Ignacio Galán – Chairman & CEO José Sáinz Armada – CFO Armando Martinez – Director General

First of all, thank you for joining us this morning. It is with great pleasure that we welcome you to the presentation of the 2014 First Half Results. The event is structured in a similar manner to our previous virtual results presentations. First, we will begin with an overview of the results and the main developments during the period given by both, our Chairman and CEO, Mr. Ignacio Galán and our CFO, Mr. José Sáinz. We also have with us today Mr. Francisco Martinez Corcoles, recently appointed as Business CEO. I’m pretty sure that the vast majority of you already know him well. At the end of the presentations we will then move on to the Q&A session. For this session we will first take questions submitted via the web. However, in the interest of time and to avoid a (inaudible) of repetitive questions, I would ask that you submit no more than three questions at the same time. After the Q&A from the web we will then move to those joining us by the telephone. In this regard, it is important to point out that for reasons out of our total control, the quality of the phone line connection can at times be poor. And so, we would ask that we’re possible do submit question via the web to avoid any potential problem. We would expect that the event will last no more than 60 minutes. Hoping that you find the presentation both useful and informative. Now without further ado, I will hand over to our Chairman and CEO, Mr. Ignacio Galán. Thank you very much again. Please Mr. Chairman. Ignacio Galán: Good morning everyone. First of all, I would like to thank you for attending this result presentation we are holding today through the webcast. I have today with me José Sáinz Armada, Chief Financial Officer and Francisco Martinez Corcoles, who as you know has been appointed Business CEO last month to replace José Luis San Pedro, who after the carrying the group for more than 40 years, ceased to hold an executive post at his own request while continuing being a member of the board as well as the Chairman of Iberdrola SA. Francisco Martinez Corcoles, most of whose career has been within the group was the previous Liberalized Business Director and has always successfully developed his various functions in the group, especially leading the integration of the generation and supply business in Spain, U.K., Mexico and Brazil. I will start with a brief presentation of the first semester company results. Next, the CFO will analyze in detail the profit and loss account and provide an overview of the group financial position. Finally, we shall be pleased to answer any questions you may have. During this first semester of the year, the good operational performance of all the businesses has continued to offset the impact of regulatory changes introduced in Spain. In this sense, I would like to highlight, the strength of Iberdrola business model, which allow us to optimize result in very different scenarios, thanks to our internationalization and balanced risk profile. Thus, EBITDA amounts €3.75 billion in line with the previous year, despite the rise is net operating expenses due to the increase of activities especially in U.K. and non-recurring items. This impact will be reduced during the second half of the year. Concerning balance sheet management, Iberdrola has made further progress towards the net debt to production. With a decrease of more than €2.2 billion compared with June 2013. Finally, net profit amounts €1.5 billion. The comparison with previous year was strongly impacted by value adjustments carried out in 2013 as the CFO will explain later. During the period, EBITDA remains similar to that obtained in previous year, amounting €3.745 billion with a contribution of 66% from regulated businesses. Excluding the exchange rate impact, EBITDA increased 0.7%. In network’s operational performance has lightly improved, positively affected by the asset budget increase in the United Kingdom and higher revenues in distribution and transmission in the United States. However, EBITDA has dropped 4.5% to €1,655 million due to remuneration cuts in Spain and the impact of draught in Brazil, which is going to be recovered mostly through tariff increases. The net revenue is suspected in August for electric. Finally, the exchange rate evolution of the Brazilian Riyal and U.S. Dollars has had a negative impact on EBITDA. Despite in partially compensated by the valuation of the pound-sterling. Generation and supply has had a very good performance through the semester. With an increase of 27 in EBITDA, reaching €1,152 million. A higher production with a more efficient generation mix, together with a positive contribution of those businesses has made it possible. Discount in the one-off of their ruling in a Spanish court of an issue to emission rights, a Northern non-operational aspect underlying EBITDA increases over 23% in the period. Finally, as you all know, the renewable business has been heavily impacted by regulatory modification in Spain. Where despite a celluloid factor, EBITDA has fallen 46% versus first half of 2013. The average part of changes introduced in the global renewable business is a 25.4% fall in EBITDA. But thanks to the international renewable businesses, we then have a strong contribution with 80% increase in Latin America, 8% in United States and 11% United Kingdom. With the offshore business providing half of that increase. The EBITDA for renewable drops 20.3%. The result of renewable businesses are likely to improve by the year-end, given that no significant changes to regulation is expected in the second part of the year. And market prices will normalize after very low level during the first semester in Spain. Regarding cash flow, once again, all of our businesses have generated cash flow, exceeding investment in line with our strategic guidelines. The operating cash flow amounts €2.9 billion and after deducting investment, this figure comes to almost €1.7 billion. The positive free cash flow generation and the progress in the divestment program, disposal on the semester’s exceed in €160 million, have allowed us to keep improving our healthy financial position. Net debt, has been reduced by more than €2.2 billion over the last 12 months to less than €25 billion, which will be €24.2 million obviously the tariff deficit. Leverage has decreased to 41.8% from 44% in first semester, which excluding tariff deficits will be only 40.4%. And finally, as the CFO will fully explain later on, main financial ratios has been improved to levels close to target set for 2016. Next, I will briefly go over the main regulatory highlights which show increasing visibility in the geographic areas where we operate. In Spain, uncertainty and regulation is being clear, as the reform of renewal has been concluded. And United Kingdom, Ofgem is about to publish a draft with a detailed condition for the return of distribution and the Rio ED1 by the end of this month. In the United States, we have already reached a pre-agreement with the regulatory main by chief of return on equity of 9.45% applicable since July. In Mexico, as you know, we feel confident about the business opportunities, with large private consumers the energy reform is going to offer. The secondary legislation of the electricity bill has been already passed by the senate and the final congressional approval is expected in August. According to the bill, a Liberalized margin will be progressively created for qualified customers with the level of concession about 1 megawatt. Money is by the new independent operator. We also positively value the fact that the private agents will be allotting investing several transmission and distribution activities under certain conditions. And finally, Brazil, the regulatory is already implemented, timely and effectively the necessary measures to compensate the drug impact of distribution companies. Both through injection of funds from the treasury and tariff increases, with head reach 35% in their cases. The result we are presenting today together with a trend suspected for second semester allow us to feel confident about our previous guidance for the end of the year. In other words, we do not take any additional changes to regulation. Additionally, the impact of draw in Brazil in result, is expected to be progressive recovery for the tariff increases and additional (inaudible). Generation and supply is likely to continue providing good results along the year. Although not occurring growth levels as we expect the normalization of market condition in second semester. Now, additional regulatory impact is expected in renewables. And under standard condition result in second semesters, should be in line with previous years. Finally, net operating expenses will probably reverse the first semester trend due to additional efficiency measures and the normalization non-recurring expenses. Our estimate for the year showed that Iberdrola has a resilient model which allow us to optimize result as the market scenarios and market change. This model is based on a balanced business portfolio geographically versified, in macro-economies and emerging countries. Focus and regulated activities. The portfolio we expect to continue optimizing through asset management. Additionally, our restricting investment criteria established in terms of security, profitability and sure good period, limit investment to cash flow generation. Besides, we keep improving our financial strength, further reducing net debt and improving financial ratios, always managing this and inter-resident risks. All these allow us to maintain our priority of our sustainable remuneration to shareholders. Thus along the year, we have already distributed amount to our shareholders, at remuneration of €0.275 per share that is stated in our Investor Day. €0.126 in general, €0.44 per share now in July, and additional €0.005 per share responding today in attendance. Now, Pepe Sainz, will explain the profit and loss account in more detail. Thank you. José Sáinz Armada: Thank you, Chairman. We will review the first half results. Before, let me summarize the regulatory impacts to be expected in 2014. 2014 first half results include €369 million of negative impacts due to the Spanish regulatory cuts announced in July 2013. That did not affect the first half 2013 results. Of these €369 million, 61% corresponds the renewables with €227 million. The full year incremental regulatory impact versus 2013 at gross margin is estimated at €367 million. So the estimated full 2014 impact will be around €643 million, 56% due to renewables. I would like to stress that the impact in the second half of the year should be similar to the one accounted for in the 2013 second half. As regulatory cuts started to be accounted in July 2013. Nevertheless, as mentioned in the Investor Day, a standard year should be affected by around €495 million or €148 million less than the expected amount for 2014. The annual impact in 2014 of all the measures introduced since 2011 reaches €1.4 billion for Iberdrola, of which €643 million are in 2014 and the rest €752 million were already reflected in 2012 and 2013 accounts. Generation business in total has an impact of €609 million. Taxes and green cent derived from the low €15 2012. Capacity payments and cogeneration derived from the royal decree 2013. Distribution business as an impact of €345 million including €112 million from royal decree 2013 and €233 million coming from the royal decree in 2012. Renewable business, €363 million. And the social bonds minus €17 million at the holding level. So, as I mentioned, €1.4 billion is the total impact for the group of the regulatory cuts in Spain. As explaining our last quarter results presentation and I will review the P&L. Both for 2014 and 2013, results have reported on the IFRS relevant. Accounting stakes at or below 50% due to some equity method instead of the proportional consolidation. As the consolidation of new energy as the main impact of the EBITDA level, compensated at the non-profit work with the income results. The comparison versus 2013, first half results is positively affected at the EBIT level by asset impairments carried in the second quarter of last year, mainly related to U.S. gas and renewables, €1.6 billion negative. And positively at the tax level, due to the first half 2013 balance sheet revaluation that had a positive impact of €1.5 billion. Revenues fell 4.5% to €15.2 billion while procurements dropped even more 6.8% to €9 billion due to the lower cost of the production mix. Consequently the gross margin is almost flat, even including the additional Spanish regulatory impacts and a €47 million FX negative impact. Net operating expenses increased 4.2% at €1.7 billion. Due to several costs incurred in the second quarter, mainly at the net external services. This impact will be personally reversed during the second half of the year. Net personnel expenses grew 2.7% similar to the 2% of the first quarter. And net external services grew 5.9% versus the 2.1% decline in the first quarter, due to costs incurred in Q2, mainly in the U.K. linked to increased capacity and renewables at specific projects both in systems, marketing and consulting. Excluded non-recurring net operating expenses grew 3%. Levy’s fell by 13.7% to €737 million due to the reduction in the U.K. as a consequence of the ACO program extension and a favorable high controlling in Spain, accounted for in the second quarter of 2009/14 for €111 million linked to legal actions initiated by Iberdrola when the previous government penalized the mission free technologies forcing to pay CO2 costs. As we explained in last quarter, Q1 2013 included also €53 million positive impact for another court ruling. So, the net effect is €58 million positive. The favorable impact of the ACO should not be extrapolated to the end of the year because in December 2013, accounts already included a positive adjustment of €62 million linked to the extension of the ACO program. As mentioned by the Chairman, the EBITDA for network business has dropped 4.5% to €1.6 billion, and 3.8% excluding FX impacts. Spain accounts for 42% of EBITDA, the U.K. 29%, the U.S. 26% and Brazil, the remaining 3% as we excluded near from the EBITDA accounts. Analyzing a bit about geography, Spain EBITDA fell 7.5% due to a 4% lower recognized revenues in Spain according to Royal Decree of 2013. That has been applied since Q2 2013. As the year passes by the EBITDA of both years will converge, with the application actually is from Q3. In the U.K, EBITDA grew 6.8% as a result of the 7.9% increase in gross margin due to higher asset base and as a consequence of higher investments. There is also a 14% increase in expenses with higher external services mainly related to consultancy and regulatory services, related to the ED 1. But will normalize along the year. In the U.S. EBITDA, remains stable minus 0.2% with 2.2% gross margin growth, 6.8% excluding FX negative impact with higher revenues as a result of right cases on the contribution of the main line. The gross margin positive evolution has been compensated by 8.2% increase in net operating expenses due to lower indemnities versus first half of 2013. In Brazil, the EBITDA fell 52% as a consequence of 33%, decreasing gross margin due to lower compensation on our higher draught impact. That will be recovered from August onwards with a new tariff review. Net operating expenses were 10% and leverage 3%. The 18% exchange rate fill, fall has reduced also the EBITDA. Generation and supply EBITDA grew 27% to €1.4 billion due to the strong operating performance with an 8.2% higher gross margin and held by the improvement in Levy’s as explained in this late 20. In Spain, EBITDA grew 39%, almost 40% with a 42% increase in gross margin due to a 13% higher output, after a 37% increase in Hydro, a 3.9% increase in nuclear production, more than compensating the 23% lower thermal production. As a consequence margins have improved. Despite €5 lower prices on average. They got business at €132 million due to the excellent trading activity and a positive one-off. In addition, the gross margin growth, net operating expenses and proof point 6% and leverage increased 20% due to the already mentioned €111 million positive court ruling. In the U.K. EBITDA grew 8.6%, held by the exchange rate impact and the ACO extension. Gross margin nevertheless fell 4.1% in local currency with 12% improvement in local currency in the whole selling generation due to better load factor on higher spreads offset by a 7.4% drop in local currency in the retail gross margin, with lower volumes in a milder weather – winter situation. Net operating expenses, that was 14% due to several second quarter costs related to systems and marketing expenses are more about offset by the decrease in Levy’s tank to the ACO program. In Mexico, EBITDA fell 26% due to a negative one-off impact associated to the renegotiation of private contracts. And that in then, to new on more favorable conditions. In the U.S. EBITDA is €46 million higher, taking advantage of the extreme weather conditions during the first quarter. Renewables EBITDA fell by 20% to €712 million due to 46% decrease in the Spanish EBITDA. Affected by the remuneration cost of the Spanish regulatory measures and the law was spot prices. Thanks to the geographical diversification of the business, the positive contribution of the rest of the geographies, partially compensate the mentioned fall in Spain. Gross margin fell 16% and net operating expenses improved by 0.5%. Worldwide operating capacity increased 0.4% to 13,548 megawatts, the large factor remains the strong on 30.6% with 0.5% increase in production. Weighted average price dropped 18% to €56.7 per megawatt hour, driven by a 38% decrease in Spain. Spain EBITDA declined 46% as explained previously. The U.K. EBITDA grew 11% with a 13% increase in gross margin, with a 7% increase in ARPU, more than compensated the lower average price due to energy and rock price reduction. Offshore wind-farms, have started contributing to the second quarter EBITDA. The U.S. EBITDA grew 8% or 12.4% excluding the FX impact, with a 5.7% increase in gross margin comes to a higher average price and trading profits taking advantage of weather conditions. Latin America, EBITDA rose 80% thanks to a 34% increase in ARPU, due to increasing star capacity, in Mexico 11% and in Brazil 97%. Rest of the World EBITDA decreased 41% due to the sale of Poly’s wind farms in 2013. The EBIT which is €2,359 million, €1.7 billion more than in June 2013, which including the €1.7 billion of gross assets impairments recorded in the second quarter of last year mainly related to U.S. custom renewals. Depreciation and Amortization grew slightly due to the addition operating capacity in renewables U.K. Net financial cost improved 7% to €510 million. As a consequence first of an €83 million lower debt related cost, thanks to a 10% decrease in average net balance. An average total net cost improvement of 13 basis points. There is also €96 million of gross capital gains from the sale of our (inaudible) following completion of the sale in the second quarter. Following the disposal, the company does not collect any dividend in the second quarter of 2013 from EVP. Financial income also fell due to the fact that in Q1 2013 we included €53 million as an accrued recognition linked to a tariff receipt that was reverted in the last quarter of the year. As I mentioned at the beginning of the presentation, 2013 first half results included two large one-off impacts, what that negative at the EBIT level due to as impairments and the other positive are the tax level lead to balance inter-valuation. Equity results increased – sorry, decreased 9.7% to €121 million negatively impacted by the decrease in new energy results due to the draught and the tariff review on the FX impact, partially compensated by the revaluation of the government and state, following the NICK 28 that which reported recognition of the higher market or fundamental value. Non-recurrent results totals €185 million versus the €17 million loss of 2013 and includes a capital gains of the sale of Itapebi and the U.K. Nuclear joint venture. Profit before taxes reaches €2.1 billion versus €240 million in 2013. And taxes again, minus €630 million negative versus the €1.5 billion positive contribution in 2013 due to a balance sheet reevaluation. There is also a one-off increase in the U.S. taxes that put the tax rates at level of 30%. Reported net profit to 13% to €1.5 billion and net recurring net profit is 7.5% down at €1.3 billion. Let me point out that while net profit is down 13% operating cash flow falls only 3.9%, as a consequence of a good operational performance. At the end of the first half, Iberdrola regulatory receivable spending collection fell to €1,445 million, €1.1 billion fully attributable to the 2013 tariff deficit and the remaining €341 million are 2014 regulatory receivables including €121 million of generation taxes based on our best estimation. Iberdrola since January 2014, finances less than 50% of the regulatory receivables pending to collect compared to the previous level of 35%. As you know finance is now supported by all pleasures with regulatory income. The financial strength of the group keeps improving. Our adjusted net debt excluding regulatory receivables, pending to collects totals €24.2 billion already below the €25 billion target set at our Investor Day. Total net debt reaches €25.7 billion decreasing €2.2 billion in the last 12 months. As a consequence, Iberdrola has reduced its leverage to €41.8 billion from €44.3. The significant debt reduction coupled with relatively stable cash flow generation, lift on improvement of our credit metrics. Our FX forward net debt improved to 21.4% versus 20.7% one year ago. Retained cash flow over net debt reaches 18.4% almost 1 percentage point higher than in the first half of 2013 and now net debt EBITDA improved to 3.8 times and 3.6 times excluding the tariff deficit. During the first half, the group has continued to adapt the liquidity level to focus on improving our financial cost. As of today, Iberdrola has available liquidity of €10.2 billion of which €2.1 billion is in gas and €8.1 billion in credit lines. 93% of them mature from 2016 onwards. Iberdrola continues to have a balance and comfortable debt maturity calendar. We have up to December 2015, €3.6 billion of debt maturing, 36% of the total liquidity available. And we maintain our average debt maturity of six years. Thank you very much.

Okay. Well, we are going to start with the Q&A session. First of all thank you very much for those of you that categorized your questions through the web. The first question is coming from Jorge Alonso from Societe Generale and Javier Suarez, Mediobanca and is talking about and they are asking which, are the possible measures, in Brazil in order to compensate the extra costs. And when we can expect these new slots? Ignacio Galán: In Brazil?

In Brazil right. Ignacio Galán: Well, according with public information by the year end on the first weeks of August, Benedez is going to provide BRL3 billion to the system and existing loan was already making in the beginning of the year, we extended €103.5 billion, just for compensating all the pending bills. Apart of that in certain of our distribution companies, has already revealed of rates by August and that we expect increases which will be in line with the 30% which as well has been already public – is demand that one. So with all these measures, we expect if the drop continue improving in the case, I think all the money, all the money pending will be compensated.

The second question comes from Carolina Dores, Morgan Stanley and she is asking, do you just pick further contract negotiations in Mexico, there was one in Q4 2013 and another in second quarter of 2014. Are there any other coming, can you give more details on this negotiation, Mexico we are talking about? Ignacio Galán: We have today with us Armando Martinez that has been appointed as Liberalized business director on the position of Francisco Martinez Corcoles, has been up to now the head of our Mexican business. So, I think he’s more than capable I suppose to reply all these questions. Please Armando.

Okay. Mexico, as the Chairman has said, the reform is now our opportunity for us. We have a very good position in Mexico. And of course we are negotiating and we are more and more negotiations with more private companies in Mexico for the future. The contracts that we have negotiating with existing, from existing companies as we opportunity to do the contract more in line with the market condition we have now in Mexico. Ignacio Galán: As to add on this point is, in this moment as you know we are building three power plant of combined cycles and we have already as well building soon a wind farm as well in the area of Puebla. Apart of that I think the consequence of the reform, I think you cannot find already wrong. We have already requested permits for our close to over 1,000 megawatt of new power plants between renewables and traditional power generation. So, also I heard them the CFE that goes to in Mexico as well, they are already planning to launch new bids in the next few weeks for another, two or three new power plants. So I think it’s plenty of opportunities and I think not only for the traditional one but as well for the power one as Armando is mentioning but we are very active in this moment.

The next question comes from Jorge Alonso from Societe Generale and Isidoro del Alamo, BBVA, and is a traditional one. Is the volume softness, gig watt in Spain 2014 and 2015 and the average achieved price? Ignacio Galán: Yes, this is a classic. Well, the volume for 2014 is 63 terawatt hours and the price is €58. And for 2015, the volume is 17 and the price is about 60.

Next question comes from Fred Barasi, Goldman Sachs. And he’s asking about, you can quantify the impact of the one-offs in the Spanish liberalized division in the second quarter. José Sáinz Armada: We have the one-off on the positive side. They’re basically the €111 million that we had in Levy’s included in the liberalized business. And around the €40 million one-off positive in the gas business. Ignacio Galán: One point to Carolina, that hard was not clearing up. I think you are requesting about the (inaudible) account in Mexico. All these contracts has been renegotiated, it’s nothing pending. I think we would renegotiate the contract, all these energy is started to gain. And the payback on these one is less than two years. So, I think now the second half of the year, we had started benefiting of the renegotiation of such contracts. José Sáinz Armada: Yes, and I want to add to Fred then, obviously we have had some positive impacts in the generation business in Spain. But that compensates the negative impact that we have in our renewable business also in Spain as a consequence of the low prices.

Next question from Manuel Palomo, BNP Paribas, he’s asking about if we can deliver on split between the electricity and gas business in Spain. And if it’s recurrent the EBITDA reached in the gas business in Spain as well? José Sáinz Armada: Well, sorry, the total EBITDA coming from gas business is about €100 million put into together Spain and USA. Well, I wouldn’t say that money or these monies are one-off because in a certain way or another we have quantities coming from weather conditions so renegotiation of contracts. On the other hand, I cannot say that this is going to be recurrent. So, €100 million is in and to split this from the rest of the EBITDA coming from commercialization or retail of gas is quite difficult because we put together with electricity and other products. So, I would say €100 million and with these considerations.

Next question from Javier Suarez, Mediobanca, it’s related to the generation business in both U.K. and in Spain. The question is related to if we can update our plans of cost cutting in the Generation activities in both countries? And a view according with the market condition that we see any recent strategic assumption in our outlook 2014-2016 in terms of prices and demand forecast? Ignacio Galán: Well, in Spain we’re seeing more or less, it’s also we have the plans from place reduction of thermal power production. And the optimization of retail is almost possible. We are probably on the limits because we cover well, very well on track production matching. And on U.K. it’s different, U.K. we have the FIS project, the full integrated system, the customer system that is fully operational since June. All our customer base is on that system now and we are now struggling against the number of claims that we have because of the illness of the system. So, I would say that this is our – the IT is the key for our efficiency and we are more or less on track as we have said in the Investor Day.

Next question from Stefano Bezzato, Credit Suisse, our expectation for EBITDA generation EBITDA in Spain in the total year for your full year 2014 considered a strong performance in H1? We expected to maintain the trend. Ignacio Galán: So, I think as we’re saying, we’re already confident that in our plans the last time we presented in the Investor Day, we are maintained. So I think our lcase in maintaining their logo, and we are confident to maintaining this average for the rest of the year.

Next question from HSBC, Pablo Cuadrado. He’s talking about a CO2 claw-back item. And he’s asking about if he said pure one-off for the H1 of 2014 and we spend one additional amount during the second part of the year. Ignacio Galán: Well, I think on the CO2, I think that is one off. But as seen, as you know they are very many legal actions taken. And certain of these legal actions we expect them certainly then we would have fully result, I don’t know in the second half of the following years. But traditionally we are ready, yes, collecting something for the decision has been taken in the past and the court has already given us the reason of our demand. So I think it’s I cannot already said what is going to be taking the decision of the different courts we have already now legal actions from those ones.

Next question from Martin John, Royal Bank of Canada. What does the U.K. capacity market mean for the future of your U.K. thermal power stations? Ignacio Galán: Well, I think it’s good news. As you know U.K. according with all – with Ofgem and according with recent interview of this year of national grid. So, it’s going to suffer problems with capacity, if the investment they’re not making the sure time. So, this option is good news for first keeping open the existing power plant. And second, for investing in new ones, I think it shall depend of the result of this option or the price for accelerating more or less this thing. But I think in global terms it’s a good news, I think the price is their putting is realistic. The ₤75 per kilowatts in the case of the new power plant is a realistic one. And the price for the existing one as well the realistic one, we should see what is, the result of the action, but that in general is a good news, it’s moving in the right direction. The point now is, is that option is going well. I think is to accelerate the construction of new ones because to avoid shortage of supply in Britain in the next few years, and that is not done in hurry.

The next question comes from Pablo Cuadrado, HSBC. And he’s related to the level of CapEx during 2013 due to the low amount that we have been invested during the first half, €1.2 billion. He’s asking about if we see some opportunities to reduce our CapEx in the different areas, so simple it’s something seasonal. And we will increase our level of CapEx at the end of the year. Ignacio Galán: So, I think we feel it’s a seasonal one. I think traditionally always the first half of the year, the investment make, in terms of accounting is less than the second one. So I think it’s the time for preparing the things in the second half with normally most of these are implemented. So I think our plans today is to keep the levels according with our plan.

Next question comes from Javier Suarez and Jorge Alonso. Javier Suarez, Mediobanca. Jorge Alonso is Societe Generale. And it’s basically the coverage situation of the starters of the direct deficit security section? Ignacio Galán: Well, I think that right now we are talking to the – with the ministry of industry and how would be the best way to securitize the 2013 direct deficit. And I hope that after the summer we will have some more concrete news about this. But I think that the process continues and we expect that there shouldn’t be any problem in securitizing the direct deficit for 2013.

The next question come again from Jorge Alonso, Soc Gen, and it’s related to the technique of under-covering level of debt, €25 billion on the possible disposals in the coming months. So, if we need, if we still are thinking in issue and hybrid, on why in that case? Ignacio Galán: Well, I think that our level of debt is €24.2 billion, if you will exclude the direct deficit. So, basically we’re just below the €25 billion. Or usually if that debt continues evolving in this very good matter, we will not need a hybrid issue. But obviously, we have it just in case, there is some evolution which is not in line with our expectations. But if that debt continues evolving as we are seeing, if we are getting a debt below the €25 billion, by the end of the year, already below our target, then usually we will not be issuing hybrids.

Next comes from Stefano Bezzato, Credit Suisse and is related as well to a level of debt. First is, we can’t confirm the recent present statements on the possible disposals of minorities taking the Spanish network business. If we are considering other additionally minority disposals in mature business. And if we could use this funds from reduced leverage or to reinvest in newer decision of organic growth? Ignacio Galán: As we said in the Investor Day, one other thing we would like to be active to continue inactive is in portfolio management. I think we have already done certain divestment which most of them has been addressed for reducing debt. But I think we will continue already yes looking wanted opportunities for use in our portfolio in the most convenient manner. So, I think it’s – that means then we can already divest partially. We can divest depending on the circumstances, we can accelerate investment in certain areas or not accelerate investment in certain areas, that is part of the strategy what we already comment in our Investor Day.

Next question comes from Carolina Dores, Morgan Stanley, and Fred Barasi, Goldman Sachs. It is related to the possible DealCo in Iberdrola. If we are considering to establish a kind of starters like this? Ignacio Galán: Well, the first thing is certain companies are already making from the spin-off of this one. I think we did 10 years ago. I think all our renewable who work in the first, with we made the second to make this spin-off of our renewable business from the global business of the group, either understated and the rest of the world. And second, I think it’s DealCo is a way of funding or financing this operation in a manner. So I think we have to really analyze this one. And this is one more way of financing the company but is not the unique one. I think we are already analyzing all opportunities, any CKs, AKs, we decide which is the most convenient for the company.

And last question from the web is coming from Carolina Dores again, Morgan Stanley and Fred Barasi, Goldman Sachs. And it is related to tax in two sides, or in two ways. First, is to explain the height of straight in the Q2 of 2014 and the guidance for the end of the year. And we can give some guidance or expectation or the impact of the new changes in the corporate tax rate in Spain, that’s been announced in the press. Ignacio Galán: Okay. So, I think that as we have explained there has been a one-off negative impact that has risen the tax rate to levels of around 30%, mainly due to activities in the U.S. We call that during the year that tax rate will be converging to the 27% rate. It is what we call share the normalized tax rate. So in principle the 30% is a higher tax rate. And regarding the changes in the corporate tax, we welcome a reduction in taxes. But until we don’t have the details, it is difficult to make an assessment of what would be the effective tax rate for 2015 and 2016.

Okay. That’s all. So, unfortunately and I predicted we have some poor telephone line and it’s not possible to be connected through a telephone. I apologize. And in any case, we will be pleased to answer your questions through the Investor Relations department and the rest of the team. Ignacio Galán: So, thank you very much for attending this presentation. And I wish you good holidays. And rest a bit. And I think we will see ourselves again in the beginning of autumn. So, thank you very much for attending. Thank you.