Ferrovial (FER) Q3 2026 Earnings Call Transcript

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DATE

Wed, Oct. 28, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Ignacio Madridejos
• Chief Financial Officer - Ernesto López Mozo
• Investor Relations - Silvia Ruiz

TAKEAWAYS

• 407 ETR Revenue -- 18.4% growth in the first nine months, driven by toll rate increases implemented on Jan. 1.
• Construction Order Book -- All-time high of EUR 19 billion at the end of September, representing 8.2% like-for-like growth from December 2025.
• Construction Adjusted EBIT Margin -- 4.1% for the first nine months, an improvement from 3.7% in the prior-year period.
• I-285 East Concession Payment -- $23.1 billion proposed for Phase 1, with final figures subject to interest rates and financial structuring at financial close.
• I-24 Concession Payments -- $21 billion on a present value basis, featuring front-loaded nominal payments of $7.7 billion during construction from 2027 to 2033.
• Net Cash Position -- EUR 1.66 billion as of Sept. 30, excluding infrastructure project companies, compared to EUR 1.3 billion at the end of 2025.
• 407 ETR Traffic -- 7.1% decline in the third quarter, impacted by targeted promotions and flat regional GDP growth.
• LBJ Revenue -- 16.3% growth in the first nine months, supported by a 3.9% increase in transactions.
• I-66 Revenue -- 17.7% growth in the first nine months, driven by higher toll rates and a 7% increase in transactions.
• I-77 Adjusted EBITDA -- 6.1% decline in the first nine months, reflecting a step-up in the revenue share band from 25% to 50%.
• NTE Revenue -- 14.8% growth in the first nine months despite a 2.2% traffic decline resulting from capacity improvement works.
• NTE 35W Revenue -- 15.8% growth in the first nine months, despite $23.5 million in revenue share impacts.
• NTO Airline Agreements -- 32 agreements reached as of Oct. 28, 2026, including 24 executed agreements and eight letters of intent.
• NTO Total Equity -- EUR 1,042 million invested following the final EUR 63 million contribution in the second quarter.
• Project Dividends -- EUR 604 million received in the first nine months, including EUR 315 million from 407 ETR and EUR 159 million from Dallas managed lanes.
• Budimex Performance -- 6.9% adjusted EBIT margin for the first nine months, supported by higher like-for-like revenue.
• Webber Performance -- 3.6% adjusted EBIT margin for the first nine months, driven by 17% like-for-like revenue growth and operating efficiencies.
• I-285 East Construction Cost -- $8.9 billion estimated for Phase 1, with a 6.5-year construction period expected to begin in 2028.
• Energy Division Investments -- EUR 75 million in the first nine months, including EUR 42 million for the Leon County solar project in Texas.
• I-285 East Pricing Framework -- Soft cap of $2.01 per mile in 2025 dollars, with dynamic pricing allowed up to a hard cap of $4.02 per mile to manage demand.

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RISKS

• López Mozo stated, "Traffic was also affected by slower economic growth, particularly impacting heavy vehicles in sectors exposed to tariffs and discretionary trips," regarding the 407 ETR performance.
• Management reported that international traffic performance at JFK was affected by geopolitical developments and FAA air traffic controller staffing constraints.
• Management noted that I-77 traffic declined 5.2% in the first nine months as heavy vehicles shifted to alternative routes during construction on the I-81 corridor.

SUMMARY

Ferrovial N.V. (NASDAQ:FER) reported growth across its highways and construction segments, with the construction order book reaching an all-time high of EUR 19 billion. Management announced two significant U.S. managed lane awards in Nashville and Atlanta, representing a multi-decade investment pipeline extending through 2040. Highway revenue across North American assets increased by double digits, as higher toll rates offset traffic volatility in some corridors. The company ended the third quarter with a net cash position of EUR 1.66 billion excluding project debt, facilitating continued investment in energy and airport infrastructure while supporting shareholder distributions.

• CEO Madridejos stated, "The I-285 East bid is underpinned by proprietary analysis, proven operating experience, and a detailed understanding of US managed lanes customer behavior in practice."
• Management reported that the design for I-285 East increases allowed movements to 117 from the 42 movements included in the reference design.
• Phase A Date of Beneficial Occupancy for New Terminal One at JFK is scheduled for March 2027.
• The company announced a second scrip dividend for 2026 totaling EUR 600 million, payable in cash or shares.
• Management stated that Phase 2 and Phase 3 of the I-285 project require separate phase agreements and further negotiation before being committed.
• Management noted that traffic on I-285 East has experienced daily congestion for over 10 years, indicating suppressed demand.

INDUSTRY GLOSSARY

• 407 ETR: The 407 Express Toll Route highway in Ontario, Canada, operated under a long-term concession.
• Managed Lanes: Highway lanes where tolls fluctuate dynamically based on traffic demand to maintain free-flowing speeds.
• OTR Soft Cap: Operating Toll Rate soft cap, a performance-based threshold for toll rate adjustments.
• DBO: Date of Beneficial Occupancy, the point at which a facility is ready for its intended use.
• TIFIA: Transportation Infrastructure Finance and Innovation Act, a U.S. federal loan program for large-scale projects.
• CDA: Comprehensive Development Agreement, the contract framework used for the I-285 project.
• P3: Public-private partnership, a long-term contract between a government entity and a private company to deliver public infrastructure.
• GDOT: Georgia Department of Transportation.
• TDOT: Tennessee Department of Transportation.

Full Conference Call Transcript

Silvia Ruiz: Good afternoon, everybody. This is Silvia Ruiz speaking. I would like to welcome you to Ferrovial's conference call to discuss the company's operating results for the third quarter of 2026 and the specific presentations from recent awards in Nashville and Atlanta. I am joined here today by our CEO, Ignacio Madridejos, and our CFO, Ernesto López Mozo. Just as a reminder, the presentations and the results report are available on our website. At the end of the presentation today, there will be a Q&A session. As in previous calls, you will have the opportunity to ask questions live.

In order to do so, you will need to join the call through the conference call channel and press star five on your phone keypad. If you prefer, you can send questions through the forum included in the webcast, and I will be reading them out loud at the end of the Q&A session. Before starting, please take a moment to look at the Safe Harbor statement included in the presentations. Please bear in mind that the presentations contain forward-looking statements and expectations that are subject to certain risks and uncertainties, so actual figures may differ.

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

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

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

In October, we were also awarded I-285 East Express Lanes, and our consortium was selected to deliver the D35 highway P3 project in the Czech Republic. Additionally, we have announced the second scrip dividend for an aggregate amount of EUR 600 million, payable in cash or Ferrovial shares at the election of our shareholders. Let's move now to the 407 ETR. The 407 ETR delivered solid revenue growth in the period despite lower traffic. In the first nine months, revenue grew by 18.4%. Toll revenue growth was primarily driven by higher toll rates, which went into effect on January 1st, 2026. EBITDA grew by 21% in the first nine months.

This includes a Schedule 22 payment provision of CAD 12.6 million, compared with CAD 35.4 million last year. In the third quarter, EBITDA grew by 15.8%, impacted by the CAD 7.1 million provision recorded in Q3 2026. This compares with a CAD 9.8 million recovery or reversal in the Q3 2025. Excluding the Schedule 22 payment effect in both periods, EBITDA grew at 18.4% in Q3 and 18.7% for the first nine months. Traffic declined 7.1% in the third quarter. When looking at the year-on-year comparison, it is important to bear in mind the different promotional approach, with more targeted promotions in 2026 compared with 2025.

Traffic was also affected by slower economic growth, particularly impacting heavy vehicles in sectors exposed to tariffs and discretionary trips. GDP in the region is almost flat in 2026, but major Canadian banks expect growth between 1%-2% in 2027. Also affecting traffic were unfavorable weather, the timing of holidays, and lower maintenance activity on alternative roads. Dividend distributions remained strong. 407 ETR distributed CAD 1.05 billion during the first nine months, and a further CAD 1.05 billion dividend was approved for the fourth quarter. This brings total dividends approved in 2026 to CAD 2.1 billion, compared to CAD 1.5 billion in 2025. Now covering Dallas-Fort Worth managed lanes, the next slide.

The managed lanes continue to show solid demand and strong operating performance, despite construction works and capacity constraints in parts of the network. In terms of operating results, the three projects posted solid growth versus last year, both in terms of revenue and EBITDA, despite the increase in revenue share. Looking at each of the assets. At NTE, traffic declined by 2.5% in the quarter and 2.2% in the first nine months, reflecting the impact from capacity improvement works. These works opened to traffic ahead of schedule on September 25th, except for two additional ramp projects that remain under construction. Despite lower traffic, NTE revenue grew by 14.8% in the first nine months.

Adjusted EBITDA increased by 12.3% year-to-date, and it was impacted by $9.8 million of revenue share. At LBJ, traffic trends improved significantly after completion of the I-635 feeder corridor, reflecting greater utilization of the managed lanes. Transactions increased 5.6% in the quarter and 3.9% in the first nine months. Revenue grew 16.3% with adjusted EBITDA up 15.9% in the first nine months. At NTE 35W, transactions declined 1.1% in Q3 and 0.2% in the first nine months. Traffic performance was affected by capacity constraints starting to occur in certain managed lane sections as congestion increased. Revenue grew by 15.8% in the first nine months, while adjusted EBITDA increased 15.1%, impacted by $23.5 million of revenue share.

The next slide shows all our Dallas North managed lanes registering double-digit growth in revenue per transaction, significantly outpacing inflation. This was driven by several factors. A favorable traffic mix with higher heavy vehicle volumes, thanks mostly to technology enhancements in camera recognition that started to be implemented in 2025. This improved vehicle classification, as well as a higher number of mandatory mode events at NTE and NTE 35W. For the first nine months, revenue per transaction increased 17.1% at NTE, 12% at LBJ, and 15.6% at NTE 35W.

Looking at revenue per transaction growth in Q3 compared with Q2, at NTE, the lower growth in revenue per transaction mainly reflects fewer and less intensive mandatory mode events during the third quarter. At NTE 35W, the comparison base is becoming more demanding as the benefits from improved vehicle classification began to have an impact in September 2025, while mandatory mode events also became more significant around the same period last year. As a result, the year-on-year contribution from both effects is now starting to normalize. The operating performance supported higher distributions at the portfolio level.

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

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

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

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

Our equity commitments have been completed following the EUR 63 million contribution invested in the second quarter. Total equity invested is EUR 1,042 million. Moving to Dalaman. Passenger traffic reached 4.5 million in the first nine months. This is 4% lower than last year, mainly due to lower international volumes affected by geopolitical challenges in the Middle East, but this was partially offset by a strong domestic air traffic growth. Revenue declined by 7.1% and adjusted EBITDA declined 7.7% in the first nine months, reflecting softer international traffic levels. Moving now to construction, the business division delivered a strong profitability and a record order book.

Revenue reached EUR 5.8 billion in the first nine months, increasing 9.1% like-for-like, with adjusted EBIT margin improving to 4.1% from 3.7% last year. Recording a solid 5.1% adjusted EBIT margin for the third quarter as well. Budimex maintained healthy profitability with a 6.9% adjusted EBIT margin for the first nine months of the year and delivered higher like-for-like revenues. Webber increased its adjusted EBIT margin to 3.6% in the first nine months of the year, supported by 17% like-for-like revenue growth and operating efficiencies. Ferrovial Construction improved its adjusted EBIT margin to 2.6% from 1.7% for the first nine months of the year.

This reflected better execution in North America, the U.K., and Spain, and lower bidding costs following the submission of major bids in July and higher revenue. The order book reached a new all-time high of EUR 19 billion and increased 8.2% like-for-like compared with December 2025. The composition of the order book remains very healthy. It does not reflect roughly EUR 8.7 billion in contracts that are pre-awards or pending financial close as of September 2026. These are mainly related to the I-24 and Budimex contracts. Half of our backlog is in our core U.S. and Canada market, which we expect will continue to support future growth. A recap on the main operating results.

We see the figures here on this slide, a strong revenue and profitability performance for the first nine months, with very strong results across the board, double-digit growth in like-for-like terms of revenue, adjusted EBITDA and adjusted EBIT. To conclude the results presentation, let's focus on the net debt ex infrastructure projects. We ended the first nine months of the year with a net cash position of roughly EUR 1.7 billion, compared with EUR 1.3 billion at the end of 2025. This reflects a strong cash generation, disciplined investment, and the impact of recent divestments.

The main components were EUR 604 million of dividends from projects, mainly from highways, with EUR 315 million from the 407 ETR, EUR 159 million from the Dallas managed lanes, and EUR 38 million from I-66, and EUR 11 million from the I-77. Next block is the construction operating cash flow, excluding tax payments and dividends, has reached EUR 591 million and reflects a strong operating performance, along with some compensation received in the U.S. and Canada, and also, it benefited from some prepayments received earlier than usual at Budimex. These inflows were partially offset by EUR 71 million of other operating cash outflows and EUR 56 million of tax payments, mainly in Poland.

In terms of investments, we had EUR 231 million, including mainly the last equity injection in NTO, EUR 63 million, together with investments in energy of EUR 75 million, of which EUR 42 million are related to the Leon County solar project plan in Texas, and construction invested EUR 71 million. Then we have the interest received on cash, I mean, from other investing activities. This cash flow reached EUR 85 million, and as I said, it is basically cash remuneration on the liquidity we have. Divestments were EUR 96 million, the main components being Silvertown Tunnel and the transmission lines in Chile. Shareholder distributions include cash and share buybacks also, and amounted to EUR 461 million.

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

Ignacio Madridejos: Thank you, Ernesto. Following on the project overview presented at the commercial close and the information provided by TDOT, we would like to provide some additional information on the concession payment structure and the revenue-sharing mechanisms included in the concession agreement. The $24.8 billion figure published at award combine present value and nominal components as required by the RFP. To provide a consistent comparison, we have now presented all payments on a present value basis. On this basis, the total payments to TDOT amount to $21 billion, which is the same value included in our offer.

In accordance with the concession agreement, the payment profile is front-loaded, with approximately $7.7 billion of nominal payments during construction from 2027 to 2033, reaching approximately $1.1 billion nominal at peak. The remaining payments will be made during the operating period through 2085. The table shows the full payment schedule on a present value basis. The $21 billion is calculated as of the contractual financial close deadline using the applicable discount rates, with final amounts remaining subject to the financing structure at financial close. In terms of financial structure, we will be providing more information at financial close. TIFIA requires a maximum leverage of 75% debt and 25% equity.

In addition to these payments, the concession includes two revenue-sharing mechanisms with TDOT. These are not included in the $21 billion and only apply if the project performs above the defined thresholds. The first is an excess revenue share. It begins when accumulated revenues exceed the base case level, with TDOT's share increasing as the project IRR outperforms the base case. The second applies when toll rates exceed $3.20 per mile in 2025 dollars. TDOT receives 50% of the revenue between $3.2 and $4.8 per mile, 75% between $4 and $6.4, and 19% above $6.4. These toll rates are escalating annually at the greater of 2.5% versus the average of state GDP, U.S.

CPI, and 3%, similar to the soft cap. Overall, the structure provides TDOT with significant contractual payments while also allowing TDOT to participate in the upside if the project performs above the base case. I will continue presenting the I-285 East Express Lanes project in Atlanta, an important addition to our managed lanes portfolio and a project with the potential to create significant long-term value. The presentation is similar to what I presented a few weeks ago about the I-24 project in Tennessee. The I-285 East program is structured in different phases under a comprehensive development agreement with GDOT. Ferrovial leads the project consortium with a 90% ownership stake. Phase 1 is the committed phase.

It covers approximately 23 miles, including the extensions at SR 400 and I-85, adding two westbound express lanes in the I-285 East corridor. The Phase 1 agreement includes design and build activities and a 50-year operational maintenance period. The project has an estimated construction cost of approximately $8.9 billion, with an expected 6.5 years of construction period, expecting service commencement in 2034. The proposed concession payment is $23.1 billion. Final figure subject to interest rate movements and financial structuring prior to financial close, expected by October 2027. Additionally, $515 million will be paid at financial close as reimbursement of State Cost. Phase 2 covers the corresponding eastbound alignment with approximately 23 mi, including the extensions already mentioned.

The second phase is partially committed. Traffic and revenue assumptions and design and construction parameters are already defined. While construction cost remains adjustable for inflation under contractual parameters described in the agreement. Phase 2 financial close is expected in 2029, and opening expected in 2036. Phase 3 is currently indicative. It covers approximately 40 mi in both directions along I-285 and SR 141. Its scope, economics, and timing remain estimates to be developed through the CDA. The current expected milestones are financial close in 2032 and opening in 2040. The important point is that Phase 2 and 3 are not automatically committed.

They have to be negotiated and developed through the CDA, and they will be executed under separate phase agreements. Turning to the economic fundamentals of the metro area, Atlanta is already one of the largest metropolitan areas in the U.S., with approximately 6.5 million residents, while continuing to grow at around 1.3% per year over the last decade. This population growth has been accompanied by a strong economic performance. Real GDP has grown at approximately 3.5% annually, supported by a large and diversified employment base. The region also benefits from relatively high household incomes, with median household income of approximately $92,000, around 13% above the U.S. average.

Atlanta is a major economic center, representing approximately 70% of Georgia's GDP and home to 14 Fortune 500 headquarters, with a significant development pipeline of around 500-600 new projects per year. Importantly, this economic base is supported by a strong talent pipeline, with more than 300,000 college students enrolled and approximately 64,000 degrees awarded annually, providing a continuous source of skilled labor for the regional economy. Atlanta is also a major transportation and logistics hub, supported by the world's busiest airport and the key interstate connections. Overall, Atlanta combines significant existing scale with a track record of sustained population and economic growth, high incomes, and a deep talent base, supporting employment, mobility, and long-term travel demand across the region.

Moving on to the corridor itself, I-285 brings together jobs, residential areas, and freight flows across a single, heavily used ring road. I-285 currently carries approximately 200,000 to 240,000 vehicles per day, making it one of the region's most heavily used corridors. I-285 connects major employment and residential centers with demand largely driven by short trips. Fewer than 3% of trips are end-to-end, and the average trip is approximately 5 mi, highlighting the importance of multiple access points along the corridor. I-285 plays an important role in the region's freight and logistics network.

Through-truck traffic is routed away from central Atlanta and onto the ring road and its interchanges, contributing to a meaningful heavy vehicle presence of approximately 10%-12% of corridor traffic. The corridor is also an important regional connector between Atlanta's major interstate highways. Around 20% of truck trips travel between I-285 and I-75, reinforcing I-285 role as a key freight bypass. Beyond freight, I-285 supports significant commuting and business demand, creating a diversified mix of users throughout the day. Overall, this combination of local commuting, business freight, and regional traffic creates a broad and diversified demand base, with connectivity playing a critical role in capturing that demand.

On the next slide, we saw the level of congestion on I-285 with a long duration and intensity not seen on other highways. As commented before, the corridor carries approximately 200,000 to 240,000 vehicles per day. The corridor experiences up to eight hours of daily congestion. At peak times, speeds can fall to around 20 mph, with four to five hours of daily peak by direction. Importantly, this is not a recent or temporary pattern. Congestion has been persistent across the corridor for more than 10 years. To put this congestion profile into context, SR 400 provides a useful benchmark given its similar managed lanes framework in Atlanta market.

The heat maps compare weekdays traffic conditions in 2025 between I-285 and SR 400. Areas shown in red colors indicate more severe congestion and longer delays. What stands out is the materially stronger congestion profile of I-285 East. Congestion extends across more hours of the day and both directions, while SR 400 is more concentrated around peak hours and the peak duration with lower intensity. I-285 East has greater freight flows exposure. Trucks accounts for approximately 10%-12% of traffic, compared with around 3% on SR 400. I-285 East also has significant greater extended vehicles exposure, similar to trucks traffic.

While the tolling frameworks are comparable, I-285 East has materially stronger underlying demand, which creates a deeper need for reliable travel times throughout the day and increases the potential value that express lanes can provide to drivers. Looking ahead, the traffic case is supported by a combination of strong existing demand, suppressed demand, and expected continued regional growth. Starting with the regional outlook, third-party forecast for 2025 to 2034 saw expected annual growth of approximately 1.1% for population, 1.9% for real income per capita, and 2.6% for real GDP. Importantly, the traffic case does not rely on future growth to create demand.

As we have seen in the previous slides, demand is already established, and the corridor is operating under significant capacity constraints. We also see evidence of suppressed demand. Between 2012 and 2023, traffic on I-285 between I-75 and I-85 grew by approximately 0.4% annually, compared with approximately 1.1% on regional freeways. However, growth on I-285 has been concentrated during off-peak periods where capacity remains available. While peak period traffic has been constrained by congestion, we therefore interpret the lower observed growth as evidence of capacity constraints rather than weak underlying demand. These two years, there is latent demand that can return to the corridor once additional capacity becomes available.

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

Compared with GDOT reference design, our solution increases allowed movements from 42 to 117, and entries and exits per mile from 2.3 to 3.1. Most importantly, the share of corridor trips served increases from 55% in the reference design to 95% in our design. This represents approximately 1.7 times more in-scope trips. A particular focus has been freeway-to-freeway connectivity at SR 400 and I-85. Based on our managed lanes portfolio experience, we see this connectivity as critical to network performance, and our design provides full connectivity at both interchanges. The design also provides direct access to major cross streets, truck-friendly connections, and further improving access across the whole corridor.

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

When volumes exceed 1,500 passenger car equivalents per lane per hour, or speeds fall below 55 mph, tolls can increase up to two times OTR hard cap. This pricing response can apply not only to the affected segment, but also to up to two preceding segments, helping ease demand before congestion reaches the bottleneck. The second important feature is the predictable growth of the OTR soft cap. The OTR soft cap increases annually at the greater of 2% or the average of nominal GSP, CPI, and 3%, providing built-in escalation. In addition, the framework includes performance-based soft cap adjustments assessed every six months, directly linked to the service experience by users.

Given the expected traffic conditions, these adjustments may play a critical role to maintain reliable travel times. A 3% congestion adjustment can apply when sustained demand keeps tolls above the soft cap more than 20% of the defined peak periods in a segment, triggering an adjustment to the OTR soft cap for the entire phase. A separate 18% target speed adjustment can apply when the speeds remain below 45 mph, more than 10% of the defined peak periods in a segment, again triggering an adjustment for the entire phase. The objective is to restore the target level of service.

These adjustments increase the OTR soft cap itself, and with it, the corresponding two times hard cap, allowing the pricing firewall to adapt as traffic and congestion evolve. Finally, vehicle class pricing protects lane capacity with toll multipliers of up to five times for extended vehicles. Overall, these three mechanisms work together to manage demand, protect travel speeds, and provide Express Lanes users with a reliable service and predictable trip. Moving to construction and design, our approach focuses on bringing forward scope while simplifying delivery and reducing execution risk.

Our approach brings forward more scope with an additional 8.5 lane miles incorporated into phases 1 and 2 while simplifying the overall phasing strategy, reducing construction interfaces, remobilization, and hand-offs between them. Another important element is the increased and optimized access. The design incorporates broader and higher quality connections while seeking to integrate this additional scope efficiently into the construction program. From a structural perspective, the design also reduces the use of elevated and steel structures, which improves constructability and supports greater schedule certainty while also reducing future maintenance requirements. Approximately 30% of advanced design development has been completed across phases 1 and 2, with additional design work for critical components. This provides greater visibility on pricing and schedule.

The delivery platform benefits from a significant local subcontractor network, self-perform activities, and more than 10 years of experience in the corridor. Inflation risk is mitigated through developer and grantor protection and additional cost contingency. A combination of more scope delivered up front, fewer interfaces, advanced design, and a strong local delivery platform gives us greater confidence in construction execution, schedule, and cost certainty. Moving on to the next slide. Beyond the design itself, the I-285 East bid is supported by operating data analysis and experience from across our managed lanes portfolio, providing differentiated data insights across the key traffic and pricing variables. This allows us to benchmark key assumptions of the bid against what we have observed in operation.

On traffic, we use portfolio experience to assess how capture rates change by vehicle class and time period, how connectivity affects usage of network, how quickly users adopt a new toll road, and how suppressed demand returns as new capacity becomes available. Similarly, on prices, we look at observed behavior around cap triggers and pricing above OTR soft cap, customer response to toll rate changes, and how toll segmentation and differentiated vehicles pricing can be configurated to manage demand and preserve service quality. In short, the I-285 East bid is underpinned by proprietary analysis, proven operating experience, and a detailed understanding of US managed lanes customer behavior in practice. Moving on to the next steps.

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

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

Congestion is longstanding, extends across the day, and affects both directions, supporting a significant base of suppressed demand. Atlanta Metro has solid demographic and economic growth prospects, with a diversified employment base above average household income and strategic transport connectivity. Our Best Value award was supported by a differentiated design that is expected to serve 95% of corridor trips, compared with 55% in the reference design.

The pricing framework provides significant flexibility to respond to congestion and grow pricing over time, starting with $2.01 per mile OTR soft cap based on 2025 dollars, dynamic pricing allowing real-time pricing up to two times OTR soft cap, including annual and performance-based adjustments supporting progressive OTR growth, and toll multipliers that go up to five times the light vehicle for standard vehicles. The CDA provides a structured framework to negotiate and develop phases 2 and 3. These potential phases represent an additional growth pipeline, but remain subject to separate development negotiation and award processes.

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

Operator: Ladies and gentlemen, we will now begin the Q&A session. If you would like to ask a question, please press star five on your telephone keypad. If you change your mind, please press star five again. Please ensure that your device is unmuted locally before proceeding with your question. Our first question comes from Luis Prieto from Kepler Cheuvreux. Your line is now open. Please go ahead.

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

Ignacio Madridejos: Thank you, Luis, for your questions. As you know, in all these processes, we have some NDA clauses and confidentiality that we cannot share some of the information. That is why we did not share some of these concession payments for the I-24. At the time that they did let us to give that information, we made it public based on the press release that they made on Monday, so immediately after, we communicated that information. Regarding the I-285 East, I have to say that each of them is different. Different projects that are differently negotiated.

In that specific case, you will not expect to receive any additional information until financial close, in which you will get all details about equity and concession payments.

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

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

Luis Prieto: Okay. Understood. Thank you.

Operator: Our next question comes from Cristian Nedelcu from UBS. Your line is now open. Please go ahead.

Cristian Nedelcu: Hi. Thank you very much for taking my question. Could I ask you first on the I-285, I think the grantor slides were talking about the concession payments being made during the six years of construction. Could you help us understand if that is set in stone or that is subject to negotiation and we could see a payment structure similar to I-24? The second one, just to clarify on I-285 Phase 2 concession payment, I understand that you cannot disclose any value, but is the same road in the opposite direction. You have committed to a traffic and revenue forecast.

Would it be fair to assume there is a similar concession payment in order of magnitude, or could it be there is no concession payment for Phase 2 at all? Any color, just for us to understand a bit of magnitude. The third one, if you allow me, maybe on the NTE. I think you have now 1 month since the new capacity has been added. I was wondering if you can share any conclusions in terms of the net impact on the revenue growth there. Less mandatory modes, more volumes, any color you could give us at this stage. Thank you.

Ignacio Madridejos: Thank you, Cristian. I will take the first two questions, and then Ernesto will take the third one. Yes, I think that at the conference call, GDOT explained that this is equal payments reconstruction, but also it was noted that it may change based on the change of interest rates or the final financial structure. Final numbers, as commented previously, will not be commented until financial close. The second question about the Phase 2, don't take assumptions that are similar. Also, yes, it is different direction, but I think will be different type of cost in order to develop that and different type of revenues. Then the financial close will be in two years.

Don't take, for the time being, any assumptions that it is going to be exactly the same. It may have some differences.

Ernesto López Mozo: Yes, thanks. Regarding the NTE impact was very limited. We can comment now, yes, we are seeing more traffic coming back to the corridor. Regarding mandatory modes, that is something that will have to be gauged next year because of how the contract is drafted after the opening. We would be informing next year about that.

Cristian Nedelcu: Thank you very much.

Operator: The following question comes from Harishankar Ramamoorthy from Deutsche Bank. Your line is now open. Please go ahead.

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

Would you dismiss the possibility of, say, reducing the tolls? Thank you.

Ignacio Madridejos: Thank you. I will take the first question about the I-24. We are not worried at all about any legal challenge. Of course, we cannot comment because there is a litigation ongoing with TDOT and the consortium that was part of this challenge. I think they will be solved fast. As I said at the beginning, we are not worried at all about this legal challenge.

Ernesto López Mozo: Okay, regarding the 407, clearly the traffic, as I mentioned before during the presentation, has been affected by how we have managed promotions, targeted promotions, and so on. We still see that the product is well valued. The growth in revenues is substantial this year. We do not provide a specific guidance, but I rule out lowering prices as you were suggesting.

Harishankar Ramamoorthy: Thanks for that. Thanks.

Operator: The next question comes from Elodie Rall from JPMorgan. Your line is now open. Please go ahead.

Elodie Rall: Hi. Thanks for taking my questions. First of all, just a follow-up on the 5.2% discount rate. I think the question was raised earlier, but I did not quite understand how it could be adjusted higher at financial close and the consequence on the project's NPV at this stage. If you could help me understand that a bit better, please. Second, the I-285 East, you got a new partner for 10%, so I think now you are at 90%. Do you look for a third partner? What is the ultimate goal there? Lastly, on construction margin, clearly very strong performance in Q3. You are above the 3.5% margin target. Is that 3.5% still a valid target in the midterm?

If you can comment on that. Thank you.

Ernesto López Mozo: Lovely. Okay. I take a high level, this is Ernesto. I will do a little bit of further explanation on the interest rate and margin compensation. We basically submitted a financial structure with the conditions indicated that were the prevailing, let's say, at the time in terms of debt. Imagine that base rates and spreads have gone up. Therefore, when you go to the financial close, the capital structure that we submitted now at financial close is different. It has higher interest rate and higher spreads. The grantor makes up for the increase in base rate and 85% of the margin.

The way that gets adjusted, there is a formula that basically says, okay, these additional payments have an NPV value of X. That is what gets compensated. It gets compensated with, let's say, concession value.

Ignacio Madridejos: Regarding the second question now about the partners of the I-285 East, yes, we have a 90%. That, they say, is higher than usually we used to have. We may, at some point of time, decide to reduce our participation to more similar participation with a majority, but similar to what we have in other managed lanes. The question is when. We have not taken a decision. We may do it before or after financial close or after construction. Of course, as long as you reduce the risk of this project, the value will increase.

We have not taken a decision yet, but at least we will consider that usually we may reduce our participation to be more similar to what we have in other assets.

Ernesto López Mozo: Okay, regarding the construction margin, we have always mentioned that this is like a long-term margin average. Yes, some moments we could be above. Of course, there are moments it could be below. We think that as a long-term margin, this is a reasonable margin for the construction business.

Elodie Rall: Okay, thank you.

Operator: Our follow-on question comes from Ruairi Cullinane from RBC Capital Markets. Your line is now open. Please go ahead.

Ruairi Cullinane: Hi there. My first question on the I-77. Do you think any of the reduced traffic year-to-date was a price elasticity impact, either for the heavy goods vehicles or the leisure traffic? Secondly, perhaps you could just talk about your appetite for further managed lanes following the awards this year. Then back to results, what drove the improved energy performance in the quarter? Thank you.

Ernesto López Mozo: Okay. Regarding the I-77 performance, when you look into the area, there are two long-haul corridors for heavy traffic. One is the I-85 that then goes into the I-95, this Northeast corridor. On the other hand, you have the I-77 that connects into the I-81. I-81, I-85, and I-95 are kind of parallel. The I-85/I-95, let us say, is more dense. What happens with the I-81 is that now it is under heavy construction. We see heavy traffic that is now using the I-85 that connects into the I-95 rather than I-77, I-81. As long as this construction goes on, we expect heavy traffic to shift, as it has been seen this year, into this alternative corridor.

When you have less heavies on the road, definitely capacity increases. Therefore our capture rate suffers. That could be seen as an important driver of the performance. It could last for some time, but in terms of the Charlotte region growing and so on, it is still expected to grow.

Ignacio Madridejos: Regarding the second question, yes, we have pre-qualified for the I-77 South. We are waiting for the RFP. We will participate and we will bid for these new managed lanes, and we actively participate in the pre-qualification process of additional managed lanes in the future. Yes, we have a full appetite for these type of projects that we think can create very good value for the company in the future.

Ernesto López Mozo: Regarding the question regarding the energy performance, well, I think it is that comparison between a year where the energy division was still developing some construction projects, some EPC plans, and also transmission lines. The moment transmission lines are operating, or you finalize EPC contracts, you get a better margin. It is a matter of scale and evolution of the portfolio.

Ruairi Cullinane: Thank you.

Operator: Our next question comes from Graham Hunt from Jefferies. Your line is now open. Please go ahead.

Graham Hunt: Thanks very much for the questions. Can I just start with the 407 and try and dig a bit deeper into this volume decline in Q3? For what it looks like and what we see, the discounts that you are offering in Q3 were really pulled back. That contrasts quite significantly with, I think, the strategy last year where they were really dialed up. I am just trying to understand what is the rationale and thinking there, and I suppose, how much of the -7% on volumes came from changes to the way you were offering promotions versus what you might refer to as one-offs or macro weakness?

I am just trying to sort of get my head around the pricing strategy that you are pursuing on that asset. And then my second question, if I can ask on the I-285, the sort of references to heavy vehicle percentage on the corridor and the 5x multipliers, etc. I am just trying to understand sort of apples-to-apples numbers here, because as I understand it, the I-285 can't take heavy vehicle traffic. Is the 10%-12% of heavy vehicles, is that a reference to the vehicles which can travel on the corridor, or are you saying that heavy vehicle traffic on the corridor in general will drive more light vehicles onto the road?

So just trying to get a sense of what percentage of vehicles in the corridor that are eligible to drive on the I-285 express lane would qualify for the higher multipliers, the 5x multipliers that you reference in the deck. Sorry for the long question. Thanks.

Ernesto López Mozo: Okay. Thanks, Graham, for the questions. I will take the first one on the 407, where last year, really promotions were broadly offered and different times of the day, different segments could be used. Right now, we have a more targeted approach. That means that there is some sort of commitment. Okay, you drive X and then you get the promotion, or the promotion is valid as long as you conclude spending some amount, that sort of thing. One idea that is well targeted is also, as you see, we have reduced the expenditure overall for the Schedule 22 with much higher revenues.

So that means that even segments where we were not that able steering traffic, now we are steering traffic. So it is a mixture of providing value for customers, they appreciate that, and also just managing the cost component. So that is when we mean targeted promotions. That is the explanation.

Ignacio Madridejos: Regarding the I-285 and heavy and extended vehicles, the point that we were making during the presentation is that today, heavy vehicles in the I-285 are around 12%-14%. We mentioned this figure because it is public information also. Also mentioning that a few of them take the whole trip. Most of them just enter in one interchange and they exit in a different one. A shorter trip, so from interchange to interchange. This type of traffic generates a lot of congestion in the I-285 in the general purpose lanes. Heavy vehicles are not allowed to use the managed lanes, but extended vehicles, yes. Extended vehicles, what is different here and that you need to consider, is the definition first.

That is broader than in other type of, in the case of the Dallas managed lanes, so it is different to the I-24. The definition of extended vehicles is broader in this case, and what is also higher is the multiplier. What is also relevant compared to others like SR 400 and other type of highways is that the number of extended vehicles is significant. We have not given a number for, we want to keep intellectual property and information that we may have from other, or own analysis and research and knowledge. We think that it plays a significant role because of the number and because how they behave and because time savings for them are very relevant.

Graham Hunt: Understood. Thank you. Thank you for the additional I-24 information as well. It is very helpful. Thanks.

Operator: The next question comes from Marc Ip Tat Kuen from Citi. Your line is now open. Please go ahead.

Marc Ip Tat Kuen: Hi, thanks for taking my questions. I've got a few all on the I-24. The first one is just clarification on the timeline for the I-24. I think it's changed maybe a bit from the analyst call at the start of the month. Previously referred to first service commencement is 2034 and full operation 2035, but the concession payment schedule shows that your payments will start from 2036. Can you just clarify the timeline there for me, please? The second one's on the maximum, the leverage 75/25 cap structure on the TIFIA term sheet. Does that only apply at the commencement of operations, or do you need to adhere to that throughout the whole of the concession?

Then just the last one, which I can't remember if you've shared before or not, but are you able to share what unlevered project IRR you're targeting for the I-24? Is that in the single digit or double digit range, please? Thank you.

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

Ernesto López Mozo: Okay-

Marc Ip Tat Kuen: I think that the presentation on October 5th, I thought the start year was 2035. Has that shifted now to 2036, as per the concession payment schedule?

Ignacio Madridejos: Yeah. 2036 is the first full-year of operations. The whole year is 2036, but 2035 will be a few months in operation, but not a full-year. I don't know if you understand the difference, no?

Marc Ip Tat Kuen: Yeah, okay.

Ernesto López Mozo: Sorry. Regarding the other two, the first one was on the TIFIA requirement for a minimum 25% equity. This is for financial close. There's no specific condition for a project that evolves a long time. It's just for financial close. Regarding the type of IRR that we required at project level, is close to double digit. It's super high single digit, I would say that, but usually the goal is to translate in a very healthy, let's say, levered, double-digit IRR as we mentioned. Of course, for the project to be solid, you need also a very high project-level IRR. We need to translate into something like that.

Marc Ip Tat Kuen: Understood. Thank you very much.

Operator: The next question comes from Marcin Wojtal from Bank of America. Your line is now open. Please go ahead.

Marcin Wojtal: Thank you so much. I've got a few questions. The first one will be on I-24 and on the capital structure. You disclosed that TIFIA documentation permits to fund up to 75% of that project with debt, and only 25% of equity is required. Is that actually the capital structure that you want to pursue for the specific project? I believe historically, equity component is closer to 40%. Could you just clarify, is there a big change versus the historical run rate? My second question will be on I-285. Are there any revenue-sharing clauses? I don't see anything disclosed, so do they don't exist, or they are just not yet disclosed at this stage?

Maybe question number three, it's a bit of an open one, but you indicated that you assess legal risk, litigation risk, for this project as being very low, and you expect this to be resolved quickly. Any additional color? What gives you the confidence in a quick resolution, if possible?

Ernesto López Mozo: Okay, Marcin, regarding the structure, in the past, if you recall, TIFIA did finance a more limited number of expenses, by type of expense. Now, their term sheet, as shown in the grantors presentation, covers up to 49% of different concepts. They have increased the scope. That is what drives the possibility of a higher leverage being how robust the TIFIA financing makes a new structure. It's that change on TIFIA scope that has changed these dynamics on leverage.

Ignacio Madridejos: Regarding the second question about the revenue share, this is going to be something very standard, not similar to what you see in other managed lanes, in which when you over-performs, according to your base case, then you start to share with the grantor. I think it is not going to be different to other managed lanes. Regarding the legal risk, yes, I think we mentioned that we are not worried. In this specific case, of course, there is litigation ongoing, and we cannot comment or give further arguments in a litigation, especially that we are not part of it, or we are not directly involved. We cannot give more information about it.

Marcin Wojtal: Okay.

Operator: Our next question comes from Eddy Diamantis from Green Street Infrastructure. Your line is now open. Please go ahead.

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

Ernesto López Mozo: Hi, Eddy. Usually, we focus this call for investors and analysts, but happy to take your questions. In terms of the structure, as I mentioned before, the debt component, the main driver is TIFIA funds. Then we have private activity bonds that basically have been allocated to the estates, and they provide a number that could be used. Then taxable bonds. As I said, the main component is the TIFIA financing. These, let us say, taxable bonds and so are assessed with financial advisors. Financial advisors are not made public, but they provide a view of what is the, let us say, the market appetite or capacity when we submit the bid.

As I said, the bulk of it is TIFIA, and then, of course, the remaining is the equity. Then the last. I think that answers your question, hopefully.

Eddy Diamantis: Yep. Just so I understand, too, I might be a little out of place here, but in terms of who will provide this financing for these private activity bonds and taxable bonds, those will be listed on public markets?

Ernesto López Mozo: Yeah. This is a capital markets transaction, and this is the usual muni bond issues and taxable bonds that are capital markets listed, and with their prospectus, everything is public financing.

Eddy Diamantis: Awesome. Great. You mentioned before that you all have full appetite for other P3 projects. Could you confirm any other projects that you are looking at besides I-77 in the U.S.?

Ernesto López Mozo: We will comment more when they come to basically a request for qualification or something like that at that point in time and when we think to make this public. Thanks, Eddy, and sorry, as I mentioned before, this is more for investors than analysts. Thanks for attending.

Eddy Diamantis: Sure. Thank you.

Operator: The following question comes from José Manuel Arroyas from Santander. Your line is now open. Please go ahead.

José Manuel Arroyas: Thank you, Ernesto and Ignacio. I have three. The first one is on the I-285 East. I wanted to come back to Cristian's earlier question and to get a clarification. The other day, the Georgia Department of Transportation said the concession fees have to be paid in seven installments. I just wanted to clarify, is there a possibility or is there not that at financial close or maybe sooner, this schedule of seven payments can be changed, can be eventually spread over the concessional life like I-24? That's question number one. Then question number two is on I-24 and the revenue-sharing payments, which are based on IRRs.

Just to get a sense of how likely these payments may be or they may not be, is the IRR triggers here, are they higher or lower than, for instance, on I-66? Lastly, on NTO, you've mentioned that there has been a change to the start of the development of Phase B1 and C1, and I understood it was at the request of the Port Authority. Could the concession be extended to make up for the three-year delay? Thank you.

Ignacio Madridejos: Thank you, José Manuel. I will start with the I-285 now, and the six payments during construction. Yes, this is what was mentioned from GDOT, and also in the same presentation, was mentioned that it may change based on the difference in the interest rates and also final financial structure. Just repeating what they were saying at that time, nothing more to be said. As commented at the end, we will see, and at the end of financial close, we will see the final numbers. Regarding the revenue share, it was easy to access that. I think that it will reach the revenue share. I think all of us will be very happy because it means the I-24 is outperforming.

Hopefully it is the case. I think that it is outperforming, and hopefully we will reach at that level. If that is the case, I think that it is performing even better than some of the other managed lanes that we have today.

Ernesto López Mozo: Regarding the potential extension of an NTO, that is not part of the contract at this point in time.

José Manuel Arroyas: Thank you.

Operator: The next question comes from Cristian Nedelcu from UBS. Your line is now open. Please go ahead.

Cristian Nedelcu: Thank you very much for allowing me to follow up. Could I ask you on the current portfolio, based on what you have been saying earlier, I think I-77, there are some headwinds from the heavy trucks moving away from the corridor. I think you have mentioned you are lapsing a bit the technology benefit in Dallas in terms of better segmenting pricing. NTE capacity is unclear what is the impact on revenue. These three levers seem to be a bit of a headwind or suggest a bit of a deceleration in the pace of revenue growth. My question is a bit what is offsetting that? Maybe could you talk a little bit about the positives?

I guess LBJ traffic is good, but I am trying to understand if going forward for the next few quarters, what are the headwinds and the tailwinds that you see in front? The second one, if you allow me, what is the range of a cost of equity for this type of project, I-24, I-285? I guess at this point, when we have construction risk and traffic ramp-up risk, and once we have de-risked them, could you help us with a bit of a range on appropriate cost of equity there? The third one and the last one, just a small clarification. Apologies, I come back to the I-285 Phase 2.

Just for us to understand the mechanism, how the concession payment is determined. Is it correct that you have committed to a revenue forecast through Phase 2? You have committed to a CapEx forecast, as well as the fact that the equity IRR that you are able to earn there cannot be higher than Phase 1. Therefore, by back-solving against these three data points, the concession payment due to the grantor will be calculated in this way. Is my understanding correct in big lines, or am I missing anything? Several investors believe there is no concession payment related to Phase 2, or there is a very symbolic one. Just wanted to understand a bit the direction of travel.

Thank you very much.

Ernesto López Mozo: Okay. In terms of revenues going on, yes, you are right that the LBJ is showing the corridor increase and that improves our performance after the opening of the 635. That should keep going up. In terms of the I-66, also, we see that the corridor is growing more than we expected. Probably there's developments to the west part of the corridor. Possibly it was more concentrated on the eastern part, very closer to the beltway. That is also driving some support growth there. In Canada, we mentioned that this has been a year very super soft in terms of economic performance. As the economic growth returns, population growth returns, those are drivers that help to the growth over there.

Those are good drivers of growth. In terms of other news, yes, we will be phasing out the technology impact on the Dallas managed lanes. The economy there, the background growth continues to be good. As the areas keep growing, also revenue growth keeps performing. I would say that's a good balance for the current portfolio. The cost of equity, it's a very good question. If we take most of the business plans that we are seeing in the market that are well below ours, probably that would merit a very low discount rate, single digit after opening. We'll see. The jury is out for that.

Ignacio Madridejos: Regarding the question about the Phase 2. In this phase, it's true that we gave traffic and revenue numbers, that they don't need to be the same as the Phase 1 first. Same with the CapEx. Also we gave a figure of CapEx that can be adjustable for inflation and other factors that does not have to be the same as Phase 1, so could be a different number that you put in the bid offer. The financial close will happen in 2029. Many things could happen until then. Extrapolating that the Phase 2 is going to be same as Phase 1 is not the case.

All what we said is that you have to wait until that time in order to understand the numbers and the figures. We cannot say that it's going to be the same of the Phase 1, and you have to wait until then because it's a long period of time, and many things could happen until then.

Cristian Nedelcu: Thank you very much.

Operator: The next question comes from Dario Maglione from BNP Paribas. Your line is now open. Please go ahead.

Dario Maglione: Hi. Good afternoon, and thanks for the many presentations today. I have four questions. The first one is on the I-285 project. How likely is that Ferrovial will get an additional partner for this project, let's say before the road opens? Second question, what happens if you don't find a partner before financial close? Would Ferrovial still sign the contract? Could you walk away from it? Third question, regarding the I-24 payment schedule, it seems the payment is very back-end loaded. Is it reasonable to expect that this fixed concession payment will be less than $200 million once the road opens in 2036, and then rises progressively towards $5 billion, even $10 billion, by the end of the concession?

Last question, regarding the discount rate that you have agreed with the DOT to do the NPV calculation for these concession payments. It's a 5.2% blended average discount rate, if I understand correctly. How did you set this discount rate? Because it seems quite low. Thanks.

Ignacio Madridejos: Okay. Thank you, Dario, about the partners. As commented previously, we have not taken a decision when we are going to incorporate partners, and if they incorporate different periods of time, the pricing will be different. If it is after it starts operations, then, of course, you have the risk, most of it, and you have revenues, and then the value of the road at that time will be much higher. Of course, if you do it after financial close, then you have the risk a lot also, the financial risk that you may have at that point of time. What I say is that we may reduce. We do not know when.

Of course, depending on when we do it, the value will be different, and we will ask for a premium that will be different depending on the timing of the sale of our participation. In case of no partners and that we can walk away, it is independently, so it is not that we need partners in order to reach financial close. We can do it without additional partners, but always we have the option to withdraw, but we do not see that as a priority because we think that this may be a good project for us.

Regarding the I-24, about your assumption, we gave present value numbers, and you can take your assumption with this number and the discount rate. I am sure that you are not going to be very far away, because it is not a big range of difference that you may have. The discount rate is based on TIFIA costs. All what is taken as a reference is the, what is the TIFIA cost for these type of projects.

Dario Maglione: Okay. Thank you.

Operator: The following question comes from Luis Prieto from Kepler Cheuvreux. Your line is now open. Please go ahead.

Luis Prieto: Thanks for taking my follow-up question. Leaving funding firepower aside, from a risk and resource management perspective, is there a limit to the number of U.S. managed lane projects that you can simultaneously develop?

Ignacio Madridejos: I agree with you that the main risk is related to construction and to have the resources to do all these projects at the same time. It is something that we need to see if we are prepared, or we may bring partners in order to develop some of those projects. We will see. For the time being, for these two projects, we can do it ourselves with the capabilities that we have. In others one, if we feel that we may need additional resources, we may partner with others. It is a decision that we need to take later on. Not today.

We feel comfortable with these two managed lanes and also bidding for the I-77 South, where we have experience before in this geography. In this place that we developed previously, the I-77.

Luis Prieto: Okay. Super clear. Thank you.

Operator: The next question comes from Marcin Wojtal from Bank of America. Your line is now open. Please go ahead.

Marcin Wojtal: Thank you for allowing me to follow up. I have two quick ones. On the 407 ETR, the asset, I believe, increased the dividend by about 40% for 2026. Would you say the asset has already reached its optimal capital structure after this dividend hike, or there is more to do on releveraging into 2027? Could you remind us what are the key credit metrics that we should monitor to determine whether there is room for further leverage or not? My second question, going back to the new managed lanes, how should we think about the timing of equity injections into these two very large projects?

Ultimately, is there anything significant that will be actually injected before 2030 as you ramp up construction, or it is very back-end loaded?

Ernesto López Mozo: Thanks, Marcin. This is Ernesto. I will take the 407 question. Probably, the credit metric that matters most for the 407 is the debt service coverage ratio, and that is around 2.6. You can see that there is always room. As I have always mentioned, do not expect big bangs in the 407, but definitely, it is super solid. You have a good angle there.

Ignacio Madridejos: Related, the last question is, most of the cash flows are back-ended, so very limited before 2030, and most of them in 2033, 2034, and even 2035. Long period of time.

Marcin Wojtal: Okay.

Operator: Our last question comes from Nicolas Mora from Morgan Stanley. Your line is now open. Please go ahead.

Nicolas Mora: Good afternoon. Just a couple. Going back a bit on the details of the I-285. I know you do not want to give much on the light vehicle, the light trucks, but at least a ballpark figure, whether the traffic for these guys is actually relevant. Are we talking about 1%, 2% traffic? I do not know, 5%, 10%, 15%? Because this changes a lot the economics, especially with the tariff multiplier. That would be very helpful. Second one, in what scenario do you not get the Phase 2 on I-285? It does not have to be [inaudible], but in which scenario would you basically walk away from what you have promised the GDOT?

Then can you help us understand on the TIFIA front, how you expect, let us say, the extra kickers on mandatory pricing to come in? I think you have got the +3% or the +18%. How realistic is this? How central is it to your bidding? Then the final point on TIFIA. I may be misunderstood, but I thought TIFIA was basically all the infra projects, state level, get into a pot and basically you share the availability of TIFIA on an annual basis. Your two projects here, if they are mostly funded by TIFIA, would require a TIFIA quantum, which is two, three, four, five times greater than what the SR400 did.

I am not entirely sure where you see the capacity of the TIFIA market for your two projects.Most likely I am wrong. Please enlighten me. That would be very helpful.

Ignacio Madridejos: Answering your question, first about the extended vehicles. As we said in the presentation, we see a meaningful presence of extended vehicles, and also we commented, compared to the SR400, that materially higher extended vehicles is possible. It is something that we have seen also in our Dallas managed lanes, that we have tested this, how relevant this could be. I think that could be a relevant thing. As commented previously, is how they are defined and what is the multiplier. Also they are usually business, and they probably behave differently when you talk about time savings.

Phase 2, I think it is going to add also value, and still a long period of time in order to be negotiated and to reach a financial close. We expect that it is going to create value for the company. But of course, at some point of time, we may withdraw, if we think it is not the case. This increase of the mechanism in which you can increase every six months, the soft cap, by 3%, that you can do it, so 6% in total during the year, or if it is related to the speed, that is 18%. As we have commented, what we see in this 25 is that it is today highly congested.

It has been highly congested for the last 10 years. It is a lot of suppressed demand that is not using it because there is not reliability at all. What we see also is the short distance trips in the corridor. As commented, we see a lot of business here, like extended vehicles. We see also high income per capita. I think that all these ingredients, what may happen is that you need, in order to improve the level of service, to apply these things. We expect that it's something that will happen, and that is because it's highly congested.

It's going to be relevant, and it's a mechanism that is going to help us in order to maintain the level of service at the managed lanes. That because of the ingredients that I commented previously, this is highly congested for 8-10 hours. It's four or five hours of peak time. I think it's relevant, the level of congestion, and it could happen that the level of service is going to be not so good in these managed lanes because of the reasons that I explained before.

Ernesto López Mozo: Regarding TIFIA, it's not for us to tell what would be the capacity, the way the contract works, if there's not the amount of TIFIA that we are requiring in the proposal, the grantor has to come up with how to sort out that risk. As I said, it's not for us to discuss the capacity.

Operator: There are no further questions at the conference call at this time. I will now hand it back to Silvia Ruiz at the Ferrovial team. Your line is now open.

Silvia Ruiz: Thank you. I will start reading the questions from the webcast. First question comes from [Dominic Schmidt] from [inaudible]. Given the recent I-24 and I-285 concessional awards, how should we think about the balance sheet between growing cash distributions from your existing infrastructure assets and the equity funding requirements for new projects over the next three to five years? Specifically, how much cash do you expect to remain available for shareholder returns?

Ignacio Madridejos: As commented previously, the equity needed for these two projects is very back-ended. Most of it, the large amounts, 2033, 2034, so it is very long dated. Meanwhile, we will continue getting distribution from the dividends and the cash collected from the business and the regular rotations that we do with mature assets. All this, of course, what we used to do is, we have a 10-year plan. We analyze what is going to be the commitments that we have, what is the expected cash that we are going to get, and based on that, the board every year takes a decision about what is going to be the dividends for shareholders.

Historically, we have given dividends to shareholders, even during COVID, but we want to keep this flexibility depending on how the situation may change in the period of time.

Ernesto López Mozo: Okay.

Silvia Ruiz: Okay, next question comes from Lucas Tomanik from [inaudible]. Following the recent decrease in the company share price, how do you view your buyback strategy? Are you, for example, considering accelerating the repurchase of your shares to take advantage of the price?

Ernesto López Mozo: Okay, you know that we have in place a buyback program. The buyback program complies with all the market abuse regulations. We do not look to the particular execution. It has agreed. There is a bank mandated that has agreed, and if the share is lower, we buy more shares. Definitely, that is taken into account, and there is more buyback, with lower share prices. We are taking advantage of the lower prices, yes.

Silvia Ruiz: I have two questions here from Filipe Leite from CaixaBank BPI. First question, I-24, regarding the payment schedule of the operating period, what is the difference between investment grade created payments discounted at between 5% and 5.5%, and the EUR 0.5 billion outside investment grade rating discounted at 8%?

Ernesto López Mozo: Basically, when we submit the bid, TIFIA funding requires two investment grade ratings for the debt structure. Basically, you there have all the senior payments. That means that the bulk of all these payments are senior, and they are discounted, as Ignacio explained before, with costs that are similar to the TIFIA cost. The outside investment rating means these payments are junior to the rest of the debt payments and these payments to the grantor, and therefore they are small, but they have a higher discount rate, naturally.

Silvia Ruiz: Second question from Filipe as well, do I-24 and the I-285 East have any kind of clause for the early termination of the contracts? If yes, how will the prices be set for these early termination clauses?

Ignacio Madridejos: No. Thank you, Filipe. This is our very standard. It's fair market value, as we have in most of our contracts, so is a clause that is similar and standard in the P3 industry.

Silvia Ruiz: And last question in the webcast comes from Igor Tonin from AlphaValue. On page six, you say the dividend lockup until now runs until the Phase B2 notice to proceed, which has a deadline of June 2033 instead of B1. Ferrovial can't receive $0.01 from JFK until it commits to the second expansion. In what year do you now expect the first distribution from NTO, and is there any time-based fallback if B2 is never launched?

Ernesto López Mozo: No dividends can be distributed until June 2033. You're right, it's in line with the commitment by NTO following the delay of the Phase B1 construction to September 2030. We don't provide guidance on dividends. NTO must issue the notice to proceed for Phase B2 no later than June 2033. There is no fallback. Any modification to this commitment must be discussed and agreed with the Port Authority.

Silvia Ruiz: There's one last question coming in the webcast from Roberto Sánchez from North Rock. When can we expect the new business plan?

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

Silvia Ruiz: Okay. I think there are no further questions.

Ignacio Madridejos: Thank you very much, all of you, for your participation in this results conference call and also the presentation of the I-24 and 25. Again, thank you very much, all of you. Bye.

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