Good morning, everyone. My name is Craig Drummond, and I'm the Chair of the Transurban Group. Welcome to the 2026 Annual General Meetings. This morning, we are holding three meetings concurrently. These are the annual general meetings for Transurban Holdings Limited, Transurban International Limited, and Transurban Holding Trust. We have a quorum, so I declare the meetings open. I'm chairing today's meetings from Melbourne. On behalf of Transurban, we acknowledge the traditional owners of the lands throughout Australia, and we pay our respects to elders, past and present. We acknowledge our roads and infrastructure are built on country. With deep respect, we incorporate the voices of First Nations peoples in our approach, supporting access to mobility across communities.
You can see this in action on the M7 motorway in Western Sydney, where we have partnered with local artists to install 12 artworks, including Frontier Warriors, pictured on the screen, which is dedicated to First Nations service men and women. Before we turn to the formal proceedings, I want to acknowledge the appalling attack that took place on Monday here in Victoria. Our thoughts are with Dr Helen Haines, her family, and her community at this very difficult time. The board and I are pleased to be meeting with security holders in person and online today. As well as providing our security holders with an update on our operations, this AGM also enables board members to hear directly from security holders. For those joining us online, should you experience any technical difficulties during the broadcast, a recording of the meetings will be available on our website later today.
As outlined in the notice of meetings, security holders will have the opportunity to vote and ask questions of the board in real time. To provide everyone with an opportunity to vote, and in case anyone cannot stay for the duration of the meetings, I will now formally open the poll on all resolutions. The notice of meetings has been made available to all of you. With your consent, I'll take that document as read. I'd now like to introduce the directors and our company secretary. On my right are our Company Secretary, Fiona Last, our Chief Executive Officer, Michelle Jablko, and Independent Non-executive Directors Gary Lennon, Patricia Cross, Mark Birrell, Tim Reed, Marina Go, Rob Whitfield, Sarah Ryan, and Michael Wright. As part of the board's active succession activities, Michael Wright was appointed as a non-executive director on November 1, 2025.
The board considers Michael's extensive experience in engineering and major infrastructure project delivery complements the board's existing mix of skills and experience. Michael is standing for election today. In addition, Mark Birrell, Patricia Cross, and Tim Reed are standing for re-election. You'll hear from each of them later in the meeting. This year, we continued to deliver real value for our nearly 12 million customers across Australia and North America. For the board, keeping these drivers safe and offering real value remains our top priority. When we deliver both, customers choose our roads, which in turn generates steady long-term value for you, our security holders. On the road, we made travel safer and more reliable with our incident response teams managing over 1,000 incidents every week. Across all of our roads, customers experienced quicker trips, saving an average of 515,000 hours every day.
Off the road, we continued to make our customer experience simpler and user-friendly. In partnership with Google, we enhanced our Linkt app to help customers plan their journeys, save on fuel, and access personalized rewards. Our Net Promoter Score remains stable at positive 13, demonstrating that our customers trust and value our services. Operating our roads is a privilege we never take for granted, and it is why our strategy is focused on delivering real value for our customers and the community. Michelle will share more on how we put this into practice shortly, including our approach to New South Wales toll reform. Despite macroeconomic headwinds and impacts on fuel availability in March and April, our traffic performance has been resilient. Overall traffic grew 2.2% year-on-year in FY 2026 to an average of 2.6 million daily trips with commercial traffic demonstrating strong underlying resilience, growing 6.6% overall.
North America continued to outperform this year with traffic up 3.5% and revenue increasing by 14%. On our express lanes, drivers are choosing the faster, more reliable trip they provide even outside of peak hours. The dynamic pricing model continues to prove its value, with free cash growing in the U.S. by an average 26% per annum every year since FY 2023. Freight grew in Brisbane and Melbourne by 4.9% and 10.7% respectfully, supported by port container growth in both cities and the opening of the West Gate Tunnel in Melbourne. In Sydney, construction impacts are abating, and we expect traffic to improve further as other new roads open over the next few years. Today, we released our September quarter traffic results with average daily traffic increasing by 3.1% on the same period last year.
This result was supported by growth across all markets, where we are seeing an overall improvement on the June quarter. The macroeconomic environment continues to be a watch point. However, the essential nature of our roads underpins the portfolio's resilience. Let me turn to our key financial results for the year ended June 30, 2026. Our financial performance this year reflects our ongoing strategy to balance disciplined cost management and sustained investment in long-term growth. Proportional total revenue grew by 6.5% to AUD 4.05 billion, supported by, as I said, resilient traffic. Proportional operating EBITDA was up 7.5% to AUD 3.06 billion. EBITDA being earnings before interest, tax, depreciation, and amortization. For the third consecutive year, we demonstrated strong cost discipline, holding underlying cost growth at 0.7%, excluding new assets and well below inflation. We also practically managed our capital, issuing and refinancing AUD 7.8 billion in debt.
This approach has kept our borrowing costs pretty steady, even as interest rates increased, with the average cost of our debt increasing by only 40 basis points over the past six years. Weighted average maturity for group debt remains steady at a comfortable 6.6 years. Free cash increased 5.1% to more than AUD 2 billion, allowing us to deliver a record AUD 2.15 billion in gross distributions to you, our security holders. In line with guidance, our FY 2026 full -year distribution was AUD 0.69 per security, a 6.2% increase on FY 2025, and 98.1% covered by free cash. We work hard to be a good neighbor to the communities around our roads, and this year we invested more than AUD 4.6 million into local partnerships and initiatives. We opened our roads to runners and cyclists supporting charity events in all of our markets.
This included celebrating the 20th anniversary of Run for the Kids, which takes place on CityLink here in Melbourne. Over the last two decades, this event has raised more than AUD 24 million for the Royal Children's Hospital Good Friday Appeal. Our longstanding commitment to road safety continued this year. To recognize National Road Safety Week, more than 3,000 child car seats were checked by Kidsafe experts at events in Brisbane, Sydney, and Melbourne. We also hosted a global roundtable uniting police leaders from Australia and the U.S. The group exchanged ideas to help solve universal challenges such as speeding and distracted driving. Our roads continue to perform well against all relevant Australian and international safety standards. We continued to work diligently towards our sustainability goals, achieving a 14% year-on-year reduction in Scope 1 and 2 emissions in FY 2026.
We also transitioned our climate reporting to align with emerging Australian sustainability reporting standards, which you can find in our corporate report. Looking ahead, our strong foundation, financial discipline, and continued focus on customers mean we are well-placed to deliver sustainable growth over the long term. We have opened more than AUD 12 billion worth of projects this year. We look to grow our project pipeline, including potential new opportunities, including the I-24 in Tennessee and bidirectional expansion of our 95 Express Lanes in Greater Washington area, and they are continuing to progress. There is work ahead, however, to finalize both, but these milestones demonstrate disciplined growth in regions where drivers need reliable travel choices. Michelle will share more about our projects and the opportunities ahead.
On the back of traffic results for the September quarter, the board today reaffirms our FY 2027 distribution guidance of AUD 0.72 per security, which would represent 4.3% growth on FY 2026. As we disclosed in our full-year result, we expect free cash coverage for the distribution to be slightly below our targeted 95%-105% range. This is not a change to our overall distribution approach, but a prudent step for the coming year. We anticipate FY 2027 will be a transitional year as we adjust to the M5 West ownership changes. Beyond FY 2027, we expect growth to be supported by the progressive ramp-up of new capacity across Sydney's road network as construction impacts on major government projects continue to ease. We are also benefiting from the actions taken over a number of years to improve business performance.
Continued productivity and efficiency gains are creating capacity to reinvest in our customers and support long-term distribution growth. Combined with our strong fundamentals, this gives us confidence in the outlook. Before I conclude, I would like to recognize Michelle, the executive team, and the broader Transurban team for their hard work this year. On behalf of the board, I would like to thank you, our security holders, for your continued and ongoing support. Before you hear from Michelle, here is a brief look at what it takes to keep our roads safe and reliable every day.
[Presentation]
Thank you, Craig, and good morning, everyone. As you've just seen in the video, our incident response and traffic control room teams work around the clock in all conditions to keep our customers safe. I'm incredibly proud to represent them here today. The past year has been one of important milestones. We delivered what we promised. We opened three major projects to traffic. We reached an agreement on toll reform in New South Wales. We grew your distributions by 6% in line with our guidance, unlocking more from our existing assets, demonstrating resilience in a more uncertain macro context. We made significant progress on building a fresh pipeline of growth opportunities. Delivering value, choice, and transparency for our nearly 12 million customers is central to our strategy of creating long-term value and growth for you, our security holders.
Demonstrating that private capital has a positive part to play in keeping our cities moving. A great example of this is the approach we took with New South Wales toll reform. We supported the New South Wales Government to reach a solution that is a genuine win for motorists, a win for the state, and is enabling a proposed new road widening, all while protecting the value of your investment. The proposed solution includes a range of measures that deliver meaningful cost-of-living relief for drivers. Some of these improvements are already in place, like switching off late fees and moving to digital toll notices. We have demonstrated that we can work constructively with governments to improve customer outcomes, and that is the broader lesson from toll reform. When industry and government work together with a shared focus on customers and where contracts are respected, we can deliver better outcomes for all parties.
This year, we also updated our Linkt app with personalized tools to help motorists choose the smartest route and find cheaper fuel. Our Linkt Rewards program in Australia continues to grow, with more than 2 million members. Rewards included practical cost-of-living relief initiatives, like our fuel savings campaign, which saw 47,000 customers save around AUD 13 on average at the bowser in August. The second round of this campaign is live right now for eligible customers to use in November. We are also delivering tangible and measurable benefits for our freight customers. A truck driver using WestConnex saves roughly 17 L of diesel, or around AUD 41 on every trip. That fuel saving alone pays for the toll, and that is before you count the value of their time saving.
They are also bypassing 49 sets of traffic lights, reducing stop-start wear and tear on their trucks, delivering tangible economic value for our customers and the community. We have delivered three major projects this year, saving drivers an additional 40,000 hours every workday. The Northern Extension project on the 495 is delivering faster, more reliable journeys in the Greater Washington area. In Australia, the M7-M12 Integration Project is already making it easier for freight heading to the new Western Sydney Airport. Customers have taken to the M7 and the 495 quickly, with traffic up more than 10% and 16% respectively. Truck volumes on the West Gate Tunnel project are also responding to the strong value proposition, and importantly, there are 90% fewer large trucks on local streets.
The broader ramp-up profile is taking longer, in line with overall Melbourne traffic trends. The fundamentals remain solid, with population growth in Melbourne's west well-placed to support the project over the longer term. Looking ahead, I am very excited about the potential opportunities we have in front of us. Over the next 20 years, almost half of our cities' populations are expected to live within 5 km of our roads. In June, we announced plans to explore a major expansion of the 495 Express Lanes. We also recently announced the opportunity to move into a new U.S. market with the I-24 in Nashville, Tennessee. The project is anticipated to be the largest public to private partnership in the state's history and one of the largest in the U.S. In Brisbane, the Logan West Upgrade project, sorry, marked an important milestone with the reference design released in September.
Once complete, it is expected to improve travel times by up to 20 minutes in peak hour. In recent weeks, we agreed to acquire one of our partner's interests in NorthConnex, the M7, and WestConnex, subject to regulatory and other approvals. Sydney is a core market for us, and we continue to work closely with the New South Wales Government so that our roads support the state's long-term transport and economic goals. Our disciplined approach to capital allocation and balance sheet management has allowed us to directly fund growth opportunities like this one. We may see some further changes in the composition of investors in WestConnex as one of our other partners is considering a sale. Our North American business continues to deliver outstanding results, with earnings up 83% over the past three years as more drivers choose our express lanes. We continue to see attractive opportunities to invest further in North America.
To ensure that we're positioned to deliver on our growth ambitions, we're working actively with our existing investment partners as well as potential new partners, and we may see a change in the composition of Transurban Chesapeake investors, too. Our future growth is enhanced by our digital capabilities. We continue to invest and innovate for the future. Building on our decade of road user charging research and advocacy, we're actively monitoring and playing our part in policy discussions in Australia, the U.S., and New Zealand. In New Zealand, we participated in their market sounding process to help explore what a modern customer-focused system could look like. In Australia, we've commenced a heavy vehicle road user charging trial. With more than 2,000 heavy vehicles participating, we're testing real-world technology to understand how we can make their customer experience better and more efficient.
Our goal is to work with governments to make sure that any new system is simple and seamless for motorists. The opportunity ahead is significant, and our approach remains disciplined and customer-focused. As Craig has touched on, we've had three years now of below-inflation cost growth, and we've guided to a fourth. Over this period, cost growth has averaged just 1.9% per year, including new assets. Active debt and portfolio management, such as divesting the A25 in Montreal, underpins the solid position of our balance sheet. With a well-managed hedging and maturity profile, our financial position continues to support our development pipeline. We enter FY 2027 as a focused, more agile organization that is ready to scale efficiently as we take on new growth opportunities. Our strong fundamentals and the work we're doing support our confidence.
To close, I'd like to thank my fellow board members and my executive committee colleagues for all that we've achieved. I would also like to thank the whole Transurban team across Australia and North America. Delivering major projects while running safe, dependable roads every day is a tremendous operational feat, and it is a credit to all of our people. To our security holders, thank you for your ongoing investment and support. We are committed to delivering long-term and sustainable value for both our customers and security holders, and we look forward to another successful year. Thank you.
Thank you, Michelle. Transcripts of my address and that of the CEO are available on the Transurban website and on the ASX. Before we move to the formalities, I will begin by outlining the procedures for today's meetings. These are security holder meetings. As in past years, only security holders, their attorneys, proxies, and corporate representatives are permitted to vote and ask questions. With the hybrid meeting format, there are three ways questions may be asked. For those attending in person, you may ask a question if you hold a blue or red card. When I invite questions later in the meeting, please make your way to a fixed microphone point and provide your name to the microphone attendant. If you are unable to make your way to the microphone, please raise your hand and we will bring a roving microphone to you.
We will take questions following the introduction of all items of business. For those attending online, you may submit written questions through the online platform by clicking on the Q&A icon and following the prompts. Written questions can be submitted at any time. To help with the smooth running of the meetings, we ask online participants to submit your questions now. If you are attending online and wish to ask a question verbally, you will need to follow the instructions below the broadcast window. We recommend that you wait until the question time begins before connecting to the audio line to minimize the time queuing to ask your question. Questions, which may be moderated, grouped, or summarized, will come through to me as chair of the meetings, and I will either answer it myself or I will pass it on to the most appropriate person to answer that question.
If a security holder has a question that relates to online meeting technology, please contact the helpline detailed in your AGM online participation guide published on our website. To enable all security holders a reasonable opportunity to ask questions, you are requested to ask no more than two questions at a time. Please keep your questions short and to the point so that as many people as possible have the opportunity to ask a question. Please ensure your question is relevant to the security holders as a whole. If you are an eligible security holder, a representative or attorney of an eligible security holder, or a proxy for an eligible security holder, you are entitled to vote. For those attending the meetings in person, at registration you should have received and been issued with a blue admission card and a voting card.
Sorry, a blue admission voting card, one and the same. If you are representing or are a proxy for more than one security holder, you will have been provided with a separate admission and voting card for each separate capacity in which you are attending the meetings. Relevant voting instructions are printed on the reverse of your blue card. When you complete your card, please indicate the manner in which the votes are to be cast by placing a mark in the for, against, or abstain box for each resolution. If you have difficulty in completing your voting card, please raise your hand and a representative from Computershare will assist you. You do not need to put the percentage or number of votes you are voting unless you wish to do so.
Before placing your voting card in the collection box, please ensure that you print your name on the bottom of the card. At the conclusion of the meetings, please place your voting card in one of the collection boxes located near the exit. If you are attending the meetings online and you are eligible to vote, a vote icon will appear on your screen. Selecting this icon will bring up the list of resolutions and present you with voting options. To cast your vote, simply select one of the options for, against, or abstain for each resolution. A tick will appear to confirm receipt of your vote. You can change your vote at any time until a poll is closed by selecting click here to change your vote. Proxy holders are reminded that you must vote in accordance with the proxy holder's directions.
Any directed proxies that are not voted at the meeting will automatically default to the chair of the meetings, and as chair, I am required to vote those proxies as directed. All proxies that are open and available to the chair of the meetings will be voted in favor of all the resolutions. Again, if you require any assistance, please contact our securities registry Computershare Investor Services. Doris Grave of Computershare will act as returning officer, and I appoint Ewan Barron of PwC, the group's independent external auditor, to be the scrutineer for all resolutions. The results of today's meetings will be announced following the meetings on the ASX and on Transurban's website. I'll now turn to the formal items of business at today's meeting. The notice of meetings set out information regarding items for consideration at today's meetings.
I'll introduce each item of business separately and then invite questions on all items of business together after all items have been introduced. We have four items of business today. Items 2 to 4 include resolutions that require a vote. Item 1 is the receipt and consideration of the financial report, the sustainability report, directors' report, and the auditor's report contained in the Transurban corporate report for the year ended June 30, 2026. The corporate report was provided to security holders in accordance with their communication preferences and is also available on Transurban's website. There is no need to pass a resolution on this item. However, security holders and proxy holders are welcome to ask questions in relation to the financial and other reports and the overall activities of the group. As previously mentioned, we'll take questions following the introduction of all items of business.
Security holders and proxy holders will also be given a reasonable opportunity to ask Ewan Barron of PwC questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted in preparing the financial statements, the policies adopted in relation to the preparation of any sustainability reports Transurban Group is required to prepare, and the auditor's independence. All questions to the auditor should, in the first instance, be addressed to me as chair, and if appropriate, I'll ask Mr. Barron to address the meetings. Item 2 of business on the agenda concerns the election and re-election of directors. Michael Wright was appointed as an independent non-executive director in November 2025. Michael is currently a member of the nominations committee.
Michael brings more than 30 years of experience in major project delivery and executive leadership across mining, infrastructure, energy, environment, utilities, and telecommunications, together with a focus on sustainability and innovation. A copy of Michael's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Michael Wright offers himself for election. I reconfirm the board's view that Michael's extensive experience in engineering and major infrastructure project delivery is highly regarded by the board. In recommending his election, the board notes Michael's contributions as a valued member of the nominations committee. The directors other than Michael unanimously recommend his election, and I will now ask Michael to address the meetings.
Thank you. Longest walk of today. Welcome, everyone attending today. It has been a real privilege for me to serve on the Transurban Board since I joined on 1st of November last year. Today, I am pleased to offer myself for the election and respectfully ask for your support. As Craig highlighted, I have a career spanning more than 30 years in project delivery and executive leadership across a broad range of industries. I believe my experience is directly relevant to Transurban and complements the diversity of skills, capabilities, and experiences of the current Transurban Board. As a civil engineer with a bachelor and master's of engineering, my career is centered on delivering and operating complex projects in global contracting environments with a focus on commercial outcomes, safety, sustainability, and innovation. I am currently Executive Chair and CEO of the Thiess Group, a global mining services provider.
Prior to that, I served as the Chief Executive Officer of then ASX-listed CIMIC Group, where I oversaw businesses including CPB Contractors, UGL, Leighton Asia, and Pacific Partnerships. I have also served as non-exec director on the then ASX-listed Adbri Board. Between all of my roles, they have given me perspectives from executive leadership and listed company governance that I believe are directly relevant to Transurban. Experience with the complexities of major infrastructure and contracting more broadly, understanding delivery, safety, operational and enterprise risk, and taking a long-term view of asset investment, operations, and performance. I recognize the responsibility that comes with serving on your board, and I am committed to give the time, preparation, and constructive engagement to do so. If elected, my priority will be to help Transurban deliver sustainable long-term value through disciplined investment, reliable operations, and strong governance.
I therefore ask for your support and would be honored to continue serving on your board. Thank you.
Thank you, Michael. I will now move to the proposed re-election of Mark Birrell as a non-executive director. Mark was appointed as an independent non-executive director in May of 2018. Mark is currently a member of the Audit and Risk Committee and the Nominations Committee. Mark is a director with deep industry experience in the fields of infrastructure and transport, including roles as founding Chair of Infrastructure Partnerships Australia, the nation's peak industry body, and Chair of Infrastructure Australia, the statutory authority advising the federal government. A copy of Mark's bio is set out in the notice of meetings. in accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Mark offers himself for re-election. Mark intends to serve part of a further term to complete his nine-year tenure.
It is acknowledged that in 2023, Mark voluntarily offered himself for re-election a year earlier in order for Transurban's directors' rotations to be appropriately balanced in the years to follow. The board has also determined that it is appropriate for Mark to serve part of a further term to facilitate coordinated board succession planning. I reconfirm the board's view that Mark's extensive infrastructure and transport industry knowledge continues to be highly regarded by the board. In recommending his re-election, the board notes Mark's valuable contributions as a member of the Audit and Risk Committee and the Nomination Committee. The directors other than Mark unanimously recommend his re-election. I will now ask Mark to address the meetings.
Well, thank you, Chair. Good morning, everyone. It is my pleasure to offer myself for re-election to your board. I confirm that I will be able to commit the time and energy to this important role, and as the Chair indicated, as part of our orderly transition plan, I anticipate that 2027 will be my final year in this role. I believe there are three reasons to serve on the board of an ASX company. First, you are attracted to the company's vision and you share its values. Second, you respect the Chair and the CEO, and you want to work closely with them and other board members. And third, perhaps most importantly, you believe you can add value to the business over both the short and long term. It has been my fortune to have found all of these attributes at Transurban.
This great Australian company is a globally respected road transport owner and operator. It is focused on delivering positive generational investments in infrastructure across cities in Australia and the United States of America. And I can attest to the fact that Transurban is purpose-driven, innovative, and determined to meet the needs of its many customers and its stakeholders. It has been a pleasure over the last eight years to draw on my transport and infrastructure experience in the private and public sectors to assist the company's strategic planning and operational outlook. My earlier roles as Chairman of Australia's largest port, the Port of Melbourne, and as Deputy Chair of the great logistics company Australia Post, have been relevant to my work at Transurban.
My experience in public policy as a legal practitioner in the fields of major projects and urban development has helped me appreciate the complex environment that Transurban works in. Having had long tenure on this board, I want to offer a personal observation about the company's excellent management team and how it brings a sustainable and future-focused approach to this business. I'll call out one recent symbolic example of management's long-term strategy and ambition bearing fruit, in this case, in the United States, with a substantial expansion of Transurban's express lanes network in the U.S. state of Virginia. in June this year, Transurban signed an agreement with the Virginia Department of Transportation, VDOT, for an expanded 45 mi project, one which will enable 24/7 bidirectional travel along the entirety of the 95 Express Lanes in that growing state.
The sheer scale and practical benefits of these new works in the American market will be admired by our road users and local communities and will be a win for you as security holders. Our U.S.A. business is growing substantially, and it is long-term investments like this one that make it a pleasure to be involved in the work of Transurban. It would therefore be an honor to represent you once again as an independent board member. Thank you.
Thank you, Mark. I now move to the proposed re-election of Patricia Cross as a non-executive director. Patricia was appointed as an ndependent non-executive director in July of 2021. She's Chair of the Remuneration, People and Culture Committee and a member of the Nominations Committee. Patricia has extensive international experience as both an executive and a non-executive director across a wide range of financial services and other industries. She has expertise in capital markets, risk management, corporate governance, treasury, and international affairs. A copy of Patricia's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Patricia offers herself for re-election. I confirm the board's view that Patricia's extensive expertise in international capital markets, risk management, and treasury continues to be highly regarded by the board.
In recommending her re-election, the board recognizes Patricia's contributions as an experienced director and her valued contributions of Chair of the Remuneration, People and Culture Committee and a member of the Nominations Committee. The directors other than Patricia unanimously recommend her re-election. I'll now ask Patricia to address the meetings.
Thank you, Chair, and good morning to everyone here. It has truly been a privilege to serve on the Transurban Board over the last five years, and I am very pleased to stand for re-election today. I will not repeat the detail of my experience, which is set out in the notice of the meeting. Instead, I would like to say that I remain strongly committed to Transurban, to the company's ongoing growth, and to the very important role that it plays in the communities in which we operate. One of the great satisfactions of serving on this board is seeing how our individual skills and experience, in my case, particularly in international banking and investment, come together to create a much stronger collective whole. The fiscal year of 2026 was a strong year of operational execution and significant progress across the business.
As directors, our responsibility is to ensure that performance is sustainable, that we continue to invest for the long term, that we manage risk well, and that we create value for our security holders and other stakeholders as well, of course. My colleagues and I take those responsibilities very seriously, knowing that we are ultimately the representatives of our security holders. I have a particular responsibility as Chair of the Remuneration, People and Culture Committee, and over the past few years, we have worked through significant leadership and organizational change while maintaining a strong focus on the capability, culture, and leadership that the business needs for its next phase of growth. We have also continued to refine the remuneration framework so that executive reward is closely aligned with performance and security holder outcomes while maintaining our focus on attracting and retaining outstanding people.
If re-elected, I will continue to bring my experience, judgment, and energy to the board and to work with my fellow directors in the long-term interests of Transurban and its security holders. I would be very grateful for your support, and thank you.
Thank you, Patricia. I will now move to the proposed re-election of Tim Reed as non-executive director. Tim was appointed as an independent non-executive director in November of 2020. Tim is currently a member of the Remuneration, People and Culture Committee and the Nominations Committee. Tim has over 30 years' experience in technology, marketing strategy, and business development, gained from various roles held in Asia, Europe, the U.S., and Australia. A copy of Tim's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Tim offers himself for re-election. I reconfirm the board's view that Tim continues to bring deep experience and expertise in technology, marketing, strategy, and business development. His insights and expertise, particularly in technology and digital innovation, are highly regarded by the board.
In recommending his re-election, the board notes Tim Reed's contributions as a valued member of the Remuneration, People and Culture Committee and the Nominations Committee. The directors, other than Tim Reed, unanimously recommend his re-election. I will now ask Tim Reed to address the meetings.
Well, thank you, Craig Drummond, and good morning, everyone. It is a privilege to be joining you here today. I have had the pleasure of being part of the Transurban board for the past six years, and I remain impressed by the professionalism and the passion that my fellow directors, that Michelle and her executive team, and indeed that every team member at Transurban brings to this great business. Transurban plays a critical role in connecting our communities. We are part of the fabric that links everyday life. We allow people to travel faster, more safely, with less environmental impact than they otherwise may be able to do. Importantly, we also free up critical government funds such that they can be invested in other parts of our community.
The board, the executive team, and certainly I know that we only have a license to operate so long as we maintain this focus on improving the outcomes for the communities that we serve. As a director, I am part of a team. I believe I bring some unique experiences that complement the views and perspectives of the other directors and executives at Transurban. I have a number of years' experience serving as an ASX CEO. I have executive and non-executive experience across a number of data, digital, and technology businesses. Through my time leading the Business Council of Australia, I have direct involvement working with both elected officials and the public sector.
As Transurban's business model continues to evolve into one where customer insights, where data, where digital technology, and marrying those technologies with our physical infrastructure becomes more important, I believe that the experiences and the views that I can bring to Transurban, to its strategy and operations, remain something of value to the business. In closing, I am excited to be here today. I believe in the importance of the work that the Transurban team does every day, and it is fair to say that I am more optimistic and more excited about the future of this business than I have been at any point in my six years with the company.
I confirm that I have the time and capacity to continue to be able to serve as a member of the Transurban Board, and with your support and given the opportunity, I look forward to continuing to serve this business with pride. Thank you.
Thank you, Tim. I would like to remind attendees that we will take questions following the introduction of the remaining items of business. Item 3 of business on the agenda is the adoption of the remuneration report of Transurban Holdings Limited and Transurban International Limited for the financial year ended June 30, 2026. Voting on the resolution in this item of business is advisory only. Transurban's remuneration strategy is designed to enable and drive our business strategy and sustainable long-term growth. The report aims to provide you with an understanding of the links between Transurban's strategy, its performance, and executive remuneration, as well as the framework we have in place to ensure effective governance of remuneration matters. The report also details the FY 2026 remuneration arrangements and outcomes for our directors and our senior executives.
In determining the remuneration outcomes for FY 2026, the board assessed Transurban's performance in terms of the financial and non-financial measures set out in the group performance scorecard and took into consideration the alignment with securityholder experiences. The group FY 2026 short-term incentive outcome was 96% of target. There was a year-on-year increase in proportional operating EBITDA of 7.5% and distribution growth of 6.2%, aligning STI outcomes with the experience of securityholders. Management have also continued to balance disciplined cost management with sustained investment in long-term growth. In determining the STI outcomes of the CEO and key executive management, the board considered both individual performance and all factors that have contributed to the overall group result. The board considers the resulting STI outcomes to be aligned with the experience and expectation of securityholders. I will now turn to the final items of business.
Item 4 on the agenda is to propose approval of the proposed grants of deferred securities and performance awards to the CEO and Managing Director, Michelle Jablko, under the Transurban Group's deferred short-term incentive plan and long-term incentive plan. The terms of the proposed grants are set out in explanatory notes in the notice of meetings. If securityholder approval is obtained, two grants of equity will be made to Michelle. The first grant represents 50% of Michelle's FY 2026 short-term incentive of approximately AUD 1.14 million. This amount will be deferred into Transurban stapled securities, which will vest if Michelle remains employed with Transurban for a period of two years. This creates a strong retention proposition for the CEO and ensures that half of her STI award remains subject to Transurban's security price, which is intended to support increased alignment between the CEO and security holders.
The second grant consists of performance awards, which will be granted to Michelle as the long-term incentive portion of her FY 2027 remuneration package. Each performance award entitles her to one ordinary, fully paid Transurban stapled security at the end of the four-year performance period, subject to the satisfaction of two equally weighted performance measures. The first measure is relative total shareholder return measured against a bespoke comparator group, and the second measure is free cash flow per security, which reflects the Transurban Group's focus on maximizing free cash to drive security holder return. Approval is being sought to grant a total number of performance awards to the CEO, not exceeding 214,792. In a moment, I will invite questions on all items of business, but before I do, details of the proxies received for each item of business are being shown on the screen.
We encouraged security holders to submit questions in advance of the meeting. We will now address questions received from security holders prior to the meetings before turning to questions in the room and then online. If you have a question, please make your way to a microphone now. Fiona, please read the first question.
Chair, we received the following question from Mr. [Angelos Kinos]. Specifically, in all forms of payment, how much has each incumbent director received in their past year?
Sorry, I missed that question.
It is asking for each director's remuneration amount.
Oh, sorry. Thank you. The question was asking for each director's remuneration. Sir, I can refer you to page 110 of the corporate report, which is the remuneration report. On page 110, every individual director's remuneration is listed. To be clear, standard non-executive director remuneration is AUD 238,000, and the Chair is paid AUD 705,000. Any other questions, Fiona?
Yes, Chair. Chair, we received the following question from Mr. [Alistair Kinloch]. As a longstanding shareholder and frequent user of the M7, I am appalled by the dangerous amount of litter and debris on the road, which is a poor reflection on our company and exposes us to litigation and reputational risk. Could you please advise what action the board is taking to address this critically important issue, not only to fix it in the short term, but also to implement a long-term strategy to ensure our roads are safe?
Thank you for the question, and it is a very relevant one. We have been doing a lot of work on the M7 and the M7-M12 interchange. We were alerted to this and management has quickly followed up now that the project has been opened. There has been an accumulation of rubbish and waste that has not been able to be safely collected previously because of the activity. That has now been actioned and management is appreciative of the question, and we have actioned that quickly. Thank you. Fiona, any other pre-submitted questions?
No, Chair.
Thank you. We will go to the room.
Chair, I have a question from Stewart Burn from the Australian Shareholders' Association.
Thank you for the presentation, Mr. Chairman. The Australian Shareholders' Association has a policy that all directors should have at least one year's director's fees in shareholdings. At the current moment, two directors, Gary Lennon and Sarah Ryan, do not have a shareholding equal to one year's of their fees. Could you please comment on the policy? We believe Transurban has the same policy.
Thank you, Stewart. Thank you for the question. I confirm that Gary Lennon has 15,000 shares, Sarah Ryan has 8,000 shares, and they are currently modestly below their director fees. Transurban has a policy to encourage all directors to acquire shares that, at a minimum, are representative of the fees that they are paid. Directors have a period of up to five years to accumulate those positions. That is the current policy, and it is one that we do discuss from time to time. But currently, all directors still sitting, given that both Sarah and Gary are relatively new directors, they sit within that policy.
Okay, thank you. I have a second question. I would like to thank the CEO for giving details of the implications of the toll position in New South Wales. Could you give us some more details of that? She didn't give a great amount of detail about the financial implications and also the potential for the same situation occurring in Victoria.
Good question, and I will pass straight to Michelle. Thank you.
Thank you. Appreciate the question. In terms of the impact on security holders, I think I made the comment that we protected the value of the investment for security holders. That means that there was no valuation impact of it, and no negative impact to distributions as a result. Essentially what happened was there were some toll price changes, there were adjustments made with government. In some, we paid the government because there was benefits of traffic increases. In others, there was equalization payments that went the other way, and it netted out to zero. Then Victoria.
Yes.
That's another very good question. I think what New South Wales has shown is that by the government making some statements very early on that contracts were binding and they respected the value of contracts, and by the way we approached it, which was to lean in and collectively work with the government to find answers that supported motorists and the government's objectives, we were able to deliver an outcome that worked for everybody. The same is true in Victoria, so I think there is opportunity in Victoria. For example, one of the opportunities in New South Wales was to digitize the way toll notices worked. I think that same opportunity could exist here in Victoria, for example. It will be a matter of what the government's priorities are. But if it is on the government's priority list, we will sit at the table and work with them in the same way.
Okay. Thank you very much.
Yeah.
Thank you, Stewart. Question two.
Introducing Mr. [Ian Charlton].
Good morning. I intend to follow the ASA's directions on voting as well, noting that director skills will become important in our consideration going forward. I have become increasingly concerned about Transurban's reliance on its monopoly position when our social license is beginning to be questioned. I note Michelle spent some time at my former employer, ANZ, and she will be aware that actual legal rights were eroded by the tide of public opinion, which demanded a more sympathetic approach to borrowers, particularly rural ones. It might be that the current political tide is seemingly embracing the notion of subsidies for frequent toll users, and I note that that hasn't got a mention here so far in this meeting. My personal experience with Transurban is less than ideal. I was threatened with legal proceedings after having a credit of AUD 70 in my Linkt account.
Your representatives were able to track down my usage by my number plate, but they weren't able to match it with my account and caused a fair bit of distress on my behalf. I could quote chapter and verse about it all, but I won't bore everybody with that. The long and the short of it all was that apparently my e-TAG was over 10 years old and was no longer being registered, and so they just went ahead and threatened me with this action. To add my frustration, I still haven't been able to get anybody from Linkt to give me a detailed account of what my road usage was in the period where my e-TAG wasn't using.
Instead, they just simply credited off the road use against my balance without any details of what the actual travel was and whether I'd actually been charged any fees for not having an e-TAG, which apparently is one of the cases. I respectfully ask for review of the customer standards. I don't believe what happened to me was reasonable, and will make it difficult for Transurban to have its social license in the future. Hopefully, there'll be some directors who will do some work on recalling e-TAGs that are over 10 years old that may no longer function. Hopefully, the directors will work towards ensuring that Transurban is well-regarded in the future, as well as being profitable.
Mr. [Charlton], look, I appreciate your question. I'm sorry that you've had that experience. What we will do, and we will definitely follow this up. Firstly, we have a Linkt representation outside this meeting, so that's the first port of call. Secondly, Michelle, we will be in contact with Mr. [Charlton], and we will forensically go through your situation because what I can say is social license is critically important to the board, to the executive, and to this company. We've taken this incredibly seriously. We have worked extremely collaboratively with all of our key stakeholders. We have put customer, this board, as does management, puts customer absolutely front and center. So when we hear of experiences like this, we want to understand what may have gone wrong because we do many, many, many millions of transactions.
That's not an excuse, but occasionally things do go wrong, and it's in our response. How do we respond? How do we correct those. We'll take your issue very seriously and take it on notice, and I appreciate you raising it today.
And Chair, I would like to echo those sentiments as well. Focusing on our customers and serving our customers, getting it right for our customers and providing value is absolutely at the core of our strategy. I apologize with the experience you have had, and we are happy to work that through with you.
I suppose the only other thing I would say, we do survey very regularly a large proportion of our customer base. As I indicated earlier, the Net Promoter Score that we have is +13. It does not mean we are doing everything right. We are clearly not. What I would say is that the customer experience generally at the moment has been better than it has been historically. We have clearly got more work to do. Yes. Thank you. Back to one.
Chair, I have a question from [Bruce Cormack].
Mr. [Cormack].
Thank you, Mr. Chair. I do appreciate the opportunity to speak. I enjoyed listening to the talk about the development of cars and transport around the world, effectively. My issue today is to do with cyclists. The veloway. I have had contact in the last 24 hours from two of your staff, bringing me up to date with what has been happening. When it opened nearly 12 months ago, I rode on it in the first week and decided not to ride on it again. It was so extraordinarily rough. The expansion joints made it dangerous, and I could not believe that this had been developed without any consideration to the actual surface of the veloway.
Just to inform you, I am sure there are some cyclists here on your executive or on the board, but we very seldom have suspension on bikes, and we do run our tires at between 50 psi and 120 psi. So we do like a smooth surface. I got my experience on riding on a suspended bikeway on the Gardiners Creek Trail in Melbourne, opposite St Kevin's. It is only 700 m long, but it is one of the best tracks in Melbourne. It is very smooth. Now, I do appreciate that there has been work being done on the veloway over the last 8 - 10 months. I rode on it 10 days ago and there are still about 10 expansion joints that shake your teeth out. We would really like to see it fixed. It has been quite a while.
I would invite any of the board or senior executives to please ride on the Gardiners Creek Trail to see what our standards are. I ask you to invite any of your senior staff to do so. Wondering where we're at now and hopefully we can get it fixed soon.
Mr. [Cormack], I have been briefed on this situation, as you would expect. I do appreciate you raising the issue because feedback like this, I'm not a cyclist, so feedback is helpful. My strong understanding is that, over the last couple of months, one particular expansion joint has been remediated. One expansion joint was remediated, and that trial to see whether that remediation was going to work and be successful has gone well. Now my understanding is in the month of November, all of the other expansion joints will be remediated. My expectation is that not too far down the track, you'll have a veloway, the Dixon Veloway, that will be acceptable for you and your colleagues.
Right. I will look forward to that. There were at least 10 exposed a week ago.
Yep.
Prior to that, there was 30, 40, or 50 of them, so we will appreciate.
I think we're getting into a much better place on that.
Thank you for your time.
Thank you. Any other questions in the room? Fiona, are there any questions from security holders attending the meetings online?
Thank you, Chair. I have a question from Mr. Stephen Mayne. There has been a lot of media about biker gangs infiltrating Victorian government Big Build projects. Our massively delayed and over-budget West Gate Tunnel project was partially government-funded. How are our systems, processes, and policies different from state government Big Build projects in order to minimize corruption and criminal infiltration? Do we have oversight and insight on the terms and conditions of any project agreements our contractors make with the CFMEU? Were the Chair and CEO surprised by the scale of the revelations by journalist Nick McKenzie about Big Build corruption, and did it lead to us making any changes to our approach?
Steven, as you would expect. Thank you for the question, firstly. As you would expect, there is an active royal commission going on, so I am not going to be making any specific or indeed related comments to that. The only thing I will say is that at Transurban, we are very happy and keen and will be very supportive of any request made on us to provide time or documents.
Maybe, Chair, just to add, we take governance very, very seriously. We have very high expectations of the contractors that do the work on these projects, and we engage with them very regularly to remind them of that.
Thanks, Michelle. Fiona.
Chair, we have another question from Mr. Stephen Mayne. What is our current understanding of the tolling approach that will be used on the state government's AUD 26 billion North East Link project, which when it opens in a couple of years, are they looking to use any of our technology and systems, or does it look like they are trying to build their own system? Also, with a change of government likely in Victoria, please summarize the known policy positions of Liberal, National, and One Nation parties when it comes to dealing with Transurban and honoring our contracts. Is there any risk of a New South Wales-style attempt to renegotiate contracts, especially under the recent policy auction on New South Wales-style toll caps?
Steven, a lot of questions in that particular question, but I am going to pass to Michelle on the detail. The one thing I would say is we are very keen to continue to collaborate and work with all state governments, not just Victoria, and specifically on North East Link, we cannot comment. We are not involved at all in that project. That is a state government project. So, it is not for us to pass any comment. But Michelle, did you want to add anything operational?
Thank you, Chair. Yes. So on North East Link, that is a matter for the government and their choices. In relation to policies coming into the Victorian election, there have been some policy announcements around caps on tolls and on public transport, which we have announced with our traffic release today that we do not expect to have any material impact on us. And certainly, the experience in New South Wales has been to that effect as well. As I mentioned in response to the earlier question, if there is a desire to work with the private sector to look at modernizing concessions for the benefit of motorists and that is done in a way where contracts are respected, we are very much happy to do that and so far both sides of government that have spoken about this have been strong that contracts would be respected.
Fiona, any other questions?
Yes, Chair. We have a question from Mrs. [Belkova]. Please update the progress on the M6 project and whether all elements are on track for delivery by 2029.
As much as I'd love to, it's not our project. That's actually a state government project, so I won't pass comment on that, but thank you for the question.
Chair, we have another question from Mr. Stephen Mayne. At the 2022 AFIC AGM, Craig Drummond, who was then just an AFIC director and not chair, said that being President of Geelong Football Club only took up one day a week of his time and AFIC and Transurban were his only other board gigs. Since then, he's become Chair of the Sir Ian Potter Foundation, Chair of AFIC, joined the Ramsay Health Care Board, and taken over as President of the AFL in March this year. How many days a week has the AFL presidency taken up over the past six months? Could the directors up for election today please comment on whether the Transurban Board has had a specific discussion about these over-boarding concerns?
The chair's preferred metric on over-boarding attending all scheduled meetings doesn't mean he has time to read the papers comprehensively, have informal discussions, tour facilities, and the like, yet he claims to play golf once a week. How often does the chair engage with our CEO, and does he attend all Transurban committee meetings? Is chairing Transurban his biggest and most time-consuming gig?
Steven, thanks for the question, and it's a similar question to the one you asked me at AFIC this year, which I responded, look, I've come off a public company executive role as CEO, and I'm used to and I want to work hard. When I look at my current commitments, I do have time for my family. I have attended every Transurban Board meeting, every Transurban committee meeting. Even though I'm not members of all of those committees, I have attended every one. I have attended every board and committee meeting of my other commitments as well. I have not missed a board or committee meeting of any of the obligations that I have, and yes, I do still play quite a bit of golf.
I appreciate the question, and for those of you in the room can look at me and see whether you think I'm stressed and struggling to cope. I can guarantee you while I'm fit and healthy, I have a significant capacity to take on and complete successfully the roles that I am currently in. But I appreciate the question.
Thank you, Chair. We have another question from Mr. Stephen Mayne. Why didn't we disclose the proxy votes to the ASX along with other formal addresses so that the market could be fully informed when trading commenced at 10:00 A.M. today? At least you disclosed them to the meeting at 11:50 A.M. before the debate, and well done for achieving strong support on all resolutions. It is disappointing that you are not following the agenda today, instead dealing with all questions in one jumbled job lot, losing focus on important issues like remuneration and director elections. The Chair has previously said that it's more efficient. Do you abandon the agenda at board meetings and ask questions on all items all at once in the name of efficiency? Obviously not. Please respect the AGM process and follow the agenda next year. How many shareholders voted by proxy ahead of today's meeting?
Is it correct that a majority of those shareholders who did vote opposed the remuneration report? Were you happy with the turnout, both in terms of shares and shareholders? Will you disclose the headcount data to the ASX in the poll results, as many other companies now do, so that we can see how successful you were in getting out the vote of your 110,914 shareholders?
Stephen, look, there's just so many multiple questions in there, I'm not quite sure where to go, other than what I can say is the process that we are running is conventional. We believe we've got a strongly governed annual general meeting. We are being transparent. As you say, we have very strong support. I think there are possibly merit to some of the sub-questions you've raised in that question. We do consider, and we have considered previously, you've raised this question for a number of years, and we have considered it, and we do discuss it. But at the moment, consistent with almost the majority of other large public companies, we think this is the most efficient way to run the meeting. We are not cutting off people's ability to ask questions, as is shown by the fact that you've asked multiple questions again today.
We want to be respectful. We want to do the right thing. We want to be transparent. But we also want to respect people's time, and we believe this is the most efficient way to run the meeting. I appreciate that is not exactly what you desire or require, but we also engage with many large shareholders. Looking at numbers, it is not always an accurate picture just to put the numbers down either, because many of the large institutions that sit on our share register represent tens and tens of thousands, hundreds of thousands of Australians that have shareholdings through their super into a company like Transurban. I just do not think it is necessarily the right way to think about it. But look, again, I respect the question, and happy for the board to continue to take on board your feedback and to consider it.
If we see significant change or a better way, a more effective way to do things, we will. But to be very clear, we are transparent. We are running a proper governance process, and it is very conventional. What we are doing is a very conventional model for the ASX 100. But appreciate the question.
Chair, we have received no further questions online.
As there are no more questions, that concludes our discussion on each items of business. Security holders and guests, that concludes the business of the meetings, and all that remains now is to complete the poll by submitting your votes. If you have not already done so, please complete your voting now. Once again, we have displayed on the screen the proxy instructions for each item of business. For those attending the meetings in person, please lodge your completed voting cards in one of the collection boxes located near the exit. If you require any assistance, please raise your hand and Computershare representatives will help you. The poll will close 10 minutes after the conclusion of the meetings.
Rather than delay the closing of the meetings, the results of the poll will be announced to the ASX and published on the Transurban website once the votes have been counted and checked. I thank you all for your attendance today at our meetings. Subject to finalization of the poll, I declare the annual general meetings of Transurban Holdings Limited and Transurban International Limited, and the meetings of Transurban Holding Trust closed. For those attending in person, I hope you will be able to join me and other Transurban directors, together with senior execs, for refreshments in the foyer, and we also have our Linkt team here today to answer any customer questions. Thank you.