Good morning, everyone. My name is Silvia Ruiz. I'm Head of Investor Relations at Ferrovial, and I would like to welcome you to Ferrovial's Capital Markets Day here in New York. First of all, I would like to introduce the agenda for today. We will be having some opening remarks from our Chairman, Rafael del Pino, followed by our CEO, Ignacio Madridejos, that will cover our strategic priorities. After him, we will have presentations from the CEOs of the main business divisions, Cintra, Airports, and Construction. The final presentation will be held by our CFO, Ernesto López Mozo. After the presentations, we will be having a Q&A session. For those of you that are following us online, please feel free to send your questions anytime during the event, and I will be reading them aloud later.
All the presentations are now available on the website, and in the coming weeks, we will be also publishing an investor pack consisting on a Fact B ook, containing detailed information on all the projects, and also an Excel file with some historical figures. Before starting, and apologies for the size, please take a moment to look at the screen at the safe harbor statement. Don't worry, I'm not going to read it now. It is available on the website. But please bear in mind that these presentations contains forward-looking statements and expectations that could be suffer from risk and uncertainty, so actuals may differ. And with all this, please let me welcome to the stage our chairman, Rafael del Pino.
So thank you, Silvia, and good morning, everyone. This is a big day for Ferrovial. It is our first Capital Markets Day in New York and in the U.S. We have been operating in North America for almost 35 years, since we got our first project in Canada in mid-1999, and in the U.S. for almost 20 years since mid or third quarter of 2004. We are embarking a journey of growth. We have been delivering important infrastructure projects that improve the quality of life of its users and of those around the infrastructure, and while contributing to solving congestion problems around large cities in the U.S. We have built solid credentials.
We have all these managed lanes projects in Texas, in Virginia, and elsewhere, and we are now building a very emblematic project here in New York with the New Terminal One at JFK. The extensive infrastructure needs of the U.S. highlight the importance of our projects that also contribute to economic growth and offer important development opportunities for us in the future. Our value proposition generates value for all stakeholders, and as you will see during the presentation today. And in the future, we aim to be one of the leading infra companies that provide solutions to congestion issues and the challenges of urban growth. So now please join me in welcoming Ignacio Madridejos, Ferrovial's CEO. Ignacio, all yours.
Since 1952, Ferrovial has promoted the progress and development of communities by betting on a better future for generations to come. We tackle complex problems through innovation and nimble thinking that results in designing and building sustainable infrastructure solutions to transform the way people live, work, and connect. Our expertise extends beyond construction, encompassing financing, operation, and major asset management, ensuring long-term value for stakeholders and lasting positive impacts on the communities we serve. Our combined capabilities across highways, airports, and construction create a unique competitive advantage, allowing us to execute complex projects with unparalleled efficiency and financial strength. This approach began with our early international endeavors, starting with the groundbreaking 407 ETR highway project in Toronto, Canada, and continuing with the acquisition of iconic assets like London Heathrow Airport, the busiest hub in Europe.
Two decades ago, we pioneered our entry into the U.S. market with a project in Dallas-Fort Worth, and further solidifying our presence with the acquisition of a leading Texas construction company. Today, we operate five express lanes across Texas, North Carolina, and Virginia, while developing key infrastructure projects like the new Terminal One at JFK Airport, committed to improving global transportation and propelling socio economic growth. At Ferrovial, our assets are more than just infrastructure. They are catalysts for economic growth, engines of social progress, and all with an eye towards environmental sustainability. We are committed to improving people's lives and creating a connected, sustainable world for everyone. Just as it was 70 years ago, our commitment and purpose remain unwavering. We are builders of opportunity, drivers of change, and engineers of a better tomorrow. We are Ferrovial, developing infrastructure for a world on the move.
... And welcome to Ferrovial's Investors Day. It's good to see some familiar faces, investors who have followed the company for many years now, and also some new faces, hopefully new local investors.
...Today I will talk about two topics. First, about who we are, and second, why Ferrovial is special. Ferrovial is one of the leading road and airport infrastructure companies in North America. The video was a very good introduction about Ferrovial, but let me give you some additional facts to understand better our company. The first one is value creation. Over the last 10 years, our total annual shareholder return was 12%. The market cap at the end of last year, $27 billion. Over the years, we have maintained financial discipline with a BBB investment grade rating by S&P and Fitch. Most of the value of the company is in North America.
According to equity analyst, at the end of last year, the value of the company in North America was 80% of the total value, and this is the market where we want to grow. Main strength is the 24,000 team of hardworking employees and a skilled and experienced management team who truly represents the value of the company. Sustainability is at the core of our strategy. That's the reason we have been in the Dow Jones Sustainability Index for the last 22 consecutive years. Ferrovial provides solutions to some of the complex problems in our cities, like traffic congestion or facilitating the energy transition, and we do that developing and operating innovative, efficient, and sustainable infrastructure for a world on the move. Our business model is an integrated platform that participates in the whole infrastructure cycle.
We differentiate from infrastructure funds in that we do or participate mainly in greenfield and yellowfield projects. We differentiate from construction companies in that we take equity participation in the concessions that we develop. We are organized in four business units. The largest ones in terms of equity value is the toll roads division, that we develop congestion relief solutions in the U.S. and Canada, with six key assets and many opportunities to grow. In airports, we have NTO, which is a very good sample, very close to here, to JFK Airport, but we have been also the largest industrial investor in Heathrow for the last 17 years, almost 18 years now. There we have invested GBP 12 billion in order to improve the facilities there and improve the customer service.
We are at the end of this investment, as we was announced at the end of November, and there we rotate the capital in order to recycle it into other greenfield projects with potential higher returns. Energy is an incipient business unit, building on our knowledge of the industry and integrated model to support the development of infrastructure for the energy transition. Finally, construction. Construction is the origin of the company. We support the concession business with best-in-class engineering capabilities to be competitive in greenfield and yellowfield projects. Over the years, we have developed best-in-class capabilities. With over 20 years of data from concessions, we are able to optimize revenues in the long term with the latest technologies.
We, I mentioned previously, we are a construction company in the region, and because of that, we have a cost optimization culture, the use of limited resources, but always looking at the long-term value of our assets. We have an integrated model participating in the whole cycle, from the consolidated conceptualization of the projects to the design, the bidding, the construction, the financing, the operations, and the maintenance of the asset. Financial discipline is key when you talk about complex infrastructure projects, and there you need to understand very well the risk. You need to find ways to compensate the risk and also price them correctly. Developing infrastructure is a very local business, and because of that, we complement our skills with local partners, mainly contractors and investors. And also, we need the support of local communities and local authorities.
It's something that we have built over the years in order to develop infrastructure to support the communities. Let me move now to explain why Ferrovial, why Ferrovial is special. First, because we have unique infrastructure assets in North America with the potential to grow above GDP and inflation. Second, because we have a very good pipeline of potential similar assets in North America. Third, because we aim to create value beyond North America in selected geographies where we have capabilities and with a business model of rotating mature assets to recycle capital. And four, because we have the cash flow generation and the financial discipline to seek long-term value for our shareholders. One characteristic of our unique assets in North America is that revenues have the potential to grow above GDP. One reason is the location of our assets.
They are in places that are expected to grow above the average of the U.S. and Canada. It is the case, for instance, of the Dallas-Fort Worth or the Charlotte Express Lanes, that over the last decade, they have grown 1.2 percentage points above the average of the U.S.... We are also located in places with population growth. It is the case of the 407, that according to third parties, is expected to add 2.8 million new immigrants by 2046. Also, the I-66 in Virginia is located in one of the areas of the U.S. with the highest GDP per capita. The New Terminal One, very close to here, JFK, is serving the traffic growth of the largest metropolis in the U.S.
But it is not only about the location of our assets, it's also that we are the owners of the non-congested capacity in our concessions. Because of that, we can capture a relevant part of this traffic growth compared to the alternatives that are saturated, but of course, always maintaining the level of service that we give to our users. Second characteristic of our unique assets in North America is the ability to capture value provided to users. Most of our users select our assets when they need to arrive on time to a relevant event, and they do that because they appreciate the time savings and the reliability of our assets compared to congested alternatives. And it is not only that they prefer our assets when the alternative is congested, they also prefer because of the higher safety, because of the convenience, and because of the peace of mind.
We have a flexible pricing scheme in our assets, some of them freedom to set the rates. Others, like the Dallas-Fort Worth Express Lanes, they have a soft cap increasing with inflation, and that can be above that soft cap with certain traffic parameters. The New Terminal One at JFK Kennedy is an unregulated terminal in which the tariffs are defined in individual negotiations with commercial airlines. This flexible pricing allow us to set toll rates above inflation. A third characteristic of our unique infrastructure assets in North America is the long duration of our concessions. The average time of our portfolio is 55 years. This is quite unique in our industry. We have very young assets, like the 35W, that opened the 3C extension just in June last year, or the I-66 that opened to traffic at the end of 2022.
Even the NTO is under construction. These assets have a higher discount rate that should be reduced once the, once the construction and traffic ramp-up risk are eliminated, increasing the value of the assets. Another characteristic of young assets is that because the cash flows are expected to grow above GDP and inflation, larger cash flows are at the end of the concession. Every year, we are closer to these larger cash flows, increasing the value of our assets. This is what we call the rolling forward effect. And we can also develop similar assets in North America. There is a high deficit of infrastructure in North America. Third parties are estimating a $4 trillion funding gap by 2025, 2040.
If you add that some of these local administrations, they have high deficits, they are working more and more with private partners to accelerate needed infrastructure, allowing the use of public funds for other alternatives. Additionally, cities are growing. It's expected, according to third parties, that 90% of the U.S. residents will live in cities by 2050. We need now additional express lanes to reduce additional congestion in cities in the future. Also, in terms of air traffic, it's expected to grow in the U.S. by 157% by 2040, and we need additional airport infrastructure to facilitate that air traffic growth. To transform these opportunities into a specific project, we have a local business development team that, over the last 20 years, have been working with local authorities in order to analyze the financial and technical feasibility of projects.
These projects, they have been transformed into a pipeline that we are expected to materialize into bids in the coming years. Later, Andrés will talk in more detail about some of these opportunities. In the case of airports, also, the New Terminal One could be a very good reference for other local airport authorities that they need to accelerate airport infrastructure to cope with additional growth. We can create value beyond North America. It is the case of India. India is an economy that is growing, one of the highest in the world. It's expected that the GDP growth over the next five years in average will be 6.3%, according to third parties. Also, the population in India is expected to grow.
According to third parties, it will add 600 million additional population in the middle class by 2045, and with that, the number of new vehicles on the road. Also, it's a country that has been working with private partners in order to accelerate a needed infrastructure and is one of the largest toll road pipelines in the world. We are very well positioned to support this growth through our investment in IRB. We acquired a 24.9% of IRB two years ago.... It is a company that can participate in yellowfield and greenfield projects, and also has a very solid track record because last year they added three toll roads to its portfolio. We can also develop other infrastructure to create value to our shareholders, toll roads, and energy transition infrastructure projects in geographies that we have capabilities that lead us to competitive advantages.
is the case, for instance, of the Silver town Tunnel, that we expect to open to traffic next year, or the Centella transmission line in Chile that we expect to start operations also in the first quarter of this year. In the case of airport, we have an asset-specific approach, our preference is bilateral negotiations in places where we have capabilities, airport operational capabilities or CapEx need capabilities. In all assets, we have a business model of rotating mature assets to recycle the capital into other greenfield projects with higher returns. Let me move to the solid cash flow generation and financial discipline. The way to value our company from a financial point of view is through discounted cash flows. Main indicator for our company is dividends coming from infrastructure assets, and these dividends from existing infrastructure assets are expected to grow in the following years.
First, because some of them are very young. 35W, that had an extension opening, the 3C in June last year, gave last year first dividend. I-77, according to the public contract, could give the first dividend this year, 2024, and the I-66 also potentially could give the first dividend at the end of this year. In the case of airports, they stopped distributions to shareholders at the beginning of the COVID, and hopefully it's something that change soon. NTO, the New Terminal One at JFK, also could give first dividend once the construction is finalized. And for all assets that potentially are growing above GDP and inflation, with that, we have operating leverage, financial leverage that could give additional dividends. Other sources of cash are potential new investment in express lanes that could give more dividends.
The Construction business that historically has been a cash flow generator for the company, or the business model that I mentioned previously, the asset rotation of mature assets, recycling the capital. About capital allocation, we want to achieve two objectives: invest for growth, but also a solid shareholder remuneration. Let me explain the rationale about capital allocation. First, it's about committed investments. Today, we have EUR 0.9 billion of committed investment, most of them related to the New Terminal One. Only this year, equity contributions to the New Terminal One are going to be $500 million. Second, to maintain the financial discipline that we have maintained over the years, the BBB investment grade rating that we want to maintain. And then equity investment. The top priority, as you know, express lanes in the U.S., and we have a good portfolio.
However, we don't know how many of these we'll be bidding for in the following years, and we don't know how many of those we will win. But we have long-term projections, 10-year projections, in which we have scenarios and forecast about the capital that is going to be needed in the future if we win some of these opportunities. Also, we may invest equity in other airports and toll roads, or energy transition projects in places where we have capabilities, limited geographies, and with a model of asset rotation, as explained before. So for us, it's invest for growth, but at the same time, a sound shareholder remuneration, as we have done historically, even during COVID. And the latter, the shareholder distribution could increase in case capital is not deployed. To finalize, let me summarize again, why Ferrovial?
First, we have unique infrastructure assets in North America with the potential to grow above GDP and inflation. Second, a very good pipeline of similar projects in North America. Third, we can create value beyond North America in selected geographies where we have capabilities and rotating mature assets to recycle capital. And four, we have the cash flow generation and the financial discipline to create long-term value for our shareholders. Now, Andrés will follow with the Cintra, the toll road division, and I will join you later for the Q&A session. Thank you very much.
At Ferrovial Toll Roads, we are engineers of progress, champions of innovation, and pioneers of a sustainable future for transportation. For over 50 years globally and 20 years in the USA, we have been driving progress by designing, building, and operating safe, efficient, and sustainable highways. Our proven expertise in solving complex mobility challenges has improved the lives of millions by creating economic opportunity and fostering social well-being. Our track record of on-time delivery and commitment to flexible, innovative solutions are the cornerstones of our success. We leverage the technical expertise of our sister business unit, Ferrovial Construction, to ensure the highest quality and maximum value for every project.... Our visionary projects, like the 407 ETR Highway in Toronto, Canada, an alternative to the city's congested highways, have paved the way for the future of transportation.
This groundbreaking, all-electronic, open-access highway, featuring a revolutionary free-flow toll system, became a model for express lanes projects in the U.S. These innovative highways increase capacity by adding dedicated toll lanes, optimize traffic flow through real-time pricing, and utilize machine learning technology to ensure faster, safer, and more reliable travel. With our unique portfolio of long-term assets, we create sustainable value for our customers, stakeholders, and the communities we serve. Our infrastructure projects are engines of growth, generating jobs, boosting economies, and improving the quality of life for millions. In the U.S. alone, our toll roads have contributed $22.6 billion to socioeconomic impact. By reducing travel time by 58 million hours, we have improved productivity and generated economic savings for our users. Our commitment to safety has resulted in 21,650 fewer traffic accidents in North America.
Additionally, our sustainable practices reduce the impact on the environment. We are at the forefront of digital transformation and continuous innovation, leveraging cutting-edge technologies like AIVIA and NextPass to enhance and add value to our infrastructure. This is just the beginning. We remain unwavering and committed to solving the mobility challenges of large communities, enhancing people's lives, and fueling economic growth. Our purpose is clear: to develop and operate sustainable infrastructure for a world on the move.
Morning, all. Thank you for joining us today in this important day for the company. I am Andrés Sacristán, and I have the honor to lead the toll road division of Ferrovial, named Cintra. I'm gonna start with an overview of what we are going to talk today. We are going to review a little bit the asset portfolio we have, and which is the main characteristics of this assets, and that we think it will bring value to shareholders. The second is how with this asset base, we get differential capabilities in the market. And the last part is how we use these differential capabilities and capture further new projects. Let's start first with the value levers in any asset we approach. First of all, we approach two areas of high economic growth.
For example, Dallas-Fort Worth has been ranked first in economic growth in the last decade. The second lever is areas that have traffic problems or challenges. For example, we are in Toronto, and Toronto is ranked by INRIX, a traffic data provider, and one of the most congested cities in North America. What we provide in those areas? We provide free-flow capacity, where the users has a very smooth driving experience. And how we assign value to this benefit the users get? We do through data and through dynamic and flexible pricings, frameworks. But for capturing all this growth in the coming years, what we have is a long-term contracts. We have contracts like 407, that will last for the next 75 years.
Now, let's have an overview of the portfolio we are going to focus today, which is the North American assets. We have 407 in Toronto, that for giving you a perception of the scale of the highway, it has it produces CAD 1.3 billion revenue every year. This is data for 2022. In the US, we have three assets in the Dallas-Fort Worth area, one in Charlotte, and one in Virginia. And all combined, they produce close to $640 million revenue a year. Let's zoom in inside of them, starting with our flagship asset, which is 407 ETR in Toronto. 407 ETR is an all-electronic, open-access highway, that goes east to west across the Greater Toronto Area.
Toronto area has a record-breaking population growth that is the main driver for the growth we are seeing. And also, Ontario is very efficient in incorporating that population growth to the labor market. There is significant plans by the government of Ontario to designate priority employment zones across the corridor. You see here in the map, which is the expected growth of the major populations across 407 ETR. As a consequence of that, 40% of today's traffic of 407 chooses 407 as their preferred alternative, which is the dark green areas for that we identify in the map. But what this growth produces? It produces traffic congestion in the network. In the rush hour, typically, 407 is 29 mph faster than the alternative.
That means that if you do a 15 mi commute, you save half an hour. 407, the alternatives in the network, they are at full capacity, and there is no more room for keep expanding or widening lanes, so they are practically built out. And the projection of total hours in lost in traffic by 2051 are expected to triple by then. So how we offer and keep this driving, this smooth driving experience to our users, how we manage to do that? We manage to do with the pricing flexibility that the contract allow us. We will keep moving those prices in the future to offer this free flow experience to our users, this safe reliable, and fast driving across the GTA or the Greater Toronto Area.
We set toll rates differently by segments of the road, by direction, by time of the day, day of the year. We have all that flexibility to do that. And on top of that, we have and design our toll rate increases to minimizes the contractual congestion payments. You see here, which has been the growth in the last decade, mostly, and how that growth beat the GDP and the inflation, and inflation growth, and what is the expectation in terms of population growth and congestion increase in the Greater Toronto Area. Let's move to the U.S. In the U.S., we have a product that we call Express Lanes. Express Lanes is a toll lane that increases the capacity of the corridor. Here, we'll start with Dallas-Fort Worth, in which we have three projects operating.
Dallas-Fort Worth is a metroplex with widespread activity across the area, so they have multiple employment center and multiple residential centers. So the necessities of move happens across the huge and vast area. The area has ranked first in absolute population growth in the U.S., and also, this population growth is estimated to keep growing, especially in the west, where our projects are located. All this population and economic activity growth will bring further congestion. You see here in the map, which is a projection by a third party, of what the congestion levels will be by 2045: 61% increase. And our tolls are designed to keep this fast, safe, and reliable experience, and we'll keep doing that, and meanwhile, the congestion increases. Let's move to another asset, which is I-66.
I-66 is just outside the Beltway of Washington, D.C., area. It provides a solution for the movements in and out of the D.C. area, but also of the movements across Fairfax County and Manassas, which are among the most affluent areas in the country. You see, all this development is happening in the west of the project, but also there is a number of logistics activity that is thriving in the area, and there is a number of depots around our highway. All this will keep increasing the congestion that is expected to increase 48% by 2045. We'll keep using our dynamic algorithms to price the driving experience of our users to be an excellent one for the coming years in a contract with all this congestion growing.
The last asset I'm going to address today is I-77 in the Charlotte area. It goes from Charlotte to the thriving neighborhoods in the north, around Lake Norman, that are growing really, really fast. It has a blend of traffic in between long-distance interstate and this local traffic in all these growing communities. This rapid growth is creating congestion, and we are providing that service of a free flow experience in our express lane. The expectation is that by 2040, 50% of the roads in the area will be at capacity, and we will keep providing that services by then with our pricing algorithms. All this congestion growth compounds with our ability to put a price to that service, that value and a smooth experience to all of our users.
You see here, a number, quite a few numbers, but what we try to demonstrate here is that the past growth again beat the GDP growth and inflation growth, and what we expect in terms of population and traffic congestion growth in those areas. Another market that Ignacio mentioned before, and I would like to address, is India. I think that is a market that we can, it can bring a lot of value to the company as well. India has great prospects of economic growth, and it's gonna be the...
It's expected to grow 6.3% over the next five years, and this is mainly driven by a population boom, where the expectations are 600 million people will be incorporated to the middle class in India, and that middle class will get into vehicles, into cars. So the car utilization in India will be 6x by 2040. That's, I think, is a consensus expectation, that India is gonna be a great market, but what differentiates us from other investors in India is that we've chosen a very good partner. It's a company called IRB, in which we invested 25% at the end of 2021, and it's the leader developer in toll roads in India.
It has in-house capabilities for doing EPC, and also it has a very good footprint across the state, with 26 projects in a portfolio in 12 states. Since our acquisition at the closing of year 2023, the price and the valuation of the company went up 95%, and also, they won four additional projects. But all this long-term value and all this growth that it will come in the years, we can only keep that growth lasting if we have a sustainable approach. Our sustainable approach has 3 main pillars. One is we are a community focus.
So we aim to improve our communities with further economic growth, creation of employment, and saving a lot of time in traffic for the people in the community, for the things that matters most to them, to spend time with their family or their leisure activities. The second is that we are a customer-centric company. We focus on this value proposition to our users, and one key one is the safety. Our roads are safer than the other roads in the alternatives on the networks we operate. And the customers tell us that they are happy with our service and the product, and that we provide with high levels of satisfaction in our annual service to them.
Finally, we want to keep our contracts sustainable for the future with the grantors, with our public clients. And when our contracts overperform, we have revenue share mechanism that we share some of that success with the grantors. The only way to keep that growth for the future is to be sustainable and to create value for the communities, for the user, and for our clients. But what we get from all this asset base? Basically, the main thing we get every day is data. Here, as we speak, all of our assets are producing data, and we harvest this data in real time, and we have in-house teams that do the analytics job. With this analytics, we are able to understand customer behavior.
We're able to understand traffic patterns, we are able to stitch that data with demographics, and we are able to understand willingness to pay for our products. With this, we produce accurate or reliable forecasts for the future. We do a price management to maximize the usage of the road at any time of the year. And finally, in hand-in-hand with the Construction division, we design new projects. We understand where the ramps needs to be, so we maximize the connectivity and the number of users that will access in the future to those projects around the communities we build them. This is our data approach. It's a high value for us and a clear competitive advantage. The second thing that our assets provide is a good base to innovate. We've been the first one in operating an all- electronic highway, 407, in the past.
We've been the first one in introducing machine learning algorithms in our pricing, dynamic pricing, engines. Now we are doing further innovation to keep creating value to our users and future-proofing our assets. I bring you here three activities that we are doing in the innovation space. First one is called AIVIA. AIVIA is an innovation that we are trying to connect the infrastructure with connected vehicles that are coming to the future to improve the safety of the infrastructure. The second one is NextPass. NextPass is a mobile app that substitutes the transponder, and you can drive along toll roads, not only our projects or other projects, without the hassle of the transponder.
And the last one is that we are incorporating ourselves to the conversation of the gas tax reduction. As electric vehicles become popular, the states are seeing the gas tax revenue reduces, and we want to be part of the solution and providing the solutions with that. But all this data and all this knowledge, where it really comes to force is when we face a new project, when we think that we can provide solutions to new areas or new communities. And how we approach this developing phase of the projects? Basically, we start to identify congestion problem, traffic problems in high economic growth areas. As soon as we identify them, we go and we speak with the transportation leaders in the area to offer tailored solutions hand-in-hand with our Construction business.
Once we get to a solution with the transportation leaders, we try to gain support in the communities, and we partner with chambers of commerce. We do grassroots initiatives with the communities to try to gain support. And also, we use our Construction business because they have a wide reach in the supply chain of construction to build up this support in the communities to the project. All this process, since we identify a solution, until that solution is being put in a tender in the market, will last us up to five years. So it's a significant effort that the company is doing to bring products to the market. Thanks to this effort, today, we see a very healthy pipeline. We see seven projects across the U.S. that are coming to us in the short term.
The short term, as short as next spring, that we are going to put an offer in Atlanta in the project of SR 400, which is the last you see on the map. All these projects are at different phases of stages of approval, but we believe that this will come to the market in a very short time. How we are getting ready for them? We have competitive skills, we have a stronger record of delivery in the U.S. of all our projects, that is second to none in the express lane space. We offer integrated solutions with construction to maximize the value, and we offer a very competitive risk-reward balance to our shareholders and grantors. In summary, what we do at Cintra is we provide solutions to congestion challenges in areas of high economic growth.
Our portfolio today is going to keep providing this value for this compound effect of congestion increase and pricing ability. Those assets provide us with really, really insightful views of what the customer wants and how the customer uses their cars. We use all this knowledge to put in hands of the, of our stakeholders, the transportation leaders of the state, to provide solutions. Today, we see a very healthy pipeline, and we are ready for that. Thank you very much. I leave you now with Luke Bugeja, which is our leader in Airports Division. Thank you.
At Ferrovial Airports, we are creating the future of air travel. We are pushing it forward, innovating and creating the experience passengers crave today. For over 25 years, we have been driving progress in the aviation industry, transforming airports into dynamic hubs that connect people and places, fueling economic growth and creating unforgettable passenger experiences. We are global investors, committed to building a diversified, high-quality portfolio of airports in key strategic locations. From our significant stake in London Heathrow, the busiest hub in Europe, to our investments in New Terminal One, we are shaping the future of air travel across the globe. In 2022, we embarked on a transformative journey, becoming the lead investor for the New Terminal One, NTO, at JFK Airport. This $9.5 billion project is a beacon of progress, a testament to our commitment to sustainable development and unparalleled passenger experience.
At Ferrovial Airports, we understand that our success is intertwined with the well-being of our communities and the environment. We prioritize care for the community and environmental responsibility, ensuring that our airports are safe, clean, modern, digital, and commercially exciting. We are committed to continuous innovation, developing solutions for the air mobility needs of the future. We focus on passenger experience and make our airports feel like destinations themselves in whatever journey travelers are on. And our unyielding belief in sustainability means that our airports are not only meeting the needs of future travelers, but operate as catalysts for a better tomorrow. This is our vision and our purpose as we invest in, develop, and operate industry-leading airports. We are building a world that is connected, sustainable, and full of possibilities. In short, we're building a world on the move.
Hello, my name is Luke Bugeja. I'm the CEO of Ferrovial Airports. Welcome to the Capital Markets Day. I'll be talking to you about the airport portfolio and how we drive value for the Ferrovial Group. Five key topics, the first being the strategy for the portfolio and how we deliver that through the pillars and how those pillars underpin that strategy. We'll also talk about the existing portfolio, which we have four airports, so we'll give you a bit of insights to those assets. One key aspect which sets us apart from our competition is our capabilities, and we'll talk about that in some detail as well. Heathrow, an asset that we've held for almost 18 years, is a good example of how we drive performance and how we drive value for the group.
New Terminal One, which has been mentioned a few times today, we'll go into some depth about that asset and how we see the project going forward. The strategy. The focus is in two geographical locations, in North America and Europe. In terms of our investment approach, we'll attempt to refrain to go into processes. The idea is really to focus on bilateral opportunities, so ways in which we can put ourselves in a privileged position. In some circumstances, however, there will be a procurement process, but we want to put ourselves in a position so we're one or two steps ahead of our competition. An example of that is exactly what we did with New Terminal One and also with Dalaman Airport, which I'll talk about a little bit later.
We'll clearly focus on growth opportunities, so areas in which we can utilize our capability to grow the business. We take a risk-adjusted approach that's common in every business, but it's important to note that no two airports, no two terminals are exactly the same. We take a forensic view of the risks, and we apply that to the returns. With regards to the focus of opportunities in the U.S., we will concentrate on terminal-related projects, so similar to what we have done in New Terminal One. We see opportunities for privatizations and whole airports being a midterm opportunity, but in the immediate term, we'll be focusing on terminals. In Europe, the focus will be on secondary sales, but particularly on opportunities where there is growth mandate. We want to look at opportunities where there is expansion. Our existing portfolio, Heathrow.
It's the airport that we're most famous for. We have a 25% stake. Freehold asset, so it's a perpetual asset. 79.2 million passengers in 2023, very close to the pre-pandemic levels. In November last year, we announced our decision to divest our stake. Key reason for that, we've held the asset for a long time, for 18 years. We've done a huge amount, and it's really time to pass the baton over to a new investor with fresh eyes. New Terminal One, acquired in 2022. We have 49% stake alongside JLC, who has 30%, Ullico, 19%, and Carlyle, 2%. 36-year concession, runs to 2060, and capacity will triple. We'll go from 8 million passengers up to 23 million passengers. That is a substantial increase. Dalaman Airport in Turkey, also acquired in 2022.
We have a 60% stake alongside YDA Construction, which is a local construction company, and our partner, who remains with 40%. 18 years concession remaining, and in 2023, traffic was at 5.2 million, which is 6% ahead of pre-pandemic levels. Leisure airport with substantial growth. And AGS, not very creative, Aberdeen, Glasgow, Southampton, easy to remember, 50% stake alongside Macquarie. Also freehold asset, 9.2 million passengers in 2022 and, getting closer and closer to pre-pandemic levels. So what are our capabilities? And it's important to note, as an institution, as an organization, Ferrovial has been involved in airports for over 25 years, and in that 25 years, we've been involved in over 30 airports, so we've seen a lot.
And our team have amazing capabilities, not only in airports, but also in airlines. We are a long-term investor. I mean, Heathrow is an example of that, holding an infrastructure asset for 18 years in an asset class that's really only been going for around 25 years, is testament to that. We have a growing and a strong U.S.-based team to providing support in our transaction desires and also our asset management capability. Ferrovial Construction. I joined Ferrovial 2.5 years ago, and one of the really key aspects that really attracted me to the group was the fact that we actually had an in-house capability in construction. Ferrovial Construction team have been building terminals, aprons, taxiways, runways, towers globally, and most notably, Heathrow Terminal 2 and Madrid Terminal 4. So substantial capability that really adds enormous value to my efforts. Heathrow.
Let's talk a little bit about Heathrow. So I'm sure you all know Heathrow, second largest international airport in the world, largest hub in Europe. We've had it for 18 years, and over that period, a very, very heavy capital program, GBP 12 billion. And despite that, despite that heavy capital program, we've been able to distribute equity, a cash back to equity of GBP 3.2 billion over that period. So that's quite an impressive investment program and also dividends to shareholders. And what we've done in that is substantially improved the operational performance and, most importantly, the passenger experience. And of note, we designed and built Terminal 2, commissioned the projects of Terminal 5, including the largest integrated baggage system in the world.
And just focusing a little bit more on Terminal 2, 'cause it's quite significant and relevant to New Terminal One, which I'm just about to talk about. Similar size, 20 million passenger capacity, EUR 3 billion, investment, EUR 3 billion investment, which was delivered ahead of schedule and on budget. And interestingly, really quite an important point, it was the first facility to receive the BREEAM environmental certificate in the U.K. That's all facilities, not just airports. And you've really got to give credit to the team back then that had the foresight to see that environmental accreditation is an important element for airport terminals going forward. New Terminal One, JFK New Terminal One. $9.5 billion. That's for two phases. That's for Phase A and Phase B.
Phase A is expected to be completed in the middle of June 2026, and Phase B towards the end of 2029. Concession runs through to 2060, so once it's open in 2026, there'll be 34 years remaining. The size of the terminal, 2.4 million sq ft. It's 3x the size of the existing facility and including, as part of that, 300,000 sq ft of high-end retail and food and beverage facilities. More than double the size of the gates. Currently, there's 10 gates; there's gonna be 23 gates, and the capacity tripling, as we mentioned earlier, from 8 million to 23 million passengers. What do we do? We're not just investors, as you heard before, we do more than that. So we have a 49% stake, but we have two key contracts with the New Terminal One.
First one is a management service agreement, which is a 15-year agreement that we provide services into New Terminal One for traffic development, retail, food and beverage, operations and maintenance, systems integration. So we provide that support from the Ferrovial Airports team. On the construction side, we provide the PMO or the Project Management Office. We do not do the construction. The construction, design, the design and construction is provided by AECOM Tishman, but our team at Ferrovial Construction provide the oversight. So they provide the oversight on design, construction, procurement, communications with the grantor. And for me, having our the owner's engineer as part of the equity gives me enormous comfort. So what are the key levers? What are the key drivers? What do we like?... New Terminal One. The first one, capturing a high share of scarce resource. What does that mean?
Well, I'll talk about that. It relates purely and simply to wide-body gates, and I'll give you a bit more clarity on the following slides. Access to a premium New York market. The long-haul international airlines that fly into JFK charge a premium. I'm sure you all know that. If you fly in and out of JFK, they charge a premium. What they want is that equivalent level of service to match the premium they charge. So you don't want to be flying out of a wonderful airport in Asia, Middle East, in Europe, and then flying to the other end at an inferior product. So we're creating that same level of experience in both sides. In terms of transforming that passenger experience, it's going to be a passenger experience not seen anywhere else in the United States.
Really important, this is a really important point for us, is the socioeconomic value for the local community. We must create a great experience for the local community. We have measures and targets delivered for the local community, and we have MWBE targets we must commit to and deliver. This is not just important for this project, it'll be important for our credentials and demonstration of our stewardship for future opportunities. Give you a bit of color about what's happening in JFK. There's a lot of construction. I'm sure you've gone through. There's a lot of cranes, a lot of steel going up. So 2023, last year, there was six terminals, and this is clearly not the scale, but as you can see, Terminal 1 will go from the smallest terminal to the largest terminal.
Terminal 2 was demolished earlier in 2023 to make way for Terminal 1. That was the old regional terminal for Delta. Terminal 4 is Delta and other international carriers. Terminal 5, JetBlue, Terminal 5 and Terminal 6 will actually be combined. Terminal 7 will be demolished. So once Phase A of Terminal 6 is completed, Terminal 7 will be demolished, and then you have Terminal 8, which is American Airlines, BA, British Airways, and other oneworld carriers. So I'm going to go into detail about the wide-body gates. I mentioned that earlier. So the new Terminal 1 is expected to increase its share of wide-body gates from where it is at the moment. Terminal 1 has 34%.
In the future, once all of the expansion is completed, we will have close to 50% of the wide-body capacity. What's important here, I'll point out, this is the numbers here. So the 4.25 is it demonstrates the average capacity of wide-body gates departing passengers, so enplanement passengers, grows from just over 4 million up to 11 million. The next row is very important as well. What this demonstrates is that as we add capacity, we're not adding excess capacity. So the average throughput per wide-body gate is going from around 450,000 passengers to around 470,000-480,000. As it demonstrates that adding the capacity doesn't add excess capacity, so the competitive tension, the competition will remain, or the scarce resource will remain.
A further example of that, just to give you a bit more color, the years leading up to 2019, strong growth in international, long-haul international traffic, so almost 6%, and the capacity increase was 0. Going forward, as you can see, supply will not get anywhere near. Sorry, supply will not get anywhere near demand. Demand will continue to outstrip supply. A further example of that, little bit technical, but, to give you an idea of the triggers upon which airports look at expanding, is once you get around the 400,000 passengers per enplanement gate. So as you can see there, these, the airports listings, many of these airports have already started and initiated expansion. Another interesting point as well.
So the value of JFK in the New York system is quite enormous, quite outstanding. 50, so 50 out of the 72 international airlines that operate into the New York system operate exclusively into JFK. 18 switch between the both, and only four operate exclusively into Newark, and the largest one of that is Porter Airlines that fly, as I'm sure you know, into Montreal and Toronto. We've already signed up five airlines representing 25% of the forecast 2027 traffic. Many are very close to signing at the moment, and there's many letter intents out there, so we're very confident that we will get the numbers that we need for 2027. Important to note, right? I mean, there's more than 30 airlines that are operating in the existing Terminal 1, right? They've got to go somewhere.
So the objective is not to attract airlines that have -- don't fly into New York or don't fly into JFK now. It really is about capturing the market within the airport. In terms of the customer experience and the revenues, as I said earlier, it's going to be a quality product, quality facility. We expect it to be superior to Terminal 4 and Terminal 6. Also important to note that the aeronautical revenue or the cost per enplanement passenger is going to be a significant percentage of our revenue, almost 90%. And this is, on the right-hand side, this is reference sources, right? Provided by Steer. And the indication is, as of last year, 2023, Terminal 1, so the current facility, is charging around $65 per enplanement passenger, and the expectation, the forecast for 2026, Terminal 4-...
Around $82, and Terminal 6 between $80 and $110. So that gives you a bit of an insight to where what has been reported, what has been suggested to be the charges. In terms of quality, and I mentioned it before, but to give you a bit more clarity, the facility that we'll offer will rival what you see in Asia, the Middle East, and Europe. You know, we'll have boarding, we'll have lounges that actually have direct boarding into gates, which I'm sure you've seen in many airports, particularly in the Middle East. So it's that quality. What's been done in LaGuardia is really impressive, right? I mean, the transition from what it was to where it is now is amazing. But it's important to note this is a major step up.
This is a big step up from what you see at LaGuardia. LaGuardia is great. This is gonna be well ahead of that. Partnerships in airports are critical in many aspects. One point that I mentioned earlier, and I'll reiterate it again, is our targets for minority-owned businesses, women-owned businesses, and local enterprises is of key focus and of key discussion. As I said, achieving that is going to be critical. We're gonna invest a huge amount in the community, and there's two projects that I've mentioned here in the slide. One is the Korn Ferry Leadership University, but the other one is the JFK Academy, and this is a cut and paste of what we have already done in Heathrow, called the Heathrow Academy.
And it really is an opportunity to upskill people within the community for airport jobs, but not only that, but giving them skills for writing CVs, for interviews. But it. The benefit to us, it gives us a pool of resources that we can draw from to deliver on our quality of service. It could be engineering jobs, it could be customer service jobs, it could be roles in retail and food and beverage, but it really is a massive benefit to the community. And one other point, it ensures that our pool of resources is local, so they're able to get to the airport at all times of night, as the airport, as you know, is a 24-hour business.
So in closing, our growth strategy, as I mentioned earlier, is North America and Europe, and where we can leverage our capabilities, where we can really put ourselves in a privileged position. Bilateral opportunities is a focus. We really want to be in a position where we're one or two steps ahead of our competition. New Terminal One is on time and on budget, and we expect to capture those leading share of the international airlines very soon. And as I mentioned earlier, success in delivering on this community and local stakeholder targets is critical, not only for this project, for the projects in the future. Thank you. I'd like to now introduce my friend, Ignacio Gastón, who's the CEO of Ferrovial Construction.
Thank you very much.
As a group that prides themselves on being engineers of progress, Ferrovial Construction is helping to champion a connected, sustainable world. For over 70 years, we have been shaping the world's infrastructure, leaving our mark on thousands of miles of highways, iconic airports, complex subway systems, and groundbreaking tunnels. We are the engine behind progress, delivering mega projects that transform communities and fuel economic growth. Our in-house engineering services are a cornerstone of our success. We have a team of over 370 talented engineers who are constantly optimizing and innovating designs with agility and flexibility. We ensure our clients benefit from international best practices and cutting-edge expertise across our global portfolio. We are at the forefront of digitalization, integrating technology into every aspect of our operations. This allows us to work smarter, increase efficiency, and minimize environmental impact.
We are also committed to sustainable development goals, ensuring the highest standards of environmental, social, and governance practices in everything we do. We are passionate about empowering communities. We work closely with small and medium-sized businesses and local contractors, fostering economic development and job creation wherever we operate. We are committed to diversity and inclusion, creating opportunities for all. Our people are our greatest asset. We have a talented and committed workforce of local and international professionals, who combine industry knowledge with creativity and innovation to deliver unique solutions to our clients. They are the driving force behind our success and the key to building the future. At Ferrovial Construction, we are not just building infrastructure, we are building a brighter future. We are connecting communities, propelling innovation, and creating a sustainable world on the move.
Hello, everybody. I am Ignacio Gastón, and I am the CEO of our Construction division. I started working in Ferrovial more than 20, more than 28 years ago, and in fact, I started as a site engineer in one of our rail infrastructure projects. It is a pleasure for me to be here today with you to talk about this very valuable part of our business. I will cover several topics for you today in my presentation. The first one is: What is our value proposition? What is the value we bring to Ferrovial? The second one is how the Construction division serves as a key pillar for the overall Ferrovial strategy. I will then cover what we believe are our differential capabilities, and I will finalize showing some historical data of our track record.
Our Construction division is a key pillar for the Ferrovial value creation formula. Our main role is to support the other Ferrovial divisions, Airports, and Cintra, in the development of projects from the very beginning through to completion. For that, we have the technical, the engineering, and the production capabilities to provide that end-to-end support from project origination through bidding, design, and of course, construction. In fact, the Construction division has been organized and set on a structure precisely to achieve that purpose: the creation of value through the delivery of complex infrastructure projects. That means the way we target our sites, the way we are, our geographical footprint, where we are, where we work, and even the level of technical and engineering capabilities is based precisely on that purpose.
While we are organized to support the other Ferrovial divisions, we are also a profitable business on our own, and we have a good track record, for example, in terms of cash flow generation. Value creation in infrastructure projects is associated with the development of large, complex design and build projects. In our opinion, there are not many construction companies that are actually prepared or equipped to deliver such a complex projects. That's why having a Construction division within Ferrovial makes the difference for Cintra and Airports, so they don't have to rely on procuring external construction with the levels of uncertainty that that brings along. Uncertainty, for example, in terms of pricing or uncertainty in terms of delivery. To illustrate the type of projects we deliver, I brought here three examples. They have been touched, covered in the previous presentations.
Each of them brought different construction challenges. The first one is the I-66. It's a project, it's a large project, complex project, that we deliver while maintaining the traffic flow of the general purpose lanes in a very congested area. The next one is our projects in Dallas-Fort Worth, where we brought some groundbreaking engineering design solutions that in a very confined space, we managed to do by a segregation of a two-level express lanes and general purpose lane, relieve the traffic in that area. And the last one, very different example, the Terminal 2 or Queen's Terminal at the heart of Heathrow. A very complex design and build project that we deliver ahead of time and on budget. But allow me to expand further on our end-to-end delivery capabilities.
We engage with Cintra and Airports from the outset, from very early stages, to help craft compelling and solid proposals that in many cases result in successful projects. That was the case, for example, of the I-77 South in Charlotte or the North Tarrant Express extensions in Dallas. We also develop innovative design solutions that are critical to winning tenders, critical to winning proposals. We propose changes to the base design proposed by the client, changes that are always oriented towards reducing cost, improving traffic flow, connectivity, and of course, ensuring delivery certainty. As I mentioned before, we believe not many companies are prepared to deliver these kind of projects. In many cases, we can see that the developers and the EPC contractors' interest are not aligned. We have seen as well that that is the cause of some of these projects to derail.
However, in Ferrovial, because we are an integrated part of the group, our interests are 100% aligned, and that means that Cintra and Airports can rely on us to deliver the projects on time and on budget. In fact, cooperation is one of the core values of Ferrovial, and it translates in the way we work together as a team. Lastly, and it was mentioned before, we also provide some other type of services to our sister companies. For example, project management services, like is the case in JFK Terminal One, or even construction advice, like is the case for IRB in India. As I mentioned before, the Construction division is organized and is structured to provide that support for Cintra and Airports. And the key metric for that is our target that at least 25% of our revenue comes from the other Ferrovial divisions.
So why 25%? Well, the reality is that to be able to deliver these kind of complex projects for Ferrovial divisions, we need to ensure we have, we maintain, and we grow our construction capabilities across the different geographies and across the different project types. We also need to ensure, by delivering these complex projects outside Ferrovial, that we remain competitive. And that is very relevant because, again, all the tenders have to win normally in a competitive manner. What is what defines how we are structured? It defines our target size, and the target size is defined by that 25% revenue coming from all the Ferrovial divisions. That ensures that we maintain the capabilities while delivering on the core projects for Ferrovial. Other very relevant element for our organization, the way we are organized, is that we have three strong local or home bases.
These three home bases are Texas, Spain, and Poland. Why we have these three strong bases? Well, that allow us to develop talent, to grow capabilities, talent and capabilities that then can be exported to other geographies and other projects when needed. Another very relevant aspect of how we are organized is our ability to manage risk. It's very relevant in this kind of project to de-risk the project as much as you can through development. We are very well-placed to balance the risk between EPC contractor and developer, and tap it to the party that is best placed to manage each specific risk. Building up on our capabilities. Our strong international in-house engineering service, I believe, is key to our ability, to our ability to deliver complex projects.
We have more than 370 designers across different geographies that can be deployed wherever and whenever needed in our projects. They have the ability, the capacity, to do everything from bidding support through to even construction drawings, and of course, provide design support during the construction phase. We have developed what we call our global operating model. It's a global operating model that captures all the lessons learned, all our know-how that we have collected during the years and during the different geographies, and it's an operating model that is focused on risk management and delivery certainty. This operating model is applied to all of our projects across our different geographies. The model consists on a set of nine processes that cover the full life cycle of a project, from opportunity evaluation through bidding, design, construction, and of course, project handover.
Very relevant, each of these processes includes different checks and balances to help mitigate, manage risk, and ensure delivery certainty, all of them informed by our technical and engineering capabilities. At Ferrovial, sustainability is at the heart of everything we do. There are three main priorities for us in the Construction division. First one, protecting the environment. Second, helping the communities where we operate. Third one, running our business responsibly. From our environmental perspective, we are focused on reducing carbon emissions and promoting circular economy, which in construction, as you can imagine, is very relevant. In terms of communities, we engage, we try to work with the communities, help the communities where we operate.
In terms of our employees, we promote diversity, engagement, and in construction, very relevant, we take care of our employees, putting health, safety, and well-being at the forefront of everything we do. In fact, we have a good track record when it comes to industry metrics in terms of health, safety, and well-being, and we compare very well with the market where we operate. Finally, we run our business responsibly with high standards of governance throughout our supply chain. We measure our suppliers against very specific sustainability metrics. I just want to touch on another element that I consider critical in our strategy: technology. Technology plays a critical role in everything we do. We are focused on implementing technologies and innovations that truly add value to the construction process.
I would say that we have a very practical approach when it comes to implementing technology. There are a number of areas where we operate, but I just want to bring to your attention three of them. The first one is information, the flow of information. For a project to be successful, it's very relevant, it's very important that the flow of information between the different departments of the project happens in a timely manner and is accurate for proper decision-making. And for that, we use best-in-class project management platforms. The second area is site progress monitoring, capturing real-time site information. And for that, we use advanced technologies like use of drones or connected equipment in what we call connected sites. And the third one is the use of data.
In a construction project, lots of data are captured, not only in production, but also when you do procurement, scheduling, all sorts of data is captured. We group that data and we use artificial intelligence and advanced analytics to ensure that we extract the right information for decision-making and reporting. But, as I mentioned before, our Construction division is a profitable business on its own merits. We have a strong backlog that we aim to maintain approximately between 20 and 24 months' worth of revenue, and we aim to maintain with good profitable prospects. A backlog that is concentrated in core, stable markets. Approximately 60% of our backlog is in the U.S. and Canada. That includes what we call managed CapEx, which is the CapEx we manage on behalf of our, partner, developer, and 30% of it is within other group divisions.
Maintaining this level of backlog allows us to take a conservative approach to bidding, meaning that we can focus on risk mitigation and profitability in the long term. Here I have a few more data about our track record, our financials. So we have set a long-term target of achieving a 3.5% adjusted EBIT margin on revenues. While that number is still at 2% between 2020 and 2022, due to some legacy projects that are now coming to an end, and also the impact of the COVID pandemic and the price escalation that came straight after that, we have a good track record of 5% between 2010 and 2019. Also, historically, our Construction business is generated recurring cash flow.
The average between 2010 and 2019 was EUR 178 million cash generated per year. This is a result of our continued focus on working capital management, and also a result of the typical advanced payments that we get in our design and build contracts that is normally around 5%-10% of the total contract value. Well, to finalize and to recap, our Construction division plays a critical and strategic role in Ferrovial value creation. We are vertically integrated to support Airports and Cintra, which means that Ferrovial is able to deliver on complex infrastructure projects from the very beginning through to completion. And in fact, our organization, we are organized, we are structured to support that overall Ferrovial strategy.
That means the way we define our target size, the way we define our geographical footprint, and even the level of technical and engineering capabilities is based precisely on that purpose. Also, the Construction division is a profitable business on its own merit, as I said, with a good track record, for example, in cash flow generation. I believe our strategy will enable us to continue building on that momentum going forward. Thank you very much. Now I hand over to Ernesto López Mozo, our CFO.
Over the past decade, Ferrovial has transformed itself into a leading provider of high-complexity infrastructure, driven by a passionate commitment to the progress that helps to shape a better future. Our strategy centers around greenfield projects, where we leverage our deep industry expertise to deliver exceptional value for our shareholders. We specialize in developing and managing complex infrastructure assets that offer congestion-free alternatives in densely populated areas. These projects are not just about bricks and mortar. They're about improving lives. By easing traffic flow and enhancing regional connectivity, we foster social well-being and contribute to a higher quality of life for the communities we serve. At Ferrovial, we're driven by a single purpose: to make our company better every day for everyone we impact. From our employees and customers to our investors and communities we operate in, we strive to leave the world better than we found it.
Whether it's through our toll roads, airports, tunnels, or bridges, Ferrovial is all about connecting people in a more sustainable way. We're proud to be at the forefront of innovation, as evidenced by the world's first 100% sustainable aviation fuel flight, which took off from London Heathrow to New York JFK in 2023. Sustainability is always on our mind at Ferrovial. Throughout the years, we've continuously evolved our infrastructure designs and embraced cutting-edge technologies to minimize our environmental footprint. A prime example is our I-66 Express Lanes project, where we used recycled concrete from the existing highway to construct the new lanes. This elevated approach significantly reduced the need for trucks, transportation, and landfills, resulting in a smaller carbon footprint for the project. At Ferrovial, we remain unwavering in our commitment to develop and operate sustainable, innovative, and efficient infrastructure for a world on the move.
Hello, good morning. My name is Ernesto López Mozo. I am the Group CFO, and I'm thrilled to be here with you guys at last in New York, our first Capital Markets Day in the U.S.
...Today, I'm going to talk about four things. The first one is long-term value creation and growth. Of course, my colleagues describe how we do that. I'm gonna relate that to the stock performance. Second, I will talk about our financial structure. I mean, that's different from our competitors, and that's for a reason. I will explain that. Third, very important, how we manage capital. I mean, the most important resource, your capital, and I will talk a little bit about that. And of course, the fourth section is gonna be about numbers and what we expect looking ahead. Well, the first is about the stock performance. I won't dwell on this one. I mean, it has a great run, but the important thing is what lies behind. What lies behind is a strategy that move-- I mean, and you can follow the orange line.
That is the percentage of value that analysts attached to our infrastructure assets in our equity evaluation. 10 years ago, it was like 60%, roughly, and it has moved to 91%. This was conscious strategy. We sold the Services division and have invested mainly in infrastructure assets in the U.S. Also in this graph, you can see some of the effects that my colleagues have described. One of them is the de-risking. I mean, these are very complex assets. To beat them with a very high return, and it's normal to have just the equity that you initially commit as a value. It expands. I mean, some of these assets were already in the portfolio along these graphs, but the market was not attaching any value to them. Well, just that money.
So the risking happens once you build it, once you see traffic ramp up, you have a lower discount rate, and it shows. I mean, the equity value of infrastructure has multiplied by three, and we have a portfolio of assets, right? Some of them early stages, but you have them. Okay, and 80% of that is in North America. But that's the past. Where are we now? Well, my colleagues described that we have strong growth ahead in the regions where we are. That's very important because our roads are an important part of the logistics and the road transportation network on these growing areas. As they grow, capacity doesn't follow track. Luke even described that with the New Terminal One, and that means that you have more growth in your assets. Of course, I mean, there's inflation. Inflation for us is a tailwind.
I mean, probably it will be sticky, and more about this in the next slide. And third, we have interest rate protection. That's very important, and the same percent of our assets have very long-term financing. Well, some of you may say, "Well, but now rates are coming down, so what about that?" Well, there's something for you later. Okay, infrastructure assets perform well in inflationary environment, but there, there's a reason for that. I mean, they are not redundant. I mean, they are scarce, overall, and they have the capacity to pass on inflation or more. When you look into our portfolio, you have that snapshot. You see the 407 ETR, for instance, the past 10 years. Well, not the past 10 years, 2013 to 2022.
You see that it clearly outpaced inflation, even though there was COVID in that part, right? And you know that some rates were not touched for some years, and now you've seen that there has been an important increase that starts on February this year. Then you have the managed lanes, the express lanes, that you see quite an important growth, of course, helped by the ramp-up situation. Nevertheless, beating inflation handsomely. And the latest arrivals to the portfolio have freedom to set tariffs, right? Charlotte, Virginia, and the I-66, and the New Terminal One, as Luke described. And last, well, we have Heathrow, and Heathrow is a regulated asset base that is, I mean, linked to inflation, so it grows with inflation.
On that inflated asset, you get a real rate of return from the regulator, and that means that tariffs are linked to RPI as well. Okay, so inflation helps because your assets are needed and the areas grow. Okay, let's move into our capital structure. It's different from other competitors. We have two layers. We have the infrastructure projects. Each one of them is like a standalone company. There's a reason for that. Well, there's several reasons for that. One of them, we have partners there. We have partners there because they help us grow. I mean, we can grow our capital on a more efficient with a more efficient pricing. If we were to raise capital at the top, it would have a discount, right? So it's more expensive. So you have a better pricing there. Well, why not? It's also a sanity check.
At the same time, you have a independent, data structure on each of them. Well, that's arguable, but we believe that, you can optimize leverage. When you have companies that mix and cross-support each other, leverage tends to be lower. Okay, and then we have the corporate, the corporate level, where we have a net cash position at the end of, of September. And here, it's very important, we have a, a BB B rating. That is key. Why is the BB B rating key? It's key for growth. I mean, in the U.S., you need it, well, for credentials, yes, but also it's very important, you are required to have performance bonds and payment and performance bonds from sureties. And sureties provide ample capacity if you have a solid rating.
The moment rating starts to waver, I mean, it can come down dramatically and overnight, okay? So growth relies on our BBB rating, and we manage it with some headroom. We could hold to some leverage if opportunities really appear. Okay, but, I mean, we are prudent, as I said, is, is key for growth. What happens with the infrastructure projects? Something also very important. We have long-term maturities. We have growing cash flows, and it's very important to have long-term maturities from the start. You have 26 years in the express lanes, is the average for 716, and Heathrow, nine years. Also very important, we don't have any refinancing wall. We have a very scattered maturities or in the, in the express lanes, very long-distance maturities, and it's almost fixed.
Okay, for the guys that say that, well, long-term rates will come a lot lower, we try to embed call options in some of this financing, right? Well, the muni bonds provide that, and that's something that is very useful. So we have some embedded options, options here. Okay, and in general, these structures have an investment grade across the board. If we move on to the capital management, as I said, the most important resource, you can see that the driving force is dividends from our infrastructure projects. And there's a high correlation, of course, with the dividends that are... or shareholder distributions between dividends and buybacks. Also very important, we rotate assets, as it has been said before. We rotate assets because once they are de-risked, sometimes you have someone that has a lower required rate of return.
We have a better opportunity to redeploy that capital with a good risk-return balance. Well, you can see that in the past 10 years, dividends, shareholder distributions have been very similar. We had infrastructure, assets rotation. We even invested more in infrastructure assets, and here is where we have proceeds from services being relocated into infrastructure. And very important, 58% of that investment went into express lanes, and it had multiplied money on money by 5x . Of course, I always leave there the commitment to BBB rating that marks the parameters for growth. Okay, and then the last slide, what we expect for the next three years, 2024 and 2026. We expect to have EUR 2.2 billion dividends from the infrastructure assets. Heathrow is not here, so no dividends from Heathrow in these numbers.
Then we have shareholder distributions of EUR 1.7 billion. Shareholder distributions is, dividends and buybacks. And here, I mean, if there's proceeds from a potential divestment of Heathrow, we would look to use them in different ways. I mean, one of them could be investment. We could be more successful, luckily, with our pipeline. We could even have maybe higher, participation in some of our projects, and of course, we could increase, shareholder, remuneration, buybacks, and, and dividends. Okay, so thanks, for that. I think that now we move on to the Q&A session with Silvia and, and Ignacio Madridejos. Thanks for being with us. Wow! Very tall chairs. Sí, sí, lo que pasa es que son un poquito altas.
Okay, can you hear me well? Yes, perfect. So ready, let's start with the Q&A session. For those of you that are here, please feel free to raise your hands. We have people here that will pass the microphone, and I will be reading the ones on the website. So yeah, please.
Hi, good morning. Thanks very much for your presentation. I'm Elodie Rall from JP Morgan. So I don't know if you can hear me.
Yes.
So maybe the first question on the U.S. listing, we were expecting it to happen, I think, before the CMD. So if you could give us a little bit of an update on that, and is it gonna be a secondary listing, a third listing, versus the Spanish and the Netherlands? And what kind of liquidity you'd expect on that?
Okay, thanks. Well, you can see that we already had a public filing, so it's just the process is going on, and it's the SEC's prerogative to see when it's finalized, right? So no more comments on that. Regarding primary and secondary listing, well, that kind of classification doesn't exist in the listing in Spain nor the Netherlands. No, it's just ordinary listings in all the three stock exchanges, we finally make it to the U.S., right? As expected. So no different classification.
Okay, also, you—I think there was more question on toll roads, on so, so on traffic . You mentioned those seven projects, the bids that you have ongoing. We all know the SR 400 in Georgia is probably the biggest one and during spring. So I was wondering if you could give us a bit of color about the capital, the requirements, the size of those projects, how much that would take from Ferrovial.
I will comment on that.
Yeah.
Well, we commented about these seven projects that we have in the pipeline, and the first one is the SR 400 in Atlanta, that we will be bidding for in May, and the decision will be taken in August. This is a large project in terms of both of construction and equity requirements. Of course, we cannot give the amount of capital because it's very sensitive for this bidding process and for competitors. It's a figure that they would like to have, but they are relevant projects. This is a very large one. After that, we mentioned others, two in Atlanta, that it will come after this one, even larger than the SR 400.
The I-285, I mean, the two additional projects there are very large in terms of construction and the size of the projects and the traffic. It's a ring road in Atlanta, so it's a very relevant one, and also with additional extensions potentially in the future. The ones in Nashville probably are not at the same size of this in Atlanta, but they are good projects around Nashville. I-77, the South is larger project than the I-77 North in terms of traffic and the construction that is needed. The I-495 in Virginia is in terms of length of the project is not very long, but it's relevant construction considering the area and very good traffic too.
What we're seeing is a lot. The capital required for this project is significant, and the amount of construction, the budget needed in these projects is also, I mean, relevant. We are talking multi-billion-dollar projects in all of them.
Maybe, you know-
It's working, it's working. Just closer on here.
Is it, is it working?
Yes.
So that what could be maybe helpful is, you two explain to us how you think about buybacks when you have those kinds of projects coming through. So you gave us a color about EUR 1.7 billion of returns versus the EUR 2.2 billion of dividends you expect. But, what would be the commitment in terms of dividend and buyback? Would it be, like, equally split, like, I think it's been more or less historical average, or like, the commitment on dividend and buyback would be conditional on whether you have investments to come?
No, I can go first, and you can comment later. Now, what we have, this figure is for a three-year period, as was commented in presentation 2024, 2025, 2026. In this period of time, we have also committed investment, as was commented before, close to EUR 0.9 billion, especially related to the NTO, the New Terminal One. And also in three-year period, what we consider is the potential capital that we need to commit with new projects that we'll have in the long term. That's why I mentioned that we look at 10-year period, and this will have... Hopefully, we win, or we'll see. The SR 400 are committed investment for this that will happen later on, and maybe you have new biddings in 2026 or whenever, that you may have additional committed investments, no? That's the way it works.
For the EUR 1.7 billion, EUR 1.7 billion is the traditional distributions, that the, the way we do normally with both dividends and buying shares in case of some of our shareholders take that option.
Okay, and I know I need to give back the mic, but you said that you talked about your competitors very quickly. In maybe for U.S. investors who are new to the story, who would be your main peers and competitors?
That's a good question. I think we have competitors, and then is... Even if the type of projects that we do in express lanes are not easy because it requires, as commented, multi-billion-dollar investments in certain regions. You need to commit a fixed price and a delivery on time, so it's not easy. It's difficult also to anticipate the traffic revenues that you will have in these places, unless you have the data that Andrés was commenting previously. Requires quite a large amount of equity. But being said that, as it's difficult, I think we have been successful, so we think that there will be some competitors. In the case of the SR 400, what we are seeing is, ACS, together with Acciona and Meridian, that are bidding, is the other bidder for that specific project.
In other cases, in the previous one in Maryland, we saw at that period of time there was a Transurban there as the main competitor. But it's expected that there may be some other competitors in the future. Usually, in any of these opportunities, we'll have three bidders, that usually they select preferred bidders, and usually, normally it's three, and I think will be a competitive process. But it's not easy to find companies with those skills and capabilities. Mm-hmm.
Okay, thank you.
Sathish from Citigroup. I got three questions and all related to airports. Firstly, on the NTO, you are almost tripling the capacity there. And can you give us some color on the runway capacity between peak and off-peak, where it is today, and what happens when you go to 23 million passenger? And how does it... You're going to get the allocation on the runway side? Yeah, so that, any clarification on terminal associated runway capacity. And the second is actually on, again, on the airport. Obviously, toll road, you got an exposure to India in the form of IRB, and whereas in your portfolio, there's not much exposure on the airport side into Indian market. If you see some of your European peers on the airport side, they got projects coming up there.
So what is actually preventing you from going into the airport side of growth in the Indian market? And the third one, again, related to JFK. Tripling the capacity, one of the key constraint is actually getting to the airport, right? So are you in discussion with the local authorities on-
... any other projects that makes it for passengers, like, get the ease of access to the airport as well? Thank you.
Well, the first question, the limitation of the capacity at the JFK Airport is no runway. There are plenty of capacity. Limitation is the number of gates, especially wide-body gates. That is what we are bringing to the market. In terms of India, about your question, we are not looking for other infra class of the country. We are just focusing on toll roads and together with IRB, that has been. The type of things that we like to do in the future has been has good capabilities in order to develop new greenfields projects or yellowfield projects, and what we could do is invest together with them, but not outside, or we are not thinking about airports for the time being. And working with local authorities is, I mean, is key to develop new opportunities in the U.S.
The reality is that the airports in the U.S. are owned by local municipalities in most cases, and they have not relied on private partners in order to develop infrastructure. That may change. We think that the NTO will be a very good reference in the future for those that they want to accelerate airport infrastructure, will be a world-class terminal, and hopefully, this open opportunities in other airports in the U.S.
Yeah. Can I quickly go back to that, runway capacity? Any clarification on the peak versus the off-peak capacity there?
I think we can, we can give more information about that, but there's plenty. I think it's not, it's not an issue, but, I don't know you want to clarify later or later.
I think it's important to note that, when we talk about the offering in the New Terminal One, the existing Terminal 1 gets demolished, so we're actually decanting that traffic into the new terminal. So that grows over a longer period. There is runway capacity in periods. In the peak period, there's significantly less than there is in the off-peak period, but we are comfortable with our projections in terminal capacity, vis-a-vis runway. As Ignacio mentioned, the key constraint is wide-body gates, not runway capacity.
Okay, got it. Thank you.
Thanks very much. Graham Hunt, Jefferies. First question on the listing: so you'll have, after the U.S. listing, is added three listings. Is that the plan for the long term, to maintain three listings, or would you consider dropping one? And are there any benefits to having all three running concurrently?
Okay, well, basically, we'll have to monitor how liquidity evolves. Liquidity tends to concentrate, so, I mean, that's a possibility in the future. I mean, investors will dictate that, right? I mean, we really expect to grow liquidity in the U.S., and, hopefully, that should be the most important one in the future. Right.
And then maybe just a question on Heathrow. A number of your shareholders have triggered their tag-along rights. Was this a scenario you had envisaged? I don't know if there's anything you can comment on in terms of your expectations for that process, in light of those tag-along rights.
According to the shareholders' agreement, they have the right to sell the shares together with us. I think that some of them, they have been for a long period of time, and probably for them, it's also the right time to rotate the assets and invest in other opportunities. I think that 40% decided to stay, 35% decided to sell together with us; it looks a fair price. I think we didn't anticipate. We know that they had the right, and they exercise it, and now we need to sell together the 60% in order to proceed with the sale of Heathrow.
Thanks.
Hi, this is Gary from Lazard. Just a quick question on the Schedule 22 payments for the 407. Just hoping to get some more color onto that, when it's expected to continue or start again.
Yeah, this Schedule 22 payments, just to remember that it will be calculated with the traffic of 2025, and the first payment will be... Well, the first payment was done before, but after the COVID, after the increase of tariffs, it will be in 2026. The decision to increase tariffs is because create value for shareholders compared to the Schedule 22 payments. When we look also at the Schedule 22 payment, we have to look at the long term. Something that will affect probably in the short term, as traffics continue to grow. Hopefully, in a few years, it will not be an issue.
We are talking about an asset that still has 24 years ahead, a lot of value in the long term, and this is what we need to look when we talk about the Schedule 22. We'll give some information in the Fact B ook that facilitate to calculate. Of course, not giving any forecast, but some information that may be helpful for you to calculate the Schedule 22.
Okay, I can read a couple of questions from the, website. So there are some of them, I believe, that have been already answered regarding what is included in the dividends, guidance that we are giving from infra projects, and especially Lev Margolin from L1 asks: "Can you please explain how you estimate dividends from infra for 2022-2026? What are the assumptions around refinancing? Could this figure be conservative or not?
... Okay, well, we don't provide a breakdown on this. I mean, the main driver of the dividends is the operating cash flow performance of the assets. Leverage could play a part, but it's, I mean, quite a degree or two less, I mean much less than the operating cash flow, right? So the driving is the operating performance.
Okay. We have one question here. Oh, go ahead, please.
Thank you. Yep, in the toll roads presentation, you talked about proactively approaching partners, and then in the airport presentation, you talked about bilateral relationships. Can you talk about what percentage of your existing pipeline is a result of the proactive approach and maybe similarly in the airports? And going forward, how do you see that percentage breaking out?
As was commented in the presentation, we have a local business development team, and we have been working long period of time with the local authorities, DOTs or airport authorities, and we prefer those that are based on bilateral negotiations. In the case of these opportunities that we have seen in express lanes, what we go is with proposals to the DOTs, in which we see that there is a problem with the traffic, and that problem will increase in the future. And we analyze if the projects are technically feasible and financially feasible, so if you have enough traffic to compensate for the level of investment that you need to do.
With that, some DOTs will decide to launch their own processes, and with that, we see we have the pipeline that you have seen. So most of them, we are proactive, talking to the DOTs, presenting potential projects that they could bring in the future, and the contribution that is going to make. And because of that, is that we have the pipeline that you have seen. In the case of airports, we try to be proactive, also talking to them. We don't like to participate in these processes that you have too many competitors, especially infrastructure funds, that with brownfields. We like to participate in those in which we have differential capabilities. That is the case of NTO, in which you have to...
A construction that is very relevant, you need to have the PMO, you need to have the MSA, you need to know how to operate airports. Not any company could. Many companies could do this type of work. This is the ones that we like to do. And then working in with airports in order to identify other opportunities, especially when they need to accelerate infrastructure, is key. Then later, in most cases, they need to open to competitors, and it's a bidding process. But in those cases, I mean, you know very well the project, you have the capabilities in order to do that, and this is the type of things that we like to do.
Oh, okay.
Hi. Can you, can you guys hear me?
Yeah.
So Abhishek here from Tribune Investment Group. Silvia, thank you so much for organizing this. I had a high-level question for Ignacio, maybe initially.
Sure.
So when I think about Ferrovial, I was considering maybe you could share what's your vision a few years from now. So is it gonna be a toll roads, toll roads-focused operator? Is there gonna be a focus on North America? Obviously, we've discussed the opportunity in India, where obviously there's a lot of growth in GDP, but we've got a lot of... If you could just share your vision for the company, let's say, a few years from now, is there gonna be a geographic or asset class focus within infrastructure?
Yes, as was commented during the presentation, focus is in North America. This is where we see more opportunities, where we have the value today, and where in the future, we like to have, similar to today, at least 80% of the value of the company in North America. With the opportunities that we have seen, I think that that hopefully is the case. In terms of infrastructure, I think we like toll roads, especially the express lanes, that have created good value for the company. We like to do more of them. In the case of airports, we also like the asset class, but it's very much more difficult to get opportunities, so probably they will be more selective in the future, but hopefully, we can also generate here in the US.
The focus is at least 80% of the value of the company in North America, and this is where we see the very good pipeline to continue growing.
Understood. I had a follow-up question on the U.S. managed lanes, maybe for Ernesto. There's a few of these roads that don't share the revenue-sharing mechanism, and from what my understanding is, that it's up to the government, the state governments there, to share these. Any idea on if and when we'll be able to get this information?
No, I mean, that information will be part of the Fact B ook that will be released, so you will have that for every single asset.
Understood. Thank you so much.
A couple of questions.
Thank you. Nicolas Mora from Morgan Stanley. I have a few, so please stop me. Maybe just on the Cintra, it's maybe more for Andrés, but to be seen. On the 407, can you help us understand a little bit the tariff path from here, following the kind of 14% increase in February, so coming on stream today? Expectations are building up for another big increase next year and then more. Can you help us frame a little bit how you think about tariffs? We understand the long term, you know, the pricing power embedded in the asset, but kind of path, I mean, yeah, frame us the next two, three year kind of based on tariffs.
Tariffs again, on managed lanes, the switch to mandatory pricing is key for some of these assets to drive value? Which asset is getting that, that premium pricing today? When will others benefit from that, that step up, considering, you know, growth developments in traffic, new stretches opening up? And then staying on the toll roads and the greenfield, you've put forward seven projects. You're not gonna put any equity in these projects before 2027, 2028, 2029, 2030, 2031. You're gonna accumulate cash, so you've given us a EUR 2.2 billion upstream, dividend upstream distribution from assets, EUR 1.7 billion of dividends, as used. Then we've got Heathrow, hypothetically, we've got AGS, hypothetically. We've got more assets, small toll road assets that could add up to EUR 3.5 billion.
There's a big, there's a big discrepancy between the DV upstreams plus the disposal and the use of cash. Can you help us also bridge a little bit the, the gap? Thank you.
Let me start by the 407. As you mentioned yesterday, is the day we are implemented the increase after four years, that last one was before the pandemic. And as commented, the way we are pricing at the 407, we have the freedom to set toll rates, and what we do is consider the value to users. And this value to user, as commented, is the time savings, the reliability compared to third, other third alternatives congested. It's about the higher safety, it's about the convenience, it's about the peace of mind. And what we will do is capture whatever we can of this value that we give to users, but also maintain a high customer satisfaction, as has been the case in the past.
In all our assets, there is a very high satisfaction by consumers, but also because we offer a good value to them, and we capture part of it. As you mentioned this, we're talking about the very long term. I mean, 75 years is still ahead with a city that is growing in terms of population, economic activity, that the 407, that was very far, far from the city center. Now you see a lot of buildings, every day you see new offices there, new logistics centers, a lot of activity around. So I think we'll have increase the value in the future, and as part of this value, we'll try to capture with a very high customer satisfaction.
The way we have done before COVID, we'll try to do in the future, and we'll take decisions every year in terms of what is the value and how we capture that. For the case of the Dallas North Lane, well, we have also a soft cap. The first thing is that this soft cap is increasing every year with inflation, so we have to consider that. And above that, we can go with the mandatory modes, as you were commenting. And these mandatory modes is when there is certain traffic parameters, we above them, or the speed is below certain numbers, or the number of vehicles is large enough in order to increase. And we have to increase these the tariffs until we increase the speed or reduce the number of vehicles.
So it's something that we have to do, and it's mandatory. In these cases, some of them, of the assets, we have commented, and these we have mandatory mode. We used to have 35W also have some, and at some point of time, limited ones. But in the future, as long as the city is growing, the economic activity is growing, hopefully we'll see more of them. Mm, the value that we provide to the user is that we are the free flow alternative compared to other congested alternatives in the area. The city is growing a lot, so I think in the future, hopefully we'll see more in several years from now. About the cash flows, you have to think in three years' time.
First, Heathrow is not included at all, so what we talk is we are not including the dividends of Heathrow. We are not including the investment of Heathrow in these numbers. It's just three years. In these three years, on top of this number, the EUR 1.7 billion, you have to add the EUR 0.9 billion committed investments that we have, including there, the NTO, and also you have to consider the potential other committed investments that we could have if we win projects like SR 400. This is what we need to consider. The worst thing could happen is that we don't have the capital to do and to develop projects that we think can create value for the company.
Because of that, we need to have certain flexibility in order to make sure that these projects that generate value, we can do them in the future. As commented previously, list is quite relevant, the size of this project is relevant, and the capital needed for this project is also relevant, and it's something that we need to consider. In the case that these are not, we don't have this project that we'll be bidding for, or we don't win them, of course, things could change, and maybe we don't need this committed investment in the future. But we need to consider in this three, three years' time, all these variables in order to take our decisions.
Okay, let me read a couple of questions from the website. We have a question from Aweti Lo from Eleva Capital regarding shareholder nomination. The question is, given the guide for EUR 1.7 billion of total shareholder remuneration and the EUR 500 million buyback that was announced on 13th November 2023, which implies a dividend of EUR 1.2 billion for the next three years, which is a step down from 2023 levels, could we get a little bit more color on the reasoning for this, given the amount of cash flow you have from your assets?
Well, basically, it's linked with what Ignacio just mentioned. I mean, we have a value accretive pipeline ahead of us that we need to really face with the capital resources to be as successful as possible. So we need to basically be prudent in that regard.
... Hi, thank you. I have a question on JFK. So you've disclosed that the capacity at the new terminal is gonna be 23 million. My, my guess is that the 23 million is at the end of phase B. Are you able to tell us what phase A capacity is, and also how the costs split between phase A and phase B? And then I have one more on the same.
Are we disclosing that the amount of capacity phase A? I'm not sure that the-
The total, I think that we have disclosed.
The total, yes, the EUR 23 million.
The total, yes.
What is the capacity of phase A?
Well, you have 14 gates versus 23 gates-
Yeah.
But in terms of the desk, I'm not sure.
Oh, yeah. Mm-hmm. All right.
We'll go back. If it is disclosed, we'll go back. But we are not sure if we are disclosing that information.
All right, no, no worries. I mean, if you can tell us, that'd be helpful, so that we can build the ramp on that as well.
Yeah.
I guess I have one more on this. You're the project manager on the construction, but you're not actually doing the construction. Have you locked down the costs? Who currently holds the risk of the costs changing?
Yeah. There is a... Yes, we are not the contractors. There is, AECOM Tishman, who is the contractor, and we have a maximum price, agreed as part of the contract with them.
Okay, I have some questions from Fernando Laf uente from Alantra. I understand that most of them have been already answered. One question regarding the pipeline. So on the growth pipeline, you give us an indication of when, could you give us some indication of when these seven projects are coming to the market? Is the strategy to go in consortium, and if so, which kind of partners are you talking to?
With these projects, the first one is the SR 400 that we are bidding in May, and the decision will be August. The others, we don't have today specific dates. They are working on it. Some of them, environmental permits is what they are doing now. Others, they announced their RF, RFQ for next year. So others are in the final decision-making, so it's difficult to anticipate now specific dates about these projects. And yes, we like to go with partners in the projects, the ones that we like, those that contribute and add things to Ferrovial. In some cases, 407, as you know, we have CP, CPPIB. I think the pension plan, local pension plan is a very good partner. NTO, we have also Ullico, the union pension plan.
I think that those partners that can contribute are the ones that we like, and I think this is a good check from third parties, that we are taking the right decisions in terms of the risk-return balance. We like to work with them. Some of them have been in several assets for certain period of time, but we try to select those that will help us to be more competitive and be more local.
Hi. Frank Greywitt from, DWS. I have three questions. The first is on the data. You've described ways that you, you're using data to win projects, bilateral agreements. Curious if there are other ways that you could monetize this data, others... You talked about some smaller businesses that you're incubating, and any ways that that could change the complexion of Ferrovial in the future. Second question, just when it comes to that data, just any indication on how you see tariff or rate of toll, and how that scales with congestion? And then finally, on the energy side, can you talk a little bit about this? I realize it's 2% today. How big do you see that getting? Do you see any, do you or do you see taking on any power price exposure?
Is this going to be regulated, PPAs? Just any other information you can give on the energy sector. Thank you.
On what?
On energy.
Okay.
Mm-hmm.
Remind me, the first question is about?
Yeah, you mentioned about-
The first question it was about?
Sorry. On the data side.
Oh, the data?
Yes.
Yes, on the data. Okay. No, I think that the main value that we have with the data today is in order, two things: One is the forecast of new projects, in order to understand well the revenues, in terms of helping us with the connectivity, if it's worth to do some additional infrastructure, additional connections in some parts of the highway, understanding how the revenues are going to be, that's critical. The other part is optimizing the ones that we have today, you know, the algorithms that they are learning, and with that learning, with the, what they do is try to maximize revenues every time, considering certain parameters, you know, that based on the behavior of the users. We, this is something that we don't want to sell to third parties.
I'm sure that some competitors would love to have some of the information that we have in our company, and it's something that today we are not planning to do. The type of projects that Andrés commented previously are things that they could add value to the assets that we have today, to the managed lanes. I mean, this idea to have a connected is just giving more information from the infrastructure to the cars, and with that, improve the safety. This next part is about tolling. I mean, instead of using your transponder, you pay with your app, and with that, we can get information not only about our toll roads, but third-party toll roads too, because they can be used in different states.
So we can get a lot of additional information that we don't have today, on top of generating some revenues that are not so relevant. And AIVIA is something that could be relevant in the future and could give a lot of additional data that will be relevant for new projects or maybe in the future too, that you will have some kind of congestion, I mean, charges, you know? So I think that. In that case, it's working with the DOTs in order to find new ways in which scarce asset that is the highways and the capacity, how you can monetize and use it in an efficient way so that you can improve the congestion in big cities, no? So that's the way we do it.
The next question was about...
Sorry, how toll rates scale with congestion, if you have any information on that?
The toll roads increasing with congestion. Well, this is we have algorithms with the dynamic pricing in which we optimize the revenues, no? So we calculate at the peak, and, I mean, it's in the especially in those that we have a freedom to set toll rates, is something that, of course, we are continue learning, because we can change the price in some cases, every two minutes or every five minutes. So understanding the willingness to pay in some of these scenarios is key and is something that you continue learning. It's very good in the case of I-66, that you don't have a multiplier for heavy vehicles, and these are willing to pay more than others.
So understanding very well how much they can pay at these peak hours, in which the alternative is really congested and is going to take much longer, well, is very relevant in order to optimize the revenues. And this is something that we are doing, we are improving every time and help us to optimize the revenues. And the last one was?
Energy, the Energy business.
Ah, Energy, yeah. Well, Energy, as committed, is an incipient business unit for us. And what we are doing is different things that we were doing already, we were participating, putting all them together. So we are already, for many years, doing energy efficiency projects in Spain. We're doing also some transmission line for third parties or renewable projects. What we are doing is putting all this together. There's going to be a need for construction companies like us in order to develop this in infrastructure that is going to be needed for the energy transition. And I think we have the skills in the company and the knowledge of the industry to, I mean, facilitate that and generating value for the company.
If in some of those, we see that there are some projects in which we have competitive advantages and we can invest on equity, we'll do. But we are not a utility. We don't want to be a utility. We are just a developer of infrastructure, building capabilities to facilitate a sector that is growing and is needing companies like us, and we have the chance to invest the limited resources in places that we have a competitive advantage, we'll do, but just as a developer of infrastructure, never as a utility.
Yes. Hi, Shawn Trudeau from Neuberger Berman. Here in New York, we're not used to such nice things, so thank you very much. Luke did give some credit, however, to LaGuardia, and I think credit is due on that particular asset. I'm curious, what has changed in the New York area environment that enabled you to introduce yourselves into the conversation and win this deal with Terminal 1? Why was it not developed in a similar way as LaGuardia was?
Well, the case of the Port Authority, they have relied with the private partners in order to develop some infrastructure, no? This is the way that what they are doing now with the New Terminal One, but it's also the case that they are doing with the Terminal 6 or others, no, in New York. So they are thinking about things like that. And I think it is, as committed, we want to speed this infrastructure that is, I think, well needed, and relying on private partners is perfect for them. This specific project at JFK was originated by Carlyle, together with the JLC and Ullico. So I think they were the ones that envisioned this, together with the airlines, got the lease and worked with the Port Authority to...
Also with the communities, because Queens, I mean, is very relevant for this project and what you can contribute to the community. So they did a very good job bringing all this together, the Port Authority, Queens, and the need of infrastructure and how to accelerate it. The issue is when they went to build it, they were lacking these skills in order to have such a large infrastructure to be developed in an area like, like New York. And that's when we had the chance. They invited us to participate and to look at the project, and this is when we took a participation. It's a large investment. We have good skills to contribute with the PMO, with other experience, like Terminal 2, that Luke commented previously, but it's something that we have done in the past.
We know how to do it. We are relying on a construction company that have the local skills, but we also participate in order to make this project on budget and on time, that is in the schedule. That is what is the relevant in order to get the returns for the investors. We think it's a very good project with contribution to the community and also a scarce resource in a market that is growing.
Thank you. Following up on that last question, you mentioned the potential effect on gas taxes, right? As EVs, etc., penetrate, which would tell me that you would maybe have an opportunity eventually to not be just in the south of the U.S., but maybe the Northeast, California. Are there any discussions there? Is that market a potential market for you in the future, do you?
Well, the main opportunities for express lanes are in cities that are growing, and they lack infrastructure. So I think that, these places, Texas is a very good example, Dallas or Houston, Atlanta, Charlotte, Nashville. So these type of cities that, they growing very fast, they lack the infrastructure. Probably the state, if they allocate funds for these multibillion-dollar projects, they don't have enough money in order to do all the rural roads or maintenance of other roads. These are the perfect targets because they need private partners in order to accelerate unneeded infrastructure. So these are the places that we are targeting. At the same time, we have to think that we cannot have construction capabilities everywhere. Each state is different.
So we need to target very well in which places we see, as Andrés was commented, that there's going to be growth, there is going to be problem of congestion, and we can be there in order to solve those problems. Because we need to, developing these construction capabilities is not, is not easy. We have been many years now in Atlanta, in Georgia, doing the projects. We have learned, I mean, losing some money, so I think it's a, but it's a learning. So at the end, you need to learn how is the market. The first time that you go there is not easy, and I think that, building those capabilities take time, so you cannot be everywhere.
You have to be selective on the places that you are going to present the projects, and that you will have the capabilities to do that specific projects. We think that the ones that we have selected, and hopefully, I mean, we'll see the projects there, and we are right. Maybe others, yes. Maybe some of them we are not there.
Let me read a couple of questions from the website. So, one question from Marcin. Please, could you confirm if you intend to divest your stake in AGS?
We don't comment about the any rumor or any type of transaction. We just commented previously what is our business model. We rotate mature assets to recycle capital in other projects with potential higher returns, especially greenfield projects. So this is the philosophy that we have in the company, and of course, when it has more value for a third party than for us. But we don't comment about any specific asset rotation right now.
Another question from Luis Prieto from Kepler. Regarding pricing: so how should we think about the pricing growth potential of both 407 ETR and U.S. managed lanes over the long term? For how long can revenue per transaction grow above inflation?
Well, first, that we have the potential to go above. But that's... And when we have these assets, you need to think about the very long term. So we have 75 years in the 407. We have still 40-something years in some of the managed lanes. So we need to think about what will happen, how the cities will grow, the population, the economic activity. And our assets, what they have to do is give service, because be the one that is not congested, and you can arrive on time for this important event that you may have in the future. In some of those, we have freedom to set the rates, so I think we'll do based on the value.
With this value, we think that could or have the potential to go above inflation, based on the value that we can provide and the economic growth that we will have in the future. In the case of those Dallas-Fort Worth managed lanes that we have a soft cap. The soft cap is increasing with inflation, so the minimum that you will go is increasing with inflation, your tolls, toll rates. And above that, you have mandatory modes. And hopefully in the future, if the cities are growing and we see more traffic and entirely congested, we see more normal to have mandatory modes in which you increase, increase, increase until you go back to the level of service that you promised to your, to your users, and then you reduce later on.
So I think we have the potential to increase above inflation, yes. Over the long term, yes, until the end of the concession. It all depends on the value that we give to users, and, and we have the potential to capture that value.
Sathish from Citigroup. Just one quick follow-up on the NTO. Is that the focus right now is mainly on the aeronautical side? And what about the non-aeronautical in terms of retail opportunities and so on? Because if I look at the airlines that you have signed up and just look at the catchment area for those like airlines, the traffic that they bring in, the spend on it is much lower than, say, some of the other regions where potentially you could sign up in terms of the airlines. So any, any color on that, where do you see that opportunity?
Yes, you are right. I think this is the case. Usually in the U.S., the part of the commercial revenues are much smaller than the aeronautical revenues. Even though the offer that we are going to have is going to be similar to Heathrow, but of course, to the local market and the needs that the we want to have here. But our estimate is that's going to be lower. No, I think we get that number. It's, it's I think is-
Yeah, also because we share it with other partners-
Yes.
So we have the risks that, I mean-
Yes.
Our exposure is more to aeronautical. There's an opportunity there.
Yeah.
We have kind of hedging.
Yeah. I think we are... I'm not sure we are giving a number, but,
Without giving you the number, but I think one of the-
Okay.
The unique proposition that we will have, this is a purely international terminal. So when you buy duty-free in terminals, whether it's O'Hare or LAX or here in New York, you pay your money, and then you get it at the gate, if you remember it. We have what we call a cash and carry concept, where you, like in other European and Asian and Middle Eastern terminals, you buy your duty free, you take it. And that does create a lot of value. We say it's a smaller percentage of total revenue, because there is a revenue share. So I think that's the difference. That's the reason why you're not seeing the same split as you would see in a normal international terminal.
Thanks for this update. Cognizant, this is mostly to talk about the U.S. opportunity and your expansion into the U.S., but you have an interesting portfolio in Europe, some regional assets on the airport side. That business seems to be doing quite nicely. Low-cost carriers are growing quite nicely. Just wondering where that fits in the long-term vision?
... Would exiting that over time? And then on Heathrow specifically, they've been talking about a third runway since before I was born. I'm just wondering, any update there? 'Cause obviously, that would add significant incremental value as you seem to be selling down on that. Any thoughts on that?
Yeah, well, to Europe, we would like to have more opportunities there. So we are very well positioned in several countries in Europe. What we don't see is the level of opportunities to grow that we see today in the U.S. But hopefully we see those opportunities in the future, because as the region of the company, and we have all the skills in several markets, some of our core markets. But the pipeline that we see in the U.S. in terms of the express lanes that we mentioned before, the need of infrastructure and the deficit, I think is huge, and that's why the focus of the company today is in North America. About the Heathrow and the third runway, well, it's of course considered in part of the plan of Heathrow.
They are working on it to achieve that. It is the largest European hub, international hub, for Global Britain, growing and expanding as is needed, and is something that hopefully happens in the future. But of course, we have to go through different processes and planning permissions and approvals, and it will take time. So it's nothing that will happen in a few years. It will take a long period of time for that to happen.
Okay, so couple of questions from the web. So Filipe Leite from CaixaBank, he asked for the timing on the U.S. listing that I think we've covered, but he also asked about the indexes and what are the indexes that we could expect to be targeting.
Well, in the end, as I mentioned before, I mean, it would make sense to increase the U.S. liquidity, and hopefully it will be the most important market in a long time. When that happens, you can be included in different indices, and you could qualify for different ones, right? From the S&P, of course, and NASDAQ 100, Russell 1000 as well. So there's a variety of them, and I think it would be natural to end up there, given that you are providing—you will be providing the U.S. investors the opportunity to diversify their portfolios into something that is not represented at the moment, right? So it's a great business, and it's not represented in any listed portfolio in the U.S., right?
So yeah, hopefully we'll be, we'll be there. We are not basically limiting ourselves to one specific index.
A question of construction. So Nicolo Pessina from Mediobanca: Is the 3.5% target for EBIT margin in Construction in 2024 confirmed? What do you plan to get in 2026?
Yeah, our target and our goal that we are the whole team is working is to achieve at the end of 2024 is 3.5% EBIT. And as commented, I think we have a good backlog that is very healthy now. Some of these legacy projects affected by hyperinflation after COVID, well, they are closer to the end, and we are working to achieve that specific target. What was mentioned also in Ignacio's presentation is that what we want to achieve over the long term is an average of 3.5% EBIT, adjusted EBIT, over revenues. And this is something that we have achieved in the past, and I don't see why not, we should not achieve in the future as an average.
Just as a follow-up on NTO, you've whet our appetite a little bit on showing other terminals' tariff per passenger. Now, $80, $82 for, I think, Terminal 6, Terminal 4. $80-$110 for T6. So it's considering you place yourself as having the highest quality terminal, you must be placing yourself into the higher end. So north of $100? I mean, is that what you're trying to tell us with this slide in terms of where to put... Because, as was said, I think 80%+ of revenues will come from aviation. I mean, this is what makes the returns on the project. Just to help us a little bit frame, you know, a more precise range, probably would be helpful.
And then just on construction, what about the mix of margin? Because we, we know the business is doing extremely well, dragged up by Budimex, right? Stocks up more than, you know, 120%, over the past 12 months. It's well reflected. What about the rest of the business, which has really been struggling, especially the, the core power construction? Are we at the end of the issues? Is the backlog that much better? Is there any selectivity because you keep growing? That's a bit antagonistic with high margin. So help us a little bit frame in terms of the mix, the drivers of that, of the business as well, please. Thank you.
Yeah, first questions are about the tariffs. This is third-party information. This is not coming from us. We just show you that something that is public, and you can get to that information. We are not giving any guidance about that. So you have to take your assumptions and based on that, do your model, but we just brought third-party information about it. And in the case of margins in construction, as I was commenting, yes, in some places, we have the effect of the COVID and the hyperinflation, some legacy projects in which we were losing money that were affecting our margins that will be over in the following year, and we have another event of hyperinflation, but we are more covered than before with the backlog that we have, and how is that considered?
Anyhow, the margins are different depending on the places and the type of work that we do. So you are doing hard bids, whether here in the US, well, the margins are usually lower. They have lower risk. When you have a local market like Poland or Spain, usually you have higher margins. So when you have a design and bid, then you take more risk, and especially when you do internally. Of course, we always target to make money in these projects, but in this, you want to be competitive. So you have to balance and see what is the type of projects that you have, where you have those projects.
As we commented, the average is the objective is to achieve a long-term average of 3.5%, but of course, has fluctuation based on where you have the backlog, where you have more work, and the type of work that that you have. So it's depending on the risk that you take and the type of work, then you used to have different margins in Construction, and that's a normal thing. And it's part of the portfolio that we have that is helping to be competitive, to do concessions project. That's the main objective that we have in the Construction business.
In terms of the free cash flow, because at the end of the day-
Yes, what is it?
Cash is king, so you used to do EUR 200 million + a year. You see that has not been the case for the past two, three years with, with losses and cash outflows. Sorry. So is that EUR 200 million+ from history some, something you can dream of over the next three years? So cash backed earnings, or we still have to go through a period basically of ups and downs?
But, you are fully right. When you need to look at the construction, it's about cash, and this is what, which will matter more than EBIT percentage, because at the end of the day, this is what we want to get from the Construction business. In the case of this business, what you have is advanced payments. So depending when you are at the backlog, if you are at the beginning, you are at the end, that can have some fluctuations. So you cannot look just one year. You need to look over a certain period of time, and the same way that you look at 3.5% adjusted EBIT over revenues, what you need to look is that, how it's transformed in terms of cash, because most of it will go, will go to cash, over the years.
But you will have fluctuations.
Yeah, the long-term average, at least a long-term average, of course, means positive operational cash flow, independent of working capital.
Right.
Okay, I have a question from Patrick Creuset from Goldman Sachs. It's a follow-up regarding shareholders, shareholder remuneration and dividends. So sorry, can you just clarify that all toll roads, including I-66 and I-77, are included in the $2.2 billion distribution guidance? And also, given it's pretty close to 2023, 2024 level in terms of run rate, would be helpful to understand whether this should be seen as a floor. Thanks.
Okay, well, as I said, we're not providing a breakdown, but yes, I mean, all the portfolio contributes in these three years, all the portfolio of toll roads. We've given our estimate, right? So, that, that's an estimate.
Thank you. Okay, a question from Miguel Medina, from Mirabaud. Can you comment on the Lima Ring Road? What is the rationale for entering the Peruvian concession market if there are plenty of opportunities in the U.S.?
As we commented, we want to keep this 80% of the value in North America because we have good pipeline and growth, but also we can create value beyond North America, and we'll continue to do that. This project in Lima is something that is an unsolicited offer that we launched 10 years ago. So it's has been a very long time after this, the type of project that is a ring road in the city of Lima, that is very well needed in order to improve traffic and avoid further congestion in the city and to develop the city. Now, it's open for other competitors. We don't know if there will be competitors bidding for this project in half a certain period of time.
We are going in this project together with other companies that we think that support us in terms of the capabilities to do this type of projects. But after 10 years, I think that is a project that could create value for the company, and that's why we are doing it. But it's not instead of the US, it's on top of and create additional value for the company.
Okay, a question from José Manuel Arroyas from Santander. What is the Fact Book that you just mentioned? What is the document about, about? And second question about 407 ETR toll roads. So the increase on average is 18% versus 2020, but there is a wide range of toll increases. Is this range a reflection of gap between your traffic expectations in 2025 and the traffic thresholds?
Can you repeat the question? Would you want to-
Okay, first question is about the Fact B ook-
The first I understood-
... And what is gonna be. The second question is, tolls have been raised on average by 18% versus 2020, but there is a wide range of toll increases. So is this range a reflection of the gap between your traffic expectations in 2025 and the traffic thresholds? So I guess that what he-
Yeah, yeah, I understand now. Need to translate. Do you want to answer the first one or about the Fact B ook?
Okay, well, the Fact B ook will provide an easy access to all the details on debt, contracts with the most relevant features that you guys asked for, like revenue sharing, refinancing gains. So it will be an easy tool to navigate aspects and help with the modeling.
...About the second part, but for a long question, I think the short answer is that yes, of course, when we have defined the tariffs for this year, we are considering Schedule 22 payments and the level of traffic, how we can have a different type of traffic and different periods of time. But yes, we will consider that and also consider the value to users, and based on that, we define the tariffs at certain segments and then different periods of time of always trying to optimize revenues, giving a good service to our customers. But at the same time, when we talk about revenues, it's net revenues also with the Schedule 22.
Thanks. Just staying on the 407, can you explain why, why did you step back from the seasonal toll rate schedule that you introduced and go back to a more simplistic structure? Should we expect sort of changes to that through the year, or are you planning to introduce the seasonal tolls for next year? Just trying to understand the thinking there.
We are, I will say that, based on the information we have in four years, since we have, an increase before, I think that, is what we expect to be for the year in terms of, understanding what is going to be the traffic and the value that we can provide. In general, in the future, it's more expected that, because of Schedule 22 payments, that you have one increase every year. So it will be more that, like that in the future, rather than to have two or several increases.
At the same time, we'll have all the data now in order to know for many years what is the will be for the whole year and every time of the day and every time of the week, what is the best, I mean, tariff that we may have. So unless we find that this additional data that makes us to change, I think probably just one increase a year will be the right way to do it.
And then maybe just following up: do you see us now back in a kind of set, steady state traffic, profile relative to where we were in terms of coming out of COVID and, and behaviors sort of in flux? Are we now back into a more steady- state environment, or are you seeing things still changing on a month-to-month basis as, as, sort of Toronto return to the office?
As we commented several times before, Toronto and in general, Canada, now we're well behind other places, one, between one and two years in terms of going back to the normal mobility and the restrictions to mobility. In terms of also work from home, we think that still they are delayed compared to others, so they have still room to go back to a more normal scenario. Even in the U.S., we are seeing now more companies asking five days a week and pushing for employees to go back to the office. But I think still, Canada, and especially Toronto, is lagging behind other places, and they could have still some room to improve in terms of work from home.
And I think it's something that we have seen some third-party references, in which every month they are continuing increasing in terms of, asking the employees on their return to the, to the office. So I think we are still, not there. But I think that, as mentioned, even the short term, long term is key. So again, population, economic growth, especially around the 407, is the key, for the long term. And this, what we need to think, it's a 75-year concession, so the value is in the long term for the 407, and we need to look at that.
And then, just last one. Still on the 407, are you happy with your stake in that asset? If there was the opportunity, would you look to increase it, and vice versa?
We are happy with the stake that we have and with the partners that we have today. If there are opportunities, we'll see.
Thanks.
Okay, I have three more questions here. So there's a follow-up on capital allocation and the strategy that we have in the energy sector, especially, where do you plan to focus in terms of projects and geographies? And, if you could just give us some visibility on how much capital do you plan to deploy there.
Capital limited. So for us, it's we don't want the... As commented, we are developers, so the idea is to, if we develop something with our own capital, we'll rotate. And what we have, we want to do is also construction for third parties. So ability to develop the infrastructure that is needed for a transition in general, because it's a good market, which it will- I mean, a place in which we can have good margins in the future. In terms of geography, it's very limited. Places that we can develop capabilities, we have for many years, as commented in Spain, and we continue to do so. We have also some transmission line projects that we have done in Chile in the past, so we can do more transmission lines there. We try to do more in the U.S.
We are already doing things for third parties with renewables. We like to do energy efficiency projects in the U.S. We have paid for some, we have not won so far, but we would like to participate more in these type of projects. And also in Poland, we have very good capabilities. It's more recipient in terms of energy transition. There could be also good opportunities. We have a very good company, Budimex, leader in the market, so we can have opportunities to do things in the energy transition. We'll try to do those. I think these are the 3.5 , because Chile is just very limited countries in which we will focus, and very limited resources, rotating the asset very fast.
Okay, I guess, Ernesto, this question is for you, from Ana Greco from BBVA. What is your attitude towards hybrid bonds? Is this an instrument you might consider coming back in the near future?
Well, it's an instrument that at a price makes sense. It provides more flexibility for growth. Well, the market now for hybrids has tightened a little bit, but it's still, I believe, expensive. Yet it's something we could look at in the future.
... Okay, and final question here from Dario Maglione, from BNP. I don't know if we're gonna need, Luke, because it's quite a lot of detail of JFK. So first question, JFK NTO: How does the FAA's cap on the number of flights affect traffic projections at JFK?
I can-
Sorry.
Wait, wait, wait for the microphone.
Yeah.
Wait for the microphone.
Mm-hmm. So I think that question was asked earlier, but there is an absolute cap, and then there are hourly caps. So, as I said before, the new facility that we're providing replaces the existing facility. So don't think of it as 23 million capacity, just in addition to where it is at the moment. We're expecting the market share for us to increase from where it is at the moment, from 34% to 49%. So you've also got to understand that our market, our focus market, is the existing traffic that's already operating in JFK, and the growth will come from either upgauging or additional frequencies. And clearly, we have done a lot of work to analyze the opportunity for growth, and we do see capacity available.
In an hourly position, obviously there's peak periods in which there's less capacity available, but there are other opportunities that we believe that we can absorb that growth.
Okay, second question: So Terminal 1 in 2023 had cost per enplanement of $65. How does this translate to revenue for the company that holds the concession of the terminal?
I can't answer that question 'cause that's TOGA. And again, just to reiterate the point that Ignacio says, these numbers that we gave you were not our numbers. Steer provided that assessment. So they're not our numbers, but I can't answer how that feeds into TOGA, which is a group of airlines that currently operate Terminal 1.
Okay.
The old Terminal 1 is not part of the concession.
Yeah. So we don't operate the existing facility. That. We'd have zero revenue from the existing facility. We don't get a dime until this facility opens.
That's it.
That's it? Good.
Okay. It seems that we don't have more questions.
Okay.
Thank you very much, all, for being here.
Okay. Thank you very much-
Thank you.
Close this Capital Markets Day. Thank you, everyone.