS 28 (as revised in 2011)Investments in Associates and Joint Ventures

– Amendments to lAS 1,Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009—2011 Cycle issued in May 2012)

– IAS 19,Employee Benefits (as revised in 2011)

F-17

The impact of these new standards on the financial statements of the Company is described as follows:

Amendments to IFRS 7 Disclosures- Offsetting Financial/ Assets and Financial/ Liabilities

The Company has applied the amendments to IFRS 7 Disclosures—Offsetting Financial Assets and Financial Liabilities for the first time in the current year. The amendments to IFRS 7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.

The amendments have been applied retrospectively. As the Company does not have any offsetting arrangements in place, the application of the amendments has had no material impact on the disclosures or on the amounts recognized in the consolidated financial statements.

Impact of the application of IFRS 10

IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements and SIC-12 Consolidation—Special Purpose Entities. IFRS 10 changes the definition of control such that an investor has control over an investee when a) it has power over the investee; b) it is exposed, or has rights, to variable returns from its involvement with the investee and c) has the ability to use its power to affect its returns. All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Additional guidance has been included in IFRS 10 to explain when an investor has control over an investee. Some guidance included in IFRS 10 that deals with whether or not an investor that owns less than 50% of the voting rights in an investee has control over the investee is relevant to the Company.

The Company’s management made an assessment as at the date of initial application of IFRS 10 (i.e. January 1, 2013) as to whether or not the Company has control over its investments in accordance with the new definition of control and the related guidance set out in IFRS 10.

F-18

Impact of the application of IFRS 11

IFRS 11 replaces lAS 31 lnterests in Joint Ventures, and the guidance contained in a related interpretation, SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers, has been incorporated in lAS 28 (as revised in 2011). IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under IFRS 11, there are only two types of joint arrangements—joint operations and joint ventures. The classification of joint arrangements under IFRS 11 is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement. Previously, lAS 31 contemplated three types of joint arrangements—jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under lAS 31 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was accounted for as a jointly controlled entity).

The initial and subsequent accounting of joint ventures and joint operations is different. Investments in joint ventures are accounted for using the equity method (proportionate consolidation is no longer allowed). lnvestments in joint operations are accounted for such that each joint operator recognizes its assets (including its share of any assets jointly held), its liabilities (including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable Standards.

The management reviewed and assessed the classification of its investments in joint arrangements in accordance with the requirements of IFRS 11, concluding that the Company’s investment listed below, which were classified as a jointly controlled entities under lAS 31 and was accounted for using the proportionate consolidation method, should be classified as a joint venture under IFRS 11 and accounted for using the equity method.

The change in accounting of the Company’s investment in Autovia Necaxa Tihuatlan, S.A. de C.V., ICA Fluor, S. de R.L. de C.V. y Subsidiarias, Rodio Kronsa, S.A., Los Portales, S.A., Suministro de Agua de Queretaro, S.A. de C.V., Aquos El Realito, S.A. de C.V., Renova Atlatec, S.A. de C.V., Mitla Tehuantepec, S.A. de C.V., Constructora de Infraestructura de Aguas Potosi, S.A. de C.V., Actica Sistemas, S. de R.L. de C.V., C7AI Servicios Industriales Especializados, S.A. de C.V., Infraestructura y Saneamiento de Atotonilco, S.A. de C.V. y Administracion y Servicios Atotonilco, S.A. de C.V. has been applied in accordance with the relevant transitional provisions set out in IFRS 11. Comparative amounts for 2012 and 2011 have been adjusted to reflect the change in accounting for the Company’s investments. The initial investment as at January 1, 2012 for the purposes of applying the equity method is measured as the aggregate of the carrying amounts of the assets and liabilities that the Company had previously proportionately consolidated (see the tables below for details). Also, the management of the Company has performed an impairment assessment on the initial investment as at January 1, 2011 and concluded that no impairment loss is required.

Impact of the application of IFRS 12

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the application of IFRS 12 has resulted in more extensive disclosures in the consolidated financial statements (see notes 17, 18 and 19 for details).

F-19

Impact of the application of IFRS 13 Fair Value Measurement

The Company has applied IFRS 13 for the first time in the current year. IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The scope of IFRS 13 is broad; the fair value measurement requirements of IFRS 13 apply to both financial instrument items and non-financial instrument items for which other IFRSs require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of lAS 17 Leases, and measurements that have some similarities to fair value but are not fair value (e.g. net realizable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under IFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, IFRS 13 includes extensive disclosure requirements.

IFRS 13 requires prospective application from January1, 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Company has not made any new disclosures required by IFRS 13 for the 2012 comparative period (please see note 30 for the 2013 disclosures). Other than the additional disclosures, the application of IFRS 13 has not had any material impact on the amounts recognized in the consolidated financial statements.

Impact of the application of Amendments to lAS 1 Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009—2011 Cycle issued in May 2012)

The Annual Improvements to IFRSs 2009—2011 have made a number of amendments to IFRSs. The amendments that are relevant to the Company are the amendments to lAS 1 regarding when a statement of financial position as at the beginning of the preceding period (third statement of financial position) and the related notes are required to be presented. The amendments specify that a third statement of financial position is required when a) an entity applies an accounting policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial statements, and b) the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position. The amendments specify that related notes are not required to accompany the third statement of financial position.

In the current year, the Company has applied a number of new and revised IFRSs (see the discussion above), which has resulted in material effects on the information in the consolidated statement of financial position as at January 1, 2012. In accordance with the amendments to lAS 1, the Company has presented a third statement of financial position as at January 1, 2012 without the related notes except for the disclosure requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors as detailed below.

F-20

Impact of the application of IAS 19 Employee Benefits (as revised in 2011)

In the current year, the Company has applied IAS 19 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time. IAS 19 (as revised in 2011) changes the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminate the “corridor approach” permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. All actuarial gains and losses are recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a “net interest” amount under IAS 19 (as revised in 2011), which is calculated by applying the discount rate to the net defined benefit liability or asset. These changes have had an impact on the amounts recognized in profit or loss and other comprehensive income in prior years (see the tables below for details). In addition, IAS 19 (as revised in 2011) introduces certain changes in the presentation of the defined benefit cost including more extensive disclosures.

Specific transitional provisions are applicable to first-time application of IAS 19 (as revised in 2011). The Company has applied the relevant transitional provisions and adjusted the comparative amounts on a retrospective basis (see the tables below for details).

ii) Quantification of the financial effects of the implementation of new and revised stantdards in the preceding paragraph:

– Effects of the application of IFRS 11

Investments in joint ventures are no longer proportionately consolidated and are valued using the equity method.

	Year ended December 31,
Consolidated Statements of Income:	2012			2011
Decrease in revenue		Ps. 9,420,717			Ps. 6,222,271
Decrease in cost of sales		7,522,022			5,424,927
Decrease in gross profit		1,898,715			797,344
Decrease in other expenses		10,521			4,549
Decrease in operating income		1,751,842			566,143
(Decrease) increase in financing cost		(111,835	)		138,319
Decrease in net income for the year		2,766			14,773
Decrease in income for the year attributable to:
Controlling interest		(660	)		14,727
Non-controlling interest		3,426			46

– Effects of the application of IAS 19 (as revised in 2011)

	Year ended December 31,
Consolidated Statements of Income:	2012			2011
Increase in administration expenses		Ps. 250,724			Ps. 40,610
Decrease in income tax		(75,217	)		(12,183	)
Decrease in net income for the year		175,507			28,427
Decrease in income for the year attributable to:
Controlling interest		175,261			28,427
Non-controlling interest		246			—

F-21

– Consolidated Statements of Financial Position

	December 31, 2011 (as previously reported)			IFRS 11 adjustments			IAS 19 adjustments			January 1, 2012 (as adjusted)
Cash and cash equivalents	Ps.	10,899,714		Ps.	(2,018,082	)	Ps.	—		Ps.	8,881,632
Customers and other receivables		38,212,821			(977,130	)		—			37,235,691
Construction materials inventory and real state inventories		9,306,921			(1,099,038	)		—			8,207,883
Advances to subcontractors and others		2,218,125			(393,111	)		—			1,825,014
Financial assets from concessions		8,488,478			(3,154,401	)		—			5,334,077
Intangible assets from concessions		14,768,140			(1,640,410	)		—			13,127,730
Property, plant and equipment, net		4,565,736			(713,429	)		—			3,852,307
Investment properties		55,898			—			—			55,898
Investment in associated companies		5,485,563			224,236			—			5,709,799
Investment in joint venture		—			1,932,861			—			1,932,861
Prepaid expenses and other assets, net		1,515,621			(306,934	)		—			1,208,687
Notes payable Current portion of long-term debt		(19,714,473	)		75,287			—			(19,639,186	)
Trade accounts payable and other payable accounts		(15,965,079	)		3,226,150			—			(12,738,929	)
Advances from customers		(3,921,824	)		755,033			—			(3,166,791	)
Long-term debt		(30,320,024	)		3,592,538			—			(26,727,486	)
Labor obligations		(607,306	)		88,912			(40,610	)		(559,004	)
Other long-term liabilities		(5,755,185	)		395,335			—			(5,359,850	)
Deferred income taxes		1,590,976			(25,582	)		12,183			1,577,577
Total effect on net assets	Ps.	20,824,102		Ps.	(37,766	)	Ps.	(28,427	)	Ps.	20,757,910
Total effect on equity	Ps.	(20,824,102	)	Ps.	37,766		Ps.	(28,427	)	Ps.	(20,757,910	)

	December 31, 2012 (as previously reported)		Reversal of discontinued operations presented in 2012			IFRS 11 adjustments			IAS 19 adjustments		December 31, 2012 (as adjusted)
Cash and cash equivalents	Ps.	8,412,601	Ps.	38,823		Ps.	(1,848,436	)	Ps.	—	Ps.	6,602,988
Customers and other receivables		34,630,811		288,253			(2,111,599	)		—		32,807,465
Construction materials inventory and real state inventories		5,996,776		2,369,562			(1,306,518	)		—		7,059,820
Advances to subcontractors and others		1,752,029		—			(202,621	)		—		1,549,408
Assets classified as held for sale		3,041,845		(2,996,697	)		(45,148	)		—		—
Investment in Trust		—		243,943			(243,943	)		—		—
Financial assets from concessions		15,596,174		—			(4,588,146	)		—		11,008,028
Intangible assets from concessions		16,872,452		—			(1,725,277	)		—		15,147,175
Property, plant and equipment, net		6,028,327		—			(722,365	)		—		5,305,962
Investment properties		491,579		—			—			—		491,579
Investment in associated companies		5,844,933		—			246,512			—		6,091,445
Investment in joint venture		—		—			2,323,677			—		2,323,677

F-22

	December 31, 2012 (as previously reported)			Reversal of discontinued operations presented in 2012			IFRS 11 adjustments			IAS 19 adjustments			December 31, 2012 (as adjusted)
Prepaid expenses and other assets, net		2,206,290			56,116			(75,939	)		—			2,186,467
Notes payable Current portion of long-term debt		(10,925,346	)		—			330,711			—			(10,594,635	)
Trade accounts payable and other payable accounts		(17,482,321	)		(385,042	)		3,743,611			—			(14,123,752	)
Advances from customers		(4,088,014	)		(108,289	)		682,838			—			(3,513,465	)
Liabilities directly associated with assets classified as held for sale		(673,168	)		673,168			—			—			—
Long-term debt		(40,841,672	)		—			4,680,605			—			(36,161,067	)
Labor obligations		(670,880	)		—			105,713			(291,334	)		(856,501	)
Other long-term liabilities		(8,479,961	)		(4,526	)		671,097			—			(7,813,390	)
Deferred income taxes		2,949,255			(175,311	)		61,353			87,400			2,922,697
Total effect on net assets	Ps.	20,661,710		Ps.	—		Ps.	(23,875	)	Ps.	(203,934	)	Ps.	20,433,901
Total effect on equity	Ps.	(20,661,710	)	Ps.	—		Ps.	23,875		Ps.	203,934		Ps.	(20,433,901	)

– Impact on cash flows for the year ended December 31, 2012 on the application of the above new and revised Standards

	IAS 19 Adjustments		IFRS 11 Adjustments			Total
Net cash inflow (outflow) from operating activities	Ps.	203,934	Ps.	(1,190,162	)	Ps.	(986,228	)
Net cash outflow from investing activities		—		(585,284	)		(585,284	)
Net cash inflow from financing activities		—		1,363,043			1,363,043
Net cash inflow	Ps.	203,934	Ps.	(412,403	)	Ps.	(208,469	)

– Impact on cash flows for the year ended December 31, 2011 on the application of the above new and revised Standards

	IAS 19 Adjustments		IFRS 11 Adjustments			Total
Net cash inflow (outflow) from operating activities	Ps.	28,427	Ps.	(144,327	)	Ps.	(115,900	)
Net cash outflow from investing activities		—		(422,718	)		(422,718	)
Net cash inflow from financing activities		—		959,151			959,151
Net cash inflow	Ps.	28,427	Ps.	392,106		Ps.	420,533

– The impact of the application of the new and revised Standards on basic and diluted earnings per share

Changes in the Company’s accounting policies during the year are described in detail above affected only the Company’s results from continuing operations. To the extent that those changes have had an impact on results reported for 2012 and 2011, they have had an impact on the amounts reported for earnings per share.

F-23

The following table summarises that effect on both basic and diluted earnings per share.

	Increase (decrease) in profit for the year attributable to the controlling  interest					Increase (decrease) in basic and diluted earnings per share
	Year ended December 31					Year ended December 31
	2012			2011		2012			2011
	Thousands of Mexican pesos					Pesos per share
Application of IFRS 11	Ps.	(660	)	Ps.	14,727	Ps.	(0.001	)	Ps.	0.024
Application of IAS 19		175,261			28,427		0.289			0.045
	Ps.	174,601		Ps.	43,154	Ps.	0.278		Ps.	0.069

iii) The Company has not applied the following new and revised IFRSs that have been issued but that are not effective until January 1, 2014 or at a later date:

– IFRS 9,Financial Instruments(“IFRS 9”) ⁽²⁾

– Amendments to IFRS 9 and IFRS 7,Mandatory Effective Date of IFRS 9 and Transition Disclosures ⁽²⁾

– Amendments to IFRS 10, IFRS 12 and IAS 27, Investment Entities⁽¹⁾

– Amendments to IAS 32, Offsetting Financial) Assets and Financial) Liabilities⁽¹⁾

1 Effective for annual periods beginning on or after 1 January 2014, with earlier application permitted.

2 Effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.

b. Reclassifications

Certain amounts in the consolidated financial statements for the years ended December 31, 2012 and 2011 have been reclassified to conform the presentation of the amounts in the 2013 consolidated financial statements.

c. Operations and transactions in foreign currency

Translation of financial statements of foreign subsidiaries

The individual financial statements of each subsidiary of the Company are presented in the currency of the primary economic environment in which the entity operates (its functional currency). To consolidate the financial statements of foreign subsidiaries, their financial information is translated into Mexican pesos (the reporting currency), considering the following methodology:

The operations in which the functional currency and the recording currency are the same, the financial statements of the entity are translated to the reporting currency using the following exchange rates: i) the closing exchange rate in effect at the date of the statement of financial position for assets and liabilities, ii) historical exchange rates for stockholders’ equity as well as revenues, costs and expenses. Translation effects are recorded in other comprehensive income.

When the functional currency of a foreign transaction differs from the recording currency, before applying the terms of the preceding paragraph, the recording currency must be converted to the functional currency by using the following methodology: monetary assets and liabilities are converted by using the exchange rate in effect at the date of the statement of changes in financial position, while nonmonetary assets and liabilities, stockholders’ equity, income, costs and expenses must be considered at the historical exchange rate. Any differences arising from this method must be recognized in the results of the year.

On the disposal of a foreign operation, all of the accumulated exchange differences in respect of that operation attributable to the Company are reclassified to profit or loss in the year of disposal.

F-24

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Company losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to results.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

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 prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange fluctuations are recorded in profit or loss, except for:

• Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

• Exchange differences on transactions entered into in order to hedge certain foreign currency risks (see paragraph (w) below for hedging accounting policies); and

• Exchange differences on monetary items such as receivables from or payables to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.

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.

Cash and investments subject to restrictions or intended for a specific purpose are presented separately under current or non-current assets as the case may be.

e. Construction materials inventories

Construction materials inventories are stated at the lower of cost, using average cost, or net realizable value. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Reductions to the value of inventories are comprised of estimates representing the impairment of inventories.

f. Real estate inventories

Housing and housing development costs comprise the cost of the acquisition of land, improvements, permits and licenses, labor costs, materials and direct and indirect costs. Borrowing costs incurred during the construction period are capitalized.

Land to be developed over a period of more than 12 months is classified under non-current assets and is recorded at acquisition cost.

F-25

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 cost of sales 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) borrowing costs incurred during the construction period and (v) administration and supervision of real estate. The costs related to real estate projects are capitalized during development of the project and are applied to cost of sales in the proportion in which revenues are recognized.

With respect to homes in the moderate-income sector, on a quarterly basis, the Company performs a review of estimated revenues and costs for the projects in-progress to evaluate the sector’s operating margin. Additionally, on an annual basis, the Company performs 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 the Company expects to incur to complete and sell the project. Revenues are projected based on the current selling price of the home, considering any discounts that the Company 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 the Company develops and the general economic conditions in Mexico. The Company only offers 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. The policy is not to grant discounts when the discounted sales price would result in a value lower than the carrying value of the inventory. Management determines discounts on a home-by-home basis. Cost estimates are based on the cost budgeting system as discussed above. Impairment is recognized when the sales price less costs to sell is less than the carrying amount of the inventory. Accordingly, the Company only recognizes impairment on inventories in the moderate-income sector if it offers discounts greater than the operating margin or otherwise significantly reduce the prices below the operating margin because of, for example, market forces or deteriorating economic factors.

The Company assesses the impairment of real estate inventories at each balance sheet date and appraisals are conducted every two years or more frequently if events or changes in circumstances indicate that certain amounts accrued will not be recoverable. If the valuation is less than the carrying value of the inventory, an impairment is recorded in results of the period in which the impairment was determined.

If circumstances that previously caused the reduction no longer exist or when there is clear evidence of an increase in net realizable value due to a change in economic circumstances, the previously recognized impairment is reversed.

g. Property, plant and equipment

Expenditures for property, plant and equipment are capitalized and valued at acquisition cost.

Depreciation is recognized so as to write off the cost or deemed cost of assets (other than freehold land and properties under construction). Depreciation of buildings, furniture, office equipment and vehicles is calculated using the straight-line method over the useful life of the asset, taking into consideration the related asset’s residual value. 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). Depreciation begins in the month in which the asset is placed in service. The useful lives of assets are as follows:

	Useful
	lives (years)
Buildings	20 to 50
Machinery and operating equipment	4 to 10
Furniture, office equipment and vehicles	4 to 10

F-26

Financing costs incurred during the construction and installation of buildings and machinery and equipment are capitalized.

Residual values, useful lives and depreciation methods are reviewed at the end of each year and adjusted prospectively if applicable. If the depreciation method is changed, this is recognized in retrospectively.

The depreciation of property, plant and equipment is recorded in results. Land is not depreciated.

Disposal of assets

The gain or loss on the sale or retirement of an item of property, plant and equipment is calculated as the difference between the net income from the sale and the carrying value of the asset, and is recognized in income when all risks and rewards of ownership of the asset is transferred to the buyer, which generally occurs when ownership of the asset is transferred to the buyer.

Replacements or renewals of complete items that extend the useful life of the asset, or its economic capacity are recognized as an increase to property, plant and equipment, with the consequent withdrawal or derecognition of the replaced or renewed.

Construction in progress

Construction in progress is carried at cost less any recognized impairment loss. Cost includes professional fees and, in the case of qualifying assets, borrowing costs capitalized in accordance with the accounting policy of the Company. Such properties are transferred to the appropriate categories of property, plant and equipment when completed and ready for intended use. The depreciation of these assets, as well as other properties, begins when the assets are ready for use.

Subsequent costs

Subsequent costs form part of the value of the asset or are recognized as a separate asset only when it is probable that such disbursement represents an increase in productivity, capacity, efficiency or an extension of the life of the asset and the cost of the item can be determined reliably. All other expenses, including repairs and maintenance are recognized in comprehensive income as incurred.

Assets held under finance leases are depreciated over their estimated useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the least term, assets are depreciated over the shorter of the lease term and their useful lived.

h. Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

F-27

i. Leasing

Leases are classified as finance leases whenever the terms of the contract lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Financial leasing

In financial leasing where the Company is the lessee, assets are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The liability to the lessor is included in the statement of financial position as other accounts payable.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company’s general policy for borrowing costs (see paragraph j).

Assets held under finance leases are depreciated over their estimated useful lives on the same basis as owned assets.

Operating leasing

As lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized in profit using the same criteria used for the recognition of lease income.

As lessee

Any payment or collection made upon execution of an operating lease is treated as an advanced payment or collection that is recognized in results over the lease term, as the benefits of the leased asset are received or transferred.

The costs and expenses arising under operating leases are recognized in results using the straight line method during the term of the lease. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

j. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

k. Business combination

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value at the acquisition date, as well as the net assets and liabilities acquired. Acquisition-related costs are generally recognized in profit or loss as incurred.

F-28

At the acquisition date, the identifiable assets acquired and the liabilities assumed of the acquiree are recognized at their fair value accordingly to IFRS 3,Business Combination (“IFRS 3”), except that:

• Deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with IAS 12 and IAS 19 respectively;

• Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Company entered into to replace share-based payment arrangements of the acquire are measured in accordance with IFRS 2,Share-based Payments (“IFRS 2”) at the acquisition date; and

• Assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 are measured in accordance with that standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the fair value of previous shareholding of the acquirer in the acquiree (if any) over the net amounts of identifiable assets acquired and liabilities assumed at the acquisition date. If after a revaluation net of the amounts of identifiable assets acquired and liabilities assumed at the date of acquisition exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of previous shareholding the acquirer in the acquiree (if any), the excess is recognized immediately in the income statement as a gain on bargain purchase.

Non-controlling interests that are shareholdings and entitle their holders a proportionate share of the net assets of the acquired company in the event of liquidation can be initially measured either at fair value or the value of the proportionate share of non-controlling interest in the amounts recognized of the identifiable net assets of the acquired company. The measurement option is applicate on each transaction. Other types of non-controlling interests are measured at fair value or, when applicable, based on the specification by others IFRS.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

“Measurement period” is from the date of purchase until the Company has obtained full information about facts and circumstances that existed at the date of acquisition, and can not exceed one year from the acquisition date.

When the consideration transferred in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Subsequent changes in fair value are adjusted against the cost of acquisition when they are classified as measurement period adjustments. The accounting treatment for changes in fair value of contingent consideration that does not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”), as appropriate, recognizing the corresponding gain or loss in the statement of income and other comprehensive income.

Goodwill is not amortized and is subject to impairment tests annually or earlier if indicators of impairment are presented. For assessing impairment, goodwill is allocated to each cash-generating unit of which the Company expects to make profits. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the unit and then to the other assets of unit, proportionally, based on the carrying amount of each asset in the unit. The impairment loss recognized for goodwill purposes cannot be reversed at a later period.

F-29

Upon the disposal a subsidiary, the amount attributable to goodwill is included in determining the gain or loss on disposal.

The Company’s policy for goodwill arising from the acquisition of an associate is described in subsection (l) below.

When a business combination is achieved in stages, the previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Company obtains control) and the resulting gain or loss, if any, is recognized in results. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.

l. Investments in associates and joint ventures

An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results of associated companies and joint venture are incorporated in the consolidated financial statements using the equity method, unless the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5.

Under the equity method, an investment in an associate or joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate or joint venture. When the Company’s share of losses of an associate exceeds the Company’s interest in that associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate or joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

The requirements of IAS 39 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Company’s investment in an associate or joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets (“IAS 36”) as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

Upon disposal of an associate or joint venture that results in the Company losing significant influence over that associate or joint venture, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with

F-30

IAS 39. The difference between the previous carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when it loses significant influence over that associate or joint venture.

When a group entity transacts with its associate or joint venture, profits and losses resulting from the transactions with the associate or joint venture are recognized in the Company’ consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Company.

m. Interests in joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

When a subsidiary of the Company operates in the context of joint operations, the Company as a joint operator recognizes in relation to its interest in a joint operation:

• Its assets, including its share of any assets held jointly.

• Its liabilities, including its share of any liabilities incurred jointly.

• Its revenue from the sale of its share of the output arising from the joint operation.

• Its share of the revenue from the sale of the output by the joint operation.

• Its expenses, including its share of any expenses incurred jointly.

When a subsidiary of the Company enters into transactions with a joint arrangement in which it is a joint operator (such as a sale or contribution of assets), the Company is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from the transactions are recognized in the Company’s consolidated financial statements only to the extent of other parties’ interests in the joint operation.

When a subsidiary of the Company enters into transactions with a joint operation in which an entity of the Company is a joint operator (such as a purchase of assets), the Company does not recognize its share of the gains and losses until it resells those assets to a third party.

n. Investment in concessions

Under all of the Company’s concession arrangements, (i) the grantor controls or regulates what services the Company must provide with the infrastructure, to whom it must provide them, and at what price; and (ii) the grantor controls, through ownership, any significant residual interest in the infrastructure at the end of the term of the arrangement. Accordingly, 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.

F-31

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.

The cost of financing incurred during the construction period is capitalized.

Financial assets are recorded at fair value and are valued at amortized cost by calculating interest by the effective interest method at the date of the financial statements, based on the yields determined for each of the concession contracts. Interest income on financial assets from concessions are recognized within revenues, as they form part of ordinary operations of the Company and as such, form part of the general objective of the concession activity, carried out regulary and thereby providing revenues on a routine basis.

Investments in concessions resulting in the recognition of an intangible asset are recorded at acquisition value or construction cost and are amortized, in the case of investment in highways, tunnels and concessions that involve the use of facilities for the duration of the concessions, based on units of production. For water treatment plants, amortization is based on treated water volumes. In the airport concessions, amortization is based on the term thereof which is 50 years.

The Company recognizes and measures contractual obligations for major maintenance of the infrastructure in accordance with IAS 37. The Company considers that periodic maintenance plans for infrastructure, whose cost is recorded in expense in the period in which the obligation arises, are sufficient to maintain the concession in good operating condition, in accordance with the obligations specified by the grantor and to ensure the delivery of the related infrastructure in good operating use at the end of the term of the concession, ensuring that no additional significant maintenance costs will arise as a result of the reversion to the grantor.

Provisions for long-term maintenance are recognized at present value, with the adjustment recorded within financial cost.

o. Government grants

Agencies of the Mexican government have provided grants to ICA to finance certain concesion investments. The conditions set forth with respect to the grants are approved by the competent agencies.

ICA identifies government grants with assets for which the grant implies the purchase of the asset or the construction or acquisition of other assets, restricting the type or location of such assets or the periods during which they are to be acquired or held to match the terms and conditions of the grant.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.

Grants for the acquisition of assets are presented net against the related asset, and are applied to results over the same period and using the same amortization criteria as that of the related asset, except when they are recognized at the time of their collection, because no basis existed for allocating a grant to periods other than that in which it was received (see Note 13.e).

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received. Receipt of a grant does not provide conclusive evidence that the conditions attached to it have been or will be fulfilled.

F-32

p. Prepaid expenses

Prepaid assets mainly consist of costs related to uncompleted construction contracts, (mainly related to insurance and performance bonds) which are recorded at historical cost and amortized over the estimated useful life of the asset, as applicable.

q. Applications of IT

Costs associated with software maintenance are recognized as expenses when incurred. The acquisition and development costs that are directly attributable to the design, implementation and testing of identifiable and unique software that ICA manages, are recognized as other assets when they fulfill the following criteria:

– It is technically possible to complete the software so that it can be used;

– Management intends to complete the software and use or sell it;

– The ability to use or sell the software exists;

– It can be shown that it is probable that the computer program will generate future economic benefits;

– Existence of the technical, financial and other resources to complete the development of software that allows use or sale, and the expenditure attributable to the software during its development can be measured reliably.

The direct costs are capitalized as part of cost of computer programs and include the costs of employees performing the computer program and a portion of the indirect costs.

Development costs of computer programs that are recognized as assets are amortized on a straight line from the start of operations of each application within their estimated useful lives fluctuating between three to five years.

r. Impairment of long-lived assets in use

Management periodically evaluates the impairment of long-lived assets in order to determine whether there is evidence that those assets have suffered an impairment loss. If impairment indicators exist, the recoverable amount of assets is determined, with the help of independent experts, to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

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s. Assets classified as hed for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when:

i) the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group),

ii) its sale is highly probable,

iii) Management must be committed to the sale, and

iv) the sale is expected to be completed within one year from the date of classification.

In addition, IFRS requires separate presentation of the results of the discontinued operation in the consolidated income statement, retrospectively for all comparative periods. Discontinued operations consider only those assets available for sale representing a line of business or geographical area.

When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Company will retain a non-controlling interest in its former subsidiary after the sale.

When the Company is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an associate or joint venture, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described above are met, and the Company discontinues the use of the equity method in relation to the portion that is classified a held for sale. Any retained portion of an investment in an associate or a joint venture that has not been classified as held for sale continues to be accounted for using the equity method. The Company discontinues the use of the equity method at the time of disposal when the disposal results in the Company losing significant influence over the associate or joint venture.

After the disposal takes place, the Company accounts for any retained interest in the associate or joint venture in accordance with IAS 39 unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the equity method (see the accounting policy regarding investments in associates or joint ventures described in paragraph l).

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

t. Investment units

Certain financial instruments are lined to inflation, such as those denominated in investment units (UDIs). UDIs are units of value established by the Bank of Mexico to address mortgage loan obligations or any financial or commercial transaction and are similar to a floating rate financial instrument. The value of the UDI increases daily to maintain the purchasing power of money and is published in the Official Gazette in Mexico. The value of UDIs is determined considering the Mexican National Consumer Price Index (“INPC”), taking into account inflation. The UDI-denominated financial instruments are valued at amortized cost. In determining the effective interest rate to measure debt instruments using the effective interest method, expected future changes in the value of the UDI are not taken into account. Changes in the value of the UDI during the year are recognized in the statement of income and comprehensive income.

As of December 31, 2013 and 2012 the UDI value was Ps.5.0587 and Ps. 4.8746, respectively.

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u. Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets are classified into four categories, which in turn determine the form of recognition and valuation of financial assets: “Financial assets at fair value through profit or loss”, “investments held-to-maturity”, “financial assets available-for-sale” and “loans and receivables”. The classification depends on the nature and purpose of the financial assets and is determined by the administration of the Company upon initial recognition. The Company generally only has financial assets at fair value through profit or loss and loans and receivables.

In the consolidated statement of financial position, financial assets are classified into current and noncurrent, depending on whether their maturity is less than / equal to or greater than 12 months.

Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss when the financial asset is held for trading or it is designated fair value through results. A financial asset is classified as held for trading if:

• It has been acquired principally for the purpose of selling it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

• It is a derivative (except those designated as hedging instruments or that is a financial guarantee).

Financial assets at fair value through profit of loss are recorded at fair value, recognizing in results any gain or loss arising from their remeasurement. The gain or loss recognized in results includes any dividend or interest earned from the financial asset and is recorded in interest expense or income in the consolidated statements income and other comprehensive income. Fair value is determined as described in Note 30.f.

Loans and receivables

Loans and receivables are non-derivative financial assets, that have fixed or determinable payments that are not quoted in an active market. After initial recognition, loans and receivables are measured at amortized cost using the effective interest method.

“Amortized cost” means the initial amount recognized for a financial asset or liability less principal repayments, less (or plus) the cumulative amortization using the effective interest method of any difference between the initial amount and the amount at maturity, less any reduction (directly or through a reserve) for impairment or bad debt.

Impairment of financial assets

Financial assets other than financial assets at fair value through profit or loss are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

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Objective evidence of impairment could include:

• Significant financial difficulty of the issuer or counterparty; or

• Breach of contract, such as a default or delinquency in interest or principal payments; or

• It becoming probable that the borrower will enter into bankruptcy or financial reorganization; or

• The disappearance of an active market for that financial asset because of financial difficulties.

The carrying amount of the financial asset is reduced directly by the impairment loss, except for trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recorded in results. Changes in the carrying amount of the allowance account are recognized in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through results to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed the amortized cost if the impairment would not have been recognized.

Derecognition of financial assets

On derecognition of a financial asset in its entirety, the difference between the asset´s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognized in results.

Financial liabilities

Financial liabilities are classified as financial liabilities at fair value through profit or loss, or other financial liabilities based on the substance of contractual arrangements.

Financial liabilities at fair value through profit or loss

A financial liability at fair value through profit or loss is a financial liability that is classified as held for trading or designated at fair value through profit or loss.

A financial liability is classified as held for trading if:

• It has been acquired principally for the purpose of repurchasing it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that are managed together for which there is evidence of a recent pattern of making short-term profits, or

• It is a derivative that accounting purposes does not comply with requirements to be designated as a hedging instrument

A financial liability other than a financial liability held for trading may be designated as at fair value through profit or loss upon initial recognition if:

• Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• It forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined contract (asset or liability) to be designated as at fair value through profit or loss.

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Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in results incorporates any interest paid on the financial liability and is included in effects of valuation of financial instruments in the statement income and other comprehensive income.

Other financial liabilities

Other financial liabilities, including loans, bond issuances and debt with lenders and trade creditors and other payables are valued initially at fair value, represented generally by the consideration transferred, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in results.

Effective interest method

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or cost over the relevant period. The effective interest rate is the rate that exactly discounts future cash receivable or payable (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or (where appropriate) a shorter period, to the carrying amount of the financial asset or liability on its initial recognition. When calculating the effective interest rate, all cash flows must be estimated (for example, prepayment, call options “call” and the like) except for future credit losses. The calculation must include all commissions and payments or receipts between the parties to the financial instrument, including other premiums or discounts.

Offsetting of financial assets and liabilities

Offsetting of financial assets and liabilities in the consolidated statement of financial position only occurs for accounts receivable and payable arising in transactions that contractually, or by law, have established a right of setoff and for which the Company has the intention to pay a net amount or to realize the asset and pay the liability simultaneously.

v. Risk management policy

ICA is exposed to risks that are managed through the implementation of systems related to identification, measurement, limitation of concentration, mitigation and supervision of such risks. The basic principles defined by ICA in the establishment of its risk management policy are the following:

• Compliance with Corporate Governance Standards

• Establishment, by each different business line and subsidiary, of risk management controls necessary to ensure that market transactions are conducted in accordance with the policies, rules and procedures of the Company

• Special attention to financial risk management, basically composed by interest rate, exchange rate, liquidity and credit risks (see Note 30).

Risk management in ICA is mainly preventive and oriented to the medium- and long-term, taking into considertaion the most probable scenarios of evolution of the variables affecting each risk.

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w. Derivative financial instruments

The Company underwrites a variety of financial instruments to manage its exposure to the risks of volatility in interest rates and exchange rates, including foreign currencyforward contracts, interest rateswaps and combined interest rate and foreign exchange swaps (cross currency swaps) related to the financing of its concession projects and construction. Note 26 includes a more detailed explanation of derivative financial instruments.

Derivatives are initially recognized at fair value at the date the derivative contract is entered into and are subsequently remeasured at fair value at the end of each reporting period. Fair value is determined based on recognized market prices. When the derivative is not listed on a market, fair value is based on valuation techniques accepted in the financial sector. Valuations are conducted quarterly in order to review the changes and impacts on the consolidated results.

The resulting gain or loss from remeasurement to fair value is recognized in profit or loss unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is greater than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

Hedge accounting

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

When the related transaction fulfills all hedge accounting requirements, the derivative is designated as a hedging instrument when the contract is entered (either as a hedge of cash flow or hedge of foreign currencies or a fair value hedge). The decision to apply hedge accounting depends on economic or market conditions and economic expectations in the national or international markets.

When the Company contracts a derivative financial instrument for hedging purposes from an economic perspective but that instrument does not comply with all requirements established by IFRS to be considered as hedging instruments, gains or losses from such derivative financial instrument is applied to the results in the period in which it occurs.

The Company’s policy not to enter into derivative financial instruments for speculative purposes, but certain instruments entered into by the Company that do not qualify as hedging instruments and accounted for as trading instruments and the fluctuation in fair value is recognized in the financial results of the period in which they are measured.

Effectiveness tests of derivatives that qualify as hedging instruments from an accounting perspective are performed at least once every quarter and every month, if there is a significant change.

Note 26 include details of the fair values of derivative instruments used for hedging purposes.

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Fair value hedges

The change in the fair value of the hedging instruments and the change in the hedged item attributable to the hedged risk are recognized in the line item in the statement of income and other comprehensive income relating to the hedged item.

Cash flow hedges

For cash flow hedges (including interest rate swaps and interest rate options) and hedging exchange rate designated as cash flow hedges and foreign currency instruments including foreign exchange, currency swaps foreign and foreign currency options, the effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The ineffective portion is recognized immediately in the financial results of the period.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to results in the periods when the hedged item is recognized in results, in the same line item in the statement of income and other comprehensive income where the hedged item is recognized. However, when a forecasted transaction that is hedged gives rise to the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Interruption of hedge accounting

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any accumulated gain or loss on the hedging instrument recognized in other comprehensive income remains there until the hedged item affects results. When a forecasted transaction is no longer expected to occur, the accumulated gain or loss is reclassified immediately to results.

Embedded derivatives

The Company reviews all of its contracts to identify embedded derivatives that should be separated from the host contract for purposes of valuation and accounting. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value through results.

The Company has no significant effects arising from embedded derivatives at the end of the periods reported.

Hedges of net investments in foreign operations

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income and accumulated under the heading of foreign currency translation reserve. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in interest expense or income.

Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

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x. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, when it is probable that the Company will be required to settle the obligation, and when a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties associated with the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

The main provisions recognized by the Company are for major maintenance (for concession assets), completion of construction and machinery leasing and related guarantees, and are classified as current or noncurrent based on the estimated time period to settle the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Major maintenance provisions

The Company is required to perform major maintenance activities to its airports as established by the concession provided by the Mexican government. The estimated major maintenance costs are based on the master develop plan (MDP), which is reviewed and updated every five years. Such contractual obligations to maintain and restore the infrastructure of the Company’s airports is recognized as a provision in the consolidated statements of financial position based on an estimate of the expenditure that would be required to settle the present obligation at the end of the reporting period. When the effect of the time value of money is material, the amount of the provision equals the present value of the expenditures expected to be required to settle the obligation. Where discounting is used, the carrying amount of the provision increases each period to reflect the passage of time and this increase is recognized as a borrowing cost. After initial recognition, provisions are reviewed at the end of each reporting period and adjusted to reflect current best estimates. Adjustments to provisions arise from three sources: (i) revisions to estimated cash flows (both in amount and timing); (ii) changes to present value due to the passage of time; and (iii) revisions of discount rates to reflect prevailing current market conditions. In periods following the initial recognition and measurement of the maintenance provision at its present value, the provision is revised to reflect estimated cash flows being closer to the measurement date. The Company’s major maintenance provisions increase over time as it incurs its obligation to restore the infrastructure of its airports, which deteriorate based on usage. At any reporting date, the best estimate of the expenditure required to settle the obligation in the future is proportional to the usage of the Company’s airport infrastructure, for example the number of airplanes that have used its airports’ runways. The unwinding of the discount relating to the passage of time is recognized as a financing cost and the revision of estimates of the amount and timing of cash flows is a reassessment of the provision and charged or credited as an operating item within the consolidated statements of income and other comprehensive income.

Contingent liabilities acquired in a business combination

Contingent liabilities acquired in a business combination are initially measured at fair value at the acquisition date. At the end of subsequent reporting periods, such contingent liabilities are measured at the higher of the amount that would be recognised in accordance with IAS 37 and the amount initially recognised less cumulative amortisation recognised in accordance with IAS 18Revenue.

y. Reserve for repurchase of shares

The Company records a reserve for the repurchase of shares from amounts appropriated from retained earnings, to strengthen the supply and demand of its shares in the stock market, as permitted by Mexican Securities Law. The shareholders authorize the maximum disbursement for the repurchase of shares.

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Purchases and sales of treasury shares are recorded decreasing or increasing stockholders’ equity of the Company through the reserve for the repurchase of shares account, based on the cost of reacquisition and replacement of such shares, respectively. Any gain or loss is recorded as additional paid-in capital. Gains or losses arising from the purchase, sale, issue or cancellation of equity instruments of ICA are not recognized in results.

z. Income taxes

Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of income and other comprehensive income because of items of income or expense that are taxable or deductible in periods different from when they are recognized in accounting profit or for items which are never taxable or deductible. Through December 31, 2013, the Business Flat Tax (“IETU”) was in effect, which was determined based on cash flows, considering the income received less the expenditures authorized by law. The income tax incurred was the higher of regular income tax (“ISR”) and IETU.

In accordance with 2014 tax reform mentioned in note 2, the tax regime in which ICA was authorized by the the Ministry of Finance and Public Credit of Mexico to prepare their income tax returns on a consolidated basis, which included the proportional tax of taxable income or loss of its Mexican subsidiaries was eliminated. The government established three alternatives are offered to companies to deconsolidate from a tax perspective and thus determine the deferred tax at December 31, 2013, including a deferred payment scheme over the next five fiscal years for the impact of deconsolidation.

As opposed to ISR, ICA and its subsidiaries incurred IETU on an individual basis. Of those subsidiaries that incurred IETU, the only amount of IETU recognized was the excess owed over ISR.

The tax provisions of foreign subsidiaries are determined based on taxable income of each individual company.

Deferred income taxes 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. Except as mentioned in the following paragraph, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences and the expected benefit of tax losses. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred taxes are recognized as income or expense in profit or loss, except when it relates to items recognized outside of profit or loss, as in the case of other comprehensive income, stockholders’ equity items, or when the tax arises from the initial recognition of a business combination, in which case the tax is recognized in other comprehensive income as part of the equity item in question or, in the recognition of the business combination, respectively.

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In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.

For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. The management of the Company reviewed the Company’s investment property portfolios and concluded that none of the Company’s investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, the Company has determined that the “sale” presumption set out in the amendments tolAS 12 is not rebutted.

Assets and deferred tax liabilities are offset when a legal right to offset assets with liabilities exists and when they relate to income taxes relating to the same tax authorities and the Company intends to liquidate its assets and liabilities on a net basis.

aa. Employee benefits and termination costs

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Certain subsidiaries are subject to statutory employee profit sharing (“PTU”) payment stemming from legal dispositions, which is recorded in the results of the year in which it is incurred and presented under general expenses in the consolidated statements of income and other comprehensive income.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements).

• Net interest expense or income.

• Remeasurement.

The Company presents the first two components of defined benefit costs in profit or loss in the line item general expenses. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

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bb. Share-based payments

Based on IFRS 2, a share-based payment of ICA, granted to executives, is classified as an equity instrument, and is recognized when the services are received by the Company subsequently settled by delivering shares. The cost of equity an instrument reflects their fair value at the date of grant and is recognized in earnings during the period in which the executive rights to the benefit accrue.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straightline basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to additional paid-in capital.

cc. Revenue recognition

Revenues are recognized when it is likely that the Company will receive the economic benefits associated with the transaction. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of activities. Revenues are reduced for estimated customer returns, rebates and other similar allowances.

By type of activity, revenue is recognized based on the following criteria.

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, in accordance with IAS 11,Construction Contracts(“IAS 11”). The percentage-of-completion method provides an understanding of the performance of the project in a timely manner, and appropriately presents the legal and economic substance of the contracts. Under this method, revenue from the contract is compared against the costs incurred thereof, based on percentage-of-completion, which will determine the amount of revenue, expenses and income that can be attributed to the portion of work completed.

To use the percentage of completion method, the following requirements should be met: (i) the contract must clearly specify legal rights relating to goods or services to be provided and received by the parties, the consideration to be paid and the terms of the agreement, (ii) the contract must specify the legal and economic right to receive payment for work performed while the contract progresses, (iii) it is expected that the contractor and the customer fulfill their contractual obligations, and (iv) that, based on the budget and the work contract, they can determine the total revenues, the total cost to be incurred and the estimated profit.

The base revenue utilized to calculate the amount of revenue to recognize 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.

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The basis for costs used to calculate the percentage of completion in accordance with the costs incurred method considers: (i) costs that relate directly to the specific contract, (ii) indirect costs related to contract activity and that can be identified with a specific contract, and (iii) any other costs that may affect the customer under the terms agreed in the contract. Costs that relate directly to a specific contract include all direct costs as raw material, labor, costs of subcontracting, manufacturing costs and supply of equipment carried out in independent workshops, project startup costs and depreciation. Indirect costs that are assignable to the contract include: indirect labor, administrative payroll, housing camps and related costs, quality control and inspection, internal and external oversight of the contract, insurance costs, bonds, depreciation, amortization, repair and maintenance.

The costs which are excluded are: (i) general administrative expenses that are not included under any form of reimbursement in the contract, (ii) selling expenses, (iii) the costs and expenses of research and development that have not been considered reimbursable by the contract, and (iv) depreciation of machinery and equipment not used in the specific contract even when available for a specific contract, if the contract does not allow revenue for such concept. Additionally, costs for work performed in independent workshops and construction in-process are excluded until their receipt or use, and are recorded as assets until such time.

Periodically, the Company evaluates the reasonableness of the estimates used in determining the percentage of completion. Estimates of the costs of construction contracts are based on assumptions which may differ from the actual cost over the life of the project. The cost estimates are reviewed periodically, taking into account factors such as increases in the prices of materials, amount of work to be performed, inflation, exchange rate fluctuations, changes in contract specifications due to adverse conditions, provisions that are recorded in accordance with construction contracts throughout the duration of projects, including those relating to penalty clauses, completion and commissioning of the projects 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, adjustments are made for the percentage of completion and if there are indications that the estimated costs to be incurred to completion of the project will exceed the expected revenue, a provision is recognized for estimated contract loss in the period in which it is determined. Revenues and estimates costs may be affected by future events. Any changes in these estimates may affect the results of the Company.

A variation on the extent of the work may be due to several factors, including: improvements in the construction process due to reduced supplies or runtime, local regulatory changes and changes in the conditions for the execution of the project or its implementation, design changes requested by the customer and the geological conditions not included in the original plan. Additionally, and in order to identify possible changes in contracts, ICA has implemented a method by which these changes can be identified and reported, the amounts can be quantified and approved and the changes can be implementedefficiently on projects. A variation is included in contract revenue when: a) it is probable that the customer will approve the changes and the amount of revenue resulting from the change, b) the amount of revenue can be reliably measured and c) and it is probable that the economic benefits flow to the entity. Claims or incentives for early completion are recognized as part of the revenue of a contract, provided that there is sufficient evidence that the customer will authorize payment for these items. Consequently, claims and incentives are included in contract revenue only when: a) negotiations have reached an advanced stage such that it is probable that the customer will accept the claim, and b) the amount that probable to be accepted by the customer can be determined reliably. The costs incurred for change orders instructed by the client and are awaiting the definition and authorization of price, are recognized as an asset under the caption “Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts” described below. With respect to incentive payments, revenues are recognized only when the execution of the contract is significantly advanced to conclude that the specified standards of performance will be achieved or exceeded and the amount of the incentive payment can be measured reliably.

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In projects financed by the Company in which the value of the contract includes revenues from work execution and financing, only borrowing costs directly related to the acquisition or construction of assets, less any yield obtained by the temporary investment of such funds and the foreign exchange loss to the extent it is an adjustment to interest costs, are attributed to contract costs. Borrowing costs that exceed estimates and are not contractually reimbursed by customers are not part of the contract costs. In these types of contracts, the collection of the contract amount from the client may take place at the end of the project. However, periodic progress reports are presented to and approved by the customer, which form the basis for the Company to obtain where appropriate, financing for the project in question.

When a contract includes the construction of several facilities, the construction of each is considered a separate profit center when: (i) separate proposals have been submitted for each facility, (ii) each facility has been subject to separate negotiations and and the contractor and customer have been able to accept or reject that part of the contract relating to each asset, and (iii) revenue, costs and profit margin of each facility can be identified.

A group of contracts, whether with one or more customers, are managed as a single profit center if: (i) the group of contracts had been negotiated as a single package, (ii) the contracts are so closely interrelated that they are, in effect, part of a single project with an overall profit margin, and (iii) the contracts are performed simultaneously or in in a continuous sequence.

The Company does not offset the profit and loss from separate profit centers. The Company also ensures that when several contracts comprise a profit center, a combined result is presented.

Under the terms of various contracts, revenue recognized is not necessarily related to the amounts billable to customers. Management periodically assesses the reasonableness of its receivables. In cases where there are indications of difficulty of their recovery, estimates for doubtful accounts are recognized thorugh results of the year they are determined. The estimate is based on the best judgment of the Company under the circumstances prevailing at the time of determination, modified by changes in circumstances.

The line item “Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts” included in the heading of “Customers”, originates from construction contracts and represents the difference between the costs incurred plus recognized profit (or less any recognized losses) and less certifications made for all contracts in progress, in excess of the amount of the certificates of work performed and invoiced. Any amounts received before work has been performed are included in the consolidated statement of financial position as a liability, as advances from customers. Amounts invoiced from the performed work but not yet paid by the customer are included in the consolidated statement of financial position as trade and other receivables.

Infrastructure concessions

In accordance with IFRIC 12, for both financial concession assets and intangible concession assets, the revenues and costs related to construction or improvements during the construction phase are recognized in revenues and construction costs. Revenues stemming from the financing of the investment in concessions are recorded in the statement of income and other comprehensive income as they accrue and are presented in concession revenues within continuing operations.

Revenues from the operation of concession projects are recognized as concession revenues, as they accrue, which is generally at the time vehicles make use of the highway and pay the respective toll in cash or electronically at toll collection booths. Revenues are derived directly from users of the concession, or at times, from the grantor of the concession. Aeronautical services revenues consist of the right of use of airports (TUA), which are recognized when services are provided. Prices for the services rendered are regulated by the grantor. In concessions involving toll revenues, tariff revisions do not apply until their effective date of application.

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Real estate sales

According to IFRIC 15,Agreements for the Construction of Real Estate and IAS 18, 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.

For sales of developments in which financial resources are obtained from financial institutions, revenue is recognized only when the properties are completed, the respective financing is received and the deed had been finalized. When the Company provides financing, revenue is recognized upon the execution of the deed of delivery-receipt, which is the moment upon which the risks, benefits, rights and obligations of the property have been transferred to the buyer and only when is probable that the economic benefits associated with the transaction will flow to the Company. The Company retains neither ongoing management involvement in the property sold in the degree to which usually is associated with an owner, except for the reservation of title, which is released at the time the price has been paid in full and the deed is ultimately processed.

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).

Mining services

Revenues from the rendering of mining services are recognized based on the stage of completion based on the services contracted with and approved by the customer.

Interest income

Interest income is recorded on a periodic basis, with reference to capital and the effective interest rate applicable.

Leasing revenues

The Company’s policy for recognition of revenue from operating leases is described in subparagraph i) of this note (the Company as lessor).

dd. Basic and diluted earnings per share

Basic earnings per share is computed over three levels of income, dividing: a) income from continuing operations attributable to the controlling interest, b) income from discontinued operations attributable to the controlling interest and c) the net income of the controlling interest, over the weighted average number of common shares outstanding during the year. The dilutive effect of the Company’s potential ordinary shares does not have a significant material effect on the Company’s determination of earnings per share; thus diluted earnings per share approximates basic earnings per share during the years ended December 31, 2013, 2012 and 2011.

5. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in Note 4, management of is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Estimates and assumptions are reviewed regularly. Changes to accounting estimates are recognized in the period in which the change is made and future periods if the change affects both the current period and to subsequent periods.

F-46

a. Critical judgments in applying accounting policies

The following are the critical judgments, apart from those involving estimations (see paragraph b), performed by management throughout the process of applying the accounting policies of the Company and that have the most significant effect on the amounts recognized in the consolidated financial statements.

• Through December 31, 2012, for the determination of deferred taxes, the Company prepared projections of future taxable income for period over which deferred taxes will reverse, in order to establish whether it expected to pay IETU or ISR in those years for purposes of determining the basis of the deferred income tax. The Company noted that certain subsidiaries will only incur ISR, while others will only incur IETU; it had therefore recognized deferred taxes by using the basis applicable for each legal entity. As of December 31, 2013, IETU was eliminated, such that deferred income taxes are only recognized on an ISR basis.

• Assessment of the existence of control, joint control or significant influence investments in subsidiaries (Note 17, 18 and 19).

• The Company’s defined benefit obligation is discounted at the rate set by reference to market yields at the end of the reporting period on government bonds. Significant judgement is required when setting the criteria for bonds to be included in the population from which the yield curve is derived.

• The Company is subject to transactions or contingent events over which professional judgment is exercised in developing estimates of probability of occurrence of probable outflows associated with adverse outcomes. The factors considered in these estimates are the legal merits of the case, as substantiated by the opinion of the Company’s legal advisors.

b. Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

• Determining profit margin and the degree of progress in construction contracts (see Note 4.cc).

• In order to estimate doubtful accounts receivable, among other elements, the Company considers the credit risk derived from the customer’s financial position and any significant collection delays based on the terms agreed in construction service agreements (see Note 7).

• The realizability of real estate inventory (see Note 4.f).

• Fair value of assets acquired in business combinations (see Note 3.h).

• The long-lived assets of the Company correspond to property, plant and equipment and concessions granted by the Mexican government and foreign governments for the construction, operation and maintenance of roads, bridges and tunnels, airport management and municipal services. The Company reviews the estimated useful life and depreciation method used for tangible and intangible assets derived from concessions at the end of each reporting period and the effect of any changes in estimates are recognized prospectively. Annually, to assess any evidence of impaired assets, the Company prepares a value in use calculation assigned to each cash-generating unit, in the case of certain assets. The estimate of value in use requires the Company to determine future cash flows to be derived from the cash generating units and an appropriate discount rate to calculate the present value. The Company uses cash flow projections of revenue based on estimates of market conditions, the calculation of prices and volumes of traffic.

• The Company reviews the estimated useful lives and residual values of property, plant and equipment at the end of each annual period. Based on the detailed analysis, Company

F-47

management makes modifications in the useful lives of certain property, plant and equipment. The level of uncertainty associated with estimates of useful lives is related to changes in the market and use of assets because of production volumes and technological development.

• The estimates made by the independent appraisers in determining the fair value of investment property (see Notes 4.h and 15).

• In determining whether goodwill is impaired, the Company makes an estimate of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires that the Company to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.

• The Company makes estimates to determine and recognize the provision for project completion rental and maintenance of equipment, which is determined based on the degree of completion of projects and the hours of operation in the case of machinery.

• Management prepares estimates to determine and recognize the provision necessary for the maintenance and repair of highways and other infrastructure under concession, which affects the results of the periods in which the infrastructure under concession becomes available for use and through the date on which the maintenance and/or repair work is performed.

• The Company values and recognizes derivatives at fair value, regardless of the purpose for holding them. Its bases fair value on market prices for derivatives traded in recognized markets. If no active market exists, the derivative instrument is valued using the valuations of counterparties (valuation agents) verified by a price provider authorized by the National Registry of Securities (Registro Nacional de Valores). These valuations are based on methodologies recognized in the financial sector and are supported by sufficient and reliable information. Note 26 contains a description of the techniques and methods utilized to value derivative financial instruments.

• To determine certain provisions, the Company uses factors related to lead times for construction contracts and production volume, as well as hours of use for owned and leased machinery.

Although these estimates were made based on the best information available at December 31, 2013, it is possible that events may take place in the future that will require their modification (increases or decreases) in subsequent years, which such modification would be made prospectively in the Company’s consolidated financial statements.

6. Cash and cash equivalents

a. Cash and cash equivalents at each period end as shown in the statement of financial position are composed as follows:

	December 31,
	2013		2012
Cash		Ps.  1,140,955		Ps.  1,066,997
Cash equivalents:
Bank paper		1,200,868		1,801,404
Government securities		192,161		849,949
Commercial paper		492,084		96,070
Bank deposit certificates		69,736		40,341
Other		273,978		294,747
Total cash and equivalents (1)		Ps.  3,369,782		Ps.  4,149,508

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b. Restricted cash and cash equivalents are as follows:

	December 31,
	2013			2012
Cash		Ps. 2,009,979			Ps. 1,949,991
Government securities		4,146			485,519
Other		32,901			17,970
Total(1)		2,047,026			2,453,480
Long-term		(37,047	)		(503,249	)
Current		Ps. 2,009,979			Ps. 1,950,231

(1) As of December 31, 2013 and 2012, total cash, cash equivalents and restricted cash are Ps.5,417 million and Ps.6,603 million, respectively.

Restricted cash represents cash and cash equivalents of the trusts created for concessions, and are affected by the collection of tolls, net of payments of operating expenses and maintenance of concession projects, and funds are assigned based on credit agreements and the trust agreement in effect. The use of these funds is restricted to the payment of the release of rights of way, construction, operation and maintenance of concessions and for payment and guarantees of debt. At December 31, 2013 and 2012, restricted cash includes a balance of Ps.1,248 million and Ps.832 million, respectively corresponding to the construction of the section of the Kantunil-Cancun-Playa del Carmen Highway.

7. Customers

a. As of December 31, 2013 and 2012, the balance of short-term customers is as follows:

	December 31,
	2013			2012
Billings on contracts(1)		Ps.�� 4,081,336			Ps.  3,633,351
Retained billings on contracts		171,406			108,439
Guarantee deposits		160,015			51,473
Notes receivable		677,397			747,068
Discounted notes		89,635			—
		5,179,789			4,540,331
Cost and estimated earnings in excess of billings on uncompleted contracts (1)		11,717,925			13,081,184
Allowance for doubtful accounts		(837,491	)		(1,087,969	)
Total customer receivables from sales and services		Ps . 16,060,223			Ps.  16,533,546

(1) As of December 31, 2013, the balance of billings on contracts included Ps. 653 millon and as of December 31, 2012, included Ps. 824 millon and the balance of cost and estimated earnings in excess of billings on uncompleted contracts included Ps.629 million, respectively, from the La Yesca Hydroelectric Project. In conformity with the financed public works mixed-price contract executed with the Comision Federal de Electricidad (“CFE”) in November and December 2012 CFE signed the provisional acceptance of the first and second turbogenerator unit of La Yesca, respectively. As a result of this, ICA received in December 2013, a payment of U.S.$140 million and in 2012 he received the first and second payment in the amount of the U.S.$700 and U.S.$342 million, which were applied in full to settle debt related to the project. 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.

Customer receivables disclosed above are classified as loans and receivables and are therefore measured at amortized cost.

F-49

ICA’s Management considers the carrying amount of accounts receivable represents its fair value. There is no interest charged on current accounts receivable as classified as customers. At December 31, 2013, the Company recognized an allowance for doubtful accounts of Ps.896,810 million, determined based on the experience of counterparty default and an analysis of their current financial position. Besides customers mentioned in Note 41, no other customer represents more than 5% of the total balance of accounts receivable.

ICA’s principal customers are concentrated in the construction segment and represent 78%, 82% and 84% of total consolidated revenues for the years ended December 31 2013, 2012 and 2011, respectively. (See Note 41)

The management of accounts receivable and the determination of the need for a reserve are carried out by each individual entity that forms part of the consolidated financial statements, as each entity has more thorough knowledge of the financial situation and relationship with each of its customers. However, in each of the Company’s lines of business, certain guidelines exist regarding specific characteristics that each customer must possess depending on the nature of the line of business.

Accounts receivable to customers include amounts that are past due at the end of the reporting period (see analysis below for aging), but for which the Company has not recognized any allowance for bad debts since there has been no significant change in credit quality and the amounts are still considered recoverable. The Company does not maintain any collateral or other credit enhancement on those balances, nor does it have the legal right of offset against any amount owed by the Company to the counterparty.

b. Aging of past due but not impaired

	December 31,
	2013			2012
Up to 120 days		Ps.  3,352,068			Ps.  6,272,748
120 to 360 days		3,891,207			4,842,178
More than 360 days		7,082,162			3,639,995
		10,973,369	(1)		8,482,173
Total		Ps.  14,325,437			Ps.  14,754,921
Average age (days)		231			235

(1) At December 31, 2013, includes Ps.515 million related to the La Yesca project and Ps.1,089 million related to the Eastern Discharge Tunnel and other projects in which management of the Company considers that in accordance with the contracts and the credit quality of its customers, as well as other elements regarding the nature of the receivables, an allowance for doubtful accounts is not necessary.

c. The balance of long-term customers is as follows:

	December 31,
	2013			2012
Billings on contracts(1)		Ps. 8,830,366			Ps. 8,170,194
Notes receivable		616,602			716,835
Allowance for doubtful accounts		(59,319	)		(313,300	)
		9,387,649			8,573,729
Cost and estimated earnings in excess of billings on uncompleted contracts (1)		3,857,163			2,846,913
		Ps. 13,244,812			Ps. 11,420,642

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(1) As of December 31, 2013 and 2012, includes Ps.11,784 and Ps.10,754 million, respectively, that correspond to the contract for the construction of the Rio de los Remedios-Ecatepec Highway which Naucalpan Ecatepec S.A. de C.V. (formerly Viabilis Infraestructura, S.A.P.I de C.V.), subsidiary of ICA, signed with the Highway, Airports, and Other Related and Auxiliary Services System of the State of Mexico, “SAASCAEM” (for its acronym in Spanish). Payment, including a guaranteed return on investment, as well as the guarantee of recovery of investment and all related financing, will be made on the basis of collections of tolls charged by the trust set up for this purpose. Collections will be made until the recovery of the investment plus an internal rate of return of 10%, which is estimated to be over a time period of 30 years. On March 1, 2013, tranche 3 of the highway, covering the area from Vallejo Avenue to the Mexico- Pachuca highway, began operations. From this date, the tranche in operation, in conjunction with tranche 1 (Puente de Vigas- A. Vallejo), covers a total length of 12.1 kilometers.

d. The allowance for doubtful accounts, considering both current and long-term is:

	December 31,
	2013			2012
Billings on contracts	Ps.	630,808		Ps.	851,305
Trade receivable		198,303			236,887
Allowance for doubtful for current accounts		829,111			1,088,192
Notes receivable		67,699			313,077
Total allowance for doubtful accounts	Ps.	896,810	(1)	Ps.	1,401,269	(1)

(1) As of December 31, 2013 and 2012, impaired accounts receivable represent customers with balances 360 days or more past due and correspond mainly to the construction and airports segments.

The changes in the allowance for doubtful accounts

	December 31,						January 1,
	2013			2012			2012
Beginning balance	Ps.	1,401,269		Ps.	1,332,010		Ps.	586,859
Increase of the period		99,939			376,408			745,385
Application of the period		(208,248	)		—			(234	)
Cancellation of the period		(396,150	)		(307,149	)		—
Ending balance	Ps.	896,810		Ps.	1,401,269		Ps.	1,332,010

e. At December 31, 2013 and 2012, the balance of cost and estimated earnings in excess of billings on uncompleted contracts is as follows:

	Projects
	CEFERESO Nayarit		Túnel Rio Medellín		Line 12			Eastern Discharge Tunnel		Arco Sur		Rio de los Remedios		Other projects		December 31, 2013
Costs incurred on uncompleted contracts	Ps.	4,019,009	Ps.	600,085	$	13,007,078		Ps.	4,547,923	Ps.	5,353,454	Ps.	10,568,327	Ps.	41,380,273	Ps.	79,476,149
Estimated earnings		1,187,630		56,369		—					348,651		1,216,203		4,537,206		7,346,059
Losses incurred		—		—		(4,006	)		—		—		—		—		(4,006	)
Recognized revenue		5,206,639		656,454		13,003,072			4,547,923		5,702,105		11,784,530		45,917,479		86,818,202
Less: billings to date		3,419,938		408,656		9,205,430			3,943,433		5,096,542		8,792,345		40,376,770		71,243,114
Total cost and estimated earnings in excess of billings on uncompleted contracts		1,786,701		247,798		3,797,642			604,490		605,563		2,992,185		5,540,709		15,575,088
Less:
Non—current cost and estimated earnings in excess of billings on uncompleted contracts		847,772		—		—			—		—		2,992,185		17,206		3,857,163
Current cost and estimated earnings in excess of billings on uncompleted contracts	Ps.	938,929	Ps.	247,798	Ps.	3,797,642		Ps.	604,490	Ps.	605,563	Ps.	—	Ps.	5,523,503	Ps.	11,717,925

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	CEFERESO Nayarit		La Yesca		Line 12			Eastern Discharge Tunnel		Arco Sur		Rio de los Remedios		Other Projects			December 31, 2012
Costs incurred on uncompleted contracts	Ps.	3,414,685	Ps.	14,239,211	Ps.	12,928,195		Ps.	4,633,589	Ps.	5,113,115	Ps.	8,273,551	Ps.	35,633,256		Ps.	84,235,602
Estimated earnings		1,014,811		440,388					809,488		331,823		953,974		4,033,273			7,583,757
Losses incurred		—		—		(3,977	)		—		—		—		(89,926	)		(93,903	)
Recognized revenue		4,429,496		14,679,599		12,924,218			5,443,077		5,444,938		9,227,525		39,576,603			91,725,456
Less: billings to date		2,873,898		14,050,665		9,183,218			3,780,164		4,277,919		6,399,079		35,232,415			75,797,358
Total cost and estimated earnings in excess of billings on uncompleted contracts		1,555,598		628,934		3,741,000			1,662,913		1,167,019		2,828,446		4,344,188			15,928,098
Less:
Non—current cost and estimated earnings in excess of billings on uncompleted contracts		—		—		—			—		—		2,828,446		18,468			2,846,914
Current cost and estimated earnings in excess of billings on uncompleted contracts	Ps.	1,555,598	Ps.	628,934	Ps.	3,741,000		Ps.	1,662,913	Ps.	1,167,019	Ps.	—	Ps.	4,325,720		Ps.	13,081,184

8. Construction backlog

a. Backlog includes the entire contract amount only for contracts in which ICA has control over the project. ICA considers that it controls a project when it has a controlling interest and it is the project leader. When control is shared, the amount included in backlog represents ICA’s participation in the equity of the association. A reconciliation of backlog representing executed construction contracts at December 31, 2013 and 2012 is as follows:

	Civil Construction		Mining Services			Other Services		Total
Balance at January 1, 2012		Ps. 19,813,996	Ps.	—		Ps.	—		Ps. 19,813,996
New contracts in 2012		24,835,504		7,603,619	(1)		1,542,985		33,982,108
Changes orders and adjustments in 2012		11,151,730		863,413			—		12,015,143
Less: construction revenue earned 2012		28,614,084		1,431,621			412,729		30,458,434
Balance at December 31, 2012		27,187,146		7,035,411			1,130,256		35,352,813
New contracts in 2013		18,417,525		105,287			—		18,522,812
Changes orders and adjustments in 2013		3,677,747		548,285			387		4,226,419
Less: construction revenue earned 2013		18,624,241		2,740,393			379,665		21,744,299
Balance at December 31, 2013		Ps. 30,658,177		Ps. 4,948,590			Ps. 750,978		Ps. 36,357,745

(1) Corresponds to the incorporation of San Martin.

b. When the control is shared, backlog incorporates the portion of the contract belonging to ICA based on its and the rights to the assets and obligations for the liabilities, as defined by IFRS 11. The principal activity of the Company is focused on the construction segment, therefore its backlog, in millions of pesos, in which ICA participates through its joint ventures (see note 19) is as follows:

	Total associates and joint ventures
Balance at January 1, 2012	Ps.	8,911
Balance at December 31, 2012	Ps.	21,737
Balance at December 31, 2013	Ps.	10,864

c. For the period beginning January 1 to March 18, 2014, the Company entered into construction contracts for Ps.1,907 million.

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9. Construction materials inventories

Construction materials inventories are as follows:

	December 31,
	2013		2012
Raw materials and other materials	Ps.	655,291	Ps.	471,533
Parts, accessories and other		282,336		271,577
	Ps.	937,627	Ps.	743,110

10. Real estate inventories

a. Short-term real estate inventories consist of the following:

	December 31,
	2013		2012
Land under development	Ps.	319,907	Ps.	846,756
Construction in-progress		3,194,056		2,082,440
Tourism and real estate projects		1,109,802		1,118,295
Vertical projects		1,654,175		2,269,219
		6,277,940		6,316,710
Less:
Long-term real estate inventories		4,202,358		2,629,782
Short-term real estate inventories	Ps.	2,075,582	Ps.	3,686,928

Capitalized financing costs are Ps.457 million and Ps.487 million, as of December 31, 2013 and 2012, respectively.

b. The movement of the period in the statements of financial position at December 31, 2013 and 2012, is as follows:

CONCEPT	Horizontal			Vertical			Total
Balance at January 1, 2012	Ps.	4,037,468		Ps.	3,175,359		Ps.	7,212,827
Additions		1,740,796			505,868			2,246,664
Application to cost		(1,513,096	)		(277,833	)		(1,790,929	)
Adjustment to fair value less selling expenses(1)		(701,525	)		—			(701,525	)
Others		(5,107	)		135,000			129,893
Reclassified to property, plant and equipment(2)		—			(780,220	)		(780,220	)
Balance at December 31, 2012		3,558,536			2,758,174			6,316,710
Additions		726,740			246,897			973,637
Application to cost		(782,971	)		(169,036	)		(952,007	)
Transferred		—			(48,869	)		(48,869	)
Others		(11,531	)		—			(11,531	)
Balance at December 31, 2013	Ps.	3,490,774		Ps.	2,787,166		Ps.	6,277,940

(1) Corresponds to the valuation of real estate inventories included in the horizontal housing line which were recognized at fair value recorded in 2012 as they were previously classified as held for sale.

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(2) During 2012, the Master Real Estate and Tourism Development Plan for Aak-Baal was approved by the Company. Based on this authorization and the terms of the plan with respect to the use of the related assets, the Company’s management decided to classify the land as property, plant and equipment, as the plan no longer contemplates the sale of this land, but rather its use by the Company. Accordingly, Ps.780 million was transferred from real estate inventories to property, plant and equipment. The plan contemplates the construction of a golf course of 18 holes. The Company will also build a marina for 100 boats and will receive boats transiting the coast of southeastern Mexico and residents of Aak-Bal. The Company also plans to build a five-star hotel averaging 200 to 250 rooms.

The vertical and horizontal housing has the following characteristics:

The vertical housing consists of mulit-level houses built on common property, with rights of ownership to the common property, but for which in contrast to the horizontal property described below, does not result in a community of owners.

Vertical growth architecture offers different activities within a commonproperty area, where mixed land use is obtained. The challenge provided by vertical architecture is to generate the best use of the common property.

A vertical development integrates as many possible uses of the common areas for people who reside there, and provides vegetation in spaces that would normally be occupied by a horizontal housing development and provides low density.

Horizontal housing is characterized by extended private property on one floor or locale of a building or urban or complex construction.Horizontal housing is a legal institution that refers to the set of rules governing the division and organization of various properties, as a result of the segregation of a building or common ground. The horizontal property is a mixture of private property and co-ownership. It is a form of division of property by dividing housing into condominiums, and attributes to the holder of such units an absolute and exclusive right of ownership over the property as well as a right of ownership regarding property in common domain.

The horizontal housing is a regime that regulates the way in which a property is divided, the relationship between the owners of private property and common assets that have been segregated of a land or a building. The horizontal housing allows the organization of the co-owners and maintenance of the common areas.

The right of horizontal property includes a percentage of ownership in the common elements of all apartment owners in the condominium.

At December 31, 2013 and 2012, certain real estate inventory valued at Ps.3,424 million and Ps.333 million, respectively, are pledged as collateral for loans outstanding totaling Ps.898 million and Ps.674 million, respectively (see Note 27).

As mentioned in Note 29.c, in December 2010, ICA activated the mechanism in a trust established to guarantee receivables owed to ICA from the Esmeralda Resort Project, S.A. de C.V. (“PER”) 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. During 2011, ICA received an additional payment in the amount of Ps.151.5 million, paid in-kind with land, thus reducing the receivable owed to ICA from PER.

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11. Other receivables

The accounts receivable are as follows:

	December 31,
	2013			2012
Sundry debtors	Ps.	697,254		Ps.	840,710
Notes receivable		51,585			52,435
Guarantee deposits		270,821			114,288
Financial assets from concessions (Note 13)		399,264			1,079,223
Derivative financial instruments (Note 26)		296,746			224
Officers and employees		60,627			28,119
Other permanent investments		3,663			—
Dividend receivables		21,528			—
Recoverable taxes		1,404,186			1,489,188
Amounts receivable from related parties (Note 38)		849,834			1,276,221
Allowance for doubtful accounts		(27,103	)		(27,131	)
	Ps.	4,028,405		Ps.	4,853,277

12. Advances to subcontractors and other

At December 31, 2013 and 2012, this item includes the following:

	December 31,
	2013		2012
Prepaid expenses	Ps.	320,083	Ps.	153,529
Advances to suppliers		90,555		449,381
Advances to subcontractors		1,086,234		832,006
Premiums paid for insurance and bonds		98,241		114,492
	Ps.	1,595,113	Ps.	1,549,408

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13. Investment in concessions

a. The classification and integration of investment in concessions is as follows:

Financial asset:

	Date of	Direct and Indirect Ownership Percentage		Balance as of December 31,
Description of Project	Concession Agreement	2013	2012	2013		2012
Water treatment plant in Cd. Acuña(1) (2)	September 1998	—	100%	Ps.	—	Ps.	207,016
Rio Verde—Cd. Valles Highway(1)	July 2007	100%	100%		3,332,185		2,990,272
Social infrastructure Sarre(4)	December 2010	100%	100%		—		4,432,456
Social infrastructure Papagos(4)	December 2010	100%	100%		—		4,457,507
					3,332,185		12,087,251
Total short-term financial assets					399,264		1,079,223
Total long-term financial assets				Ps.	2,932,921	Ps.	11,008,028
Intangible asset:
Kantunil—Cancun Highway	October 1990	100%	100%	Ps.	3,385,812	Ps.	2,571,810
Acapulco Tunnel	May 1994	100%	100%		798,669		824,985
Water treatment plant in Cd. Acuña(1) (2)	September 1998	—	100%		—		31,777
Autovia Queretaro, Palmillas-Apaseo el Gde	February 2013	100%	—		3,058,132		—
Central North Airport Group	November 1998	41.38%	58.63%		7,299,035		7,155,243
Rio Verde—Cd. Valles Highway (1)	July 2007	100%	100%		1,713,161		1,555,007
Libramiento La Piedad, Highway	January 2009	100%	100%		2,529,588		2,438,843
Barranca Larga- Ventanilla, Oaxaca Highway	April 2012	100%	100%		1,944,587		569,510
Diamond Tunnel(3)	May 2013	100%	—		221,189		—
Total intangible assets				Ps.	20,950,173	Ps.	15,147,175

(1) Combination of both financial and intangible assets.

(2) Company sold in 2013.

(3) Company incorporated in 2013.

(4) These subsidiaries are presented in the consolidated financial statements

as assets classified as held for sale, at December 31, 2013 (see Note 34).

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Concession projects are generally financed with long-term debt without recourse to shareholders, which are mainly guaranteed by the cash flows generated by the related concession, project resources and assets, receivables and contract rights. When cash flow is the main guarantee for the payment of the debt, funds are not freely disposable to shareholders until compliance with certain conditions are met, which are assessed annually.

Additionally, the Company provides and maintains reserve accounts during the term of the related loan, usually corresponding to six months of debt service, which are not available to the concessionaire. These funds are for debt service, in the event that the cash flows generated by the concession are insufficient.

b. For the years ended December 31, 2013, 2012 and 2011, the Company recognized construction costs and related revenues in exchange for a financial asset, an intangible asset or a combination of both, in relation to construction on its concessions for Ps.6,654 million, Ps.8,404 and Ps.4,726 million, respectively.

c. The changes in investment in concessions classified as intangible assets in the consolidated statement of financial position at December 31, 2013 and 2012 were as follows:

	Cost			Amortization			Net
Balance at January 1, 2012		Ps. 16,870,483		Ps.	(3,742,753	)	Ps.	13,127,730
Acquisition or additions		1,832,610			—			1,832,610
Acquisitions through business combinations		569,510						569,510
Amortization		—			(373,111	)		(373,111	)
Transfers		(9,564	)		—			(9,564	)
Balance at December 31, 2012		19,263,039			(4,115,864	)		15,147,175
Acquisition or additions		6,436,984			—			6,436,984
Sales or disposals		(76,876	)		—			(76,876	)
Amortization		—			(410,251	)		(410,251	)
Transfers and grants		(133,866	)		—			(133,866	)
Others		(12,993	)		—			(12,993	)
Balance at December 31, 2013		Ps. 25,476,288		Ps.	(4,526,115	)	Ps.	20,950,173

d. The integration of concessions classified as intangible assets is as follows:

	December 31,
	2013			2012
Projects completed and in operation:
Construction cost and acquisition	Ps.	9,470,117		Ps.	8,337,913
Rights to use airport facilities		5,228,404			5,228,404
Improvements in concessioned assets		5,289,829			3,291,983
Financing costs capitalized		264,032			(38,335	)
Accumulated amortization		(4,526,115	)		(4,115,864	)
Others		—			(168,080	)
		15,726,267			12,536,021
Construction in-progress:
Construction cost		4,936,987			2,290,514
Financing costs capitalized		286,919			320,640
	Ps.	20,950,173		Ps.	15,147,175

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e. Capital grants received by government agencies, to finance concessions, are as follows:

		December 31,
	Date received	2013		2012
Grants assets:
Kantunil- Cancun Highway	December, 1990 October, 1994	Ps.	932,057	Ps.	932,057
Autopista Barranca Larga – Ventanilla—Highway	December, 2012		1,212,850		1,212,850
			2,144,907		2,144,907
Grants receivable			1,096,048		1,425,172
Grants collected and applied in concession investment		Ps.	1,048,859	Ps.	719,735

Government grants that have been amortized to results in the year 2013, 2012 and 2011 presented in cost of concessions in the consolidated statement of income and other comprehensive income amounted to Ps.329 million, Ps.13 million and Ps. 107 million, respectively.

f. For the years ended December 31, 2013, 2012 and 2011, interest income earned on the financial concession asset was Ps.672 million, Ps.451 million and Ps.508 million, respectively, which is presented within concession revenues in the consolidated statement of income and other comprehensive income.

g. The concessionaires are required to maintain the infrastructure concession at an optimal level of service, ensuring a minimum score established by the grantor (see Note 23). At the end of the concession period, the assets assigned to it and the operating rights will revert to the grantor, in good condition, free of charge and free of any liens. The following describes the basic terms and conditions of the concessions:

Concessions highways and tunnels

• Concessionaires shall establish, as trustee, in a national credit institution, a management trust, for the fiduciary purpose of management of capital, debt and proceeds from the operation of the concessions.

• The concessionaires will be obligated to pay an initial consideration referred to in each of its proposals and periodic consideration in favor of the Federal Government, based on revenues earned in the operation of the concession.

• In addition to the causes for revocation under Article 17 of the Roads, Bridges and Federal Motor Carrier Law, the grantor may also revoke the concessions because of any breach of the terms and conditions of the concession agreements.

• Concessionaires must operate, conserve and maintain concessions in conditions that allow fluid and safe transit for its users and minimize deterioriation of the infrastructure assets.

• The Communications and Transportation Ministry (“SCT”) will evaluate compliance by the concessionaires with respect to the requirements of quality of service, and the operation and maintenance of the concessions.

• To ensure compliance with its obligations as stipulated in the concession agreements, concessionaries have provided specific guarantees.

Water treatment plant

• In order to provide for the necessary investments in water treatment plants granted in the related service agreements (“CPS” for its acronym in Spanish), the Company will seek, manage, obtain and apply economic resources arising from the Mexican National Infrastructure Fund (“FONADIN”).

• The Company must acquire insurance bonds that guarantee its compliance during the construction phase, operation and termination of the concession.

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Airport concessions

• The concessionaire should grant access to and the use of specific areas of the airport free of charge, to certain agencies of the Mexican Government in order to enable them to carry out their activities within the airports.

• The concessionaire has the right to manage, operate, maintain and use the airport facilities and carry out the construction, improvement or maintenance of facilities in accordance with the MDP every five years as well as provide airport services and complementary and commercial services.

• The concessionaire can only use the airport facilities for the purposes specified in the concession agreement and should provide services in accordance with applicable law and regulations, subject to revisions by the SCT.

• Airports and Auxiliary Services (ASA) has the exclusive right to supply fuel at the concessioned airports.

• The concessionaire must pay a fee for the right to use the concession assets (currently 5% of gross annual income of the concession holder), in accordance with the Mexican Federal Rights Law.

• The concession can be revoked if the concessionaire violates any obligations imposed by the concession, as established in article 27 of the Airports Law or for the reasons mentioned in article 26 of the aforementioned law and in the concession. The violation of certain terms of the concession may cause the revocation of the concession only if non-compliance is sanctioned by the SCT on at least three different occasions.

Social infrastructure concessions

• Upon execution of the contracts, each party should designate a risk manager, assuming the cost with respect to their designation.

• Within 60 days of the conclusion of the contract, the Decentralized Administrative System for Prevention and Social Rehabilitation of the Ministry of Public Security (“PyRS”) and Sarre Infraestructure and Services, S.A. de C.V. (“Sarre”) and Papagos Services for the Infraestructure, S.A. de C.V. (“Papagos”) (both “ Suppliers”), will establish a Consultation Committee composed of 3 representatives of PyRS (one of them will serve as Chairman of the Advisory Committee and will be responsible for the coordination of the Consultation Committee) and 3 representatives of the Suppliers (one of them will be Secretary of the Advisory Committee and will be responsible for the minutes of the agreements and resolutions adopted and issued by the Advisory Committee).

• Costs to develop the infraestructure are the sole responsibility of the Suppliers; PyRS will not reimburse any costs incurred in excess.

• Suppliers will be solely responsible for obtaining the financing necessary to meet their obligations under the contracts.

• Suppliers should comply with all the legal requirements for hiring, dismissal and retirement of their employees and will be responsible for the experience and technical expertise of hired subcontractors.

• In case of termination of the contract, for any reason, Suppliers will be responsible for the completion of each and every one of the subcontracts or legal instruments that linked to the project and shall deliver to PyRS or another designated organism, all project information.

At December 31, 2013, these concessions are presented as assets classified as held for sale (see Note 34).

All terms and conditions have been fulfilled during the years ended December 31, 2013 and 2012.

h. Below is a description of the primary concessions held by the subsidiaries of the Company:

Grupo Aeroportuario Centro Norte (“GACN”)

In November 2008, the SCT granted to GACN, concession agreements to manage, operate and where appropriate, build and maintain the following international airports: Acapulco, Ciudad Juarez, Culiacan, Chihuahua, Durango, Mazatlan, Monterrey, Reynosa, San Luis Potosi, Tampico, Torreon, Zacatecas and Zihuatanejo. 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 concession term is for 50 years.

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GACN has the obligation to make investments in and perform improvements to concessioned assets according to the five-year MDP, authorized by SCT. The total amount is Ps.2,745 million, based on December 2009 values and Ps.3,135 million, based on December 2013 values (as the SCT considers the effects of inflation on the required investment amounts). At December 31, 2013 the remaining amount to be invested by the Company is Ps.1,552 million is as follows:

Year	Amount
2014		Ps.    1,179,867
2015		372,112
Total		Ps.    1,551,979

Improvements made at the Company’s expense to airport facilities may be recognized by the Mexican Bureau of Civil Aviation (Direccion General de Aviacion Civil, or “DGAC”) as part of the Company’s investment in the airport concession. The cost of airport improvements recognized by the DGAC that form part of the Company’s investment in the concession are “recovered” by the Company in the form of adjustments to the maximum rates that the Company may charge for aeronautical services, which are regulated by the DGAC.

In 2009, the Company paid Ps.1,159,611 to acquire land strategically located adjacent to the Monterrey airport to allow for the airport’s future growth, including the construction of a second runway, which the Company intends to complete in the future. The acquired land is classified in the Company’s financial statements for the year ended December 31, 2013 and 2012 as land owned by the Company at its acquisition value, presented as a fixed asset. The Company is negotiating the ability to recognize the cost of the investment made on this land as part of the its future investment in the Monterrey airport concession included in the airport’s required master development program investments, rather than as a fixed asset owned by the Company.

The DGAC authorized the recognition of Ps.386,538 of the land acquired as part of the Company’s investment in concession included in the MDP at the Monterrey airport for the period from 2013 to 2015.

Of the Ps. 386,538 thousand authorized by the DGAC, Ps. 121,701 thousand were authorized for recognition as investment in concession by the Company in 2013, Ps. 138,486 for 2014, and Ps. 126,351 thousand were authorized for 2015. An additional amount of Ps.77,306 was authorized by the DGAC through the extraordinary review of the maximum rate in 2011. The Company is still negotiating for the recognition as investment in concession of the remaining cost of the land acquired, for the amount of Ps.695,769. All amounts in this paragraph are expressed in nominal at December 2009 pesos. The current amounts to be recognized by the DGAC as part of the investment in the concession will be adjusted based on the Mexican National Producer Price Index (Indice Nacional de Precios Productor).

The land acquired by the Company is the exclusive property of the Company and are classified in the consolidated statement of financial position as part of property and equipment. The land will remain classified as a fixed asset until negotiations with DGAC have been concluded. If the DGAC recognizes the land as part of the concession, it is expected that title thereto will transfer from the Company to the Mexican government, at which point the company would derecognize the fixed asset and recognize a corresponding addition for the same amount as part of the investment in airport concessions (intangible assets).

F-60

The MDP would be modified based on the following schedule and restated values based on the PPI, at December 31, 2013:

Year	Amount
2013		Ps. 139,000
2014		158,171
2015		144,311
		Ps. 441,482

The Company has pledged baggage screening equipment, included within improvements to concessioned assets, as a guarantee for bank loans that the Company has with Private Export Funding Corporation, with a carrying value of Ps.328,577 as of December 31, 2013. The Company is not authorized to use this equipment as a guarantee for other loans, nor sell them to another entity.

Acapulco Tunnel (“TUCA”)

In May 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. In November 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.

Toll revenues provided by this concession guarantee a long-term debt agreement which matures over 25 years (see Note 27).

Rio Verde - Ciudad Valles - Highway (“RVCV”)

In July 2007, the SCT granted the Company a concession for the highway between Rio Verde and Ciudad Valles covering a length of 113.2 kilometers for: (i) operation, maintenance upgrade, conservation and extension of the Rio Verde — Rayon highway of 36.6 kilometers; (ii) construction, operation, maintenance and conservation of the Rayon — 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. The concession term is for 20 years.

At December 31, 2013, 2012 and 2011, accumulated financing cost amounted to Ps.130 million, Ps.927 million and Ps.622 million, respectively. The annual average capitalization rate was 5.25%, 12.08% and 12.49%, respectively.

Kantunil - Cancun - Highway

In December 1990, the SCT granted a concession to Mayab Consortium, S.A. to build, operate and maintain 241.5 kilometers of road, which connects the cities of Kantunil and Cancun in the states of Yucatan and Quintana Roo. The concession term is for 30 years. The first stretch of highway came into operation in December 1991.

In March 2008, ICA acquired 100% of the stock of Consorcio del Mayab, S.A. de C.V.

During the third quarter of 2011, the Company signed an amendment to the concession which adds to the terms of the concession the construction, operation, conservation and maintenance of an additional 54 kilometers related to the Kantunil-Cancun highway to Playa del Carmen. This additional highway project will connect Lazaro Cardenas with the Playa del Carmen municipality, which would be a branch of the toll road from Cancun to Merida. It is estimated that the additional 54 kilometers, which began construction in January 2012, will have two phases: 7 km into the municipality of Solidaridad (Playa del Carmen) and another 47 kilometers into Lazaro Cardenas, which will have two lanes, one for each direction of 3.5 meters each with a width of 2.5 meters; with a right of way of 40 meters and a maximum speed of 110 kilometers per hour. The first section, called Cedral-Tintal, will begin at the Trunk Cedral junction, which connects with Kantunil Highway in the town of Lazaro Cardenas, bound for Playa del Carmen; while the beginning of the branch-Playa del Carmen Tintal be built in the second grade-separated junction- called Tintal junction-, that the project will also connect with the toll road Merida-Cancun. The term of the concession is extended 30 years, terminating in 2050.

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Toll revenues provided by this concession guarantee the redeemable participation certificates that will be amortized over a 17 year period (see Note 27).

At December 31, 2013, accumulated financing cost amounted to Ps.117 million. The annual average capitalizarion rate was 5.83%.

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, conserve and maintain the Libramiento de La Piedad (La Piedad Bypass), which is 21.388 km long 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 Michoacan. The Libramiento de La Piedad will form part of the major junction joining the highway corridors of Mexico City-Nogales and Queretaro-Ciudad Juarez and will free the city of La Piedad from the long-haul traffic moving between the Bajio region and Western Mexico. The concession term is for 30 years. The construction period under the original plan was 22 months which expired in 2011; due to problems related to the delivery of rights of way, the concession was renegotiated and construction concluded in November 2012. In 2013, the concession was financially restructured, which originated the modification of the concession to extend its term for an additional term of 15 years, therefore, the term of the concession conclude in 2054.

At December 31, 2012 and 2011, accumulated financing cost amounted to Ps.145 million and Ps.74 million, respectively; the annual average capitalization rate was 10.93% and 13.24%, respectively.

SARRE y Papagos - Social Infrastructure

In December 2010, the Ministry of Public Security (“Secretary”) of the Federal Government of United Mexican States (“Federal Government”) executed a CPS service agreement with Sarre and Papagos, subsidiaries of ICA; the purpose of CPS is to construct and operate social infrastructure and provide to the Federal Government the services associated with infrastructure, under the understanding that at no time the Company will be responsible for those functions and the related public services are the sole responsibility of the Federal Government. In accordance with the CPS, the services to be provided by the Company only consist of the construction and maintenance of the infrastructure, and ongoing services related to cleaning, pest control, landscaping, stores, food, laundry and laboratory services. Construction services performed with respect to the social infrastructure as set forth in the contract, amounted to Ps.21,190 and Ps.21,401, million for Sarre and Papagos, respectively.

The construction of social infrastructure was completed in October and November, 2012 respectively, upon which customer acceptance was received and the process for collection under of the CPS began. The maximum period of the CPS is for 20 years from the beginning of operation of the infrastructure.

At December 31, 2013, these projects are presented as held for sale (see Note 34).

Barranca Larga – Ventanilla - Highway

In January 2009, the SCT granted to DIPESA a concession for the construction, operation, use and maintenance of the Barranca Larga – Ventanilla highway, in the state of Oaxaca, with a length of 104 kilometers. Total investment of the project is approximately Ps.5,352 million. The National Bank for Public Works (“Banobras”) and FONADIN participate in financing. The concession term is for 30 years.

The new highway will provide a fast connection between the tourist development of Huatulco and Puerto Escondido on the Pacific coast and the capital of the state of Oaxaca. The new four-lane highway will decrease travel time from Oaxaca to Puerto Escondido by approximately 100 minutes.

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The previous owners of DIPESA did not obtain the necessary financing for the construction of the highway. Therefore, on March 23, 2012, the first amendment to the concession was executed, whereby the date of completion of construction was changed to 24 months after the date of the start of construction (May 31, 2012). Accordingly, construction will conclude on May 31, 2014.

At December 31, 2013, accumulated financing cost amounted to Ps.117 million. The annual average capitalizarion rate was 3.37%.

Palmillas - Apaseo El Grande

In November 2012, the SCT granted a concession to build, operate, conserve and maintain the Palmillas—Apaseo El Grande highway. The cost of construction is approximately Ps.5,313 million. The 4-lane, 68-kilometer, high specification highway, located between the states of Queretaro and Guanajuato, creates a new connection between the metropolitan area of Mexico city, the Bajio region and the North. The highway will provide greater flow of traffic around the city of Queretaro that will reduce traffic, will improve environmental conditions and road safety. The new highway creates a connection between the highways operated by RCO, an associate of ICA. The project includes 9 junctions, the construction of 15 bridges and a total of 29 vehicular overpasses and underpasses. The total investment will be approximately Ps.9,630 million. The concession term is for 30 years.

At December 31, 2013, accumulated financing cost amounted to Ps.69 million. The annual average capitalizarion rate was 3.57%.

14. Property, plant and equipment

Property, plant and equipment consist of the following:

	December 31,
	2013		2012
Carrying amount:
Land		Ps. 2,999,280		Ps. 3,015,101
Buildings		619,041		612,018
Machinery and operating equipment		886,253		856,033
Furniture, office equipment and vehicles		289,091		303,375
Machinery and equipment under lease		336,055		349,862
Machinery and equipment in-transit		21,205		78,473
Construction in-process		204,701		91,100
		Ps. 5,355,626		Ps. 5,305,962

Carrying amount	Land			Buildings			Machinery and operating equipment			Furniture, office equipment and vehicles			Machinery and equipment under lease			Machinery and equipment in-transit			Construction in-process			Total
Balances at January 1, 2012		Ps. 2,199,781			Ps. 832,686			Ps. 1,294,294			Ps. 508,922			Ps. 145,579			Ps. 19,148			Ps. 75,400			Ps. 5,075,810
Additions		28,611			1,175			219,476			81,708			44,140			—			20,608			395,718
Disposals		(12	)		—			(275,641	)		(11,586	)		(4,649	)		—			(1,408	)		(293,296	)
Acquisitions through business combinations		—			19,787			303,033			33,712			218,077			—			1,664			576,273
Transfer from real estate		780,220			—			—			—			—			—			—			780,220
Transfers		6,501			6,138												—			(5,164	)		7,475
Others		—			(1,231	)		4,912			(2,591	)		1,184			59,325			—			61,599
Balance at December 31, 2012		3,015,101			858,555			1,546,074			610,165			404,331			78,473			91,100			6,603,799
Additions		2,059			15,000			247,081			55,420			119,430			—			61,562			500,552
Sales		(42,571	)		(11,223	)		(44,569	)		(28,709	)		(59,562	)		—						(186,634	)
Transfers		24,691			862			—			—			9,798			—			52,134			87,485
Others		—			40,120			(62,797	)		20,234			2,982			(57,268	)		(95	)		(56,824	)
Balance at December 31, 2013		Ps. 2,999,280			Ps. 903,314			Ps. 1,685,789			Ps. 657,110			Ps. 476,979			Ps. 21,205			Ps. 204,701			Ps. 6,948,378

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Accumulated depreciation	Land		Buildings			Machinery and operating equipment			Furniture, office equipment and vehicles			Machinery and equipment under lease			Machinery and equipment in-transit		Construction in-process		Total
Balances at January 1, 2012		Ps. —		Ps. 203,703			Ps. 771,345			Ps. 247,045			Ps. 1,411			Ps. —		Ps. —		Ps. 1,223,504
Elimination on sale of assets		—		—			(227,293	)		(7,964	)		(2,179	)		—		—		(237,436	)
Depreciation expense		—		42,834			97,114			53,112			55,237			—		—		248,297
Others		—		—			48,875			14,597			—			—		—		63,472
Balance at December 31, 2012		—		246,537			690,041			306,790			54,469			—		—		1,297,837
Elimination on sale of assets		—		(2,118	)		(32,804	)		(19,758	)		(45,902	)		—		—		(100,582	)
Depreciation expense		—		30,424			126,307			66,989			120,728			—		—		344,448
Others		—		9,430			15,992			13,998			11,629			—		—		51,049
Balance at December 31, 2013		Ps. —		Ps. 284,273			Ps. 799,536			Ps. 368,019			Ps. 140,924			Ps. —		Ps. —		Ps. 1,592,752

The Company’s obligations under finance leases (see Note 25) are secured by the lessors’ title to the leased assets, which have a carrying amount of Ps.298 million and Ps.321 million at December 31, 2013 and 2012, respectively.

15. Investment properties

In 1994, the Company acquired land from the Government of Queretaro; this land has been restricted with respect to its use as it is considered forest land. In November 2009, the Company initiated legal proceedings in order to unrestrict the use of the land in order to begin development and on November 22, 2012, obtained the authorization for the change in use of the land. Subsequently, the final favorable decision received by the Company, unrestricting the use of the land on November 22, 2012 resulted in the recognition of gain from changes in its fair value, which amounted to Ps.435,680.

As of December 31, 2013, the Company has not yet built any infrastructure on the land and does not yet have a specific intended future use for such land. Accordingly, the Company continues to classify the land as investment properties.

The fair value of the Company’s investment property at December 31, 2013 has been determined in accordance IFRS13.91 (a), 93 (d) on the basis of an assessment carried out at the respective date by Ingenieria Industrial para America Latina, S.A. de C.V. (“Ingenial”), independent appraisers not related to the Company. Ingenial is registerd with the Mexican National Banking and Securities Commission with registration number 116-85-006, and has all appropriate qualifications as well as sufficient and recent experience in the valuation of investment properties similar in nature and location to that of the Company. The fair value determined at December 31, 2013 is similar to that recorded at December 31, 2012. The fair value was determined based on the market comparables that reflects recent transaction prices for similar properties, adjusted for specific characterics related to the Company’s property, obtained through market research by different media, direct visits to comparable properties and mass-media. There has been no change to the valuation technique during the year.

Valuation at fair value qualifies in Level 2 within the fair value hierarchy.

There were no transfers between Levels 1 and 2 during the year.

16. Other assets

Other assets are comprised of the following:

	December 31,
	2013		2012
Goodwill(1)		Ps.    723,785		Ps.    787,339
Applications of IT		308,931		57,659
Guarantee deposits		13,123		5,333
Intangible asset (Net of Ps.111 million of amortization)(2)		297,709		409,286
Total		Ps. 1,343,548		Ps. 1,259,617

(1) Includes the value of goodwill determined in the acquisition of San Martin of Ps.417,597.

(2) Corresponds to the allocation of intangible assets identified in the San Martín backlog at the date of acquisition.

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17. Composition of ICA

Information about the composition of ICA at the end of the reporting period is as follows:

Principal activity	Place of incorporation and operation	Number of wholly-owned subsidiaries
		December 31,				January 1,
		2013		2012		2012
Construction	Mexico		24		25		19
Concessions	Mexico		20		21		16
Housing development	Mexico		9		9		9
Corporate and others	Mexico		18		17		17
			71		72		61
Principal activity	Place of incorporation and operation	Number of less than wholly-owned subsidiaries
		December 31,				January 1,
		2013		2012		2012
Construction	Mexico		12		12		14
Concessions	Mexico		2		3		5
Airports	Mexico		25		24		20
Housing development	Mexico		3		3		2
Corporate and others	Mexico		2		2		2
			44		44		43

Details of non-wholly owned subsidiaries that have material non-controlling interests in ICA are disclosed below:

Name of subsidiary	Place of incorporation and principal place of business	Proportion of ownership interests and voting rights held by non- controlling interests						Profit allocated to non- controlling interests				Accumulated non-controlling interests
		December 31,						Year ended December 31,				December 31,
		2013			2012			2013		2012		2013		2012
San Martin Contratistas Generales, S.A. (“San Martin”)	PERU		49	%		49	%	Ps.	230,944	Ps.	48,335	Ps.	397,498	Ps.	185,914
Grupo Aeroportuario Centro Norte y Subsidiarias (“GACN”)	MEXICO		59	%		41	%		668,912		338,282		3,727,593		2,649,789
Non-wholly owned subsidiaries that are not individually material	MEXICO		Various			Various			65,478		84,413		48,613		417,701
								Ps.	965,334	Ps.	471,030	Ps.	4,173,704	Ps.	3,253,404

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Summarised financial information in respect of each of the ICA’s subsidiaries that has material non-controlling interests is set out below. The summarised financial information below represents amounts before intragroup eliminations:

	December 31,
San Martin	2013		2012
Current assets	Ps.	1,480,144	Ps.	1,311,692
Non-current assets		601,227		584,933
Current liabilities		1,093,306		1,325,131
Non-current liabilities		176,846		192,078
Equity attributable to owners of the Company		413,721		193,502
Non-controlling interests		397,498		185,914

	Year ended December 31,
San Martin	2013			2012			2011
Revenue	Ps.	4,296,758		Ps.	2,031,895		Ps.	3,428,155
Costs and expenses		3,552,547			1,882,096			3,386,362
Profit for the year		471,315			98,643			7,706
Profit attributable to owners of the Company		240,371			50,308			3,930
Profit attributable to the non-controlling interests		230,944			48,335			3,776
Profit for the year		471,315			98,643			7,706
Total comprehensive income attributable to owners of the Company		219,511			50,308			3,930
Total comprehensive income attributable to the non-controlling interests		210,902			48,335			3,776
Total comprehensive income for the year	Ps.	430,413		Ps.	98,643		Ps.	7,706
Net cash inflow from operating activities	Ps.	471,562		Ps.	90,274		Ps.	153,445
Net cash (outflow) inflow from investing activities		(124,782	)		(113,343	)		115,490
Net cash (outflow) inflow from financing activities		(202,353)			29,382			(262,476)
Net cash inflow	Ps.	257,258		Ps.	121,659		Ps.	118,541

	December 31,
GACN	2013		2012
Current assets		Ps. 2,250,443		Ps. 1,717,412
Non-current assets		8,744,474		8,431,666
Current liabilities		894,617		1,260,310
Non-current liabilities		3,741,389		2,472,814
Equity attributable to owners of the Company		2,631,318		3,766,165
Non-controlling interests		3,727,593		2,649,789

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	Year ended December 31,
GACN	2013			2012			2011
Revenue	Ps.	3,420,166		Ps.	3,097,785		Ps.	2,790,618
Costs and expenses		2,260,375			1,937,868			1,871,369
Profit for the year		1,141,099			819,086			626,878
Profit attributable to owners of the Company		472,187			480,804			340,834
Profit attributable to the non-controlling interests		668,912			338,282			286,044
Profit for the year		1,141,099			819,086			626,878
Total comprehensive income attributable to owners of the Company		471,356			476,153			340,834
Total comprehensive income attributable to the non-controlling interests		667,735			335,010			286,044
Total comprehensive income for the year	Ps.	1,139,091		Ps.	811,163		Ps.	626,878
Net cash inflow from operating activities	Ps.	1,008,569		Ps.	1,260,415		Ps.	749,144
Net cash outflow from investing activities		(290,504	)		(393,884	)		(454,475	)
Net cash outflow from financing activities		(336,492	)		(237,732	)		(83,873	)
Net cash inflow	Ps.	1,534,006		Ps.	1,152,433		Ps.	523,634

Description of effective control in San Martin

Management assessed whether ICA has the control over San Martin based on its ability to make unilaterial decisions regarding the relevant activities of San Martin. As part of its judgment, management considered the rights of non-controlling interest holders, as well as its own potential voting rights with respect to call options that are included in the shareholders’ agreement. After such analysis, management concluded that ICA has the ability to direct the relevant activities of San Martin and therefore has control. Potential voting rights are considered substantive because they can be exercised at the time that there is a potential disagreement regarding a decision related to the relevant activities of the entity and their exercise price would be at fair value.

Changes in ICA’s ownership interests in subsidiaries

GACN

As mentioned in Note 2, during 2013 Aeroinvest, direct subsidiary of ICAsold certain of its shares of GACN in a secondary public offering (the “Offering”). GACN listed on the stock exchange in Mexico and New York. As a result of the Offering, the shareholding of the Company in GACN decreased from 54.37% to 37.12%. At December 31, 2013, the shareholding in GACN is as follows:

	GACN
	%
Aeroinvest		24.68
Servicios de Tecnologia Aeroportuaria (“SETA”)		16.70
Public investors		58.62
Total		100.00

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The shareholding of SETA is distributed as follows:

	SETA
	%
Aeroinvest		74.50
Aeropuertos de Paris (“ADP”)		25.50
Total SETA		100.00

For purposes of its consolidated financial statements as of December 31, 2013, the Company’s participation in GACN is 41.38%.

Because of the decrease in the percentage of its participation in GACN, management has reassessed if the Company has effective control over GACN in order to consolidate its investment. As part of this analysis, the following circumstances existing at December 31, 2013 were taken into consideration:

a. GACN´s Board of Directors is comprised of a minimum of 11 members, considering that a minimum of 25% of members must be independent. Each shareholder with 10% equity has the right to nominate a director, the Series BB shareholders (SETA) are entitled to nominate three directors; the remaining directors are nominated by the existing directors. Aeroinvest as the holder of a direct 24.68% of the shares can appoint two directors and SETA can appointthree directors, two of which will be appointed by Aeroinvest. There is onlyone shareholder with a participation of greater than 10% who may nominate a director. As the remaining directors are nominted by the existing directors, , the vote of Aeroinvest is always required for at least a simple majority of the remaining directors.

b. In accordance with the statutes of GACN, SETA (holder of the Series “BB” shares) has the authority to appoint and remove the CEO, the CFO, the COO and the commercial director of GACN, and elect three members the Board of Directors and veto power over certain actions requiring the approval of the shareholders of GACN (including the payment of dividends and related to their right to appoint certain members of senior management). Upon termination of the technical assistance agreement, the Series “BB” shares will be converted into Series “B” shares, resulting in the termination of the aforementioned rights. If at any time prior to June l4, 2015, SETA holds less than 7.65% of Series “BB” shares, SETA will lose its veto rights. If anytime after June 14 2015, SETA has less 7.65% Series “BB” shares, such shares shall be converted into Series “B” shares, upon which SETA would lose all their special rights attached to the Series “B” shares. As long SETA retains at least 7.65% of the Series “BB” shares, all existing special rights will prevail.

Based on the analysis described in the preceding paragraphs and its related judgment, management has concluded that ICA has effective control over GACN and its subsidiaries, as it has substantive rights as a majority shareholder; it has the ability to appoint directors and executives of GACN; it controls, administers and has the right to direct the relevant activities of GACN; it has rights to variable returns of GACN and declare dividends as a result of a simple majority at the general meeting of shareholders; it controls the variable returns through the consideration of technical assistance for services provided by SETA to GACN and it has de facto control over GACN as result of the dispersion of other shareholdings. Additionally, the veto power of the non-controlling interests in SETA, regarding the relevant activities of GACN, are considered protective rights and not substantive, and thus do not grant privileges to control or manage the company, only to block certain decisions from a protective standpoint.

In addition, the statutes of GACN and Article 23 of the Mexican Airport Law stipulate that any shareholder holding 35% or more of the shares of GACN has the right to request control; condition that the Company fulfills at December 31, 2013.

Considering the aforementioned analysis and elements described above, management has concluded that ICA has effective control over GACN and its subsidiaries at December 31, 2013. Accordingly, ICA continues to consolidate GACN in the accompanying consolidated financial statements.

During 2013 and 2012, GACN made capital repayments and dividends to non-controlling interest for Ps.496,492 and Ps.186,105, respectively.

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18. Investments in associates

Details of material associates:

Investment in concessionaires associated companies	Principal activity	Date of	Proportion of ownership interest and voting power held by ICA						Balance of the investment
Investment		Concession	December 31,						December 31,
		Agreement	2013			2012			2013		2012
Red de Carreteras de Occidente, S.A.B. de C.V.(1)	Infraestructure	October 2007		—			18.70	%	Ps.	—	Ps.	4,350,936
Autopistas Concesionadas del Altiplano, S.A. de C.V.	Infraestructure	Various		49.00	%		49.00	%		6,973		6,973
Proactiva Medio Ambiente Mexico, S.A. de C.V.(2)	Infraestructure	Various		49.00	%		49.00	%		627,422		572,683
Concesionaria Distribuidor Vial San Jeronimo Muyuguarda, S.A. de C.V.(3)	Infraestructure	December 2010		30	%		30	%		—		857,685
Terminal de Contenedores TEC II, Lazaro Cardenas, S.A. de C.V.(5)	Infraestructure	August 2012		5	%		5	%		97,621		48,534
Logistica Portuaria Tuxpan, S.A. de C.V.	Infraestructure			25	%		25	%		16,568		16,536
Trust rights (4)	Housing development	Various 2010		30	%		30	%		417,695		243,943
Aguas Tratadas del Valle de Mexico, S.A. de C.V.3	Infraestructure			10.20	%		10.20	%		—		(8,414	)
Others		Various		—			—			1,635		2,569
Total investment in associates									Ps.	1,167,914	Ps.	6,091,445

(1) Sold during 2013 (Note 2).

(2) According to the shareholders agreement, the Company is entitled to cast 49% of the votes at the shareholders’ meeting of Proactiva.

(3) Equity investments classified as asset available for sale at December 31, 2013 (Note 34).

(4) During 2013, the investment included an investment in trust rights for a housing development for Ps.130,534.

(5) The Company has concluded that it has significant influence as it has the ability to designate a board member. Additionally, it has entered into a construction contract with this company, which is in the process of construction of the terminal.

ASSOCIATED COMPANIES

RCO

Due the sale of shares mentioned in Note 2, RCO was no longer an associate of ICA in August 2013.

In October 2007, the SCT granted to RCO a concession for the construction, operation, maintenance and conservation of the Maravatio — Zapotlanejo and Guadalajara — Aguascalientes — Leon highways covering a length of 558 kilometers, in the states of Michoacan, Jalisco, Guanajuato and Aguascalientes. The concession agreement included up to Ps.1,500 million of additional investments for extension of the four highways to be carried out in the future. The concession term is for 30 years. RCO, was formed on August 13, 2007, with an initial participation of 20% by ICA in RCO’s capital

F-69

stock. In November 2009, the shareholders of RCO, owners of the shares Series A shares, made contributions of Ps.4,000 million pesos reducing the percentage of participation of ICA to 13.63% at December 31, 2010. As a result of the sale of shares of COVIQSA and CONIPSA to RCO in 2011, the percentage of participation of ICA increased to 18.70%, maintaining significant influence.

In September 2011, the company transferred the following concessions to RCO:

Irapuato – La Piedad—Highway (“CONIPSA”)

In August 2005, the SCT granted to the Company a 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 a 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 concession has a term 20 years.

Queretaro – Irapuato—Highway (“COVIQSA”)

In June 2006, the SCT granted a concession and services agreement to upgrade, extend and conserve the toll-free Queretaro-Irapuato highway in the states of Queretaro 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. The concession has a term of 20 years.

Proactiva Medio Ambiente Mexico (“PMA”)

Proactiva Medio Ambiente Mexico is a consortium comprised of Controladora de Operaciones de Infraestructura, S.A. de C.V. and Proactiva Medio Ambiente, S. A. de C.V. 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.

San Jeronimo - Muyuguarda- Dealer Road

In December 2010, the Mexico City Government granted the concession contract for the design, construction, use, development, operation and management of the property identified in the public domain as the Via Peripheral High in the upper Peripheral Manuel Avila Camacho (Anillo Periferico) in the tranche between San Jeronimo avenue and Distribuidor Vial Muyuguarda , with Concesionaria Distribuidor Vial San Jeronimo Muyuguarda, S.A. de C.V, a consortium formed by Promotora del Desarrollo de America Latina, S.A. de C.V. and Controladora de Operaciones de Infraestructura, S.A. de C.V. The concession contract has a term of 30 years.

Atotonilco - Waste Water Treatment Plant

In January 2010, the National Water Commission (Comision Nacional del Agua) (“CONAGUA”) granted the concession contract for the construction and operation of the Atotonilco waste water treatment plant (“PTAR”) in Tula, Hidalgo, to the a consortium comprised of Promotora del Desarrollo de America 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. The total contract value is approximately Ps.9,300 million. The concession term is for 25 years.

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Summarised financial information in respect of each of the ICA’s material associates is set out below. The summarized financial information below represents amounts shown in the associate’s financial statements prepared in accordance with IFRS.

	December 31,
	2013		2012
	Proactiva		Proactiva		Muyuguarda		RCO
Current assets	Ps.	1,021,676	Ps.	1,201,768	Ps.	255,673	Ps.	4,356,674
Non-current assets		1,522,861		1,416,850		5,349,443		51,104,505
Current liabilities		660,018		729,777		494,916		1,495,362
Non-current liabilities		537,121		573,405		2,375,889		34,896,210
Equity attributable to owners of the Company		687,173		670,872		1,914,018		15,503,590
Non-controlling interests		660,225		644,564		820,293		3,566,017

	Year ended December 31,
	2013						2012
	Proactiva			RCO			Proactiva			Muyuguarda			RCO
Revenue	Ps.	1,834,387		Ps.	2,222,199		Ps.	1,746,553		Ps.	5,770		Ps.	4,912,885
Costs and expenses		1,651,106			1,016,355			228,183			31,103			2,202,060
Profit (loss) for the year		125,936			(665,075	)		6,725			(18,514	)		(703,108	)
Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:
ICA’s share of profit for the year before reconciliation items	Ps.	61,709		Ps.	(124,369	)	Ps.	82,305		Ps.	(5,554	)	Ps.	(131,481	)
Reconciliation items		(6,273	)		(611	)		(9,329	)		—			(53	)
ICA’s share of profit for the year	Ps.	55,436		Ps.	(124,980	)	Ps.	72,976		Ps.	(5,554	)	Ps.	(131,534	)
Total comprehensive income for the year		125,936			(553,875	)		13,198			(117,890	)		(998,030	)
Dividends received from the associate during the year		Ps. 53,900		Ps.	—		Ps.	—		Ps.	—		Ps.	—

	Year ended December 31, 2011
	Proactiva		Muyuguarda			RCO
Revenue	Ps.	1,586,606	Ps.	1,511,802		Ps.	3,771,418
Costs and expenses		1,356,470		1,511,802			1,702,900
Profit (loss) for the year		147,850		(4,745	)		(515,874	)
Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:
ICA’s share of profit for the year before reconciliation items	Ps.	72,447	Ps.	(1,424	)	Ps.	(96,468	)
Reconciliation items		3,342		55			48,124
ICA’s share of profit for the year	Ps.	75,789	Ps.	(1,369	)	Ps.	(48,344	)
Total comprehensive income for the year	Ps.	147,850	Ps.	(156,283	)	Ps.	(920,460	)

F-71

Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:

	December 31,
	2013			2012
	Proactiva			Proactiva			Muyuguarda			RCO
Net assets of the associate before reconciliation items	Ps.	1,347,398		Ps.	1,315,436		Ps.	2,734,311		Ps.	19,069,607
Reconciliation items1		(66,945	)		(146,695	)		124,639			4,197,430
Net assets of the associate	Ps.	1,280,453		Ps.	1,168,741		Ps.	2,858,950		Ps.	23,267,037
Proportion of the ICA’s ownership interest		49.00	%		49.00	%		30.00	%		18.70	%
Carrying amount of the ICA’s interest	Ps.	627,422		Ps.	572,683		Ps.	857,685		Ps.	4,350,936

The reconciling items relate mainly to amortization of intangible assets and differences stemming from recognizing the net assets of the investments at their fair value.

Summarised financial information of associates that are not individually material:

	December 31,
	2013			2012			2011
ICA’s share of profit for the year	Ps.	(90,672	)	Ps.	10,880		Ps.	12,881
ICA’s share of other comprehensive income		12			(18,145	)		(25,333	)
ICA’s share of total comprehensive income		(90,660	)		(7,265	)		(12,452	)
Aggregate carrying amount of ICA’s interests in these associates		540,492			310,141			245,397

Change in the Company’s ownership interest in associates:

As of December 31, 2012, the Company held an 18% interest in RCO and it was presented as an investment in associates. In August 2013, the Company sold its interest to a third party in the amount of Ps.5,073 million, this transaction resulted in the recognition of a gain in profit or loss of Ps.491 million, see Note 2.

19. Joint ventures

The Investment of the Company in joint ventures is as follows:

					Proportion of ownership interest and voting rights held by ICA						Balance of the investment
Name of joint venture	Principal activity		Place of incorporation and principal place of business		December 31,						December 31,
					2013			2012			2013		2012
ICA Fluor Daniel, S. de R.L. de C.V. (“ICA Fluor”)(1)		Construction		Mexico		51	%		51	%	Ps.	793,786	Ps.	757,319
Rodio Kronza, S.L.U. (“Rodio”)		Construction		Spain		50	%		50	%		291,027		276,697
Los Portales, S.A. (“Portales”)		Housing development		Peru		50	%		50	%		700,273		545,149
Autovia Necaxa Tihuatlan, S.A. de C.V. (“AUNETI”)		Infraestructure		Mexico		50	%		50	%		468,953		27,827
Infraestructura y Saneamiento de Atotonilco, S.A. de C.V.		Construction		Mexico		42.5	%		42.5	%		219,829		172,840

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Name of joint venture	Principal activity	Place of incorporation and principal place of business	Proportion of ownership interest and voting rights held by ICA December 31,						Balance of the investment December 31,
			2013			2012			2013			2012
Actica Sistemas, S. de R.L. de C.V.	Construction	Mexico		50	%		50	%		26,776			30,149
Suministros de Agua Acueducto II Queretaro, S.A. de C.V.	Infraestructure	Mexico		42.39	%		42.39	%		273,547			369,207
Renova Atlatec, S.A. de C.V. (“Renova”)	Infraestructure	Mexico		50	%		50	%		189,262			70,340
Autovia Mitla-Tehuantepc, S.A. de C.V.	Infraestructure	Mexico		60	%		60	%		358,273			(62,939	)
El Realito, S.A. de C.V. (“Realito”)	Infraestructure	Mexico		51	%		51	%		242,814			103,302
Constructora de Infraestructura de Aguas Potosi, S.A. de C.V.	Construction	Mexico		51	%		51	%		(27,311	)		25,119
Otras										6,995			8,667
										Ps. 3,544,224			Ps. 2,323,677

(1) During 2013, the Company received dividends for Ps.485,439.

Companies listed in the table above, are companies whose legal form confers separation between the parties of the joint agreement and the entity itself. Aditionally, there is no contractual agreement or other facts and circumstances which indicate that the parties of the joint arrangement have rights to the assets and obligations for the liabilities of the entity. Consequently, these investments are classified as joint ventures of ICA.

The above joint ventures are recognized using the equity method in the consolidated financial statements.

A description of the most significant joint ventures is as follows:

Resident in Mexico

ICA Fluor

This entity is involved in all types of engineering including all aspects of pure and applied research, comprising construction, procurement, engineering and installation of all types of industrial, civil, electromechanical and maritime projects as well as the provision of project management services.

Nuevo Necaxa-Tihuatlan - Highway (“AUNETI”)

In June 2007, the SCT granted a concession for: (i) construction, operation, maintenance and conservation of the Nuevo Necaxa — Avila Camacho highway of 36.6 kilometers; (ii) operation, maintenance and conservation of the Avila Camacho — Tihuatlan highway of 48.1 kilometers; and (iii) long-term service contract for the Nuevo Necaxa — Avila Camacho highway capacity service. The concession term is for 30 years.

Aqueduct II Water System in Queretaro (“SAQSA”)

In May 2007, the Government of the State of Queretaro, through the State Water Commission of Queretaro

F-73

(“CEA”) granted a concession for the purpose of rendering water pipeline and purification services 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. The concession term is for 240 months. The Acueducto began operations in February 2011.

El Realito – Aqueduct

In July 2009, the Comision Estatal del Agua (the State Water Commission) of San Luis Potosi awarded a contract to render services for the construction and operation of the El Realito aqueduct 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. The concession term is for 25 years.

Agua Prieta – Waste Water Treatment Plant

In September 2009, the State Water Commission (Comision Estatal del Agua) 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. The total value of the contract is Ps.2,318 million, through a private and public resource investment scheme from theFondo Nacional para el Desarrollo de Infraestructura (“FONADIN”). The concession term is for 20 years.

Mitla - Tehuantepec - Highway

In June 2010, the SCT granted to the subsidiaries Caminos y Carreteras Del Mayab, S.A.P.I. de C.V. and Controladora de Operaciones de Infraestructutra, S.A. de C.V. (CONOISA), the agreements for the construction and operation of the Mitla- Tehuantepec highway in Oaxaca, under a Service Provision Project (PPS) program. Construction work is valued at Ps.9,318 million. The project includes the concession for the construction, operation, 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 Maria Albarradas, and La Chiguiri- Entronque Tehuantepec II highways. The construction work will be performed over an approximate 40-month period. The concession term is for 20 years.

Resident Abroad

Rodio

This entity resides in Madrid, Spain. Its activities consist primarily of management, and counseling of companies related with the construction sector, especially incorporation of companies, execution of all works of construction and facilities in both the public and private sectors, and it acts as an agent, representative or broker of individuals or corporations, whether Spanish or foreign.

Los Portales

This entity resides in Lima, Peru. Its activities include different kind of business: real estate, including investment, promotion and housing development, within of which stand the urban habilitation, construction of social housing and development of multifamily housing projects, funded by government programs, investment in the construction, management and operation of parking concessions, owned by the company or by third parties; operation and management of hotels owned by the company or by third parties, under two brands; one of luxury and other for corporate activities; Telemarketing business that operates within the hotel division, managing the services of “Call Center’’ and “Sales by television”, and the business of lease consisting in the habilitation of malls and “Strip Malls”, as well as the management of commercial leases owned by Los Portales.

Summarised financial information in respect of each of the ICA’s material join ventures is set out below. The summarized financial information below represents amounts shown in the company’s financial statements prepared in accordance with IFRS.

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	December 31, 2013
	ICA Fluor		Rodio		Portales		AUNETI		MITLA		Realito
Current assets	Ps.	6,738,267	Ps.	1,137,318	Ps.	3,033,680	Ps.	927,502	Ps.	531,414	Ps.	333,273
Non-current assets		919,117		470,947		2,057,790		8,657,893		2,018,032		1,574,333
Current liabilities		5,680,507		855,770		2,182,781		2,699,096		477,390		10,278
Non-current liabilities		420,434		170,441		1,508,143		5,948,394		1,474,933		1,421,222

The amounts of assets and liabilities above include the following:

	December 31, 2013
	ICA Fluor		Rodio		Portales		AUNETI		MITLA		Realito
Cash and cash equivalents	Ps.	1,641,014	Ps.	107,021	Ps.	249,700	Ps.	578,570	Ps.	33,521	Ps.	192,244
Current financial liabilities (excluding suppliers and other liabilities)		640,990		126,210		472,166		54,415		3,515		—
Non-current financial liabilities (excluding suppliers and other liabilities)		—		87,194		762,422		5,948,394		1,474,933		1,294,130

	December 31, 2012
	ICA Fluor		Rodio		Portales		AUNETI		Mitla		Realito
Current assets	Ps.	7,718,042	Ps.	922,356	Ps.	2,670,356	Ps.	1,458,318	Ps.	352,858	Ps.	774,360
Non-current assets		803,488		408,394		1,642,556		7,055,552		389,561		974,683
Current liabilities		6,578,478		615,626		2,075,050		2,057,548		118,709		120,266
Non-current liabilities		385,880		161,742		1,229,708		6,400,608		728,608		1,426,224

The amounts of assets and liabilities above include the following:

	December 31, 2012
	ICA Fluor		Rodio		Portales		AUNETI		Mitla		Realito
Cash and cash equivalents	Ps.	2,518,032	Ps.	130,736	Ps.	182,880	Ps.	1,043,784	Ps.	21,667	Ps.	707,996
Current financial liabilities (excluded suppliers and other liabilities)		467,353		107,864		607,850		99,602		572		—
Non-current financial liabilities (excluded suppliers and other liabilities)		—		118,144		390,454		6,236,972		724,517		937,378

	Year ended December 31, 2013
	ICA Fluor			Rodio			Portales		AUNETI		Mitla			Realito
Revenue	Ps.	10,114,624		Ps.	1,747,002		Ps.	2,476,542	Ps.	1,944,450	Ps.	1,707,327		Ps.	1,150,828
Costs and expenses		9,723,745			1,726,832			2,250,480		1,530,118		1,694,910			1,092,497
Profit (loss) for the year		433,962			(9,729	)		216,610		273,919		(22,948	)		(32,165	)
Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:
ICA’s share of profit for the year before reconciliation items	Ps.	221,321		Ps.	(4,865	)	Ps.	108,305	Ps.	136,960	Ps.	(13,769	)	Ps.	(16,404	)
Reconciliation items		(4,343	)		—			—		—		16,625			(1,371	)
ICA’s share of profit for the year	Ps.	216,978		Ps.	(4,865	)	Ps.	108,305	Ps.	136,960	Ps	2,856		Ps.	(17,775	)
Total comprehensive income for the year		410,934			(16,171	)		216,610		810,222		350,618			9,555
Dividends received from the joint ventures during 2013		450,000			—			33,439		—		—			—

F-75

Net profit (loss) for the year includes the following:

	Year ended December 31, 2013
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Depreciation and amortization	Ps.	110,565		Ps.	82,397		Ps.	45,291		Ps.	50,414		Ps.	-		Ps.	-
Interest income		(27,642	)		(4,242	)		(244,331	)		(15,529	)		(34,243	)		(7,373	)
Interest expense		4,142			9,999			251,008			182,485			109,305			125,389
Income tax		60,929			14,657			101,017			(171,801	)		37,805			92,823
	Year ended December 31, 2012
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Revenue	Ps.	13,014,420		Ps.	1,554,258		Ps.	1,961,502		Ps.	1,365,870		Ps.	32,478		Ps.	1,059,033
Costs and expenses		12,508,648			1,623,552			1,861,895			1,364,870			199,767			1,012,231
Profit (loss) for the year		425,338			(97,074	)		239,186			(114,474	)		(21,510	)		15,114
Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:
ICA’s share of profit for the year before reconciliation items	Ps.	216,922		Ps.	(48,537	)	Ps.	119,593		Ps.	(57,237	)	Ps.	(12,906	)	Ps.	7,708
Reconciliation items		30,826			—			—			—			5,239			—
ICA’s share of profit for the year	Ps.	247,748		Ps.	(48,537	)	Ps.	119,593		Ps.	(57,237	)	Ps	(7,667	)	Ps.	7,708
Total comprehensive income for the year		535,184			17,236			239,186			(290,648	)		(497,203	)		(58,825	)
Net profit (loss) for the year includes the following:
	Year ended December 31, 2012
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Depreciation and amortization	Ps.	95,266		Ps.	87,952		Ps.	38,562		Ps.	12		Ps.	—		Ps.	—
Interest income		(44,624	)		(2,144	)		(118,499	)		(281,318	)		(125,267	)		(78,122	)
Interest expense		94,928			12,442			54,621			622,902			125,268			68,322
Income tax		219,986			17,482			117,461			105,998			21,510			42,004
	Year ended December 31, 2011
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Revenue	Ps.	10,629,384		Ps.	2,170,144		Ps.	348,809		Ps.	2,044,787		Ps.	3,983		Ps.	286,048
Costs and expenses		9,151,462			1,974,464			212,966			2,044,787			3,983			288,751
Profit (loss) for the year		422,730			2,690			45,038			(135,509	)		8,923			(16,284	)

Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:

F-76

ICA’s share of profit for the year before reconciliation items	Ps.	215,592		Ps.	1,345		Ps.	22,519		Ps.	(67,755	)	Ps.	5,354		Ps.	(8,305	)
Reconciliation items		(23,222	)		(2,974	)		83,361			(8,526	)		(5,289	)		6,928
ICA’s share of profit for the year	Ps.	192,370		Ps.	(1,629	)	Ps.	105,880		Ps.	(76,281	)	Ps	65		Ps.	(1,377	)
Total comprehensive income for the year		328,638			840			45,038			(118,456	)		8,923			(34,909	)
Dividends received from the joint ventures during 2011	Ps.	127,500		Ps.	—		Ps.	—		Ps.	—		Ps.	—		Ps.	—
Net profit (loss) for the year includes the following:
	Year ended December 31, 2011
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Depreciation and amortization	Ps.	48,121		Ps.	50,441		Ps.	40,932		Ps.	3,918		Ps.	—		Ps.	—
Interest income		3,342			(1,232	)		(24,521	)		(19,156	)		—			(1,388	)
Interest expense		(31,367	)		7,447			13,738			511,330			—			24,536
Income tax		166,405			8,317			15,170			10,951			(8,815	)		13,581
Reconciliation of the above summarised financial information to the carrying amount of the recognised in the consolidated financial statements:
	December 31, 2013
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Net assets of the joint ventures before reconciliation items	Ps.	1,568,790		Ps.	582,054		Ps.	1,318,402		Ps.	937,905		Ps.	597,123		Ps.	476,106
Reconciliation items		(12,347	)		—			82,144			—			—			—
Net assets of the joint ventures	Ps.	1,556,443		Ps.	582,054		Ps.	1,400,546		Ps.	937,905		Ps.	597,123		Ps.	476,106
Proportion of the ICA’s ownership interest.		51	%		50	%		50	%		50	%		60	%		51	%
Carrying amount of the ICA’s interest in the joint ventures	Ps.	793,786		Ps.	291,027		Ps.	700,273		Ps.	468,953		Ps.	358,273		Ps.	242,814
	December 31, 2012
	ICA Fluor			Rodio			Portales			AUNETI			Mitla			Realito
Net assets of the joint ventures before reconciliation items	Ps.	1,557,172		Ps.	553,394		Ps.	1,008,154		Ps.	55,714		Ps.	(104,898	)	Ps.	202,553
Reconciliation items		(72,233	)		—			82,144			—			—			—
Net assets of the joint ventures	Ps.	1,484,939		Ps.	553,382		Ps.	1,090,298		Ps.	55,714		Ps.	(104,898	)	Ps.	202,553
Proportion of the ICA’s ownership interest.		51	%		50	%		50	%		50	%		60	%		51	%
Carrying amount of the ICA’s interest in the joint ventures	Ps.	757,319		Ps.	276,691		Ps.	545,149		Ps.	27,857		Ps.	(62,939	)	Ps.	103,302

F-77

Summarised financial information of joint ventures that are not individually material:

	December 31,
	2013		2012		2011
ICA’s share of profit for the year	Ps.	67,956	Ps.	200,675	Ps.	28,855
ICA’s share of other comprehensive income	Ps.	18,797	Ps.	48,375	Ps.	(23,183	)
ICA’s share of total comprehensive income	Ps.	86,753	Ps.	249,050	Ps.	5,672
Aggregate carrying amount of ICA’s interests in these joint ventures	Ps.	693,098	Ps.	676,298	Ps.	535,254

Significant restrictions:

The main significant restrictions in the investments of joint ventures are directly related with the concession agreements of the titles they hold. Some significant limitations are described as follow:

Concessions highways

• Concessionaires shall establish, as trustee, in a national credit institution, a management trust, for the fiduciary purpose of management of capital, debt and proceeds from the operation of the concessions.

• The concessionaires will be obligated to pay an initial consideration referred to in each of its proposals and periodic consideration in favor of the Federal Government, based on revenues earned in the operation of the concession.

• The Communications and Transportation Ministry (“SCT”) will have the right to revoke the concessions after any breach to the terms and conditions of the concession agreements.

• Concessionaires must operate, conserve and maintain concessions in conditions that allow fluid and safe transit for its users and minimize deterioriation of the infrastructure assets.

• The SCT will evaluate compliance by the concessionaires with respect to the requirements of quality of service, and the operation and maintenance of the concessions.

• To ensure compliance with its obligations as stipulated in the concession agreements, concessionaries have provided specific guarantees.

Water treatment plant

• In order to provide for the necessary investments in water treatment plants granted in the related service agreements (“CPS” for its acronym in Spanish), the Company will seek, manage, obtain and apply economic resources arising from the Mexican National Infrastructure Fund (“FONADIN”).

• The Company must acquire insurance bonds that guarantee its compliance during the construction phase, operation and termination of the concession.

20. Joint operation

Summarised financial information of joint operations that are not individually material:

	Year ended December 31,
	2013			2012			2011
ICA’s share of (loss) profit from continuing operations	Ps.	(279,767	)	Ps.	(25,550	)	Ps.	10,050
Aggregate carrying amount of ICA’s interests in these joint operations		(92,464	)		84,157			111,258

Joint operations are primarily related with construction contracts in which the Company is entitled to receive a proportionate share of the income thereof and incurs a proportionate share of the expenses of the joint operation.

F-78

21. Notes payable

Notes payable consist of the following:

	December 31,
	2013			2012
Notes payable to banks		Ps. 3,837,314			Ps. 4,305,999
Notes payable to banks denominated in U.S. dollars		4,873,215	(1)		5,221,808
Other denominations (principally euros)		134,114			43,556
Senior bonds		99,369			—
		8,944,012			9,571,363
Less:
Financing commissions and issuance costs, net		(42,313	)		—
		Ps. 8,901,699			Ps. 9,571,363

(1) At December 31 2013, the balance mainly includes unsecured loans in the construction segment and the Corporate and Other segment, for Ps. 3,436 and Ps.1,439 million, respectively.

Within the balance in notes payable to banks, at December 31, 2013 and 2012, there are mortgage loans for Ps.323 million and Ps.576 million, respectively, aimed for the construction of social housing. Additionally, certain subsidiaries have loans guaranteed by the resources generated from certain construction projects.

Notes payable to banks have a weighted average interest rate of 6.69% and 6.30% in 2013 and 8.90% and 3.80% in 2012 for pesos and U.S. dollars, respectively.

22. Accrued expenses and other

Accrued expenses and other consist of the following:

	December 31,
	2013		2012
Accrued operating expenses		Ps. 4,233,009		Ps. 2,568,283
Share purchase(1)		790,147		329,089
PTU provision		79,441		50,319
Notes payable sundry creditors		158,823		543,215
Interest payable		572,866		479,821
Financial leasing (Note 25)		184,406		219,363
Derivative financial instruments (Note 26)		8,922		85,583
Accounts payable due to related parties		785,905		622,519
Compensation to officers and employees		251,518		334,790
Taxes, except income taxes		311,555		268,987
		Ps. 7,376,592		Ps. 5,501,969

(1) Contingent consideration arising from the acquisition of San Martin (Note 3.h and 24)

23. Provisions

The Company recognizes provisions for those present obligations that result from a past event, which upon the expiration of the obligation, it is probable the Company will incur an outflow of economic resources in order to settle the obligation. Provisions are recognized as accrued at an amount that represents the best estimate of the present value of future disbursements required to settle the obligation, at the date of the accompanying consolidated financial statements.

F-79

At December 31, 2013 and 2012, the composition and changes of principal provisions is as follows:

a. Current

	December 31, 2012		Additions		Provisions used and transfers			Reversals			December 31, 2013
Provision for:
Costs expected to be incurred at the end of the project	Ps.	1,106,147	Ps.	714,838	Ps.	(902,379	)		Ps. (175,422	)		Ps. 743,184
Repairs and maintenance of machinery under lease agreements		575,267		2,048,433		(1,896,985	)		(340,057	)		386,658
Claims		145,295		53,630		(5,278	)		(3,153	)		190,494
Major maintenance of concession assets		145,577		268,802		(145,577	)		—			268,802
Contingencies and warranty reserves for construction contracts		26,209		—		(26,209	)		—			—
	Ps.	1,998,495	Ps.	3,085,703	Ps.	(2,976,428	)		Ps. (518,632	)		Ps. 1,589,138

	December 31, 2011		Additions		Provisions used and transfers			Reversals			December 31, 2012
Provision for:
Costs expected to be incurred at the end of the project	Ps.	407,009	Ps.	908,664	Ps.	(18,864	)	Ps.	(190,662	)	Ps.	1,106,147
Estimated contract loss		248		—		(248	)		—			—
Repairs and maintenance of machinery under lease agreements		610,412		1,725,955		(1,607,789	)		(153,311	)		575,267
Claims		132,164		35,727		(22,596	)		—			145,295
Major maintenance of concession assets		164,374		145,577		(164,374	)		—			145,577
Contingencies and warranty reserves for construction contracts		580,790		—		(393,677	)		(160,904	)		26,209
	Ps.	1,894,997	Ps.	2,815,923	Ps.	(2,207,548)		Ps.	(504,877	)	Ps.	1,998,495

b. Long term

The long-term provisions are as follows:

	December 31, 2012		Additions		Provisions used and transfers			December 31, 2013
Contingencies and warranty reserves for construction contracts		Ps. 154,605		Ps. 3,096		Ps. —			Ps.157,701
Claims		—		4,571		—			4,571
Major maintenance of concession assets		374,114		46,885		(83,272	)		337,727
		Ps. 528,719		Ps. 54,552		Ps. (83,272	)		Ps. 499,999

F-80

	December 31, 2011		Additions		Provisions used and transfers			December 31, 2012
Contingencies and warranty reserves for construction contracts	Ps.	—	Ps.	154,605	Ps.	—		Ps.	154,605
Major maintenance of concession assets		454,153		2,402		(82,441	)		374,114
	Ps.	454,153	Ps.	157,007	Ps.	(82,441	)	Ps.	528,719

The provision related to costs expected to be incurred at the end of the project refers to costs that are originated under construction projects that the Company anticipates it will incur through the time the projects are finished and ultimately paid for by the customer. Such amounts are determined systematically based on a percentage of the value of the work completed, over the performance of the contract, based on the experience gained from construction activity.

Due to the nature of the industry in which the Company operates, projects are performed with individual specifications and guarantees, which require the Company to create guarantee and contingency provisions that are continually reviewed and adjusted during the performance of the projects until they are finished, or even after termination. The increases, applications and cancellations shown in the previous table represent the changes derived from the aforementioned reviews and adjustments, as well as the adjustments for expiration of guarantees and contingencies.

The Company recognizes a provision for the costs expected to be incurred for major maintenance, mainly at airports, which affect the results of periods from the commencement of operation of the concession, until the year in which the maintenance and/or repair work is performed. This provision is recognized in accordance with IAS 37 and IFRIC 12. A portion is recorded as short-term and the remainder as long-term depending on the period in which the Company expects to perform the major maintenance.

The provision for litigation is recognized in accordance with the analysis of the related lawsuits or claims, according to opinions prepared by the legal advisers of ICA. The Company does not derecognize provisions until final resolutions are obtained and the payment process has begun, or there is no further doubt with respect to the associated risk.

The provision for repairs and maintenance of machinery under lease agreements is accrued based on the estimated hours used. The provision is used to cover the expenses related to maintenance, spare parts and repairs for return of the asset to the lessor in accordance with the terms of the lease agreement.

24. Other long-term liabilities

	December 31,
	2013		2012
Financial lease (Note 25)		Ps. 113,358		Ps. 102,376
Share purchase (1)		287,702		317,260
Suppliers and secured creditors		531,762		54,061
Notes payable to creditors		—		527,179
Guarantee deposits from customer		206,506		164,407
Prepaid expenses		35,459		37,715
VAT payable		1,622,996		1,074,770
Income tax		75,908		—
		Ps. 2,873,691		Ps. 2,277,768

(1) Contingent consideration arising from the acquisition of San Martin (Note 3.h and 22).

F-81

25. Leases

Financial lease

	December 31,
	2013		2012
Lease payables, short-term		Ps. 184,406		Ps. 219,363
Lease payables , long-term		113,358		102,376
		Ps. 297,764		Ps. 321,739

	Minimum lease payments						Present value of minimum lease payments
	December 31,						December 31,
	2013			2012			2013		2012
Less than one year		Ps. 192,800			Ps. 212,719			Ps. 184,406		Ps. 219,363
Greater than one year, less than five years		121,751			109,165			113,358		102,376
		314,551			321,884			297,764		321,739
Less: future finance charges		(16,787	)		(145	)		—		—
Present value of minimum lease payments		Ps. 297,764			Ps. 321,739			Ps. 297,764		Ps. 321,739

Finance leases relate to machinery and equipment, with a 5-year term. The Company has the option of acquiring the leased equipment at the end of such lease contract periods at nominal value.

Operating leases

a. Costs and expenses for operating leases

Operating leases are related to buildings, machinery and equipment, vehicles and computers with different lease terms, which range from 5 to 10 years. All operating lease contracts with terms greater than 5 years contain a clause that stipulates a rental rate review at least every 5 years. The Company does not have an option to purchase the leased assets at the end of the lease term.

Payments recognized as cost and expense:

	Year ended December 31,
	2013		2012		2011
Costs and leasing expenses		Ps. 2,072,840		Ps. 1,642,274		Ps. 992,686

The cost of leasing of machinery considers a maximum limit by number of hours of use; any hours in excess result in additional rent. During the year, there was no additional rent.

Operating lease commitments:

	December 31, 2013
	Land and buildings		Machinery and equipment		Others		Total
Less than one year	Ps.	—	Ps.	1,060,686	Ps.	34,426	Ps.	1,095,112
Greater than 1 year and less than 5 years		144,899		1,275,604		90,045		1,510,548
Greater than 5 years		—		—		246,530		246,530
	Ps.	144,899	Ps.	2,336,290	Ps.	371,001	Ps.	2,852,190

F-82

	December 31, 2012
	Land and buildings		Machinery and equipment		Others		Total
Less than one year	Ps.	34,583	Ps.	876,207	Ps.	2,093	Ps.	912,883
Greater than 1 year and less than 5 years		228,196		1,063,135		35,038		1,326,369
Greater than 5 years		—		—		4,087		4,087
	Ps.	262,779	Ps.	1,939,342	Ps.	41,218	Ps.	2,243,339

b. Revenues from operating leases

The leases entered into by the Company contain monthly rental payments that generally increase each year based on the INPC, and/or the greater of a guaranteed minimum monthly rent plus a percentage of monthly income of the tenant if greater. At December 31, 2013, 2012 and 2011 committed future rents are as follows:

	Year ended December 31,
Term	2013		2012		2011
Less than one year	Ps.	345,808	Ps.	406,682	Ps.	330,765
Greater than 1 year and less than 5 years		347,443		494,997		601,820
Greater than 5 years		129,624		97,762		96,545
Total	Ps.	822,875	Ps.	999,441	Ps.	1,029,130

Minimum lease payments in the table above do not include contingent rentals, such as increases for INPC or increases based on a percentage of the monthly income of the lessee. Contingent rental income recorded for the years ended December 31, 2013, 2012 and 2011 were Ps.73,825, Ps.72,258 and Ps.67,838, respectively.

Revenues from operating leases at December 31, 2013, 2012 and 2011, amounted to Ps.323 million, Ps.423 million and Ps.400 million, respectively.

26. Derivative financial instruments

Financial instruments for trading and hedging purposes. As of December 31, 2013, ICA had outstanding approximately Ps.17,722 million in notional amount of derivative financial instruments for hedging and Ps.2,395 million in notional amount of derivative financial instruments for trading purposes. The Company enters into derivative financial instruments to hedge the exposure to the interest rate risk and exchange rate risk of foreign currency related to the financing of construction projects. The Company’s policy is not to enter into derivative instruments for purposes of speculation.

There are no significant differences in the financial market risk to which the aggregated portfolios of derivative financial instruments are exposed.

Derivative financial instruments as of December 31, 2013 and 2012 are composed of instruments that hedge interest and exchange rate fluctuations.

F-83

The following table shows the summary of the fair values, as of December 31, 2013 and 2012, of hedges arranged according to terms of the contracts.

	December 31,
	2013				2012
	Assets		Liability		Assets		Liability
Derivative financial instruments of:
Interest rate swaps	Ps.	—		Ps. 275,063	Ps.	—	Ps.	317,993
Interest rate options
Equity options		398,653		—		374,462		35,760
Exchange rate instruments and FX swaps		363,146		58,879		107,678		111,568
		761,799		333,942		482,140		465,321
Derivate financial instruments short-term		296,746		8,922		224		85,583
Derivate financial instruments long-term		Ps. 465,053		Ps. 325,020	Ps.	481,916	Ps.	379,738

a. Interest rate swaps

To mitigate the risk of interest rate fluctuations, the Company uses swaps to set variable rates to fixed rates.

The following table shows the most significant financial instruments that the Company has entered into through its subsidiaries to cover interest rate fluctuations through interest rate swaps:

Notional (Thousands of Mexican pesos)

Contracting date

Maturing date

Fair value (Thousands of Mexican pesos)

Rate

December 31,

Project

Received

Paid

2013

2012

Hedging

RVCV

2,090

Dec.03.08

Dec.28.15

TIIE 28D (3.80%)

9.65%

Ps.   (192,293)

Ps.   (254,518)

LIPSA

339

Jan.27.10

May.25.20

TIIE 28D (3.80%)

7.35%

(1)

(45,421)

(63,475)

Palmillas

1,006

Sep. 26.13

Sep.20.23

TIIE 28D (3.80%)

6.92%

(24,470)

—

Aeroinvest

750

Jan.23.13

Nov.30.15

TIIE 28D (3.80%)

5.16%

(12,879)

—

Ps.   (275,063)

Ps.   (317,993)

The values shown in the “Received” column are as of December 31, 2013.

(1) Weighted average rate for the amount of the three derivatives of this project.

As of March 18, 2014, the fair value of these instruments has not fluctuated significantly.

RVCV

On December 3, 2008 the Company entered into an interest rate swap in order to modify the profile of interest payments on a variable rate credit loan related to this project. Through the contract the Company receives the 28-day TIIE rate paid on the credit loan and agrees to pay a fixed rate of 9.65% plus the applicable margin in the period of construction of 1.80%. At December 31, 2013 and 2012, this swap was designated as a cash flow hedge for which fluctuations in fair value are presented in other comprehensive income.

LIPSA

In January 2010, an interest rate swap was entered into to fix 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, 2013 and 2012 it is considered a hedging derivative and fair value fluctuations are presented under other comprehensive income. On February 16, 2011, the derivative was restructured to conform to the terms of the project. Additionally, in April and August 2011, two interest rate swaps were contracted to conform to the terms of the project by reducing the fixed rate to a weighted average rate of 7.35%.

F-84

Palmillas

In September 2013, an interest rate swap was entered into to fix the project financing rate. With this instrument, a floating interest rate of the 28-day TIIE is received and a fixed interest rate of 6.92% is paid. As of December 31, 2013, it is considered a hedging derivative and fair value fluctuations are presented under other comprehensive income.

Aeroinvest

In January 2013, an interest rate swap was entered into to fix the rate of the loan. With this instrument, a floating interest rate of the 28-day TIIE is received and a fixed interest rate of 5.16% is paid. As of December 31, 2013, it is considered a hedging derivative and fair value fluctuations are presented under other comprehensive income.

Sensitivity Analysis

A sensitivity analysis was performed considering the following interest rate scenarios: +100 basis points, +50 basis points, +25 basis points, -25 basis points, -50 basis points -100 basis points. This analysis reflects the potential gain or loss of each derivative financial instrument depending on the position that it was in at the end of December 2013, providing an overall effect on the portfolio of instruments that the Company maintains, with the intent of reflecting static scenarios that may or may not occur.

Project	Fair value in December 2013			+100 bp			+50 bp			+25 bp			-25 bp			-50 pb			-100 pb
RVCV	Ps.	(192,293	)	Ps.	(158,198	)	Ps.	(175,094	)	Ps.	(183,655	)	Ps.	(201,009	)	Ps.	(209,804	)	Ps.	(227,635	)
LIPSA		(45,421	)		(23,394	)		(34,103	)		(39,608	)		(50,937	)		(56,766	)		(60,118	)
Palmillas		(24,470	)		69,853			23,849			(12	)		(49,549	)		(75,268	)		(128,725	)
Aeroinvest		(12,879	)		587			(6,096	)		(9,482	)		(16,343	)		(19,820	)		(26,867	)
	Ps.	(275,063	)		(111,152	)		(191,444	)		(232,757	)		(317,838	)		(361,658	)		(443,345	)
Variation				Ps.	163,911		Ps.	83,619		Ps.	42,306		Ps.	(42,775	)	Ps.	(86,595	)	Ps.	(168,282	)

The effects of the sensitivity analysis on stockholders’ equity of the Company with respect to fluctuations in interest rates, derived by the change in fair value of derivative financial instruments, are as follows:

	Year ended December 31, 2013
Effect on stockholders’ equity (after tax):
+100 bp		Ps.    (77,806	)
+50 bp		(134,011	)
+25 bp		(162,929	)
- 25 bp		(222,486	)
- 50 bp		(253,161	)
- 100 bp		(310,342	)

F-85

b. Exchange rate instruments, FX swaps

The following table shows the financial instruments that the Company has entered into as of the dates indicated, to hedge interest rate fluctuations through Cross Currency Swap and interest rate options, of which the most relevant data are as follows:

	Notional (thousands of Mexican pesos and foreign currency)	Contracting date		Maturing date		Ref.	Level			Fair value (thousands of Mexican pesos)
										December 31,
Project										2013		2012
Hedging
Tunel Rio de la Compañia (CCS)	30,405 MXN		Dec.24.07		Jun.24.15	Pesos/ EUR		15.63		Ps.	2,178	Ps.	1,355
	Interest on notional					EURIBOR 6M		7.77	%
Tunel Emisor Oriente (EUR Put)	1,200 EUR		Jul.28.10		Dec.30.14	Pesos/ EUR		15.2			60		366
Tunel Emisor Oriente (CCS)	237,900 MXN		Jul.28.10		Dec.30.14	Pesos/ EUR		16.49			(2,484)		(10,800)
EURIBOR 6M								4.80	%
Tunel Emisor Oriente (CCS)	460,381 MXN		Oct.22.10		Jun.17.19	Pesos/ EUR		17.31			5,964		(9,042)
EURIBOR 6M								6.99	%
ICA Senior Notes (CCS)	350,000 USD		Aug.03.12		Jan.26.15	Pesos/USD		13.3			136,696		(21,513)
MX								8.66	%
ICA Senior Notes (CCS)	500,000 USD		Feb.14.11		Feb.04.17	Pesos/USD		12.055			181,491		89,388
								(9.95)	%
CICASA (CCS)	U.S. 80,000		Dec.07.13		Dec.02.13	Pesos/U.S.		12.87			—		(7,613)
CICASA (CCS)	3,167 MXN		Jan.10.12		Jul.15.18	Pesos/USD		13.65			(2,798)		(20,373)
MX								9.05	%
San Martin	135,572 PEN		Jun.15.12		May.30.15	Pesos/soles		5.2543			(47,522)		(44,409)
MX								4.30	%
ICASA (American forward)	4,650,734 USD		Apr.01.13		Mar.26.14	Pesos/USD		12.765			36,528		—
Aeroinvest	U.S. 45,000		Jan.12.12		Jan.31.15	Pesos/U.S.		13.66			—		17,417
Others											234		18,453
Negotiation:
La Yesca (FX FWD)	U.S. 32,045		Ago.09.11		Dic.28.12	Pesos/U.S.		11.33			—		—
MXN-TIIE								6.32	%
ICAPlan	90 USD		Dic.09.13		Dic.08.14	USD-LIBOR		8.80	%		(8,922)		—
										Ps.	301,425	Ps.	13,229

c. Options

The following table shows the financial instruments that the Company has entered into as of the dates indicated, to hedge interest rate fluctuations through interest rate options, of which the most relevant data are as follows:

Notional (thousands of Mexican pesos and foreign currency)

Contracting date

Maturing date

Ref.

Level

Fair Value (thousands of Mexican pesos)

December 31,

Project

2013

2012

ICA

368,224,063 MXN

25.may.12

21.ago.13

Average price

23.32

Ps.

63,887

Ps.

(6,436

)

SETA(3)

U.S. 150,000

14.jun.06

14.jun.15

Price per share

NA

38,249

(29,324

)

CICASA (Shares option)

166,666 USD

Jan.10.12

Jul.15.18

Price per share

13.65

2,847

(17,119

)

# Shares

11,966,716

CICASA (call spread)

11,966,716 Shares

7.dec.12

4.dec.13

Price per share

30

—

374,467

ICAPlan

90 USD

09.dec.13

08.dec.14

MXN-TIIE

6.32

%

USD-LIBOR

8.80

%

296,517

—

Ps.

401,500

Ps.

321,588

F-86

At March 5, 2014, the fair value of these instruments has not fluctuated significantly.

Sensitivity analysis

For the main instruments included in paragraphs b and c above, a sensitivity analysis was performed considering the following interest rate scenarios: +100 basis points, +50 basis points, +25 basis points, -25 basis points, -50 basis points—100 basis points. Additionally, the following changes in the exchange rates were considered for each of the above scenarios: -100 cents, -50 cents, -25 cents, +25 cents + 50 cents and +100 cents. This analysis reflects the potential gain or loss of each derivative financial instrument depending on the position that it was in at the end of December 2013, providing an overall effect on the portfolio of instruments that the Company maintains, with the intent of reflecting static scenarios that may or may not occur.

Project	Fair value December 2013			+100 bp / -100 cents			+50 bp / -50 cents			+25 bp / -25 cents			-25 bp / +25 cents			-50 bp / +50 cents			-100 bp /+100 cents
Tunel Rio de la Compañia (CCS)	Ps.	2,178		Ps.	2,254		Ps.	2,216		Ps.	2,197		Ps.	2,159		Ps.	2,139		Ps.	2,009
Tunel Emisor Oriente (EUR Put)		(10,749	)		(36,924	)		(20,082	)		(14,699	)		(7,855	)		(5,732	)		(3,029	)
Tunel Emisor Oriente (CCS)		(2,484	)		5,734			7,156			7,875			9,329			10,064			11,551
Tunel Emisor Oriente (CCS)		5,964			13,247			9,667			7,832			4,064			2,131			(1,839	)
ICA Senior Notes (CCS)		136,696			135,873			136,282			136,488			136,905			137,115			137,541
ICA Senior Notes (CCS)		181,491			175,962			178,679			180,073			182,934			184,404			187,421
CICASA (CCS)		(2,798	)		(2,124	)		(2,456	)		(2,626	)		(2,973	)		(3,151	)		(3,514	)
San Martin		(47,522	)		(42,284	)		(44,901	)		(46,211	)		(48,833	)		(50,147	)		(52,776	)
ICASA (Forward Americano)		36,528			36,442			36,485			36,506			36,549			36,571			36,613
ICAPlan (CCS)		(8,922	)		(7,888	)		(8,405	)		(8,663	)		(9,180	)		(9,438	)		(9,955	)
Total	Ps.	290,382			280,292			294,641			298,772			303,099			303,956			304,022
Variation				Ps.	(10,090	)	Ps.	4,259		Ps.	8,390		Ps.	12,717		Ps.	13,574		Ps.	13,640
ICA		63,887			63,854			63,871			63,879			63,895			63,903			63,918
SETA		38,249			42,545			40,312			39,260			37,276			36,338			34,563
CICASA (Share Option)		2,847			2,542			2,693			2,770			2,925			3,003			3,160
ICAPlan (Call Spread)		296,517			295,926			296,224			296,371			296,662			296,806			297,090
Total	Ps.	401,500		Ps.	404,867		Ps.	403,100		Ps.	402,280		Ps.	400,758		Ps.	400,050		Ps.	398,731
Variation				Ps.	3,367		Ps.	1,600		Ps.	780		Ps.	(742	)	Ps.	(1,450	)	Ps.	(2,769	)

F-87

The effects of the sensitivity analysis on stockholders’ equity of the Company with respect to fluctuations in interest rates, considering existing hedging instruments, as well as the fixed interest rate financing, is as follows:

	December 31, 2013
Effect on stockholders’ equity (after tax):
+100 bp / -100 cents	Ps.	283,001
+50 bp / -50 cents		277,984
+25 bp / -25 cents		286,945
-25 bp / 25 cents		289,341
-50 bp / 50 cents		291,462
-100 bp / 100 cents		291,646

	December 31, 2013
Effect on results (after tax):
+100 bp / -100 cents	Ps.	(6,245	)
+50 bp / -50 cents		(5,522	)
+25 bp / -25 cents		(5,884	)
-25 bp /+ 25 cents		(6,064	)
-50 bp / +50 cents		(6,426	)
-100 bp / + 100 cents		(6,607	)

Considering the value of the Company’s consolidated assets, liabilities and stockholders’ equity, none of the aforementioned scenarios included in tables a), b) and c), would exceed the 5% of such balances, likewise, under any circumstances they would exceed 3% of sales, for the year ended December 31, 2013.

Million	Total		Level		%
Assets		Ps.  101,507		Ps.  5,075		5	%
Liabilities		77,375		3,869		5	%
Stockholders’ equity		24,132		1,206		5	%
Revenues		29,556		887		3	%

Tunel Emisor Oriente

In 2010, exchange and interest rate swaps called cross currency swaps (“CCS”), were entered into to mitigate the risks associated with the project. The primary position relates to loans for the acquisition of machinery related to the project. The cost of principal and interest on loans is 6.99% and 4.80% for each derivative.

As of December 31, 2012, the fair value of these hedging derivatives is recognized in other comprehensive income.

ICA

At December 31, 2013, ICA held the following derivative financial instruments:

• In February 2011, the Company entered into four Cross Currency Swaps (CCS) with maturities of six years, in order to mitigate the exchange rate risk of the bond coupons on ICA’s Senior Notes. The maximum level sets an exchange rate of Ps.12.055 per U.S. dollar at a fixed rate of 9.95%. A fixed rate is paid in Mexican pesos in exchange for receiving interest in a foreign currency, used to pay the coupons to the holders of the bond.

These instruments have been designated as hedging instruments and fluctuations in their fair value is recognized in other comprehensive income.

• In August 2012, the Company entered into three CCSs with maturities of three years, in order to mitigate the exchange rate risk of the interest payments on ICA’s Senior Notes. The maximum level sets an exchange rate of Ps.13.30 per U.S. dollar at a fixed rate of 8.66%.

The Company entered into the CCSs in order to mitigate foreign exchange risk arising from its placement of debt obligations in the international market.

• In June 2012, the Company entered CCSs in order to mitigate the exchange rate risk. The primary position of this instrument is contractual obligations denominated in Peruvian new soles. The fixed exchange rate is Ps.5.2543 per new Peruvian soles.

F-88

• ICA contracted a forward settled in cash on 22,280,100 of its shares, from May 22, 2012 to August 21, 2013 in non-consecutive periods, for a weighted average strike price of Ps.24.99 per share and equivalent to an amount of Ps.556.8 million. In August, 2013 the term of this derivative was extended to February 19, 2014, with an average strike of Ps.23.31.

• If the instrument is exercised, the effect will be accounted for in the reserve for the acquisition of shares. If the instrument is not exercised, the fair value of the forward will be recognized in valuation of financial instruments in interest expense in the consolidated statement of income and other comprehensive income.

CICASA

• In January 2012, the Company entered a CCS in order to mitigate losses from fluctuations in exchange rates and interest rates. The primary position related to this instrument corresponded to a dollar-denominated loan. The fixed exchange rate is Ps.13.65 per dollar with a fixed rate of 9.05%.

• In December 2012, the Company entered into a CCS in order to mitigate the fluctuations in exchange rates and interest rates. The fixed exchange rate is Ps.12.87 per dollar with a fixed rate of 7.99%. The primary position related to this instrument is dollar denominated debt bearing interest at a variable rate (LIBOR). As a part of the same transaction, ICA entered into a derivative financial instrument, which gives the Bank the right to purchase 11.9 million shares of ICA at a fixed price. This instrument was classified as trading.

ICAPlan

In December 2013, the Company entered into a cross currency swap to mitigate losses and exchange rate risk and interest rate. The primary position related to this instrument is dollar denominated debt of U.S.$90 million dollars at an exchange rate of Ps.12.877, in which only the interest payments are covered to pay TIIE 28 days in exchange of LIBOR six months. At December 31, 2013, this instrument was classified as trading.

27. Long-term debt

a. Debt to credit institutions and debentures and other securities at December 31, 2013 and 2012, which amounted to Ps.29,670 million and Ps.37,184 million, respectively, net of Ps.799 million and Ps.955 million, from financing commissions or expenses, respectively, is detailed as follows:

	December 31,
	2013		2012
Payable in U.S. dollars:
Concessions:
Unsecured lines of credit at Private Export Funding Corporation (PEFCO) granted to GACN in 2012 for U.S.$20,385 million dollars, effective on December 21, 2021. As of December 31 2013 and 2012, the amount exercised was U.S.$19,471 thousands dollars. The loan is guaranteed by the security equipment for checked-in luggage. The loan bears interest at a 3-month Libor rate plus 1.25 percentage points, with quarterly payments of principal. As of December 31, 2013 and 2012, the rate was 1.52% and 1.61%, respectively.		Ps. 187,436		Ps. 209,622

F-89

	December 31,
	2013		2012
Unsecured line of credit at UPS Capital Business Credit (supported by Ex-Im Bank) granted to GACN in October 2010 for U.S.$4,463 million dolars. As of December 31, 2013 the balance is U.S.$2,000 thousands dollars. The loan is guaranteed by the security equipment for checked-in luggage and other new security equipment. It accrues interest at a 3-month Libor rate plus 0.95 percentage points, with quarterly payments of principal and maturing on August 1, 2017. As of December 31, 2013 and 2012, the rate was 1.21% and 1.31%, respectively.		26,127		33,695
Construction:
Loan granted to ICASA in June 2012, for up to U.S.$35 million dollars for working capital maturing in June 2017, bearing interest at the 28-day TIIE plus 375 basis points (7.54% and 8.60%, as of December 31, 2013 and 2012, respectively).		333,930		122,600
Loans granted to CICASA maturing in July 2018. The contracted rate is the one-month LIBOR plus 450 basis points. At December 31, 2013 and 2012, the rate was 4.75% and 4.71%, respectively.		41,373		186,483
Syndicated loan of up to U.S.$910 million dollars for the construction of the La Yesca Hydroelectric Project, maturing in the second quarter of 2012. As of December 31, 2011, U.S.$829.9 million dollars was withdrawn; in 2012, the Company used the entire line of credit. In the fourth quarter 2012, the account receivable from CFE was collected and the resources were used to pay this loan. The contracted rate was the one-month LIBOR plus 50 basis points. Additionally, the project had a revolving bridge loan for working capital of U.S.$140 million dollars, divided into Tranche A1, Tranche B and Tranche A2 for U.S.$80 million dollars, U.S.$30 million dollars and U.S.$30 million dollars, respectively, which matures on the same date as the syndicated loan. During 2012, U.S.$132 million dollars were withdrawn, U.S.$127 million dollars were paid in the fourth quarter with the resources obtained from the collection of accounts receivable from the CFE and U.S.$5 million was pending payment, which was paid in 2013. The interest rate on this line of credit is one-month LIBOR plus a range of 0.75% to 4.25% (as of December 31, 2012, the rates range were between 0.9590% and 4.4590%, respectively).		—		68,188
Other purposes:
In February 2011 ICA placed senior notes for a principal amount of U.S.$500 million dollars, a coupon of 8.36% and maturing in 2021. ICA issued these notes which are guaranteed by CICASA, CONOISA and Controladora de Empresas de Vivienda, S.A. de C.V. (“CONEVISA”).		6,532,600		6,430,450
In July 2012, ICA placed senior notes for a principal amount of U.S.$350 million dollars, maturing in 2017. Debt instruments have an annual interest rate of 8.806%, payable semi-annually, resulting in a yield to maturity of 8.625%. ICA issued these unsecured notes which are guaranteed by CICASA, CONOISA and CONEVISA.		4,572,820		4,501,315

F-90

	December 31,
	2013		2012
Payable in euros:
Construction
Bank loan granted to ICASA in July 2008, for import purchases, maturing in September 2015, payable in 16 semiannual installments beginning December 2007, bearing interest at EURIBOR plus a 0.45% margin (0.84% and 0.77%, as of December 31, 2013 and 2012, respectively).		21,012		33,488
Loan granted to ICASA in April 2009, maturing in October 2019, bearing interest at the six-month EUROLIBOR plus a 0.3% (0.69% and 0.62%, at December 31, 2013 and 2012, respectively).		202,164		229,680
Loan granted to ICASA in June 2011, maturing in June 2019, bearing interest at the six-month EUROLIBOR plus a 1.1% (1.47% and 1.42%, at December 31, 2013 and 2012, respectively).		309,470		349,745
Payable in Mexican pesos:
Concessions and Airports:
Credit granted to Aeroinvest for working capital up to Ps.1,100 million maturing in November 2015. The contracted rate is the 28-day TIIE plus 3.5% (8.35% at December 31, 2012). The financing is guaranteed by 53,473,020 shares of Series B of capital stock of GACN, of which is the owner. Prepaid credit during 2013.		—		750,000
Loan granted to Aeroinvest for Ps.385 million, maturing in October 2014, bearing interest at the 28-day TIIE plus 3.5% (8.35% at December 31, 2012). The loan is guaranteed by 22,168,028 shares of Series B of capital stock of GACN. Prepaid credit during 2013.		—		385,407
TUCA performed a new issuance of securitization certificates, which is guaranteed by collection rights and toll revenues of the Acapulco Tunnel, through a trust that issued a share certificate program with a term of up to 25 years. Principal and interest are paid semiannually and bear interest at a rate of the 182-day TIIE plus 2.65% (7.54% and 7.53%, at December 31, 2013 and 2012, respectively) and the 182-day TIIE plus 2.95%, respectively (7.84% and 7.83%, at December 31, 2013 and 2012, respectively). The loan is also guaranteed by toll revenues and a letter of credit of Ps.75 million. During 2012, a prepayment was made for Ps.300 million.		969,645		933,424
Consorcio del Mayab, concession holder of Kantunil road – Cancun, issued participating security certificates (CBs) for a total of Ps.4,500 million in two parts: (i) Ps.1,195 million at a fixed rate of 9.67% and (ii) the equivalent of Ps.3,305 million in UDIs at a real rate of 5.80%. At December 31, 2013, the amount totaled 685,513,000 UDIS equivalent to Ps.3,305 million. Interest is paid semiannually. The maturity is in 22 years. Amortization of capital is semiannual and will begin in December 2014. Approximately Ps.2,339 million were used to prepay the CBs described in the preceding paragraph and Ps.1,909 million will be used for the construction of the extension of 54 additional miles of highway that goes from Playa del Carmen to Cedral (Note 13). The cash flows of the project are the source of repayment of the CBs.		4,661,621		4,536,285

F-91

	December 31,
	2013		2012
In July 2011, GACN issued debt certificates at Mexican market for Ps.1,300 million at a variable 28-day TIIE rate plus 70 basis points, in a 5-year term maturing on July 8, 2016, with unsecured guarantee. As of December 31, 2013 and 2012, the interest rate is 4.54% and 5.55%, respectively.		1,300,000		1,300,000
In March 2013, GACN issued debt certificates at Mexican market for Ps.1,500 million at a fixed rate of 6.47%, in a 10-year term maturing on March 14, 2023. Nine of the thirteen airports guarantee the loan, representing a guarantee by 80% of consolidated EBITDA of GACN.		1,500,000		—
In July 2011 an irrevocable trust agreement was established for the issuance, management and payment F/1496 (Issuer Trust) between Papagos and Sarre (as trustors and beneficiaries in the second instance), and holders of Peso Series Trust Certificates represented by Monex Casa de Bolsa, S.A. de C.V., Grupo Financiero Monex, as common representative and beneficiaries in the first instance, and Deutsche Bank Mexico, S. A., commercial bank, in as trustee. On September 30, 2011, the Issuer Trust issued Ps.5,323, millions of Trust Certificates (“CBFs”) in pesos to mature in April 2032; with a fixed annual interest rate of 10.1%. On the same date, the Issuer Trust issued 387,181,900 Trust Certificates in UDIs, with value of Ps. 4.589563 per certificate representing Ps.1,777 million, with a fixed annual interest rate of 5.65%. Interest on the CBFs, both in pesos and UDIs, will be paid quarterly, beginning July 30, 2013; the interest generated until that date will be capitalized. The certificates are redeemable quarterly in 76 consecutive payments starting from July 30, 2013. Proceeds were distributed proportionately between Papagos and Sarre using a factor of 0.497747 and 0.502253, respectively. The certificates are guaranteed with the patrimony of the Issuer Trust. They are also guaranteed, proportionately by Papagos and Sarre. At December 31, 2012, the loan balance amounted to 387,181,900 in UDI, equivalent to Ps.1,887 million. At December 31, 2013, the balance is presented as liabilities directly associated with assets classified as held for sale.		—		7,872,336
In April 2012, Sarre and Papagos, performed an issue of subordinated share certificates (“CBS”) for 167,958,000 and 189,377,000 UDIs, at Ps.4.763093 and Ps.4.748455 per UDI, respectively, equivalent to Ps.800 million and Ps.899 million, related to the inflation (“UDIBONOS”), maturing in 20 years. The CBS were placed at par with a yield of 8%, equivalent to UDIBONOS plus 324 basis points. At December 31, 2012, the credit in UDIs is 357,335,000 UDIs, equivalent to Ps.1,741 million. The source of loan repayment is the receivables of service delivery contracts. At December 31, 2013, the balance is presented as liabilities directly associated with assets classified as held for sale.		—		1,901,874
Credit granted to CONOISA in June 2011, for working capital up to Ps.1,350 million pesos maturing in June 2026. The contracted rate is the 28-day TIIE plus 2.0 basis points (5.79% and 6.85%, at December 31, 2013 and 2012, respectively). This loan is secured with a pledge on 100% of its equity shares.		215,512		124,369

F-92

	December 31,
	2013		2012
Loan granted in September 2008, to ICA San Luis, S.A. de C.V for the construction of the Rio Verde – Ciudad Valles highway in San Luis Potosi, the loan is payable over 17 years, matures in 2025, and interest is payable quarterly at a rate of the 28-day TIIE plus 205 basis points (as of December 31, 2013 and 2012, 6.04% and 6.90%, respectively). This loan is amortized monthly and is guaranteed with toll revenues.		2,397,000		2,468,400
Loan granted to LIPSA in January 2008, 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 tolls collected; the loan matures in 2024, bears monthly amortization; and interest at a TIIE rate plus an applicable margin that varies between 2.75 and 3.50 basis points ( between 6.54% and 7.29% and 7.60% and 7.85%, at December 31, 2013 and 2012, respectively).		677,719		688,907
Loan granted to ANESA for the Rio 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 – Mexico Pachuca highway project); the loan matures in 2027 and bears interest at a fixed 7.81% rate. The loan is amortized quarterly from the end of the grace period, i.e. from July 2013. This loan is guaranteed with shares of CONOISA that have full corporate rights.		2,978,180		3,000,000
Loan granted to DIPESA in November 2012, for the Barranca Larga highway project, up to an amount of Ps.1,368 million, which matures in November 2032. Amortization and interest are quarterly. Interest is payable at a rate of the 28-day TIIE plus 3.0 basis points (6.78% and 7.60%, at December 2013 and 2012) and with a fixed rate of 9.38%. This loan is secured with a pledge on 100% of its equity shares.		505,665		327,799
Loan granted to Autovia Queretaro, S.A. de C.V. in June 2013, for the Palmillas – Apaseo El Grande highway project, up to an amount of Ps.5,450 million, maturing in September 2023. Interest is payable at a rate of the 28-day TIIE plus 2.75 basis points (6.54% as of December 31, 2013).		1,382,864		—
Loan granted to Tunel Diamante, S.A. de C.V., in July, 2013 for the “Acapulco – Las Cruces” tunnel Access in the state of Guerrero, up to an amount of Ps.850 million, maturing in July 2033. Interest is payable at a rate of the 28-day TIIE plus 2.75 basis points (9.32% as of December 31, 2013).		100,382		—
Construction
Loan granted to ICASA in December 2012, up to an amount of Ps.950 million for working capital for the Nayarit Social Readaptation project; maturing in March 2017. The contracted rate is the 28-day TIIE plus 3.0 basis points (6.78% and 7.85%, at December 31, 2013 and 2012, respectively).		576,201		498,073

F-93

	December 31,
	2013			2012
Housing:
Loan granted to Viveica of Ps.105 million, maturing in May 2013, bearing interest at a 28-day TIIE rate plus 4.5% (9.35%, at December 31, 2012).		—			33,173
Bridge loan granted to Viveica in March 2011, for the development of projects, maturing in March 2014, bearing interest at the 28-day TIIE rate plus 4.0% (4.82% and 8.85% at December 31, 2013 and 2012, respectively).		167,779			244,392
Various bridge loans granted to Viveica for the development of projects, with maturities ranging from 2013 to 2017, and interest at the 28-day TIIE plus percentage points fluctuating between 3.5 and 6.5. (between 4.81% and 7.81%, at December 31, 2013).		652,612			793,698
Other		157,151			115,961
		30,469,263			38,139,364
Less:
Financing commissions and issuance costs, net		(799,345	)		(955,025	)
Total debt		29,669,918			37,184,339
Current portion		(854,374	)		(1,023,272	)
Long-term debt	Ps.	28,815,544		Ps.	36,161,067

b. The scheduled maturities of long-term debt as of December 31, 2013, are as follows:

	2014		2015		2016		2017		2018		2019 and thereafter		Total
Bank loans	Ps.	826,176	Ps.	1,031,193	Ps.	623,826	Ps.	856,118	Ps.	479,495	Ps.	7,115,770	Ps.	10,932,578
Bonds		28,198		56,006		1,378,903		4,679,531		106,711		13,287,336		19,536,685
Total	Ps.	854,374	Ps.	1,087,199	Ps.	2,002,729	Ps.	5,535,649	Ps.	586,206	Ps.	20,403,106	Ps.	30,469,263	(1)

⁽¹⁾  Amounts before commissions and issuance costs.

c. As of December 31, 2013, the Company has credit lines with financial institutions as follows:

Credit lines:
Amount awarded	Ps.	35,085,633
Used		27,305,930
Available to use	Ps.	7,779,703

Long-term debt and other agreements of the Company’s subsidiaries mentioned in this note 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, 2013, 2012 and 2011, the Company and its subsidiaries were in compliance with such covenants.

F-94

28. Income tax

The Company is subject to income tax and through 2013, the flat tax.

Tax Reform 2014

ISR- The rate was 30% for the years 2013, 2012 and 2011, and under the new Income Tax Law 2014 (2014 Income Tax Law) will continue at 30% for 2014 and subsequent years. The Company incurred ISR on a consolidated basis until 2013 with its Mexican subsidiaries. Because the current income tax law was modified in 2013 (see note 2), the tax consolidation regime was eliminated. Therefore, the Company and its subsidiaries are now required to pay the tax related to deconsoliation for which the law previously allowed deferral. The tax determined as of the date of deconsoliation will be paid in accordance with the options provided in the 2014 Income Tax Law, which will be over the next ten years beginning in 2014, according to the Tax Reform 2009 as described below.

The Company elected to be in the new Optional Regime for Group Companies beginning in 2014, as permitted by the 2014 Income Tax Law, having presented the appropriate notice to the tax authorities.

Pursuant to Section XVIII of transitional ninth article of Law 2014, and because the Company had the character of fiscal controller to December 31, 2013 and in this date was subject to the payment schedule contained in section VI of article four the transitional provisions of the Income Tax Law published in the Official Gazette of the Federation on December 7, 2009, or Article 70-A of the Income Tax Act 2013 which was abrogated by Law 2014, the Company shall continue to pay the tax deferred by fiscal consolidation 2007 and earlier, according to the above provisions until conclude payment.

IETU—Since 2014 the flat tax was eliminated. Accordingly, the Company was subject to, and recognized, IETU through December 31, 2013, which is a tax based on cash flows from both income and deductions and certain tax credits in each year. The rate was 17.5%. As a result of the elimination of the tax, the Company canceled its existing deferred IETU balances through results of the period.

In addition, as opposed to ISR, the parent and its subsidiaries incurred IETU on an individual basis.

Through December 31, 2013, current income tax was based on the greater of ISR and IETU.

From 2008, the IMPAC Law was eliminated; however, in certain circumstances, recovery of IMPAC paid in the ten years immediately preceding that in which ISR is paid is permitted.

Tax Reform 2009

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 ISR 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 consolidated for tax purposes, made in years prior to 1999, could also be required to be paid in some cases, as established in tax provisions, such as upon sale of the shares of the controlled companies or at the time the Company eliminates the tax consolidation regime, among others.

The tax payable for deconsolidation and IMPAC is Ps.4,690 million, payable as follows: Ps.286 million pesos in 2014 (reflected in current liabilities at December 31, 2013) and Ps.1,808 million from 2015 to 2018 and the remaining amount from 2019 to 2023. The estimate that is reflected in the financial statements was determined based on the terms of the Mexican Income Tax Law.

a. The income taxes are as follows:

Consolidated statements of financial position:

	December 31,
	2013		2012
Assets:
Deferred ISR		Ps.   4,198,832		Ps. —
Deferred ISR, including consolidated tax loss carryfowards		—		7,115,224
Tax credit for foreign taxes paid		249,644		380,492
Recoverable IMPAC		97,127		—
Deferred IETU		—		200,194
		Ps.   4,545,603		Ps.   7,695,910

F-95

	December 31,
	2013			2012
Liabilities:
Deferred ISR		Ps.   1,692,729			Ps.   4,640,881
Deferred income tax related to items in other comprehensive income		(51,247	)		(580,331	)
Deferred IETU		—			712,663
		Ps. 1,641,482			Ps. 4,773,213

Consolidated statements of comprehensive income:

	Year ended December 31,
	2013			2012			2011
Current:
ISR		Ps.   326,561			Ps.   117,259			Ps.   189,740
IETU		21,515			116,389			(23,710	)
Asset tax		(144,999	)		—
Others		—			(16,212	)		—
Total		203,077			217,436			166,030
Deferred
ISR		(306,372	)		228,872			39,673
Tax credit for foreign taxes paid		—			(380,492	)		(273,000	)
Cancellation of deferred IETU		(512,469	)		(100,116	)		(269,765	)
Asset tax		19,863			—			—
Others		—			(492	)		(621	)
Total		(798,978	)		(252,228	)		(503,713	)
Benefit for income taxes from continuing operations		Ps.  (595,901	)		Ps.   (34,792	)		Ps.   (337,683	)

For the years ended December 31, 2013, 2012 and 2011, income (loss) before income taxes of foreign subsidiaries is Ps.35 million, Ps.574 million and Ps.(367) million, respectively.

b. 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:

	2 0 1 3
	Companies incurring ISR						Companies incurring IETU
	Amount			Rate %			Amount			Rate %
Income before income taxes		Ps.   103,766						Ps.   103,766
Current		181,562			174.97	%		21,515			20.73	%
Deferred		(286,509	)		(276.11	)%		(512,469	)		(493.86	)%
Total income taxes		(104,947	)		(101.14	)%		(490,954	)		(473.13	)%
Add (deduct)
Inflationary effects		184,236			177.54	%		—			—
Effects of permanent differences, primarily non-deductible expenses		(7,406	)		(7.13	)%		—			—
Effect of modification of tax rates(1)		25,054			24.14	%		—			—
Taxable income of foreign subsidiaries		(190,909	)		(183.98	)%		—			—
IMPAC		125,102			120.57	%
IETU		—			—			509,113			490.63	%
Statutory rate		Ps. 31,130			30	%		Ps. 18,159			17.50	%

(1) Corresponds to a modification to the statutory rate for years subsequent to 2013, which causes an effect in the rate reconciliation when applying at 28% rate to certain temporary differences.

F-96

	2 0 1 2
	Companies incurring ISR						Companies incurring IETU
	Amount			Rate %			Amount			Rate %
Income before income taxes		Ps.   927,781			—			Ps.   927,787			—
Current		101,047			10.89	%		116,389			12.54	%
Deferred		(152,112	)		(16.39	)%		(100,116	)		(10.79	)%
Total income taxes		(51,067	)		(5.50	)%		16,273			1.75	%
Add (deduct)
Inflationary effects		(613,665	)		(66.14	)%		100,585			10.84	%
Effects of permanent differences, primarily non-deductible expenses		203,892			21.98	%		(43,073	)		(4.64	)%
Effect of modification of tax rates		702,775			75.75	%		—			—
Taxable income of foreign subsidiaries		36,399			3.92	%		—			—
IETU		—			—			88,577			9.55	%
Statutory rate		Ps.   278,336			30	%		Ps.   162,362			17.50	%

	2 0 1 1
	Companies incurring ISR						Companies incurring IETU
	Amount			Tasa %			Amount			Tasa %
Income before income taxes		Ps.   (167,996	)					Ps.   (167,996	)
Current		189,740			(112.94	)%		(23,710	)		14.11	%
Deferred		(233,948	)		139.26	%		(269,765	)		160.58	%
Total income taxes		(44,208	)		26.32	%		(293,475	)		174.69	%
Add (deduct)
Inflationary effects		(24,518	)		14.59	%		(76,228	)		45.37	%
Effects of permanent differences, primarily non-deductible expenses		29,031			(17.28	)%		183,547			(109.26	)%
Taxable income of foreign subsidiaries		(10,704	)		6.37	%		—
IETU		—			—			156,756			(93.31	)%
Statutory rate		Ps.  (50,399	)		30.00	%		Ps.  (29,400	)		17.50	%

F-97

c. At December 31, 2013, the main items comprising the balance of the deferred ISR asset (liability) are:

	December 31,
	2013
	Deferred ISR asset			Deferred ISR liability
Liabilities:
Customers		Ps.   (223,850)			Ps.   (7,595,125)
Real estate inventories		(33,904)			(57,658)
Intangible assets from concessions		(1,888,500)			(2,924,700)
Total liabilities		(2,146,254)			(10,577,483)
Assets:
Provision and accrued expenses		299,287			722,760
Property, plant and equipment		373,800			370,408
Real estate inventories		1,210,703			4,617,092
Advances from customers		178,615			1,172,362
		2,062,405			6,882,622
Deferred ISR liabilities on temporary differences		(83,849)			(3,694,861)
Tax loss carryforwards in consolidated tax reporting		4,282,681			2,002,132
Net asset (liability) on temporary differences		Ps.   4,198,832			Ps.  (1,692,729)
Deferred income tax related to items in other comprehensive income		—			(51,247)
Total net asset (liability)		Ps.    4,198,832	(1)		Ps.  (1,641,482)

⁽¹⁾  At December 31, 2013, and 2012, the Company has recognized credits for tax loss carryforwards of Ps.4,199 million and Ps.7,233 million, respectively, which can be recovered under certain circumstances. Management has the expectation of applying such benefits in accordance with projections and several tax strategies with expect favorable outcomes.

d. At December 31, 2012, the main items comprising the balance of the deferred ISR liability are:

	December 31,
	2012
Liabilities:
Customers		Ps.   (4,391,516)
Real estate inventories		(3,135,408)
Intangible assets from concessions		(2,770,826)
Total liabilities		(10,297,750)
Assets:
Provision and accrued expenses		123,882
Property, plant and equipment		573,743
Inventories		16,959
Inventories		—
Advances from customers		1,449,346
		2,163,930
Deferred ISR liabilities on temporary differences		(8,133,820)
Tax loss carryforwards in consolidated tax reporting		3,492,939
Net liability		Ps.   (4,640,881)

F-98

e. The main items comprising the liability balance of deferred IETU at December 31, 2012 are as follows:

	December 31,
	2012
Liabilities:
Customers		Ps.   (407,305)
Inventories		(91,079)
Real estate inventories		(266,312)
Investments in concessions		(1,781,539)
Property, plant and equipment, and others		(212,021)
Total liabilities		(2,758,256)
Assets:
Notes payable		309,250
Provisions		225,585
Tax credits permitted by IETU law		1,710,952
Total assets		2,245,787
IETU liability		Ps.   (512,469)

⁽¹⁾  Amount is net of the deferred IETU asset of Ps.200,194 (see subset a. above).

f. The changes in deferred tax assets and liabilities during the year are as follows:

	December 31,
	2013		2012
Beginning balance		Ps.   (2,922,697)		Ps.   (1,577,577)
ISR in results		(306,372)		609,364
Business combination and other		143,761		(117,368)
Tax credit for taxes paid abroad		—		(380,492)
Recoverable IMPAC		(97,127)		—
Income tax effects recognized in other comprehensive income and equity		25,580		(492,537)
Tax on sale of shares in subsidiary for application of losses for the year included in retained earnings		336,658		—
Others		428,545		(863,971)
Elimination of IETU		(512,469)		(100,116)
Ending balance		Ps.   (2,904,121)		Ps.   (2,922,697)

g. Tax consolidation:

Changes in the income tax liability resulting from fiscal deconsolidation are as follows:

	December 31,
	2013			2012
Beginning balance		Ps. 4,901,137			Ps. 3,429,803
Increase in liability for tax consolidation		1,604,860			4,455,577
Unused tax losses in tax consolidation		(1,643,502	)		(2,751,722	)
Payments		(273,972	)		(232,521	)
Total income tax payable for deconsolidation		4,588,523			4,901,137
Current income tax payable for deconsolidation		(260,236	)		(273,972	)
Discount of tax liability by deconsolidation, arising from definition of specific time to payment		(675,000	)		—
Non-current income tax payable for deconsolidation		Ps. 3,653,287			Ps. 4,627,165

F-99

The income tax at December 31, 2013, on the tax consolidation will be paid as follows:

Year	Deferred ISR		IMPAC
2014		Ps. 260,236		Ps. 25,303
2015		185,946		25,303
2016		321,946		20,242
2017		558,471		15,182
2018		666,069		15,181
2019-2023		2,595,855		—
		Ps. 4,588,523		Ps. 101,211

h. In accordance with Mexican tax law, indexed tax losses and recoverable IMPAC, at a consolidated level, for which a deferred ISR asset has been recognized and have been paid, can be recovered under certain circumstances. The amounts and expiration dates as of December 31, 2013, are as follows:

Year of	Tax loss		Recoverable
Expiration	carry forwards		IMPAC
2014		Ps. 50,096		Ps. 36,553
2015		59,034		11,199
2016		145,628		11,199
2017		257,135		22,397
2018		143,168		—
2019		458,952		—
2021		1,165,139		—
2022		1,340,211		—
2023		2,865,976		—
		Ps. 6,485,339		Ps. 81,348

i. The tax loss carryforwards for an amount Ps.201 million that can beused to offset future taxable income were not included in the determination of deferred tax of 2013, because the Company believes it is not likely to recover. Expiration dates and restated amounts at December 31, 2013, are as follows:

Year of Expiration	Tax loss carry forwards
2014		Ps.   4,405
2015		11,757
2016		1,204
2017		978
2018		3,155
2019		14,661
2020		20,264
2021		27,306
2022		22,331
2023		94,464
		Ps.   200,525

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j. Income tax recognized in other comprehensive income or directly in equity:

	December 31,
	2013		2012		2011
Deferred taxes
Income and expense recognized in other comprehensive income:
Labor obligations		Ps.   (15,020)		Ps.   32,877		Ps.   35,414
Financial instruments treated as cash flow hedges		90,699		63,186		76,326
Valuations of financial instruments treated as cash flow hedges of associates and joint ventures		219,624		327,365		20,040
		295,303		423,428		131,780
Reclassifications from equity to income:
Cash flow hedges		(92,452)		(53,027)		(133,869)
Deferred taxes from derivative instruments of associated companies and joint ventures		(324,366)		(110,246)		(65,833)
Total income tax recognized in other comprehensive income		(121,515)		260,155		(67,922)
Equity forward recorded in additional paid-in capital		(5,438)		22,506		—
Reclassifications from equity to income:
Tax on sale of shares in subsidiary for application of losses for the year included in retained earnings		(336,658)		—		—
		(463,611)		282,661		(67,922)
Less:
Deferred tax of associated companies, joint ventures and other		438,031		(287,882)		45,793
Change of deferred tax (see paragraph f)		Ps.   (25,580)		Ps.   (5,221)		Ps.   (22,129)

k. The balances of stockholders’ equity tax accounts at December 31, 2013, 2012 and 2011 are as follows:

	December 31,
	2013		2012		2011
Contributed capital account		Ps. 26,773,479		Ps. 26,933,336		Ps. 25,970,977
Net consolidated tax profit account		16,147,174		14,387,584		14,156,350
Total		Ps. 42,920,653		Ps. 41,320,920		Ps. 40,127,327

29. Contingencies

a. Lawsuits and litigation – At December 21, 2013, our subsidiaries were subject to legal proceedings and claims arising in the ordinary course of business. Our management and legal advisers do not expect the Company’s results of operations and financial condition as described in our consolidated financial statements will be materially impacted by the resolution of these matters.

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b. Tax lawsuits –As of the date hereof, ICA and certain of its subsidiaries are in the process of settling several tax disputes before the relevant authorities. Given that these disputes relate to the return or recovery of taxes paid by the Company’s subsidiaries before filing such claims, the Company does not expect to pay any additional amounts in the event it does not obtain favorable resolutions of such matters.

c. Construction

Subway Line 12 – In December 2012, ICA, together with its partners Carso Infraestructura y Construccion, S.A. de C.V. and Alstom Mexicana, S.A. de C.V., (the “Consortium”) filed a civil law suit against the Government of the Federal District, the Federal District Department of Works and Services and the decentralized agency known as Proyecto Metro del Distrito Federal. The Consortium seeks the payment of additional and extraordinary costs associated with work performed outside the scope of the Lump Sum Construction Agreement no. 7.8 CO 01 T.2.022 that was entered into on June 17, 2008, for the execution of Mexico City’s Metro Line 12. The claims total Ps.3,835 million plus (i) value-added tax, or VAT, (ii) Ps.118 million in financial expenses for the late payment of the estimated work, (iii) default interest, and (iv) expenses and legal costs incurred for the duration of the dispute.

On April 23, 2013, the Judge with whom the lawsuit was filed, determined not to investigate the merits of the case, given that an administrative procedure to resolve the case exists that should be exercised prior to a judicial proceeding. Once the administrative procedure has been invoked and carried out, to the extent the matter is not resolved, judicial procedings may be brought forth. Based on the foregoing, the parties invoked the non-judicial administrative procedure in order to resolve technical and administrative matters.

As of the date of issuance of these financial statements, that administrative procedure was complete and has left intact the ability of the parties to enforce their dispute through a judicial proceeding with a competent Federal Distric court. Accordingly, on December 13, 2013, the parties jointly submitted a juidical proceeding.

As a result of the proceeding, in January, 2014 an expert opinion was issued which confirmed that the additional and extraordinary work was beyond the scope of the Contract.

However, the Company’s legal advisors believe there is a probability of a favorable outcome, as it maintains sufficient evidentiary documentation confirming the request and approval of the additional work performed.

Proyecto Esmeralda Resort– The claim respresent the collective amount of corporate and judicial proceedings brought forth or responded to by ICA to enable it to assume corporate control over Proyecto Esmeralda Resort, S.A. de C.V. (“PER”), Marina Esmeralda Resort, S.A. de C.V. (MER) and Campeche Golf, S.A. de C.V. (GOLF) (collectively the “Companies) and, consequently, the assets of the “Aak Bal” Project.

In December 2010, ICA concluded a fiduciary enforcement procedure permitted by the project’s trust agreement which guaranteed the financing provided by ICA to PER, MER, GOLF and other amounts owed for the performance of the project, and which ultimately resulted in the resolution that the Companies must transfer the assets guaranteed as partial payment of the debts of the Companies to ICA. As of December 31, 2010, the amount owed by the companies PER, MER and GOLF to ICA was approximately Ps.553 million, which amount is secured. Pursuant to the same lawsuit, October 20, 2011, ICA obtained as accord and satisfaction, the title to land in the amount of Ps.151.5 million, thus reducing the amount payable by PER to ICA.

It is estimated that all of the arbitration procedures and court proceedings still underway will be resolved in favor of ICA, without adversely affecting the Company’s financial position.

Malla Vial Colombia –In April 2002, ICA was ordered by an Arbitration Panel to pay compensation to the Instituto de Desarrollo Urbano del Distrito Capital de Bogota (“IDU”), for breach of the construction contract of the “Malla Vial” project in Bogota, for approximately U.S.$2.2 million, and established the criteria for settlement of the Contract. Such ruling was acknowledged by the Mexican courts in January 2009 and ICA made the respective payment.

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In a separate action related to the same project, the IDU filed suit against ICA with a Colombian court for breach of contract damages in the amount of approximately U.S.$4.72 million, and filed suit against the bonding company for reimbursement of the advance which had not been repaid.

By the same token, ICA filed a counter claim, seeking compensation plus damages and lost profits for U.S.$17.8 million. The court suspended all legal action against the bonding company until the countersuit filed by ICA is resolved.

In June 2011, the suspension of the lawsuit ordered by the judge in the administrative law proceeding, filed against the bonding company, concluded, which means that despite the reciprocal claims filed between the parties, it may be possible to request the execution of the bonds for U.S.$17 million, plus interest, although there are legal proceedings available to contest a ruling in that regard.

On September 26, 2012, an arbitration agreement was signed between the parties, for the purpose of terminating all the disputes arising from the performance of contract 462 from 1997. Such agreement was filed with the Administrative Court of Cundinamarca, which for purposes of issuing the respective judgment, requested the opinion of the Attorney General’s Office of Colombia.

On February 28, 2013, the Administrative Court of Cundinamarca rejected the arbitration with the IDU, for which reason on March 8, 2013, ICA filed an appeal, which was resolved through a judgment issued on April 17, 2013. This judgment partially granted the suspension, against the ruling which partially accepted the arbitration proposal, and the respective docket was sent to the Council of State for the respective resolution.

In a ruling issued on October 24, 2013, the Council of State fully approved the arbitration performed with the IDU, after which the parties consider Contract 462 from 1997 as terminated. ICA must make the payment of the arbitration amounts agreed and the IDU must abandon the administrative proceedings filed against ICA.

With regard to the administrative proceeding filed by the IDU against Chubb de Colombia de Seguros S.A. and ICA, seeking collection from the ruling which enforced the court protection from the advance for the performance surety, the Administrative Court of Cundinamarca declared unproven the challenges submitted by Chubb de Colombia de Seguros S.A. For this reason it issued instructions to continue with the enforcement of the amount established in the lawsuit filed on February 18, 2003. An appeal and an action for annulment were filed against such ruling on May 3, 2013, for which the respective judgment has yet to be issued.

With regard to the administrative law proceeding filed by the IDU against Chubb de Colombia de Seguros S.A. and ICA, seeking collection for the judgment declaring the Contract terminated and enforcing the monetary penalty clause (Lawsuit No. 2002-02258), the Court issued a ruling on October 18, 2013 which, without ruling on the challenges filed by ICA, ruled that the enforcement should be continued. An appeal was filed against this ruling on November 28, 2013, mainly based on the arbitration held with the IDU. In this regard, once the payment of the arbitration amounts agreed is made and the IDU abandons the administrative law proceedings filed against ICA, it will also have to abandon the administrative-law proceeding filed against Chubb de Colombia de Seguros, S.A.

The Company’s management believes that the arbitration agreement will come to approximately U.S.$6 million dollars, for which a provision has been created.

PAC-4 Arbitration Procedures

1. Arbitration of the Consortium ICA-FCC-MECO filed against the Panama Canal Authority (“ACP”) for additional work performed.

On July 19, 2013, the Consortium ICA-FCC-MECO filed with the Arbitration and Reconciliation Center of Panama (CeCAP) a request for arbitration against the ACP, due to the monetary damages suffered through such date by the Consortium, as a result of the unforeseen geological conditions encountered during the performance of the project.

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On August 14, 2013, the arbitration panel was formally convened, which before ruling on the principal questions, must determine the national or international scope of the arbitration. By the same token, on October 23, 2013, the ACP responded to the lawsuit, and also made an ancillary claim to be settled prior to the main action, in which it requested that the arbitration panel rule on the untimeliness of all the claims filed by the Consortium in the lawsuit, for the purpose of terminating the arbitration proceeding. As of this date, the Company is awaiting the arbitration panel to issue a ruling on the national or international scope of the arbitration, and on the aforementioned ancillary claim filed by the ACP.

The basic premise of the Consortium to uphold its claims is that adverse situations and conditions have arisen that were not initially contemplated by both parties, which give the Consortium the right to amend the Contract regarding the delivery time of the project and the price. Accordingly, it is reasonably possible that the arbitration will be successful and that the cost overruns suffered by the Consortium ICA-FCC-MECO will be acknowledged, for which reason it is not considered necessary to create a provision in this regard. As of this date, the total value of the contingency is U.S.$23 million dollars, plus the effect of inflation on any cost overruns which continue to be generated during the effective term of the Contract.

2. Arbitration of Consortium ICA-FCC-MECO against the ACP for the increase in the minimum daily wage of the workers in the Panama Canal area.

On September 21, 2012, the Consortium ICA-FCC-MECO filed with the CeCAP, a request for arbitration against the ACP, as a result of the monetary damages suffered by the Consortium due to the increase in the minimum daily wage of the workers in the Panama Canal area, which is U.S.$1.25 million dollars, plus any and all costs generated during the effective term of the contract. Such increase is directly due to the issuance of Decree No. 6 dated January 20, 2012, which according to the Consortium ICA-FCC-MECO constitutes an amendment to the Contract executed between the parties.

On January 22, 2013, the Arbitration Panel was formally convened. In ruling No. 02/2013 dated April 11, 2013, such Panel extended the deadline for its ruling until September 26, 2013. On August 9, 2013 the parties filed a request to extend the deadline for the ruling again, which was accepted by the Arbitration Panel. Consequently, October 25, 2013 was set as the new deadline for issuing the respective judgment.

The Arbitration Panel issued its judgment on October 25, 2013, and dismissed all the claims filed by the Consortium ICA-FCC-MECO, for which reason it is considered that the arbitration procedure has ended unfavorably for the Consortium.

ICAMEX – TERMOTECNICA

1. Tax liability lawsuit filed by the General Controller’s Office of Colombia against the Consortium ICAMEX – TERMOTECNICA.

On July 27, 2012, the General Controller’s Office of Colombia notified the Consortium ICAMEX – TERMOTECNICA and its contracting party, Empresa Colombiana de Petroleos ECOPETROL, S.A., that a tax liability lawsuit had been filed as a result of an oil spill which took place on December 11, 2011 due to a leak in the oil pipeline Caño Limon—Coveñas in section 231+080, resulting in damage to the nation’s environmental heritage, filed in the jurisdiction of the Municipalities of Chinacota, Los Patios and Cucuta of the Norte de Santander Province, as well as the loss of 3267 barrels of petroleum spilled at the accident site.

The aforementioned General Controller’s Office is seeking tax damages for aggravated negligence in the amount of approximately U.S.$19.5 million dollars.

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The Company is currently waiting for the evidentiary hearings to be scheduled by the General Controller’s Office.

As of the date of issuance of these financial statements, the file remains inactive.

2. Lawsuit for direct remedy filed by the Corporacion Autonoma Regional de la Frontera Nororiental (“CORPONOR”) against the Consortium ICAMEX – TERMOTECNICA.

On September 28, 2012, the CORPONOR notified the Consortium ICAMEX – TERMOTECNICA of the request for out-of-court arbitration, seeking direct remedy for environmental damages from such Consortium and from the Empresa Colombiana de Petroleos ECOPETROL, S.A. as a result of the oil spill which took place in the Caño Limon-Coveñas oil pipeline.

The amount of the claims filed by CORPONOR to restore the ecosystem to the condition existing before the oil spill comes to approximately U.S.$18.5 million dollars.

CORPONOR informed the parties involved that an out-of-court arbitration hearing would be held on November 7, 2012. No agreement was reached at such hearing, for which reason CORPONOR would be able to then file a formal law suit against ICAMEX – TERMOTECNICA.

Notwithstanding the above, it is not considered necessary to create a provision against this lawsuit or that indicated in numeral 1 above, because currently there is no legal sign in either of the lawsuits that would indicate a possible contingency, apart from the fact that the oil spill is not attributable to the Consortium, as will be demonstrated at the appropriate time in either lawsuit.

It is also worth noting that at the appropriate moment in the lawsuit, the competent court authority of Colombia will have to determine which of the two lawsuits should prevail, either that filed by the General Controller’s Office of Colombia or one filed by CORPONOR. This is because both lawsuits refer to the same event, the oil spill which occurred at the place described above.

As of the date of issuance of the financial statements, no progress has been reported in this lawsuit.

d. Airports

1. Aeropuerto de Ciudad Juarez S.A. de C.V. (“Ciudad Juarez Airport”)

In 1991, the persons claiming to be the original owners of a plot of land (204 ha), which includes the Ciudad Juarez Airport, filed an action for repossession against the airport to reclaim the land, on the basis that it was illegally transferred to the Mexican Government.

As an alternative to recovering such land, the plaintiff also seeks monetary damages of U.S.$120 million dollars (approximately Ps.1,543 million). The company Aeropuerto de Ciudad Juarez S.A. de C.V., a subsidiary, indicated that the Department of Communications and Transportation should get involved because it was the Department which granted the concession to the Ciudad Juarez Airport, and the concession title only covers the capacity of concessionaire.

The lawsuit is still underway because the final verdict has yet to be issued, but the Federal Government has already appeared in court, and urged that a federal judge should be the competent body to rule on the case, rather than a civil-law judge, who was currently hearing the suit. The dispute about competence was resolved in favor of the Federal Government, and the Civil Court was instructed to send the files to the Federal Court for purposes of issuing the respective judgment. As the District Judge did not accept the competence ruling, the case was sent to the Supreme Court. However, the High Court ruled that the competence dispute should be

F-105

resolved by the Circuit Appeals Court. The latter issued its ruling dated January 13, 2013, to the effect that the Civil Authorities should hear the lawsuit rather than the Federal Court , so the docket was sent back to the Civil Courts to resume with the lawsuit, which is its current status today.

No provision has been recorded in relation to this lawsuit, because it was considered that if the ruling went against the company, the economic effect would be assumed by the Federal Government, as established in the Concession Title and given that the title of the land is held with the Mexican Government and not with the Ciudad Juarez Airport.

2. Airport Property Tax

These disputes refer to different lawsuits and/or legal actions filed against different companies of GACN for nonpayment of property tax, in which the respective rulings have favored the Company, generally given that the respective properties constitute state-owned assets for which reason GACN is exempt from payment of the tax. Notwithstanding the above, at the date of this report the following lawsuits have not yet been resolved:

a) Reynosa

There is an action for annulment filed by the Reynosa Airport to challenge the collection for the period 2000 to 2004, in the amount of Ps.263. The lawsuit was resolved on March 5, 2012, and the ruling challenged was declared null and void, without the authorities filing an appeal, so this case is closed.

In February 2011, the Municipality of Reynosa filed a new request for payment of property tax, in the amount of Ps.118 million, without specifying the period for which the debt is owed. An action for annulment was filed against such request, and the respective ruling has yet to be issued.

In November 2011, the Municipality of Reynosa filed another request against the company for payment of property tax in the amount of Ps.127 million. An action for annulment was filed against this request, and the respective ruling has yet to be issued.

In August, 2012, the Municipality of Reynosa requested the payment of property tax in the amount of Ps.1,119 million, against which an action for annulment was filed. The respective ruling has yet to be issued.

b) Zihuatanejo.

In October 2010, the Municipality requested from the Aeropuerto de Zihuatanejo, S.A. de C.V. the payment of Ps.2.2 million (for the period from the second to the sixth bimester of 2004 and from the first to the sixth bimester of 2005). An action for annulment was filed against this payment request with the Tax Court of the State of Guerrero. The verdict issued in this lawsuit declared that the rulings challenged were null and void, thus enabling the authority to perform a new action to remedy the formal defects. This was challenged by the airport and in February 2012 the ruling issued in the petition was notified, which was favorable to the concessionaire, without the authority having filed legal action, for which reason this case is closed. However, in October 2012, the Treasurer of the Municipality of Zihuatanejo de Azuela of the State of Guerrero requested that Aeropuerto de Zihuatanejo, S.A. de C.V. pay Ps.2.2 million for an alleged debt of property tax, fines and enforcement expenses for the period from the second to the sixth bimester of 2004 and from the first to the sixth bimester of 2005.

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An action for annulment was filed against this payment request with the Tax Court of the State of Guerrero. In October 2012 the Municipal Finances Coordinator of Zihuatanejo de Azuela, Guerrero assessed and requested that Aeropuerto de Zihuatanejo, S.A. de C.V. pay the amount of Ps.2.8 million for additional unpaid property tax and surcharges for the period from the first bimester of 2007 to the fifth bimester of 2012 and the respective penalty for Ps.865 and the amount of Ps.57 for enforcement expenses. An action for annulment was filed against this payment request with the Tax Court of the State of Guerrero, and the respective judgment has not been issued yet.

3. Unpaid Tax Liabilities - Airports

a) Acapulco

The Acapulco Local Tax Audit Administration of the SAT (“SAT Acapulco”) assessed a due and payable tax liability against the Acapulco Airport for income tax for the year 2006, surcharges and fines for a total of Ps.43 million, as well as additional employee profit sharing (“PTU”) for Ps.3.3 million. An administrative remedy was filed against the tax liability assessed, in which it was overruled so this case is closed. However, in the exercise of its official powers, in December 2011 the Acapulco Local Tax Audit Administration conducted an official visit and issued a new ruling assessing an unpaid tax liability for the new amount of Ps.27.9 million, as it states that the taxable income used as the basis for distribution of PTU for the year 2006, is missing unreported revenues and as well as for excess deductions detected, surcharges and fines and the application of 10% of the aforementioned amount, for the payment of PTU of such fiscal year.

A motion for reconsideration was filed against this new ruling which confirmed the ruling challenged, and assessed the unpaid tax liability for income tax of the year 2006, surcharges, fines and restatements for Ps.16 million, as well as additional PTU payable for Ps.2.8 million. An action for annulment was filed against this last ruling with the Federal Tax Court, which is still under way and the respective judgment has not yet been issued.

b) Monterrey

In August 2012, an action for annulment was filed with the Federal Tax Court to challenge the ruling issued by the Advisory Committee of the Regional Delegation of the Mexican Social Security Institute of Nuevo Leon, which ruled on the appeal filed by Aeropuerto de Monterrey, S.A. de C.V., against the settlement determined by the Adjunct Department of the IMSS Apodaca, which assesses due and payable tax liabilities owed by the Airport from the period from January 1, 2007 to December 31, 2012, in the amount of Ps.28 million, for the alleged nonpayment of Social Security fees related to insurance for occupational hazards, illness and maternity, disability, life and nursery, and insurance for retirement, early retirement and old age, as well as fines for the alleged nonpayment of such Social Security fees during the construction of Terminal B. The respective judgment has yet to be issued in this lawsuit and the surety for the unpaid tax liability has been established with the IMSS.

c) Reynosa

An action for annulment was filed against the ruling on the motion for reconsideration, which confirmed the assessment of the unpaid tax liability for income tax in the year 2007, and the related restatement, surcharges and fines in the amount of Ps.1.2 million, as well as additional PTU payable for Ps.194. The respective judgment has yet to be issued and the surety for the unpaid tax liability has been established with the SAT.

4. Dispute Related to the Ownership of Land Acquired by Aeropuerto de Monterrey, S.A. de C.V.

Ordinary civil lawsuit filed against the Monterrey Airport (MTY) (as purchaser), DIAV, S. A. de C. V. (as vendor) and officials engaged in land purchase and sale transaction, in which a third party claims to be the owner of part of the real estate acquired by MTY. The compensation claimed derives from a comprehensive lawsuit of ownership and alleges the legal nonexistence of purchase and sale documents, and claims the real estate property which it presumably owns, and the nonexistence of the public instruments for the purchase and sale of real property, the legal and physical restoration of the land demanded, together with any appropriate improvements and rights.

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The contingency is not quantified in the lawsuit. At the date of the financial statements, the contingency remains in effect because no final ruling has been issued in the lawsuit, in which the company that sold the land has already appeared to give evidence. The Company does not believe that an unfavorable outcome is probable. Additionally, if the court rules against MTY, the Company believes that the economic effect of the lawsuit will be the obligation of the company that sold the land (DIAV, S.A. de C.V.), for which reason MTY has not recorded any provision in this regard.

e. Infrastructure

Grupo Corporativo Excell –In December 2012, Excell filed suit against CONOISA, a Company subsidiary, for the payment of Ps.48 million related to fees for professional services rendered in the project named Acueducto II de Queretaro, which was earned for providing advice on different tasks and studies in the aforementioned construction contract.

It also filed suit against other companies of the Consortium.

In September 2013, the proceeding concluded the evidentiary stage and in December of that year a ruling was issued relieveing CONOISA and SAQSA, as well as other companies from the Consortium brought into the suit. Grupo Corporativo Excel filed an appeal because it did not agree with the ruling.

Jose de Jesus Montes Lozano –The dispute arose as a result of a highway accident on the Autopista de Occidente, operated by ICA Infraestructura S.A. de C.V. (“ICAI”), formerly Maxipistas, S.A. de C.V., which occurred due to speeding and a tire left on the highway; two persons died in the accident. Given the above, on December 14, 2001 the family of the deceased persons filed suit for payment of different considerations, which were only indicated conceptually, with the aim of quantifying them in the enforcement of judgment, for which reason the related amount is unknown at this time. On November 10, 2008 a trial level verdict was issued in which Maxipistas was ordered to pay the plaintiff the compensation amounts for pain and suffering and mental distress, which are yet to be quantified. However, such judgment was not made final finalized, due to different objections filed by the parties.

In January 2013, the plaintiff filed suit with the Supreme Court to make the aforementioned verdict final and have it enforced against ICAI. However, the Company believes that the ruling will be in its favor, because the verdict was not final given that the plaintiff has challenged the rulings of the original judge, mainly because it did not timely quantify the compensation for pain and suffering during the lawsuit. If ruled unfavorably for the Company, it does not expect that the amount will adversely affect its financial position.

As of this date, the Company has not been notified of the admission of the complaint filed with the Mexican Supreme Court.

In December 2013, the document was turned over to the original court in Guadalajara, Jalisco, and it is expected any time that the plaintiff will file its ancillary claim for verdict settlement, seeking to justify the amount for pain and suffering.

Right-of-Way on the Corredor Sur–The Banco Hipotecario Nacional (“BHN”) filed a major ordinary proceeding against ICA Panama, S.A. for disruptions caused through the use of the right-of-way on the Corredor Sur, which was admitted by the Third Circuit Court on December 11, 2003, seeking the payment of U.S.$2.5 million dollars. In March 2012 the expert evidence was submitted, both of the court’s expert and those of ENA (formerly ICA PANAMA) and BHN. The results of the appraisals show figures in excess of the estimate, to deal with the compensation for the property affected during the construction of the Corredor Sur. The fees of the court’s expert were rejected and submitted for review because they were considered excessively high.

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In March 2013, the Court issued a verdict at the trial level which recognized the claim of BHN, and assessed the sum of U.S.$1.981 million to redress the disruptions suffered by BHN. On March 5 and 19, BHN and the defendant, respectively, filed an appeal against such judgment, which has yet to be resolved.

On June 5, the Attorney General’s Office for Civil Matters was notified of the verdict and on June 10 requested clarification and filed the respective appeal. In judgment No. 1656/456-03 dated October 31, 2013, the Court did not accept the request for clarification. The motion for reconsideration, as well as those filed by BHN and the defendant, are still pending and the respective judgment has yet to be issued.

c. 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, 2013, the Company had granted bonds to its customers for Ps.16,515 million and U.S.$172 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.4,662 million.

30. Risk management

a. Significant accounting policies

The details of the significant accounting policies and adopted methods (including recognition, valuation and basis of recognition of related income and expenses) for each class of financial asset, financial liability and equity instrument is disclosed in Note 4.

b. Categories of financial instruments and risk management policies

The main categories of financial instruments are:

		December 31,
		2013		2012
Financial assets	Classification of risk
Cash	Credit		Ps. 1,140,955		Ps. 1,066,997
Restricted cash	Credit		2,009,979		1,950,231
Cash equivalents	Credit and Interest rate		2,228,827		3,082,511
Restricted cash equivalents	Credit and Interest rate		37,047		503,249
Customers (1)	Credit and Foreign exchange		4,342,298		3,452,362
Other receivables	Credit		3,328,732		3,773,830
Customers- non current	Credit		9,387,649		8,573,729
Financial assets from concessions	Credit and Interest rate		3,332,185		12,087,251
Derivative financial instruments	Interest rate and Foreign exchange		761,799		482,140

(1) Cost and estimated earnings in excess of billings on uncompleted contracts is not considered a financial instrument, therefore it is not included.

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		December 31,
		2013		2012
Financial liabilities	Classification of risk
Derivative financial instruments	Interest rate, Foreign exchange and Credit		Ps. 333,942		Ps. 465,321
Current debt	Interest rate, Foreign exchange and Liquidity		8,901,699		9,571,363
Long-term debt	Interest rate, Foreign exchange and Liquidity		29,669,918		37,184,339
Trade accounts payable	Foreign exchange and Liquidity		6,439,800		6,237,084
Accrued expenses and other	Liquidity and Foreign exchange		7,287,433		5,416,386
Other long-term liabilities	Operating and Liquidity		2,873,691		2,277,768

Based on the nature of its activities, ICA is exposed to different financial risks, mainly as a result of its ordinary business activities and its debt contracts entered into to finance its operating activities. The Corporate Treasury function provides services to ICA business to coordinate access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of ICA. The principal financial risks to which operating units are exposed are: market risk (interest rates, currency exchange rates and foreign currency pricing), credit risk and liquidity risk.

Periodically, the Company’s management assesses risk exposure and reviews the alternatives for managing those risks, seeking to minimize the effects of these risks using financial derivatives to hedge risk exposures. The Company does not use derivatives for speculative purposes. The Board of Directors sets and monitors policies and procedures to measure and manage the risks to which the Company is exposed, which are described below.

c. Market risk

The Company is exposed to price risks, mainly for the following activities:

Construction contracts

The construction contracts, into which the Company enters, are generally either: (i) fixed price (either “lump sum” or “or not-to exceed”) or (ii) profit margin over cost (“unit price”). 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 if it is with the private sector, which is normally different.

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 the Company retains 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) a review of unit prices by group, which multiplied by their corresponding amounts of work remaining to be performed, represent 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.

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In lump sum contracts, not-to-exceed contracts or contracts where there are no escalation clauses in which the Company undertakes to provide materials or services at fixed unit prices required for a project in the private sector, the Company generally absorbs the risk related to inflation, exchange-rate fluctuations or price increases for materials. The Company mitigates 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, the Company carries out a quantitative analysis in which it determines the probability of occurrence of the risk, measures the potential financial impact, and adjusts the fixed price of the contract to an appropriate level.

For fixed price contracts in the public sector, 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. The proposed application of these mechanisms for the public-to-private initiative is uncertain, but the proposed law would benefit the Public/Private Partnership (Proyecto para Prestacion de Servicios, or PPS) by introducing options to renegotiate, in good faith, the contract terms in the event of government action to increase the project costs or otherwise reduce contractual benefits to developers.

In recent years, the 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. Even though the Company has entered into contracts with unit pricing in the last years, it believes that fixed price contracts are more prevalent in the construction market and the contracts that the Company enters into in the future will reflect this shift to fixed price contracts.

Additionally, it is expected that due to trends toward financing, future contracts related to concessions, infrastructure construction and industrial construction will restrict price adjustments for additional work performed due to incorrect specifications in the original contract.

Concessions

The return to the Company on any investment in a concession for a highway, bridge, tunnel or wastewater treatment plant is based on the duration of the concession and the amount of capital invested, as well as the amount of the revenues obtained from use, debt servicing costs and other factors. For example, traffic volumes and, consequently, the revenues from highway tolls, are affected by several factors, including toll rates, the quality and proximity of alternate free highways, the price of fuel, taxes, environmental regulations, the purchasing power of the consumer and general economic conditions. The traffic volume of a highway is also strongly influenced by its integration into other highway networks. Generally, the concession contracts and PPS stipulate that the grantor must deliver the right-of way to the land involved in the project in accordance with the construction program. If the grantor does not timely release such rights of way, the Company might be required to incur additional investments and suffer delays at the start of operations and could therefore find it necessary to seek amendments to the concession contract or PPS. ICA cannot ensure that it will reach agreement on the amendments to any of such contracts. Particularly in relation to new projects, in which it absorbs construction costs, cost overruns may generate a higher base investment than that expected, which results in a lower return on investment. Based on these factors, there is no assurance that its return on any investment in a highway, bridge, tunnel or residual water treatment plant concession matches the estimates established in the respective concession contract or PPS.

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The concession agreements are some of the principal assets of ICA, and it could not continue with the operations of any specific concession without the concessionaire rights granted by the governments involved. The granting governments may revoke any concession as established in the agreements themselves and in the law applicable to the concession, which reasons might include that the development and/or maintenance programs were not duly fulfilled, that the operations were temporarily or permanently suspended, that the Company was unable to pay damages resulting from the operations, that it exceeded the maximum rates or that it did not comply with any significant other conditions of a concession.

Additionally, the Mexican government may also terminate a concession, at any time, through a reversion of rights if, in accordance with applicable Mexican laws, it were considered to be in the public interest. The Mexican government may also assume the operation of a concession in the event of war, public unrest or a threat to national security. Furthermore, in the event of force majeure, the Mexican government may demand that ICA make specific changes in its operations. In the event of a reversion of assets in the public domain that were subject to the concessions held by the Mexican government, under Mexican laws, generally ICA may demand compensation for the value of the concessions or the extra costs incurred.

By the same token, if the government took over the operations of ICA, provided that it was not for reasons of war, compensation may be sought from the government and from any third parties involved, for any resulting damages. Other governments generally have similar conditions in their construction contracts and in the applicable law. ICA cannot ensure that it would receive any compensation in a timely fashion or for an amount equivalent to the value of its investment in the concession, plus the respective lost profits or damages.

Interest rate risk management – This risk principally stems from changes in the future cash flows of debt entered into at variable interest rates (or with short-term maturity and presumable renewal) as a result of fluctuations in the market interest rates. The purpose of managing this risk is to lessen the impact in the cost of the debt due to fluctuations in such interest rates. To mitigate this risk, ICA enters into financial derivatives which ensure fixed interest rates, establish maximum limits (ceilings) or narrow fluctuation bands for interest payments, relative to a substantial portion of any debt affected by such risk.

The risk is also managed by ICA through maintaining an appropriate combination of fixed rate loans and variable rate loans, and using hedging and futures contracts for interest rates. Hedging activities are assessed regularly so that they are in line with the interest rates and the identified risk so as to ensure that the most profitable hedging strategies are applied. As of December 31, 2013, the Company had an approximate Ps.39,413 million in outstanding debt, of which 52% has a fixed interest rate and the 48% a variable interest rate. As of December 31, 2012, ICA had approximately Ps.47,711 million of outstanding debt, of which 64% had a fixed interest rate and the 36% a variable interest rate. As of December 31, 2011, ICA had approximately Ps.46,884 million of outstanding debt, of which 22% had a fixed interest rate and the 78% a variable interest rate. The interest rate on the variable rate debt of ICA is generally based on reference to the LIBOR rate and the TIIE rate.

ICA has entered into cash flow hedge contracts, including cash flows in foreign currency and other commercial derivative instruments for the duration of some of its long-term lines of credit, in order to reduce uncertainty due to interest rate fluctuations.

Analysis of interest-rate sensitivity – The following sensitivity analyses are based on the assumption of an adverse change in basis points, in the amounts indicated, applicable to each category of variable rate financial liability. The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For liabilities accruing interest at a floating rate, the analysis is prepared assuming the amount of liability outstanding at the end of the year was outstanding throughout the year. These sensitivity analyses cover all the debt of ICA and its financial derivatives. ICA determines its sensitivity analyses by applying the hypothetical interest rate to its outstanding debt and making adjustments due to such fluctuations for the debt which is hedged by the financial derivatives.

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For the year ended December 31, 2013, a hypothetical, instantaneous and adverse change of 100, 50 and 25 basis points in the interest rate applicable to the variable rate financial liabilities, including financial derivatives only if they are held for hedging purposes, would have resulted in an additional financing expense of approximately Ps.169 million, Ps.87 million and Ps.43 million, respectively. For the year ended December 31, 2012, a hypothetical, instantaneous and adverse change of 100, 50 and 25 basis points in the interest rate applicable to the variable rate financial liabilities, including financial derivatives only if they are held for hedging purposes, would have resulted in an additional financing expense of approximately Ps.73 million, Ps.37 million and Ps.18 million, respectively. For the year ended December 31, 2011 a hypothetical, instantaneous and adverse change of 100, 50 and 25 base points in the interest rate applicable to the variable rate financial liabilities, including financial derivatives only if they are held for trading purposes, would have resulted in an additional financing expense of approximately Ps.114 million, Ps.58 million and Ps.28 million, respectively.

Foreign exchange risk management –The Company performs transactions denominated in foreign currency; consequently, it is exposed to exchange rate risks, which are managed within the parameters of established and approved policies by using, as the case may be, exchange rate forward contracts when they are considered effective. The main risk related to the exchange rate involves changes in the value of the Mexican peso against the U.S. dollar.

In fixed price, lump sum or guaranteed maximum price contracts, estimates are made to try and contemplate the risk of fluctuations in the exchange rate between the Mexican peso and other currencies in which the contracts are expressed, included the related financing agreements, or other contracts entered into for the purchase of supplies, machinery or raw materials, ordinary expenses and other inputs. A severe devaluation or appreciation of the Mexican peso could also result in an interruption in the international currency markets and could limit the ability to transfer or convert pesos to U.S. dollars and other currencies in order to make timely payments of interest and principal on the related obligations expressed in U.S. dollars or in other currencies. Although the Mexican government does not currently restrict, and has not restricted since 1982, the right or ability of Mexican individuals or business entities to convert pesos into U.S. dollars or other currencies, or to transfer them outside Mexico, the Mexican government could institute exchange control policies in the future. It cannot be guaranteed that the Banco de Mexico will maintain its current policy regarding the peso. The fluctuation of the currency may have an adverse effect on the Company’s financial position, results of operations and cash flows in future years.

For the year ended December 31, 2013, approximately 32% of consolidated revenues were expressed in foreign currencies, mainly U.S. dollars. An appreciation of the Mexican peso against the U.S. dollar would reduce the dollar-denominated revenues and the Company’s obligations under dollar-denominated debt when expressed in pesos, whereas a depreciation of the peso against the U.S. dollar would increase the Company’s dollar-denominated revenues and obligations under debt agreements when expressed in pesos.

For the year ended December 31, 2013, 2012 and 2011, approximately 26%, 43% and 12%, respectively, of the Company’s backlog was denominated in foreign currencies, and approximately 23%, 9% and 55%, respectively, of the accounts receivable were denominated in foreign currencies. For the year ended December 31, 2013, 2012 and 2011, approximately 23%, 6% and 39%, of consolidated financial assets were denominated in foreign currencies and the rest in Mexican pesos. Furthermore, for the year ended December 31, 2013, 2012 and 2011, approximately 43%, 36% and 50%, respectively, of consolidated debt was expressed in foreign currencies. A depreciation of the Mexican peso against the U.S. dollar would increase the peso value of the costs and expenses denominated in foreign currency and, unless they were denominated in the same currency as the source of payment (as established by ICA’s risk management policies), increase the obligations for debt expressed in foreign currency. For the year ended December 31, 2013, the Mexican peso appreciated against the U.S. dollar by 1.75%, related to the foreign exchange rate existing of the year ended 2012.

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Foreign currency sensitivity analysis– The following sensitivity analyses are based on an instantaneous and unfavorable change in exchange rates which affect the foreign currencies in which the Company transacts. These sensitivity analyses cover all the assets and liabilities denominated in foreign currency, as well as its derivative financial instruments. Sensitivity is determined by applying a hypothetical exchange rate change to those items, including the outstanding debt expressed in foreign currency, subsequently adjusting for this fluctuation for debt hedged by derivative financial instruments.

As of December 31, 2013, a hypothetical, instantaneous, unfavorable changed in the exchange rate of 100 Mexican cents to the exchange rate applicable to the Company’s receivables, payables and debt, including derivative financial instruments not held for trading purposes (and excluding the debt hedged by instruments held for trading purposes), would have resulted in an estimated exchange loss of approximately Ps.1,273 million, based on the highest value in pesos of the debt expressed in foreign currency. As of December 31, 2013, the Company did not hold any derivative financial instruments for trading purposes, except as mentioned in Note 26.b.

UDI exchange rate risk management – Although a portion of the Company’s long-term debt is denominated in UDIs, there is no exchange risk because the Trust Securitization Certificates (CBFs) were issued in the same currency as that in which the payments to be received from the federal government agency will be denominated under the project to which the debt is related.

UDI sensitivity analysis – As of December 31, 2013, 2012 and 2011, 12%, 30% and 20% of the Company’s debt, respectively is denominated in UDIs, which corresponds to the Sarre, Papagos and Mayab debt, in which a natural hedge exists because the revenues received under the project are indexed for inflation on a monthly basis using the INPC published by the National Institute of Geography and History (“INEGI”). The liabilities of Sarre and Papagos as of December 31, 2013, are presented as liabilities associated with assets held for sale.

The sensitivity analysis does not reflect the inherent exchange risk because the Company’s exposure at year-end does not reflect its exposure throughout the year.

The carrying values of monetary assets and liabilities denominated in foreign currency at the end of the reporting period are as follows (amounts in thousands):

	Liabilities				Assets
	December 31,				December 31,
Currency	2013		2012		2013		2012
U.S. dollars		Ps. 15,340,514		Ps. 19,517,089		Ps. 4,412,113		Ps. 4,393,025
Euros		542,706		660,612		71,473		92,122
Soles		438,732		2,169,135		1,364,301		1,180,154
Colombian pesos		39,348		—		618,509		—
UDIs		3,305,329		6,970,820		—		—

Pertinent exchange rate information at the date of the consolidated statements of financial position is as follows:

	December 31, 2013		December 31, 2012
	FIX		Buy		Sell
US dollar exchange rate
Interbank		Ps. 13.0652		Ps. 12.8409		Ps. 12.8609
Euro exchange rate				16.7388		17.2205
			December 31
			2013		2012
UDI exchange rate				Ps. 5.0587		Ps. 4.8746

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As of March 18, 2014, the issuance date of financial statements, the interbank FIX rate was Ps.13.1675.

d. Credit risk

Credit risk management – Credit risk refers to the risk whereby one of the parties defaults on its contractual obligations, thereby generating a financial loss for ICA. To the extent possible, the objective of this risk management is to reduce its impact by reviewing the solvency of the Company’s potential customers. Once contracts are underway, the credit rating of uncollected amounts is periodically evaluated and estimates are revised for allowance for doubtful accounts with corresponding entries to the statements of income and other comprehensive income in the period of the revision. The credit risk has historically been very limited.

The Company’s maximum credit risk exposure is presentd in the amounts included in the table in subsection b) as well as within the past due but not impaired analysis of accounts receivable, included in Note 7.

ICA has adopted the policy of only doing business with solvent parties and obtaining sufficient collateral when necessary, so as to mitigate the risk of financial losses derived from potential default. The Company only performs transactions with entities with the best possible risk rating. The Company’s credit exposure is reviewed and approved by senior management committees. The credit risk derived from cash, cash equivalents and derivative financial instruments is limited because counterparties are banks with high credit ratings assigned by credit bureaus. The financial instruments which potentially expose the Company to credit risks are primarily composed by receivable certifications and uncertified work completion (generically known as “construction instruments”) and other accounts receivable.

Claims are occasionally filed against customers for additional project costs which exceed the contract price or for amounts which were not included in the original contract price, including modification orders. This type of claim is filed for issues such as delays attributable to the customer, higher unit prices or the modification of the initial project scope, thereby resulting in additional indirect or direct costs. These claims are often subject to long arbitration or legal processes or procedures involving external experts, meaning that it is difficult to accurately forecast when they will be definitively resolved. When this occurs and it has unresolved claims, ICA can invest significant amounts of working capital in projects to cover excess costs while claims are resolved. Regarding particular modification orders, ICA can reach an agreement with the customer regarding the work scope, albeit without determining the final price. In this case, the opinion of external experts may be required to appraise unfavorable prices determined outside the Company’s control. As of December 31, 2013 and 2012, ICA had an allowance for doubtful accounts of Ps.897 and Ps.1,401 million related to commercial contracts and accounts receivable, including an allowance for doubtful accounts of Ps.146 million pesos in the Airport segment related to the bankruptcy of the airlines of the Mexicana Group. The failure to quickly recover resources from this type of claim and modification orders could have a significant adverse effect on the Company’s liquidity and financial position.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by recognized rating agencies.

The Company does not have any kind of guarantees or other credit enhancement to cover its credit risk associated with financial assets.

Other accounts receivable are composed by amounts receivable from associated companies and notes receivable. The Company considers that these amounts will not result in a significant credit risk concentration.

e. Liquidity risk

Liquidity risk management – This risk is generated by temporary differences between the funding required by the Company to fulfill business investment commitments, debt maturities, current asset

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requirements, etc., and the origin of funds generated by the regular activities of ICA, different types of bank financing and disinvestment. The objective of ICA in the management of this risk is to maintain a balance between the flexibility, period and conditions of credit facilities contracted to manage short, medium and long-term funding requirements. In this regard, the Company’s use of project financing and debt with limited resources described in Note 27 and the short-term financing of current assets are significant. The Executive Committee of ICA is ultimately responsible for liquidity management. This Committee has established appropriate liquidity management guidelines. The Company manages its liquidity risk by maintaining reserves, financial facilities and adequate loans, while constantly monitoring projected and actual cash flows and reconciling the maturity profiles of financial assets and liabilities. Additionally, as mentioned in Note 27, the Company has available credit lines for working capital.

The following table details the remaining contractual maturity for the financial liabilities of the Company with agreed repayment periods. This table has been prepared based on the projected non-discounted cash flows of financial liabilities at the date on which ICA must make payments. The table includes projected interest cash flows such as disbursements required for the financial debt included in the consolidated statement of financial position. As interest is accrued at variable rates, the non-discounted amount is derived from interest rate curves at the end of the reporting period. Contractual maturity is based on the earliest date when ICA must make the respective payment.

As of December 31, 2013	1 year		Up to 2 years		Up to 3 years		Up to 4 years		Up to 5 years		Up to 6 years and thereafter		Total
Derivative financial instruments	Ps.	1,472,884	Ps.	1,155,795	Ps.	701,134	Ps.	189,246	Ps.	78,760	Ps.	52,895	Ps.	3,650,714
Notes payable		8,901,699		—		—		—		—		—		8,901,699
Long-term debt		3,276,779		3,235,696		4,073,787		7,368,678		2,122,818		31,790,544		51,868,302
Trade accounts payable		6,439,800		—		—		—		—		—		6,439,800
Other accounts payable and accrued expenses		7,287,433		—		—		—		—		—		7,287,433
Other long-term liabilities		—		518,561		199,085		183,470		14,567		1,958,008		2,873,691
Total	Ps.	27,378,595	Ps.	4,910,052	Ps.	4,974,006	Ps.	7,741,394	Ps.	2,216,145	Ps.	33,801,447	Ps.	81,021,639
As of December 31, 2012	1 year		Up to 2 years		Up to 3 years		Up to 4 years		Up to 5 years		Up to 6 years and thereafter		Total
Derivative financial instruments	Ps.	1,654,094	Ps.	1,472,884	Ps.	1,155,795	Ps.	701,134	Ps.	189,246	Ps.	131,655	Ps.	5,304,808
Notes payable		9,571,363		—		—		—		—		—		9,571,363
Long-term debt		4,185,872		4,495,558		4,828,930		5,149,739		7,844,626		42,318,108		68,822,833
Trade accounts payable		6,237,084		—		—		—		—		—		6,237,084
Other accounts payable and accrued expenses		5,416,386		—		—		—		—		—		5,416,386
Other long-term liabilities		—		692,071		212,728		186,065		111,789		1,075,115		2,277,768
Total	Ps.	27,064,799	Ps.	6,660,513	Ps.	6,197,453	Ps.	6,036,938	Ps.	8,145,661	Ps.	43,524,878	Ps.	97,630,242

The amounts forming part of the debt contracted with credit institutions include fixed and variable rate instruments. Variable-rate financial liabilities are subject to change when variable interest rates differ from the estimated interest rates determined at the end of the reporting period for which reporting is presented at fair value.

The Company expects to meet its liabilities with its operational cash flows and resources received from the maturity of its financial assets. Furthermore, the Company has access to revolving credit lines with different banking institutions.

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f. Financial instruments at fair value

This note provides information about how the Company determines fair values of various financial assets and financial liabilities. Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used):

Financial assets and liabilities	Fair value at December 31,		Fair value hierarchy	Valuation technique (s) and key input(s)	Significant unobservable input(s)	Relationship of unobservable inputs to fair value
	2013	2012
Foreign currency forward contracts (see Note 26)	Assets: Ps.363,146 Liabilities: Ps.58,874	Assets: Ps.107,678 Liabilities: Ps.111,568	Level 2	Discounted cash flow. Future cash flows are estimated based on forward exhange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.	NA	NA
Interest rate swaps	Liabilities designated for hedging: Ps.(266,141) Liabilities designated for negociation: Ps.(8,922)	Assets: Ps.(317,993)	Level 2	Discounted cash flow. Future cash flows are estimated based on forward interest rates (from observable yield curves at the end of the reporting period) and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties.	NA	NA
Investment properties	Asset: $491,579	Asset: $491,579	Level 2	The fair value was determined based on the market comparables that reflects recent transaction prices for similar properties	Specific characterics related to the Company’s property obtained through market research by different media, direct visits to comparable properties and mass-media	NA
Contingent consideration in business combination (see note 22 and 24)	Liabilities: Ps.1,077,849	Liabilities: Ps.646,349	Level 3	Discounted cash flow	Probability-adjusted revenues and profits, with a range from Ps.100,000 to Ps.150,000 and a range from Ps.60,000 to Ps.90,000 respectively.	The higher the amounts of revenue and profit, the higher the fair value.

The only financial liabilities subsequently measured at fair value on Level 3 fair value measurement represent contingent consideration relating to the acquisition of San Martin (see 3.h).

During the reporting period there were no transfers between Level 1 and 2.

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Except as detailed in the following table, the Company considers that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

	December 31, 2013				December 31, 2012
	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets:
Financial assets from concessions	Ps.	3,332,185	Ps.	3,332,185	Ps.	12,087,251	Ps.	12,087,251
Financial liabilities:
Long-term bank loans		29,669,918		37,584,388		37,184,339		42,609,196
Contingent consideration		1,077,849		1,077,849		646,349		646,349
	Fair value hierarchy as at December 31, 2013
	Level 1		Level 2		Level 3		Total
Financial assets:
Financial assets from concessions	Ps.	—	Ps.	3,332,185	Ps.	—	Ps.	3,332,185
Financial liabilities:
Long-term bank loans	Ps.	—	Ps.	29,669,918	Ps.	—	Ps.	29,669,918
Contingent consideration		—		—		1,077,849		1,077,849
	Ps.	—	Ps.	29,669,918	Ps.	1,077,849	Ps.	30,747,767

The fair values of the financial assets and financial liabilities included in the level 2 and level 3 categories above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.

31. Stockholders’ equity

a. Equity risk management

The objectives of ICA with respect to management of equity risk is to maintain an optimum financial-net worth structure, to reduce capital costs and safeguard its capacity to continue its operations with solid indebtedness ratios.

ICA is not subject to any externally imposed requirements for managing capital.

The Executive Committee quarterly reviews the Company´s equity structure. As part of this review, the Committee considers the cost of capital and the risks associated with each class of equity.

The equity structure is essentially managed through the maintenance of adequate levels of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), which is calculated in the following manner: income attributable to controlling interests plus income attributable to non-controlling interests, discontinued operations, income taxes, other expenses (income), net, plus the participation in the equity held in unconsolidated subsidiaries and associated entities, plus borrowing costs, depreciation, amortization and the borrowing costs included in the cost of sales of projects financed during the construction stage:

	Year ended December
	2013			2012			2011
Income from controlling interests	Ps.	423,554		Ps.	955,038		Ps.	1,437,135
Income from non-controlling interests		998,799			574,193			309,954
Discontinued operations		(722,680	)		(566,658	)		(1,577,402	)
Income taxes		(595,905	)		(34,792	)		(337,683	)
Share in results of associated companies		(350,198	)		(409,051	)		(286,033	)
Borrowing costs		3,379,003			1,159,846			3,321,463
Depreciation and amortization		1,022,320			929,299			1,130,448
Interest expense (income) included in cost of sales		580,561			1,132,584			1,092,529
EBITDA	Ps.	4,735,454		Ps.	3,740,459		Ps.	5,090,411

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b. At December 31, 2013, the authorized common stock of the Company amounts to Ps.8,503 million and is integrated by a single class of common stock without par value, comprised of the following:

	Shares		Amount
Subscribed and paid shares		617,174,656		Ps.8,502,720
Shares held in treasury		7,163,400		95,187
		610,011,256		Ps.8,407,533

c. At the Ordinary Shareholders’ Meeting held on April 19, 2013 and November 17, 2011, the shareholders approved an increase in the reserve fund for the purchase of Company shares up to Ps.2,140 and Ps.1,850 million, respectively, authorizing the availability to repurchase shares of the Company up to that maximum amounts. At a previous Ordinary Shareholders’ Meeting on April 14, 2011, the shareholders approved a maximum reserve of Ps.1,000 million for the repurchase of Company shares.

d. Share plan– At December 31, 2005, the number of shares held in treasury assigned to meet the Company’s obligation under the employee bonus plan was 9,647,899, of which at December 31, 2008, 3,308,313 shares were granted. During 2010 and 2009, 3,627,389 and 2,819,452, respectively, of shares were issued to executives and employees of ICA, considering transfer of 107,255 shares of Option Plan described in the next paragraph.

At the stockholders’ special meeting on June 25, 2009, the stockholders agreed i) to transfer 231,887 treasury shares held to meet the requirements of the Option Plan, whose rights were not exercised in accordance with the deadline for assignment under the Option Plan, to the Share Plan for executives of Empresas ICA, ii) future transfers of shares to the Share Plan for executives of Empresas ICA, of the shares assigned to the Option Plan that have not been exercised in accordance with the deadlines.

ICA also offered an Option Plan for executives and employees, whose term ended in 2010. Upon cancellation of the plan, 370,827 shares designated to meet the requirements of this plan were transferred to the Share Plan for executives of Empresas ICA. The balance of treasury shares designated for the Share Plan for executive of Empresas ICA as of December 31, 2013 is 495,459.

e. During 2013 and 2012, the Company repurchased 6,409,430 and 4,207,000 of its own shares respectively, with a value of Ps.23,174 and Ps.57,983 (nominal value), respectively.

f. Equity forward – During May 2012, ICA entered into an equity forward to be settled in cash with respect to 22,280,100 shares of its capital, from May 22, 2012 to August 21, 2013 in non-consecutive terms, at a weighted average strike price of Ps.24.99, equivalent to an amount of Ps.556.8 million. The total amount of shares subject to the instrument represents 3.67% of the outstanding shares of the Company.

In the event that market conditions are favorable and the instruments are exercised, the Company will record the exercised amount in the reserve for repurchase of shares, according to the Policy and Regulations for the acquisition and placement of treasury shares approved by the Board of Directors. The amount paid out at maturity of the instruments is determined by multiplying the number of the shares under the contract exercised at the maturity date by the strike price.

In the event that the Company does not exercise the instruments, the settlement price will be the difference between the strike price and the market value of the shares of ICA. On a quarterly basis, the fair value of the forward contracts will be determined in the same manner, and the effects are recognized within the effects of valuation of financial instruments line item in the consolidated statement of income and other comprehensive income. On August, 2013, the instrument was renewed.

As of December 31, 2013, the fair value of the instrument resulted in a charge of Ps.83,934 to equity.

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g. Stockholders’ equity, except restated paid-in capital and tax retained earnings, will be subject to income tax at the rate in effect when a 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.

h. Retained earnings include the statutory legal reserve. The General Corporate Law requires that at least 5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (historical pesos). The legal reserve may be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason. As of December 31, 2013 and 2012, the legal reserve, was Ps.325,621 and Ps.307,638.

32. Share-based payment

ICA has established a share-based compensation plan for executive middle- and upper-level management. Middle- and upper-level management identified as key manage personal and personnel with significant potential will obtain a stock bonus under the plan, awared with ordinary shares of ICA.

The number of shares granted is calculated in accordance with the performance-based formula approved by the Compensation Committee (“Committee”). The formula rewards executives and middle- and upper-managment based on their individual achievements and their contribution to the Company, evaluated based on both quantitative and qualitative criteria stemming from the following measures: performance and achievement of goals and objectives, conduct in accordance with the principles of teamwork and morals, integrity, service attitude, and achievement and adherence to the Code of Ethics and corporate policies.

The Company has established the following policies regarding the calculation of the performance bonus: if the net income of ICA represents 4% or less of the value of stockholders’ equity or less, the bonus will not be paid, and if the net income of ICA represents more than 4%, the amount of the stock bonus may not exceed 20% of the amount of net income, which should also not exceed 4% of equity.

Once the stock bonus has been authorized by the Committee, ICA will transfer shares (either shares repurchased under ICA’s repurchase program or new shares issued for the bonus program, as approved by the shareholders) to the Administration Trust 11971-5 that was established on April 8, 1992 (“Trust”), with the National Bank of Mexico as trustee. Bonds within the Trust can be designated by the technical committee to purchase shares in the name of those who received a bonus. All dividends paid with respect to the shares included in the Trust also are placed within the Trust. At the discretion of the technical committee, dividends on shares assigned to participants in the Trust may be paid in cash or are used to purchase shares at the prevailing market price for the benefit of the respective employee. If an employee terminates is working relationship with the Company, such employee is entitled to receive, via partial periodic payments, its respective shares; certain exceptions may be permitted to accelerate those payments to the former employee. The Trust may, but is not required to, buy the shares constituting such partial periodic payments. All dividends received with respect to the shares owned by any former employee are paid to such former employee.

Members of the administration that stop working for the Company are entitled to receive, in annual installments, the shares credited to their accounts in the management trust. From time to time, certain exceptions may be made to these rules to allow employees that stop working for the Company to receive shares on an accelerated basis.

During the years ended December 31, 2013, 2012 and 2011, the Company made share-based payments of 4,335,094, 6,885,385, and 3,785,611, shares, respectively. The shares issued were valued at Ps.13.78 per share, corresponding to the theoretical value of the shares in circulation (subscribed and paid capital) at the date of their grant. The Company recorded Ps.59.7 million, Ps.95 million and Ps.52 million as an increase to its common stock during 2013, 2012 and 2011, respectively. The fair value of the shares paid as a bonus to the date of grant, amounted to Ps.33.26, Ps.20.65 and Ps.28.05, respectively, according to the market market value of the stock as listed on the Mexican Stock Exchange (“BMV”). This fair value was used to determine compensation cost of Ps.144,185, Ps.142,183 and Ps.106,193 for 2013, 2012 and 2011, respectively.

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33. Non-controlling interest in consolidated subsidiaries

Non-controlling interest consist of the following:

	Year ended December 31
	2013		2012		2011
Common stock	Ps.	1,996,392	Ps.	2,484,964	Ps.	3,062,766
Contributions for future capital increases		2,472		2,472		143,031
Retained earnings and others		3,556,498		1,546,661		981,798
	Ps.	5,555,362	Ps.	4,034,097	Ps.	4,187,595

The fluctuation in the non-controlling interest mainly occurs because of the effects of dividends received as well as the effects of incorporation of subsidiaries or the purchase or sale of non-controlling interests.

34. Assets classified as held for sale and discontinued operations

a. As mentioned in Note 2, the Company entered into a Letter of Intent for the sale of the shareholding of Sarre and Papagos, which was formalized, whereby a subsidiary of Hunt acquired the 70% shareholding of CONOISA in DDIO. Based on the foregoing, the assets and liabilities of Saare and and Papago are presented as assets held for sale and liabilities directly associated with assets held for sale in the consolidated statement of financial position as of December 31, 2013; the results of Sarre and Papagos are also presented within discontinued operations in the consolidated statements of income and other comprehensive income and cash flows, which were retrospectively adjusted to reflect the discontinued operation.

b. As mentioned in Note 2, on August 24, 2011, ICA negotiated the sale of the “Corredor Sur” toll highway, a concession segment subsidiary, to Empresa Nacional de Autopistas, S.A. de C.V. (“ENA”). Amounts are presented within discontinued operations in the consolidated statement of income and other comprehensive income.

c. Discontinued operations is integrated as follows:

	Year ended December 31,
	2013		2012			2011
Net revenues	Ps.	2,801,368	Ps.	6,542,201		Ps.	2,755,577
Services cost		930,522		6,039,391			2,589,100
Gross profit		1,870,846		502,810			166,477
Operating expenses		18		93			87
Other income		—		(174,831	)		—
Operating income		1,870,828		677,548			166,390
Finance expenses (income)		906,580		(19,680	)		—
Income before income taxes		964,248		697,228			166,390
Income taxes		241,568		130,570			72,847
Gain on sell of Corredor Sur(1)		—		—			1,483,859
Income from discontinued operations	Ps.	722,680	Ps.	566,658		Ps.	1,577,402

(1) Related to the sale of Corredor Sur, see following subsection f.

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d. Assets and liabilities held for sale corresponding to Sarre and Papagos, as well as investments in associates of Concesionaria Distribuidor Vial San Jeronimo-Muyuguarda, S.A. de C.V. (“AUSUR”) and Aguas Tratadas del Valle de Mexico, S.A. de C.V. (“ATVM”), are as follows:

	December 31, 2013
Assets:
Cash and cash equivalents	Ps.	1,584,632
Accounts receivable		317,285
Investment in associated companies (1)		919,652
Intangible assets from concessions, net		9,386,373
Other assets		482,140
	Ps.	12,690,082
Liabilities:
Notes payable	Ps.	9,840,362
Other liabilities		720,366
	Ps.	10,560,728

(1) In December 2013, the Company signed a binding and enforceable Letter of Understanding with Promotora del Desarrollo de America Latina, S.A. de C.V. (“IDEAL”) for the sale of ICA’s participation in the following companies: 30% de Concesionaria Distribuidor Vial San Jeronimo-Muyuguarda, S.A. de C.V. (“AUSUR”) and 10.20% de Aguas Tratadas del Valle de Mexico, S.A. de C.V. (“ATVM”). The purchase price is Ps.1,000 million and will be paid by IDEAL when the governmental and third party approvals will be obtained. Both parties agree that the effective date of the transaction will take place no later than within 90 days from the date of signing the Letter of Understanding.

They also agreed that if ICA, (a) refuses to execute and / or execute the contracts, agreements and / or instruments necessary to formalize the acquisition of shareholding by IDEAL per the terms agreed in the Letter of Understanding, ICA will be required to pay a penalty to IDEAL of Ps.100 million. The same penalty shall be paid by IDEAL to ICA if IDEAL fails to comply the the aforementioned agreements, including making payments.

In June 2013, IDEAL granted the company a loan Ps.600 million for working capital. Both companies agree that payment for the sale of the shareholding will be used for the payment of principal, interest and other financial attachments; any remaining amount shall be delivered to the Company.

Based on the above, the investment in associates was classified under current assets as held for sale.

e. Condensed financial information of Corredor Sur is as follows:

	Eight months ended August 31, 2011
Net revenues	Ps.	476,145
Services cost		114,749
Gross profit		361,396
Operating expenses		25,976
Operating income		335,420
Finance expenses		661,038
Loss before income taxes		(325,618	)
Income taxes		20,752
Loss from discontinued operations	Ps.	(304,866	)

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f. Gain on sale of Corredor Sur is comprised as follows:

	September, 2011
Consideration received	Ps.	3,277,147
Less:
Net assets sold		64,211
Others (1)		372,584
Loss for the period		304,866
Income tax attributable to the operation		1,051,627
Gain on sale of subsidiary	Ps.	1,483,859

⁽¹⁾  Includes gain from foreign operations for Ps.73 million generated through the date of disposal and provision for legal indemnizations for Ps.333 million.

Gain sale of subsidiary is presented in income from discontinued operations in the consolidated statement of income and other comprehensive income.

Net cash flows from the sale of the subsidiary:

	December 31, 2011
Consideration received in cash	Ps.	3,277,147
Less: balance of cash and equivalents from discontinued operations		322,474
Net movement in cash from discontinued operation	Ps.	2,954,673

g. Basic and diluted earnings, per share from discontinued operations for the year ended December 31, 2013, 2012 and 2011, amounted to Ps.1.185, Ps.0.935 and Ps.2.498, respectively.

35. Continuing operations

a. Income from continuing operations are:

	Year ended December 31,
	2013		2012		2011
Construction revenue	Ps.	13,048,172	Ps.	17,340,135	Ps.	19,069,437
Interest income from construction contract		832,201		597,475		838,297
Construction revenue by concessions		6,182,727		11,224,268		7,193,908
Revenue from concessions		434,823		468,360		747,075
Revenue from airports		3,243,657		2,836,945		2,627,367
Interest income from concessions		672,028		450,755		508,461
Revenue from mining		2,738,861		1,414,462		—
Revenue from services		943,982		687,089		216,967
Revenues from sale of housing, goods and other		894,186		2,484,700		2,467,037
Rental income		415,560		439,512		440,095
Royalties		149,997		178,420		150,203
	Ps.	29,556,194	Ps.	38,122,121	Ps.	34,258,847

Note 41, segment information, presents an analysis of revenues for the Company’s main products and services.

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b. Cost of sales from continuing operations consist of the following:

	Year ended December 31,
	2013		2012		2011
Direct cost	Ps.	17,850,019	Ps.	25,093,469	Ps.	24,853,553
Indirect cost		5,000,428		6,223,203		2,493,335
Cost of sales of housing		593,196		1,853,333		1,713,384
Cost of sales of real estate		29,169		13,764		6,078
Others		—		14,453		(88,541	)
	Ps.	23,472,812	Ps.	33,198,222	Ps.	28,977,809

c. Costs and expenses for depreciation, amortization and employee benefits are as follows:

	Year ended December 31, 2013
	Direct cost		Indirect cost		General expenses		Total
Depreciation	Ps.	438,872	Ps.	82,402	Ps.	26,630	Ps.	547,904
Amortization of concessions		109,200		301,051		—		410,251
Amortization of other assets		—		40,790		23,376		64,166
Wages and salaries		2,795,057		1,917,769		590,522		5,303,348
Development and improvements		3,232		4,645		26,059		33,936
Bonus to employees		—		—		87,832		87,832
Statutory employee profit sharing expense		—		—		39,588		39,588

	Year ended December 31, 2012
	Direct cost		Indirect cost		General expenses		Total
Depreciation	Ps.	347,307	Ps.	79,503	Ps.	105,500	Ps.	532,310
Amortization of concessions		307,920		65,191		—		373,111
Amortization of other assets		—		1,422		22,457		23,879
Wages and salaries		3,262,235		1,921,689		1,109,859		6,293,783
Development and improvements		2,604		7,025		22,481		32,110
Bonus to employees		—		—		81,753		81,753
Statutory employee profit sharing expense		—		—		21,267		21,267

	Year ended December 31, 2011
	Direct cost		Indirect cost		General expenses		Total
Depreciation		Ps. 360,009		Ps. 62,892		Ps. 26,798		Ps. 449,699
Amortization of concessions		407,889		32,521		—		440,410
Amortization of other assets				213,483		26,855		240,338
Wages and salaries		5,023,314		188,899		934,564		6,146,777
Development and improvements		975		5,767		18,961		25,703
Bonus to employees		—		—		48,096		48,096
Statutory employee profit sharing expense		—		—		11,659		11,659

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36. Other income, net

Other income, net, consists of the following:

	Year ended December 31,
	2013			2012			2011
Gain on sales of property, plant and equipment		Ps.  (12,387	)	Ps.	(13,051	)	Ps.	(975	)
Gain on sales of shares		(586,472	)		(729	)		(466,821	)(1)
Increase in contingent liabilities		544,392	(3)		—			—
Other		(7,000	)		(436,193	)(2)		(22,347	)
		Ps.(61,467	)	Ps.	(449,973	)	Ps.	(490,143	)

(1) During the year ended December 31, 2011, the gain on the sale of shares, mainly correspond to the sale of CONIPSA and COVIQSA.

(2) For the year ended December 31, 2012, amount includes a gain of Ps.435,681 from changes in the fair value of investment properties.

(3) Adjustment to contingent consideration (See Note 4.g., 22 and 24).

37. Financing cost

Financing cost is detailed as follows:

	Year ended December 31, 2013
				Capitalized in statement of			Results
	Total			financial position			Cost			Financing cost
Interest expense(1)		Ps.  4,146,257			Ps. 465,874			Ps. 714,595			Ps.  2,965,788
Interest income(2)		(412,961	)		(8,748	)		(134,034	)		(270,179	)
Foreign exchange		392,270			—			34,951			357,319
Valuation of derivative financial instruments		326,075			—			—			326,075
Total		Ps. 4,451,641			Ps. 457,126			Ps. 615,512			Ps. 3,379,003

	Year ended December 31, 2012
				Capitalized in statement of			Results
	Total			financial position			Cost			Financing cost
Interest expense(3)		Ps.  4,110,525			Ps. 512,581			Ps. 1,164,372			Ps.  2,433,572
Interest income(2)		(343,186	)		(8,748	)		(31,788	)		(302,650	)
Foreign exchange		(1,197,784	)		—			(71,516	)		(1,126,268	)
Valuation of derivative financial instruments		155,192			—			—			155,192
Total		Ps. 2,724,747			Ps. 503,833			Ps. 1,061,068			Ps. 1,159,846

	Year ended December 31, 2011
				Capitalized in statement of			Results
	Total			financial position			Cost			Financing cost
Interest expense		Ps.  3,340,614			Ps. 501,027			Ps. 1,108,563			Ps.  1,731,024
Interest income(2)		(237,172	)		(7,939	)		(16,034	)		(213,199	)
Foreign exchange		1,332,665			—			(152,491	)		1,485,156
Valuation of derivative financial instruments		318,482			—			—			318,482
Total		Ps. 4,754,589			Ps. 493,088			Ps. 940,038			Ps. 3,321,463

(1) Includes Ps.675.487 related to the discount of tax liability from deconsolidation, arising from definition of specific time period for payment (see Note 28).

(2) Note 41 include the integration of the interest income by business segment.

(3) For the year ended December 31, 2012, interest expense includes Ps.161 million of a premium paid to bondholders for prepayment of certain notes.

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38. Related party balances and transactions

a. The accounts receivable and accounts payable with related parties are as follows:

	December 31,
	2013		2012
Accounts receivable:
Constructora Nuevo Necaxa Tihuatlan, S.A. de C.V.	Ps.	530,196	Ps.	201,359
Red de Carreteras de Occidente, S.A.B. de C.V.		—		269,443
Autovia Necaxa Tihuatlan, S.A. de C.V.		128,267		24,058
Constructora de Infraestructura de Aguas Potosi, S.A. de C.V.		65,370		40,701
Constructora de Infraestructura de Aguas de Queretaro, S.A. de C.V.		—		119,582
ICA Fluor Daniel, S. de R.L. de C.V.		54,464		114,530
Actica Sistemas, S. de R.L. de C.V.		25,047		32,891
Sismologia Burgos, S.A.		9,891		9,980
Proactiva Medio Ambiente Mexico, S.A. de C.V.		8,972		1,438
Constructora Mexicana de Infraestructura Subterranea, S.A. de C.V.		—		401,690
Concesionaria de Vias Irapuato Queretaro, S.A. de C.V.		—		—
Others		27,627		60,549
Total (Note 11)	Ps.	849,834	Ps.	1,276,221

	December 31,
	2013		2012
Accounts payable:
ICA Fluor Daniel, S. de R.L. de C.V	Ps.	385,959	Ps.	343,345
Actica Sistemas, S. de R.L. de C.V.		313,930		222,993
Infraestructura y Saneamiento de Atotonilco, S.A. de C.V.		29,659		—
Others		56,357		56,181
Total (Note 22)	Ps.	785,905	Ps.	622,519

b. Transactions with related parties, carried out in the ordinary course of business, were as follows:

	Year ended December 31,
	2013		2012		2011
Construction revenues		Ps. 3,213,361		Ps. 4,247,803		Ps. 2,893,899
Construction costs		42,586		1,092,509		—
Administrative services provided		421,052		473,663		467,915
Royalties		150,112		178,401		150,199

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c. For the years ended December 31, 2013, 2012 and 2011, the aggregate compensation of the directors and executive officers paid or accrued for services in all capacities, was approximately Ps.262 million, Ps.263 million and Ps.259 million, respectively. The Company also paid non-management Directors Ps.44 thousand pesos of January to April 2013 and Ps.50 thousand pesos of May to December 2013, net of taxes, for each Board of Directors meeting or corporate practices committee, finance and sustainability meeting or audit committee meeting they attended during 2013, 2012 and 2011. Additionally, the Company paid Ps.38 million, Ps.10 million and Ps.15 million of emoluments, net of taxes, to non-management directors and president of the Board of Directors for the year ended December, 31, 2013, 2012, and 2011, respectively.

39. Retirement benefit obligation

The liability for employees derives from the pension plan, seniority premiums and payments at the end of employment to employees upon retirement, are determined based on actuarial computations made by external actuaries, using the projected unit credit method. Seniority premiums consist of a single payment equal to 12 day’s salary for each year of service based on the employee’s most recent salary, but without exceeding twice the current minimum wage established by law.

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 individuals may exercise these benefits after 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 such deferral ended in 2010. During 2012, the pension plan was further modified to provide lifelong benefits for these executive. Also, the Company established an early retirement from age 60 for all employees, provided that they have 10 years of service with the Company.

The plans in Mexico typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk	The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to long- term government bond yields. To select the discount rate is considered the rate of the bond yield that is similar to the duration of the obligations of labor liabilities of the company. This rate is obtained from a company dedicated to provide updated prices for the valuation of financial instruments, as well as comprehensive calculation, reporting, analysis, and risks related to these prices, and that is regulated by the National Banking and Securities Commission. Considering the average days on which would be payable the benefits and not the maturity of the bond, which means that the discount rate will depend on the expected flow of benefit payments from plan.
Interest risk	A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.
Longevity risk	The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk	The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

No other post-retirement benefits are provided to these employees.

The most recent actuarial valuation of the defined benefit obligation were carried out at December 31, 2013 by Mercer, which employs actuaries certified by the Colegio Nacional de Actuarios de Mexico. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

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The principal assumptions used for the purposes of the actuarial valuations were as follows

	December 31,						January 1,
	2013			2012			2012
Discount rate(s)		7.50	%		6.50	%		7.75	%
Expected rate(s) of salary increase		5.5	%		5.5	%		5.5	%
Average longevity at retirement age for current pensioners (years)		16			15			14
Inflation		4	%		4	%		4	%

Amounts recognized in comprehensive income in respect of these defined benefit plans are as follows:

	Year ended December 31
	2013			2012			2011
Service cost:
Current service cost	Ps.	64,692		Ps.	43,988		Ps.	30,244
Past service cost and (gain) loss from settlements		55,799			253,107			50,256
Net interest expense		61,836			42,259			31,169
Components of defined benefit costs recognised in results		182,327			339,354			111,669
Remeasurement on the net defined benefit liability:
Return on plan assets (excluding amounts included in net interest expense)		4,290			(5,000	)		—
Actuarial gains and losses arising from changes in financial assumptions		(111,429	)		—			—
Actuarial gains and losses arising from experience adjustments		78,211			100,189			90,579
Components of defined benefit costs recognized in other comprehensive income		(28,928	)		95,189			90,579
Total	Ps.	153,399		Ps.	434,543		Ps.	202,248

The current service cost and the net interest expense for the year are included in the employee benefits expense in results.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

The information below shows the most significant detail about the plans of the Company.

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The amount included in the consolidated statement of financial position arising from the Company’s obligation in respect of its defined benefit plans is as follows:

	December 31,						January 1
	2013			2012			2012
Present value of funded defined benefit obligation	Ps.	(1,096,259	)	Ps.	(979,602	)	Ps.	(568,680	)
Fair value of plan assets		160,587			165,929			67,095
Net liability arising from defined benefit obligation	Ps.	(935,672	)	Ps.	(813,673	)	Ps.	(501,585	)

Movements in the present value of the defined benefit obligation in the current year were as follows:

	Year ended December 31
	2013			2012			2011
Present value of defined benefit obligation as of January 1		Ps. 979,602			Ps. 568,680			Ps. 380,180
Current service cost		64,692			43,988			30,244
lnterest cost		61,836			42,259			31,169
Remeasurement (gains)/losses:
Actuarial gains and losses arising from changes in financial assumptions		(111,429	)		—			—
Actuarial gains and losses arising from changes in financial assumptions		78,211			100,189			90,579
Liabilities assumed in a business combination		(3,538	)		—			—
Benefits paid		(28,914	)		(28,620	)		(19,955	)
Plan amendments and other		55,799			253,107			56,463
Present value of defined benefit obligation as of December 31		Ps. 1,096,259			Ps. 979,603			Ps. 568,680

Movements in the fair value of the plan assets in the current year were as follows:

	Year ended December 31
	2013			2012			2011
Present value of plan assets as of January 1	Ps.	165,929		Ps.	67,147		Ps.	—
Interest income		9,919			—			—
Contributions from the employer		—			122,967			85,609
Remeasurement gain (loss):
Return on plan assets (excluding amounts included in net interest expense)		(4,290	)		1,296			—
Benefits paid		(10,971	)		(25,481	)		(18,462	)
Present value of defined benefit obligation as of December 31	Ps.	160,587		Ps.	165,929		Ps.	67,147

The fair value of the plan assets at the end of the reporting period for each category, are as follows:

	Fair value of plan assets
	December 31,
	2013		2012
Debt instruments	Ps.	160,587	Ps.	165,929

The fair values of the above debt instruments are determined based on quoted market prices in active markets.

The actual return on plan assets was Ps.9,919 and Ps.5,000, respectively.

F-129

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

• If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Ps.1,046,401 (increase by Ps.1,148,055).

• If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by Ps. 1,117,722 (decrease by Ps.1,066,100).

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

F-130

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the statement of financial position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Each year an Asset-Liability-Matching study is performed in which the consequences of the strategic investment policies are analyzed in terms of risk-and-return profiles. Investment and contribution policies are integrated within this study.

There has been no change in the process used by the Company to manage its risks from prior periods.

The average duration of the benefit obligation at 31 December 2013 is 14 years (2012:13 years).

40. Nonmonetary transactions

During the years ended December 31, 2013, 2012 and 2011, the Company carried out the following nonmonetary transactions, which are not reflected in its consolidated cash flow statement:

a. The Company recognized construction revenues which were exchanged for intangible assets for the year ended December 31, 2013, 2012 and 2011 for the amount of Ps.6,654 million, Ps.8,404 million and Ps.4,726, million, respectively. Construction costs are considered as an operating activity.

b. As of December 31, 2012, the Company reclassified real estate inventories to property, plant and equipment for Ps.780,218.

c. The Company has a long-term balance of real estate inventories of Ps.135,000 which, corresponds to a contractual obligation.

d. The Company sold 100% of the shares of COVIQSA and CONIPSA to RCO, as is mentioned in Note 2. Such acquisition was essentially settled through payments of Ps.1,550 million in shares.

e. In October 2011, ICA obtained a payment in-kind composed by land ownership for the amount of the Ps.152 million (see note 29.c).

f. As discussed in Note 2, until November 2011, the Company jointly controlled the shares of Geoicasa, S.A. de C.V. (Geoicasa) and Grupo Punta Condesa, S.A. de C.V. (Condesa). In December 2011, it sold 50% of the shares of Geoicasa and received the remaining 50% of the shares of Condesa as payment.

g. In November 2011, the Company acquired machinery through capital leases for the amount of Ps.141 million and subsequently recorded an asset and liability for the same amount. The contract has a term of 27 months.

41. Business segment data

Until December 31, 2012, for management purposes, the Company was organized into six major reportable segments which were: Civil Construction, Industrial Construction, Airports, Concessions, Housing Development and Corporate and other. As a result of changes in the Directors of the Company in the second half of 2012 and after a subsequent review of the internal financial information provided to management for decision-making, in addition to the adoption of IFRS 11 “Joint Arrangements”, the management of the Company has concluded that the Industrial Construction segment no longer qualified as an operating segment. Therefore, from the first quarter of 2013 the operations of Industrial Construction were not presented to the Executive Committee and the Board of Directors of the Company as an operating segment.

F-131

Also, as result of the classification of the main assets in the Housing segment as available for sale in the year 2012 and the reversal made in 2013, the Company also ceased presenting this operating segment internally, given the decrease in its importance. Therefore, the Company has four reportable segments remaining. These segments are determined on the basis on which the Company internally reports its segment information. Information by reportable segment is presented considering the internal reports on the business units of the Company, which are reviewed regularly by management for decision-making in the operating area in order to allocate resources to segments and assessing their yield.

Civil Construction

The 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. The Civil Construction segment has also pursued opportunities in other parts of Latin America, the Caribbean, Asia and the United States, and in 2011 was pursuing select opportunities outside of Mexico and performing one construction project in Panama and Colombia. The Civil Construction segment performs activities such as demolition, clearing, excavation, de-watering, drainage, embankment fill, structural concrete construction, concrete and asphalt paving, and tunneling. Fort the years ended December 31, 2013, 2012 and 2011, the Civil Construction segment accounted for approximately 74%, 80% and 79%, respectively, of total revenues.

Airports

Through GACN, ICA operates 13 airports in the Central North region of Mexico pursuant to concessions granted by the Mexican government, including the Monterrey airport. For the years ended December 31, 2013, 2012 and 2011, the Airports segment amounted for 12%, 8% and 8% respectively, of total revenues. 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.

Concessions

The concessions segment focuses on the construction, development, maintenance and operation of long-term concessions of toll roads, tunnels and water projects. For the years ended December 31, 2013, 2012 and 2011, this segment accounts for 13%, 6% and 7%, respectively, of total revenues. The construction work the Company performs on the concessions is included in the Civil Construction segment. During 2013, ICA participated in two highways and a tunnel concessioned under construction and three operating concessioned highways; a tunnel in operation (the Acapulco tunnel), two rehabilitation centers, a bypass and parking lots.

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.

F-132

The 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 the 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. The return on investment in the water treatment concessions is generally based on the volume of water supplied or treated.

To finance the obligations of the projects, ICA typically provides a portion of the equity and the rest is arranged through third party financing, through loans or debt securities. Recourse on the indebtedness is typically limited to the subsidiary engaged in the project. The investment of equity is returned over time once the project is completed. Generally, ICA contributes 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, ICA typically seeks to form a consortium with entities that have expertise in different areas and that can assist us in obtaining financing from various sources.

F-133

A summary of certain segment information is as follows (amounts may not add or tie to other accompanying information due to rounding):

	Construction									Corporate
	Civil			Airports			Concessions			and others			Total segments			Eliminations			Consolidated
December 31, 2013:
External revenues		Ps. 21,744,299			Ps. 3,420,166			Ps. 3,965,464			Ps. 871,875			Ps. 30,001,804			Ps.(445,606	)		Ps. 29,556,198
Intersegment revenues		7,342,320			2,202,203			2,918,253			4,483,261			16,946,037			445,606			17,391,643
Operating income		890,845			1,144,682			1,576,907			(290,534	)		3,321,900			(189,329	)		3,132,571
Financing income		(565,961	)		(154,369	)		(133,324	)		(2,775,048	)		(3,628,702	)		2,714,018			(914,684	)
Financing cost		1,393,547			366,627			1,737,738			2,255,032			5,752,944			(1,459,257	)		4,293,687
Income tax expense (benefit)		207,868			(139,483	)		(1,517,170	)		660,845			(787,940	)		192,035			(595,905	)
Statutory employee profit sharing expense		31,753			7,835			—			—			39,588			—			39,588
Share in operations of associated companies		210,401			—			20,687			119,110			350,198			—			350,198
Segment assets		36,649,140			14,250,035			53,897,437			48,518,089			153,314,701			(51,807,557	)		101,507,144
Investments in associated companies and joint ventures		1,272,266			—			2,281,547			28,929,826			32,483,639			(27,771,501	)		4,712,138
Segment liabilities(1)		28,271,331			5,030,000			39,600,471			28,950,256			101,852,058			(24,476,696	)		77,375,362
Capital expenditures(2)		487,258			488,874			5,860,931			1,276,170			8,113,233			—			8,113,233
Depreciation and amortization		530,204			250,816			218,701			24,217			1,023,938			(1,617	)		1,022,321
Net cash provided by (used in) operating activities		1,057,289			394,740			1,736,553			2,023,257			5,211,839			(5,043,372	)		168,467
Net cash (used in) provided by investing activities		(207,420	)		(1,182,568	)		2,372,051			1,461,943			2,444,006			(1,643,330	)		800,676
Net cash (used in) provided by financing activities		(1,789,510	)		1,089,690			(4,726,774	)		(3,406,282	)		(8,832,876	)		6,680,599			(2,152,277	)
December 31, 2012:
External revenues		30,458,434			3,097,785			2,402,313			2,556,175			38,514,707			(392,586	)		38,122,121
Intersegment revenues		16,823,789			2,209,162			4,700,406			4,361,262			28,094,619			392,586			28,487,205
Operating income		832,984			1,147,297			98,261			(628,676	)		1,449,866			228,710			1,678,576
Financing income		(319,855	)		(57,580	)		(235,689	)		(703,280	)		(1,316,404	)		1,013,754			(302,650	)
Financing cost		563,388			125,535			871,616			838,490			2,399,029			(936,534	)		1,462,495
Income tax expense (benefit)		748,996			82,977			(18,727	)		(627,173	)		186,073			(220,865	)		(34,792	)
Statutory employee profit sharing expense		12,775			8,493			—			—			21,268			—			21,268
Share in operations of associated companies		338,577			—			(93,878	)		164,352			409,051			—			409,051
Segment assets		46,007,964			12,705,184			36,818,816			53,954,020			149,485,984			(51,216,060	)		98,269,924
Investments in associated companies and joint ventures		1,241,130			—			6,352,499			27,230,496			34,824,125			(26,409,003	)		8,415,122
Segment liabilities(1)		35,472,310			5,327,824			29,336,121			33,301,725			103,437,980			(25,601,957	)		77,836,023
Capital expenditures(2)		593,509			198,873			1,492,162			1,916,877			4,201,421			—			4,201,421
Depreciation and amortization		387,488			219,843			155,930			110,500			873,761			55,539			929,300
Net cash provided by (used in) operating activities		8,114,900			572,656			(776,719	)		(3,326,628	)		4,584,209			1,845,492			6,429,701
Net cash (used in) provided by investing activities		(266,108	)		(314,087	)		(2,058,552	)		(20,974	)		(2,659,721	)		(440,732	)		(3,100,453	)
Net cash (used in) provided by financing activities		(6,999,234	)		402,407			874,355			3,426,992			(2,295,480	)		(3,286,365	)		(5,581,845	)
December 31, 2011:
External revenues		27,168,997			2,776,283			2,254,428			2,470,013			34,669,721			(410,872	)		34,258,849
Intersegment revenues		16,656,040			2,295,690			5,383,009			5,013,705			29,348,444			410,872			29,759,316
Operating income		989,516			916,807			821,687			176,572			2,904,582			(37,148	)		2,867,434
Financing income		(231,938	)		(20,957	)		(220,936	)		(251,202	)		(725,033	)		511,834			(213,199	)
Financing cost		804,353			224,789			575,306			2,329,395			3,933,843			(399,181	)		3,534,662
Income tax expense (benefit)		620,390			153,881			267,163			(502,008	)		539,426			(877,109	)		(337,683	)
Statutory employee profit sharing expense		8,169			3,490			—			—			11,659			—			11,659
Share in operations of associated companies and joint ventures		251,846			—			(44,052	)		78,239			286,033						286,033
Segment assets		45,601,918			11,172,117			29,822,047			42,227,476			128,823,558			(38,275,192	)		90,548,366
Investments in associated companies		888,802			—			6,116,269			26,921,860			33,926,931			(26,284,273	)		7,642,658
Segment liabilities (1)		38,023,367			4,242,675			19,982,250			20,465,742			82,714,034			(12,923,578	)		69,790,456
Capital expenditures (2)		833,737			387,673			1,217,073			2,791,719			5,230,202			—			5,230,202
Depreciation and amortization		649,639			160,306			275,959			19,599			1,105,503			24,945			1,130,448
Net cash provided by (used in) operating activities		(2,689,919	)		595,722			(3,035,820	)		(1,556,580	)		(6,686,597	)		(3,352,666	)		(10,039,263	)
Net cash provided by (used in) investing activities		141,182			(814,323	)		(4,706,230	)		(3,716,104	)		(9,095,475	)		10,408,324			1,312,849
Net cash provided by (used in) financing activities		3,033,156			251,821			13,011,190			5,387,992			21,684,159			(7,070,776	)		14,613,383

(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.

F-134

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:

	Year ended December 31,
National:	2013		2012		2011
a.         Public sector
Petroleos Mexicanos		Ps. 795,315		Ps. 9,538		Ps. —
Comision Federal de Electricidad		1,080,117		1,929,069		3,272,771
Secretaria de Comunicaciones y Transportes		4,871,859		2,547,837		3,040,405
Instituto Mexicano del Seguro Social		—		—		2,390
Secretaria de Seguridad Publica del Gobierno Federal		45,747		7,093,144		2,325,869
Instituto Nacional de Rehabilitacion		—		—
Comision Nacional del Agua		1,412,586		2,613,775		2,029,373
Gobiernos Estatales		—				174,354
Gobierno del Distrito Federal		340,261		4,331,858		6,293,660
Instituto de Seguridad Social al Servicio de Trabajadores del Estado		—		—		446,158
Sistema de Autopistas y Aeropuertos y Servicios Conexos y Auxiliares del Estado de Mexico		135,892		2,196,237		3,794,019
Comision Estatal de Agua del Gobierno de Jalisco		256,120		—		285,936
Secretaria de Seguridad Publica de Nayarit		777,619		—		1,212,725
Centro Nacional de Evaluacion para la Educacion Superior, A.C.		—		144,106		64,248
Comision Estatal del Agua del Gobierno de San Luis Potosi		—		—		39,641
Secretaria de Planeacion Urbana, Infraestructura y Ecologica del Edo de BCS		—		850,049		—
Comision estatal de agua del gobierno de Queretaro		—		—		43,579
Secretaria de Infraestructura del Estado de Puebla		43,562		832,904		—
Comision Estatal del Agua de Jalisco				609,479		—
Instituto Nacional de Cardiologia		512,313		434,484		—
Hospital General DR. Manuel Gea Gonzalez		105,279		360,717		—
Gobierno del Estado de Campeche		156,461		209,705		—
Gobierno del Estado de Oaxaca		113,070		—		—
Secretaria de Medio Ambiente y Recursos Naturales		84,657		55,892		—
Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado		—		33,614		—
APM Terminal Lazaro Cardenas, S.A. de C.V.		263,602		22,855		—
Rio La Compañia		—		—		3,977

F-135

	Year ended December 31,
	2013		2012		2011
b.         Private sector
Fideicomiso de Autotransportes del Golfo		—		—		351,070
Minera y Metalurgica del Boleo, S.A. de C.V.		—		—		272,706
Marathon Oil Company		—		—		1,373
Altos Hornos de Mexico, S.A.		—		—		663,789
Aeropuerto Internacional de la Ciudad de Mexico		—		5,536		18,889
RCO		—				195,437
Minera San Javier		379,665		372,148		327,026
Partes Relacionadas (ICA Fluor Daniel)				—		75,608
Fideicomiso Autopistas y Puentes del Golfo		357,978		247,789		—
Administradora Mexiquense de Aeropuerto de Toluca		—		33,598		—
Autofinanciamiento Mexico, S.A. de C.V.		102,655		—		—
Concesionaria de la autopista de Guadalajara—Tepic		327,734		30,079		—
Foreign:
Public and private sector
Colombia		1,016,375		612,378		193,726
Peru		4,291,090		2,023,620		891,759
Panama		2,954,279		884,050		639,747
Costa Rica		140,196		302,030		—

The Company´s four 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						Intersegment
	Mexico		Europe		States		Latin America		Sub-total		Eliminations			Total
2013:
Revenues:
Construction		Ps. 14,104,333		Ps.—		Ps. —		Ps. 7,639,966		Ps. 21,744,299		Ps. —			Ps. 21,744,299
Concessions		3,699,935		—		—		265,529		3,965,464		—			3,965,464
Sales of goods and other		3,846,435		—		—				3,846,435		—			3,846,435
Total revenues		21,650,703		—		—		7,905,495		29,556,198		—			29,556,198
Capital expenditures		7,811,635		—		—		301,598		8,113,233		—			8,113,233
Fixed assets		4,636,349		—		—		719,277		5,355,626		—			5,355,626
Total assets		95,105,047		69,396		1,773,076		7,227,206		104,174,725		(2,667,581	)		101,507,144
2012:
Revenues:
Construction		26,638,733		—		—		3,819,701		30,458,434		—			30,458,434
Concessions		2,246,599		—		—		155,714		2,402,313		—			2,402,313
Sales of goods and other		5,261,374		—		—		—		5,261,374		—			5,261,374
Total revenues		34,146,706		—		—		3,975,415		38,122,121		—			38,122,121
Capital expenditures		4,037,321		—				164,100		4,201,421		—			4,201,421
Fixed assets		4,553,874		—		—		746,456		5,300,329		5,633			5,305,962
Total assets		92,972,139		67,344		1,728,245		5,531,294		100,299,022		(2,029,098	)		98,269,924

F-136

			Foreign
					United						Intersegment
	Mexico		Europe		States		Latin America		Sub-total		Eliminations			Total
2011:
Revenues:
Construction		26,398,264		—		—		770,733		27,168,997		—			27,168,997
Concessions		2,216,330		—		—		38,098		2,254,428		—			2,254,428
Sales of goods and other		4,835,424		—		—				4,835,424		—			4,835,424
Total revenues		33,450,018		—		—		808,831		34,258,849		—			34,258,849
Capital expenditures		4,985,256		—		—		244,946		5,230,202		—			5,230,202
Fixed assets		3,641,438		—		—		204,866		3,846,304		6,003			3,852,307
Total assets		88,602,665		63,195		2,940,708		1,727,178		93,333,746		(2,785,380	)		90,548,366

42. Subsequent events

As discussed in Note 29, at the close of the year 2013, a number of different tax lawsuits were under way, and at the date of issuance of the consolidated financial statements, the following lawsuits had been resolved in favor of the Company:

a. On April 4, 2014 Aeroinvest pledged 26 million shares of GACN to Inbursa as a guarantee for a loan to CONOISA in the amount of Ps.700 million due to mature on July 4, 2014.

b. On March 28 2014, ICASA paid the equivalent of U.S.$5.8 million in Colombian Pesos to the Instituto de Desarrollo Urbano del Distrito Capital de Bogota (“IDU”) for breach of the construction contract of the “Malla Vial” project in Bogota (see note 29.c).

c. In August 2012, MTY filed an action for annulment with the Federal Tax Court against the lawsuit brought by the Apodaca office of the IMSS for alleged nonpayment of Social Security fees in the amount of Ps.28,300. The lawsuit was won by MTY through a verdict issued on January 2, 2014, which declared the challenged ruling null and void, and the authorities have yet to issue a new ruling that complies with the court verdict, or, as the case may be, to challenge the verdict.

d. The action for annulment filed by REX against the ruling of the motion for reconsideration, which confirms the assessment of an unpaid income tax liability for PS.1,217 and profit sharing of Ps.195, was resolved through a verdict issued on January 20, 2014, which declared the partial nullity of the ruling challenged; i.e., the result is favorable for the Company, which will challenge the verdict to obtain a final favorable judgment.

e. The legal challenge filed by the Ciudad Juarez Airport against the demand for payment of real estate tax for fiscal year 2013 in the amount of Ps.1,861, was resolved in December in favor of the Company, and the challenged request was declared null and void. Such ruling was notified in January 2014.

43. Authorization for issuance of financial statements

The publication of the consolidated financial statements prepared in accordance with IFRS was authorized on April 29, 2014, by Alonso Quintana Kawage, General Director of Empresas ICA, S.A.B. de C.V., and Victor Bravo Martin, Administration and Finance Vicepresident of the Company, and subject to the approval of the Shareholders of the Company who may be modified in accordance with the provisions of the General Law of Commercial Companies.

F-137

44. List of subsidiaries

			Ownership Percentage
Controlled entity	Country	Activity	2013	2012
SUB-HOLDING
Aeroinvest, S. A. de C.V.	Mexico	Holding of shares	100.00%	100.00%
Controladora de Empresas de Vivienda, S. A. de C. V. (“CONEVISA”)	Mexico	Holding of shares	100.00%	100.00%
Controladora de Operaciones de Infraestructura, S. A. de C. V. (“CONOISA”)	Mexico	Holding of shares	100.00%	100.00%
Constructoras ICA, S. A. de C. V. (“CICASA”)	Mexico	Holding of shares	100.00%	100.00%
Icatech Corporation	United States	Holding of shares	100.00%	100.00%
AIRPORTS
Aeropuerto Acapulco	Mexico	Airport services	41.38%	58.63%
Aeropuerto Chihuahua	Mexico	Airport services	41.38%	58.63%
Aeropuerto Culiacán	Mexico	Airport services	41.38%	58.63%
Aeropuerto Ciudad Juárez	Mexico	Airport services	41.38%	58.63%
Aeropuerto Durango	Mexico	Airport services	41.38%	58.63%
Aeropuerto Mazatlán	Mexico	Airport services	41.38%	58.63%
Aeropuerto Monterrey	Mexico	Airport services	41.38%	58.63%
Aeropuerto Reynosa	Mexico	Airport services	41.38%	58.63%
Aeropuerto San Luis Potosí	Mexico	Airport services	41.38%	58.63%
Aeropuerto Tampico	Mexico	Airport services	41.38%	58.63%
Aeropuerto Torreón	Mexico	Airport services	41.38%	58.63%
Aeropuerto Zacatecas	Mexico	Airport services	41.38%	58.63%
Aeropuerto Zihuatanejo	Mexico	Airport services	41.38%	58.63%
Consorcio Grupo Hotelero T2, S. A. de C. V.	Mexico	Holding of shares	33.53%	49.04%
Grupo Aeroportuario Centro Norte, S. A. de C. V.	Mexico	Holding of shares	41.38%	58.63%
Holding Consorcio Grupo Hotelero T2, S. A. de C. V.	Mexico	Holding of shares	41.38%	58.63%
Oma Logística, S. A. de C.V.	Mexico	Airports	41.38%	58.63%
Oma Vynmsa Aero Industrial Park, S. A. de C. V.	Mexico	Airport operations	19.00%	27.79%
Operadora de Aeropuertos del Centro Norte, S. A. de C. V.	Mexico	Administrative services	41.38%	58.63%
Servicios Aeroportuarios Centro Norte, S. A. de C. V.	Mexico	Administrative services	41.38%	58.63%
Servicio Aero Especializado del Centro Norte, S. A. de C. V.	Mexico	Airport operations	41.38%	58.63%
Servicios Corporativos Terminal T2, S. A. de C. V.	Mexico	Airport operations	33.53%	49.04%
Servicios Complementarios del Centro Norte, S. A. de C. V.	Mexico	Airport operations	41.38%	58.63%
Consorcio Hotelero Aeropuerto Monterrey, S. A. P. I. de C. V.	Mexico	Airport operations	31.62%	—
Servicios de Tecnología Aeroportuaria, S. A. de C. V.	Mexico	Airport operations	74.50%	74.50%
PORTS AND WATER CONSTRUCTION
Consorcio CICE	Colombia	Construction	80.00%	80.00%
Construcciones y Trituraciones, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
INDUSTRIAL CONSTRUCTION
ICA El Salvador, S. A.	El Salvador	Construction	100.00%	100.00%
URBAN CONSTRUCTION
Casaflex, S. A. P. I. de C. V.	Mexico	Construction	50.10%	50.10%
ICA Ingeniería, S. A. de C. V.	Mexico	Engineering services	100.00%	100.00%
Icapital, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
Prefabricados y Transportes, S. A. de C. V.	Mexico	Construction	100.00%	100.00%

F-138

			Ownership Percentage
Controlled entity	Country	Activity	2013	2012
SUB-HOLDING
Aeroinvest, S.A. de C.V.	Mexico	Holding of shares	100.00%	100.00%
Controladora de Empresas de Vivienda, S. A. de C. V. (“CONEVISA”)	Mexico	Holding of shares	100.00%	100.00%
Controladora de Operaciones de Infraestructura, S. A. de C. V. (“CONOISA”)	Mexico	Holding of shares	100.00%	100.00%
Constructoras ICA, S. A. de C. V. (“CICASA”)	Mexico	Holding of shares	100.00%	100.00%
Icatech Corporation	United States	Holding of shares	100.00%	100.00%
AIRPORTS
Aeropuerto Acapulco	Mexico	Airport services	41.38%	58.63%
Aeropuerto Chihuahua	Mexico	Airport services	41.38%	58.63%
Aeropuerto Culiacan	Mexico	Airport services	41.38%	58.63%
Aeropuerto Ciudad Juarez	Mexico	Airport services	41.38%	58.63%
Aeropuerto Durango	Mexico	Airport services	41.38%	58.63%
Aeropuerto Mazatlan	Mexico	Airport services	41.38%	58.63%
Aeropuerto Monterrey	Mexico	Airport services	41.38%	58.63%
Aeropuerto Reynosa	Mexico	Airport services	41.38%	58.63%
Aeropuerto San Luis Potosi	Mexico	Airport services	41.38%	58.63%
Aeropuerto Tampico	Mexico	Airport services	41.38%	58.63%
Aeropuerto Torreon	Mexico	Airport services	41.38%	58.63%
Aeropuerto Zacatecas	Mexico	Airport services	41.38%	58.63%
Aeropuerto Zihuatanejo	Mexico	Airport services	41.38%	58.63%
Consorcio Grupo Hotelero T2, S. A. de C. V.	Mexico	Holding of shares	33.53%	49.04%
Grupo Aeroportuario Centro Norte, S. A. de C. V.	Mexico	Holding of shares	41.38%	58.63%
Holding Consorcio Grupo Hotelero T2, S. A. de C. V.	Mexico	Holding of shares	41.38%	58.63%
Oma Logistica, S.A. de C.V.	Mexico	Airports	41.38%	58.63%
Oma Vynmsa Aero Industrial Park, S. A. de C. V.	Mexico	Airport operations	19.00%	27.79%
Operadora de Aeropuertos del Centro Norte, S. A. de C. V.	Mexico	Administrative services	41.38%	58.63%
Servicios Aeroportuarios Centro Norte, S. A. de C. V.	Mexico	Administrative services	41.38%	58.63%
Servicio Aero Especializado del Centro Norte, S. A. de C. V.	Mexico	Airport operations	41.38%	58.63%
Servicios Corporativos Terminal T2, S.A. de C. V.	Mexico	Airport operations	33.53%	49.04%
Servicios Complementarios del Centro Norte, S. A. de C. V.	Mexico	Airport operations	41.38%	58.63%
Consorcio Hotelero Aeropuerto Monterrey, S. A. P. I. de C. V.	Mexico	Airport operations	31.62%	—
Servicios de Tecnologia Aeroportuaria, S. A. de C. V.	Mexico	Airport operations	74.50%	74.50%
PORTS AND WATER CONSTRUCTION
Consorcio CICE	Colombia	Construction	80.00%	80.00%
Construcciones y Trituraciones, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
INDUSTRIAL CONSTRUCTION
ICA El Salvador, S. A.	El Salvador	Construction	100.00%	100.00%
URBAN CONSTRUCTION
Casaflex, S. A. P. I. de C. V.	Mexico	Construction	50.10%	50.10%
ICA Ingenieria, S. A. de C. V.	Mexico	Engineering services	100.00%	100.00%
Icapital, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
Prefabricados y Transportes, S. A. de C. V.	Mexico	Construction	100.00%	100.00%

F-139

			Ownership Percentage
Controlled entity	Country	Activity	2013	2012
HEAVY CONSTRUCTION
Autopista Naucalpan Ecatepec S. A. de C. V. (formerly Viabilis Infraestructura, S. A. P. I de C. V.)	Mexico	Infraestructure operation	100.00%	100.00%
Autovia Urbana TT S. A. P. I de C. V.(1)	Mexico	Infraestructure operation	—	100.00%
Compañia Hidroelectrica La Yesca, S. A. de C. V.	Mexico	Construction	99.00%	99.00%
Consorcio ICA-MECO Panama	Panama	Construction	70.00%	70.00%
Consorcio San Carlos 020	Colombia	Construction	65.00%	70.00%
Constructora de Proyectos Hidroelectricos, S. A. de C. V.	Mexico	Construction	99.00%	99.00%
Constructora El Cajon, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
Constructora Hidroelectrica La Yesca, S. A. de C. V.	Mexico	Construction	51.00%	51.00%
Constructora Internacional de Infraestructura, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
Constructora ICA-Tecsa, S. A.	United States	Construction	99.38%	99.38%
Constructoras ICA Chile, S. A.	Chile	Construction	99.85%	99.85%
Constructoras ICA de Guatemala, S. A.	Guatemala	Construction	100.00%	100.00%
Desarrolladora de Proyectos Hidroelectricos, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
Desarrolladora Mexicana de Huites, S. A. de C. V.	Mexico	Construction	60.00%	60.00%
ICA Construccion Civil de Venezuela, S. A.	Venezuela	Construction	100.00%	100.00%
ICA Construccion Civil, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
ICA Construction Corporation (M) Sdn Bhd	United States	Construction	100.00%	100.00%
ICA Internacional Peru, S. A.	Peru	Holding of shares	100.00%	100.00%
ICA de Puerto Rico INC.	Puerto Rico	Holding of shares	100.00%	100.00%
ICA- Miramar Corporation	Puerto Rico	Construction	100.00%	100.00%
ICA- Miramar Metro San Juan Corp.	Puerto Rico	Construction	100.00%	100.00%
ICA Promotora de Construccion Urbana, S. A. de C. V.	Mexico	Construction	100.00%	100.00%
ICAPEV, C. A.	Venezuela	Construction	100.00%	100.00%
ICA Venezuela, C. A.	Venezuela	Construction	100.00%	100.00%
Icaprin Servicios, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
Ingenieros Civiles Asociados, S. A. de C. V. (“ICASA”)	Mexico	Construction	100.00%	100.00%
Ingenieros Civiles Asociados Mexico, S. A.	Colombia	Construction	100.00%	100.00%
Ingenieros Civiles Asociados Panama, S. A.	Panama	Construction	100.00%	100.00%
Recursos Tecnicos y de Administracion La Yesca, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
San Martin Contratistas Generales, S. A.	Peru	Mining and construction services	51.00%	51.00%
CORPORATE
Autopistas Concesionadas de Venezuela, S. A.	Venezuela	Infraestructure operation	100.00%	100.00%
Compañia Integradora Mercantil Agricola, S. A. de C. V.	Mexico	Commodity trading, especially grains	100.00%	100.00%
Construexport, S. A. de C. V.	Mexico	Corporate services	99.73%	99.73%
Ica Reinsurance, A. G.	Switzerland	Insurance	100.00%	100.00%
Maxipistas de Venezuela, C. A.	Venezuela	Infraestructure operation	75.00%	75.00%
BUSINESS DEVELOPMENT
ICA Construction Corporation	Estados Unidos	Holding of shares	100.00%	100.00%
Icador, S. A.	Ecuador	Construction	100.00%	100.00%
ICA Costa Rica, S. A.	Costa Rica	Construction	100.00%	100.00%
Icatech Services Corporation	Estados Unidos	Holding of shares	100.00%	100.00%
ICA REAL ESTATE
Promotora e Inversora Adisa, S. A. de C. V.	Mexico	Real state construction	100.00%	100.00%

F-140

			Ownership Percentage
Controlled entity	Country	Activity	2013	2012
ICA SERVICES
Asesoria Tecnica y Gestion Administrativa, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
Grupo ICA, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
ICA Desarrolladora de Recursos Gerenciales y Directivos, S. A. de C. V.	Mexico	Services	100.00%	100.00%
ICA Propiedades Inmuebles, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
ICA Risk Management Solutions Agente de Seguros y Fianzas, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
ICA Servicios de Direccion Corporativa, S. A. de C. V.	Mexico	Corporate services	100.00%	100.00%
ICA Planeacion y financiamiento, S. A. de C. V. Sofom. E. N. R.(4)	Mexico	Corporate services	100.00%	-
INFRAESTRUCTURE
Autopista del Occidente S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Autovia Paradores y Servicios, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Autovia Queretaro, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Caminos y Carreteras del Mayab, S. A. P. I. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Desarrollo, Infraestructura y Operacion, S. A. P. I. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Concesionaria de Ejes Terrestres de Coahuila, S. A. de C. V.	Mexico	Infraestructure operation	76.36%	76.36%
Consorcio del Mayab, S. A. de C. V.	Mexico	Construction, operation and maintenance of roads	100.00%	100.00%
Compañia Insular Americana, S. A.(2)	Panama	Real estate	-	100.00%
Convias de Morelos, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Desarrolladora de Infraestructura Puerto Escondido S.A. de C.V. (formerly Concesionaria OMEGA S. A. de C. V.)	Mexico	Infraestructure operation	100.00%	100.00%
Desarrolladora de Proyectos de Infraestructura, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Fideicomiso 21935 Autopista Kantunil Cancun(3)	Mexico	Infraestructure operation	-	100.00%
ICA Infraestructura, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	95.00%
ICA San Luis, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Libramiento ICA La Piedad, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Maxipista de Panama, S. A.	Panama	Infraestructure operation	100.00%	100.00%
Operadora Autopista Rio de los Remedios, S. A. P. I. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Operadora de la Autopista del Occidente, S. A. de C. V.	Mexico	Infraestructure operation	98.78%	98.78%
Papagos Servicios Para la Sociedad, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
PASARRE Servicios, S. A. de C.V.	Mexico	Infraestructure operation	100.00%	100.00%
Sarre Infraestructura y Servicios, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Sissa Coahuila, S. A. de C. V. (2)	Mexico	Infraestructure operation	-	100.00%
Tuneles Concesionados de Acapulco, S. A. de C. V.	Mexico	Infraestructure operation	100.00%	100.00%
Tunel diamante, S. A. de C. V.(4)	Mexico	Infraestructure operation	100.00%	-
HOUSING
Arrendadora de Vivienda, S. A. de C. V.	Mexico	Housing	100.00%	100.00%
Centro Sur, S. A. de C. V.	Mexico	Construction of real estate	75.00%	75.00%
Grupo Punta Condesa, S. A. de C. V.	Mexico	Housing	100.00%	100.00%
Inmobiliaria Baja S. A. de C. V.	Mexico	Construction of real estate	100.00%	100.00%
Operadora de Marina PITCH S. A. de C. V.	Mexico	Real estate and tourism development	98.00%	98.00%
Promocion Inmobiliaria Turistica Champoton, S. A. P. I. de C. V.	Mexico	Real estate and tourism development	100.00%	100.00%
Promocion Turistica Aak-Bal, S. A. P. I. de C. V.	Mexico	Real estate and tourism development	100.00%	100.00%
Viveflex, S. A. de C. V.	Mexico	Housing	50.00%	50.00%
Viveica, S. A. de C. V.	Mexico	Housing	100.00%	100.00%
Viveica Construccion y Desarrollo, S. A. de C. V.	Mexico	Housing	100.00%	100.00%

F-141

			Ownership Percentage
Joint Operations	Country	Activity	2013	2012
Construction
Constructora de Infraestructura de Agua de Queretaro, S. A. de C. V.	Mexico	Operation of infraestructure	51.00%	51.00%
Constructora Nuevo Necaxa—Tihuatlan, S. A. de C. V.	Mexico	Operation of infraestructure	60.00%	60.00%
Consorcio PAC 4	Panama	Construction	43.00%	43.00%
Constructora Mexicana de Infraestructura Subterranea, S. A. de C. V.	Mexico	Operation of infraestructure	50.00%	50.00%
Via Rapida del Sur, S. A. de C. V.	Mexico	Operation of infraestructure	65.00%	65.00%
Constructora MT de Oaxaca, S. A. de C. V.	Mexico	Construction	60.00%	60.00%
Joint Ventures
Construction
Administracion y Servicios Atotonilco, S. A. de C. V.	Mexico	Operation of infraestructure	42.50%	42.50%
Constructora de Infraestructura de Aguas de Potosi, S. A. de C. V.	Mexico	Operation of infraestructure	51.00%	51.00%
FRAMEX	Spain	Holding of shares	50.00%	50.00%
Grupo Rodio Kronsa	Spain	Construction	50.00%	50.00%
Infraestructura y Saneamiento de Atotonilco, S. A. de C. V.	Mexico	Operation of infraestructure	42.50%	42.50%
Industrial Construction		Construction and industry
Caribbean Thermal Electric, LLC	Dominican Republic	Construction and industry	51.00%	51.00%
Desarrolladora de Etileno S. de R. L. de C. V.	Mexico	Construction and industry	10.20%	10.20%
Dominican Republic Combined Cycle, LLC	Dominican Republic	Construction and industry	51.00%	51.00%
Etileno Contractors S. de R. L. de C. V.	Mexico	Construction and industry	51.00%	51.00%
Ethylene XXI Contractors, S. A. P. I. de C. V.	Mexico	Construction and industry	10.20%	10.20%
Etileno XXI Services, B. V.	Holanda	Construction and industry	10.20%	10.20%
Industria del Hierro, S. A. de C. V.	Mexico	Construction and industry	51.00%	51.00%
ICA Fluor Daniel, S. de R. L. de C. V.	Mexico	Corporate services	51.00%	51.00%
ICA Fluor Operaciones, S. A. de C. V.	Mexico	Construction and industry	51.00%	51.00%
ICA Fluor Petroquimica, S. A. de C. V.	Mexico	Corporate services	51.00%	51.00%
ICA Fluor Servicios Operativos, S. A. de C. V.	Mexico	Corporate services	51.00%	51.00%
ICA Fluor Servicios Gerenciales, S. A. de C. V.	Mexico	Corporate services	51.00%	51.00%
IFD Servicios de Ingenieria, S. A. de C. V.	Mexico	Corporate services	51.00%	51.00%
Housing
Los Portales, S.A.	Peru	Construction of real state	50.00%	50.00%
Infraestructure
Autovia Mitla- Tehuantepec, S. A. de C. V.	Mexico	Operation of infraestructure	60.00%	60.00%
Operadora Carretera de Mitla, S. A. de C. V.	Mexico	Infraestructure operation	60.00%	60.00%
Renova Atlatec, S. A. de C. V.	Mexico	Infraestructure operation	50.00%	50.00%
Aquos El Realito, S. A. de C. V.	Mexico	Infraestructure operation	51.00%	51.00%
Prestadora de Servicios Acueducto el Realito, S. A. de C. V.	Mexico	Operation of infraestructure	51.00%	51.00%
Autovia Necaxa—Tihuatlan, S. A. de C. V.	Mexico	Services	50.00%	50.00%
Suministro de Agua de Queretaro, S. A. de C. V.	Mexico	Operation of infraestructure	37.00%	42.39%
Services
Actica Sistemas, S. de R. L. de C. V.	Mexico	Systems development	50.00%	50.00%
C7AI Servicios Industriales Especializados, S. A. de C. V.	Mexico	Services	50.00%	50.00%

⁽¹⁾  Merged in 2013

⁽²⁾  Sold in 2013.

⁽³⁾  Merged with Consorcio del Mayab.

⁽⁴⁾  Incorporated in 2013.

F-142

ICA Fluor Daniel,

S. de R. L. de C. V. and Subsidiaries

Consolidated Financial Statements at December 31, 2013, 2012 and January 1, 2012 and for the Years Ended December 31, 2013, 2012 and 2011, and Independent Auditors’ Report dated April 29, 2014

ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2013 and 2012 and 2011

Content:	Page
Independent Auditors’ Report		G-3
Consolidated Statements of Financial Position		G-5
Consolidated Statements of Income and Other Comprehensive Income		G-6
Consolidated Statements of Changes in Stockholders’ Equity		G-7
Consolidated Statements of Cash Flows		G-8
Notes to Consolidated Financial Statements		G-10

G-2

Independent Auditors’ Report to the Board of Directors and Partners of ICA Fluor Daniel, S. de R. L. de C. V.

We have audited the accompanying consolidated financial statements of ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries (the “Entity”), which comprise the consolidated statements of financial position as of December 31, 2013 and 2012, and the related consolidated statements of income and other comprehensive income, changes in stockholders’ equity and cash flows for the years ended December 31, 2013, 2012 and 2011.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Responsibility of the Independent Auditors

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

G-3

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries as of December 31, 2013 and 2012, and the results of their operations their financial performance and their cash flows for the years ended December 31, 2013, 2012 and 2011 in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.

Emphasis of matter

We direct your attention to the information included in Note 4 of the accompanying consolidated financial statements, where the impacts of the adoption of International Financial Reporting Standard No. 11,Joint Arrangements (IFRS 11) and International Accounting Standard No. 19,Employee Benefits (IAS 19) are disclosed. Our opinion is not modified with respect to this matter.

Galaz, Yamazaki, Ruiz Urquiza, S. C.

Member of Deloitte Touche Tohmatsu Limited

C.P.C. Alejandro Anaya Quiroz

Mexico City, México

April 29, 2014

G-4

ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries

Consolidated Statements of Financial Position

(Thousands of Mexican Pesos)

	Millions of U.S. dollars (Convenience			December 31,						January 1,
				2013			2012			2012
	Translation Note 3.d) December 31, 2013:						(As adjusted; see Note 4.a)			(As adjusted; see Note 4.a)
Assets
Cash and cash equivalents (Note 6)	U.S.$	126		$	1,641,014		$	2,467,847		$	2,549,327
Customers - net (Note 7)		343			4,474,852			4,212,616			2,800,670
Due from related parties (Note 29)		15			194,914			31,929			83,473
Other receivables (Note 9)		10			123,534			373,750			164,775
Inventories (Note 10)		1			5,975			3,789			32,935
Other current assets (Note 11)		10			128,779			189,689			406,880
Derivative financial instruments (Note 20)		1			5,593			21,965			—
Current assets		506			6,574,661			7,301,585			6,038,060
Property, machinery and equipment (Note 12)		46			594,081			605,861			390,485
Other assets, net (Note 13)		3			30,561			23,787			31,367
Investment in joint ventures (Note 15)		12			147,038			15,251			—
Deferred income taxes (Note 21)		10			121,970			105,834			341,280
Total assets		577		$	7,468,311		$	8,052,318		$	6,801,192
Liabilities
Notes payable (Note 16)		50		$	640,990		$	467,352		$	—
Trade accounts payable		99			1,286,275			1,934,863			2,334,742
Income tax payable (Note 21)		3			35,584			4,099			22,668
Other payable accounts and accrued expenses (Note 17)		131			1,699,915			1,737,144			1,206,660
Derivative financial instruments (Note 20)		—			—			—			54,814
Provisions (Note 18)		44			565,841			699,390			490,885
Due to related parties (Note 29)		18			229,854			286,816			67,296
Statutory employee profit sharing		4			41,310			46,553			85,065
Advances from customers		78			1,017,132			1,018,001			1,278,840
Current liabilities		427			5,516,901			6,194,218			5,540,970
Long-term leasing agreements (Note 19)		2			31,473			34,269			20,376
Employee benefits (Note 30)		18			235,370			246,471			215,584
Provisions (Note 18)		9			115,777			69,510			61,522
Total liabilities		456			5,899,521			6,544,468			5,838,452
Commitments and contingencies (Notes 19 and 22)
Stockholders’ equity(Note 24):
Contributed capital:
Common stock		72			939,824			339,824			340,824
Earned capital:
Retained earnings		52			675,143			1,191,188			676,720
Valuation of derivative financial instruments (Note 25)		—			647			15,375			(54,814	)
Actuarial losses		(4	)		(46,579	)		(38,516	)		—
Translation effects of foreign subsidiaries		—			(260	)		(30	)		—
Controlling interest		120			1,568,775			1,507,841			962,730
Non-controlling interest (Note 26)		1			15			9			10
Total stockholders’ equity		121			1,568,790			1,507,850			962,740
Total liabilities and stockholders’ equity	U.S.$	577		$	7,468,311		$	8,052,318		$	6,801,192

The accompanying notes are an integral part of these consolidated financial statements

G-5

ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries

Consolidated Statements of Income and Other Comprehensive Income

(Thousands of Mexican pesos)

	Millions of U.S. dollars (Convenience			Year ended December 31,
				2013			2012			2011
	Translation Note 3.d) December 31, 2013:						(As adjusted; see Note 4.a)			(As adjusted; see Note 4.a)
Construction revenues (Note 8)	U.S.$	774		$	10,114,624		$	12,706,792		$	10,396,736
Construction costs		687			8,976,420			11,369,557			8,980,798
Gross profit		87			1,138,204			1,337,235			1,415,938
Selling, general and administrative expenses		57			748,794			779,833			699,967
Other income, net (Note 28)		—			(1,469	)		(100	)		(551	)
Operating income		30			390,879			557,502			716,522
Financing cost (income):
Interest expense		—			4,248			6,867			3,342
Interest income		(2	)		(27,642	)		(44,624	)		(31,367	)
Exchange (gain) loss, net		—			(6,251	)		(122,683	)		192,537
Effects of valuation of derivative financial instruments		4			57,650			20,992			—
		2			28,005			(139,448	)		164,512
Participation in result of joint venture		(10	)		(132,017	)		(14,417	)		—
Income before income taxes		38			494,891			711,367			552,010
Income taxes (Note 21)		5			60,929			196,898			166,404
Consolidated net income for the year		33			433,962			514,469			385,606
Other comprehensive income (loss):
Items that will not be reclassified subsequently to profit or loss:
Actuarial losses on labor obligations	U.S.$	—		$	(5,539	)	$	(48,688	)	$	(1,918	)
Income tax relating to items that will not be subsequently reclassified to profit or loss		—			(2,525	)		10,169			60
Items that may be reclassified subsequently to profit or loss:
Translation effects of foreign subsidiaries		—			(329	)		(42	)		—
Valuation effects derivative financial instruments		(2	)		(21,040	)		76,779			(92,247	)
Income tax relating to items that may be reclassified subsequently to profit or loss		—			6,411			(6,578	)		—
Total other comprehensive income		(2	)		(23,022	)		31,640			(94,105	)
Total comprehensive income for the year	U.S.$	31		$	410,940		$	546,109		$	291,501
Consolidated net income attributable to:
Controlling interest	U.S.$	33		$	433,955		$	514,468		$	385,603
Non-controlling interest		—			7			1			3
	U.S.$	33		$	433,962		$	514,469		$	385,606
Total comprehensive income attributable to:
Controlling interest	U.S.$	31		$	410,934		$	546,110		$	291,498
Non-controlling interest		—			6			(1	)		3
	U.S.$	31		$	410,940		$	546,109		$	291,501

The accompanying notes are an integral part of these consolidated financial statements.

G-6

ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(Thousands of Mexican pesos except for share data) (Note 24)

			Contributed capital			Earned Capital			Other items of comprehensive income
	Number of shares		Common stock			Retained earnings			Valuation of derivative financial instruments			Translation effect of foreign subsidiaries			Actuarial loss			Total controlling interest			Total non-controlling interest			Total stockholders’ equity
Balance as of January 1, 2011 (As previously reported)	$	2	$	289,824		$	1,023,830		$	37,433		$	—		$	—		$	1,351,087		$	7		$	1,351,094
Dividend declared ( Note 24i)		—		—			(730,855	)		—			—			—			(730,855	)		—			(730,855	)
Issuance common stock increase (Note 24h)		—		100,000			—			—			—			—			100,000			—			100,000
Common stock not paid-in (Note 24h)		—		(49,000	)		—			—			—			—			(49,000	)		—			(49,000	)
Actuarial gain / loss		—		—			(1,858	)		—			—			1,858			—			—			—
Comprehensive income (loss)		—		—			385,603			(92,247	)		—			(1,858	)		291,498			3			291,501
Balance as of December 31, 2011 (as adjusted; see Note 4.a)		2		340,824			676,720			(54,814	)		—			—			962,730			10			962,740
Common stock increase (Note 24h)		—		49,000			—			—			—			—			49,000			—			49,000
Capital reimbursement (Note 24g)		—		(100,000	)		—			—			—			—			(100,000	)		—			(100,000	)
Common stock increase (Note 24g)		—		50,000			—			—			—			—			50,000			—			50,000
Comprehensive income (loss)		—		—			514,468			70,189			(30	)		(38,516	)		546,111			(1	)		546,110
Balance as of December 31, 2012 (as adjusted; see Note 4.a)		2		339,824			1,191,188			15,375			(30	)		(38,516	)		1,507,841			9			1,507,850
Dividends declared (Note 24f)		—		—			(950,000	)		—			—			—			(950,000	)		—			(950,000	)
Common stock increase (Note 24e)		—		600,000			—			—			—			—			600,000			—			600,000
Comprehensive income (loss)		—		—			433,955			(14,728	)		(230	)		(8,063	)		410,934			6			410,940
Balance as of December 31, 2013	$	—	$	939,824		$	675,143		$	647		$	(260	)	$	(46,579	)	$	1,568,775		$	15		$	1,568,790

The accompanying notes are an integral part of these consolidated financial statements

G-7

ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries

Consolidated Statements of Cash Flows

(Thousands of Mexican pesos)

	Millions of U.S. dollars (Convenience			Year ended December 31,
	Translation Note 3.d) December 31, 2013:			2013			2012			2011
							(As adjusted; see Note 4.a)			(As adjusted; see Note 4.a)
Cash flows from operating activities:
Consolidated net income	U.S.$	33		$	433,962		$	514,469		$	385,606
Adjustments for:
Income taxes		5			60,929			196,898			166,404
Depreciation		8			106,923			82,877			48,121
Amortization		—			3,642			12,804			27,606
Gain on sale of fixed assets		—			(1,117	)		(156	)		(481	)
Participation in results of joint ventures		(10	)		(132,017	)		(14,417	)		—
Interest expense		2			27,779			13,414			21,544
Unrealized exchange loss (gain)		—			(2,635	)		2,531			(19,013	)
		38			497,466			808,420			629,787
Customers		(20	)		(262,236	)		(1,411,946	)		(576,383	)
Other receivable accounts		14			184,319			(39,796	)		737
Inventories		—			(2,186	)		29,146			(11,001	)
Other current assets		5			60,910			217,191			(40,315	)
Trade accounts payable		(50	)		(648,588	)		(399,879	)		867,293
Due to related parties		(13	)		(174,755	)		268,798			(180,819	)
Income taxes payments		(2	)		(21,087	)		(143,354	)		(667,524	)
Other payable accounts		(3	)		(39,751	)		522,657			202,157
Statutory employee profit sharing		—			(5,243	)		(38,512	)		(45,223	)
Provisions		(7	)		(87,282	)		216,493			193,692
Advances from customers		—			(869	)		(260,839	)		892,223
Employee benefits		(1	)		(16,641	)		(17,800	)		52,198
Derivative financial instruments		—			(4,668	)		—			—
Net cash (used in) provided by operating activities		(39	)		(520,611	)		(249,421	)		1,316,822
Cash flows from investing activities
Property, machinery and equipment acquisitions		(4	)		(49,973	)		(227,484	)		(78,554	)
Other assets acquisitions		(1	)		(10,416	)		(5,224	)		(8,033	)
Joint venture capital contribution		—			—			(864	)		—
Sale of property, machinery and equipment		—			1,357			420			516
Net cash used in investing activities		(5	)		(59,032	)		(233,152	)		(86,071	)

(Continue)

G-8

				2013			2012			2011
							(As adjusted; see Note 4.a)			(As adjusted; see Note 4.a)
Cash flows from financing activities:
Issuance of common stock		46			600,000			99,000			51,000
Proceeds from debt		111			1,445,676			1,120,946			488,500
Payments of debt		(97	)		(1,273,623	)		(654,788	)		(799,206	)
Payments under leasing agreements		(4	)		(46,101	)		(43,160	)		(30,393	)
Interest paid		(2	)		(24,144	)		(9,947	)		(18,716	)
Interest paid for financial leasing		—			(3,520	)		(3,214	)		(2,880	)
Capital reimbursement		—			—			(100,000	)		—
Dividend paid		(73	)		(950,000	)		—			(730,855	)
Net cash (used in) generated by financing activities		(19	)		(251,712	)		408,837			(1,042,550	)
(Decrease) increase in cash and cash equivalents		(63	)		(831,355	)		(73,736	)		188,201
Effect of exchange rate changes on cash and cash equivalents		—			4,522			(7,744	)		22,397
Cash and cash equivalents at beginning of period		189			2,467,847			2,549,327			2,338,729
Cash and cash equivalents at the end of period	U.S.$	126		$	1,641,014		$	2,467,847		$	2,549,327

(Concluded)

The accompanying notes are an integral part of these consolidated financial statements.

G-9

ICA Fluor Daniel, S. de R. L. de C. V. and Subsidiaries

Notes to consolidated financial statements

For the years ended December 31, 2013, 2012 and 2011

(Thousands of Mexican pesos and thousands of American dollars, except as otherwise indicated)

1. Activities

ICA Fluor Daniel, S. de R. L. de C. V. (“ICA FD” or together with its subsidiaries, the “Entity”) was incorporated on March 16, 1978 under Mexican laws on March 16, 1978 and is primarily engaged in all types of engineering activities, which include construction, procurement, engineering, and installation services related to all types of industrial facilities (civil, electromechanical and maritime), as well as project management services. The Entity is a direct 51%-owned subsidiary of Constructoras ICA, S. A. de C. V., an indirect subsidiary of Empresas ICA, S. A. B. de C. V. (“ICA”) and a direct 49%-owned subsidiary of Fluor Daniel México, S. A., which is a subsidiary of Fluor Inc., a U.S. company. Its registered address is Dakota # 95, Colonia Nápoles, C.P. 03810 Benito Juárez, México, D. F.

2. Significant events

2014 Fiscal Reform

In December 2013, the Mexican Government enacted a package of tax reforms, which includes several significant changes to income tax laws including the elimination of the Business Flat Tax (“IETU”) and the tax consolidation regime. Because the IETU law was eliminated, the deferred IETU that the Company had recorded for accounting purposes was canceled on the date of enactment of the tax reform (Note 21).

3. Basis of presentation and consolidation

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), including its amendments and interpretations, as issued by the International Accounting Standards Board (“IASB”).

b. Restatement of financial statements

As result of the application of the new IFRS 11 and IAS 19 (revised 2011), the financial statements of prior periods presented for comparative purposes were reformulated.

c. Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the revaluation of financial instruments at fair value.

i. Historical cost

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

G-10

ii. Fair value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Entity takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transactions that are within the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 or value in use in IAS 36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

d. Convenience translation

Solely for convenience of readers, peso amounts included in the consolidated financial statements as of December 31, 2013 and for the year then ended have been translated into U.S. dollar amounts at exchange rate of Ps.13.0652 pesos per U.S. dollar, as published by Banco de Mexico, S.A. 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.

e. Reporting currency

The Mexican peso, legal currency of the United Mexican States is the currency in which the consolidated financial statements are presented. Transactions in currencies other than the peso are recorded in accordance with established policies described in Note 4.c.

f. Consolidated statements of income and other comprehensive income

The Entity chose to present the consolidated statements of income and other comprehensive income in a single statement, including separate lines for gross profit and operating income, in accordance with practices of the industry. Costs and expenses were classified according to their function due to different economic activities and businesses of the Entity.

g. Basis of consolidation

The consolidated financial statements incorporate the financial statements of ICA FD and entities (including structured entities) controlled by the Entity and its subsidiaries. Control is achieved when the Entity:

• Has power over the investee;

• Is exposed, or has rights, to variable returns from its involvement with the investee; and

• Has the ability to use its power to affect its returns.

G-11

The Entity reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Entity has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Entity considers all relevant facts and circumstances in assessing whether or not the Entity’s voting rights in an investee are sufficient to give it power, including:

• The size of the Entity’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• Potential voting rights held by the Entity, other vote holders or other parties;

• Rights arising from other contractual arrangements; and

• Any additional facts and circumstances that indicate that the Entity has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Entity obtains control over the subsidiary and ceases when the Entity loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Entity gains control until the date when the Entity ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

The non-controlling interests in equity of subsidiaries are presented separately as non-controlling interests in the consolidated statements of financial position, within the stockholders’ equity section, and the consolidated statements of income and other comprehensive income.

When necessary, adjustments to the financial statements of subsidiaries are made to align its accounting policies in accordance with the accounting policies of the Entity.

The financial statements of the companies that are included in the consolidation are prepared ??as of December 31 of each year.

All significant intercompany balances and transactions have been eliminated on consolidation.

Note 14 include the subsidiaries consolidated by the Entity as well as information related thereto.

Changes in the Entity’s ownership interests in existing subsidiaries

Changes in the Entity’s ownership interests in subsidiaries that do not result in the Entity losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Entity’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Entity.

G-12

When the Entity loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Entity had directly disposed of the relevant assets (i.e. they are reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39,Financial Instruments: Recognition and Measurement (“IAS 39”) or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity .

4. Significant accounting policies

The consolidated financial statements are prepared in accordance with IFRS as issued by the IASB. Preparation of financial statements under IFRS requires management of the Entity to make certain estimates and use assumptions to value certain of the items in the consolidated financial statements as well as their related disclosures required therein. The areas with a high degree of judgment and complexity or areas where assumptions and estimates are significant in the consolidated financial statements are described in Note 5. The estimates are based on information available at the time the estimates are made, as well as the best knowledge and judgment of management based on experience and current events. However, actual results could differ from those estimates. The Entity has implemented control procedures to ensure that its accounting policies are appropriate and are properly applied. Although actual results may differ from those estimates, the Entity’s management believes that the estimates and assumptions used were adequate under the circumstances.

The consolidation requirements, accounting policies and valuation methods used in preparing the consolidated financial statements as of and for the year ended December 31, 2013 are the same as those applied in the consolidated financial statements for 2012 and 2011, except for the adoption of new standards and interpretations described in paragraph a) (i) included below, which are effective since 2013.

a. Application of new and revised IFRS

i) Effective January 1, 2013, the Entity adopted the following IFRS and interpretations in its consolidated financial statements:

• Amendments to IFRS 7:Disclosures – Offsetting Financial Assets and Financial Liabilities

• IFRS 10,Consolidated Financial Statements, IFRS 11,Joint Arrangements, IFRS 12,Disclosure of Interests in Other Entities, IAS 27 (as revised in 2011)Separate Financial Statements and IAS 28 (as revised in 2011)Investments in Associates and Joint Ventures

• IFRS 13,Fair Value Measurement

• Amendments to IAS 1,Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009—2011 Cycle issued in May 2012)

• IAS 19Employee Benefits (as revised in 2011)

The impact of these new standards on the financial statements of the Entity is described as follows:

Amendments to IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities

The Entity has applied the amendments to IFRS 7Disclosures - Offsetting Financial Assets and Financial Liabilities for the first time in the current year. The amendments to IFRS 7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.

The amendments have been applied retrospectively. As the Company does not have any offsetting arrangements in place, the application of the amendments has had no material impact on the disclosures or on the amounts recognized in the consolidated financial statements.

G-13

Impact of the application of IFRS 10

IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements and SIC-12 Consolidation – Special Purpose Entities. IFRS 10 changes the definition of control such that an investor has control over an investee when a) it has power over the investee; b) it is exposed, or has rights, to variable returns from its involvement with the investee and c) has the ability to use its power to affect its returns. All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Additional guidance has been included in IFRS 10 to explain when an investor has control over an investee. Some guidance included in IFRS 10 that deals with whether or not an investor that owns less than 50% of the voting rights in an investee has control over the investee is relevant to the Entity.

The Entity’s management made an assessment as at the date of initial application of IFRS 10 (i.e. January 1, 2013) as to whether or not the Entity has control over its investments in accordance with the new definition of control and the related guidance set out in IFRS 10.

Impact of the application of IFRS 11

IFRS 11 replaces lAS 31 lnterests in Joint Ventures, and the guidance contained in a related interpretation, SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers, has been incorporated in lAS 28 (as revised in 2011). IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under IFRS 11, there are only two types of joint arrangements—joint operations and joint ventures. The classification of joint arrangements under IFRS 11 is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement. Previously, lAS 31 contemplated three types of joint arrangements - jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under lAS 31 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was accounted for as a jointly controlled entity).

The initial and subsequent accounting of joint ventures and joint operations is different. Investments in joint ventures are accounted for using the equity method (proportionate consolidation is no longer allowed). lnvestments in joint operations are accounted for such that each joint operator recognizes its assets (including its share of any assets jointly held), its liabilities (including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable Standards.

The management reviewed and assessed the classification of its investments in joint arrangements in accordance with the requirements of IFRS 11, concluding that the Company’s investment listed below, which were classified as a jointly controlled entities under lAS 31 and was accounted for using the proportionate consolidation method, should be classified as a joint venture under IFRS 11 and accounted for using the equity method.

G-14

Comparative amounts for 2012 and 2011 have been adjusted to reflect the change in accounting for the Entity’s investments. The initial investment as at January 1, 2012 for the purposes of applying the equity method is measured as the aggregate of the carrying amounts of the assets and liabilities that the Entity had previously proportionately consolidated (see the tables below for details). Also, the management of the Entity has performed an impairment assessment on the initial investment and concluded that no impairment loss is required.

IFRS 12 application impact

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the application of IFRS 12 has resulted in more extensive disclosures in the consolidated financial statements (see notes 14 and 15 for more details).

Impact of the application of IFRS 13 Fair Value Measurement

The Company has applied IFRS 13 for the first time in the current year. IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The scope of IFRS 13 is broad; the fair value measurement requirements of IFRS 13 apply to both financial instrument items and non-financial instrument items for which other IFRSs require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of lAS 17 Leases, and measurements that have some similarities to fair value but are not fair value (e.g. net realizable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under IFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, IFRS 13 includes extensive disclosure requirements.

IFRS 13 requires prospective application from January1, 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Company has not made any new disclosures required by IFRS 13 for the 2012 comparative period (see Note 23). Other than the additional disclosures, the application of IFRS 13 has not had any material impact on the amounts recognized in the consolidated financial statements.

Impact of the application of Amendments to lAS 1 Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009 - 2011 Cycle issued in May 2012)

The Annual Improvements to IFRSs 2009 - 2011 have made a number of amendments to IFRSs. The amendments that are relevant to the Company are the amendments to lAS 1 regarding when a statement of financial position as at the beginning of the preceding period (third statement of financial position) and the related notes are required to be presented. The amendments specify that a third statement of financial position is required when a) an entity applies an accounting policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial statements, and b) the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position. The amendments specify that related notes are not required to accompany the third statement of financial position.

G-15

In the current year, the Company has applied a number of new and revised IFRSs (see the discussion above), which has resulted in material effects on the information in the consolidated statement of financial position as at January 1, 2012. In accordance with the amendments to lAS 1, the Company has presented a third statement of financial position as at January 1, 2012 without the related notes except for the disclosure requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors as detailed below.

Impact of the application of IAS 19 Employee Benefits (as revised in 2011)

In the current year, the Company has applied IAS 19 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time. IAS 19 (as revised in 2011) changes the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminate the “corridor approach” permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. All actuarial gains and losses are recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a “net interest” amount under IAS 19 (as revised in 2011), which is calculated by applying the discount rate to the net defined benefit liability or asset. These changes have had an impact on the amounts recognized in profit or loss and other comprehensive income in prior years (see the tables below for details). In addition, IAS 19 (as revised in 2011) introduces certain changes in the presentation of the defined benefit cost including more extensive disclosures.

Specific transitional provisions are applicable to first-time application of IAS 19 (as revised in 2011). The Company has applied the relevant transitional provisions and adjusted the comparative amounts on a retrospective basis (see the tables below for details).

ii) Quantification of the financial effects of the implementation of new and revised standards in the preceding paragraph:

• Effects of the application of IFRS 11

Investments in joint ventures are no longer proportionately consolidated and are valued using the equity method.

	Year ended December 31, 2012
Consolidated Statements of Income :
Decrease in revenues	$	291,091
Decrease in cost of sales		270,484
Decrease gross profit		20,607
Decrease in selling and administrative expense		118
Decrease operating income		20,489
Decrease in financing income		104
Increase in income for equity method		14,417
Decrease in income before income taxes		6,176
Decrease in income taxes		6,176
Profit or loss of the year decrease		—
Decrease in income for the year attributable to:
Controlling interest		—
Non-controlling interest		—

G-16

• Effects of the application of IAS 19 (as revised in 2011)

	Year ended December 31, 2012
Net income for the year:
Decrease in construction cost	$	1,687
Decrease in administrative expenses		374
Decrease in income tax		10,222
Increase in net income for the year		12,283

• Total effect in profit of the year for the application of the standards described above

	Year ended December 31, 2012
Statement of comprehensive income:
Decrease in revenues	$	291,091
Decrease in cost of sales		272,171
Decrease in gross profit		18,920
Decrease in selling, general and administrative expenses		492
Decrease in operating income		18,428
Decrease in interest income		104
Increase in income for equity method		14,417
Decrease in income before income taxes		4,115
Decrease in income taxes		16,398
Increase in net income for the year		12,283
Decrease in income for the year attributable to:
Controlling interest		12,283
Non-controlling interest		—

• Effects of the application of IAS 19 (as revised in 2011)

	Year ended December 31, 2011
Consolidated Statements of Income:
Increase in construction costs	$	32,999
Increase in administrative expenses		8,248
Decrease in net income for the year		41,247

• Consolidated Statement of Financial Position

	December 31, 2011 (as previously reported) D ( H )			IFRS 11 adjustments D (H)		IAS 19 adjustments D (H)			December 31, 2011 (as adjusted) D (H)
Cash and cash equivalents	$	2,549,327		$	—	$	—		$	2,549,327
Customers and other accounts receivable		3,488,733			—		—			3,488,733
Property, plant, equipment and other assets		421,852			—		—			421,852
Deferred income taxes		341,280			—		—			341,280
Current liabilities		(5,540,970	)		—		—			(5,540,970	)
Other long-term liabilities		(81,898	)		—		—			(81,898	)
Employee benefits		(174,337	)		—		(41,247	)		(215,584	)
Total effect on net assets	$	1,003,987		$	—	$	(41,247	)	$	962,740

G-17

	December 31, 2011 (as previously reported)			IFRS 11 adjustments		IAS 19 adjustments		December 31, 2011 (as adjusted)
Non-controlling interest	$	(10	)	$	—	$	—	$	(10	)
Capital stock		(340,824	)		—		—		(340,824	)
Derivative financial instruments valuation		54,814			—		—		54,814
Retained earnings		(717,967	)		—		41,247		(676,720	)
Total effect on equity	$	(1,003,987	)	$	—	$	41,247	$	(962,740	)

	December 31, 2012 (as previously reported)			IFRS 11 adjustments			IAS 19 adjustments			December 31, 2012 (as adjusted)
Cash and cash equivalents	$	2,468,621		$	(774	)	$	—		$	2,467,847
Customers and other accounts receivable		4,996,148			(162,410	)		—			4,833,738
Property, plant and equipment		629,648			—			—			629,648
Deferred income taxes		94,565			1,044			10,225			105,834
Joint venture investments		—			15,251			—			15,251
Notes payable		(467,352	)		—			—			(467,352	)
Other current liabilities		(5,873,755	)		146,889			—			(5,726,866	)
Other long-term liabilities		(103,779	)		—			—			(103,779	)
Employee benefits		(207,283	)		—			(39,188	)		(246,471	)
Total effect on net assets	$	1,536,813		$	—		$	(28,963	)	$	1,507,850
Non-controlling interest	$	(9	)	$	—		$	—		$	(9	)
Capital stock		(339,824	)		—			—			(339,824	)
Derivative financial instruments valuation		(15,375	)		—			—			(15,375	)
Actuarial losses		38,516			—			—			38,516
Conversion effect		30			—			—			30
Retained earnings		(1,220,151	)		—			28,963			(1,191,188	)
Total effect on equity	$	(1,536,813	)	$	—		$	28,963		$	(1,507,850	)

• Impact on cash flows for the year ended December 31, 2012 on the application of the above new and revised Standards

	IAS 19		IFRS 11 Adjustments			Total
Increase (decrease) of net cash flows from operating activities	$	—	$	(47	)	$	(47	)
Increase (decrease) of net cash flows from investing activities		—		864			864
Increase (decrease) conversion effect		—		(43	)		(43	)
Net cash flows		—		774			774

Cash flows from operating, investing and financing activities in 2011 were not impacted, as all changes were presented net in activities from operations.

G-18

iii) The Company has not applied the following new and revised IFRSs that have been issued but that are not effective until January 1, 2014 or at a later date:

• IFRS 9 “Financial Instruments” (“IFRS 9”) ⁽²⁾

• Amendments to IFRS 9 and IFRS 7,Mandatory Effective Date of IFRS 9 and Transition Disclosures ⁽²⁾

• Amendments to IFRS 10, 12 and IAS 27,Investment Entities ⁽¹⁾

• Amendments to IAS 32, Offsetting Financial Assets and Financial Liabilities ⁽¹⁾

1 Effective for annual periods beginning on or after January 1 2014, with earlier application permitted.

2 Effective for annual periods beginning on or after January 1 2018, with earlier application permitted.

b. Reclassifications

Certain amounts in the consolidated financial statements for the years ended December 31, 2012 and 2011 have been reclassified to conform the presentation of the amounts in the 2013 consolidated financial statements.

c. Operations and transactions in foreign currency

Translation of financial statements of foreign subsidiaries

The individual financial statements of each subsidiary of the Company are presented in the currency of the primary economic environment in which the entity operates (its functional currency). To consolidate the financial statements of foreign subsidiaries, their financial information is translated into Mexican pesos (the reporting currency), considering the following methodology:

The operations in which the functional currency and the recording currency are the same, the financial statements of the entity are translated to the reporting currency using the following exchange rates: i) the closing exchange rate in effect at the date of the statement of financial position for assets and liabilities, ii) historical exchange rates for stockholders’ equity as well as revenues, costs and expenses. Translation effects are recorded in other comprehensive income.

When the functional currency of a foreign operation differs from the recording currency, before applying the terms of the preceding paragraph, the recording currency must be converted to the functional currency by using the following methodology: monetary assets and liabilities are converted by using the exchange rate in effect at the date of the statement of changes in financial position, while nonmonetary assets and liabilities, stockholders’ equity, income, costs and expenses must be considered at the historical exchange rate. Any differences arising from this method must be recognized in the results of the year.

On the disposal of a foreign operation, all of the accumulated exchange differences in respect of that operation attributable to the Entity are reclassified to profit or loss in the year of disposal.

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognized in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Company losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to results.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognized in other comprehensive income.

G-19

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 prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange fluctuations are recorded in profit or loss, except for:

• Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

• Exchange differences on transactions entered into in order to hedge certain foreign currency risks (see paragraph (o) below for hedging accounting policies); and

• Exchange differences on monetary items such as receivables from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.

d. 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, 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.

e. Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Reductions to the value of inventories are comprised of estimates representing the impairment of inventories.

f. Property, machinery and equipment

Expenditures for property, machinery and equipment are capitalized and valued at acquisition cost.

Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction). Depreciation of property, machinery and equipment is calculated using the straight-line method over the useful life of the asset, taking into consideration the related asset’s residual value. Depreciation begins in the month in which the asset is placed in service. The useful lives of assets are as follows:

	Useful lives (years)
Buildings	20
Other construction	20
Machinery and operating equipment	2
Minor machinery	3
Vehicles	3
Furniture and equipment	10
Computers	3
Communication equipment	10
Leasehold improvements	Contract term

G-20

Financing costs incurred during the construction and installation of property, machinery and equipment are capitalized.

Residual values, useful lives and depreciation methods are reviewed at the end of each year and adjusted prospectively if applicable. If the depreciation method is changed, this is recognized in retrospectively.

The depreciation of property, plant and equipment is recorded in results. Land is not depreciated.

Disposal of assets

The gain or loss on the sale or retirement of an item of property, machinery and equipment is calculated as the difference between the proceeds from the sale and the carrying value of the asset, and is recognized in income when all risks and rewards of ownership of the asset is transferred to the buyer, which generally occurs when ownership of the asset is transferred to the buyer.

Replacements or renewals of complete items that extend the useful life of the asset, or its economic capacity are recognized as an increase to property, machinery and equipment, with the consequent withdrawal or derecognition of the replaced or renewed.

Construction in progress

Construction in progress is carried at cost less any recognized impairment loss. Cost includes professional fees and, in the case of qualifying assets, borrowing costs capitalized in accordance with the accounting policy of the Entity. Such properties are classified to the appropriate categories of property, machinery and equipment when completed and ready for intended use. The depreciation of these assets, as well as other properties, begins when the assets are ready for use.

Subsequent costs

Subsequent costs form part of the value of the asset or are recognized as a separate asset only when it is probable that such disbursement represents an increase in productivity, capacity, efficiency or an extension of the life of the asset and the cost of the item can be determined reliably. All other expenses, including repairs and maintenance are recognized in comprehensive income as incurred.

Assets under capital leases

Assets held under finance leases are depreciated over their estimated useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the least term, assets are depreciated over the shorter of the lease term and their useful lives.

g. Leasing

Leases are classified as finance leases whenever the terms of the contract lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Financial Leasing

In financial leasing where the Company is the lessee, assets are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The liability to the lessor is included in the statement of financial position as long-term leasing arrangements.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company’s general policy for borrowing costs (see paragraph h).

Assets held under finance leases are depreciated over their estimated useful lives on the same basis as owned assets.

G-21

Operating Leasing

As lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized in profit using the same criteria used for the recognition of lease income.

As lessee

Any payment or collection made upon execution of an operating lease is treated as an advanced payment or collection that is recognized in results over the lease term, as the benefits of the leased asset are received or transferred.

The costs and expenses arising under operating leases are recognized in results using the straight line method during all the term of the lease. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

h. Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

i. Investment in associates and joint ventures

An associated company is an entity over which the Entity has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee in but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results of associated companies and joint venture are incorporated in the consolidated financial statements using the equity method, unless the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5,“Non-current Assets Held for Sale and Discontinued Operations”.

Under the equity method, an investment in an associate or joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate or joint venture. When the Company’s share of losses of an associate exceeds the Company’s interest in that associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

G-22

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate or joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

The requirements of IAS 39 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Entity’s investment in an associate or joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36Impairment of Assets (“IAS 36”) as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

Upon disposal of an associate or joint venture that results in the Company losing significant influence over that associate or joint venture, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with IAS 39. The difference between the previous carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when it loses significant influence over that associate or joint venture.

When a group entity transacts with its associate or joint venture, profits and losses resulting from the transactions with the associate or joint venture are recognized in the Entity’s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Entity.

j. Interest in joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

When a subsidiary of the Company operates in the context of joint operations, the Company as a joint operator recognizes in relation to its interest in a joint operation:

• Its assets, including its share of any assets held jointly.

• Its liabilities, including its share of any liabilities incurred jointly.

• Its revenue from the sale of its share of the output arising from the joint operation.

• Its share of the revenue from the sale of the output by the joint operation.

• Its expenses, including its share of any expenses incurred jointly.

When a subsidiary of the Company enters into transactions with a joint arrangement in which it is a joint operator (such as a sale or contribution of assets), the Company is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from the transactions are recognized in the Company’s consolidated financial statements only to the extent of other parties’ interests in the joint operation.

G-23

When a subsidiary of the Company enters into transactions with a joint operation in which an entity of the Company is a joint operator (such as a purchase of assets), the Company does not recognize its share of the gains and losses until it resells those assets to a third party.

k. Other assets

Other current assets includes advances to subcontractors and suppliers as well as other prepaid expenses.

Other assets mainly consist of expenditures for works in progress and software and are recorded at cost of acquisition and amortized according to useful lives, as appropriate.

l. Impairment of long-lived assets in use

The Entity periodically evaluates the impairment of long-lived assets in order to determine whether there is evidence that those assets have suffered an impairment loss. If impairment indicators exist, the recoverable amount of assets is determined, with the help of independent experts, to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Entity estimates recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with an indefinite useful life or not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

m. Financial instruments

Financial assets and financial liabilities are recognized when the Entity becomes a party of contractual provisions of the instruments.

Financial assets and liabilities are initially measured at fair value. The costs of transaction that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and liabilities at fair value through results), are added or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets are classified into four categories, which in turn determine the form of recognition and valuation of financial assets: “Financial assets at fair value through profit or loss”, “investments held-to-maturity”, “financial assets available-for-sale” and “loans and receivables”. The classification depends on the nature and purpose of the financial assets and is determined by the administration of the Entity administration upon initial recognition. The Entity generally only has financial assets at fair value through profit or loss and loans and receivables.

In the consolidated statement of financial position, financial assets are classified into current and noncurrent, depending on whether their maturity is less than / equal to or greater than 12 months.

G-24

Financial assets at fair value through results

Financial assets are classified at fair value through results when the financial asset is held for trading or it is designated fair value through results. A financial asset is classified as held for trading if:

• It has been acquired principally for the purpose of selling it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that the Entity manages together and has a recent actual pattern of short-term profit-taking; or

• It is a derivative (except those designated as hedging instruments or that is a financial guarantee).

Financial assets at fair value through the results are recorded at fair value, recognizing in results any gain or loss arising from their measurement. The gain or loss recognized in results includes any dividend or interest earned from the financial asset and is recorded in interest expense or income in the consolidated statements income and other comprehensive income. Fair value is determined as described in Note 23.

Loans and receivables

Loans and receivables are non-derivative financial assets, that have fixed or determinable payments that are not quoted in an active market. After initial recognition, loans and receivables are measured at amortized cost using the effective interest method.

“Amortized cost” means the initial amount recognized for a financial asset or liability less principal repayments, less (or plus) the cumulative amortization using the effective interest method of any difference between the initial amount and the amount at maturity, less any reduction (directly or through a reserve) for impairment or bad debt.

Impairment of financial assets

Financial assets other than financial assets at fair value through results are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Objective evidence of impairment in financial assets could include:

• Significant financial difficulty of the issuer or counterparty; or

• Breach of contract, such as a default or delinquency in interest or principal payments; or

• It becoming probable that the borrower will enter bankruptcy or financial reorganization; or

• The disappearance of an active market for that financial asset because of financial difficulties

The carrying amount of the financial asset is reduced directly by the impairment loss, except for trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recorded in results. Changes in the carrying amount of the allowance account are recognized in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through results to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed the amortized cost if the impairment would not have been recognized.

G-25

Derecognition of financial assets

On derecognition of a financial asset in its entirety, the difference between the asset´s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in results.

Financial liabilities

Financial liabilities are classified as financial liabilities at fair value through profit or loss, or other financial liabilities based on the substance of contractual arrangements.

Financial liabilities at fair value through profit or loss

A financial liability at fair value through profit or loss is a financial liability that is classified as held for trading or designated at fair value through profit or loss.

A financial liability is classified as held for trading if:

• It has been acquired principally for the purpose of repurchasing it in the near term; or

• On initial recognition it is part of a portfolio of identified financial instruments that are managed together for which there is evidence of a recent pattern of making short-term profits, or

• It is a derivative that for accounting purposes does not comply with requirements to be designated as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at fair value through profit or loss upon initial recognition if:

• Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Entity’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• It forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined contract (asset or liability) to be designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on measurement recognized in profit or loss. The net gain or loss recognized in results incorporates any interest paid on the financial liability and is included in the effects of valuation of derivative financial instruments line item in the statement income and other comprehensive income. Fair value is determined in the manner described in Note 23.

Other financial liabilities

Other financial liabilities, including loans, bond issuances and debt with lenders and trade creditors and other payables are valued initially at fair value, represented generally by the consideration transferred, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method.

Derecognition of financial liabilities

The Entity derecognizes financial liabilities when, and only when, the obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in results.

G-26

Effective interest rate method

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or cost over the relevant period. The effective interest rate is the rate that exactly discounts future cash receivable or payable (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or (where appropriate) a shorter period, to the carrying amount of the financial asset or liability on its initial recognition. When calculating the effective interest rate, all cash flows must be estimated (for example, prepayment, call options “call” and the like) except for future credit losses. The calculation must include all commissions and payments or receipts between the parties to the financial instrument, including other premiums or discounts.

Offsetting of financial assets and liabilities

Offsetting of financial assets and liabilities in the consolidated statement of financial position only occurs for accounts receivable and payable arising in transactions that contractually, or by law, have established a right of setoff and for which the Entity has the intention to pay a net amount or to realize the asset and pay the liability simultaneously.

n. Risk management policy

Entity is exposed to risks that are managed through the implementation of systems related to identification, measurement, limitation of concentration, mitigation and supervision of such risks. The basic principles defined by Entity in the establishment of its risk management policy are the following:

• Compliance with the Corporate Governance Standards

• Establishment, by each different business line and subsidiaries, of risk management controls necessary to ensure that market transactions are conducted in accordance with the policies, rules and procedures of the Entity.

• Special attention to the financial risk management, basically composed by interest rate, the exchange rate, liquidity and credit risks (see Note 23).

Risk management in the Entity is mainly preventive and oriented to the medium and long term, taking into consideration the most probable scenarios of evolution of the variables affecting each risk.

o. Derivative financial instruments

The Entity underwrites a variety of financial instruments to manage its exposure to the risks of volatility in interest rates and exchange rates, including foreign currencyforward contracts, interest rateswaps and interest rate swaps and foreign exchange (cross currency swaps) related to financing its construction projects. Note 20 includes a more detailed explanation of derivative financial instruments.

Derivatives are initially recognized at fair value at the date the derivative contract is entered into and are subsequently remeasured at fair value at the end of each reporting period. Fair value is determined based on recognized market prices. When the derivative is not listed on a market, fair value is based on valuation techniques accepted in the financial sector. Valuations are conducted quarterly in order to review the changes and impacts on the consolidated results.

The resulting gain or loss from remeasurement to fair value is recognized in profit or loss unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is greater than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

G-27

Hedge accounting

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

When the related transaction fulfills all hedge accounting requirements, the derivative is designated as a hedging instrument when the contract is entered (either as a hedge of cash flow or hedge of foreign currencies or a fair value hedge). The decision to apply hedge accounting depends on economic or market conditions and economic expectations in the national or international markets. When the Company contracts a derivative financial instrument for hedging purposes from an economic perspective but that instrument does not comply with all requirements established by IFRS to be considered as hedging instruments, gains or losses from such derivative financial instrument is applied to the results in the period in which it occurs.

The Entity’s policy not to enter into derivative financial instruments for speculative purposes, but certain instruments entered into by the Company that do not qualify as hedging instruments and accounted for as trading instruments and the fluctuation in fair value is recognized in the financial results of the period in which they are measured.

Effectiveness tests of derivatives that qualify as hedging instruments from an accounting perspective are performed at least once every quarter and every month, if there is a significant change.

Note 23 includes details of the fair values of derivative instruments used for hedging purposes.

Fair value hedges

The change in the fair value of the hedging instruments and the change in the hedged item attributable to the hedged risk are recognized in the line item in the statement of income and other comprehensive income relating to the hedged item.

Cash flow hedges

For cash flow hedges (including interest rate swaps and interest rate options) and hedging exchange rate designated as cash flow hedges and foreign currency instruments including foreign exchange, currency swaps foreign and foreign currency options, the effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The ineffective portion is recognized immediately in the financial results of the period.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to results in the periods when the hedged item is recognized in results, in the same line item in the statement of income and other comprehensive income where the hedged item is recognized. However, when a forecasted transaction that is hedged gives rise to the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Interruption of hedge accounting

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any accumulated gain or loss on the hedging instrument recognized in other comprehensive income remains there until the hedged item affects results. When a forecasted transaction is no longer expected to occur, the accumulated gain or loss is reclassified immediately to results.

G-28

Embedded derivatives

The Entity reviews all of its contracts to identify embedded derivatives that should be separated from the host contract for purposes of valuation and accounting. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value through results.

The Entity has no significant effects arising from embedded derivatives at the end of the periods reported.

Hedges of net investments in foreign operations

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income and accumulated under the heading of foreign currency translation reserve. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in interest expense or income.

Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

p. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, when it is probable that the Company will be required to settle the obligation, and when a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties associated with the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

The main provisions recognized by the Company are for major maintenance, completion of construction and machinery leasing and related guarantees, and are classified as current or noncurrent based on the estimated time period to settle the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

q. Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of income and other comprehensive income because of items of income or expense that are taxable or deductible in periods different from when they are recognized in accounting profit or for items which are never taxable or deductible. Through December 31, 2013, the Business Flat Tax (“IETU”) was in effect, which was determined based on cash flows, considering the income received less the expenditures authorized by law.

The income tax incurred was the higher of regular income tax (“ISR”) and IETU.

The tax provisions of foreign subsidiaries are determined based on taxable income of each individual entity.

G-29

Deferred income taxes 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. Except as mentioned in the following paragraph, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences and the expected benefit of tax losses. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred taxes are recognized as income or expense in profit or loss, except when it relates to items recognized outside of profit or loss, as in the case of other comprehensive income, stockholders’ equity items, or when the tax arises from the initial recognition of a business combination, in which case the tax is recognized in other comprehensive income as part of the equity item in question or, in the recognition of the business combination, respectively.

In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.

Assets and deferred tax liabilities are offset when a legal right to offset assets with liabilities exists and when they relate to income taxes relating to the same tax authorities and the Company intends to liquidate its assets and liabilities on a net basis.

r. Employee benefits and termination costs

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Certain subsidiaries are subject to statutory employee profit sharing (“PTU”) payment stemming from legal dispositions, which is recorded in the results of the year in which it is incurred and presented under general expenses in the consolidated statements of income and other comprehensive income.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

G-30

• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements).

• Net interest expense or income.

• Remeasurement.

The Company presents the first two components of defined benefit costs in profit or loss in the line item general expenses. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

s. Revenue recognition

Revenues are recognized when it is likely that the Entity will receive the economic benefits associated with the transaction. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of activities, Revenues are reduced for estimated customer returns, rebates and other similar allowances.

By type of activity, revenue is recognized based on the following criteria.

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, in accordance with IAS 11,Construction Contracts(“IAS 11”). The percentage-of-completion method provides an understanding of the performance of the project in a timely manner, and appropriately presents the legal and economic substance of the contracts. Under this method, revenue from the contract is compared against the costs incurred thereof, based on percentage-of-completion, which will determine the amount of revenue, expenses and income that can be attributed to the portion of work completed.

To use the percentage of completion method the following requirements must be met: (i) the contract must clearly specify legal rights relating to goods or services to be provided and received by the parties, the consideration to be paid and the terms of the agreement, (ii) the contract must specify the legal and economic right to receive payment for work performed while the contract progresses, (iii) it is expected that the contractor and the customer fulfill their contractual obligations, and (iv) that, based on the budget and the work contract, they can determine the total revenues, the total cost to be incurred and the estimated profit.

The base revenue utilized to calculate the amount of revenue to recognize 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.

G-31

The basis for costs used to calculate the percentage of completion in accordance with the costs incurred method considers: (i) costs that relate directly to the specific contract, (ii) indirect costs related to contract activity and that can be identified with a specific contract, and (iii) any other costs that may affect the customer under the terms agreed in the contract. Costs that relate directly to a specific contract include all direct costs as raw material, labor, costs of subcontracting, manufacturing costs and supply of equipment carried out in independent workshops, project startup costs and depreciation. Indirect costs that are assignable to the contract include: indirect labor, administrative payroll, housing camps and related costs, quality control and inspection, internal and external oversight of the contract, insurance costs, bonds, depreciation, amortization, repair and maintenance.

The costs which are excluded are: (i) general administrative expenses that are not included under any form of reimbursement in the contract, (ii) selling expenses, (iii) the costs and expenses of research and development that have not been considered reimbursable by the contract, and (iv) depreciation of machinery and equipment not used in the specific contract even when available for a specific contract, if the contract does not allow revenue for such concept. Additionally, costs for work performed in independent workshops and construction in process are excluded until their receipt or use and are recorded as assets until such time.

Periodically, the Entity evaluates the reasonableness of the estimates used in determining the percentage of completion. Estimates of the costs of construction contracts are based on assumptions which may differ from the actual cost over the life of the project. The cost estimates are reviewed periodically, taking into account factors such as increases in the prices of materials, amount of work to be performed, inflation, exchange rate fluctuations, changes in contract specifications due to adverse conditions, provisions that are recorded in accordance with construction contracts throughout the duration of projects, including those relating to penalty clauses, completion and commissioning of the projects 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, adjustments are made for the percentage of completion and if there are indications that the estimated costs to be incurred to completion of the project will exceed the expected revenue is recognized a provision for estimated contract loss in the period in which it is determined. Revenue and estimates cost may be affected by future events. Any changes in these estimates may affect the results of the Entity.

A variation on the extent of the work may be due to several factors, including: improvements in the construction process due to reduced supplies or runtime, local regulatory changes and changes in the conditions for the execution of the project or its implementation, design changes requested by the customer and the geological conditions not included in the original plan. Additionally, and in order to identify possible changes in contracts, the Entity has implemented a method by which these changes can be identified and reported, the amounts can be quantified and approved and the changes can be implementedefficiently on projects. A variation is included in contract revenue when: a) it is probable that the customer will approve the changes and the amount of revenue resulting from the change, b) the amount of revenue can be reliably measured and c) and it is probable that the economic benefits flow to the entity. Claims or incentives for early completion are recognized as part of the revenue of a contract, provided that there is sufficient evidence that the customer will authorize payment for these items. Consequently, claims and incentives are included in contract revenue only when: a) negotiations have reached an advanced stage such that it is probable that the customer will accept the claim, and b) the amount that probable to be accepted by the customer can be determined reliably. The costs incurred for change orders instructed by the client and are awaiting the definition and authorization of price, are recognized as an asset under the caption “Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts” described below. With respect to incentive payments, revenues are recognized only when the execution of the contract is significantly advanced to conclude that the specified standards of performance will be achieved or exceeded and the amount of the incentive payment can be measured reliably.

G-32

In projects financed by the Entity in which the value of the contract includes revenues from work execution and financing, only borrowing costs directly related to the acquisition or construction of assets, less any yield obtained by the temporary investment of such funds and the foreign exchange loss to the extent it is an adjustment to interest costs, are attributed to contract costs. Borrowing costs that exceed estimates and are not contractually reimbursed by customers are not part of the contract costs. In these types of contracts, the collection of the contract amount from the client may take place at the end of the project. However, periodic progress reports are presented to and approved by the customer, which form the basis for the Company to obtain where appropriate, financing for the project in question.

When a contract includes the construction of several facilities, the construction of each is considered a separate profit center when: (i) separate proposals have been submitted for each facility, (ii) each facility has been subject to separate negotiations and the contractor and customer have been able to accept or reject that part of the contract relating to each asset, and (iii) revenue, costs and profit margin of each facility can be identified.

A group of contracts, whether with one or more customers, are managed as a single profit center if: (i) the group of contracts had been negotiated as a single package, (ii) the contracts are so closely interrelated that they are, in effect, part of a single project with an overall profit margin, and (iii) the contracts are performed simultaneously or in in a continuous sequence.

The Entity does not offset the profit and loss from separate profit centers. The Entity also ensures that when several contracts comprise a profit center, a combined result is presented.

Under the terms of various contracts, revenue recognized is not necessarily related to the amounts billable to customers. Management periodically assesses the reasonableness of its receivables. In cases where there are indications of difficulty of their recovery, estimates for doubtful accounts are recognized thorugh results of the year they are determined. The estimate is based on the best judgment of the Company under the circumstances prevailing at the time of determination, modified by changes in circumstances.

The line item “Cost and Estimated Earnings in Excess of Billings on Uncompleted Contracts” included in the heading of “Customers”, originates from construction contracts and represents the difference between the costs incurred plus recognized profit (or less any recognized losses) and less certifications made for all contracts in progress, in excess of the amount of the certificates of work performed and invoiced. Any amounts received before work has been performed are included in the consolidated statement of financial position as a liability, as advances from customers. Amounts invoiced from the performed work but not yet paid by the customer are included in the consolidated statement of financial position as trade and other receivables.

Interest income

Interest income is recorded on a periodic basis, with reference to capital and the effective interest rate applicable.

Leasing revenues

The Entity’s policy for recognition of revenue from operating leases is described in subsection g) on this note (the Entity as lessor).

G-33

5. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Entity’s accounting policies, which are described in Note 4, the Entity’s management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Estimates and assumptions are reviewed regularly. Changes to accounting estimates are recognized in the period in which the change is made and future periods if the change affects both the current period and to subsequent periods.

a) Critical judgments in applying accounting policies

The following are the critical judgments, apart from those involving estimations (see subsection b), performed by management throughout the process of applying the accounting policies of the Entity and that have the most significant effect on the amounts recognized in the consolidated financial statements.

• Through December 31, 2012, for the determination of deferred taxes, the Entity prepared projections of future taxable income for period over which deferred taxes will reverse, in order to establish whether it expected to pay IETU or ISR in those years for purposes of determining the basis of the deferred income tax. The Entity noted that certain subsidiaries will only incur ISR, while others will only incur IETU; it had therefore recognized deferred taxes by using the basis applicable for each legal entity. As of December 31, 2013, IETU was eliminated, such that deferred income taxes are only recognized on an ISR basis.

• Assessment of the existence of control, joint control or significant influence investments in subsidiaries (see Notes 14 and 15).

• The Entity’s defined benefit obligation is discounted at the rate set by reference to market yields at the end of the reporting period on government bonds. Significant judgment is required when setting the criteria for bonds to be included in the population from which the yield curve is derived.

• The Entity is subject to transactions or contingent events over which professional judgment is exercised in developing estimates of probability of occurrence of probable outflows associated with adverse outcomes. The factors considered in these estimates are the legal merits of the case, as substantiated by the opinion of the Entity’s legal advisors.

b) Key sources of estimation uncertainly

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

• Determining the profit margin and degree of progress in construction contracts. (See Note 4s).

• In order to estimate doubtful accounts receivable, among other elements, the Entity considers the credit risk derived from the customer’s financial position and any significant collection delays based on the terms agreed in construction service agreements. (see Note 7).

• The Entity reviews the estimated useful life and residual values of property, plant and equipment at the end of each annual period. Based on detailed analysis, Entity management makes modifications in the useful lives of certain property, machinery and equipment. The level of uncertainty associated with estimates of useful lives is related to changes in the market and use of assets because of production volumes and technological development.

G-34

• The Entity prepares estimates to determine and recognize the provision necessary for the completion of projects, rental and maintenance of machinery, which are determined based on the stage of completion of projects and hours of use in case of machinery.

• The Entity values and recognizes derivatives at fair value, regardless of the purpose for holding them. Its bases fair value on market prices for derivatives traded in recognized markets. If no active market exists, the derivative instrument is valued using the valuations of counterparties (valuation agents) verified by a price provider authorized by the National Registry of Securities (Registro Nacional de Valores). These valuations are based on methodologies recognized in the financial sector and are supported by sufficient and reliable information. Note 23 contains a description of the techniques and methods utilized to value derivative financial instruments.

• To determine certain provisions, the Entity uses factors related to lead times for construction contracts and production volume, as well as hours of use for owned and leased machinery.

Although these estimates were made based on the best information available at December 31, 2013, it is possible that events may take place in the future that will require their modification (increases or decreases) in subsequent years, which such modification would be made prospectively in the Entity’s consolidated financial statements.

6. Cash and cash equivalents

Cash and cash equivalents at each period end as shown in the statement of financial position, are composed as follows:

	December 31,
	2013		2012
Cash	$	109,069	$	94,486
Cash equivalents:
Bank paper		224,859		1,569,484
Commercial paper		1,307,086		803,877
Other investments		—		—
Total cash and cash equivalents	$	1,641,014	$	2,467,847

7. Customers

a. At December 31, 2013 and 2012, the balance of customers is as follows:

	December 31,
	2013			2012
Billings on contract	$	597,307		$	648,161
Allowance for doubtful accounts		(3,937	)		—
Retained billings on contracts		47,552			64,888
Advanced payments received on contracts(1)		(103,508	)		(84,075	)
		537,414			628,974
Cost and estimated earnings in excess of billings on uncompleted contracts		3,937,438			3,583,642
Total customers	$	4,474,852		$	4,212,616

(1) Advance payments on work performed are applied against the receivable certificates as work on those projects is carried out.

Customers receivables disclosed above are measured at amortized cost.

Entity’s management considers that the carrying amount of accounts receivable represents its fair value. There is no interest charged on accounts receivable from customers.

G-35

Accounts receivable from customers include amounts that are past due at the end of the reporting period (see below analysis of aging), but for which the Entity has not recognized any allowance for bad debts since there has been no significant change in credit quality and the amounts are still considered recoverable. The Entity does not maintain any collateral or other credit enhancement on those balances, nor does it have the legal right to offset against any amount owed by the Entity to the counterparty.

The management of accounts receivable and the determination of the need for a reserve are carried out by each construction project that forms part of the consolidated financial statements, as each project has more thorough knowledge of the financial situation and relationship with each of its customers. However, in each of the lines of business, certain guidelines exist regarding specific characteristics that each customer must possess depending on the nature of the line of business. Generally, receivables from governmental entities do not possess recoverability issues.

Regarding the contracts of the private sector, to which a maximum level of risk is assigned and collection conditions and terms are established based on the credit profile of the customer at the beginning of the customer relationship based on the magnitude of the specific project. For foreign private clients, the Entity’s policy is to generally require payments in advance at the start of the project and routine collections on a short-term basis to allow positive working capital management.

With Respect to public contracts (mainly Pemex), the contracting entities define the payment through its established contract models, which provide for the payment of monthly amounts as well as payment in advance at the beginning of each of the periods during which the project will be executed.

b. Amounts past due but not impaired

	December 31,
	2013		2012
Up to 120 days	$	345,156	$	631,938
120 to 360 days		1,853,335		1,378,522
More than 360 days		132,100		9,297
Total	$	2,330,591	$	2,019,757
Average age (days)		215		163

c. Changes in allowance for doubtful accounts:

	December 31,
	2013		2012		2011
Beginning balance	$	—	$	—	$	—
Increase of the period		3,937		—		—
Application of the period		—		—		—
Cancellation of the period		—		—		—
Ending balance	$	3,937	$	—	$	—

d. Cost and estimated earnings in excess of billings on uncompleted contracts is as follows:

	December 31, 2013
	Costs incurred on uncompleted contracts		Estimated earnings		Total		Less: Billings to date		Cost and estimated earnings in excess of billings on uncompleted contracts
Public sector	$	26,619,113	$	1,730,129	$	28,349,242	$	24,496,668	$	3,852,574
Private sector		263,132		34,671		297,803		212,939		84,864
Total	$	26,882,245	$	1,764,800	$	28,647,045	$	24,709,607	$	3,937,438

G-36

	December 31, 2012
	Costs incurred on uncompleted contracts		Estimated earnings		Total		Less: Billings to date		Cost and estimated earnings in excess of billings on uncompleted contracts
Public sector	$	24,206,721	$	2,025,095	$	26,231,816	$	22,666,912	$	3,564,904
Private sector		305,919		54,285		360,204		341,466		18,738
Total	$	24,512,640	$	2,079,380	$	26,592,020	$	23,008,378	$	3,583,642

8. Construction backlog

a. Backlog includes the entire contract amount only for contracts in which the Entity has control over the project. The Entity considers that it controls a project when it has a controlling interest and it is the project leader. When control is shared, the amount included in backlog represents the Entity’s participation in the equity of the associate. A reconciliation of backlog representing executed construction contracts at December 31, 2013 and 2012 is as follows:

Balance at January 1, 2012	$	14,230,098
New contracts and changes in 2012		8,132,169
Less: construction revenue 2012		12,706,792
Balance at December 31, 2012		9,655,475
New contract and changes in 2013		10,425,051
Less: construction revenue 2013		10,114,624
Balance at December 31, 2013	$	9,965,902

b. When the control is shared, backlog incorporates the portion of the contract belonging to the Entity, as follows:

	Total
Balance at January 1, 2012	$	—
New contracts and changes in 2012		7,277,392
Less: construction revenue 2012		291,090
Balance at December 31, 2012		6,986,302
New contracts and changes in 2013		38,386
Less: construction revenue 2013		3,932,451
Balance at December 31, 2013	$	3,092,237

G-37

9. Other receivables

Other receivables are as follows:

	December 31,
	2013		2012
Income tax recoverable (excess tax prepayments)	$	6,053	$	243,602
Accreditable value-added tax		24,343		43,928
Sundry debtors		72,519		65,916
Guarantee deposits(1)		20,619		20,304
	$	123,534	$	373,750

⁽¹⁾  At December 31, 2013 and 2012, corresponds to deposits for offices and campsite leases.

10. Inventories

Inventories consist of the following:

	December 31,
	2013		2012
Materials and spare parts	$	5,975	$	3,789
Allowance for obsolete inventories		—		—
Total inventories, net	$	5,975	$	3,789

The analysis of allowance for obsolete inventory is as follows:

	December 31,
	2013		31, 2012
Beginning balance	$	—	$	9,164
Reversals		—		(9,164	)
Ending balance	$	—	$	—

11. Other current assets

Other current assets consist of the following:

	December 31,
	2013		2012
Advances to subcontractors	$	68,915	$	117,651
Advances to suppliers		28,888		44,415
Prepaid expenses		—		8,881
Insurance and bonds paid in advance		30,976		18,742
	$	128,779	$	189,689

G-38

12. Property, machinery and equipment

Property, machinery and equipment consist of the following:

	December 31,
	2013			2012
Buildings	$	53,324		$	51,012
Other construction		106,987			88,745
Machinery and operating equipment		33,528			23,174
Vehicles		48,327			37,824
Furniture and equipment		68,751			72,175
Computers		4,516			3,109
Communication equipment		1,235			1,235
Leasehold improvements		206,269			203,674
		522,937			480,948
Accumulated depreciation and amortization		(155,069	)		(102,444	)
		367,868			378,504
Land		156,829			156,829
Sub-total	$	524,697		$	535,333

Equipment under capital leases are as follows:

Vehicles	$	16,444		$	14,230
Computers		99,986			96,435
Communication equipment		17,684			15,273
		134,114			125,938
Accumulated depreciation		(64,730	)		(55,410	)
Sub-total		69,384			70,528
Total	$	594,081		$	605,861

G-39

Carrying amount	Land		Buildings, other constructions and improvements		Machinery major and minor			Vehicles			Computer and communication equipment			Furniture and equipment			Equipment under lease			Total
Balances at January 1, 2012	$	156,829	$	162,291	$	11,548		$	30,840		$	2,856		$	49,324		$	82,738		$	496,426
Additions		—		181,140		11,626			8,710			2,071			23,937			71,217			298,701
Disposals		—		—		—			(618	)		—			(889	)		(28,017	)		(29,524	)
Transfers		—		—		—			(1,108	)		(583	)		(197	)		—			(1,888	)
Balances at December 31, 2012		156,829		343,431		23,174			37,824			4,344			72,175			125,938			763,715
Additions		—		23,149		10,589			13,332			1,541			1,362			45,410			95,383
Disposals		—		—		(235	)		(2,457	)		(40	)		(237	)		(37,234	)		(40,203	)
Transfers		—		—		—			(372	)		(94	)		(4,549	)		—			(5,015	)
Balances at December 31, 2013	$	156,829	$	366,580	$	33,528		$	48,327		$	5,751		$	68,751		$	134,114		$	813,880
Accumulated depreciation	Land		Buildings, other constructions and improvements		Machinery major and minor			Vehicles			Computer and communication equipment			Furniture and equipment			Equipment under lease			Total
Balances as of January 1, 2012	$	—	$	35,906	$	1,976		$	13,506		$	1,509		$	10,348		$	42,696		$	105,941
Depreciation expense		—		22,565		5,516			8,291			879			5,079			40,547			82,877
Disposals		—		—		—			(618	)		—			(625	)		(27,833	)		(29,076	)
Transfers		—		—		—			(1,108	)		(583	)		(197	)		—			(1,888	)
Balances at December 31, 2012		—		58,471		7,492			20,071			1,805			14,605			55,410			157,854
Depreciation expense		—		33,720		7,943			10,513			1,287			6,906			46,554			106,923
Disposals		—		—		(112	)		(2,342	)		(40	)		(235	)		(37,234	)		(39,963	)
Transfers		—		—		—			(372	)		(94	)		(4,549	)		—			(5,015	)
Balances at December 31, 2013	$	—	$	92,191	$	15,323		$	27,870		$	2,958		$	16,727		$	64,730		$	219,799

Depreciation expense for 2011 was $48,121.

Note 19 includes information on financial and operating leases.

13. Other assets

Other assets are comprised of the following:

	December 31,
	2013			2012
Cost related to uncompleted construction contracts	$	36,726		$	36,530
Software		42,214			35,282
Accumulated amortization		(48,379	)		(48,025	)
	$	30,561		$	23,787

G-40

Movements in other assets in the statements of financial position as of December 31, 2013 and 2012 were as follows:

	Cost related to uncompleted construction contracts		Software			Total
Balances as of January 1, 2012	$	33,960	$	32,628		$	66,588
Additions		2,570		2,654			5,224
Balances as of December 31, 2012		36,530		35,282			71,812
Additions		196		10,220			10,416
Transfers		—		(3,288	)		(3,288	)
Balances as of December 31, 2013	$	36,726	$	42,214		$	78,940
Accumulated amortization	Cost related to uncompleted construction contracts		Software			Total
Balances as of January 1, 2012	$	26,999	$	8,222		$	35,221
Amortization		9,531		3,273			12,804
Transfers		—		—			—
Balances as of December 31, 2012		36,530		11,495			48,025
Amortization		137		3,505			3,642
Transfers		—		(3,288	)		(3,288	)
Balances as of December 31, 2013	$	36,667	$	11,712		$	48,379

Amortization expense was $27,606 for 2011.

14. Composition of the Entity

Information about entity´s composition at the end of the reporting period is as follows:

	Place of incorporation and operation		Direct and indirect interest
			December 31,
Name of the company		Activity	2013			2012
Industria del Hierro, S. A. de C. V. (IH)	Mexico	Construction services		99.99	%		99.99	%
IFD Servicios de Ingeniería, S. A. de C. V. (IFD SI)	Mexico	Engineering services		99.97	%		99.97	%
ICA Fluor Servicios Gerenciales, S. A. de C. V. (ICAF SG)	Mexico	Consulting service		99.99	%		99.99	%
ICA Fluor Operaciones, S. A. de C. V. (ICA FO)	Mexico	Consulting service		99.99	%		99.99	%

G-41

	Place of incorporation and operation			Direct and indirect interest
				December 31,
Name of the company			Activity	2013			2012
ICA Fluor Servicios Operativos, S. A. de C. V. (ICA FSO)		Mexico	Consulting service		99.99	%		99.99	%
ICA Fluor Petroquímica , S. A. de C. V. (IFP)		Mexico	Petrochemical industry		99.99	%(1)		99.99	%(1)
Etileno Contractors , S. de R. L. de C. V. (EC)		Mexico	Construction services		99.99	%(1)		99.99	%(1)

Financial statements of the subsidiaries are prepared considering accounting period and in accordance with the accounting policies of the entity. Profit or loss of the subsidiaries is included in entity´s consolidated financial statements one month after its acquisition.

(1) Entities incorporated in 2012

The Entity has the power to vote at meetings of shareholders of the subsidiaries and has control by virtue of its contractual right to appoint the board of directors of the Companies.

15. Joint ventures

The investment of the Entity in joint ventures is as follows:

			Proportion of ownership interest and voting rights held by the Entity						Balance of the investment
Name of joint venture	Principal activity	Place of incorporation and principal place of business	December 31,						December 31,
			2013			2012			2013		2012
Desarrolladora de Etileno, S. de R. L. de C.V (DE) (1)	Consulting	México		20	%		20	%	$	10	$	10
Ethylene XXI Contractors, S. A. P. I. de C. V. (EC SAPI) (1)	Construction services	México		20	%		20	%		25,172		27
Etileno XXI Services, B. V. (E XXI) (1) (2)	Technical, finance and management services	Netherlands		20	%		20	%		121,856		15,214
									$	147,038	$	15,251

(1) Entities incorporated in 2012.

(2) Amounts of the entity “ Etileno XXI Services, B.V.” are translated to Mexican pesos according to IFRS, as the entity’s functional and recording currency are U.S. dollars.

G-42

Companies listed in the table above, are companies whose legal form confers separation between the parties of the joint agreement and the entity itself. Aditionally, there is no contractual agreement or other facts and circumstances which indicate that the parties of the joint arrangement have rights to the assets and obligations for the liabilities of the entity. Consequently, these investments are classified as joint ventures of the Entity.

The above joint ventures are recognized using the equity method in the consolidated financial statements.

Summarized financial information concerning the relevant joint ventures are included below. The summarized financial information below represents amounts shown in the Entity’s financial statements prepared in accordance with IFRS.

	December 31, 2013
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Current assets	$	50	$	1,951,716	$	3,532,775
Non-current assets		—		18		373
Current liabilities		—		1,825,873		2,745,316
Non-current liabilities		—		—		178,551

The amounts of assets and liabilities include the following:

	December 31, 2013
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Cash and cash equivalents	$	50	$	495	$	2,684,850
Currents financial liabilities (excluding suppliers and other liabilities)		—		—		—
Non-current financial liabilities (excluding suppliers and other liabilities)		—		—		—

	December 31, 2012
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Current assets	$	50	$	134	$	1,456,937
Non-current assets		—		—		242
Current liabilities		—		—		1,375,866
Non-current liabilities		—		—		5,242

The amounts of assets and liabilities include de following:

	December 31, 2012
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Cash and cash equivalents	$	50	$	—	$	3,820
Currents financial liabilities (excluding suppliers and other liabilities)		—		—		—
Non-current financial liabilities (excluding suppliers and other liabilities)		—		—		—

G-43

	December 31, 2013
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Revenue	$	—	$	9,551,795	$	10,060,899
Cost and expenses		—		9,342,713		9,301,780
Profit of the year		—		125,726		534,360
Total other comprehensive income for the year		—		125,726		533,210

	December 31, 2013
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Depreciation and amortization	$	—	$	—	$	—
Interest income		—		12,249		12
Interest expenses		—		142		—
Income tax		—		74,627		229,012

	December 31, 2012
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)		Ethylene XXI Contractors, S. A. P. I. de C. V		Etileno XXI Services, B. V. (2)
Revenue	$	—	$	—	$	1,455,452
Cost and expenses		—		—		1,353,006
Profit of the year		—		34		72,051
Total comprehensive income for the year		—		34		71,903
Depreciation and amortization	$	—	$	—	$	—
Interest income		—		34		—
Interest expenses		—		—		12
Income tax		—		—		30,879

Reconciliation of condensed financial information presented above, with carrying amounts of the interest recognized in the financial statements:

	December 31, 2013
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)			Ethylene XXI Contractors, S. A. P. I. de C. V			Etileno XXI Services, B. V. (2)
Net assets of the joint ventures	$	50		$	125,860		$	609,281
Proportion of the Entity’s ownership interest		20	%		20	%		20	%
Carrying amount of entity’s interest in the joint ventures		10			25,172			121,856

	December 31, 2012
	Desarrolladora de Etileno, S. de R. L. de C.V (DE)			Ethylene XXI Contractors, S. A. P. I. de C. V			Etileno XXI Services, B. V. (2)
Net assets of the joint ventures	$	50		$	134		$	76,071
Proportion of the Entity’s ownership interest		20	%		20	%		20	%
Carrying amount of entity’s interest in the joint ventures		10			27			15,214

G-44

16. Notes payable

Notes payable consist of the following:

	December 31,
	2013		2012
Notes payable to banks denominated in Mexican pesos	$	368,737	$	198,970
Notes payable to banks denominated in U.S. dollar		272,253		268,382
	$	640,990	$	467,352

Notes payable to banks have a different interest rate for loans in pesos and U.S. dollars.

	2013	2012
Interest rate for loans in Mexican pesos Interbank equilibrium interest rate for 28 days (TIIE)	TIIE+2.00, TIIE +2.20 and TIIE +1.00	TIIE+2.00, TIIE +2.20 and TIIE +1.00
Interest rate for loans in U.S. dollar London Interbank Offered Rate (Libor) for one month	Libor +2.50, Libor +2.20, Libor +1.35	Libor +2.50, Libor +2.20, Libor +1.35

Notes payable to banks have been issued with HSBC México, JP Morgan and Banco Nacional de México.

Obligations for financing with JP Morgan

1. Delivery of financial statements, within 90 calendar days after the year end close in the case of audited financial statements and 45 calendar days after each quarterly close for internal purposes

2. Maintain of insurances

3. Business maintenance and preservation of corporate existence

Covenants for financing with JP Morgan

1. Prohibited from assuming liens totaling more than USD$20,000, in the case of liens related to PEMEX, amounts may be up to USD$40,000

2. Prohibited to carry out a merger

3. Prohibited from disposing property or assets for an amount of USD$20,000, in case disposals to PEMEX, disposals may be up to USD$40,000

In the case of financing with HSBC and Banco Nacional de Mexico, credit lines have no established obligations and covenants.

17. Other payable accounts and accumulated liabilities

Other payable accounts consist of the following:

	December 31,
	2013		2012
Subcontracts	$	675,830	$	641,030
Current capital lease obligations (Note 19)		37,769		35,247
Other lessors		—		5,142
Contractual and union fees		10,063		9,305
Salaries and wages, bonuses, vacations and premium vacations payable		230,262		213,176
Closing of contracts		27,929		19,801
Accrued expenses		489,036		561,594
Taxes, except income tax		228,995		251,818
Other notes payable		31		31
	$	1,699,915	$	1,737,144

G-45

18. Provisions

The Entity recognizes provisions for those present obligations that result from a past event, which upon the expiration of the obligation; it is probable the Entity will incur an outflow of economic resources in order to settle the obligation. Provisions are recognized as accrued at an amount that represents the best estimate of the present value of future disbursements required to settle the obligation, at date of the accompanying consolidated financial statements.

At December 31, 2013 and 2012 the principal provisions are as follows:

	December 31, 2012		Additions		Reversals			Provision used			December 31, 2013
Current:
Cost expected to be incurred at the end of the project	$	55,341	$	10,091	$	—		$	—		$	65,432
Estimated contract loss		—		27,785		—			—			27,785
Claims		19,407		18,248		(4,000	)		(385	)		33,270
Warranty reserves		20,342		8,816		—			(851	)		28,307
Contingency reserves for construction projects and others		604,300		132,605		(70,988	)		(254,870	)		411,047
	$	699,390	$	197,545	$	(74,988	)	$	(256,106	)	$	565,841
Long term:
Warranty reserves	$	69,510	$	47,863	$	—		$	(1,596	)	$	115,777

	January 1, 2012		Additions		Reversals			Provision used			December 31, 2012
Current:
Cost expected to be incurred of the end at the project	$	36,987	$	18,354	$	—		$	—		$	55,341
Claims		12,493		10,435		(144	)		(3,377	)		19,407
Warranty reserves		34,373		2,504		(16,535	)		—			20,342
Contingency reserves for construction projects and others		407,032		197,268		—			—			604,300
	$	490,885	$	228,561	$	(16,679	)	$	(3,377	)	$	699,390
Long-term:
Warranty reserves	$	61,522	$	7,988	$	—		$	—		$	69,510

The provision related to costs expected to be incurred at the end of the project refers to costs that are originated under construction projects that the Entity anticipates it will incur through the time the projects are finished and ultimately paid for by the customer. Such amounts are determined systematically based on a percentage of the value of the work completed, over the performance of the contract, based on the experience gained from construction activity.

Due to the nature of the industry in which the Entity operates, projects are performed with individual specifications and guarantees, which require the Entity to create guarantee and contingency provisions that are continually reviewed and adjusted during the performance of the projects until they are finished, or even after termination. The increases, applications and cancellations shown in the previous table represent the changes derived from the aforementioned reviews and adjustments, as well as the adjustments for expiration of guarantees and contingencies.

The provision for litigation is recognized in accordance with the analysis of the related lawsuits or claims, according to opinions prepared by the legal advisers of the Entity. The Entity does not derecognize provisions until final resolutions are obtained and the payment process has begun, or there is no further doubt with respect to the associated risk.

G-46

19. Leases

Financial leases

	December 31,
	2013		2012
Lease payable, short term	$	37,769	$	35,247
Lease payable, long term		31,473		34,269
	$	69,242	$	69,516

	Minimum lease payments						Present value of minimum lease payment
	December 31,						December 31,
	2013			2012			2013		2012
Less than one year	$	40,933		$	38,072		$	37,769	$	35,247
Greater than one year, less than five years		34,816			38,347			31,473		34,269
		75,749			76,419			69,242		69,516
Less future finance charges		(6,507	)		(6,903	)		—		—
Present value of minimum lease payments	$	69,242		$	69,516		$	69,242	$	69,516

Finance leases relate to computer equipment, telecommunications and vehicles; lease periods range from between 24 to 48 months. The Entity has the option to acquire this equipment at market value following the conclusion of each capital lease. The Entity’s capital lease obligations are guaranteed by the lessor’s ownership of the leased assets.

The fair value of finance lease liabilities is approximately equal to its carrying amount.

Operating leases

a. Costs and expenses for operating leases

Operating leases are related to machinery and equipment with different lease terms, which range from 5 to 10 years. All operating lease contracts with term greater than 5 years, contain a clause that stipulates a rental rate review at least every 5 years. The Entity does not have an option to purchase the leased assets end of the lease term.

Payments recognized as cost and expense:

	Year ended December 31,
	2013		2012		2011
Costs and leasing expenses	$	307,597	$	291,679	$	284,478

Operating lease commitments:

	December 31,
	2013		2012		2011
Term	Buildings		Buildings		Buildings
Less than one year	$	65,743	$	54,312	$	13,586
Greater than 1 year and less than 5 years		218,480		239,607		246,969
Greater than 5 years		143,835		187,273		256,140
	$	428,058	$	481,192	$	516,695

G-47

b. Revenues from operating leases

The leases entered into by the Entity contain monthly rental payments that generally increase each year based on the INPC. At December 31, 2013 and 2012 committed future rents are as follows:

Term	2013		2012
Less than a year	$	9,428	$	7,437
Greater than 1 year and less than 5 years		6,914		14,525
Total	$	16,342	$	21,962

The amount charged to income for operating leases for the years ended December 31, 2013, 2012 and 2011, amounted to $8,698, $3,107 and $—, respectively.

20. Derivative financial instruments - Currency Forwards

Certain of the Entity’s construction contracts are denominated in in U.S. dollars, while the related construction costs incurred are in Mexican pesos. In order to mitigate the risk of changes in the exchange rate of the U.S. dollar against the Mexican peso, forward currency contracts were entered into through which the exchange rate in which U.S. dollars will be received is fixed.

The risk of changes in the exchange rate at which the Entity is exposed by monetary position different to its functional currency is mitigated by contracting currency forwards through of which the exchange results are compensated.

The forwards are “over the counter” entered into with financial institutions and designated as cash flow hedging instruments for a forecasted transaction (future revenue receivable in U.S. dollars) for which fluctuations in fair value are recognized in other comprehensive income in equity.

As of December 31, 2013 and 2012, the characteristics of current forward contracts are shown below:

			Date of				December31, 2013
Derivative instrument	Type		Engagement		Maturity		Notional amount in American dollars			Fair value in thousands of Mexican pesos
Forwards		Plain Vanilla		20/06/2013		09/01/2014		1,000		$	471
Forwards		Plain Vanilla		22/08/2013		16/01/2014		1,000			196
Forwards		Plain Vanilla		23/08/2013		23/01/2014		1,000			86
Forwards		Plain Vanilla		03/12/2013		03/01/2014		1,000			172
Forwards		Plain Vanilla		09/12/2013		13/01/2014		(24,082	)		4,376
Forwards		Plain Vanilla		18/12/2013		13/01/2014		(2,183	)		292
								(22,265	)		5,593
Recognized in statement of comprehensive income due the amount of the cover transaction was already recognized in statement of comprehensive income											4,668
Recognized in equity as other comprehensive income item										$	925

G-48

Date from

December 31, 2012

Derivative instrument

Type

Engagement

Maturity

Notional amount in American dollars

Fair value in thousands of Mexican pesos

Forwards

Plain Vanilla

29/08/2012

28/02/2013

4,579

$

2,093

Forwards

Plain Vanilla

29/08/2012

27/03/2013

5,796

2,627

Forwards

Plain Vanilla

29/08/2012

30/04/2013

8,154

3,651

Forwards

Plain Vanilla

29/08/2012

31/05/2013

10,558

4,683

Forwards

Plain Vanilla

29/08/2012

28/06/2013

12,534

5,482

Forwards

Plain Vanilla

29/08/2012

31/07/2013

3,878

1,668

Forwards

Plain Vanilla

29/08/2012

30/08/2013

1,974

836

Forwards

Plain Vanilla

30/08/2012

31/01/2013

2,789

1,588

Forwards

Plain Vanilla

31/12/2012

18/01/2013

(104,000

)

(663

)

(53,738

)

$

21,965

At December 31, 2013 and 2012 the fair value of forwards resulted in an asset of $5,593 and $21,965, respectively. The effective portion of the hedge is recognized within comprehensive income within stockholders’ equity. There was no ineffectiveness associated with the hedge. The total amount recognized in other comprehensive income is expected to be reclassified to results in 2014, amount that is subject to change according to market conditions prevailing in 2014.

During 2013, 2012 and 2011, the Entity recognized gains of $48,001, $32,378 and $ 22,360, respectively, presented within constructions revenues for cash flow hedges that were liquidated in the year.

During the year ended December 31, 2013, 2012 and 2011, the Entity recognized a loss of $62,318 , $20,992 and $-, respectively, which were recorded in financial cost for cash flow hedges that were settled in the year.

As of April 29, 2014, fair value of these instruments has not significantly changed.

Sensitivity analysis

A sensitivity analysis was preformed considering the following exchange rate scenarios: -100 cents, -50 cents, -25 cents, +25 cents, +50 cents and +100 cents.

	Fair value at December, 2013		+100 cents			+50 cents			+25 cents			-25 cents		-50 cents			-100 cents
Total fair value		5,593		27,838			16,713			11,153			34		(5,524	)		(16,636	)
Variation in fair value				(22,245	)		(11,120	)		(5,560	)		5,559		11,117			22,229

The sensitivity analysis below reflects the possible impact in to Entity’s stockholders’ equity based on the position of the derivative financial instruments at the end of the year:

	2013
Effect in stockholders’ equity (after tax):
+100 cents		15,572
+50 cents		7,784
+25 cents		3,892
(25 cents)		(3,891	)
(50 cents)		(7,782	)
(100 cents)		(15,560	)

G-49

21. Income taxes

The Entity is subject to income tax and through 2013, the flat tax.

2014 Fiscal Reform

ISR- The rate was 30% for the years 2013, 2012 and 2011, and under the new Income Tax Law 2014 (2014 Income Tax Law) will continue at 30% for 2014 and subsequent years.

IETU - Since 2014 the flat tax was eliminated. Accordingly, the Company was subject to, and recognized, IETU through December 31, 2013, which is a tax based on cash flows from both income and deductions and certain tax credits in each year. The rate was 17.5%. As a result of the elimination of the tax, the Company canceled its existing deferred IETU balances through results of the period.

Through December 31, 2013, current income tax was based on the greater of ISR and IETU.

From 2008, the IMPAC Law was eliminated; however, in certain circumstances, recovery of IMPAC paid in the ten years immediately preceding that in which ISR is paid is permitted.

Through 2012, based on its financial projections, the Company recognized deferred income tax and flat tax. As of December 31, 2013, deferred income tax is solely determined based on ISR due to the abrogation of the flat tax.

a. The income tax impacts are as follows:

Consolidated statements of financial position:

	December 31,
	2013		2012
Assets:
Deferred income tax	$	121,970	$	172,023
Deferred IETU		—		(66,189	)
Total long-term	$	121,970	$	105,834
Liabilities:
Current ISR		35,584		4,099
Current portion	$	35,584	$	4,099

Consolidated statements of comprehensive income:

	Year ended December 31,
	2013			2012			2011
ISR:
Current	$	73,315		$	86,948		$	3,588
Cancellation of liabilities of prior years		—			(275	)		—
Total current income tax		73,315			86,673			3,588
Effect of deferred taxes of the year		53,842			81,439			(487	)
Total ISR		127,157			168,112			3,101
IETU:
Current		—			13,911			435,090
Cancellation of liabilities of prior years		—			(149,301	)		—
Cancellation of liabilities of prior years		(136	)		—			—
Deferred		(66,092	)		164,176			(271,787	)
Total IETU		(66,228	)		28,786			163,303
Income tax expense	$	60,929		$	196,898		$	166,404

G-50

b. The reconciliation of the statutory income tax rate and the effective income tax rate as a percentage of net income before income taxes is as follows:

	2013
	Companies incurring ISR
	Amount			Rate %
Income before income tax	$	494,891
Current		73,315
Deferred		53,842
Cancellation of deferred IETU		(66,228	)
Total income taxes		60,929			12.3	%
Add (deduct) effects of permanent differences, non-deductible expenses and non-taxable income		(7,802	)		(1.5	%)
Inflationary effects		11,491			2.3	%
Equity method in joint ventures		39,605			8.0	%
Effect of modification of tax rates from fiscal reform		51,084			10.3	%
Profit of derivative instruments recognized in comprehensive income		(6,589	)		(1.3	%)
Others		(251	)		(0.1	%)
Statutory rate	$	148,467			30.0	%

	2012
	Companies incurring ISR
	Amount			Rate %
Income before income tax	$	711,367			—
Current		(48,718	)		—
Deferred		245,616			—
Total income taxes		196,898			27.7	%
Add (deduct) effects of permanent differences, non-deductible expenses and non-taxable income		(6,984	)		(1.0	%)
Inflationary effects		16,231			2.3	%

	2012
	Companies that incurring ISR
	Amount			Rate %
Effect of foreign currency exchange		868			0.1	%
Equity method in joint venture		4,325			0.6	%
Effect of changes in tax rates		7,998			1.1	%
Effects of estimating costs on customer advances		(5,926	)		(0.8	%)
Statutory rate	$	213,410			30	%

G-51

	2011
	Companies incurring in IETU
	Amount			Rate %
Income before income tax	$	552,010			—
Current		438,678			—
Deferred		(272,274	)		—
Total income taxes		166,404			30.1	%
Add (deduct) effects of permanent differences, primarily non-deductible expenses and non-taxable revenues		(9,687	)		(1.7	%)
Royalties		(52,926	)		(9.6	%)
Exempt salaries and profit sharing provisions		(52,194	)		(9.4	%)
Foreign exchange not subject to flat tax		37,800			6.8	%
Financial income		6,076			1.1	%
Credit in inventories and fixed assets		2,192			0.4	%
Other		(1,064	)		(0.2	%)
Statutory rate	$	96,601			17.5	%

c. Deferred income tax recognized in other comprehensive income:

	Year ended December 31,
	2013			2012			2011
Deferred tax
Retirement benefit cost	$	2,525		$	(10,169	)	$	—
Effect on financial instruments treated as cash flow hedges		(6,411	)		6,578			—
Total income tax recognized in other comprehensive income	$	(3,886	)	$	(3,591	)	$	—

d. The main items comprising the balance of the deferred ISR (asset) liability at December 31, 2013 and 2012, are:

	December 31,
	2013			2012
Deferred tax assets:
Advances from costumers	$	(383,394	)	$	(330,627	)
Estimated cost on advances from customers		(235,659	)		(153,109	)
Purchases abroad		(26,897	)		(23,211	)
Accrued expenses		(7,681	)		(12,088	)
Provisions		(551,466	)		(578,216	)
Labor obligations		(33,187	)		(60,236	)
Fixed assets		—			(2,167	)
Others		—			(9	)
Derivative financial instruments		—			(1,861	)
Recoverable IMPAC		(3,640	)		—
Tax loss carryforwards		(194,365	)		—
		—			(65	)
PTU provision		(11,232	)		(12,623	)
	$	(1,447,521	)	$	(1,174,212	)

G-52

	December 31,
	2013			2012
Deferred tax liabilities:	$	1,249,706		$	932,657
Cost and estimated earnings in excess of billings		—			13,508
Contract billings		15,863			21,089
Prepaid expenses		5,201			5,628
Revenues on estimated cost		23,444			26,693
Fixed assets (net)		31,235			—
Derivative financial instruments		3			—
Others		99			2,614
Total liabilities	$	1,325,551		$	1,002,189
Asset for deferred ISR, net	$	(121,970	)	$	(172,023	)

e. The main items comprising the (asset) liability balance of deferred IETU at December 31, 2012 are as follows:

	December 31,
	2012
Deferred tax assets:
Accounts payable	$	(12,700	)
Tax credits permitted in inventory and fixed assets		(1,121	)
Tax credits permitted by IETU law		(49,099	)
Provisions for construction expected to be incurred at the end of the project, warranty reserves and contingencies reserves for construction projects and others, net		(21,571	)
		(84,491	)
Deferred tax liabilities:
Fixed assets		45,180
Contract billings		12,891
Costs and estimates in excess billings on uncompleted contracts		92,609
		150,680
(Asset) liability for deferred IETU, net		66,189
Asset for deferred ISR		(172,023	)
(Asset) liability for IETU, deferred ISR net	$	(105,834	)

Based on its taxable income projections, the Entity did not recognize deferred income tax assets of $23,444 and $28,196 as of December 31, 2013 and 2012, respectively, as it does not believe that it will generate taxable income sufficient to realize the associated benefits.

G-53

f. The movements of deferred tax assets during the year are as follows:

	December 31,
	2013			2012			2011
Beginning balance (asset)	$	(105,834	)	$	(341,280	)	$	(68,946	)
Income tax applied to results		(12,250	)		245,615			(272,274	)
Income tax applied to other comprehensive items		(3,886	)		(10,169	)		(60	)
Total	$	(121,970	)	$	(105,834	)	$	(341,280	)

g. In accordance with Mexican income tax law, tax losses from prior year may be carried forward, restated for inflation, against taxable income generated in the next ten years.

The amount of the Entity’s tax loss carry forwards for income tax purposes and recoverable IMPAC for which the deferred tax effects have been recognized, respectively can be restated and recovered according to the procedures established by applicable law. Expiration dates and restated amounts as of December 31, 2013, are as follows:

Year of	Tax loss		Recoverable
Expiration	carry forwards		IMPAC
2013	$	—	$	2,336
2015		—		2,414
2016		—		6,811
2017		—		5,080
2018		157,352		—
2022		100,328		—
2023		395,085		—
	$	652,765	$	16,641

h. The balances of stockholders’ equity tax at December 31, 2013 and 2012 are as follows:

	December 31,
	2013		2012
Contributed capital account	$	1,639,331	$	869,348
Net consolidated tax profit account		168,634		971,666
Total	$	1,807,965	$	1,841,014

22. Commitments and contingencies

The Entity is subject to certain commitments and contingencies, in addition to lease commitments mentioned in Note 19, as follows:

a. Lawsuits and litigation - At December 21, 2013, the Entity was subject to legal proceedings and claims arising in the ordinary course of business. Management and legal advisers do not expect the Entity’s results of operations and financial condition as described in its consolidated financial statements will be materially impacted by the resolution of these matters.

b. Tax lawsuits - As of the date hereof, the Entity is in the process of settling several tax disputes before the relevant authorities. Given that these disputes relate to the return or recovery of taxes paid by the Entity before filing such claims, it does not expect to pay any additional amounts in the event it does not obtain favorable resolutions of such matters.

G-54

c. Performance guarantees. In the normal course of its operations, the Entity is required to guarantee its performance on its construction contracts, by means of letters of credit or bonds that guarantee compliance with its contracts or the quality of work performed. At December 31, 2013 the Entity has issued letters of credit in favor of its customers of $- and USD$52,240.

In addition At December 31, 2013 the Entity has also taken out bonds, mostly in favor of its customers of $3,307,259 and USD$155,938.

23. Risk management

a. Significant accounting policies

The significant accounting policies and methods adopted (including the criteria for recognition, valuation and the basis of recognition of related income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in Note 4.

b. Categories of financial instruments and risk management policies

The main categories of financial instruments are:

		December 31,
Financial Assets	Risk classification	2013		2012
Cash	Credit	$	109,069	$	94,486
Cash equivalents	Credit and exchange rate		1,531,945		2,373,361
Customers(1)	Credit and exchange rate		644,859		713,049
Due from related parties	Credit and exchange rate		56,187		31,929
Other accounts receivables	Credit and exchange rate		51,880		65,776
Derivative financial instruments	Credit and exchange rate		5,593		21,965

(1) Cost and estimated earnings in excess of billings on uncompleted contracts is not considered a financial instrument, therefore it is not included.

		December 31,
Financial liabilities	Risk classification	2013		2012
Derivative financial instruments	Exchange rate and liquidity	$	—	$	—
Notes payable	Interest rate, Exchange rate and liquidity		640,990		467,352
Trade account payable	Exchange rate and liquidity		1,286,275		1,934,863
Other accounts payable	Exchange rate and liquidity		1,470,922		1,485,327
Due to related parties	Exchange rate and liquidity		229,854		286,816
Long-term leasing agreements	Exchange rate and liquidity		31,473		34,269

Based on the nature of its activities, the Entity is exposed to different financial risks, mainly arising from the conduct of its ordinary business activities and its borrowings entered into to finance its operating activities. The financial risks to which the Entity is subject are mainly: market risk (interest rates, currency exchange rates and prices), credit and liquidity risk.

G-55

Periodically, the Entity’s management assesses risk exposure and reviews the alternatives for managing those risks, seeking to minimize the effects of these risks using financial derivatives to hedge risk exposures. The Company does not enter into derivatives for speculative purposes. The Board of Directors sets and monitors policies and procedures to measure and manage the risks to which the Entity is exposed, which are described below.

c. Market risk

The Entity is exposed to price risks, mainly for the following activities:

Construction contracts

The Entity generally executes two kinds of construction contracts with its customers: (i) fixed price (“either lump-sum or not-to exceed”) or (ii) profit margin over cost (“unit price”). The risks associated with inflation, exchange rates and the price increases of each contract type, whether executed with the public or private sector, are usually evaluated in a different manner.

In the case of private sector unit price contracts, the customer generally assumes risks involving inflation, exchange rates and the price increases of materials used for contract purposes. Under a unit-price contract, the signing of the contract, the parties agree the price for each unit of work. However, Unit price contracts normally contain escalation clauses whereby the Entity reserves the right to increase the unit price of certain inputs based on inflation, exchange rate variations or price increases whenever these risks increase over and above the 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) a review of unit prices by group, which multiplied by their corresponding amounts of work remaining to be performed, represent 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 where there are no escalation clauses in which the Entity undertakes to provide materials or services at the unit prices required for a project in the private sector generally require it to absorb risks related to inflation, exchange rate fluctuations and materials price increases. However, these risks are mitigated in the following manner: (i) when preparing its bid, the Entity considers these risks to determine project costs and applies certain economic variables provided by firms of acknowledged reputation as regards economic analysis; (ii) certain contractual arrangements are made with the Entity’s main suppliers, including the payment of advances to ensure fixed materials prices throughout the duration of the contract; and (iii) the exchange rate risk is mitigated by executing contracts with suppliers and subcontractors in the same currency as that used for the customer contract.

For those risks which cannot be mitigated or surpass acceptable levels, the Entity performs a quantitative analysis to determine the probability of each risk arising, measure its financial impact and adjust fixed contractual costs to an appropriate level.

For fixed price contracts in the public sector, 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. The proposed application of these mechanisms for the public-to-private initiative is uncertain, but the proposed law would benefit the Public/Private Partnership (Proyecto para Prestacion de Servicios, or PPS) by introducing options to renegotiate, in good faith, the contract terms in the event of government action to increase the project costs or otherwise reduce contractual benefits to developers.

G-56

In recent years, the 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. Even though, the Entity has entered into contracts with unit pricing in the last three years, it believes that fixed price contracts are more prevalent in the construction market and the contracts that the Entity enters into in the future will reflect this shift to fixed price contracts.

Additionally, it is expected that due to trends toward financing, future contracts related to concessions, infrastructure construction and industrial construction will restrict the price adjustment contract for additional work performed due to incorrect specifications in the original contract.

Interest rate risk management - This risk principally stems from changes in the future cash flows of debt entered into at variable interest rates (or with short-term maturity and presumable renewal) as a result of fluctuations in the market interest rates. The purpose of managing this risk is to lessen the impact in the cost of the debt due to fluctuations in such interest rates. To mitigate this risk, the Entity enters into financial derivatives which ensure fixed interest rates, establish maximum limits (ceilings) or narrow fluctuation bands for interest payments, relative to a substantial portion of any debt affected by such risk.

Given its debt position as of the reporting periods presented herein, management of the Entity does not consider that its interest rate risk is significant related to its financial position, operations and cash flows.

Foreign exchange risk management - The Entity performs transactions denominated in foreign currency; consequently it is exposed to exchange rate risks which are managed within the parameters of approved policies. Accordingly, for this purpose, the Entity contracts exchange rate forwards whenever these instruments are considered to be effective. The main exchange rate risk is based on changes to the value of the Mexican peso against the US dollar.

In fixed price, lump sum or guaranteed maximum price contracts, estimates are made to try and contemplate the risk of fluctuations in the exchange rate between the Mexican peso and other currencies in which the contracts are expressed, included the related financing agreements, or other contracts entered into for the purchase of supplies, machinery or raw materials, ordinary expenses and other inputs. A severe devaluation or appreciation of the Mexican peso could also result in an interruption in the international currency markets and could limit the ability to transfer or convert pesos to U.S. dollars and other currencies in order to make timely payments of interest and principal on the related obligations expressed in U.S. dollars or in other currencies. Although the Mexican government does not currently restrict, and has not restricted since 1982, the right or ability of Mexican individuals or business entities to convert pesos into U.S. dollars or other currencies, or to transfer them outside Mexico, the Mexican government could institute exchange control policies in the future. It cannot be guaranteed that the Banco de México will maintain its current policy regarding the peso. The fluctuation of the currency may have an adverse effect on the Entity’s financial position, results of operations and cash flows in future years.

For the year ended December 31, 2013, approximately 47% of consolidated revenues were expressed in foreign currencies, mainly U.S. dollars. An appreciation of the Mexican peso against the U.S. dollar would reduce the dollar denominated revenues when expressed in pesos, whereas a depreciation of the peso against the U.S. dollar would increase the dollar denominated revenues when expressed in pesos.

For the year ended December 31, 2013, 2012 and 2011, approximately 43%, 66% and 55%, respectively, of the construction backlog was denominated in foreign currencies, and approximately 21%, 61% and 28%, respectively, of accounts receivable were denominated in foreign currencies. At December 31, 2013, 2012 and 2011, approximately 40%, 31% and 51%, respectively, of consolidated financial assets were denominated in foreign currencies. Moreover, at December 31, 2013 and 2012, roughly 42% and 57%, respectively, of the debt was expressed in foreign currency. A depreciation in the value of the Mexican peso against the dollar will increase the peso value of costs, expenses and obligations denominated in U.S. dollars, unless they were denominated in the same currency as the source of payment. For the year ended at December 31, 2013, the Mexican peso had a 2% depreciation against the U.S. dollar compared to the exchange rates at the end of 2012.

G-57

Foreign currency sensitivity analysis - The following sensitivity analyses are based on an instantaneous and unfavorable change in exchange rates which affect the foreign currencies in which the Entity’s debt is expressed. These sensitivity analyses cover all the assets and liabilities denominated in foreign currency, as well as its derivative financial instruments. Sensitivity is determinated by applying the hypothetical exchange rate change to its outstanding debt and making adjustments due to such fluctuations for the debt which is hedged by the financial derivatives.

As of December 31, 2013, a hypothetical, instantaneous and unfavorable change of 100 Mexican cents to the currency exchange rate applicable to the Entity’s receivables and debts, including derivative financial instruments only for hedging purposes, would have resulted in an estimated exchange loss of approximately $28 million pesos. The Entity did not hold any derivative financial instruments for trading purposes as of December 31, 2013.

The carrying values of monetary assets and liabilities denominated in foreign currency at the end of the reporting period are as follows:

	Liabilities				Assets
	December 31,				December 31,
Currency	2013		2012		2013		2012
U.S. dollars		179,885		257,512		125,844		144,876
Euros		—		646		86		34

The Exchange rates at financial statements date were:

	December 31, 2013		December 31, 2012
	Fix		Buy		Sell
American dollar Exchange rate:
Interbank	$	13.0652	$	12.8409	$	12.8609
Euro exchange rate		18.0079		16.7388		17.2205

d. Credit risk

Credit risk management -Credit risk refers to the risk whereby one of the parties defaults on its contractual obligations, thereby generating a financial loss for the Entity. To the extent possible, the objective of this risk management is to reduce its impact by reviewing the solvency of the Entity’s potential customers. Once contracts are underway, the credit rating of uncollected amounts is periodically evaluated and estimates are revised for allowance for doubtful accounts with corresponding entries to the statements of income and other comprehensive income in the period of the revision. The credit risk has historically been very limited.

The Entity’s maximum credit risk exposure is based on the table amounts detailed in the subsection b). Additionally, details of overdue, unimpaired accounts receivable are included in note 7.

The Entity has adopted the policy of only doing business with solvent parties and obtaining sufficient collateral when necessary, so as to mitigate the risk of financial losses derived from potential default. The Entity only performs transactions with entities with the best possible risk rating. The Entity’s credit exposure is reviewed and approved by senior management committees. The credit risk derived from cash, cash equivalents and derivative financial instruments is limited because counterparties are banks with high credit ratings assigned by credit bureaus. The financial instruments which potentially expose the Entity to credit risks are primarily composed by receivable certifications and uncertified work completion (generically known as “construction instruments”) and other accounts receivable.

Claims are occasionally filed against customers for additional project costs which exceed the contract price or for amounts which were not included in the original contract price, including modification orders. This type of claim is filed for issues such as delays attributable to the customer, higher unit prices or the modification of the initial project scope, thereby resulting in additional indirect or direct costs. These claims are often subject to long arbitration or legal processes or procedures involving external experts, meaning that it is difficult to accurately forecast when they will be definitively resolved. When this occurs and it has unresolved claims, the Entity can invest significant amounts of working capital in projects to cover excess costs while claims are resolved.

G-58

Regarding particular modification orders, the Entity can reach an agreement with the customer regarding the work scope, albeit without determining the final price. In this case, the opinion of external experts may be required to appraise unfavorable prices determined outside the Entity’s control. As of December 31, 2013 the Entity had an allowance for doubtful accounts of Ps.3,937 related to commercial contracts and accounts receivable. The failure to quickly recover resources from this type of claim and modification orders could have a significant adverse effect on the Company’s liquidity and financial position.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by recognized rating agencies.

Other accounts receivable consist of amounts owed by debtors. The Entity considers that these amounts do not result in significant concentrations of credit risk.

e. Liquidity risk

Liquidity risk management - This risk is generated by temporary differences between the funding required by the Entity to fulfill business investment commitments, debt maturities, current asset requirements, etc., and the origin of funds generated by the regular activities of the Entity, different types of bank financing and disinvestment. The objective of the Entity in the management of this risk is to maintain a balance between the flexibility, period and conditions of credit facilities contracted to manage short, medium and long-term funding requirements. The Executive Committee of the Entity is ultimately responsible for liquidity management. This Committee has established appropriate liquidity management guidelines. The Entity manages its liquidity risk by maintaining reserves, financial facilities and adequate loans, while constantly monitoring projected and actual cash flows and reconciling the maturity profiles of financial assets and liabilities.

The following table details the remaining contractual maturity of the Entity’s non-derivative financial liabilities, together with agreed repayment periods. This table has been prepared based on the projected non-discounted cash flows of financial assets and liabilities at the date on which the Entity must make payments. Contractual maturity is based on the earliest date when the Entity must make the respective payment.

As of December 31, 2013	Up to 1 year		Up to 2 years		Up to 3 years		Up to 4 years		Total
Notes payable	$	640,990	$	—	$	—	$	—	$	640,990
Suppliers		1,286,275		—		—		—		1,286,275
Other accounts payable		1,470,922		—		—		—		1,470,922
Due to related parties		229,854		—		—		—		229,854
Long-term leases		—		23,161		7,642		670		31,473
Total	$	3,628,041	$	23,161	$	7,642	$	670	$	3,659,514

As of December 31, 2012	Up to 1 year		Up to 2 years		Up to 3 years		Up to 4 years		Total
Notes payable	$	467,352	$	—	$	—	$	—	$	467,352
Suppliers		1,934,863		—		—		—		1,934,863
Other accounts payable		1,485,327		—		—		—		1,485,327
Due to related parties		286,816		—		—		—		286,816
Long-term leases		—		20,329		12,199		1,741		34,269
Total	$	4,174,358	$	20,329	$	12,199	$	1,741	$	4,208,627

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The Entity expects to meet its liabilities with its operational cash flows and resources received from the maturity of its financial assets. Furthermore, the Entity has access to revolving credit lines with different banking institutions.

f. Financial instruments at fair value

This note provides information about how the Company determines fair values of various financial assets and financial liabilities. Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used):

Financial assets and liabilities	Fair value at		Fair value hierarchy	Valuation models and key inputs	Not visible significant inputs	Relation of not visible inputs for fair value
	2013	2012
Foreign currency forward contacts (see Note 20)	Assets for: $5,593 Liabilities for: $0	Assets for: $21,965 Liabilities for: $0	Level 2	Future cash flows discounted are calculated using period exchange rates (since foreseeable exchange rates at the end of the reference period) and forward contract rates, discounted at a rate that shows credit risk of counterparties	NA	NA

During the period there were no transfers between Level 1 and 2.

The Entity considers carrying amount of all other financial assets and liabilities shown in financial statements approximate their fair value given their nature and short-term maturity.

24. Stockholder´s equity

a. Equity risk management

The objectives of the Entity with respect to management of its equity risk, are intended to maintain an optimum financial-net worth structure, to reduce capital costs and safeguard its capacity to continue its operations with solid indebtedness ratios.

The Entity is not subject to any externally imposed requirements for managing capital.

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The equity structure is essentially managed through the maintenance of adequate levels of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), which is calculated in the following manner: income attributable to controlling interests plus income attributable to non-controlling interests, discontinued operations, income taxes, other expenses (income), net, plus the participation in the equity held in unconsolidated subsidiaries and associated entities, plus borrowing costs, depreciation, amortization and the borrowing costs included in the cost of sales of projects financed during the construction stage:

	December 31,
	2013			2012
Income from controlling interest	$	433,955		$	514,468
Income from non-controlling interest		7			1
Income taxes		60,929			196,898
Borrowing cost		28,005			(139,448	)
Other income		(1,469	)		(100	)
Depreciation and amortization		110,565			95,681
Interest expense included in cost of sales		24,277			11,113
EBITDA	$	656,269		$	678,613

b. At December 31, 2013 and 2012 the share capital is variable, with a fixed minimum of $ 270 and is divided into two parts social (Series A and Series B). The series A represents 51% of the capital and can only be acquired by Mexicans Series B represents 49% of the capital and subscription is free. Social capital are as follows

	Series		December 31,
Partner	Class		2013		2012
Constructoras ICA, S. A. de C. V.		“A”	$	479,310	$	173,310
Fluor Daniel México, S. A.		“B”		460,514		166,514
Historical value				939,824		339,824
Contributed capital unpaid				—		—
			$	939,824	$	339,824

c. Stockholders’ equity, except restated paid-in capital and tax retained earnings will be subject to income tax at the rate in effect upon distribution. Any tax paid on such distribution may be credited against annual and estimated income tax of the year in which the tax on dividends is paid and the following two fiscal years, against the exercise tax and interim payments.

d. Retained earnings include the statutory legal reserve. The General Corporate Law requires that at least 5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (historical pesos). The legal reserve may be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason.

e. At December 31, 2013 and 2012, the legal reserve is $57,965.

f. The stockholders’ extraordinary general meeting of December 2013, resolved to increase in cash $600,000 of capital stock in its variable part.

g. The stockholders’ extraordinary general meeting of September 30, October 14, and December 31, 2013 resolved to declare dividends for $50,000, $600,000 and $300,000, respectively. At December 31, 2013, these dividends have been fully paid.

h. The stockholders’ extraordinary general meeting of March 1, 2012, resolved to refund $ 100,000 of capital stock of the Bank and in December 2012 resolved to increase the Entity’s variable capital by $50,000

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25. Other comprehensive income

Other comprehensive income is as follows:

	Actuarial losses for labor obligations									Effect of foreign currency translation								Gain on cash flow hedges									Total
	Amount			Taxes			Total			Amount			Taxes		Total			Amount			Taxes			Total			Amount			Taxes			Total
Balance at January 1, 2012	$	—		$	—		$	—		$	—		$	—	$	—		$	(54,814	)	$	—		$	(54,814	)	$	(54,814	)	$	—		$	(54,814	)
Reclassifications of the year		—			—			—			—			—		—			54,814			—			54,814			54,814			—			54,814
Movements of the year		(48,688	)		10,169			(38,519	)		(42	)		12		(30	)		21,965			(6,590	)		15,375			(26,765	)		3,591			(23,174	)
Balance at December 31, 2012		(48,688	)		10,169			(38,519	)		(42	)		12		(30	)		21,965			(6,590	)		15,375			(26,765	)		3,591			(23,174	)
Reclassifications of the year		—			—			—			—			—		—			(21,965	)		6,590			(15,375	)		(21,965	)		6,590			(15,375	)
Movements of the year		(5,539	)		(2,525	)		(8,064	)		(329	)		99		(230	)		925			(278	)		647			(4,943	)		(2,704	)		(7,647	)
Balance at December 31, 2013	$	(54,227	)	$	7,644		$	(46,583	)	$	(371	)	$	111	$	(260	)	$	925		$	(278	)	$	647		$	(53,673	)	$	7,477		$	(46,196	)

The gain on cash flow hedges represents the changes in fair value of cash flow hedges disclosed in Note 20.

Effects of foreign currency translation represents the effects of converting the financial information of foreign operations from functional currency to reporting currency.

Actuarial losses for labor obligations represents remeasurement effects on employee benefits under defined benefit plans.

26. Non-controlling interest in consolidated subsidiaries

Non-controlling interest is as follows:

	December 31,
	2013		2012
Common stock	$	2	$	2
Retained earnings and others		13		7
	$	15	$	9

Changes in non-controlling interest are generally from the participation of the non-controlling interest holder in the results of the subsidiaries and dividends.

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27. Construction cost

a. Cost of sales from continuing operations consist of the following:

	Year ended December 31,
	2013		2012		2011
Direct cost	$	6,799,340	$	9,746,608	$	7,570,081
Indirect cost		2,177,080		1,622,949		1,410,717
	$	8,976,420	$	11,369,557	$	8,980,798

b. Costs and expenses for depreciation, amortization and employee benefits are as follows:

	Year ended December 31, 2013
	Direct cost		Indirect cost		Total
Wages and salaries	$	1,322,502	$	600,384	$	1,922,886
Construction materials inventory		2,857,013		—		2,857,013
Rent and depreciation		241,316		37,347		278,663
Subcontractors		1,776,470		—		1,776,470
Administrative Services		—		641,024		641,024
Others		602,039		898,325		1,500,364

	Year ended December 31, 2012
	Direct cost		Indirect cost		Total
Wages and salaries	$	1,366,376	$	456,045	$	1,822,421
Construction materials inventory		4,780,407		—		4,780,407
Rent and depreciation		222,003		35,786		257,789
Subcontractors		2,530,555		—		2,530,555
Administrative Services		—		189,985		189,985
Others		847,267		941,133		1,788,400

	Year ended December 31, 2011
	Direct cost		Indirect cost		Total
Wages and salaries	$	749,773	$	372,042	$	1,121,815
Construction materials inventory		4,111,169		—		4,111,169
Rent and depreciation		235,593		45,115		280,708
Subcontractors		1,850,068		—		1,850,068
Administrative Services		—		196,918		196,918
Others		623,478		796,642		1,420,120

28. Other income

Other income, net is comprised as follows:

	For the year ended at December 31
	2013		2012		2011
Profit in fixed assets disposal	$	1,045	$	100	$	551
Tax recovery income		424		—		—
	$	1,469	$	100	$	551

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29. Transactions and balances with related parties

All of the companies mentioned below belong to the same group of partners (Empresas ICA, S. A. B. de C. V. and Fluor Corporation Inc.) and all related party transactions are of the same business nature as the Entity’s.

a. As of December 31, 2013 and 2012, due from and due to related parties is as follows:

	December 31,
	2013		2012
Accounts receivable:
Ethylene XXI Contractors, S.A.P.I. de C.V.	$	146,648	$	—
Empresas ICA, S. A. B. de C. V.		45,192		—
Etileno XXI Services, B.V.		1,521		—
ICA Risk Management Solutions Agente de Seguros y de Fianzas S.A. de C.V.		1,160		—
Grupo ICA, S. A. de C. V.		196		37
ICA Infraestructura, S. A. de C. V.		52		52
Interim Project Solutions, S. de R. L. de C. V.		145		113
Fluor Daniel South America Limited		—		31,712
Fluor Corporation, Inc.		—		15
Total	$	194,914	$	31,929
Accounts payable:
Ingenieros Civiles Asociados, S. A. de C. V.	$	43,986	$	143,527
ICA Ingeniería, S. A. de C.V.		758		—
Caribbean Thermal Electric, LLC.		393		386
Constructoras ICA, S. A. de C. V.		379		379
Dominican Republic Combined Cycle, LLC.		26		26
Fluor Enterprises, Inc.		126,653		1,054
Fluor Daniel México, S. A.		35,598		114,439
Ameco Services, S. de R. L. de C. V.		10,305		15,701
Fluor Daniel Latin America, Inc.		8,660		5,197
Fluor Daniel Technical Services, Inc.		2,611		3,341
TRS Internacional Group, S. de R. L. de C.V.		485		2,766
Total	$	229,854	$	286,816

As of December31, 2013 and 2012, accounts receivable and accounts payable with related parties are comprised of unsecured current account balances which bear no interest and are payable in cash in 30 days, except for royalties payable to Fluor Daniel México, S. A., Constructoras ICA, S. A. de C. V. and Ingenieros Civiles Asociados, S. A. de C. V., which are payable within 15 days of the quarter-end in the case of royalties, as well as are dividends, provided the Entity’s cash flow so allows.

Terms of related party agreements may vary based on negotiations with each party. Based on the Entity’s past experience, management does not believe there are any items of doubtful recovery with respect to its related party receivables.

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b. Transactions with related parties, carried out in the ordinary course of business were as follows:

	Year ended December 31,
	2013		2012		2011
Revenues:
Engineering services (1)	$	473,814	$	22,337	$	69,753
Other income		17,614		5,156		10,333
	$	491,428	$	27,493	$	80,086
Expenses:
Services received (6) and (7)	$	713,652	$	226,566	$	257,686
Royalties (2) and (3)		269,941		356,841		302,432
Property rental (4)		—		10,025		27,659
Equipment rental (5)		59,415		56,676		61,092
Other expenses		228		2,831		5,507
	$	1,043,236	$	652,939	$	654,376

The Entity has executed the following contracts with related parties, generating the aforementioned transactions:

1) Engineering services agreements with several related parties for several projects, the terms of which depend on the execution of the work and which are subject to annual reviews when material changes in the established prices are expected.

2) Royalty agreement with Fluor Daniel México, S. A., effective from 1999, which specifies payment of a royalty for the use of trademarks equal to 1.5% of certain construction revenues. The agreement is for an indefinite term.

3) Royalty agreement with Ingenieros Civiles Asociados, S. A. de C. V., effective from 1999, which specifies payment of a royalty for the use of trademarks equal to 1.5% of certain construction revenues. The agreement is for an indefinite term.

4) Lease agreement with ICA Propiedades Inmuebles, S. A. de C. V. for the offices located on Río Becerra. This lease has been approved by the legal owner of the building. The agreement was renewed for a one-year period as of April 30, 2012.

5) Lease agreement with Ameco Services, S. de R. L. de C. V. for machinery, equipment, tools, and services. The lease is for a compulsory ten-year term commencing in October 1998. The agreement automatically renews on an annual basis.

6) In August 2010, the Entity executed a services agreement with TRS International Group, S. de R. L. de C. V., its maturity depends on project requirements.

7) In December 2010, the Entity executed an engineering services agreement with Fluor Daniel Latin America, Inc. for the El Boleo project, the period of which depends on work performance. Annual reviews are performed whenever established prices are subject to significant changes.

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30. Retirement benefit obligation

The liability for employees derives from the pension plan, seniority premiums and payments at the end of employment to employees upon retirement, are determined based on actuarial computations made by external actuaries, using the projected unit credit method. Seniority premiums consist of a single payment equal to 12 day’s salary for each year of service based on the employee’s most recent salary, but without exceeding twice the current minimum wage established by law.

The plans in Mexico typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to long- term government bond yields. To select the discount rate, the rate of the bond yield is determined based on a term that is similart to the duration of the obligations of labor liabilities of the Entity. This rate is obtained from a company dedicated to provide updated prices for the valuation of financial instruments, as well as comprehensive calculation, reporting, analysis, and risks related to these prices, and that is regulated by the National Banking and Securities Commission. Considering the average days on which would be payable the benefits and not the maturity of the bond, which means that the discount rate will depend on the expected flow of benefit payments from plan.

Interest Risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary Risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The most recent actuarial valuation of the defined benefit obligation were carried out at December 31, 2013 by Mercer, which employs actuaries certified by the Colegio Nacional de Actuarios de Mexico. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The principal assumptions used for actuarial valuations were the following:

	2013 %			2012 %
Discount for present value of labor benefits		7.00	%		6.50	%
Salaries increase		5.50	%		5.50	%

Amounts recognized in comprehensive income:

	Year ended December 31,
	2013		2012		2011
Service cost:
Current service cost	$	27,711	$	21,852	$	16,473
Past service cost		—		859		43,274
Net interest expense		15,929		16,347		12,839
Period costs recognized in results		43,640		39,058		72,586

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	Year ended December 31,
	2013			2013		2013
Components of defined benefit costs recognised in results:
Return on plan assets (excluding amounts recorded in financial expenses)		2,234			275		1,048
Actuarial gains or losses from demography hypothesis		2,937			—		—
Actuarial gains or losses from financial hypothesis		(18,231	)		48,413		870
Actuarial gains or losses from experience adjustments		18,599			—		—
Components of defined benefit costs recognized in other comprehensive income		5,539			48,688		1,918
Total	$	49,179		$	87,746	$	74,504

The current service cost and the net interest expense for the year are included in the employee benefits expense in results.

For the years ended December 31, 2013, 2012 and 2011, $43,640, $39,058 and $72,586, respectively, was recorded in cost of goods sold.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

The following information shows a detail of the most significant plans of the company.

Amounts included in the consolidated statement of financial position arising from the entity´s obligation related to defined employees benefit are as follows:

				December 31,
	2013			2012			2011
				(As adjusted; see Note 4.a)			(As adjusted; see Note 4.a)
Present value of funded defined benefit obligation	$	(400,062	)	$	(354,874	)	$	(269,868	)
Fair value of plan assets		164,692			108,403			54,284
Net liability from defined benefits obligation	$	(235,370	)	$	(246,471	)	$	(215,584	)

Changes in present value of the obligation for defined employee’s benefits during the period were as follow:

	Year ended December 31,
	2013			2012
				(As adjusted; see Note 4.a)
Present value of the obligation for defined employees benefits at January 1	$	354,874		$	269,868
Current service cost		27,711			21,852
Interest cost		22,395			20,463
Remeasurement adjustments:
Actuarial gains or losses from demography hypothesis		2,937			—
Actuarial gains or losses from financial hypothesis		(18,230	)		48,413
Actuarial gains or losses from experience adjustments		18,599			—
Past service cost including losses and (profits) in reductions		—			859
Benefits paid		(8,224	)		(6,581	)
Present value of the obligation for defined employees benefits at December 31	$	400,062		$	354,874

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Changes in present value plan assets:

	Year ended December 31,
	2013			2012
				(As adjusted; see Note 4.a)
Initial balance of plan assets at fair value	$	108,403		$	54,284
Interest income		6,467			4,115
Re-measurement gain(loss):
Efficiency of plan assets (excluding amounts recognized in financial cost)		(2,234	)		(275	)
Employer contributions		59,214			56,121
Benefits paid		(7,158	)		(5,842	)
Total plan assets at fair value	$	164,692		$	108,403

The actuarial assumptions to determine the defined obligation are: the discount rate and the salary increase. The following sensibility analysis is determined based on reasonable changes that could occur at the end of the period, keeping constant all other variables:

• If the base discount rate increases (decreases) 50 points, the obligation for defined benefits would decrease $17,948 (increase $18,838).

• If the salary rate were to increase (decrease) by 0.5%, the obligation for defined benefits would increase $18,236 (decrease $17,632).

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the statement of financial position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Defined contribution plans:

As part of its employee benefits, the Entity has defined contribution plans covering all employees under which the Entity contributes a maximum of 12.5% of each employee’s annual salary.

At December 31, 2013, 2012 and 2011, the Entity has established a fund to which it contributes to cover the defined contribution plan which amounts to $39,494, $29,205 and $19,735, and is invested in deposits financial institutions at market interest rates. The amount of contributions to the plan during the years ended December 31, 2013, 2012 and 2011 was $8,804, $8,047 and $4,419, respectively.

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31. Non-cash transactions

During the years ended December 31, 2013, 2012 and 2011 the Entity carried out the following transactions, which did not generate or utilize cash and thus are not presented in the cash flows.

	2013			2012		2011
Purchases of fixed assets under finance leases	$	45,410		$	71,217	$	26,720
Fair value of derivative instruments		(21,040	)		76,779		(92,247	)
Unpaid issuance of common stock		—			—		49,000

32. Authorization for issuance of financial statement

On April 29, 2014, the issuance of these consolidated financial statements was authorized by Ing. Juan Carlos Santos Fernandez Director, and James Robert Breuer the Entity’s Director of Operations, and Lic. Juan Carlos Becerra Posada the Entity’s Accounting and Finance Manager, for their issuance and subsequent approval by the Audit Committee and, if applicable, the Board of Directors. The consolidated financial statements must also then be approved by the Entity’s partners, who have the authority to modify the Entity’s consolidated financial statements.

* * * * * * *

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