Atlas Arteria Limited (ALX) Earnings Call Transcript & Summary

Good morning, everyone. My name is Tess Palmer, and I am the Director of Investor Relations at Atlas Arteria. I welcome you to Atlas Arteria's 2022 Annual General Meetings. As securityholders and proxy holders are participating in the meetings online, there are a few important things to cover before we start. Due to Atlas Arteria's stapled structure, there will be 2 meetings taking place this morning: One, for Atlas Arteria Limited, the Australian parent company that forms part of the Atlas Arteria Group; and one for its stapled entity, Atlas Arteria International Limited, Bermudian parent company of the group. For today's meetings, you will hear from the Atlas Arteria Limited Chair, Debbie Goodin; the Atlas Arteria International Limited Chair, Jeff Conyers; and then Graeme Bevans, the CEO of Atlas Arteria. After the CEO's address, we will turn to the formal business of the meetings. As you will be aware, voting on the resolutions is by way of a poll, and securityholders and proxy holders will be able to cast votes online during the meetings through the Computershare online platform. To provide securityholders and proxy holders with sufficient opportunity to vote, the Chairs will declare the poll open on all items of business to be considered at the meetings after they formally open each meeting. The poll on all items will be closed 2 minutes after the meeting is finished to allow time to find votes. The proxy positions, including open proxies, will be shown after each resolution is introduced, and the results will be released to the ASX after the end of the meetings. As mentioned in the Notices of Meeting, the Chairs will vote all undirected proxies held by them in favor of the resolutions. securityholders and proxy holders may vote on the items of business via the Computershare online platform once the polls are open. When the Chairs declare the polls open, a voting icon will appear on your screen and the items of business will be displayed. To vote, press the vote icon, and the voting options will appear on your screen. You can then select your voting direction and a tick will appear to confirm receipt of your vote. There is no need to hit a submit or enter button as the vote is automatically recorded. You will receive a confirmation notification on your screen. To change your vote, select Click Here to Change Vote and press a different voting direction to override. You may change your vote up to the time the polls are closed after the meetings are finished. Securityholders may also ask questions at any time by submitting a written question using the online platform or a verbal question via telephone. To ask a written question via the online platform, click on the Q&A speech bubble icon. Once you have completed typing your question, please select the Send button to submit your question. If you are asking a written question about a resolution, please start your question by identifying the resolution it relates to. To ask a question verbally, please follow the instructions shown below the broadcast window on the online platform. If you are asking a verbal question, please state your full name before asking your question, and please limit your questions to only 1 or 2 questions at a time, and then rejoin the queue to allow others to ask questions. If you are experiencing any technical issues, please call the number on the screen. And with that, I hand over to Debbie Goodin, the Chair of Atlas Arteria Limited. Thank you.

Thanks, Tess, and welcome to Atlas Arteria's 2022 Annual General Meetings. My name is Debbie Goodin, and I am the Chair of Atlas Arteria Limited. I am advised that there is a quorum present, and so I declare the meeting of Atlas Arteria Limited open. I will open the polls now so you can vote at any time during the meeting. Whilst today's meeting is virtual, I'd like to acknowledge the Wurundjeri People, past, present and emerging, who are the traditional owners and custodians of the land on which I am presenting today. I'd also like to pay respect to the elders past, present and emerging of the Kulin Nation. We respect and value the importance of preserving their cultures and customs. We are an Australian-listed stapled group, with operations over 3 continents, and I wish to acknowledge the traditional owners of all those lands. Atlas Arteria is committed to ensuring securityholders have the ability to actively participate in today's meetings. All securityholders have had the opportunity to ask questions and submit a proxy prior to the AGMs. Also, as mentioned earlier, you can vote and ask questions during the AGMs via the Computershare online platform. If you have a written question already prepared on any item of business, please submit it now on the platform so that as many questions as possible can be answered during the meetings. For those who prefer to ask questions verbally, I will indicate later in the meeting the appropriate time to ask your question. Due to Atlas Arteria's staple structure, as we mentioned earlier, two meetings will take place this morning: One for Atlas Arteria Limited, the Australian parent company; and one for its stapled entity, Atlas Arteria International Limited, the Bermudian parent company of the group. Most of you will be familiar with the relationship between the two companies, but is set out on the screen for ease of reference. This morning, I will refer to the Australian entity as ATLAX, the Bermudian entity of ATLIX and the Australian group as Atlas Arteria. In addition to chairing ATLAX, I am also a Director of ATLIX. The Chair of ATLIX is Jeff Conyers, who joins us today from Bermuda. Good morning, or should I say good evening, Jeff.

Good morning, everyone. I would like to extend a warm welcome to all investors and other visitors, and reiterate Debbie's thanks for your support in joining us today. Debbie and I are also joined by our fellow ATLIX directors, who are participating online from Bermuda: Fiona Beck, Caroline Foulger and Andrew Cook. I now declare the 2022 Annual General Meeting of the securityholders of Atlas Arteria International Limited open and on advice, declare that we do have a quorum. I also confirm the polls are now open, so you can vote at any time during the meeting. While I will Chair the ATLIX meeting today, I've asked Debbie as a Director of ATLAX to assist with the running of the meeting to make the process smoother. I will now hand back to Debbie.

Thank you, Jeff. I would now like to introduce the ATLAX directors in attendance today. David Bartholomew, who is based in Sydney; Jean-Georges Malcor, who is based in Paris; Ariane Barker, who is based in Melbourne; and our Managing Director and CEO, Graeme Bevans, who is also with me today. Also in attendance are Tess Palmer, our Director of Investor Relations, who you heard from earlier. Tess will be assisting me later in the meeting by reading out any written questions; Chris Dedrick of Computershare, our registry, who will be the returning officer for today's meetings; and Ben Gargett, our signing partner from PricewaterhouseCoopers, our auditors. I will now move on to my Chair's address. 2021 was another extraordinary year marked by the COVID-19 pandemic. Fortunately, in regions where Atlas Arteria operates, COVID-related restrictions abated in the second half of the year. In France, significant traffic momentum built through the European summer, leading to record volumes on our largest road, APRR. As we reported in April, the traffic recovery continues across our businesses. The last two years have underscored the critical nature of the road networks that we own and operate, whether that be an enabling trade between European countries and in the United States, linking communities to services and employment or connecting families. Safety is one of our core values at Atlas Arteria, and our teams are continually working to deliver safe outcomes for our people and our customers. We are all saddened by a tragic accident that occurred in April at APRR in France, which involved 3 of our employees who were working on the road to reopen a lane and were struck by a van. One of those employees lost his life, one remains in critical condition in hospital and the other sustained minimal injuries. APRR is providing support to the employees, the families and the colleagues who have been impacted by this terrible incident, and we extend our condolences to them. This accident highlights the risks that are present in our businesses in which we need to be continually managed to ensure that our people return home safely every day. While COVID-19 continues to impact the way we live and work, it is great to see the traffic on our APRR business back to levels seen before the pandemic, and Graeme will touch on that later. Now that we are finally able to travel again, I have very much enjoyed spending time face-to-face with my fellow directors in Europe in recent weeks. We met with our joint venture partners Eiffage, visited the Warnow Tunnel in Rostock, traveled along the APRR network, had meetings with APRR management and visited the operations center. Spending time in our businesses and with our partners is something we all value and have missed. It was also an interesting time to be in France with the election held at the end of April, resulting in the return of President Macron. In France, despite the conflict in Ukraine, there is positive sentiment of growth. There is an expectation that the worst impacts of the pandemic are behind us and that infrastructure development will be a key driver for economic stimulus. The team delivered several important strategic initiatives during 2021. The completion of the capital restructure of Warnow Tunnel on highly attractive terms allowed for the first distribution to Atlas Arteria from that business paid in August last year. This is important because it diversifies our sources of distributions for securityholders and by bringing forward those cash flows, substantially increases the value of that business. In April 2021, a successful rate case outcome relating to Dulles Greenway in Virginia, USA was achieved, with the Virginia State Corporation Commission providing toll price increases for 2021 and 2022. Taken together, these developments allowed for the declaration and ultimate payment of record distribution of $0.36 per security. This is a remarkable achievement when you consider the significant disruptions faced at various points during 2020 and 2021. Looking forward, our company is well positioned for growth. The work done over the past 2 years to optimize our balance sheet gives us the capacity and flexibility to pursue our growth priorities. In addition, the strong and deep relationships we have cultivated in our jurisdictions provides a platform for productive conversations about value creation for all stakeholders. At the same time, we continue to grow our internal capabilities to support growth. In 2022, our strategic priorities are very clear. Firstly, creating a clear pathway to sustainable cash flows from the Dulles Greenway; and secondly, improving the average concession life of the Atlas Arteria portfolio. The Board continues to increase its focus on environmental, social and governance, or ESG matters. We are embedding a culture in our businesses where all key decisions incorporate a sustainability lens. That means making commercial decisions allows us to deliver strong and sustainable outcomes for all our stakeholders over the longer term. Stakeholder expectations are changing quickly in this space. We are committed to keeping pace, and we are pleased to have performed well against several key benchmarks. This past year, we have set targets to guide our direction and expanded our metrics for improved measurement. We have also implemented initiatives that make a real difference across our 4 areas of focus. These are customer and community, safety, people and environmental stewardship. In 2021, we committed to scope 1 and scope 2 greenhouse gas emissions targets. We will reduce our emissions from fuel and electricity use by 25% by 2025 and by 46% by 2030 compared to a baseline. This is aligned with a 1.5 Celsius degree warming scenario. We believe we have an important role to play in supporting customers to reduce their carbon footprint. A great example of our efforts in this area is the installation of electric vehicle charging stations along the APRR and AREA networks. At the end of 2021, almost 60% of service areas were equipped with charging stations. The aim is to increase this to 100% by the end of 2022. I would invite you to read our first stand-alone Sustainability Report, which was published last month for more detail. In 2022, we will continue to direct our efforts across the 4 priority areas, with a particular focus on improving safety outcomes as measured by lost time injury frequency and lost time injury targets and achieving milestones towards implementation of the Task Force on Climate-related Financial Disclosures recommendations or TCFD. Turning to the G in ESG, governance. The Board is continually looking for opportunities to improve and evolve the company's approach to remuneration so it remains appropriate to the business, aligned to securityholder interest and consistent with market practices. This year, we incorporated an ESG measure with a 10% weighting in our short-term incentive plan to reflect the importance of these issues in our business. We also introduced a second long-term incentive performance target that corresponds to our strategic priorities for Dulles Greenway and extending the average concession life of the Atlas Arteria businesses. We consulted widely with investors and their advisers in relation to this change and received positive support on its inclusion in the long-term incentive framework. However, some securityholders had reservations about the vesting time line for the new measure, which was originally proposed to be for 3 years after the effective grant date, with the possibility of a vesting some or all of the awards after 2 years if the outcomes were achieved ahead of time. In response to this feedback, we decided to fix the performance period at 3 years, with vesting to occur only when absolute total shareholder returns over the period are positive to ensure alignment with securityholder outcomes. The Board is confident these enhancements for 2022 will align performance and outcomes for our securityholders. The Board has continued its planned and considered process of Board renewal, which has seen an almost complete refresh of both Boards since 2019. ATLIX Chairman, Jeff Conyers, has been a long-standing member of the ATLIX Board. His fellow directors value his contribution and his extensive knowledge of and role in the company's journey so far. Consideration is being given to the ATLIX Chair succession and an orderly transition to a new Chair. There are 4 directors standing for reelection today. David Bartholomew and Jean-Georges Malcor are standing to be reelected to the ATLAX Board; and Jeff Conyers and Caroline Foulger are standing to be reelected to the ATLIX Board. You will hear from each of them later. Before passing to Graeme, I would like to acknowledge the entire Atlas Arteria team for their significant efforts over 2021. On behalf of the Boards, thank you for all you have done to create value and to position Atlas Arteria for the future. To you, our securityholders, thank you for your continued support and investment. I will now hand you over to Graeme.

Thank you, Debbie, and good morning, all. As Debbie noted, Atlas Arteria delivered some excellent results in 2021. Before getting to those, I'd also like to speak to the tragic accident that occurred at APRR and pass on my condolences to the employees and their families that have been affected by this tragic event. I want to assure our securityholders that we are taking this incident extremely seriously. We're undertaking a full investigation into the circumstances of the accident to identify how we can change our work practices to avoid similar incidents in the future. The recovery of traffic at APRR over the last 6 months of '21 set new records for performance. Pent-up demand extended the strong summer holiday traffic period past July and August into the final quarter of the year. Favorable ski conditions in the French Alps over the recent winter paved the way through a wonderful ski season and consequent strong traffic on our APRR network. This has given us a great start to the '22 year. As a combined commuter and tourist road, the Warnow Tunnel in Germany delivered a strong summer performance, reaching near 2019 levels. Over the year, COVID restrictions slightly hindered traffic performance. Because of the nature of work in the Rostock region and the culture of workplace attendance, traffic during COVID was less affected than it has been in other commuter markets. While heavy snowfalls worked in our favor at APRR, traffic at Dulles Greenway was negatively affected by higher snowfall in the first quarter of '22. Traffic was also constrained as white collar workers continue to work from home with the Omicron variant delaying a return to the office. That said, peak hour traffic has gradually improved, and as at March was at its highest level since the beginning of the pandemic. In good news, the Republican administration in Virginia has continued to relax COVID restrictions, which has supported mobility. Moving on to strategy. We are continuing to focus on reducing legacy complexity, maximizing operational efficiencies in our existing businesses to improve margins, applying a disciplined capital management approach to underpin distributions, lengthening our average concession life and diversifying and managing our risks. You can see how the disciplined and consistent execution of our strategy over the past 3 years has materially increased the value of both APRR, Warnow Tunnel and our cash flows from them. In doing so, we have significantly improved the value of Atlas Arteria. Looking forward, we will continue to seek opportunities where we can see a clear ability for Atlas Arteria to add value to businesses and deliver appropriate returns for our securityholders. I would now like to focus on the progress we are making at APRR to grow this business. Full ownership of the RCEA project is expected to transfer to APRR in the second quarter of this year at a cost of EUR 650 million to EUR 700 million. RCEA will be a strong addition to the APRR portfolio when it is complete at the end of '22. And it's a good case study for our ability to grow the APRR network. The RCEA concession extends to 2068, and we expect this road to continue to support its significant heavy vehicle traffic and grow that. Earlier this year, we also agreed a new investment plan with the Macron administration, focused on carbon reduction and environmental protection. This is the fourth investment plan of its kind that we've been able to agree with the French government and demonstrates our ability to work with the administration to solve problems, whilst generating value for all stakeholders. In good news, ART, the regulator reviewing the investment plan, provided its review on Friday, which is broadly favorable. Having regard to the review, the Macron government will now consult with APRR to negotiate any adjustments to the investment plan prior to its final approval. APRR, in a consortium with Eiffage, utilizing a similar process to that we used for RCEA, is currently bidding for the A412, a new concession in and around Geneva that is being tendered by the French government. As we've previously said, a further package of work that would require a concession extension in France will not be considered until after the French assembly elections in June. Moving to the U.S.A. Following the delay of legislation at the recent session of Virginia's General Assembly, we continue to engage with the Secretary of Transportation and VDOT on the best path forward for the introduction of lower tolls and distance-based tolling at the Greenway. We have continued our engagement across the community to gather further support for the restructuring of Dulles Greenway. We already enjoy strong support from the Northern Virginia Transport Alliance, Loudoun County Chamber of Commerce, Northern Virginia Chamber of Commerce and other industry bodies. On the community side, the Run the Greenway event attracted about 1,700 entrants on a rainy Saturday, which was a significant increase from the 1,200 participants last year. The event raised about $220,000 for local charities compared to just over $150,000 last year and is shaping up as a key component of charitable work in the county, while providing an opportunity for the broader community to participate in a unique experience, and in turn, demonstrate our commitment to the community. In order to deliver on our strategic objectives and the opportunities I've just described, we've increased our resourcing, particularly in the areas of traffic forecasting, data analysis, project management and operations. We are very pleased to have David Collins joining us as CFO on the 12th of September. David brings a wealth of experience in the infrastructure space from his time at Chorus in New Zealand and Aurizon in Australia and will be a great addition to our senior team. From a balance sheet and capital perspective, we are well placed to take advantage of the opportunities ahead for Atlas Arteria. APRR has significant balance sheet capacity, enabling it to fund projects that are under consideration without the need for further equity. And Atlas Arteria is also holding cash, which can help fund the restructure of Dulles Greenway or other smaller projects. Before I conclude, I'd like to thank you, our investors, for your continued support. After some tough times, we're especially pleased to provide you with a record level of distributions of $0.36 per security for the '21 year. Achieving this has taken a significant commitment from all our team. I would like to thank them sincerely for the support they have provided to each other and the business as a whole to achieve strong outcomes, and very importantly, lay the groundwork for a strong and sustainable future. I'll now hand back to Debbie.

We will now move on to the formal business for today. The formal proceedings involve the 2022 Annual General Meetings for ATLAX and ATLIX, which are being held concurrently as permitted by the constitutions of each company. I now table the notices of the annual general meetings for ATLAX and ATLIX and propose that they be taken as read. As we indicated earlier, I will Chair the ATLAX AGM and Jeff Conyers with Chair the ATLIX AGM. However, for the efficient running of the meetings, the ATLIX Board has agreed that I will take securityholders through all agenda items, including the ATLIX agenda items on Jeff's behalf. I'll remind you that securityholders and proxy holders will be able to vote on each item of business to be conducted at today's meetings via the Computershare online platform. I note that instructions on how to vote and to ask questions were provided at the start of the meeting, and that you can refer to the Computershare online meeting guide for further information on how to participate in the meeting. I confirm the telephone lines are now open for verbal questions. All questions asked will be responded to after each item of business and prior to the conclusion of the meetings. I will answer or, if appropriate, redirect any questions after each item of business is read out. I may respond to a number of questions together if they cover the same subject. If it is not practical to respond to all questions, Clayton McCormack, our General Counsel and Company Secretary, will review the written questions submitted and seek to ensure that those read out are representative of the questions submitted. You may also ask questions of our auditors, PricewaterhouseCoopers. As mentioned earlier, the poll for each item of business is open. You will now see on the screen all the agenda items, which form part of the business to be conducted at today's meetings. I will introduce each item of business in turn, and then show the proxy position on that item. Your ability to vote via the Computershare platform will cease 2 minutes after the meetings are declared closed to allow time for some final submissions of votes after any questions have been responded to. We will then close the meeting, and the results of the voting will be released to the ASX later today and published on our website. I will start with ATLAX and ATLIX item 1, the financial accounts and reports. As required by the Corporations Act, I now table the financial report, directors' report and auditor's report for ATLAX for the financial year ended 31 December 2021. And on behalf of ATLIX Chair, I also table the 31st December 2021 audited financial statements of ATLIX. The financial reports are included in the 2021 Atlas Arteria Annual Report, which is available on our website. There is no formal resolution required to approve the financial accounts and reports. This item of business normally provides securityholders with an opportunity to ask questions in relation to the accounts or, more generally, on our business. Securityholders were invited to submit questions ahead of the meetings. And as previously mentioned, securityholders and proxy holders have an opportunity to ask further questions today, which will be answered after each item of business and at the end of the formal business as required. Our auditor, PricewaterhouseCoopers, has not received any written questions in relation to the content of their report or the conduct of the audit. However, Mr. Ben Gargett, the signing partner for the 2021 audit, is present today and will be able to address any questions that you may wish to put to him. We will now answer the questions that were submitted in advance of this meeting. Tess, can you please read the questions?

Chair, we have received the following question from Mr. [ Harry Misra ]. Any hope for a recovery in the share price beneficial to investors who bought shares in this progressive company for over $7.95 per unit?

Thank you for your question, Mr. [ Misra ]. It's pleasing to have seen the recent recovery of our share price over recent times following the fall of our share price at the commencement of the pandemic. As Graeme and I spoke about, we are focused on our strategy to maximize our existing businesses and deliver growth. And by this continued progress with our strategy, we will drive securityholder value through distributions and security price performance. Tess, is there any other questions?

Chair, we do have another question from Mr. [ George Collins ], which is in 3 parts. On Page 6 of the annual report, the MD reports that the Dulles Greenway again failed to pass the lockup test. Why is this so? What are the implications for ALX? When does management expect to pass the test? And we have also received a similar question from Nick Berry at the Australian Shareholders' Association as follows. What exactly has to be done to comply with the current banking covenants that prevent ALX accessing the USD 240 million held by Dulles Greenway for either distribution to shareholders or else to further their future ALX investment interest by pursuing whatever strategy?

Thanks, Tess. And I'll take those questions as the one question. And as Graeme and I both spoke about in our addresses, we are very focused on restructuring the Dulles Greenway, including its balance sheet, as we recently did with Warnow Tunnel to create sustainable distributions. You are correct, the Dulles Greenway has failed the 1-year and 3-year lockup tests. This means that funds, which otherwise would have been available for distributions to Atlas Arteria, remain included as part of the cash reserves for Dulles Greenway. Given the current traffic performance at the Dulles Greenway and the high leverage, we cannot see the business coming out of lockup in the near term unless we undertake some structural changes. It is important to note, however, that the cash reserves remain at the asset level as undistributed cash. Tess, have you got any other questions?

Chair, our next question is from Mr. [ Norman Wellington ] as follows. Is it likely that shareholders will receive any tax relief in the near future on dividends received?

Thank you, Mr. Wellington, for your question. Atlas Arteria's dividends are underpinned by dividends that we received from both APRR and Warnow Tunnel. And as those businesses are taxed in Europe, we don't see any change in the tax treatment of our distributions of Atlas Arteria. Tess, any other questions?

Yes. The next question is from Mr. [ Daniel Schafer ] and Mrs. [ Susan Schafer ] as follows. How is the current war in Ukraine impacting on traffic volumes and revenues for ALX road assets in Europe?

Thanks, Tess. And thank you for your question. The conflict in Ukraine is not in the whole of Europe. And as we've reported, traffic momentum in Europe is continuing. You would have seen in our most recent quarter 1 2022 traffic and revenue update that we saw strong performance with our European businesses over the period. It's also important to understand that in France, for example, with the rebates that were in place, that fuel prices in France are currently at the same level as pre-Ukraine conflict levels. Tess, is there any other questions?

Thank you, Chair. We have received 2 further questions from the Australian Shareholders' Association in relation to this item. Firstly, for the benefit of shareholders, when is the date that any tranche of debt becomes renewable at an assumed higher interest rate? And how much debt would that be?

Thank you, Mr. [ Eric Barry ]. I might ask Graeme to respond to that.

Thanks, Debbie. Generally, our debt is fixed in nature with very long-term debt facilities. We do have some floating interest rates generally supported by cash. On both Warnow and APRR, our revenue is increased by a proportion of inflation each year as inflation rises, which interest rates tend to correspond with. So we get an over benefit from our inflation increase relative to any increase in interest rates. So we're very well protected in a rising interest rate environment.

Thanks, Graeme. Tess, are there any other questions?

Chair, the second question from the Australian Shareholders' Association is, when and what actions can Atlas Arteria take, if any, to extend the APRR concession beyond 2035? And a comment, we only need to have a future unfriendly government regime inflicted on us and basically, we could then lose the company, which is the big worry.

Thank you, Tess. I might just respond to the first part and then pass over to Graeme. I guess, what we are saying is that we are looking forward to continuing to work with the Macron government on achieving their road and ESG objectives. But Graeme, perhaps you could respond more fully.

Yes. It's very important to understand that the APRR concession arrangement is a contractual one. And in that contract, we are put in a position where we are subject to compensation should that contract be breached. So in the recent election campaign, it was estimated that the cost of unwinding those contracts in concessions would be well over EUR 60 billion, a sum some that the French government cannot afford to undertake.

Great. Thanks, Graeme. Tess, are there any other questions?

That ends the questions received in advance of the meeting for this item, and there are no online questions in relation to this item or in general business. Do we have any audio questions on the line?

We have no telephone questions at this time.

No questions, Tess?

No further questions.

Next, we will consider item 2 for the ATLIX AGM. Companies to which the Bermudian Companies Act 1981 applies are required to appoint an auditor at each annual general meeting, and that auditor then holds office until the close of the next annual general meeting. Accordingly, this item of business relates to the reappointment of PricewaterhouseCoopers as auditor of ATLIX and to the close of the ATLIX 2023 AGM. The ATLIX Board has recommended the reappointment of PricewaterhouseCoopers to provide ATLIX's audit services for the 2022 year. PricewaterhouseCoopers has confirmed its independence, and the ATLIX Audit and Risk Committee and Board are satisfied of their independence. The status of the proxy votes in relation to this resolution will now be displayed on the screen. As previously advised, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

We have no telephone questions at this time.

You can now vote on this resolution if you have not already done so. [Voting]

Turning now to the resolutions dealing with the reelection of directors. As I mentioned earlier, the directors standing for reelection have prerecorded a video message, which will be played at the relevant time. Item 2(a) of the ATLAX AGM agenda deals with David Bartholomew's reelection as a director of ATLAX. David was appointed to the Board of ATLAX in October 2018. His biography was included in the meeting materials that were circulated to securityholders. David is regarded as an independent by the ATLAX Board. We will now play a prerecorded video message from David about his reelection.

Good morning. My name is David Bartholomew, and I've had the privilege to serve on the ATLAX Board and as Chair of the ATLAX People and Remuneration Committee since 2018. I also currently serve on the Boards of Endeavour Energy, the New South Wales electricity distributor; Keolis Downer, an operator of public transport networks; and I'm Chair of the NASDAQ-listed Iris Energy. I'm the former Chief Executive of the DUET Group, an ASX 100 company that had interests in regulated energy utilities and electricity generation in Australia, the U.S. and the U.K. Like Atlas Arteria, DUET terminated its external management arrangements and established a stand-alone governance structure and management team in 2012. I bring to this role substantial relevant experience, having served on the boards of companies in the energy, transport and infrastructure sectors, as a nonexecutive director and as a shareholder representative for almost 25 years. I have a background in the Australian toll road sector, representing investors on the boards of Sydney's M5 and M4 motorways, as well as leading bids for a number of major toll road development projects. I also have had experience in the broader transport sector, having served on the boards of the Port of Geelong, metro transport Sydney and currently on the board of Keolis Downer, which operates Yarra Trams in Melbourne, the Adelaide heavy rail network, the Gold Coast Light Rail and bus networks throughout Australia. In my executive career, I also worked with Hastings Funds Management, Lendlease, the Boston Consulting Group and BHP Minerals. I very much look forward to continuing to contribute to Atlas Arteria's success.

Thank you for your message, David. The ATLAX Board, with the exception of David, unanimously recommends his reelection. The status of the proxy votes in relation to this resolution will now be displayed on the screen. As previously advised, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Chair, there are no online questions in relation this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can vote on this resolution now if you have not already done so. [Voting]

Next, we turn to item 2(b) for the ATLAX AGM, the reelection of Jean-Georges Malcor as a director of ATLAX. Jean-Georges was appointed to the Board of ATLAX in November 2018. His biography was included in the meeting materials that were circulated to securityholders. Jean-Georges is regarded as independent by the ATLAX Board. We will now play a prerecorded video message from Jean-Georges about his reelection.

Hello. Good morning. I'm Jean-Georges Malcor. It has been my pleasure to be an independent nonexecutive director of Atlas Arteria since November 2018. I have been serving as a member of the ATLAX Audit and Risk Committee, Nomination and Governance Committee and the People and Remuneration Committee. I'm also a nonexecutive director on the Board of the French-based ORTEC, an international construction and engineering company; and FIVES, a global industrial engineering group. I also serve as Chairman of the ENSTA Bretagne School of Engineering. Before joining the ATLAX Board, I spent 8 years as CEO at CGG, a Euronext-listed French geoscience company, in the global oil and gas industry and 25 years at Thales Group, including 11 years in Australia. This executive experience gives me a high level of expertise in areas such as organization, corporate governance, risk mitigation, strategy, technology, financing and restructuring. In addition, I bring to Atlas Arteria an intimate knowledge of the French and European market, business and governmental environment, where two of our key assets are located. I look forward to continuing to serve and contribute on the ATLAX Board and to playing a part in the exciting future of Atlas Arteria. Thank you.

Thank you for your message, Jean-Georges. The ATLAX Board, with the exception of Jean-Georges, unanimously recommends his reelection. The status of the proxy votes in relation to this resolution will now be displayed on the screen. As previously advised, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can vote on this resolution now if you have not already done so. [Voting]

Next, we turn to item 3(a) for the ATLIX AGM, the reelection of Jeffrey Conyers as director of ATLIX. Jeff has been Chair and a Director of ATLIX since it was established in 2009. As recorded in the meeting materials, a succession process for the position of the ATLIX Chair is underway. Jeff has advised the ATLIX Board that once a new Chair is selected and an orderly transition process is complete, he intends to retire from the ATLIX Board. On Jeff's retirement, it is intended to reduce the ATLIX Board to 4 directors. Further, the Atlas Arteria Boards have considered the tenure of Jeff and believe that his tenure does not impact his independence, and he continues to exercise independent judgment as he does not have deep associations with the current management team who have all commenced employment with Atlas Arteria in 2018 or later. In addition, Jeff's experience and corporate knowledge remains invaluable to Atlas Arteria, particularly given the ATLIX Board's recent renewal process. Jeff's biography was included in the meeting materials that were circulated to securityholders. Jeff is regarded as independent by the ATLIX Board. We will now play a prerecorded video message from Jeff about his reelection.

Hi, I'm Jeff Conyers, and I've been the Chair of the ATLIX Board since its inception in 2018. In addition to my role as ATLIX Chair, I'm also a Director of a number of companies in Bermuda, including a private P&I Club, Steamship Mutual Trust, Polaris Holding Company, Bermuda Aviation Services Limited, and I also remain as a Director of the Bermuda Stock Exchange, now 100% owned by MIAX Holdings. With the global impacts of COVID, the last couple of years have provided many challenges for Atlas Arteria, and I'm very proud of the resilience and achievements of management and Board during this time. As a result, we emerged from this period as a stronger organization, and I look forward to working with my fellow directors and the management team to ensure that our existing businesses achieve their full potential and that we continue to deliver on our strategic priorities to create shareholder value. As mentioned in the Notice of Meeting documents, the succession process for my position as ATLIX Chairman is currently underway. This follows a period of Board renewal at ATLIX for all other directors having commenced in the last 3 years. I believe my experience and corporate knowledge has been important through this period of Board renewal and continues to add value to Atlas Arteria. Once the new ATLIX Chair is selected and an orderly transition process is complete, I intend to retire from the ATLIX Board. In the meantime, I continue to look forward to serving you as the Chairman of ATLIX.

Thank you for your message, Jeff. The ATLIX Board, with the exception of Jeff, unanimously recommends his reelection. The status of the proxy votes in relation to this resolution is now displayed on the screen. And as previously advised, all undirected proxies held by the Chair will be voted in favor of this resolution. We will now answer the questions that were submitted in advance of this meeting in relation to this item. Tess, can you please read out the questions?

Thank you, Chair. We have received the following question from the Australian Shareholders' Association. We would like to know when ATLIX Chair, Jeffrey Conyers, will be retiring, and the size of the ATLIX Board reduced accordingly as he has been with either ALX or its predecessors, MQA and MIG, for about 20 years from recollection, so can no longer be considered independent.

Thanks for your question. Look, I think as I outlined in my address in the resolution and as Jeff has also outlined, there is a Board renewal process that is underway. And in the meantime, we value Jeff's contributions to the Board and the corporate knowledge that he brings. We do value the varying tenures of our directors on our Board. And with this Board renewal process, we want to continue with this orderly process to the renewal of the ATLIX Board and the succession of the Chair. Once this takes place and is in process, once it takes place, it is intended that the Board will reduce to 4 members. Tess, is there any other questions?

That ends the questions received in advance of the meeting for this item, and there are no online questions on this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can vote on this resolution now if you have not already done so. [Voting]

Next, we turn to item 3(b) for the ATLIX AGM, the reelection of Caroline Foulger as a director of ATLIX. Caroline was appointed to the Board in May 2020. Her biography was included in the meeting materials that were circulated to the securityholders. Caroline is regarded as independent by the ATLIX Board. We will now play a prerecorded video message from Caroline about her reelection.

Good day, everyone. My name is Caroline Foulger. I've been a Bermuda resident 34 years being originally from the U.K., and I've been on the ATLIX Board since my appointment in May 2020. In September 2020, I was appointed Chair of the ATLIX Audit and Risk Committee. It has been a great privilege to serve on the ATLIX Board during this incredibly busy and transformative time as the company has navigated the economic and business challenges resulting from the COVID-19 pandemic. 2022 is bringing a return to normality, and I finally had the chance to meet my Australian-based ATLAX colleagues in person recently. I'm a former partner with PwC, where I spent over 20 years working in the financial services sector, public global organizations headquartered in Bermuda and operating across the globe. For the past 9 years, I've served as an independent nonexecutive director on the boards of public and private insurance companies and private equity listed entities and their respective audit, risk and governance committees. I'm confident I have the necessary time for each of these roles, including, of course, Atlas Arteria. These roles have involved a natural focus on public company accounting and reporting, trends in corporate governance and risk management. I was the initial champion of diversity inclusion programs at the largest of these organizations, and I was thrilled to see the focus on this at Atlas Arteria. I look forward to continuing to serve on the ATLIX Board and be part of the exciting future of the company.

Thank you for your message, Caroline. The ATLIX Board, with the exception of Caroline, unanimously recommends her reelection. The status of the proxy votes in relation to this resolution is now displayed on the screen. And as previously advised, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can vote on this resolution now if you have not already done so. [Voting]

The next item of business is item 3 of the ATLAX AGM, the adoption of the ATLAX remuneration report. The ATLAX 2021 remuneration report has been circulated to the securityholders, including a covering letter, which explains Atlas Arteria's remuneration philosophy and framework, the outcomes of executive remuneration in 2021 and the annual fees paid to directors. The report and the covering letter can be found in the 2021 annual report and are available on our website or a hard copy is available upon request. As I mentioned in my address earlier, we took the opportunity to review the remuneration strategy during 2021 to ensure the framework remained consistent with business needs. We also met with a large -- a number of large investors and proxy advisers as well as the Australian Shareholders' Association and listened to their feedback. In response to their feedback regarding the new long-term incentive performance measure that is focused on strategic priorities, we have made 2 changes from the terms outlined in the Notice of Meeting by fixing the performance period for 3 years by removing the Board discretion for early vesting between 2 and 3 years; and introducing an absolute positive TSR test to ensure that vesting of the relevant performance rights cannot occur unless Atlas Arteria's TSR is positive over the performance period. These changes were announced to the ASX on the 21st of April. The vast majority of the investors I met with were supportive of the 2021 remuneration outcomes and the changes to the 2022 remuneration framework, including the changes announced to the ASX on the 21 April. Similarly, I note that a majority of the proxy advisers have recommended their clients vote in favor of all resolutions at today's AGMs. It is the Board's views that the new strategic performance condition appropriately aligns the executive team's incentives with the delivery of our key strategic objectives over the next 3 years. Further, I would like to reiterate the vesting will only occur where there is a positive absolute TSR performance over the performance period and where the Board is satisfied that achievement of the strategic objectives have delivered quantifiable improvement in securityholder value. Whilst this item of business is advisory only and strictly only applies to ATLAX, the directors of both Boards take seriously the views expressed by our securityholders, and these have and will be considered in our ongoing Board deliberations. Voting restrictions apply to this resolution and are set out in the Notice of Meeting. The status of proxy votes in relation to this resolution are now displayed on the screen. As previously advised, where permitted, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can now vote on this resolution if you have not already done so. [Voting]

I now turn to item 4 of the ATLAX AGM, the approval of the grant of performance rights to the Managing Director and CEO, Graeme Bevans. As outlined in the remuneration report, as part of Graeme's remuneration package, he participates in Atlas Arteria's long-term incentive plan, under which he has granted performance rights to acquire fully paid Atlas Arteria securities, subject to satisfaction of performance hurdles over a 3-year period. This resolution relates to the period starting at the beginning of this year and ending on 31st December 2024. Details of the terms and conditions of the grant of these performance rights are contained in the remuneration report and the ATLAX Notice of Meeting, noting that the terms of conditions of the grant will be updated to reflect the recent changes announced to the ASX on 21 April. Voting restrictions apply to this resolution and are set out in the Notice of Meeting. The status of proxy votes in relation to this resolution is now displayed on the screen. As previously advised, where permitted, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Thanks, Chair. We have received a comment from the Australian Shareholders' Association on this item. The ASA opposes the payment in cash of LTIs to KPI were shareholders to consider that any subject LTI should not be paid out in whatever given instance.

Thanks, Nick. We appreciate and acknowledge your comment. Tess, have any other written questions been submitted on this resolution?

Chair, there are no online questions on this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can now vote on this resolution if you have not already done so. [Voting]

The final item of business for today is item 5 for the ATLAX AGM and the approval of the grant of restricted securities to the Managing Director and CEO, Graeme Bevans. As outlined in the remuneration report, as part of Graeme's remuneration package, he participated in Atlas Arteria's 2021 short-term incentive plan, under which 50% of his short-term incentive award is delivered in restricted securities. Under this plan, a restricted security is an Atlas Arteria security, which is subject to a restriction that prevents Graeme from dealing in the securities until after January 2023. Details of the grant of the restricted securities are contained in the remuneration report and the ATLAX Notice of Meeting. Voting restrictions apply on this resolution and are set out in the Notice of Meeting. The status of the proxy votes in relation to this resolution is now displayed on the screen. As previously advised, where permitted, all undirected proxies held by the Chair will be voted in favor of this resolution. Tess, are there any questions in relation to this resolution?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

There are no phone questions at this time.

You can now vote on this resolution if you have not already done so. [Voting]

That concludes the formal business for today's AGMs. Voting has now been opened for most of the meeting to allow ample opportunity for votes to be lodged via the Computershare online platform. If you have not lodged your online vote, please do so now as I'm about to close the poll. I will pause briefly now to allow for final questions before we close today's meeting. Tess, are there any final questions or comments from securityholders before we close the meetings?

Chair, there are no further online questions.

Do we have any audio questions on the line?

There are no phone questions at this time.

As there is no further business, I declare the ATLAX 2022 Annual General Meeting closed and thank everyone for attending and for your continued support of Atlas Arteria.

The ATLIX 2022 Annual General Meeting is closed. And on behalf of the ATLIX Board, I thank everyone for your continued support and wish for you all for Bermutiful day.

Thank you, Jeff. As noted earlier, voting will remain open for the next 2 minutes to allow time for securityholders and proxy holders to submit any final votes. The formal results of voting will be released to the ASX later today and posted on our website. Please note the proxy forms and voting papers in respect of today's meetings will be destroyed 28 days after declaration of the poll. With the meetings closed, we will now be logging off. Thank you for your attendance, and I wish you a good day.