Oct 28, 2026 earnings call — I-285 East managed lanes award
Announced I-285 East award and a proposed concession payment of $23.1 billion for Phase 1.
Revenue $2.7B (est $3.1B) · EPS $0.28 (est $0.28)
Key quotes
"I-285 East is a highly congested multipurpose ring road and Atlanta's principal freight bypass."
"The 407 ETR delivered solid revenue growth in the period despite lower traffic."
"Revenue reached EUR 5.8 billion in the first nine months, increasing 9.1% like-for-like, with adjusted EBIT margin improving to 4.1% from 3.7% last year."
Analyst Q&A 15
Why concession payment schedule was made public
Q (Luis Prieto · Kepler Cheuvreux): Why did TDOT and you publish the I-24 concession payment schedule before financial close? Will I-285 East follow the same negotiation and disclosure pattern?
A: Management said they could not share some information earlier because of NDAs. When TDOT allowed disclosure via a press release, they published the schedule immediately. For I-285 East they said each project is different and you should not expect more details until financial close.
"At the time that they did let us to give that information, we made it public based on the press release that they made on Monday, so immediately after, we communicated that information." — Ignacio Madridejos (CEO)
I-285 payment timing and NTE traffic impact
Q (Cristian Nedelcu · UBS): Is the concession payment timing for I-285 fixed or negotiable like I-24? For Phase 2, might there be a similar concession payment? Also, any early conclusions on NTE traffic after added capacity?
A: Management said the equal payments structure could change with interest rates and final financial structure and final numbers come at financial close. They warned not to assume Phase 2 will match Phase 1 because direction, costs and revenues differ. On NTE, they see a very limited impact so far and more traffic returning; mandatory mode effects will be assessed next year.
"We can comment now, yes, we are seeing more traffic coming back to the corridor." — Ernesto López Mozo (CFO)
I-24 legal challenge and 407 pricing
Q (Harishankar Ramamoorthy · Deutsche Bank): What is the process and exposure from the I-24 legal challenge? If overturned, what happens? Also, is 407 traffic decline steep and would you consider reducing tolls next year?
A: They said they are not worried about the legal challenge but cannot comment during ongoing litigation; they expect a quick resolution. On 407, management noted promotions affected traffic but the product is well valued, revenue growth is substantial, and they rule out lowering prices.
"We are not worried at all about any legal challenge. Of course, we cannot comment because there is a litigation ongoing with TDOT and the consortium that was part of this challenge." — Ignacio Madridejos (CEO)
Discount rate, partners, and construction margin
Q (Elodie Rall · JPMorgan): How does the 5.2% discount rate adjust at financial close and affect NPV? Will you seek a third partner for I-285 East? Is the 3.5% construction margin midterm target still valid?
A: They explained TIFIA and market rates may raise interest and spreads by financial close; the grantor compensates increases via a formula that adjusts concession value. On partners, Ferrovial holds 90% now and may later reduce to a more typical majority but has not decided timing. The 3.5% is a long-term average and actual quarters can be above or below it.
"The grantor makes up for the increase in base rate and 85% of the margin." — Ernesto López Mozo (CFO)
I-77 traffic drop and appetite for more managed lanes
Q (Ruairi Cullinane · RBC): Was reduced I-77 traffic caused by price elasticity for heavy or leisure vehicles? Do you want more managed lanes? What drove better energy results this quarter?
A: They said construction on a parallel corridor (I-81) pushed heavy trucks onto another route, reducing heavies on I-77 and lowering capture rate. They confirmed appetite for more managed lanes, pre-qualifying for I-77 South and planning to bid. Energy margin improved as projects moved from construction to operating transmission lines and completed EPC contracts.
"When you have less heavies on the road, definitely capacity increases." — Ernesto López Mozo (CFO)
407 promotions and I-285 heavy/extended vehicles
Q (Graham Hunt · Jefferies): Why were Q3 promotions on 407 pulled back and how much of the -7% volume is due to that vs macro? For I-285, what percent of corridor vehicles are eligible for higher multipliers?
A: They said promotions are now more targeted, with conditional offers that steer traffic while reducing overall Schedule 22 spend and improving revenues. For I-285 they said heavy vehicles are around 12%-14% in the corridor, heavy vehicles cannot use managed lanes but extended vehicles can; extended vehicles are more broadly defined here and multipliers are higher, making them significant for economics.
"One idea that is well targeted is also, as you see, we have reduced the expenditure overall for the Schedule 22 with much higher revenues." — Ernesto López Mozo (CFO)
I-24 timeline, TIFIA leverage, target IRR
Q (Marc Ip Tat Kuen · Citi): Why do concession payments start in 2036 versus service commencement in 2035? Does the 75/25 TIFIA leverage cap apply only at commencement? What unlevered project IRR are you targeting for I-24?
A: They clarified 2036 is the first full year of operation while 2035 will have only part-year service. The 25% equity requirement is for financial close only. Project-level returns aimed close to double digit at project level, described as very high single digit, translating to a healthy levered double-digit IRR.
"Regarding the type of IRR that we required at project level, is close to double digit." — Ernesto López Mozo (CFO)
TIFIA scope, revenue sharing, legal risk
Q (Marcin Wojtal · BofA): Is the 75/25 debt/equity a change from historical equity closer to 40%? Are there revenue-sharing clauses for I-285? Any color on quick resolution of legal risk?
A: They said TIFIA's term sheet now covers up to 49% of different concepts, increasing leverage possibilities compared with past scope. Revenue share will be standard: when performance exceeds base case the grantor shares upside as in other managed lanes. On legal risk they repeated they are not worried but cannot give further comment because litigation is ongoing and they are not directly involved.
"Now, their term sheet, as shown in the grantors presentation, covers up to 49% of different concepts." — Ernesto López Mozo (CFO)
Financing structure and bonds for I-24 and I-285
Q (Eddy Diamantis · Green Street Infrastructure): How will project financing for I-24 and I-285 be structured? Who are the financial/legal advisors and will private activity and taxable bonds be public market issues?
A: They said TIFIA is the main debt component, supplemented by private activity bonds and taxable bonds; financial advisors assess market appetite but are not public. They confirmed private activity and taxable bonds are capital markets transactions with public prospectuses. They did not name advisors.
"As I said, the bulk of it is TIFIA, and then, of course, the remaining is the equity." — Ernesto López Mozo (CFO)
I-285 payment schedule change and I-24 revenue share likelihood
Q (José Manuel Arroyas · Santander): Could the seven-installment concession fee schedule for I-285 be changed or spread over the concession life? Are I-24 revenue-sharing IRR triggers higher or lower than I-66? Could NTO concession be extended for delays?
A: They said GDOT noted payments may change with interest rates and the final financial structure and final numbers will be available at financial close. On I-24 revenue share they said they expect the revenue share could be reached and would indicate outperformance versus other managed lanes. On NTO, a concession extension is not part of the contract at this time.
"I think that it will reach the revenue share. I think all of us will be very happy because it means the I-24 is outperforming." — Ignacio Madridejos (CEO)
Portfolio headwinds and cost of equity range
Q (Cristian Nedelcu · UBS): Given headwinds at I-77, Dallas tech phase-out, and unclear NTE impact, what offsets will support revenue growth near-term? What is the cost of equity range for projects like I-24/I-285? Clarify Phase 2 concession payment mechanics.
A: They listed tailwinds: LBJ and corridor growth supporting revenues, and Canada should improve as economic growth returns. Technology phase-out in Dallas is being phased and economies are growing. On cost of equity they said market plans might merit a very low post-opening discount rate, single digit, but the jury is out. For Phase 2 they emphasized reported traffic, revenue and CapEx can differ from Phase 1 and financial close in 2029 will clarify numbers.
"If we take most of the business plans that we are seeing in the market that are well below ours, probably that would merit a very low discount rate, single digit after opening." — Ernesto López Mozo (CFO)
Partners, walking away, and discount rate basis
Q (Dario Maglione · BNP Paribas): How likely are partners before road opens and what if you don't find partners before financial close? Can you walk away? Is the back-end loaded payment assumption reasonable? How was the discount rate set?
A: They said they have not decided timing to bring partners; selling participation later yields different premiums. They can reach financial close without extra partners and always have the option to withdraw, though they do not see withdrawal as a priority. The discount rate reference is based on TIFIA costs used as reference.
"We can do it without additional partners, but always we have the option to withdraw, but we do not see that as a priority because we think that this may be a good project for us." — Ignacio Madridejos (CEO)
Capacity to develop many US managed lanes
Q (Luis Prieto · Kepler Cheuvreux): Is there a limit to how many US managed lane projects you can develop at once, from a risk and resource view?
A: They said the main risk is construction resource capacity. For the two current projects they feel they can manage with existing capabilities. For more projects they may bring partners if additional resources are needed; decisions will be taken later.
"It is something that we need to see if we are prepared, or we may bring partners in order to develop some of those projects." — Ignacio Madridejos (CEO)
407 capital structure and timing of equity injections
Q (Marcin Wojtal · BofA): After the 40% dividend hike, is 407 at optimal capital structure or can it be re-levered further? What credit metrics to watch? Will equity injections into I-24/I-285 occur before 2030 or mostly later?
A: They said the key credit metric for 407 is debt service coverage ratio, around 2.6, implying some room though no big changes expected. Most cash flows and equity injections for the new large projects are back-ended with limited amounts before 2030 and larger needs in 2033-2035.
"Probably, the credit metric that matters most for the 407 is the debt service coverage ratio, and that is around 2.6." — Ernesto López Mozo (CFO)
I-285 extended vehicles, Phase 2 risk, TIFIA capacity
Q (Nicolas Mora · Morgan Stanley): How large is light/extended vehicle traffic on I-285 (ballpark)? In what scenario would you not get Phase 2 and walk away? How realistic are TIFIA pricing kickers and is there capacity for large TIFIA needs?
A: They said extended vehicles have a meaningful presence and are materially higher than SR400, are often business trips with higher time-savings and higher multipliers, so they can be relevant. Phase 2 is expected to add value but could be withdrawn if not valuable; financial close negotiations will take time. On TIFIA capacity they said it's not for them to assess; if a grantor requires more TIFIA than available, the grantor must resolve that risk.
"As we said in the presentation, we see a meaningful presence of extended vehicles, and also we commented, compared to the SR400, that materially higher extended vehicles is possible." — Ignacio Madridejos (CEO)