Ferrovial N.V. (FER) Earnings Call Transcript & Summary

Good morning, everyone. My name is Silvia Ruiz, I'm Head of Investor Relations at Ferrovial, and I would like to welcome you to Ferrovial's Capital Markets Day here in New York. First of all, I would like to introduce the agenda for today. So we will be having some opening remarks from our Chairman, Rafael del Pino. Followed by our CEO, Ignacio Madridejos, that will cover our strategic priorities. After him, we will have presentations from the CEOs of the main business divisions, Cintra, airports and construction. And the final presentation will be held by our CFO, Ernesto López Mozo. After the presentation, we will be having a Q&A session. For those of you that are following us online, please feel free to send your questions any time during the event, and I will be reading them out later. All the presentations are now available on the website. And in the coming weeks, we will be also publishing an investor pack consisting of a facto, containing detailed information on all the projects and also an excel file with some historical figures. Before starting and apologies for the size. Please take a moment to look at the screen at the safe harbor statement. Don't worry, I'm not going to read it now. It is available on the website. But please bear in mind that this presentation contains forward-looking statements and expectations that could be suffered from risks and uncertainties, so actuals may differ. And with all these, please let me welcome on stage, our Chairman, Rafael del Pino.

Thank you, Silvia, and good morning, everyone. This is a big day for Ferrovial. It is our first Capital Markets Day in New York and in the U.S. We have been operating in North America for almost 35 years since we got our first project in Canada in mid '99, and in the U.S., for almost 20 years since mid -- third quarter of 2004. We are embarked in a journey of growth. We have been delivering important infrastructure projects that improve the quality of life of its users and all those around the infrastructure. And while contributing to solving congestion problems around large cities in the U.S. We have built solid credentials. We have all these managing projects in Texas, in Virginia and elsewhere. And we are now building a very emblematic project here in New York with the new Terminal One at JFK. The extensive infrastructure needs of the U.S. highlight the importance of our projects that also contribute to economic growth and offer important development opportunities for us in the future. Our value proposition generates value for all stakeholders. And as you will see during the presentation today. In the future, we aim to be one of the leading infra companies that provide solutions to congestion issues and the challenges of urban growth. So now please join me in welcoming Ignacio Madridejos, Ferrovial's CEO. [Presentation]

Good morning and welcome to Ferrovial's Investors Day. It's good to see some familiar faces, investors who have followed the company for many years now and also some new faces, hopefully, new local investors. Today, I will talk about 2 topics. First, about who we are; and second, why Ferrovial is special. Ferrovial is one of the leading road and airport infrastructure companies in North America. The video was a very good introduction about Ferrovial, but let me give you some additional facts to understand better our company. The first one is value creation. Over the last 10 years, our total annual shareholder return was 12%. The market cap at the end of last year, $27 billion. And over the years, we have maintained financial discipline, with a BBB investment grade rating by S&P and Fitch. Most of the value of the company is in North America. According to equity analysts at the end of last year, the value of the company in North America was 80% of the total value. And this is the market where we want to grow. Main strength is the 24,000 team of hard-working employees and skilled and experienced management team who truly represents the value of the company. And sustainability is at the core of our strategy. That's the reason we have been in the Dow Jones Sustainability Index for the last 22 consecutive years. Ferrovial provides solutions to some of the complex problems in our cities, like traffic congestion or facilitating the energy transition. And we do that, developing and operating innovative, efficient and sustainable infrastructure for a wall on the move. Our business model is an integrated platform that participates in the whole infrastructure cycle. We differentiate from infrastructure funds in that we do or participate mainly in greenfield and yellow field projects. And we differentiate from construction companies in that we take equity participation in the concessions that we develop. We are organized in 4 business units. The largest one in terms of equity value is the toll roads division that we develop congestion relief solutions in the U.S. and Canada with 6 key assets and many opportunities to grow. In airports, we have NTO is a very good sample, very close to here, JFK Airport, but we have been also the largest industrial investor in Heathrow for the last 17 years -- almost 18 years now. There, we have invested GBP 12 billion in order to improve the facilities there and improve the customer service. We are at the end of this investment as it was announced at the end of November. And there, we rotate the capital in order to recycle it into other greenfield projects with potential higher returns. Energy is an incipient business unit, building on our knowledge of the industry and the integrated model to support the development of infrastructure for the energy transition. And finally, construction. Construction is the origin of the company. We support the concession business with best-in-class engineering capabilities to be competitive in greenfield and yellow field projects. Over the years, we have developed best-in-class capabilities. With over 20 years of data from concessions, we are able to optimize revenues in the long term with the latest technologies. We -- I mentioned previously, we are a construction company in the region. And because of that, we have a cost optimization culture, the use of limited resources, but always looking at the long-term value of our assets. We have an integrated model participating in the whole cycle from the conceptualization of the projects to the design, the bidding, the construction, the financing, the operations and the maintenance of the asset. Financial discipline is key when you talk about complex infrastructure projects. And there, you need to understand very well the risk. You need to find ways to compensate the risk and also price them correctly. Developing infrastructure is a very local business. And because of that, we complement our skills with local partners, mainly contractors and investors. And also, we need the support of local communities and local authorities, is something that we have built over the years in order to develop infrastructure to support the communities. Let me move now to explain why Ferrovial -- why Ferrovial is special. First, because we have unique infrastructure assets in North America with the potential to grow above GDP and inflation. Second, because we have a very good pipeline of potential similar assets in North America. Third, because we aim to create value beyond North America in selected geographies where we have capabilities and with a business model of rotating mature assets to recycle capital. And four, because we have the cash flow generation and the financial discipline to seek long-term value for our shareholders. One characteristic of our unique assets in North America is that revenues have the potential to grow above GDP. One reason is the location of our assets. They are in places that are expected to grow above the average of the U.S. and Canada. It's the case, for instance, of the Dallas-Fort Worth, of the Charlotte express lanes that over the last decade, they have grown 1.2 percentage points above the average of the U.S. We are also located in places with population growth is the case of the 407 that according to third parties is expected to add 2.8 million new immigrants by 2046. Also the I-66 in Virginia is located in one of the areas of the U.S. with the highest GDP per capita. And the new Terminal One, very close to here, JFK, is serving the traffic growth of the largest metropolis in the U.S. But it is not only about the location of our assets, is also that we are the owners of the not congested capacity in our concessions. Because of that, we can capture a relevant part of this traffic growth compared to the alternatives that are saturated, but of course, always maintaining the level of service that we give to our users. Second characteristic of our unique assets in North America is the ability to capture value provided to users. Most of our users select our assets when they need to arrive on time to a relevant event. And they do that because they appreciate the time savings and the reliability of our assets compared to congested alternatives. And it is not only that they prefer our assets when the alternative is congested, they also prefer because of the higher safety, because of the convenience and because of the peace of mind. We have a flexible pricing scheme in our assets. Some of them freedom to set the rates. Others like the Dallas-Fort Worth Express Lanes, they have a soft cap, increasing with inflation and that can be above that soft cap with certain traffic parameters. And the new terminal One at JF Kennedy is an unregulated terminal in which the tariffs are defined in individual negotiations with commercial airlines. This flexible pricing allow us to set toll rates above inflation. A third characteristic of our unique infrastructure assets in North America is the long duration of our concessions. The average time of our portfolio is 55 years. This is quite unique in our industry. We have very young assets like the 35 West that opened the [indiscernible] just in June last year. Or the I-66 that opened to traffic at the end of '22, even the NTO is under construction. These assets have a higher discount rate that soon will be reduced once the construction and traffic ramp-up risk are eliminated increasing the value of the assets. Another characteristic of young assets is that because the cash flows are expected to grow above GDP and inflation, larger cash flows are at the end of the concession. Every year, we are closer to these larger cash flows increasing the value of our assets. This is what we call the rolling forward effect. And we can also develop similar assets in North America. There is a high deficit of infrastructure in North America. Third parties are estimating a $4 trillion funding gap by 2040. If you add that some of these local administrations, they have high deficits, they are working more and more with private partners to accelerate and needed infrastructure, allowing the use of public funds for other alternatives. Additionally, cities are growing as expected according to third parties that 90% of the residents will live in cities by 2050. We need now additional express lanes to reduce additional congestion in cities in the future. Also, in terms of our traffic is expected to grow in the U.S. by 157% by 2040, and we need additional airport infrastructure to facilitate that air traffic growth. To transform these opportunities into specific projects, we have a local business development team that over the last 20 years, have been working with local authorities in order to analyze the financial and technical feasibility of projects. These projects, they have been transformed into a pipeline that we are expected to materialize into bids in the coming years. Later Andres will talk in more detail about some of these opportunities. In the case of airports, also the new Terminal One could be a very good reference for all the local airport authorities that they need to accelerate airport infrastructure to cope with additional growth. And we can create value beyond North America. It is the case of India. India is an economy that is growing, one of the highest in the world. It's expected that the GDP growth over the next 5 years in EBITDA will be 6.3%, according to third parties. Also, the population in India is expected to grow. According to third parties, it will add 600 million additional population in the middle class by 2045. And with that, the number of new vehicles on the road. Also it's a country that has been working with private partners in order to accelerate and needed infrastructure and is one of the largest toll road pipelines in the world. We are very well positioned to support this growth through our investment in IRB. We acquired a 24.9% of IRB 2 years ago. It is a company that can participate in yellow field and greenfield projects and also has a very solid track record because last year, they added 3 toll roads to its portfolio. We can also develop other infrastructure to create value to our shareholders, toll roads and energy transition infrastructure projects in geographies that we have capabilities that lead us to competitive advantage. Is the case, for instance, of the Silvertown Tunnel that we expect to open to traffic next year or the Centella Transmission Line in Chile that we expect to start operations also in the first quarter of this year. In the case of airport, we have an asset-specific approach or preferences bilateral negotiations in places where we have capabilities, airport operational capabilities or CapEx need capabilities. And in all assets, we have a business model of rotating mature assets to recycle the capital into other greenfield projects with higher returns. Let me move to the solid cash flow generation and financial discipline. The way to value of our company from a financial point of view is through discounted cash flows. Main indicator for our company is dividends coming from infrastructure assets. And these dividends from existing infrastructure assets are expected to grow in the following years. First, because some of them are very 35 West, that had an extension opening the 3C in June last year, gave last year first dividend. I-77, according to the public contract could give the first dividend this year 2024. And the I-66 also potentially could give the first dividend at the end of this year. In the case of airports, they stopped distributions to shareholders at the beginning of the COVID and, hopefully, it's something that change soon. NTO, the new Terminal One at JFK, also could give first dividend once the construction is finalized. And for all assets that potentially are growing above GDP and inflation, with that, we have operating leverage, financial leverage that could give additional dividends. Other sources of cash are potential new investment in Express Lanes that could give more dividends. The Construction business that historically has been a cash flow generator for the company or the business model that I mentioned previously, the asset rotation of mature assets, recycling the capital. Our capital allocation, we want to achieve 2 objectives: invest for growth, but also a solid shareholder remuneration. Let me explain the rationale about capital allocation. First is about committed investments. Today, we have EUR 0.9 billion of committed investment. Most of them related to the new Terminal One. Only this year, equity contributions to the new Terminal One are going to be $500 million. Second, to maintain the financial discipline that we have maintained over the years, the BBB investment grade rating that we want to maintain. And then equity investment, the top priority, as you know, Express Lanes in the U.S., and we have a good portfolio. However, we don't know how many of these will be bidding for in the following years. And we don't know how many of those we will win. But we have long-term projections, 10-year projections in which we have scenarios and forecast about the capital that is going to be needed in the future, it will win some of these opportunities. Also, we may invest equity in other airports, toll roads or energy transition projects in places where we have capabilities, limited geographies and with a model of asset rotation as explained before. So for us, it's invest for growth, but at the same time, a sound sort of holder remuneration as we have done historically, even during COVID. And the later, the shareholder distribution could increase in case capital is not deployed. To finalize, let me summarize again why Ferrovial? First, we have unique infrastructure assets in North America with the potential to grow above GDP and inflation. Second, a very good pipeline of similar projects in North America. Third, we can create value beyond North America in selected geographies where we have capabilities and rotating mature assets to recycle capital. And four, we have the cash flow generation and the financial discipline to create long-term value for our shareholders. Now Andres will follow with the Cintra Toll Roads division, and I will join you later for the Q&A session. Thank you very much. [Presentation]

Good morning, all. Thank you for joining us today in this important day for the company. I'm Andres Sacristan, and I've the honor to lead the Toll Roads division of Ferrovial named Cintra. I'm going to start with an overview of what we are going to talk today. We are going to review a little bit in the asset portfolio we have and which is the main characteristics of this asset that we think it will bring value to shareholders. The second is how with this asset base, we get differential capabilities in the market. And the last part is how we use these differential capabilities and capture further new projects. Let's start first with the value levers in any asset we approach. First of all, we approach 2 areas of high economic growth. For example, Dallas-Fort Worth is being ranked first in economic growth in the last decade. The second lever is areas that have traffic problems or challenges. For example, we are in Toronto, and Toronto is ranked by INRIX, a traffic data provider, one of the most congested cities in North America. What we provide in those areas? We provide free flow capacity where the user has a very smooth driving experience. And how we assign value to this benefit the users get. We do through data and through dynamic and flexible pricing frameworks. But for capturing all this growth in the coming years, what we have is long-term contracts. We have contracts like 407 that will last for the next 75 years. Now let's have an overview of the portfolio we are going to focus today, which is the North American assets. We have 407 in Toronto that for giving you a perception of the scale on the highway, it produces CAD 1.3 billion revenue every year. This is data for 2022. In the U.S., we have 3 assets in the Dallas-Fort Worth area, 1 in Charlotte, and 1 in Virginia. And all combined, they produce close to $640 million revenue a year. Let's zoom in, in [indiscernible] starting with our flagship asset, which is 407ETR in Toronto. 407ETR is an all-electronic open access highway that goes east to west across the Greater Toronto area. Toronto area has a record breaking population growth. That is the main driver for the growth we are seeing. And also Ontario is very efficient in incorporating that population growth to the labor market. There are significant plans by the government of Ontario to designate priority employment zones across the corridor. You see here in the map, which is the expected growth of the major populations across 407ETR. As a consequence of that, 40% of today's traffic of 407 chooses 407 as the preferred alternative, which is the dark green areas that we identified in the map. But what this growth produces? It produces traffic congestion in the network. In the rush hour, typically, 407 is 29 miles per hour faster than the alternative. That means that you do a 50 miles commute, you save half an hour. 407, the alternatives in the network, there are our full capacity, and there is no more room for keep expanding or widening lanes. So they are practically built out. And the projection of total hours lost in traffic by 2051 are expected to triple by then. So how we offer and keep this driving -- the smooth driving experience to our users, how we managed to do that? We managed to do with the pricing flexibility that the contract allow us. We will keep moving those prices in the future to offer this free flow experience to our users, this safe, reliable and fast driving across the GTA or the Great Toronto area. We set toll rates differently by segments of the row by direction, by time of the day, day of the year, we have all that flexibility to do that. And on top of that, we have designed our toll rate increases to minimize the contractual congestion payments. You see here, what's been the growth in the last decade, mostly, and how that growth, be the GDP and in inflation growth. And what is the expectation in terms of population growth and congestion increase in the Greater Toronto area. Let's move to the U.S. In the U.S., we have a product that we call Express Lane. Express Lane is a toll lane that increases the capacity of the corridor. Here, we'll start with Dallas-Fort Worth in which we have 3 projects operating. Dallas-Fort Worth is a metroplex with widespread activity across the area. So they have multiple employment centers and multiple residential centers. So the necessities of move happens across the huge and fast area. The area has ranked first in absolute population growth in the U.S. And also this population growth is estimated to keep growing, especially in the West where our projects are located. All this population and economic activity growth will bring further congestion. You see here in the map, which is a prediction by a third party or what the congestion levels will be by 2045, 61% increase. And our tolls are designed to keep this fast, safe and reliable experience. And we'll keep doing that meanwhile the congestion increases. Let's move to another asset, which is I-66. I-66 is just outside the Washington DC area. It provides a solution for the movements in and out of the DC area, but also movements across Fairfax County and Manassas, which are among the most affluent areas in the country. You see all this development is happening in the west of the project, but also there is a number of logistic activity that is thriving in the area, and there is a number of depots are on our highway. All this will keep increasing the congestion that is expected to increase 48% by 2045. We'll keep using our dynamic algorithms to price the driving experience of our users to be an excellent one for the coming years in the contract with all these congestion growing. The last asset I'm going to address today is I-77 in the Charlotte area. It goes from Charlotte to the thriving neighborhoods in the north around Lake Norman that are growing really, really fast. It has a blend of traffic in between long distance interstate and this local traffic in all these growing communities. This rapid growth is creating congestion, and we are providing that service of a free flow experience in our Express Lane. The expectation is that by 2040, 50% of the roads in the area will be at capacity and we will keep providing that services by then with our pricing algorithms. All these congestion growth compounds with our ability to put a price to that service that value and a smooth experience to all of our users. You see here a number -- quite a few numbers, but what we try to demonstrate here is that the fast growth, again, be the GDP growth and inflation growth and what we expect in terms of population and traffic congestion growth in those areas. Another market that Ignacio mentioned before, and I would like to address is India. I think that is a market that we -- and it can bring a lot of value to the company as well. India has great prospects of economic growth. It's going to be the -- you're going to expect to grow 6.3% over the next 5 years. And this is mainly driven by a population boom where the expectations are 600 million people will be incorporated to the middle class in India, and that middle class will get into vehicles, into cars. So the car utilization in India will be 6x by 2040. That's, I think, is a consensus expectation that India is going to be a great market, but would differentiate us from the investors in India, is that we've chosen a very good partner. It's a company called IRB in which we invested 25% at the end of 2021 and is the leader developer in toll roads in India. It has in-house capabilities for doing EPC. And also, it has a very good footprint across the state with 26 projects in a portfolio in 12 states. Since our acquisition at the closing of year 2023, the price and the valuation of the company went up 95%. And also they won 4 additional projects. But all these long-term value and all this growth that it will come in the years, we can only keep that growth lasting if we have a sustainable approach. Our sustainable approach has 3 main pillars. One is where a community focus. We aim to improve our communities with further economic growth, creation of employment and saving a lot of time in traffic to people in the community for the things that matters most to them to spend time with their family or the leisure activities. The second is that we are a customer-centric company. We focus on this value proposition to our users and one -- key one is the safety. Our roads are safer than the other roads in the alternatives on the networks we operate. And we -- and the customers tell us that they are happy with our service and the product that we provide with high levels of satisfaction in our annual service to them. Finally, we want to keep our contracts sustainable for a future with the granters with our public clients. And when our contracts overperform, we have revenue share mechanism that we serve some of that success with the granters. The only way to keep that growth for the future is to be sustainable and to bring -- create value for the communities, for the user and for our clients. But what we get from all this asset base. Basically, the main thing we get every day is data. Here as we speak, all of our assets are producing data and we harvest this data in real time, and we have in-house teams that do the analytics job. With this analytics, we are able to understand customer behavior. We are able to understand traffic patterns. We are able to stitch that data with demographics, and we are able to understand willingness to pay for our products. With this, we produce accurate or reliable forecast for the future. We do a price management to maximize the usage of the road at any time of the year. And finally, in hand-in-hand with Construction division, we designed new projects. We understand where the ramps needs to be. So we maximize the connectivity and the number of users that will access in the future to those projects are on the communities we build them. This is our data approach. It's a high value for us and a clear competitive advantage. The second thing that our assets provide is a good base to innovate. We've been the first one in operating an all electronic highway of 407 in the past. We've been the first one in introducing machine learning algorithms in our pricing -- dynamic pricing engines. And now we are doing further innovation to keep creating value to our users and future proof in our assets. I bring you here 3 activities that we are doing in the innovation space. First one is called AIVIA. AIVIA is an innovation that we are trying to connect the infrastructure with connected vehicles that are coming to the future to improve the safety of the infrastructure. The second is Nextpass. Nextpass is a mobile app, the substitute is the transponder and you can drive along toll roads, not only our other projects without the hassle of the transponder. And the last one is that we are incorporating ourselves to the conversation of the gas tax reduction. As electric vehicles become popular, the states are seeing the gas tax revenue reduces and we want to be part of the solution and provide them the solutions with that. But all this data and all this knowledge will really come to force is when we face a new project, when we think that we can provide solutions to new areas or new communities. And how we approach this developing phase of the projects? Basically, we start to identify congestion problems, traffic problems in high economic growth areas. As soon as we identify them, we go and we speak with the transportation leaders in the area, to offer tailored solutions hand-in-hand with our construction business. Once we get to a solution with the transportation leaders, we try to gain support in the communities. And we partner with chambers of commerce, we do grassroot initiatives with the communities to try to gain support. And also, we use our construction business because they have a wide reach in the supply chain of construction to build up this support in the communities to the project. All this process since we identified a solution until that solution is being put in a tender in the market will last us up to 5 years. So it's a significant effort that the company is doing to bring projects to the market. Thanks to this effort, today, we see a very healthy pipeline. We see 7 projects across the U.S. that are coming to us in the short term. The short term as short as next spring that we are going to put an offer in Atlanta in the project of SR 400, which is the last you see on the map. All these projects are at different phases of stages of approval, but we believe that this will come to the market in the very short term. And how we are getting ready for them? We have competitive skills. We have a strong record of delivery. In the U.S. of all our products that is second to none in the Express Lane space. We offer integrated solutions with construction to maximize the value, and we offer a very competitive risk reward balance to our shareholders and granters. In summary, what we do at Cintra is we provide solutions to congestion challenges in areas of high economic growth. Our portfolio today is going to keep providing this value for this compound effect of congestion increase and pricing ability. And those assets provide us with really, really insightful views of what the customer wants, and how the customer uses their cars. We use all this knowledge to put in hands under our stakeholders, the transportation [indiscernible] to provide solutions. And today, we see a very healthy pipeline and we are ready for that. Thank you very much. I'll leave you now with Luke Bugeja, which is our leader in Airports division. Thank you. [Presentation]

Hello. My name is Luke Bugeja, I'm the CEO of Ferrovial Airports. Welcome to the Capital Markets Day. What we're talking to you about the air portfolio and how we drive value for the Ferrovial Group. So 5 key topics. The first being the strategy for the portfolio and how we deliver that through the pillars and how those pillars underpin that strategy. I'll also talk about the existing portfolio, which we have 4 airports. So we'll give you a bit of insights to those assets. One key aspect which sets us apart from that competition is our capabilities, and we'll talk about that in some detail as well. Heathrow, an asset that we've held for almost 18 years is a good example of how we drive performance and how we drive value for the group. And new Terminal One, which has been mentioned a few times today, we'll go into some depth about that asset and how we see the project going forward. So the strategy. The focus is in 2 geographical locations in North America and Europe. In terms of our investment approach, we'll attempt to refrain to go into processes. So the idea is really to focus on bilateral opportunities, the ways in which we can put ourselves in a privileged position. So in many -- in some circumstances however, there will be a procurement process, but we want to put ourselves in a position, so we're at 1 or 2 steps ahead of that competition. And an example of that is exactly what we did with new Terminal One and also with Dalaman Airport, which I'll talk about a little bit later. We'll clearly focus on growth opportunities. So areas in which we can utilize our capability to grow the business. We take a risk-adjusted approach, that's common in every business. But it's important to note that no 2 airports, no 2 terminals are exactly the same. So we take a forensic view of the risk and we apply that to the returns. With regards to the focus, of opportunities in the U.S., we will concentrate on terminal-related projects. That's similar to what we have done in new Terminal One. We see opportunities for privatizations and whole airports being a midterm opportunity, but in the immediate term, we'll be focusing on terminals. And in Europe, the focus will be on secondary sales, but particularly on opportunities where there is growth mandate. We want to look at opportunities where there is expansion. Our existing portfolio, Heathrow. It's an airport that we're most famous for. We have a 25% stake. Freehold assets, so it's a perpetual asset, 79.2 million passengers in 2023, very close to the pre-pandemic levels. In November last year, we announced our decision to divest our stake. Key reason for that. We've held the asset for a long time, for 18 years. We've done a huge amount, and it's really time to pass the baton over to a new investor with fresh eyes. New Terminal One acquired in 2022. We have 49% stake alongside JLC has 30%, Ullico 19%, and Carlyle 2%. 36-year concession runs to 2060 and capacity will triple. We'll go from 8 million passengers up to 23 million passengers, is a substantial increase. Dalaman Airport in Turkey, also acquired in 2022. We have a 60% stake alongside YDA Construction, which is a local construction company and our partner who remains with 40%. 18 years concession are remaining. And in 2023, traffic was at 5.2 million, which is percent ahead of pre-pandemic levels, leisure airport with substantial growth. And AGS, not very creative, Aberdeen, Glasgow Southampton, easy to remember, 50% stake alongside Macquarie, also freehold asset, 9.2 million passengers in 2022 and getting closer and closer to pre-pandemic levels. So what are our capabilities? And it's important to note, as an institution, as an organization, Ferrovial has been involved in airports for over 25 years. And in that 25 years, we've been involved in over 30 airports. So we've seen a lot. And our team have amazing capabilities, not only in airports, but also in airlines. We are a long-term investor. I mean, Heathrow is an example of that holding an infrastructure asset for 18 years, in an asset class that's really only been going for around 25 years is a testament to that. We have a growing and a strong U.S.-based team to providing support in our transaction desires and also our asset management capability. Ferrovial construction. I joined Ferrovial 2.5 years ago, and one of the really key aspects that really attracted me to the group was the fact that we actually had an in-house capability in construction. Ferrovial Construction team have been building terminals, aprons, taxiways, runways, towers globally and most notably, Heathrow Terminal 2 and Madrid Terminal 4. So substantial capability that really adds enormous value to my efforts. Heathrow, let's talk a little bit about Heathrow. So as you all know Heathrow is the second largest international airport in the world, largest hub in Europe. We've had it for 18 years. Over that period, a very, very heavy capital program, GBP 12 billion. And despite that heavy capital program, we've been able to distribute equity -- cash back to equity of GBP 3.2 billion over that period. So that's quite an impressive investment program and also dividends to shareholders. And what we've done in that is substantially improved the operational performance and most importantly, the passenger experience. And of note, we designed and built Terminal 2, commissioned the projects of Terminal 5, including the largest integrated baggage system in the world. And just focusing a little bit on Terminal 2 because it's quite significant and relevant to new Terminal One, which I'm just about to talk about. Similar size, 20 million passenger capacity, EUR 3 billion investment, which was delivered ahead of schedule and on budget. And interestingly, and really quite an important point, it was the first facility to receive the BREEAM environmental certificate in the U.K. at all facilities, not just airports. And you really got to give credit to the team back then that had the foresight to see that environmental accreditation is an important element for airport terminals going forward. New Terminal One, JFK new Terminal One, $9.5 billion. That's for 2 phases. That's a Phase A and Phase B. Phase A is expected to be completed in the middle of June '26 and Phase B towards the end of '29. Concession runs through to 2060. So once it's open in '26, it'll be 34 years remaining. The size of the terminal, 2.4 million square feet, is 3x the size of the existing facility. And including as part of that 300,000 square feet of high-end retail and food and beverage facilities. More than double size of the gates. Currently, there's 10 gates. There's going to be 23 gates and the capacity tripling as we mentioned earlier, from 8 million to 23 million passengers. What do we do? We're not just investors, as you heard before, we do more than that. So we have a 49% stake, but we have 2 key contracts with the new Terminal One. First one is a management service agreement, which is a 15-year agreement. We provide services into new Terminal One, for traffic development, retail, food and beverage, operations and maintenance systems integration, so we provide that support from the Ferrovial Airports team. On the construction side, we provide the PMO or the project management office. We do not do the construction. The construction -- the design or construction is provided by [indiscernible], but our team at Ferrovial Construction provide the oversight. So they provide the oversight on design, construction, procurement, communications, with the grantor. And for me, having the owners engineer is part of the equity gives me enormous comfort. So what are the key levers? What are the key drivers? What do we like new Terminal One? The first one, capturing a high share of a scarce resource. What does that mean? Or I'll talk about that. It relates purely and simply to wide-body gates. And I'll give you a bit more clarity on the following slides. Access to a premium New York market. The long haul international airlines fly into JFK charge a premium. I'm sure you all know that. If you fly in and out of JFK, they charge a premium. What they want is at equivalent level of service to match the premium they charge. So you don't want to be flying out of a wonderful airport in Asia, Middle East, in Europe and then flying to the other end at an inferior product. So we're creating that same level of experience in both sides. In terms of transforming the passenger experience, it's going to be a passenger experience not seen anywhere else in the United States. And really important -- this is a really important point for us is the socio-economic value for the local community. We must create a great experience for the local community. We have measures and targets to deliver for the local community. And we have MWB targets we must commit to and deliver. This is not just important for this project. It will be important for our credentials and demonstration of our stewardship for future opportunities. Give you a bit of color about what's happening in JFK. There's a lot of construction. I'm sure you've gone through. There's a lot of cranes and a lot of steel going up. So 2023 last year, there was 6 channels, and this is clearly not the scale. But as you can see, Terminal One will go from the smallest terminal to the largest terminal. Terminal 2 was demolished earlier in 2023 to make way for Terminal One, that was the old regional terminal for delta. Terminal 4 is delta and other international carriers. Terminal 5 JetBlue and that Terminal 5 and Terminal -- the new Terminal 6 will actually be combined. Terminal 7 will be demolished. So once Phase A of Terminal 6 is completed, Terminal 7 will be demolished. And then you have Terminal 8, which is American Airlines, British Airways and other 1-well carriers. So I'm going to go into detail about the wide-body gates, I mentioned that earlier. So the new Terminal One is expected to increase its share of wide-body gates from where it is at the moment, Terminal One has 34%. In the future, once all of the expansion is completed, we will have close to 50% of the wide-body capacity. What's important here, I'll point out this is the numbers here. So the 4.25 is it demonstrates that the average capacity of wide-body gates departing passengers to enplanement passengers grows from just over 4 million up to 11 million. The next line is also -- the next row is very important as well. What this demonstrates is as we add capacity, we're not adding excess capacity. So the average throughput per wide-body gate is going from around 450,000 passengers to around 470,000 to 480,000 as it demonstrates that adding the capacity doesn't add excess capacity. So the competitive tension, the competition will remain and the scarce resource will remain. And a further example just to give you a bit more color is leading up to 2019, strong growth in international -- long-haul international traffic, almost 60% and the capacity increase was not. And going forward, as you can see, supply will not get anywhere near -- so supply will not get anywhere near demand. Demand will continue to outstrip supply. And a further example of that a little bit technical, but to give you an idea of the triggers upon which airports look at expanding is once you get around the 400,000 passengers per enplaned gate. So as you can see there, the airport listed, many of these airports have already started initiated expansion. Another interesting point as well. So the value of JFK in the New York system is quite enormous, quite outstanding. So 50 out of the 72 international airlines that operate into the New York system operate exclusively into JFK. 18 switch between the both and only 4 operate exclusively into New York. And the largest one of that is Porter Airlines that fly, as I'm sure you know, into Montreal and Toronto. We've already signed up 5 airlines, representing 25% of the forecast 2027 traffic. Many are very close to signing at the moment, and there's many [indiscernible] out there. So we're very confident that we will get the numbers that we need for 2027. Important to note, right? I mean there's more than 30 airlines that are operating in the existing Terminal One, right? They got to go somewhere. So the objective is not to attract airlines that have -- don't fly into New York or don't fly into JFK now, it really is about capturing the market within the airport. In terms of the customer experience and the revenues. As I said earlier, it's going to a quality product, quality facility. We expect it to be superior to Terminal 4 and Terminal 6. Also important to note that the aeronautical revenue or the cost per enplanement passenger is going to be a significant percentage of our revenue, almost 90%. And this -- on the right-hand side, this is reference sources, right, provided by Steer. And the indication is, as of last year, 2023, Terminal One, so the current facility is charging around $65 per enplanement passenger and the expectation, the forecast for '26 Terminal 4 around $82 in Terminal 6 between $80 and $110. So that gives you a bit of an insight to where -- what is being reported or what has been suggested to be the charges. In terms of quality, and I mentioned it before, but to give you a bit more clarity, the facility that we'll offer will rival what you see in Asia, the Middle East and Europe. We'll have boarding -- we'll have lounges that actually have direct boarding into gates, which I'm sure you've seen in many airports, particularly in the Middle East. So it's that quality. What's been done in [indiscernible] is really impressive, right? I mean the transition from what it was to where it is now is amazing. But it's important to note, this is a major step up. This is a big step up from what you see [indiscernible] is great. This is going to be well ahead of that. Partnerships in airports are critical in many aspects. One point that I mentioned earlier, and I'll reiterate it again, is our targets for minority-owned businesses, women-owned business and local enterprises is a key focus and key discussion. And as I said, achieving that is going to be critical. We're going to invest huge amount in the community, and there's 2 projects that I mentioned here in the slide. One is the Korn Ferry Leadership University and the other one is the JFK Academy. And this is a cut and paste of what we have already done in Heathrow, called that Heathrow Academy. And it really is an opportunity to upscale people within the community for airport jobs, but not only that, but giving them skills for writing CVs, for interviews. But the benefit to us, it gives us a pool of resources that we can draw from to deliver on our quality of service. Could be engineering jobs, could be customer service jobs, could be roles in retail and food and beverage, but really is a massive benefit to the community. And one other point, it ensures that our pool of resource is local. So they're able to get to the airport at all times at night as the airport, as you know, is a 24-hour business. So in closing, our growth strategy as I mentioned earlier, is North America and Europe, and where we can leverage our capabilities, where we can really put ourselves in a privileged position. Bilateral opportunities is a focus. We really want to be in a position where we want 2 steps ahead of our competition. New Terminal One is on time and on budget, and we expect to capture those leading share of the international airlines very soon. And as I mentioned earlier, success in delivering on this community and local stakeholder targets is critical, not only for this project, for the projects in the future. Thank you. I'd like to now introduce my friend, Ignacio Gaston who's the CEO of Ferrovial Construction. [Presentation]

Hello, everybody. I am Ignacio Gaston and I am the CEO of our Construction division. I started working in Ferrovial more than 28 years ago. In fact, I started as a site engineer in one of our rail infrastructure projects. It is a pleasure for me to be here today with you to talk about this very valuable part of our business. I will cover several topics for you today in my presentation. The first one is what is our value proposition, what is the value we bring to Ferrovial. The second one is how the Construction division serves as a key pillar for the overall Ferrovial strategy. I will then cover what we believe our differential capabilities, and I will finalize showing some historical data of our track record. Our Construction division is a key pillar for the Ferrovial value creation formula. Our main role is to support the other Ferrovial divisions, airports, Cintra in the development of projects from the very beginning through to completion. And for that, we have the technical, the engineering and the production capabilities to provide that end-to-end support from project origination through bidding, design and, of course, construction. In fact, the Construction division has been organized and set on a structure precisely to achieve that purpose. The creation of value through the delivery of complex infrastructure projects. And that means the way we target our size, the way we are, our geographical footprint where we are, where we work. And even the level of technical and engineering capabilities is based precisely on that purpose. But while we are organized to support the other Ferrovial divisions, we are also a profitable business on our own, and we have a good track record, for example, in terms of cash flow generation. Value creation in infrastructure projects is associated with the development of large complex design and build projects. And in our opinion, there are not many construction companies that are actually prepared or equipped to deliver such a complex projects. So that's why having a Construction division within Ferrovial makes the difference for infra and airport. So they don't have to rely on procuring external construction with the levels of uncertainty that, that brings along uncertainty, for example, in terms of pricing or uncertainty in terms of delivery. To illustrate the type of projects we deliver, I got here three examples. They have been touched, covered in the previous presentations. Each of them brought different construction challenges. The first one is I-66 it's a project -- it's a large complex project that we delivered while maintaining the traffic flow of the express lanes in a very congested area. The next one is our projects in Dallas-Fort Worth where we brought some groundbreaking engineering design solutions that in a very confined space, we managed to do bi-elevation of a 2-level express lane and general purpose lane to relieve the traffic in that area. And the last one, a very different example, the Terminal 2 or Queen's Terminal at the heart of Heathrow, a very complex design and build project that we delivered ahead of time and on budget. But allow me to expand further on our end-to-end delivery capabilities. We engaged with Queen's Terminal airport from the outset from very early stages to help craft compelling and consolidated proposals that, in many cases, result in successful projects. That was the case, for example, of the I-77 South in Charlotte or the Northern Express extensions in Dallas. We also developed innovative design solutions that are critical to win -- critical to winning proposals. We proposed changes to the base design proposed by the client, changes that are always orientated towards reducing cost, improving traffic flow, connectivity and, of course, ensuring delivery certainty. As I mentioned before, we believe not many companies are prepared to deliver these kind of projects. In many cases, we can see that the developers and the EPC contractors interest are not aligned. And we have seen as well that, that has caused some of these projects to derail. However, in Ferrovial because we are an integrated part of the group, our interest are 100% aligned and that Cintra and airports can rely on us to deliver the projects on time and on budget. In fact, corporation is one of the core values of Ferrovial and is translating the way we work together as a team. Lastly, as we mentioned before, we also provide some other type of services to our sister companies. For example, project management services, like is the case in JFK Terminal 1 or even construction advice that is the case for IRB in India. As I mentioned before, the Construction division is organized and is a structure to provide that support for Cintra and airports. And the key metric for that is our target that at least 25% of our revenue comes from the other Ferrovial division. So why 25%? What the reality is that to be able to deliver these kind of complex projects for Ferrovial divisions, we need to ensure we have, we maintain and will grow our construction capabilities across the different geographies and across the different project types. We also need to ensure by delivering these complex projects outside Ferrovial that we remain competitive, and that is very relevant because, again, all the tenders have to be won normally in a competitive manner. Why is what defines how we are structured, it defines our target size and the target size is defined by that 25% revenue coming from other Ferrovial divisions. That ensures that we maintain the capabilities while delivering on the core projects for Ferrovial. Other very relevant element for our organization that we are organized is that we have three strong local or home bases. These three home bases are Texas, Spain and Poland. And then we have these three strong bases that allow us develop talent, to grow capabilities, talent and capabilities that then can be exported to other geographies and other projects when needed. And another very relevant aspect of how we organized is our ability to manage risk. It's very relevant in this kind of projects to derisk the project as much as you can through development. We are very well placed to balance the risk between EPC, contractor and developer and tap it to the party that is best placed to manage each of these risks. Building up on our capabilities. Our strong international in-house engineering service, I believe, is key to our ability to deliver complex projects. We have more than 370 designers across different geographies that can be deployed wherever and whenever needed in our projects. They have the ability, the capacity to do everything from building support through to even construction drawings and of course, provide support during design support during the construction phase. We have developed what we call our global operating model. Our operating model that captures all the lessons learned, all our know-how that we have collected during the years and in the different geographies. And it's an operating model that is focused on risk management and delivery certainty. This operating model is applied to all of our projects across our different geographies. The model sits on a set of nine processes that cover the full life cycle of a project from opportunity evaluation through bidding, design, construction and of course, project handover and very relevant. Each of these processes includes different checks and balances to help mitigate, manage risk, ensure delivery certainty, all of them informed by our technical and engineering capabilities. Ferrovial sustainability is at the heart of everything we do. And there are three main priorities for us in the Construction division. First one, protective environment; second, helping communities where we operate; and third one running our business responsibly. From our environmental perspective, we are focused on reducing carbon emissions and promoting circular economy, which in construction, as you can imagine, is very relevant. In terms of communities, we engage, we try to work with the communities, help the communities where we operate, and in terms of our employees, we promote diversity, engagement and in construction, very relevant. We take care of our employees putting health, safety and well-being at forefront of everything we do. In fact, we have a good track record when it comes to industry metrics, in terms of health, safety and well-being, and we compare very well with the markets where we operate. And finally, we run our business responsibly with high standards of governance throughout our supply chain. We measure our suppliers against various specific sustainability metrics. I want to touch on another element that I consider critical in our strategy, technology. Technology plays a critical role in everything we do. We are focused on implementing technologies and innovations that truly add value to the construction process. I will say that we are -- we have a very practical approach when it comes to implementing technology. There are a number of areas where we operate, but I just want to bring to your attention three of them. The first one is information, the flow of information. For a project to be successful is very relevant. It's very important that the flow of information between the different departments of the project happens in timely manner and is accurate for proper decision-making. And for that, we use best-in-class project management platform. The second area is site progress monitoring, capturing real-time site information. And for that, we use advanced technologies like use of drones or connected equipment in what we call connected sites. And the third one is the use of data. In a construction project, lots of data are captured not only in production, but also when you do procurement, scheduling, all sorts of the data is captured, we group that data, and we use artificial intelligence and advanced analytics to ensure that we extract the right information for decision-making and reporting. But as I mentioned before, our Construction division is a profitable business on its own merits. We have a strong backlog that we aim to maintain approximately between 20 and 24 months' worth of revenue and willing to maintain with good profitable prospects, a backlog that is concentrated in core stable markets. Approximately 60% of our backlog is in the U.S. and Canada that includes what we call managed CapEx, which is the CapEx we manage on behalf of our partner developer. And 30% of it is within other group divisions. Maintaining this level of backlog allows us to take a conservative approach to bidding, meaning that we can focus on risk mitigation and profitability in the long term. Here, I have a few more data about our financials. So we have set a long-term target of achieving a 3.5% adjusted EBIT margin on revenues. While that number stood at 2% between 2020 and 2022 due to some legacy projects that are now coming to an end and also the impact of the COVID pandemic and the price escalation that came straight after that, we had a good track record of 5% between 2010 and 2019. Also, historically, our Construction business is generating recurring cash flow, the average between 2010 and 2019 was EUR 178 million, cash generated per year. This is a result of our continued focus on working capital management and also a result of the typical advance payments that we get in our design and build contracts that is normally around 5% to 10% of the total contract value. I want to finalize and to recap. Our Construction division plays a critical and strategic role in Ferrovial value creation. We are vertically integrated to support airports and Cintra, which means that Ferrovial is able to deliver on complex infrastructure projects from the very beginning through to completion. And in fact, our organization, we are organized, we are structured to support that overall Ferrovial strategy. And that means the way we define our target size. The way we define our geographical footprint and even the level of technical and engineering capabilities based precisely on that purpose. And also, the Construction division is a profitable business on its own merit, as I said, with a good track record, for example, in cash flow generation. And I believe our strategy will enable us to continue building on that momentum going forward. Thank you very much. And now I hand over to Ernesto López Mozo, our CFO. [Presentation]

Hello. Good morning. My name is Ernesto Lopez Mozo. I am the Group CFO, and I'm thrilled to be here with you guys at last in New York, our first Capital Markets Day in the U.S. Today, I'm going to talk about four things. The first one is long-term value creation and growth. Of course, my colleagues describe how we do that. I'm going to relate that to the stock performance. Second, I will talk about our financial structure. I mean that's different from our competitors, and that's for a reason. I will explain that. Third, very important, how we manage capital, I mean the most important resource here is capital. And I will talk a little bit about that. And of course, the fourth section is going to be about numbers and what we expect looking ahead. Well, the first is about the stock performance. I won't dwell on this one. I mean it has a great run, but the important thing is what lies behind. What lies behind is a strategy that moved -- I mean, and you can follow the orange line that is the percentage of value that analysts attached to our infrastructure assets in our equity valuation. 10 years ago, it was like 60% roughly, and it has moved to 91%. This was a conscious strategy. We sold the Services division and have invested mainly in infrastructure assets in the U.S. Also in this graph, you can see some of the effects that my colleagues have described. One of them is the derisking. I mean these are very complex assets to bid them with a very high return, and it's normal to have just the equity that you initially commit as the value. It expands. I mean some of these assets were already in the portfolio along these graphs, but the market was not attaching any value to them, well, just that money. So the risking happens. Once you build it, once said, you see traffic ramp up, you have a lower discount and it shows. I mean the equity value of infrastructure has multiplied by 3, and we have a portfolio of assets, right? Some of them early stages, but you have them, okay? And 80% of that is in North America. But that's the past. Where are we now? Well, my colleagues described that we have strong growth ahead in the regions where we are. That's very important because our roads are an important part of the logistics and the road transportation network on these growing areas. As they grow, capacity doesn't follow track. Luke even described that with the new Terminal 1 and that means that you have more growth in your assets. Of course, I mean, there's inflation. Inflation for us is a tailwind. I mean probably it will be sticky and more about this in the next slide. And third, we have interest rate protection. That's very important, 97% of our assets have very long-term financing. Well, some of you may say, well, but now rates are come down. So what about that? Well, there's something for you later. Okay. Infrastructure assets performed well in inflationary environment, but there's a reason for that. I mean they are not redundant. I mean they are scarce overall, and they have the capacity to pass on inflation or more. When you look into our portfolio, you have that snapshot. You see the 407 ETR for instance, the past 10 years, well not the past years, 2013, 2022, you see that it clearly outpaced the inflation even though there was COVID in that part, right? And you know that some rates were not touched for some years. And now you've seen that there has been an important increase that starts from February this year. Then you have the managed lanes, the Express Lanes that you see quite an important growth, of course, helped by the ramp-up situation, nevertheless, beating inflation handsomely. And latest arrivals to the portfolio have freedom to set tariffs, right? Charlotte, Virginia and the I-66 and the new Terminal 1, as Luke described. And last, well, we have Heathrow, and Heathrow is a regulated asset base that is I mean, linked to inflation, so it grows with inflation. And on that inflated asset, you get a real rate return from the regulator, and that means that tariffs are linked to RPI as well. Okay. So inflation helps because your assets are needed and the escrow. Okay, let's move into our capital structure is different from our competitors. We have two layers, have the infrastructure projects. Each one of them is like a stand-alone company. There's a reason for that. Well, there are several reasons for that. One of them, we have partners there. We have partners there because they help us grow. I mean we can grow our capital on a more efficient -- with a more efficient price. If we were to raise capital at the top, it would have a risk on, right? So it's more expensive. So you have a better pricing there and why not, it's also sanity check. At the same time, you have an independent data structure on each of them. Well, that's arguable, but we believe that you can optimize leverage. When you have companies that are linked and cross support each other, leverage tends to be lower. Okay. And then we have the corporate level where we have a net cash position at the end of September. And here, it's very important. We have a BBB rating. That is key. Why is the BBB rating key? It's key for growth. I mean, in the U.S., you need it well, for credentials, yes. This is very important. You are required to have performance bonds and payment and performance bonds from sureties. And sureties provide ample capacity if you have a solid rating. The moment rating starts to weather, I mean, it can come down dramatically and overnight, okay? So growth relies on our BBB rating. And we manage it with some headroom. We could hold to some leverage if opportunities really appear, okay? But I mean, we are prudent, as I said, it's key for growth. What happens with the infrastructure projects, something that is also very important. We have long-term maturities. We have growing cash flows, and it's very important to have long-term maturities from the start. You have 26 years in Express Lanes is the average, 407, 16; and Heathrow, 9 years. Also very important, we don't have any refinancing wall. We have very discounted maturities in the Express Lanes, very long distance maturities. And it's almost fixed, okay, for guys that say that, well, long-term rate will come a lot lower, we try to embed call options in some of these financing, right? Well, the money bonds provide that. And that's something that is very useful. So we have some embedded options here. And in general, these structures have an investment grade across the board. If we move on to the capital management, as I said, the most important resource. You can see that the driving force is dividends from our infrastructure projects. And there's a high correlation, of course, with the dividends that are -- or shareholder distributions between dividends and buybacks. Also very important are the assets as it has been said before. Rotate assets because once they are the risk, sometimes you have someone that has lower required rate of return, we have a better opportunity to redeploy that capital with a good risk-return balance. Well, you can see that in the past 10 years, dividends, shareholder distributions have been very similar. We had infrastructure asset rotation. We've invested more in infrastructure assets and here is where we have proceeds from services being relocated into infrastructure. And very important, 58% of that investment went into Express Lanes and it had multiplied money and money by 5x. Of course, I always live there, the commitment to BBB rating that is the parameters for growth. Okay. And then the last slide, what you expect for the next three years, '24 and '26. We expect to have EUR 2.2 billion dividends from the infrastructure assets. Heathrow is not here, so no dividends from Heathrow in these numbers. And then we have shareholder distributions of EUR 1.7 shareholder distributions is dividends and buybacks. And here, I mean, if there's proceeds from a potential divestment of Heathrow, we would need to use them in different ways. I mean, one of them could be investment, we could be more successful luckily with our pipeline. We could even have maybe higher participation in some of our projects and of course, we could increase shareholder remuneration, buybacks and dividends. Okay. So thanks for that, I think that now we move on to the Q&A session with Silvia and Ignacio Madridejos. Thanks for being with us.

Okay. Can you hear me well? Yes. Perfect. So ready, let's start with a Q&A session. For those of you that are here, please feel free to raise your hands. We have people here that will pass the microphone, and I will be reading the ones on the website. So yes, please.

Elodie Rall from JPMorgan. So I don't know if you can hear me. So maybe the first question on the U.S. listing. We were expecting it to happen, I think, before the CMD. So if you could give us a little bit of an update on that. And is it going to be a secondary listing, a third listing versus the Spanish and the Netherlands? And what kind of liquidity you'd expect on that?

Okay. Well, you can see that we already had a public filing. So we just -- the process is going on and is the SEC's prerogative to see when it's finalized, right? So no more comments on that. Regarding primary, secondary listing, well, that kind of classification doesn't exist in the listing in Spain nor the Netherlands. No, it's just ordinary listings in all the three stock exchanges, we finally make it to the U.S., right, as expected. So no, no different classification.

Okay. Also, you -- I think there was more a question on toll roads. You mentioned those seven projects, the bids that you have ongoing. We all know the SR 400 in Georgia is probably the biggest one in during spring. So I was wondering if you could give us a bit of color about the capital, the requirements, the size of those projects, how much that would take from Ferrovial.

Ignacio will comment on that.

We commented about these seven projects that we have in the pipeline. And the first one is the SR 400 in Atlanta that we will be bidding for in May and the decision will be taken in August. This is a large project. It's in terms of both construction and equity requirements. Of course, we cannot give the amount of capital because it's very sensitive for this bidding process and for competitors. It's a figure that they would like to have, but they are relevant projects. This is a very large one. After that, we mentioned others two in Atlanta that it will come after this one, even larger than the SR 400 . So the I-285, I mean the two additional projects there are very large in terms of construction and the size of the projects and the traffic. It's a ring road in Atlanta. So [indiscernible] what is need. The 495 in Virginia is in terms of length of the project is not very long, but it's relevant construction considering the area and very good traffic too. So what we've seen is a lot -- the capital required for this project is significant, and the amount of construction, and the budget needed in these projects is also, I mean, relevant. We are talking multibillion dollar projects in all of them.

And maybe [indiscernible]

It's working. It's working. Just close around.

Is it working? So what could be maybe helpful is you to explain to us how you think about buyback when you have those kinds of projects coming through. So you gave us a color about EUR 1.7 billion of returns versus the EUR 2.2 billion of dividends you expect. But what would be the commitment in terms of dividend and buyback. Would it be like equally split like I think it's been more or less historical average or like the commitment on dividend and buyback would be conditional on whether you have investments to come.

No. I can go first. You can comment later. No, what -- this figure is for a 3-year period as was commented in the presentation, '24, '25, '26. In this period of time, we have also committed investment, as was commented before, close to EUR 0.9 billion, especially related to the NTO, the new Terminal 1. And also in 3-year period, what we consider is the potential capital that we need to commit with new projects that we have in the long term. That's why I mentioned that we look at 10-year period, and this will have -- hopefully, we win, we'll see with the SR 400, a committed investment for this that will happen later on. And maybe you have new biddings in '26 or whenever that you may have additional committed investments. That's the way it works. For the EUR 1.7 billion is the traditional distributions that the way we do normally with both dividends and buying share in case of some of our shareholders take that option.

Okay. And I know I need to give back the mic, but you said -- you talked about your competitors, very quickly, maybe for U.S. investors who are new to the story, who would be your main peers and competitors?

That's a good question. I think we will have competitors. I think it's -- even if the type of projects that we do in Express Lanes are not easy because as Luke has commented multibillion dollar investments in certain regions, you need to commit a fixed price and delivery on time, so it's not easy. It's difficult also to anticipate the traffic revenues that you will have in these places unless you have the data that Andres was commenting previously, requires quite a large amount of equity. But we said that, that is difficult, I think we have been successful. So we think that there will be some competitors. In the case of the SR 400, what we are seeing is ACS, together with ACCIONA and Meridian that are bidding, is the other bidder for that specific project. In other cases, in the previous one in Maryland, we saw at that period of time, there was Transurban as the main competitor. But expected that there may be some other competitors in the future. Usually, in any of these opportunities, we'll have three bidders that usually they select preferred bidders and usually normally is three and I think will be a competitive process, but it's not easy to find companies with those skills and capabilities.

Sathish from Citigroup. I've got three questions and all related to airports. Firstly, on the NTO. You're almost tripling the capacity there, and can you give us some color on the runway capacity between peak and off-peak where it is today? And what happens when you go to 23 million passenger. And how does it you're going to get the allocation on the runway side. So that -- any clarification on terminal necessity, runway capacity. And the second is actually, again, the airport obviously, Toll Road, you got an exposure to India in the form of IRB. And whereas in your portfolio, there's not much exposure on the airport side into Indian market. If you see some of your European peers on the airport side, they got projects coming up there. So what is actually preventing you or going into the airport side of growth in the Indian market? And the third one, again, related to JFK. Tripling the capacity, one of the key constraint is actually getting to the airport, right? So are you in discussion with the local authorities on any other projects that makes it for passengers like get the ease of access to the airport as well?

About the first question, the limitation of the capacity at the JFK Airport is not runaway, plenty of capacity, limitation is the number of gates, especially wide-body gates. That is what we are bringing to the market. In terms of India about the question we are not looking for other in the class at the country, we are just focusing on toll roads and together with IRB that has been -- the type of things that we like to do in the future has been -- has good capabilities in order to develop new greenfields projects or yellow field projects. And what we could do is invest together with them, but not outside or we are not thinking about airports for the time being. And working with the local authorities is -- I mean it's key to develop new opportunities in the U.S. The reality is that airports in the U.S. are owned by local municipalities in most cases, and they have no right of private partners in order to develop infrastructure. That may change. We think that NTO could be a very good reference in the future for those that they want to accelerate airport infrastructure, will be a world-class terminal, and hopefully, these open opportunities in other airports in the U.S.

Can I actually go back to that runway capacity. Any clarification on the peak versus the off-peak capacity there?

I think Luke can give more information about that, but there's plenty, I think it's not an issue about that, I know you want to clarify a little later.

I think it is good to know that when we talk about the offering in the new Terminal 1, the existing Terminal 1 gets demolished, so we're actually redirecting that traffic in detail but that grows over a longer period. There is runway capacity in those -- sorry, there is runway capacity in periods in the peak period, it is significantly less than it is in the off-peak period, but we are comfortable with our projections in terminal capacity vis-a-vis runway. As Ignacio mentioned, the key constraint is wide body gates, not runway capacity.

Graham Hunt, Jefferies. First question on the listing. So you'll have -- after the U.S. listing has added three listings. Is that the plan for the long term to maintain three listings or would you consider dropping one? And are there any benefits to having all three running concurrently?

Okay. Well, basically, we'll have to monitor how liquidity evolves. Liquidity tends to concentrate. So I mean, that's a possibility in the future. I mean, investors will dictate that, right? I mean we really expect to grow liquidity in the U.S. And hopefully, that should be the most important one in the future, right?

And then maybe just a question on Heathrow. A number of your shareholders have to get their tag along rights. Was this a scenario you had envisaged. I don't know if there's anything you can comment on in terms of your expectations for that process in light of those tag along rates.

According to the shareholders agreement they have right to sell the shares working with us. I think that some of them they have been for a long period of time, and probably for them is also the right time to rotate assets in other -- invest in other opportunities. And I think that the 40% decided to stay, 35% decided to sell together, looks a fair price. And I think we didn't anticipate. We know that they had the right and they exercised it, and now we need to -- in order to sell, to sell together the 60% in order to proceed with the sale of Heathrow.

Thank you. This is [ Gary ] from [ Lazard ]. Just a quick question on the Schedule 22 payments for the 407. Just hoping to get some more color on to that, when it's expected to continue, will start again.

This Schedule 22 payments, just to remember that the -- it will be calculated with the traffic of 2025, and the first payment will be a -- well the first payment was done before but after the COVID, after the increase of tariffs, it will be in 2026. The decision to increase tariffs is because to create value for shareholders compared to the Schedule 22 payments. When we look also at the Schedule 22 payment, we have to look at the long term, something that will affect probably in the short term, as traffic continues to grow. Hopefully, in a few years, it will not be an issue. We are talking about an asset that still has 24 years ahead, a lot of value in the long term, and this is what we need to look when we talk about the Schedule 22. We'll give some information in the fact book that facilitates to calculate, of course, not giving any forecast, but some information that may be helpful for you to calculate the Schedule 22.

Okay. I can read a couple of questions from the website. So there are some of them, I believe, that have been already answered regarding what is included in the dividend guidance that we get from infra projects and especially [indiscernible] asks, can you please explain how you estimate dividends for 2022, 2026? What are the assumptions around refinancing? Could this be -- figure be conservative or not?

Okay. Well, we don't provide a breakdown on this. I mean, the main driver of the dividends is the operating cash flow performance of the assets. Leverage could play a part, but it's, I mean, quite a degree or I mean, much less than the operating cash flow, right? So it gives the operating performance.

Okay. We have one question here. Go ahead, please.

Thank you. In the Toll Roads presentation, you talked about proactively approaching partners and then in the Airport presentation, you talked about bilateral relationships. Can you talk about what percentage of your existing pipeline is a result of the proactive approach and maybe similarly in the Airports? And going forward, how do you see that percentage breaking out?

As was commented in the presentation, we have been -- we have a local business development team, and we have been working a long period of time with the local authorities, DOTs or airport authorities. And we prefer those that are based on bilateral negotiations. In the case of these opportunities that we have seen in the Express Lanes, but we go with proposals to the DOTs and we see that there is a problem with the traffic, and that will increase in the future. And we analyze if the projects are technically feasible and financially feasible. So it have enough traffic to compensate for the level of investment that you need to do. With that, some DOT, we'll decide to launch their own process. And with that, we see we have the pipeline that you have seen. So most of them, we are proactive talking to the DOTs, presenting potential projects that they could bring in the future and the contribution that is going to make, and because of that is that we have the pipeline that you have seen. In the case of Airports, we try to be proactive also talking to them. We don't like to participate in these processes that you have too many competitors, especially infrastructure funds that with brownfields we like to participate in those in which we have differential capabilities. That is the case of NTO in which you have to do a construction that is very relevant. You need to have the PMO. You need to have the MSA. You need to know how to operate airports, not many companies could do this type of work. This is the ones that we like to do, I mean, working with airports in order to identify other opportunities, especially when they need to accelerate infrastructure it's key. Then later in most cases, we need to open to competitors and it's a bidding process. But in those cases, you know very well the project, you have the capabilities in order to do that. And this is the type of things that we like to do.

Abhishek here from Tribune Investment Group. Silvia thank you so much for organizing this. I had a high-level question for Ignacio maybe initially. So when I think about Ferrovial, I was considering you could -- maybe you could share what's your vision a few years from now? So is it going to be a toll roads focused operator? Is there going to be a focus on North America? Obviously, we've discussed the opportunity in India, where, obviously, there's a lot of growth in GDP. But we've got a lot of -- if you could just share your vision for the company, let's say, a few years from now, is there going to be a geographic or asset class focus within infrastructure?

Yes, as was commented during the presentation, focus is in North America. This is where we see more opportunities where we have the value today and where in the future we'd like to have similar to today, at least 80% of the value of the company in North America and with the opportunities that we have seen, I think that, that hopefully is the case. In terms of infrastructure, we like toll rocks roads especially express lanes that have created good value for the company. We like to do more of them. And in the case of airports, we also like the asset class, but it's very -- much more difficult to get opportunities. So probably there will be more selective in the future. But hopefully, we can also generate here in the U.S. But the focus is at least 80% of the value of the company in North America, and this is where we see a very good pipeline to continue growing.

Understood. And I had a follow-up question on the U.S. managed lanes, maybe for Ernesto. There's a few of these roads that don't share the revenue-sharing mechanism. And from what my understanding is that it's up to the government -- the state governments there to share these. Any idea on if and when we'll be able to get this information?

No. I mean, that information will be part of the fact that will be released. So you will have that for every single asset.

A couple of questions.

Nicolas Mora from Morgan Stanley. I have a few so please stop me. Maybe just on Cintra, it's maybe more for Andres, but to be seen on the 407, can you help us understand a little bit the tariff path from here following the 14% increase in February, so coming on stream today, expectations are building up for another big increase next year and then more. Can you help us frame a little bit how you think about tariffs? We understand the long term, the pricing power embedded in the asset. We kind of pass, I mean, yes, for almost the next 2, 3 years kind of based on tariffs, tariffs again on managed lanes. The switch to mandatory pricing is key for some of these assets to drive value, which asset is getting that premium pricing today. When will others benefit from that step-up, considering growth developments in traffic, new stretches opening up? And then staying on toll roads and the greenfield, you've put forward 7 projects. You're not going to put any equity in these projects before '27, '28, '29, 2030, '31. You're going to accumulate cash. So you've given us a EUR 2.2 billion upstream dividend stream distribution from assets, EUR 1.7 billion of dividends as used, then we've got Heathrow, hypothetically, we got AGS, hypothetically. We've got more assets, small toll road assets that could add up to EUR 3.5 billion. There is a big discrepancy between the [ dividend ] upstreams plus the disposal and the use of cash. Can you help us also bridge a little bit of the gap?

Let me start by the 407. As you mentioned yesterday, we have implemented the increase after the 4 years, that last one was before the pandemic. And as commented, the way we are pricing at 407, we have the freedom to set toll rates. And what we do is the value -- consider the value to users. And this value to user as commented is the time savings, the reliability compared to other alternatives congested, it Is about the higher safety, it's about the convenience, it's about the peace of mind. And what we will do is capture whatever we can of this value that we give to users. But also considering high customer satisfaction as has been the case in the past in all our assets, there is a very high satisfaction by consumers, but also because we offer a good value to them, and we capture part of it. As you mentioned this, we are talking about the very long term. I mean, 75 years is still ahead with a city that is growing in terms of population, economic activity, 407 was very far from the city center. Now you see a lot of buildings, every day you see new offices there, new logistic centers, a lot of activity around. So I think we'll have increased the value in the future. And as part of this value, we'll try to capture with a very high customer satisfaction. The way we have done before COVID, we will try to do in the future and we'll take decisions every year in terms of what is the value and how we capture that. For the case of the [ Dallas-Forth Worth ] Express Lanes we have also a soft cap. And we can -- the first thing is that this soft cap is increasing every year with inflation. So we have to consider that. And above that, we can go with the mandatory modes that's what you were commenting. And these mandatory modes is when there is certain traffic parameters, we have about them. The speed is below certain numbers or the number of vehicles is large enough in order to increase. And we have to increase these tariffs until we already increased the speed or reduced the number of vehicles. So it's something that we have to do at least mandatory. And in these cases, some of the assets, we have commented indeed we have mandatory modes we used to have 35 West also have some and at some point of time, limited ones. But in the future, as long as the city is growing, the economic activity is growing. Hopefully, we'll see more of them. The value that we provide to the user is that we are the free flow alternative as compared to other congested alternatives in the area. The city is growing a lot. So I think in the future, hopefully, we'll see more in several years from now. About the cash flows, you have to think in 3 years' time, first, Heathrow is not included at all. So it's -- what we talk is we are not including the dividends of Heathrow. We are not including divestment of Heathrow in these numbers. It's just 3 years in these 3 years, on top of this number, the [ EUR 1.7 billion ], you have to add the [ EUR 0.9 ] committed investments that we have, including there the NTO. And also you have to consider the potential other committed investments that we could have if we win projects like SR-400, and this is what we need to consider. The worst thing will happen is that we don't have the capital to do and to develop projects that we think can create value for the company. And because of that, we need to have certain flexibility in order to make sure that these projects that generate value, we can do them in the future. And as commented previously, the list is quite relevant, the size of these projects is relevant and the capital needed for these projects is also relevant. And it's something that we need to consider. In the case that we are -- these are not -- we don't have this project that we'll be bidding for or we don't win them. Of course, things will change and maybe we don't need this committed investment in the future. But we need to consider in this 3 years' time, all these variables in order to take our decisions.

Okay. Let me read a couple of questions from the website. So we have a question from [indiscernible] from [ 11 Capital ] regarding shareholder remuneration. The question is, given the guide for EUR 1.7 billion of total shareholder remuneration and a EUR 500 million buyback that was announced on 30th November 2023 which implies a dividend of EUR 1.2 billion for the next 3 years, which is a step down from 2023 levels. Could we get a little bit more color on the reasoning for this given the amount of cash flow you have from your assets?

Well, basically, selling with what Ignacio just mentioned. I mean we have a value-accretive pipeline ahead of us that we need to really face with the capital resources to be as successful as possible. So we need to basically be prudent in that regard.

Okay. I have a question on JFK. So you've disclosed that the capacity at the 2 terminals will be [ EUR 23 million ]. My guess is that the EUR 23 million is at the end of Phase B. Are you able to tell us what Phase A capacity is? And also how the cost split between Phase A and Phase B? And then I have one more on the same.

Are we disclosing that amount of CapEx [ raised safe ] I'm not sure about that.

The total, I think we have disclosed.

The total yes, the EUR 23 million, what is the capacity of Phase A?

[indiscernible]

We'll go back. If this is disclosed, we will go back. So we are not sure we are disclosing anything.

No worries. I mean if you can tell us that would be helpful so that we can build the ramp on that as well. But, I guess, I have one more on this. You are the project manager on the construction, but you're not actually doing the construction. Have you locked down the costs who currently holds the risk of the costs changing?

Yes. There is -- yes, we are not the contractors. There is Aecom Tishman who is the contractor, and we have a maximum price agreed as part of the contract with them.

Okay. I have some questions from Fernando Lafuente from Alantra. I understand that most of them have been already answered. One question regarding the pipeline. So on the growth pipeline, you give us an indication of when -- could you give us some indication of when these 7 projects are coming to the market? Is the strategy to go in consortium? And if so, which kind of partners are you talking to?

With these projects, the first one is the SR-400 that we are bidding in May, and the season will be August. The others, we don't have today specific days. We are working on it, some of the environmental permits is what they are doing now. Others they announced their RFQ for next year. So we're starting the final decision making. So it's difficult to anticipate now specific dates about these projects. And yes, we like to go with partners in the projects, the ones that we like, the ones that contribute and add things to Ferrovial. In some cases for 407. As you know, we have CPPIB, Canada Pension Plan. Local pension plan is a very good partner. And we also have Ullico, the union pension plan. So I think that those partners that can contribute are the ones that we like. And I think this is I would check from third parties that we are taking the right decisions in terms of [ brief ] return of balance. And we like to work with them. Some of them have been in several assets for a certain period of time. But we try to select those that will help us to be more competitive and be more local.

Frank Greywitt from DWS. Three questions, so first is on the data. You've described ways that you're using data to win projects, bilateral agreements. Curious if there are other ways that you can monetize this data? Other -- you talked about some smaller businesses that you're incubating in any ways that, that could change the complexion of Ferrovial in the future? Second question, just when it comes to that data, just any indication on how you see tariff or rate of toll and how that scales with congestion? And then finally, on the energy side, can you talk a little bit about this? I realize 2% today. How big you see that getting? Do you see taking on any power purchase exposure? Is going to be regulated PPAs. Just any other information you can give on the energy sector?

Remind me the first question is about?

Yes, you mentioned.

The First question was about?

Sorry. On the data side.

Oh the data. Okay. No, I think that the main value that we have with the data today is in order two things. One is the forecast of new projects in order to understand well the revenues in terms of helping us with connectivity, it's worth to do some additional infrastructure, additional connections in some parts of the highway, understanding how the revenues are going to be. That's critical. The other part is optimizing the ones that we have today, the algorithms that they are learning and without learning what they do is try to maximize revenues every time considering certain parameters that based on the behavior of the users. This is something that we don't want to sell to third parties. I'm sure that some competitors will love to have some of the information that we have in our company and it's something that today we are not planning to do. The type of projects that was -- Andres commented previously are things that could add value to the assets that we have today to the managed lanes. I mean, this idea to have it connected is just give you more information from the infrastructure [indiscernible] and with that improve the safety. This next pass is about tolling and instead of users, [ Euro transponder ], you pay with your app. With that, we can get information not only about our toll roads, but third-party toll roads too because they can be used in different states. So we can get a lot of additional information that we don't have today on top of that it generates revenues that are not so relevant. And the [indiscernible] is something that could be relevant in the future and could give a lot of additional data that will be relevant for new projects or maybe in the future to -- that you will have some kind of congestion, I mean [indiscernible]. So I think that in that case is working with the DOTs in order to find new ways in which a scarce asset that is the highways and the capacity, how you can monetize and use it in an efficient way so that you can improve the congestion in big cities. So that's the way we do it. The next question was about?

Sorry, how toll rates scale with congestion? If you have any information on that.

The toll roads increasing with congestion? Well, this is -- we have algorithms with dynamic pricing in which we optimize the revenues. So we calculate at the peak and -- I mean especially in those that we have freedom to settle rates is something that, of course, we are continue learning because we can change the price in some cases, every 2 minutes, or every 5 minutes. So understanding the willingness to pay some of these scenarios is key and it's something that you continue learning. It's very good in the case of I-66 that you don't have a multiplier for highway vehicles, and these are willing to pay more than others. So understanding very well how much they can pay at these peak hours in which the alternative is really congested and it's going to take much longer. But it's very relevant in order to optimize the revenue. And this is something that we are doing. We are improving every time and help us to optimize the revenues. And the last one was?

Energy. The Energy business.

Well, Andres commented this [indiscernible] business unit for us. And what we are doing is different things that we were doing already, we were participating, putting all of them together. So we're already for many years doing energy efficiency projects in Spain. We're doing also some transmission line for third parties or renewal projects, but we have been putting all this together. This is going to be a need for construction companies like us in order to develop this infrastructure that is going to be needed for the energy transition. And I think we have the skills in the company and the knowledge of the industry to facilitate that and generating value for the company. If in some of those, we see that there are some projects in which we have competitive advantages and we can invest and equity will do. But we are not in utility, we don't want to be an utility. We are just a developer infrastructure, building capabilities to facilitate a sector that is growing and is needing companies like us, and if we have the chance to invest limited resources in places that we have a competitive advantage we will do, but just as a developer of infrastructure never as a utility.

Shawn Trudeau from Neuberger Berman. Here in New York, we're not used to such nice things. So thank you very much. Luke did give some credit, however, to LaGuardia. And I think credit is due on that particular asset. I'm curious what has changed in the New York area environment that enabled you to introduce yourselves into the conversation and win this deal with the Terminal One? Why was it not developed in a similar way as LaGuardia was?

Well, the case of the port authority, they have relied with the private partners in order to develop some infrastructure. This is the way that they are doing now with the New Terminal One, but it's also the case that they are doing with Terminal 6 or others, in New York. So they are thinking about things like that. And I think it is as commented, we want to speed this infrastructure that is a thing well needed and relying on private partners is perfect for them. This specific project NTO was originated by Carlyle together with JLC and Ullico. So I think they were the ones that [indiscernible] together with the airlines got the lease and worked with Port Authority to -- and also with the community because Queens, I mean, is very relevant for this project and what you can contribute to the committee. So they did a very good job bringing all these together, the Port Authority, the Queens and the needed of infrastructure help accelerate it. The issue is when they went to build it, they were lacking these skills in order to have such a large infrastructure to be developed in an area like New York. And that's when we had the chance. They invited us to participate and to look at the project and this is when we took a participation. It's a large investment, we have good skills to contribute with the [ PMO ] with other experience like a Terminal 2 that Luke was commented previously that is something that we have done in the past. We know how to do it. We are relying on a construction company that have the local skills, but we also participate in order to make this project on budget and on time that is a schedule that is what is the relevant in order to get the returns for the investors. We it's a very good project with contribution to the community and also a scarce resource in a market that is growing.

Following up on the last question. You mentioned the potential effect on gas taxes, right, as EVs, et cetera, penetrated, which would tell me that you would maybe have an opportunity eventually to not be just in the South of the U.S. but maybe in the Northeast, California. Are there any discussions there? Is that market a potential market for you in the future? Do you...

But -- main opportunities for express lanes are in cities that are growing and they lack infrastructure. So I think that these places, Texas, it's a very good sample, Dallas or Houston, Atlanta, Charlotte, Nashville. So this type of cities that -- they're growing very fast. They lack the infrastructure, probably the state if they allocate funds for this multibillion dollar projects. They don't have enough money in order to do other rural roads or maintenance of other roads, these are the perfect targets because they need private partners in order to accelerate needed infrastructure. So these are the players that we are targeting. At the same time, we have to think that we cannot have construction capabilities everywhere. Each state is different. So we need to target very well in which places we see -- as Andres was commenting that there's going to be growth, there is going to be a problem of congestion, and we can be there in order to solve those problems because we need to develop in this construction capabilities is not easy. We have been many years now in Atlanta, in Georgia doing the projects. We have learned them in losing some money. So I think it's -- but it's a learning. So at the end you need to learn how is the market, the first time that you go there is not easy. And I think that building those capabilities take time. So you cannot be everywhere. You have to be selective on the places that you are going to present the projects and that you will have the capabilities to do that specific projects. We think that once that we have selected, but hopefully, I mean, we'll see the progress there, and we are right. Maybe others, yes, maybe some of them we are not there.

Let me read a couple of questions from the website. So one question from Marcin. Please, could you confirm if you intend to divest your stake in AGS.

We don't comment about any rumor any type of transaction. We just commented previously what this business model. We rotate mature assets to recycle capital in other projects with potential higher returns, especially greenfield projects. So this is the philosophy that we have in the company. And of course, when it has more value for our third party not for us, but we don't comment about any specific asset rotation right now.

Another question from Luis Prieto from Kepler. Regarding pricing. So how should we think about the pricing growth potential of both for 407 ETR and U.S. managed lanes over the long term? For how long can revenue per transaction grow above inflation?

First that we have the potential to go above, that's -- and when we have this asset, you need to think about the very long term. So we have 75 years in the 407, we have still 40-something years in some of the managed lanes. So we need to think about what will happen, how the cities can grow, the population, the economic activity and our assets what they have to do is give service because be the one that is not congested and you can arrive on time for this important event that you may have in the future. In some of those, we have freedom to set the rates. So I think we'll do based on the value. And with this value, we think that we'll the potential to go above inflation based on the value that we can provide and the economic growth that we will have in the future. In the case of those Dallas-Forth Worth managed lanes that we have a soft cap, the soft cap is increasing with inflation. So the minimum that you will go is increasing with inflation your toll rates. And above that, you have mandatory modes. And hopefully, in the future, if the cities are growing, and we see more traffic and congested, we see more normal to have mandatory modes in which you increase, increase, increase until you go back to the level of service that you promised to your users and then you reduce later on. So, I think, we have the potential to increase our inflation, yes, over the long term, yes, until the end of the concession. It also depends on the value that we give to users, and we have the potential to capture that value.

Sathish from Citi Group. Just one quick follow-up on the NTO, is that the focus right now is mainly on the aeronautical side? And what about the non-aeronautical in terms of retail opportunities and so on? Because if I look at the [ ad lanes ] that you've signed up, and just look at the catchment area for those [ ad lanes ], the traffic that they bring in, the spend on -- is much lower than, say, in some of the other regions that potentially could sign up in terms of the airlines. So any color on that, where do you see that opportunity?

Yes, you are right. I think this is the case. Usually, in the U.S., the part of the commercial revenues are much smaller than the aeronautical revenues. Even of the offer that we are going to have is going to be similar to Heathrow, but of course, to the local market and the needs that they -- we want to have here. But our estimate is that's going to be lower. I think -- and we get that number.

I think it's also because we share it with other partners. So we have the rigs -- I mean our exposure is more to aeronautical, there's an opportunity there, but we have kind of hedging.

Yes. I think we are -- I'm not sure we are giving the number, but...

We are not giving you the number [indiscernible]. The unique proposition that we will have, this is a purely international terminal. So when you -- you buy duty free in terminals, whether it's O'Hare or LAX here in New York, you have -- you pay your money and then you get into the gate if you remember it. We have what we call a cash and carry concept where you are paying in Asia and Middle Eastern terminals, you buy you're duty-free, you take it. And that does create a lot of value. We say it's a smaller percentage of total revenue. because there is a revenue share. So I think that's the difference. That's the reason why you're not seeing the same split as you would see in a normal international terminal.

Thanks for this update. Cognizant is mostly to talk about the U.S. opportunity and your expansion into the U.S., but you have an interesting portfolio in Europe, some regional assets on the airport side. That business seems to be doing quite nicely. Low-cost carriers are growing quite nicely. Just wondering where that fits in the long-term vision with exiting that over time? And then on Heathrow specifically, they've been talking about a third runway since before I was born. Just wondering any update there obviously, that would add significant incremental value as you seem to be selling down on that? Any thoughts on that?

About Europe, we'd like to have more opportunities there. So we are very well positioned in several countries in Europe. What we don't see is the level of opportunities that -- to grow that we see today in the U.S. But hopefully, we see those opportunities in the future because as the region of the company, and we have good skills in several markets, some of our core markets. But the pipeline that we see in the U.S. in terms of the spread lanes that we mentioned before, the need of infrastructure and the deficit, I think, is huge. And that's why the focus of the company today is in North America. About the Heathrow and the third runway, well, is, of course, is considered in part of the plan of Heathrow. We are working [indiscernible] is the largest European half international hub for global Britain, growing and expanding is needed, and it's something that hopefully happens in the future. But of course, we have to go through different processes and planning permissions and approvals, and it will take time. So there's nothing that will happen in a few years. It will take a long period of time for that to happen.

Okay. So a couple of questions from the web. So [ Philippe late from Kaiserman ], he asked for the timing on the U.S. listing that I think we've covered, but he also asked about the indexes and what are the indices that we could expect to be targeting.

In the end, as I mentioned before, I mean, it would make sense to increase their U.S. liquidity and hopefully, will be the most important market along time. When that happens it can be included in different indices you could qualify for a different one. From the S&P of course, NASDAQ 100 and Russell 1000 as well. So there's a variety of them. And I think it would be natural to end up there given that you are -- you would be providing the U.S. investors the opportunity to diversify their portfolios into something that is not represented at the moment, right? So it's a great business, and it's not represented in any listed portfolio in the U.S., right? So yes, hopefully, we'll be there. We are not basically limiting ourselves to one specific index.

And a question of construction. So Nicolo Pessina from Mediobanca, is the 3.5%...

Okay. Our target and our goal that the whole team is working is to achieve at the end of the 2024 is 3.5% EBIT. And as commented, I think we have a good backlog that is very healthy now. Some of these legacy projects affected by hyperinflation after COVID where they are closer to the end and we are working to achieve that specific target. What was mentioned also in Nacho's presentation is that what we want to achieve over the long term is an average of 3.5% EBIT adjusted EBIT of revenues. And this is something that we have achieved in the past. And I don't see why not we should not achieve in the future as an average.

Just as a follow-up on NTO, you've met our appetite a little bit on showing other terminals, tariff per passenger. $80, $82 for, I think, Terminal 6, Terminal 4, $80 to $110 for T6 you place yourself by having the highest quality terminal. You must be placing yourself into the higher end, so north of $100. I mean, just -- is that what you're trying to tell us with this slide in terms of where to -- as we said, I think 80% plus of revenues will come from aviation. I mean this is what makes the returns on the project. Just to help us a little bit frame a more precise range traffic would be helpful. And then just on construction. What about the mix of margin? Because we know the business doing extremely well. Dragged up by Budimex, stocks up more than 100%, 120% over the past 12 months. It's well reflected what about the rest of the business, which has really been struggling, especially the core product construction. We are at the end of the issues, is the backlog that much better? Is there any selectivity because you keep growing. That's a bit antagonistic with high margin. So help us a little bit frame in terms of the mix, the drivers of the business as well, please.

First question about the tariffs. This is third party information. This is not coming from us. we have shown you the something that is public, and you can get to that information. We are not giving any guidance about that. So you have to take your assumptions and based on that to your model, but we just brought third-party information about it. And in the case of margins in construction, as what was commenting, yes, in some places, we have the effect of the COVID and the hyperinflation some legacy projects in which we were losing money that were affecting our margins. That will be over in the following year and will have another event of hyperinflation, but we are more covered than before with the backlog that we have. And how is that considered? Anyhow, the margins are different depending on the places and the type of work that we do. So you are doing hard bids weather here in the U.S., while the margins are usually lower. They are lower risk. When you have a local market like Poland and Spain, usually you have higher margins. So when you have a design and bid and you take more risk and especially when you do internally. Of course, we always started to make money in these projects. But in this, you want to be competitive. So you have to balance and see what is the type of projects that you have, where do you have those projects. And as we commented, the average [indiscernible] based on where you have the backlog where you have more work and the type of work that you have. So it's depending on the risk that you take and the type of work, and you used to have different margins in construction, and that's a normal thing and is part of the portfolio that we have that is helping to be competitive to do concessions project that has the main objective that we have in the construction business.

In terms of the free cash [indiscernible] used to do EUR 200 million plus a year, [indiscernible]. Is that EUR 200 million plus a year from history something you can dream off over the next 3 years? So cash-backed earnings or we still have to go through a period basically of ups and downs?

But -- fully right, when you need to look at the construction, it's about cash, this is which will matter more than EBIT percentage because at the end of the day, this is what we want to get from the construction business. In the case of this business, when you have this advanced payments. So depending when you are in the backlog, if you are at the beginning, you are at the end, that can have some fluctuation. So you cannot look just one year, you need to look over a certain period of time. And the same way that you look at 3.5% adjusted EBIT over revenues, what you need to do look is that how it's transformed in terms of cash because most of it will go to cash over the years. But you will have fluctuations.

And the long-term average at this long-term average, of course, means a positive operational cash flow, independent of working capital.

Okay. I have a question from Patrick Creuset from Goldman Sachs. As a follow-up regarding Shareholders. Shareholder and [ remediation ] and dividends. So sorry, can you just clarify that all toll roads, including I-66 and I-77 are included in the EUR 2.2 billion distribution guidance? And also given its pretty close to 2023, 2024 level in terms of run rate would be helpful to understand whether this should be seen as a floor.

Okay. Well, as I said, we're not providing our breakdown, but yes, I mean, all the portfolio contributes in these 3 years old portfolio of toll roads. We've given our estimate, right? So that's an estimate.

Okay. A question from [ Miguel Medina ] from Mirabel. Can you comment on the [ Lima ] regrowth? What is the rationale for entering the Peruvian concession market if there are plenty of opportunities in the U.S.?

As we commented, we want to keep this 80% of the value in North America because we have a good pipeline and growth. But also we can create value beyond North America, and we'll continue to do that. This project in [ Lima ] is something that is an unsolicited offer that we launched 10 years ago. So it has been a very long time after this type of project that -- railroad in the city of Lima that is very well needed in order to improve traffic and avoid further congesting the city and to develop the city. Now we open for other competitors, we don't know if there will be competitors bidding for this project. I have a certain period of time. We are going in this project together with other companies that we think that support us in terms of the capabilities to do these type of projects. But after 10 years, I think that is a project that could create value for the company, and that's why we are doing it. It's not instead of the U.S. is on top of and create additional value for the company.

Okay. A question from Jose Manuel Arroyas from Santander. What is the factor that you just mentioned. What is the document about? And second question about 407 ETR toll roads. So the increase on average is 20%, 18% versus 20%, 20%, but there's a wide range of toll increases. Is this range a reflection of gap between your traffic expectations in 2025 and the traffic threshold?

Can you repeat the question if you want to?

Okay. First question is about the 407 and what is going. And the second question is tolls have been raised on average by 18% versus 2020, but there is a wide range of toll increases. So is this range a reflection of the gap between your traffic expectations in 2025 and the traffic thresholds? So I guess that what he...

Do you want to answer the first one or...

The fact book will provide an easy access to all the details on debt contracts with the most relevant features that you guys asked for like revenue sharing, refinancing gains. So it will be an easy tool to navigate aspects and help with the modeling.

About the second part, the long question, I think the short answer is that yes, of course, when we have defined the tariffs for this year, we are considering schedule 22 payments and the level of traffic, how we can have -- I think we can have a different type of traffic and different periods of time. At this we will consider that and also consider the value to users. And based on that, we define the tariffs at segments and different periods of time, always trying to optimize revenues, giving a good service to our customers. But at the same time, when we talk about revenues, it's net revenues also with the Schedule 22.

Just staying on the 407. Can you explain why did you step back from the seasonal toll rate schedule that you introduced and go back to a more simplistic structure? Should we expect sort of changes to that through the year? Or are you planning to introduce the seasonal tolls for next year? Just trying to understand the thinking there.

I will say that based on the information we have in 4 years since we have an increase before. I think that is what we expect to be for the year. in terms of understanding what is going to be the traffic and the value that we can provide. In general, in the future, it's more expected that because of schedule 22 payments that you have one increase every year. So there will be more of that like that in the future rather than to have two or several increases. And at the same time, we'll all the data now in order to know for many years, what is will be for the whole year and every time of the day. And every time of the week, what is the best, I mean, tariff that we may have. So unless we find that this additional data that makes us to change, I think probably just one increase a year would be the right way to do it.

And then maybe just following up, do you see us now back in a kind of steady state traffic profile relative to where we were in terms of coming out of COVID and behaviors sort of in flux. Are we now back into a more steady-state environment? Or are you seeing things still changing on a month-to-month basis as sort of Toronto returns to the office?

As we commented several times before, Toronto and in General Canada were well behind other places between one and two years in terms of going back to the normal mobility and the restrictions to mobility. In terms of also work from home, we think that still they are delayed compared to others. So they have still room to go back to a more normal scenario in the U.S., we have seen now more companies asking 5 days a week and pushing for employees to go back to the office. But I think still Canada and especially Toronto is lagging behind other places, and they could have still some room to improve in terms of work from home and I think it's something that we have seen some third-party references in which every month, they are continued increasing in terms of asking employees and the return to the office. So I think we are still not there. I think that as mentioned, even the short term, long term is key. So again, population and economic growth, especially around the 407 is the key for the long term, and it's what we need to think is a 75-year concession. So the value is in the long term for 407 and we need to look at that.

And then just last one, still on the 407. Are you happy with your stake in that asset if there was the opportunity, would you look to increase it and vice versa?

We are happy with the stake that we have and with the partners that we have today. If there are opportunities, we'll see.

Okay. I have three more questions here. So there's a follow-up on capital allocation and the strategy that we have in the energy sector, especially where do you plan to focus in terms of projects and geographies and deploy there?

Capital Limited. So for us is we don't want -- as commented, we are developers. So idea is to we develop something with our own capital, we'll rotate. And what we have, we want to do is also construction for third parties. So ability to develop the infrastructure that is needed for a new transition in general because it's a good market. We see -- I mean, a place in which we can have good margins in the future. In terms of Europe its very limited. In places that we can develop capabilities. We have, for many years, has commented in Spain, and we'll continue to solve. We have also [ Santarelli ], projects that we have done in Chile in the past. So we can do more transmission lines there. We try to do more in the U.S. We are really doing things for third parties with renewables. We like to do energy efficiency projects in the U.S. We have paid for some. We have not won so far, but [ they ] would like to participate more in these type of projects. And also in Poland, we have very good capabilities. It's more recipient in terms of energy transition that would be also good opportunities. We have a very good company, good mix and leader in the market. So we can have opportunities to do things in the energy transition. We'll try to do those. I think these are the 3.5% because Chile is just very limited in countries in which we will focus very limited resources, rotating the asset very fast.

Okay. I guess Ernesto this question is for you from Ana Greco from BBVA. What is your attitude towards hybrid bonds? Is this an instrument you might consider coming back in the near future?

It's an instrument that at a price makes sense. It provides more flexibility for growth while, the market now for hybrids has tightened a little bit, but this is still I believe, expensive yet is something we could look at in the future.

Okay. Final question here from Dario Maglione from BNP. I don't know if we're going to need a look because it's quite of detail of JFK. So first question, JFK and TO, how does the FAA's cap on the number of flights affects traffic projections at JFK?

[indiscernible] cap and then there's [ Alicap ]. So as I said before, the new facility that we're providing replaces the existing facilities. So don't think of it as 23 million capacity just in addition to where it is at the moment. We are moving the -- we're expecting the market share for us to increase from where it is at the moment from 34% to 49%. So the -- you've also got to understand that our market, our focus market is the existing traffic that's already operating in JFK and the growth will come from either upgauging or additional frequency and clearly, we have done a lot of work to analyze the opportunity for growth -- we do see capacity available in an hourly positions, obviously, there's peak periods in which there's less capacity available. There are other opportunities that we believe that we can absorb that growth.

'23 had cost per employment of USD 65. How does this translate to revenue for the company that holds the concession of the terminal?

I can't answer that question because that's TOGA. And again, just to reiterate the point that Ignacio says, these numbers that we gave you were not our numbers. [ Steer ] provided that assessment. So they're not our numbers, but I can't answer how that feeds into TOGA, which is a group of airlines that currently operate Terminal 1.

The old terminal one is not part of the construction...

Yes. So we don't operate the existing facility that we'd have zero revenue from the existing facility. We don't get a dime until this facility opens.

Okay. Seems that we don't have more questions. Thank you very much all for being here.

Okay. Thank you very much. And we'll close this at Capital Markets Day. Thank you, everyone.