Ferrovial (Madrid:FER) Q3 2026 Earnings Call

0:00 Good afternoon, everybody. This is Silvia Ruiz speaking. I would like to welcome you to Frovial's conference call to discuss the company's operating results for the third quarter of 2026 and the specific presentations from recent awards in Nashville and Atlanta. I'm joined here today by our CEO, Ignacio Madridejos, and our CFO, Ernesto Lopez Mozo. Just as a reminder, the presentations and the results report are available on our website. At the end of the presentation today, there will be a Q&A session. As in previous calls, you will have the opportunity to ask questions live. In order to do so, you will need to join the call through the conference call channel and press star 5 on your phone keypad. If you prefer, you can send questions through the forum included in the webcast and I will be reading them out loud at the end of the Q&A session. Before starting, please take a moment to look at the Safe Harbor Statement included in the presentations and please bear in mind that the presentation contains forward-looking statements and expectations that are subject to certain risks and uncertainties, so actual figures may differ.

1:03 During this call, we will also discuss non-IFRS financial measures, which are defined and reconciled to the most comparable IFRS measures in our results report and in our website. With all this, I will hand over to Ernesto to cover the third quarter operating results. Ernesto, the floor is yours.

1:22 Thank you, Silvia, and good morning or good afternoon, everyone. Thank you for joining us today to review Ferrovial's operating results for the first nine months of 2026. Overall, the first nine months of 2026 showed strong growth across our core businesses, particularly highways and construction. In highways, 407 ETR delivered robust revenue growth despite lower traffic, while all our used managed lanes posted double-digit growth in revenue per transaction. Construction continued to improve profitability, with the adjusted EBIT margin reaching 4.1% in the first nine months. In airports, March 2027 remains the phase 8 DBO, which is subject to, among other factors, contractor fulfillment of the remediation plan submitted to the authority.

2:14 In terms of cash, we closed September with a net cash position of 1,660 million euros, 1.66 billion euros, excluding infrastructure project companies. The primary sources of cash were 604 million euros of dividends from projects and 591 million euros of construction operating cash flow Excluding tax payments and dividends. We also received 96 million euros from divestments mainly Silvertown Tunnel and TransChile. The main cash outflows included a 63 million euros equity contribution to New Terminal 1 and 461 million euros related to the cash dividend and treasury share purchases. Regarding recent developments, our consortium was awarded I-24 Southeast Choice Lansing Novel and Rich Commercial closed in September.

3:08 In October, we were also awarded I-285 East Express Lanes and our consortium was elected to deliver the D35 Highway P3 project in the Czech Republic. Additionally, we have announced the second script dividend for an aggregate amount of 600 million euros, payable in cash or for real shares at the election of our shareholders. Let's move now to the 407 ETR. The 407 ETR delivered solid revenue growth in the period despite lower traffic. In the first nine months, revenue grew by 18.4%. Toll revenue growth was primarily driven by higher toll rates which went into effect on January 1, 2026.

3:53 EBITDA grew by 21% in the first nine months. This includes a Schedule 22 payment provision of C$12.6 million, compared with C$35.4 Thank you very much. Traffic declined 7.1% in the third quarter.

4:40 Looking at the year-on-year comparison, it is important to bear in mind the different promotional approach, with more targeted promotions in 2026 compared with 2025. Traffic was also affected by slower economic growth, particularly impacting heavy vehicles and sectors exposed to tariffs and discretionary trips. GDP in the region is almost flat in 2026, but major Canadian banks expect growth between 1 to 2% in 2027. Also affecting traffic were unfavorable weather, the timing of holidays, and lower maintenance activity on alternative roads. Dividend distributions remained strong. 407 ETR distributed 1.05 billion Canadian dollars during the first nine months, and a further 1.05 billion Canadian dollars dividend was approved for the fourth quarter.

5:31 This brings total dividends approved in 2026 to 2.1 billion Canadian dollars compared to 1.5 billion Canadian dollars in 2025. And now covering Dallas forward managed lanes, the managed lanes continue to show solid demand and strong operating performance despite construction works and capacity constraints in parts of the network. In terms of operating results, the three projects posted solid growth versus last year, both in terms of revenue and EBITDA, despite the increase in revenue share. Looking at each of the assets, at NTE, traffic declined by 2.5% in the quarter and 2.2% in the first nine months, reflecting the impact from capacity improvement works.

6:20 These works opened to traffic ahead of schedule on September 25, except for two additional ramp projects that remain under construction. Despite lower traffic, NT revenue grew by 14.8% in the first nine months. Adjusted EBITDA increased by 12.3% year-to-date, and it was impacted by $9.8 million of revenue share. At LBJ, traffic trends improved significantly after completion of the I-635 feeder corridor, reflecting greater utilization of the managed lanes. Transactions increased 5.6% in the quarter and 3.9% in the first nine months. Revenue grew 16.3% with adjusted EBITDA up 15.9% in the first nine months.

7:05 At NTE 35 West, transactions declined 1.1% in Q3 and 0.2% in the first nine months. Traffic performance was affected by capacity constraints starting to occur in certain management sections as congestion increased. Revenue grew by 15.8% in the first nine months while adjusted EBITDA increased 15.1%. impacted by $23.5 million of revenue share. The next slide shows all our Dallas forward managed lanes registering double-digit growth in revenue per transaction, significantly outpacing inflation. This was driven by several factors. A favorable traffic mix with higher heavy vehicle volumes, thanks mostly to technology enhancements in camera recognition that started to be implemented in 2025.

7:55 This improved vehicle classification. As well as a higher number of mandatory mode events at NTE and NTE35 West. For the first nine months, revenue per transaction increased 17.1% at NTE, 12% at LBJ, and 15.6% at NTE35 West. Looking at revenue per transaction growth in Q3 compared with Q2, At NTE, the lower growth in revenue per transaction mainly reflects fewer and less intensive mandatory mode events during the third quarter. At NTE 35 West, the comparison base is becoming more demanding as the benefits from improved vehicle classification began to have an impact in September 2025, while mandatory mode events also became more significant around the same period last year. As a result, the year-on-year contribution from both effects is now starting to normalize.

8:48 The operating performance supported higher distributions at the portfolio level. Dividend distributions for the first nine months were at 100% stake, $118 million for NTE, $61 million for LBJ, and $143 million for NTE 35 West. No changes versus June, as these projects usually distribute dividends in June and December. Let us now turn to I-66 and I-77. IC66 delivered an outstanding performance. Transactions increased 4.1% in the third quarter and 7% in the first nine months. Revenue per transaction grew 10% in the first nine months of the year and revenue increased 17.7% driven by higher toll rates, with adjusted EBITDA up 18.1%.

9:35 In Q3, the adjusted EBITDA margin was lower than in the first nine months of the year, mainly due to higher provision for doubtful accounts related to video transactions. In terms of dividends, I-66 distributed $80 million in the first nine months at 100%, compared with $64 million in the same period last year. At I-77, traffic declined by 5.3% in the quarter and 5.2% year-to-date. Performance was affected by heavy vehicles shifting to alternative routes, increasing available capacity in the corridor, and summer travel showing fewer leisure trips in the third quarter. Revenue per transaction increased by 11% in the first nine months and revenue grew by 5.4%.

10:20 However, adjusted EBITDA declined 6.1%, mainly reflecting the step-up in the revenue share band from 25% to 50%. This EBITDA impact is largely a first-year effect and is expected to normalize over time as revenue grows within the new band. I-77 distributed $18 million in the first nine months at 100% compared with $22 million last year. Turning to airports and starting with new Terminal 1 at JFK. March 2027 remains the Phase A DBO date. This is subject to contractor execution and other factors, including the sequencing of the remaining activities, achievement of the required KPIs, and coordination with key stakeholders, including CBP and TSA.

11:09 The first set of basic trials has been completed, and the remaining activities are focused on systems integration, testing, and commissioning. New Terminal 1 has reached 32 airline agreements comprising 24 executed agreements and 8 letters of intent as of the date of publication of the results. The international traffic performance at JFK has been affected by geopolitical developments and by FAA measures taken to manage New Yorkers by capacity constraints. Those are related to air traffic controller staffing mainly. Given the current market conditions, the Port Authority's Board of Commissioners approved extensions to the Phase B1 and B2 construction milestones, with the notice to proceed deadline extended to September 2030 for Phase B1 and June 2033 for B2.

12:02 Our equity commitments have been completed following the 63 million euros contribution invested in the second quarter. Total equity invested is 1 billion 42 million euros. Moving to Dalaman, passenger traffic reached 4.5 million in the first nine months. This is 4% lower than last year, mainly due to lower international volumes affected by geopolitical challenges in the Middle East, but this was partially offset by a strong domestic traffic growth. Revenue declined by 7.1% and adjusted EBITDA declined 7.7% in the first nine months, reflecting softer international traffic levels. Moving now to construction, the business division delivered strong profitability and a record order book. Revenue reached 5.8 billion euros in the first nine months, increasing 9.1% like for like, with adjusted EBIT margin improving to 4.1% from 3.7% last year.

13:02 Recording a solid 5.1% adjusted EBIT margin for the third quarter as well. Udimex maintained healthy profitability with a 6.9% adjusted EBIT margin for the first nine months of the year and delivered higher like-for-like revenues. Weber increased its adjusted EBIT margin to 3.6% in the first nine months of the year, supported by 17% like-for-like revenue growth and operating efficiencies. Ferrovial Construction improved its adjusted EBIT margin to 2.6% from 1.7%. for the first nine months of the year. This reflected better execution in North America, the United Kingdom and Spain, and lower bidding costs following the submission of major bids in July and higher revenue.

13:48 The order book reached a new all-time high of 19 billion euros and increased 8.2% like for like compared with December 2025. The composition of the order book remains very healthy. It does not reflect roughly 8.7 billion euros in contracts that are pre-awards or pending financial clauses of September 2026. These are mainly related to the I-24 and Budimex contracts.

14:12 Half of our backlog is in our core US and Canada market, which we expect will continue to support future growth.

14:21 Well, a recap on the main operating results. We see the figures here on this slide, the strong revenue and profitability performance for the first nine months with Very strong results across the board, double-digit growth in like-for-like terms of revenue, adjusted EBITDA and adjusted EBIT. And now to conclude the results presentation, let's focus in the net debt infrastructure projects. We ended the first nine months of the year with a net cash position of roughly 1.7 billion euros, compared with 1.3 billion euros at the end of 2025. This reflects a strong cash generation, discipline investment, and the impact of recent divestments.

15:08 The main components were 604 million euros of dividends from projects, mainly from highways, with 350 million euros from the Forward 70TR, 159 million euros from the Dallas Forward Managed Lanes, and 38 million euros from I-66 and 11 million from the I-77. Next block is the Construction operating cash flow, excluding tax payments and dividends, has reached €591 million and reflects strong operating performance, along with some compensation received in the U.S. and Canada, and also it benefited from some prepayments received earlier than usual at Budimex.

15:54 These inflows were partially offset by €71 million of operating cash outflows, and 56 million euros of tax payments, mainly in Poland. In terms of investments, we have 231 million euros, including mainly the last equity injection in NTO, 60 million euros, together with investments in energy of 75 million, of which 42 million are related to the Leon County solar project plant in Texas, and construction invested 71 million euros. Then we have the interest received on cash, I mean from other investment activities, this cash flow reached 85 million euros, and as I said, it's basically cash remuneration on the liquidity we have. The investments were 96 million euros, the main components being Silvertown Tunnel and the transmission lines in Chile.

16:45 Shareholder distributions include cash and share buybacks also, and amounted to 461 million euros. and then we have the cash from their financing activities, 612 million euros and mainly is related to repayment of 780 million corporate bond, the issuance of a new one, together with the dividends to minorities in Budimex, financial leases and interest payments. Last in the cash breakdown, we have the effect of the exchange rate on cash equivalents of 23 million euros. Overall, the group continues to maintain a strong net cash position and financial capacity while we are funding shareholder distributions and investment in our growth opportunities. Thanks for your attention. I will now hand over to Ignacio to discuss the information on recent awards.

17:32 Thank you, Ernesto. And following on the project overview presented at the commercial close and the information provided by TDOT, we'd like to provide some additional information on the concession payment structure and the revenue sharing mechanisms included in the concession agreement. The $24.8 billion figure published at the World Combined Present Value and Nominal Components as required by the RFP. To provide a consistent comparison, we have now presented all payments on a present value basis. On this basis, the total payments to TDOT amount to $21 billion, which is the same value included in our offer. In accordance with the concession agreement, the payment profile is front-loaded, with approximately $7.7 billion of nominal payments during construction from 2027 to 2033, reaching approximately $1.1 billion nominal at peak.

18:26 The remaining payments will be made during the operating period through 2085. The table shows the full payment schedule on a present value basis. The $21 billion is calculated as of the contractual financial close deadline using the applicable discount rates. with final amounts remaining subject to the financing structure at financial clause. In terms of financial structure, we will be providing more information at financial clause. TIFIA requires a maximum leverage of 75% debt and 25% equity. In addition to these payments, the concession includes two revenue sharing mechanisms with TDOT. These are not included in the $21 billion and only apply if the project performs above the defined thresholds. The first is an excess revenue share.

19:13 It begins when accumulated revenues exceed the base case level, with TDOT share increasing as the project IRR outperforms the base case. The second applies when toll rates exceed $3.2 per mile in 2025 dollars. TDOT receives 50% of the revenue between $3.2 and $4.8 per mile, 75% between $4.8 and $6.4, and 19% above $6.4. These toll rates are escalating annually at the greater of 2.5% versus the average of state GDP, U.S. CPI, and 3%, similar to the soft cap. So overall, the structure provides TDOT with significant contractual payments while also allowing TDOT to participate in DAP site if the project performs above the base case.

20:01 I will continue presenting the I-285 East Express Lanes project in Atlanta, an important addition to our managed lanes portfolio and a project with the potential to create significant long-term value. The presentation is similar to what I presented a few weeks ago about the I-284 project in Tennessee. The I-285 East program is structured in different phases under a comprehensive development agreement with GDOT. Provial leads the project consortium with a 90% ownership stake. Phase 1 is the committed phase. It covers approximately 23 miles, including the extensions at SR 400 and I-85, adding two westbound express lanes in the I-285 east corridor. The Phase 1 agreement includes design and build activities and a 50-year operational maintenance period. The project has an estimated construction cost of approximately $8.9 billion, with an expected 6.5 years of construction period.

21:00 expecting service commencement in 2034. The proposed concession payment is $23.1 billion, final figure subject to interest rate movements and financial structuring prior to financial clause expecting by October 2027. Additionally, $515 million will be paid at financial clause as reimbursement of estate cost. Phase 2 covers the corresponding eastbound alignment with approximately 23 miles, including the extensions already mentioned. The second phase is partially committed. Traffic and revenue assumptions and design and construction parameters are already defined, while construction cost remains adjustable for inflation and the contractual parameters described in the agreement. Phase 2 financial clause is expected in 2029 and opening expected in 2036.

21:51 Phase 3 is currently indicative. It covers approximately 40 miles in both directions along I-285 and SR-141. Its scope, economics and timing remain estimates to be developed through the CDA. The current expected milestones are financial close in 2032 and opening in 2040. The important point is that Phase 2 and 3 are not automatically committed. They have to be negotiated and developed through the CDA and they will be executed under separate phase agreements. Turning to the economic fundamentals of the metro area, Atlanta is already one of the largest metropolitan areas in the U.S., with approximately 6.5 million residents, while continuing to grow at around 1.3% per year over the last decade.

22:36 This population growth has been accompanied by strong economic performance. Real GDP has grown at approximately 3.5% annually, supported by a large and diversified employment base. The region also benefits from relatively high household incomes, with median household income of approximately $92,000, around 13% above the U.S. average. Atlanta is a major economic center, representing approximately 70% of Georgia's GDP and home to 14 Fortune 500 headquarters, with a significant development pipeline of around 500 to 600 new projects per year. Importantly, this economic base is supported by a strong talent pipeline, with more than 300,000 college students enrolled and approximately 64,000 degrees awarded annually, provided a continuous source of skilled labor for the regional economy. Atlanta is also a major transportation and logistics hub, supported by the Walls Business Airport and the key interstate connections.

23:38 Overall, Atlanta combines significant existing scale with a track record of sustained population and economic growth, High incomes and a deep talent base supporting employment, mobility, and long-term travel demand across the region. Moving on to the corridor itself, I-285 brings together jobs, residential areas, and freight flows across a single heavily used ring road. I-285 currently carries approximately 200,000 to 240,000 vehicles per day, making it one of the region's most heavily used corridors. I-285 connects major employment and residential centers, with demand largely driven by short trips. Fewer than 3% of trips are end-to-end, and the average trip is approximately 5 miles, highlighting the importance of multiple access points along the corridor. I-285 plays an important role in the region's freight and logistics network. Through-track traffic is routed away from central Atlanta and on Tothering Road and its interchanges, contributing to a meaningful heavy vehicle presence of approximately 10-12% of corridor traffic.

24:48 The corridor is also an important regional connector between Atlanta's major interstate highways. Around 20% of track trips travel between I-285 and I-75, reinforcing I-285's role as a key freight bypass. Beyond freight, I-285 supports significant commuting and business demand, creating a diversified mix of users throughout the day. Overall, this combination of local, commuting, business, freight, and regional traffic creates a broad and diversified demand base, with connectivity playing a critical role in capturing that demand. On the next slide, we saw the level of congestion on I-285 with a long duration and intensity not seen on other highways.

25:35 As commented before, the corridor carries approximately 200,000 to 240,000 vehicles per day. The corridor experiences up to eight hours of daily congestion. At peak times, speeds can fall to around 20 miles per hour, with four to five hours of daily peak by direction. Importantly, this is not a recent or temporary pattern. Congestion has been persistent across the corridor for more than 10 years. To put this congestion profile into context, SR400 provides a useful benchmark given its similar managed lanes framework in the Atlanta market. The heat maps compare weekdays traffic conditions in 2025 between I-285 and SR400. Areas shown in red colors indicate more severe congestion and longer delays. What stands out is the materially stronger congestion profile of I-285 East. Congestion extends across more hours of the day and both directions, while SR-400 is more concentrated around peak hours and the peak duration with lower intensity. I-285 East has greater freight flows exposure. Tracks account for approximately 10-12% of traffic, compared with around 3% on SR-400.

26:50 I-285 East also has significant greater extended vehicles exposure, similar to TRAX traffic. So while the tolling frameworks are comparable, I-285 East has materially strong and underlying demand, which creates a deeper need for reliable travel times throughout the day and increases the potential value that the express lanes can provide to drivers. Looking ahead, the traffic case is supported by a combination of strong existing demand, suppressed demand, and expected continued regional growth. Starting with the regional outlook, third-party forecasts for 2025 to 2034 show expected annual growth of approximately 1.1% for population, 1.9% for real income per capita, and 2.6% for real GDP.

27:36 Importantly, the traffic case does not rely on future growth to create demand. As we have seen in the previous slides, demand is already established and the corridor is operating under significant capacity constraints. We also see evidence of suppressed demand. Between 2012 and 2023, traffic on I-285 between I-75 and I-85 grew by approximately 0.4% annually compared with approximately 1.1% on regional freeways. However, growth on I-285 has been concentrated during off-peak periods where capacity remains available, while peak period traffic has been constrained by congestion. We therefore interpret the lower observed growth as evidence of capacity constraints rather than weak underlying demand. This suggests there is latent demand that can return to the corridor once additional capacity becomes available.

28:30 Based on our management portfolio experience, users typically take approximately two to three years to become familiar with a new road configuration and the benefits it provides supporting progressive adoption following opening. Together, strong existing demand, the release of suppressed demand, anticipated continued regional growth and expected progressive user adoption support, the long-term traffic assumptions for I-285 East following its expected opening in 2034. Turning to connectivity, as highlighted earlier, it is particularly important on I-285, given the predominantly local nature of demand and the relatively short average trip length. This has therefore been a key focus of our design and one of its principal differentiators.

29:17 Compared with G-DOT reference design, our solution increases allowable movement from 42 to 117, and entries and exits per mile from 2.3 to 3.1. Most importantly, the share of corridor trips increases from 55% in the reference design to 95% in our design. This represents approximately 1.7 times more in scope trips. A particular focus has been freeway-to-freeway connectivity at SR485. Based on our management portfolio experience, we see this connectivity as critical to network performance. and our design provides full connectivity at both interchanges. The design also provides direct access to major cross streets, track-friendly connections and further improving access across the whole corridor.

30:07 In addition, the design extends the corridor through additional mileage along I-285 and at the SR-400 and I-85 connections. Overall, Better access allows more drivers to use the express lanes for their everyday trips while providing smooth connections across Atlanta's wider highway network. Moving to the pricing framework, the objective is straightforward, to maintain reliable travel times and a predictable free-flowing experience for users as traffic conditions change. The framework starts with an OTR soft cap of $2.01 per mile in 2025 dollars, with a corresponding hard cap of two times OTR soft cap, or $4.02 per mile. Pricing responds dynamically to real-time traffic conditions to protect travel speeds. When volumes exceed 1,500 passenger car equivalents per lane per hour, or speeds fall below 55 mph, tolls can increase up to two times OTR hard cap.

31:11 This pricing response can apply not only to the affected segment, but also to up to two preceding segments, helping ease demand before congestion reaches the bottleneck. The second important feature is the predictable growth of the OTR soft cap. The OTR soft cap increases annually at the greater of 2% or the average of nominal GSP, CPI, and 3%, providing built-in escalation. In addition, the framework includes performance-based soft cap adjustments assessed every six months, directly linked to the service experience by users. Given the expected traffic conditions, these adjustments may play a critical role to maintain reliable travel times. A 3% congestion adjustment can apply when sustained demand keeps tolls above the soft cap more than 20% of the defined peak periods in a segment, triggering an adjustment to the OTR soft cap for the entire phase. A separate 18% target speed adjustment can apply when speeds remain below 45 mph, more than 10% of the defined peak periods in a segment, again triggering an adjustment for the entire phase.

32:25 The objective is to restore the target level of service. These adjustments increase the OTR soft cap itself and we did the corresponding two times hard cap, allowing the pricing framework to adapt as traffic and congestion evolve. Finally, vehicle class pricing protects lane capacity with tall multipliers of up to five times for extended vehicles. Overall, these three mechanisms work together to manage demand, protect travel speeds, and provide express lanes users with a reliable service and predictable trip. Moving to construction and design, our approach focuses on bringing forward scope while simplifying delivery and reducing execution risk. Our approach brings forward more scope with additional 8.5 lane miles incorporated into Phases 1 and 2, while simplifying the overall facing strategy, reducing construction interfaces, remobilization, and handoffs between them.

33:23 Another important element is the increased and optimized access. The design incorporates broader and higher quality connections while seeking to integrate this additional scope efficiently into the construction program. From a structural perspective, the design also reduces the use of elevated and steel structures which improves constructability and supports greater schedule certainty while also reducing future maintenance requirements. Approximately 30% of advanced design development has been completed across phases one and two with additional design work for critical components. This provides greater visibility on pricing and schedule. The delivery platform benefits from a significant local subcontractor network, self-perform activities and more than 10 years of experience in the corridor.

34:10 Inflation risk is mitigated through developer and grantor protection and additional cost contingency. A combination of more scope delivered upfront, fewer interfaces, advanced design, and a strong local delivery platform gives us greater confidence in construction execution, schedule, and cost certainty. Moving on to the next slide, beyond the design itself, the I-285 piece bit is supported by operating data analysis and experience from across our managed lanes portfolio. providing differentiated data insights across the key traffic and pricing variables. This allows us to benchmark key assumptions of the bid against what we have observed in operation. On traffic, we use portfolio experience to assess how capture rates change by vehicle class and time period, how connectivity affects usage of network, how quickly users adopt a neutral route, and how suppressed demand returns as new capacity becomes available. Similarly on prices, we look at observed behavior around cap triggers and pricing above OTRs of cap, customer response to toll rate changes, and how toll segmentation and differentiated vehicles pricing can be configured to manage demand and preserve service quality. In short, the I-285 bid is underpinned by proprietary analysis, proven operating experience, and a detailed understanding of managed lanes customer behavior in practice.

35:31 Moving on to the next steps, this slide sets out the main expected milestones for Phase 1. Commercial close is expected in December 2026. The next major milestone is financial close. The contractual deadline is October 2027, and we currently expect completion before that date. Groundbreaking is expected in first quarter 2028, with early works expected to occur between commercial and financial close ahead of the groundbreaking date. Full-service commencement is expected in 2034. As we also explained in I-24, the financing framework includes agreed interest rate protection with GDOT from bid to financial clause varying by instrument. For private activity bonds, GDOT bears 100% of base rate risk and 85% of margin risk, while the developer bears the remaining 15% of margin risk.

36:19 For taxable debt, GDOT bears 100% of base rate risk and 85% of margin risk. The developer bears volume risk and the remaining 15% of margin risk. For TIFIA debt, GDOT bears volume and pays rate risk, as shown on the slide. GDOT also requires an investment credit rating for the project debt bidding proposal. The overall framework provides meaningful protection against financing market movements between bid and financial clause. We'll be sharing information on final concession value and final structure after financial clause. Let me close by bringing together the key messages from today's presentation. I-285 East is a highly congested, multipurpose ring road and Atlanta's principal freight bypass.

37:06 Congestion is long-standing, stands across the day, and affects both directions, supporting a significant base of surprise demand. Atlanta Metro has solid demographic and economic growth prospects, with a diversified employment base above average household income and strategic transport connectivity. Our best value award was supported by a differentiated design that is expected to serve 95% of corridor trips compared with 55% in the reference design. The pricing framework provides significant flexibility to respond to congestion and grow pricing over time. Starting with a $2.01 per mile OTR soft cap based on $20.25, dynamic pricing allowing real-time pricing up to two times OTR soft cap, including annual and performance-based adjustments supporting progressive OTR growth, and tall multipliers that go up to five times the live vehicle for standard vehicles. The CDA provides a structured framework to negotiate and develop phases 2 and 3. These potential phases represent an additional growth pipeline, but remain subject to separate development negotiation and award processes.

38:12 As we shared during the I-24 presentation, we have maintained our disciplined approach to capital allocation, targeting a double-digit equity IRR calibrated to the project's risk profile and complexity, considering that these types of projects are riskier than others. We continue to have a strong balance sheet capacity and we intend to source the funds for the equity commitments for both I-24 and Phases 1 and 2 of I-285 East, mainly with cash generated in our operations and to a lesser degree with additional corporate debt, all within the framework of our deeper B rating and excluding any equity rates at the ferrovial level. Thank you for your attention and I will now hand the presentation back to Silvia for questions. Ladies and gentlemen, we will now begin the Q&A session.

39:09 If you'd like to ask a question, please press star five on your telephone keypad. If you change your mind, please press star five again. Please ensure that your device is unmuted locally before proceeding with your question. Our first question comes from Luis Prieto from Kepler Chevro. Your line is now open, please go ahead.

39:33 Thank you. Good afternoon and thanks for taking my questions today. I had a number of related questions. The first one, what led the TDOT and you to make public the concession value payment schedule for the I-24 ahead of financial close? Can we, in this context, can we assume this schedule is a result of a negotiation that was completed with the commercial close agreement? and in relation to the I-285E, should we expect a similar dynamic in terms of negotiating the schedule and reaching commercial close and disclosing the structure? Thanks for

40:22 that. Thank you, Luis, for your questions. So as you know in this all these processes we have some NDA clauses and confidentiality that we cannot share some of the information so that's why we did not share some of the concession payments for the I-24 and at the time that the TDOT let us to give that information we made it public based on the press release that they made on Monday so immediately after we communicated that information. Regarding the I-285 East, I have to say that each of them is different, different projects that are differently negotiated. And in that specific case, you will not expect to receive any additional information on the financial clause. And you will get all the details about equity and concession payments.

41:12 Thanks for that, Ignacio. And if I might squeeze in another one, a more technical one. How should we interpret the I-24 and the 285E interest risk? assumed by the grantor. Is the grantor obliged to pay the excess financial expenses if interest rates deviate from commercial close guidelines until the facilities are refinanced at cheaper prices? Is that a way of looking at it or is it completely different?

41:35 Thank you. Probably the way to look at it, Luis, this is Ernesto speaking, is you look at the interest rate effect on a present value basis and payments are adjusted accordingly. So it's in terms of concession value that it gets adjusted.

41:57 Okay, understood. Thank you. Our next question comes from Cristian Nedelku from UBS. Your line is now open. Please go ahead.

42:14 Hi, thank you very much for taking my question. Could I ask you first on the I-285, I think the grantor slides were talking about the concession payments being made during the six years of construction. Could you help us understand if that is set in stone or that is subject to negotiation and we could see a payment structure similar to I-24? The second one, just to clarify on I-285 phase two concession payment, I understand that you cannot disclose any value, but is the same road in the opposite direction. You've committed to a traffic and revenue forecast. Would it be fair to assume there's a similar concession payment in order of magnitudes, or could it be there's no concession payment for Phase II at all, any color just for us to understand the magnitude?

43:06 And the third one, if you allow me, maybe on the NTE side, I think you have now one month since the new capacity has been added. And I was wondering if you can share any conclusions in terms of the net impact on the revenue growth there. Less mandatory, more volumes, any color you could give us at this stage. Thank you.

43:36 Thank you, Christian. I will take the first two questions and then Ernesto will take the third one. Yes, I think that the At the conference call, GDOT explained that it sees equal payments reconstruction, but also it was noted that it may change based on the change of interest rates or the final financial structure.

43:55 So final numbers as commented previously will not be commented until financial close.

44:01 And the second question about the phase two, don't take assumptions that are similar. Also, yes, it's different direction, but I think will be different type of cost in order to develop that and different type of revenues. and then the financial clause will be in two years. So don't take for the time being any assumptions that it's going to be exactly the same. It may have some differences.

44:23 Yes, thanks. I mean, regarding the impact, there's very limited we can comment now. Yes, we are seeing more traffic coming back to the corridor. Regarding mandatory modes, I mean, that is something that will have to be gauged. Thank you very much. The following question comes from Harishankar Ramamurthy from Deutsche Bank. Your line is now open. Please go ahead.

45:09 Yeah, hi, good afternoon, everyone. Thanks for taking my questions. A couple from my side. How should we think about the I-24 legal challenge? What's the process from here on? Does the award become irreversible at some point? And if not, and if the decision gets overturned, then what's the exposure for Ferrovial? That's the first one. And then secondly, on 407 EDR, Is it fair to say that outside of the COVID period, the traffic decline there has been the steepest in the last quarter? And I do get the point on several external factors, tariffs and whatnot. But thinking about the levers that you have at your disposal, should we think about or rather how should we think about price increases next year?

46:02 And would you dismiss the possibility of, say, reducing the tolls? Thank you.

46:26 Thank you. I will take the first question about the I-24. We are not worried at all about any legal challenge. Of course, we cannot comment because there is a litigation ongoing in which Tidot and the consortium that was part of this challenge. But I think it will be solved fast. And as I said at the beginning, we are not worried at all about this legal challenge.

47:02 Okay, and regarding the 407, I mean, clearly the traffic, as I mentioned before during the presentation, has been affected by how we have managed promotions, targeted promotions and so, and we still see that the product is well-valued. I mean, the growth in revenues is substantial this year. We don't provide specific guidance, but I mean, I rule out lowering prices as you were suggesting. Thanks for that.

47:37 Thanks. The next question comes from Elodie Roll from J.P. Morgan. Your line is now open. Please go ahead.

47:54 Hi, thanks for taking my questions. First of all, just to follow up on the 5.2% discount rate. I think the question was raised earlier, but I didn't quite understand how it could be adjusted higher at financial close and the consequence on the projects in PV at this stage. So if you could help me understand that a bit better, please. Second, the I-285 East, you got a new partner for 10%, so I think now you're at 90%. Do you look for a third partner? What's the ultimate goal there? And maybe lastly, on construction margin, clearly very strong performance in Q3. You're above the 3.5% margin target, so Is that 3.5% still a valid target in the mid-term? If you can comment on that. Thank you.

49:00 Okay, so I take a high yellow. This is Ernesto. I'll do a little bit of further explanation on the interest rate and margin compensation. So, I mean, we basically... submitted a financial structure with the conditions indicating that were the prevailing, let's say, at the time in terms of debt, right? So imagine that base rates and spreads have gone up, right? And therefore, when you go to the financial close, the capital structure that we submitted now at financial close is different. It has higher interest rate and higher spreads. The grantor makes up for the increase in base rate and 85% of the margin. And the way that gets adjusted, there's a formula that basically says, okay, these additional payments have an NPV value of X, right? And that is what gets compensated, right?

50:03 And it gets compensated with, let's say, concession value.

50:09 Regarding the second question about the partners of the 285, yes, we have a 90%, that is higher than usually we used to have, so we may at some point of time decide to reduce our participation to more similar participation with maturity, but similar to what we have in other managed lanes. But the question is when, so we have not taken a decision, we may do it before, after financial growth or after construction. Of course, as long as you reduce the risk of this project, the value will increase. But we have not taken a decision yet. But at least we'll consider that usually we may reduce our participation to be more similar to what we have in other assets.

51:01 Okay, regarding the construction margin, we've always mentioned that this is like a long-term margin average, right? So, yes, some moments we could be above. Of course, there are moments it could be below. So, we think that as a long-term margin, this is a reasonable margin for the construction business.

51:30 Okay, thank you. Our following question comes from Rairi Kulinane from RBC Capital Markets. Your line is now open. Please go ahead.

51:46 Hi there. Yes, my first question on the I-77. Do you think any of the reduced traffic year-to-date was a price elasticity impact, either for the heavy goods vehicles or the leisure traffic? Secondly, perhaps you could just sort of talk about your appetite for So regarding the I-77 performance, when you look into the area, there's like two areas

52:34 Thank you very much. is that now it's under heavy construction, right? So we see heavy traffic that is now using the I-85 that connects into the I-95 rather than I-77 and I-81. So as long as this construction goes on, we expect heavy traffic to shift as it has been seen this year into this alternative corridor, right? When you have less heavies on the road, definitely, Capacity increases, right? And therefore, our capture rate suffers, right?

53:36 So that could be seen as an important driver of the performance. It could last for some time. But I mean, in terms of the Charlotte region growing and so on, it's still expected to grow.

53:57 Regarding the second question about, yes, we have pre-qualified for the I-77 South. We are waiting for the RFP. And yes, we'll participate and we'll bid for these new manned lanes. And we actually participate in the re-qualification process of additional manned lanes in the future. So yes, we have a full appetite for this type of project that we think can create a very good value for the company in the future.

54:25 Regarding the question, regarding the energy performance, well, I think it's a comparison between a year where still the energy division was still developing some construction projects, some EPC plants and also transmission lines. The moment transmission lines are operating or you finalize EPC contracts, you get a better margin. So it's a It's a matter of scale and evolution of the portfolio.

54:58 Thank you. Our next question comes from Graham Hunt from Jefferies. Your line is now open, please go ahead.

55:12 Yeah, thanks very much for the questions. Can I just start with the 407? and try and dig a bit deeper into this volume decline in Q3. I mean, for what it looks like and what we see the discounts that you're offering in Q3 were really pulled back. I mean, that contrasts quite significantly with, I think, the strategy last year where they were really dialed up. So I'm just trying to understand what's the rationale and thinking there. And I suppose how much of the minus seven on volumes came from changes to the way you were offering promotions versus what you might refer to as one-offs or macro weakness. I'm just trying to get my head around the pricing strategy that you're pursuing on that asset.

55:59 And then my second question, if I can ask on the 285, the sort of references to heavy vehicle percentage on the corridor and the five times multipliers, etc. I'm just trying to understand sort of apples to apples numbers here because I understand that the I-285 can't take heavy vehicle traffic, but is the 10% to 12% of heavy vehicles, is that a reference to the vehicles which can travel on the corridor? Or are you saying that that heavy vehicle traffic on the corridor in general will drive more light vehicles onto the road? So just trying to get a sense of what percentage of vehicles in the corridor that are eligible to drive on the 285 express lane would qualify for the higher multiplies, the five times multiplies that you referenced in the deck.

56:50 Sorry for the long question. Thanks.

56:55 Okay, thanks, Graham, for the questions. I'll take the first one on the 407. Last year, I mean, really promotions were broadly offered and different times of the day, different segments could be used. Right now, we have a more targeted approach that means that there's some sort of commitment. Okay, you drive X and then you get the promotion or, I mean, the promotion is valid as long as you conclude spending some amount, that sort of thing, right? And one idea that is well targeted is also, as you see, We have reduced the expenditure overall for the Schedule 22 with much higher revenues, right? So that means that even segments where we were not that able to steer in traffic, now we are steering traffic, right? So it's a mixture of providing value for customers, they appreciate that, and also managing the cost component, right? So that's when we mean targeted promotions.

58:10 That's the explanation.

58:14 Regarding the 285 and heavy and extended vehicles, The point that we were making during the presentation is that today heavy vehicles in the 285 are around 12 to 14%. And we mentioned this figure because it's public information. And also mentioning that a few of them take the whole trip. So most of them just enter in one interchange and they exit in a different one. So shorter trips, so from interchange to interchange. But this type of traffic, what generates is a lot of congestion in the 285, in the general purpose lanes. Heavy vehicles are not allowed to use the managed lanes, but extended vehicles, yes. And extended vehicles, what is different here and that you need to consider is the definition first. that is broader than in other type of, in the case of the Texas Managed Lanes, so it's different to the I-24.

59:09 So the definition of extended vehicles is broader in this case. And what is also higher is the multiplier. And what is also relevant compared to others like SR-400 and other type of highways is that the number of extended vehicles is significant. We have not given a number for, I mean, we want to keep intellectual property and information that we may have from other or own, I mean, analysis and research and knowledge. But we think that it plays a significant role because of the number and because how they behave and because time savings for them are very relevant.

59:50 Understood. Thank you. And thank you for the additional I-24 information as well. It's very helpful. Thanks. The next question comes from Mark Ip Tat-Quen from Citi. Your line is now open, please go ahead.

1:00:06 Hi, thanks for taking my questions. I've got a few just on, all on the I-24. The first one is just clarification on the timeline for the I-24. I think it's changed maybe a bit from the analyst call at the start of the month. Previously referred to first service commitments 2034 and full operation 2035. The Concession Payment Schedule shows your payments will start from 2036. Can you clarify the timeline there for me, please? The second one is on the leverage 75-25 cap structure on the TIFIA term sheet. Does that only apply at the commencement of operations, or do you need to adhere to that throughout the whole of the concession? and then just the last one, which I can't remember if you've shared before or not, but are you able to share what unlevered project IRR you're targeting for the ITIL?

1:00:58 Is that in the single digit or double digit range, please? Thank you.

1:01:17 I don't know.

1:01:38 Sorry, about the first question. If you understood well, it's about the payment in 2036. What we think, if we understood well the question, is because it's the first year of operation, so the full year of operation. That's why it's the first payment. But I don't know if we are answering the question that you are asking or not. Hopefully, yes.

1:01:58 Okay. The presentation on the 5th of October, I thought the start year was 2035. Has that shifted now to 2036? as per the concession payment schedule.

1:02:12 Yeah, the 36 is the first full year of operations. So the whole year is 2036, but the 35 will be a few years, a few months, sorry, in operation, but not a full year. I don't know if you understand the difference, no?

1:02:31 Okay, so then regarding the other two, the first one was on the Tifia requirement for a minimum 25% equity. This is for financial close. I mean, there's no specific condition for the project that involves a long time. It's just for financial close. And then regarding the, I mean, type of IRR that we required at a project level is close to double, is close to double D. So it's Super high single digit, I would say that usually the goal is to translate in a very healthy, let's say, levered double digit IRR, as we mentioned.

1:03:19 But of course, for the project to be solid, you need also a very high project level IRR. So we need to translate into something like that.

1:03:29 Understood. Thank you very much. The next question comes from Marcin Wojtal from Bank of America. Your line is now open, please go ahead.

1:03:44 Yes, thank you so much. So I've got a few questions. The first one will be on I-24 and on the capital structure. So you disclose that TIFIA documentation permits to fund up to 75% of those projects with debt and only 25% of equity is required. But is that actually the capital structure that you want to pursue for the specific project? I believe historically equity component is closer to 40. So could you just clarify, is there a big change versus the historical run rate? My second question will be on I-285. Are there any revenue sharing clauses?

1:04:29 I don't see anything disclosed, so Do they don't exist or they are just not yet disclosed at this stage? And maybe question number three. It's a bit of an open one, but you indicated that you assess legal risk, litigation risk for this project as being very, very low and you expect this to be resolved quickly. Any additional color? What gives you the confidence in a quick resolution, if possible?

1:05:11 Okay, Marcin, regarding the structure, I mean, in the past, if you recall, TIFIA did finance a more limited number of expenses by type of expense, right? Now they can, I mean, their term sheet, as shown in the grantor's presentation, covers up to 49% of different concepts, right? So they have increased the scope, right? And that is what drives the possibility of a higher leverage being how robust the TIFIA financing makes any structure, right? So is that change on TIFIA scope that has changed these dynamics on leverage?

1:06:00 Regarding the second question about the revenue share, this is going to be something very standard, not similar to what you see in other managed lanes, in which when you overperform, according to your base case, then you start to share with the grantor.

1:06:14 So I think this is not going to be different to other managed lanes.

1:06:18 And regarding the legal risk, as we mentioned, we are not worried. In this specific case, of course, there is litigation ongoing and we cannot comment or give further arguments in a litigation especially that we are not part of it or we are not directly involved. So we cannot give more information about it. Our next question comes from Eddie Diamantis from Green Street Infrastructure. Your line is now open. Please go ahead.

1:07:06 Sure. Thank you very much. Just as an introduction, my name is Eddie Diamantis. I'm a senior reporter covering infrastructure in North America and throughout the Americas. Really excited to hear about the I-24 and I-285 transactions. So thank you very much for taking my question today. My question is more so focused on the financing for it. So I'm curious, how will the project financing for I-24 and I-285 East be structured? Who are your financial and legal advisors, and who do you anticipate will provide this project financing? Thank you very much.

1:07:46 Hi, Eddie. I mean, usually we focus this call for investors and analysts, but happy to take your questions. Well, in terms of the structure, as I mentioned before, the debt component, the main driver is TIFIA funds, and then we have private activity bonds that basically have been allocated to the states, and they provide a number that could be used, and then taxable bonds. But as I said, the The main component is the TIFIA financing. These, let's say, taxable bonds and so are assessed through with financial advisors.

1:08:35 Financial advisors are not made public, but they provide a view of what is the, let's say, the market appetite or capacity when we submit the bid, right? But as I said, the bulk of it is... is TIFIA, and then, of course, the remaining is the equity. And then the last, okay, so I think that that answers your question, hopefully.

1:09:09 Yep, yep, and just so I understand, too, and I understand this is for investors, I might be a little out of place here, In terms of who will provide this financing for these private activity bonds and taxable bonds, those will be listed on public markets?

1:09:25 Oh, yeah, yeah. This is the capital markets transaction, and this is the usual muni bonditions and taxable bonds that are capital markets listed, and they're with their prospectus. Everything is public financing.

1:09:43 Awesome. Great. And you mentioned before that you all have full appetite. for other P3 projects. Could you confirm any other projects that you're looking at besides I-77 in the United States?

1:09:56 Well, we will comment more when they come to basically request for qualifications or something like that at that point in time when we tend to make this public. So thanks, Eddie. And sorry, as I mentioned before, this is more for investors than analysts. So thanks for attending. Sure. Thank you. The following question comes from José Manuel Arroyas from Santander. Your line is now open. Please go ahead.

1:10:31 Thank you, Ernesto and Ignacio. I have three. The first one is on the I-285 fees. I wanted to come back to Christian's earlier question and to get a clarification. The other day, the Georgia Department of Transportation said the concession fees have to be paid in seven installments. I just wanted to clarify, is there a possibility or is there not? That at financial close or maybe sooner, this schedule of seven payments can be changed and be eventually spread over the concessional life like I-24. That's question number one. Then question number two is on I-24 and the revenue sharing payments which are based on IRRs. Just to get a sense of how likely these payments may be or they may not be, is the IRR triggers here, are they higher or lower than, for instance, on I-66?

1:11:23 and lastly on NTO, you've mentioned that there has been a change to the start of the development of Phase 1B and 1C and I understood it was at the request of the Port Authority. Could the concession be extended to make up for the three-year delay? Thank you.

1:11:49 Thank you, José Manuel. I will start with the 285 and the six payments during construction. Yes, this is what was mentioned from GDOT and also in the same presentation was mentioned that it may change based on the difference in interest rates and also final financial structure. So just repeating what they were saying at that time, nothing more to be said. And as commented at the end, we'll see at the end of financial close, we'll see the final numbers.

1:12:15 Regarding the

1:12:17 The revenue, sir, and it was easy to access that. I think that it will reach the revenue, sir. I think all of us will be very happy because it means that the I-24 is outperforming. But hopefully it's the case, no? I think that it's outperforming and hopefully it will reach at that level. But if that's the case, I think that it is performing even better than some of the other manhousings that we have today.

1:12:44 Regarding the potential extension of an NTO, no, that's not part of the contract at this point in time. Thank you. The next question comes from Christian Nadelcu from UBS. Your line is now open.

1:13:10 Please go ahead. Thank you very much for allowing me to follow up. Could I ask you on the current portfolio, based on what you've been saying earlier, I think I-77, there are some headwinds from the heavy trucks moving away from the corridor. I think you've mentioned you're lapsing a bit the technology benefit in Dallas in terms of pricing, better segmenting pricing. NTE capacity is unclear what's the impact on revenue. Did These three levers seem to be a bit of a headwind or suggest a bit of a deceleration in the pace of revenue growth. My question is a bit, what's offsetting that? Maybe could you talk a little bit about the positives? I guess LBJ traffic is good, but I'm trying to understand if going forward for the next few quarters, what are the headwinds and the tailwinds that you see in front?

1:14:02 The second one, if you allow me... What's the range of a cost of equity for this type of projects, I-24, I-285? I guess at this point when we have construction risk and traffic ramp up risk and once we've de-risked them, could you help us with a bit of a range on appropriate cost of equity there? And the third one and the last one, just a small clarification, apologies, I come back to the I-285 phase two. Just for us to understand the mechanism, how the concession payment is determined, is it correct that you've committed to a revenue forecast through Phase 2? You've committed to a CapEx forecast, as well as the fact that the equity IRR that you are able to earn there cannot be higher than Phase 1. So therefore, by back-solving against these three data points, The concession payment due to the grantor will be calculated in this way. Is my understanding correct in big lines, or am I missing anything?

1:15:07 Several investors believe there's no concession payment related to Phase 2, so I just wanted to, or there's a very symbolic one, just wanted to understand a bit the direction of travel. Thank you very much.

1:15:29 Okay, so in terms of revenues, I mean, going on, yes, you are right that the LBJ is showing, I mean, the corridor increase, and that improves our performance after the opening of the 635. That should keep going up. And then in terms of the I-66, also we see that the corridor is growing more than we expected. Probably there's developments to the west part of the corridor. I mean, in the past it was more concentrated on the eastern part, very closer to the beltway. So that is also driving some support there. Thank you very much.

1:16:55 Other news, yes, we will be facing now the technology impact on the Dallas-Fort Worth concessions. The economy there, the background growth continues to be good. So as the areas keep growing, also the revenue growth keeps performing, right? I would say that's a good balance for the current portfolio. And the cost of equity, it's a very good question. I mean, if we take most of the business plans that we are seeing in the markets, that are well below ours, probably that would merit a very low discount rate, single digit, after opening, right?

1:17:56 So we'll see. I mean, the URI is out for that.

1:18:04 Regarding the question about phase two, in this phase, it's true that we gave traffic and revenue numbers that they don't need to be the same as the phase one first. Same with the CAPEX. So also we gave a figure of CAPEX that can be adjustable for inflation and other factors that does not have to be the same as phase one. So it could be a different number that you put in the bid offer. And then the financial close will happen in 2029. So many things could happen until then, no? So extrapolating that phase two is going to be the same as phase one is not the case. And all what we say is that you have to wait until that time in order to understand the numbers and the figures. And we cannot say that it's going to be the same of the phase one. You have to wait until then because it's a long period of time and many things will happen until then.

1:19:03 Thank you very much. The next question comes from Dario Maglione from BNP Paribas. Your line is now open, please go ahead.

1:19:16 Hi, good afternoon and thanks for the many presentations today. I have four questions. The first one is on the I-285 project. How likely is it that Ferrovial will get an additional partner For this project, let's say in the next, before the road opens. Second question, what happens if you don't find a partner before financial close? Would Fervialis sign the contract? Could you walk away from it? The question regarding the I-24 payment shadow, it seems the payment is very back and loaded.

1:20:02 So it's reasonable to expect that this fixed concession payment will be less than $200 million once the road opens in 2036 and then rises progressively. towards 5 and 10 billion by the end of the concession. And then last question regarding the discount rate that you have agreed with the DOT to do the MPV calculation for these concession payments. It's a 5.2% blended average discount rate, if I understand correctly.

1:20:47 How did you set this discount rate? because it seems quite low. Thanks.

1:21:10 Okay. Thank you, Darío, about the partners. As commented previously, we have not taken a decision when we are going to incorporate partners and that if they incorporate different periods of time, the pricing will be different. So if it's after the road starts operation, after it starts operations, then of course you have the risk most of it and you have revenues and then the value of the road at that time will be much higher. And of course, if you do it after financial close and you have the risk a lot also the

1:21:45 Thank you very much.

1:22:07 No partners and that we can walk away is independently, so it's not that we need partners in order to reach financial close. We can do it without additional partners, but always we have the option to withdraw, but we don't see that as a probability because we think that this may be a good project for us. And regarding the I-24, about your assumption, we gave present value numbers and you can take your assumption with this number and the discount rate.

1:22:35 I'm sure that you are not going to be very far away because it's not a big range of difference that you may have.

1:22:41 And the discount rate is based on TIFIA costs. All what is taken as a reference is what is the TIFIA cost for this type of projects.

1:22:50 Thank you. The following question comes from Luis Prieto from Kepler Chevro. Your line is now open. Please go ahead.

1:23:04 Thanks for taking my follow-up question. Leaving funding firepower aside, from a risk and resource management perspective, is there a limit to the number of use management projects that you can simultaneously develop?

1:23:26 I agree with you that the main risk is related to construction and to have the resources to do all these projects at the same time. and something that we need to see if we are prepared or we may bring partners in order to develop some of those projects. So we'll see. For the time being, for these two projects, we can do it ourselves with the capabilities that we have. In others, one, if we feel that we may need additional resources, we may partner with others. But it's a decision that we need to take later on, not today. But we feel comfortable with these two managed lanes and also bidding for the E77 itself. where we have experienced before in this geography, in this place that we developed previously, the I-77.

1:24:05 Super clear. Thank you. The next question comes from Marcin Wojtal from Bank of America. Your line is now open. Please go ahead.

1:24:21 Yes. Thank you for allowing me to follow up. So I have two quick ones. On the 407 ETR, the asset, I believe, increased dividend by about 40% for 2026. Would you say the asset has already reached its optimal capital structure after this dividend hike, or there is more to do on re-leveraging into 2027? And could you remind us what are the key credit metrics that we should monitor to determine whether there is room for further leverage? My second question, going back to the new managed lanes, how should we think about the timing of equity injections into these two very large projects? Ultimately, is there anything significant that would be injected before 2030 as you ramp up construction or is it very back and loaded?

1:25:23 Thanks, Marcin. This is Ernesto. I'll take the 407 question. Well, probably the metric, the credit metric that matters most for the 407 is the debt service coverage ratio, and that's around 2.6. So you can see that there's always room. As I've always mentioned, I don't expect big banks in the 407, but definitely, I mean, it's super solid, right? So you have a good angle there.

1:25:57 Related, the last question is most of the cash flows are back-ended, so very limited before 2030, and most of them 33, 34, and even 35, so a long period of time. Okay. Our last question comes from Nicolás Mora from Morgan Stanley. Your line is now open. Please go ahead.

1:26:30 Yes, good afternoon, just a couple, coming back a bit on the details of the I-285, I know you don't want to give much on the light vehicle, the light trucks, but at least a ballpark figure, whether the traffic for these guys is actually relevant, are we talking about 1-2% traffic, 5, 10, 15, because this changes a lot the economics, especially with the with a tariff multiplier, that would be very helpful. Second one, in what scenario do you not get the phase two on I-285? I mean, it doesn't have to be Armageddon, but in which scenario would you basically walk away from what you've promised the G-DOT?

1:27:20 And then, can you help us understand on the tariff front how you expect Let's say the extra kickers on mandatory pricing to come in. So I think you've got the plus 3% and the plus 18%. How realistic is this? How central is it to your bidding? And then the final point on TIFIA. I may be misunderstood, but I thought TIFIA was basically all the infra projects state level get Get into a pot and basically you share the availability of TIFIA on an annual basis. Your two projects here, if they're mostly funded by TIFIA, would require a TIFIA quantum, which is two, three, four, five times greater than what the SR-400 did.

1:28:10 So I'm not entirely sure where you see the capacity of the TIFIA market for your two projects. Most likely I'm wrong, but please enlighten me, that would be very helpful.

1:28:27 So, answering your question, first of all, the standard vehicles, as we said in the presentation, we see a meaningful presence of standard vehicles, and also we commented compared to the SR400 that materially higher standard vehicles is possible. And it's something that we have seen also in our Dallas Managed Lanes, that we have tested this, how relevant this could be, and I think that it could be a relevant thing, and as commented previously is how they are defined and what is the multiplier and also they are usually business and they are probably behave differently when you talk about time savings.

1:29:13 Phase 2 is I think it's going to add also value and still a long period of time in order to be negotiated and to reach a financial clause but we expect that it's going to create value for the company but Of course, at some point of time, we may withdraw. We think it's not the case. And this increase of the mechanism in which you can increase every six months the soft cap by 3% that you can do it, so 6% in total during the year, or if it's related to the speed, that is 18%. As we have commented, what we see in this 285 is that it is today highly congested. It has been highly congested for the last 10 years.

1:30:02 So it's a lot of suppressed demand that is not using it because there is not reliability at all. And what we see also is the short distance trips in the corridor. And as commented, I mean, we see a lot of business here, like extended vehicles. We see also All these ingredients, what may happen is that you need in order to improve the level of service to apply these things. We expect that is something that will happen and that is because it's highly congested. So it's going to be relevant and it's a mechanism that is going to help us in order to maintain the level of service at the managed lanes because all the ingredients that they commented previously This is highly congested for 18-20 hours. It's four or five hours of peak time.

1:30:54 So I think it's relevant the level of congestion and it could happen that the level of service is going to be not so good in these managed lanes because of the reasons that I explained before.

1:31:08 Thanks. And regarding TIFIA, it's not for us to tell what would be the capacity, the way the... The contract works if there's not the amount of TIFIA that we are requiring in the proposal, the grantor has to come up with how to sort out that risk, right? So, as I said, it's not for us to discuss the capacity. There are no further questions at the conference call at this time.

1:31:54 I will now hand it back to Silvia Ruiz at the Ferrovial team. Your line is now open.

1:32:04 Thank you. I will start reading the questions from the webcast. First question comes from Dominique Schmid from Astro Suisse. Given the recent I-24 and I-285 concession awards, how should we think about the balance sheet between growing cash distributions from your existing infrastructure assets and the equity funding requirements for new projects over the next three to five years? Specifically, how much cash do you expect to remain available for shareholder returns?

1:32:34 As commented previously, the equity needed for these two projects is very back-ended. Most of the large amounts are 33, 34, so it's very long-dated. Meanwhile, we'll continue getting distribution from the dividends and cash collected from the business and regular rotations that we do with mature assets. All this, of course, what we used to do is we have a 10-year plan. We analyze what is going to be the commitments that we have, what is the expected cash that we are going to get. And based on that, the board every year takes a decision about what is going to be the dividends for shareholders. Historically, we have given dividends to shareholders even during COVID, but we want to keep this flexibility depending on how the situation may change any period of time.

1:33:29 Okay, so...

1:33:37 Okay, next question comes from Lucas Tomanic from Baixa Hart Capital. Following the recent decrease in the company share price, how do you view your buyback strategy? Are you, for example, considering accelerating the reputations of your shares to take advantage of the price?

1:33:54 Okay, you know that we have placed a buyback program. The buyback program complies with all the market abuse regulations, right? So we don't look to the particular execution. It has agreed. So there's a bank mandated that has agreed. And if the share is lower, we buy more shares. So definitely that's taken into account. and there is more buyback with lower share prices. So we are taking advantage of the lower prices, yes.

1:34:43 I have two questions here from Philippe Leite from CaixaBank BPI. First question, I-24, regarding the payment schedule of the operating period, what is the difference between investment rate-rated payments discounted at between 5% and 5.5% and the US$0.5 billion outside investment rate rating discounted at 8%?

1:35:09 Well, basically, when we submit the bid, TIFIA funding requires two investment grade ratings for the debt structure, right? So, basically, you have all the senior payments, right? That means that the bulk of all these payments are senior and they are discounted as Ignacio explained before with costs that are similar to the TIFIA cost. So the outside investment rating means these payments are junior to the rest of the debt payments and these payments to the grantor and therefore they are small but they have a higher discount rate naturally.

1:36:09 And second question from Philip as well. Do I-24 and the I-25s have any kind of clause for the early termination of the contracts? And if yes, how will the prices be set for these early termination clauses?

1:36:22 Thank you, Philip. This is very standard. It's fair market value as we have in most of our contracts.

1:36:29 So it's a clause that is similar and standard in the foreign industry.

1:36:42 Last question in the webcast comes from Igor Sonin from Amphavalue. On page 6, you say the dividend lock-up of NTO now runs until the phase B2 notice to proceed, which has a deadline of June 2033 instead of B1. So Forreal can't receive a cent from JFK until it commits to the second expansion. In what year do you now expect the first distribution from NTO, and is there any time-based fallback if B2 is never launched?

1:37:11 Okay, so no dividends can be distributed until June 2033. You're right, I mean, it's in line with the commitment by NTO following the delay of the Phase 1 B1 construction to September 2030. So, I mean, we don't provide guidance on dividends. NTO must issue the notice to proceed for Phase B2 no later than June 2033. There is no fallback. Any modification to this commitment must be discussed and agreed with the port authority.

1:37:51 Okay, there's one last question coming in the webcast from Roberto Sanchez from North Rock. When can we expect the new business plan?

1:38:02 We are working on it and we'll take to the board for approval at the end of December. So it will be in place at the beginning of next year because the one that we have to do is until 2026. What we have not decided is how and when we will communicate it externally. Of course, internally, we are already giving some guidance about what we want to do in the following years.

1:38:31 I think there are no further questions.

1:38:36 Well, thank you. Thank you very much, all of you, for your participation in this results conference call and also the presentation of the I-24 and I-25. And again, thank you very much, all of you. Bye.