HOCHTIEF Annual report 2008 - Information for our Shareholders

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Discounting method for PPP projects

For PPP projects, we apply a risk-adjusted discount rate determined with reference to secondary market transactions. The basic risk-free interest rate is supplemented with market-based mark-ups according to project type and completion stage. We apply a weighted discount rate of 12.3 percent for our PPP portfolio as of December 31, 2008. As projects move toward completion, risk and hence the mark-up drops and the value of HOCHTIEF's assets rises.

Project selection is subject to strict return-on-investment targets that are normally above the applied discount rates. Proceeds from sales of equity stakes further boost our internal rate of return.

The net present value of HOCHTIEF's airport portfolio as of the 2008 balance sheet date was EUR 1,245.6 million. This corresponds to a loss in value of 6.9 percent compared to the previous year. This is partly due to the resale of 1.36 percent of the shares in Sydney Airport to HOCHTIEF AirPort Capital, and partly to changes wrought by the global financial crisis and the related fall in growth expectations for air travel.

The net present value of HOCHTIEF's PPP projects as of December 31, 2008 was EUR 224.4 million, up EUR 18.5 million on the prior year. Most of the increment is accounted for by growth in the value of the portfolio, progress and project development and improvement in operating cash flows at project level. The reduction in the size of the portfolio on disposal of the 3.75 percent stake in the Vespucio Norte Express toll highway in Chile was slightly more than made up for by the gain on the award in 2008 of the Maliakos- Kleidi and Elefsina-Patras-Tsakona highway projects in Greece.

The total value of the concessions portfolio amounts to EUR 1,470 million. The future discounted cash flows exceed HOCHTIEF's EUR 820 million investment by EUR 650 million.

In view of its rapidly growing market potential internationally, the concessions business will continue to offer substantial opportunities for HOCHTIEF.**

Portfolio value of concessions projects in the HOCHTIEF Concessions division

Status: Financial close (EUR million)	Total capital required	Capital provided by Dec. 31, 2008	NPV of expected cash flows at Dec. 31, 2008	NPV at Dec. 31, 2007	Difference due to portfolio growth	Difference value growth
HOCHTIEF AirPort	720.0	720.0	1,245.6	1,337.8	(41,7)	(50,5)
HOCHTIEF PPP Solutions	240.4	100.0	224.4	205.9	(5,0)	23.5
Total	960.4	820.0	1,470.0	1,543.7	(46,7)	(27,0)

The net present value (NPV) established by HOCHTIEF Concessions was calculated as of December 31, 2008 on the basis of various future-looking assumptions, among others with regard to the operative and financial development of individual subsidiaries/associates as well as with regard to the applied discounting rates. In the event these assumptions change or do not materialize, this may lead to a deviation – possibly even on a significant scale – of the actual value from the value shown here.