Ignacio Cuenca - Director of Investor Relations Ignacio Galan - Chairman and Chief Executive Officer José Sainz Armada - Chief Financial Officer of the Iberdrola Group Neil Clitheroe - Global Sales and Marketing Director Francisco Martínez Córcoles - Business Chief Executive Officer of the Iberdrola Group Aitor Moso Raigoso - Director of Deregulated Business of the Iberdrola Group Xabier Viteri Solaun - Director of the Renewable Energy Business of the Iberdrola Group Armando Martínez - Director of the Grid Business of the Iberdrola Group

Alberto Gandolfi - Goldman Sachs Stefano Bezzato - Credit Suisse Virginia Sanz - Deutsche Bank José Javier Ruiz - Macquarie Carolina Dores - Morgan Stanley Javier Garrido - JP Morgan Securities Manuel Palomo - Exane BNP Antonella Bianchessi - Citi Alejandro Vigil - Cygnus Asset Management

Good morning, ladies and gentlemen. First of all thank for joining us this morning. It is with great pleasure that we welcome you to the presentation of the results for the financial year 2016 as well as our update on the outlook for the period 2016/2020 which was presented last year here in London. Before we start, we will like to offer our sincere condolences to Isidoro del Álamo, BBVA Analyst whose father passed away last night, our thought some prayer share with his family at this time. [Foreign Language] The agenda of the day has been already shared to all of you. First of all it will begin with the detail overview of the 2016 results given by our Senior Management team which we’ll then followed by a brief Q&A session related only to this results. After this block, we will have a 15 minutes coffee break and then we will start with intervention of our top management presenting dimension and strategic update for the next year which will be ended by Q&A session. We are planning to finish with it around noon. Afterwards and right after the lunch, two interesting speeches, one given by the MIT related to the utility of the future, and the second one about one of the most requested topics in our industry in these days, the wind offshore business. We’d also like to remind you that this event can be followed online as well through our webpage www.iberdrola.com hoping that you will find the day with us informative and productive. Now without further ado, I will hand over to our Chairman and CEO, Mr. Ignacio Galan. Thank you very much again, please Mr. Chairman.

Good morning. I would like to thank you all of you for attending this presentation here in London and through the web. Always we appreciate very much or interest in following the company. We will start with the bit presentation of 2016 results later as Ignacio was mentioning we will provide an update of our outlook for the 2016/2020 period and we presented last year as well here in London. I’d like to say then our company as already deliver strong result in 2016, thanks to the good performance mainly of our businesses and all the businesses in the reduction if all cost. As consequence net profit grown by 11.7% to EUR2,705 million mainly driven by the contribution of U.S. business Avangrid which grew by 53%, so American business has already grown very, very, very, very much. EBITDA increased by 5.5% to EUR7,880 million and then excluding foreign exchange rate impact our EBITDA grows - grew by 8.2%. Operational efficiency improved by 5% with a ratio of net operating expenses to gross margin already down to a 27.7% it was already as you remember the target for 2020. Net investments are up 32.3% to EUR4,264 million as we continue implementing our investment plan. Meanwhile financial strength is maintained with operating cash flow to net debt ratio by 21.5%. As a result the board of directors will proposed to the annual share at shareholder meeting an increase of 2016 shareholder remuneration on nearly 11% to EUR0.31 per share. The EBITDA performance by businesses shows an increase of 24.5% in adverse mainly due to UIL and the higher tariff on the New York rate cases effective from May 2016. In Spain, along with establishment of regulated asset value of EUR8,690 million. The new remuneration scheme that has started in January 2016 contributed possibility with 2.5% increase and remuneration compared with 2015. In renewables the output was stable or above 2015 levels as said for the UK which experience a decrease in 16.8%. To these we must add the impact of the elimination of LECs in August 2015 and the negative impact of foreign exchange. Our regulator generation EBITDA in Mexico has decreased due to the lowered CFE tariffs during the first month of 2016 and to the small delay in the commission in some of powered planning construction then all of them today are in operation. Finally or liberalized activities recorded 3% decrease in EBITDA this was mainly due to the UK with a lowered contribution in retail the closure of our Longannet coal plant and the negative foreign exchange impact. On the other hand there was higher output in Spain and higher retail activity. In 2016, we’re continuing improving our operational efficiency with the decrease of EUR167 million in net operating expenses with led to a 5% improvement in net operating expenses to gross margin ratio from 29.1% to 27.7% as I mentioned before. There is further room for progress as our American subsidy of Avangrid has yet to implement the 2020 efficiency plan they will convert its levels to the efficiency with the rest of the group with improvement just having a start in 2016. Net investment in 2016 grew by 32.3% to over EUR4.2 billion for two main reasons. The identification on the organic growth opportunities mainly in renewables United State and regulated units in Mexico and the access to bring favorable financial conditions. Operating cash flow increased by 6.8% to EUR6.3 billion exceeding investment across all businesses and set for renewables where over 3000 megawatts of capacity adding construction. Half of which will be commissioned this year include the New York offshore wind farm in Germany. In 2016 results, we are presenting today have allowed the Board of Directors to propose shareholder remuneration increased to almost 11% to EUR0.3 per share consistent as an interim remuneration of EUR0.135 we was paid last month in healthy high demand in scrip dividend 85% of retail and 68% of the total shareholders. And the company supplementary dividend of EUR0.175 to be approved at annual shareholders meeting and to redistributed in July. Moreover the company will pay a usual in Annual General Meeting agenda premium EUR0.05 per share. Additionally to avoid the dilution effect the Board of Directors will propose in the general assembly a new share buyback program to maintain total number of shares in EUR6,240 million. In order to make a complete balance of the year, I would like to briefly highlight the contribution Iberdrola to the society. Firstly, we have maintained our commitment to the creation of a stable and high quality employment. During 2016, EUR2,638 new employees joining our company. Overall thanks to our investment and activities we generated around almost 300,000 jobs worldwide according to report from PricewaterhouseCoopers. Our average training hours for employee are three times the European average we opened a New Corporate Education Campus in Madrid also last year. Additionally we remain strongly committed to an employee safety, where we have achieved 58% in this incident rate decrease in the last five years. Our environmental commitment is reflecting in the 31% emission reduction in the last five years as well and 75% since the year 2000. Dow Jones Sustainability Index as recognized as the world’s top utility. Our EUR211 million investment in innovation in clean energy efficiency and services has placed us in the fourth position of utilities worldwide. And finally our total tax contribution in the country we operate was almost EUR5.8 billion including our own taxes and those collected by Iberdrola to pay to the fiscal authorities. The increasing report for the group of our American company Avangrid has shown by the increase of 53% in the attributable net income. The investment of the company had grown by 64% to EUR1.9 billion. In adverse three years rate agreements had been sign in New York & Connecticut. And in renewables Avangrid has 5,900 megawatts in operation and 800 megawatts in construction. The efficiency measure implemented had begun improving efficiency by 5.8% to achieve the proposed target by 2020. Finally the company has confirmed its dividend commitments in announce in annual dividend floor of $1.728 per share. And now let me conclude with our guidance for 2017. Our networks activities should show a positive evolution notably in United State with a full year contribution or the New York rate case and the new UI Connecticut rate case effective from last January. We also expect a good performance for our generation and supply businesses. We have an additional 717 megawatts in operation over the full year. But we with the normalization of these financial conditions compared to record a production in 2016. We foresee a positive performance in renewable business. Thanks to the contribution of the additional 467 megawatts of capacity commission during 2016 and the megawatts which will be in operation in the fourth quarter of this year. Overall we expect a mid-single digit growth of EBITDA and profit level as well. So thank you very much for your attention. And now Pepe Sainz will present the group financial results in more detail. Thank you very much. José Sainz Armada: Thank you very much Chairman. As the Chairman as pointed out our strong operating results grow 2016 EBITDA 5.5%. In addition net financial expenses improved to 11.7% resulting in 2016 reported net profit growing by 11.7%. UIL consolidation increased our EBITDA by EUR531 million and net income by EUR83 million. In 2016 the British pound fell an average of 12.7% against the euro, the Brazilian real by 4.6% and the dollar was mainly flat. As a consequence FX lowered EBITDA by EUR195 million, but did not have a negative impact and net income as FX risk was hedged at this level. Revenues decrease 7% to EUR29.2 billion due to lower prices and FX depreciation while procurements fell more 12.3% to EUR16.3 billion due to the above mentioned impacts and a better generation mix. As a consequence gross margin increased 0.6% to EUR12.9 billion. EUR770 million of UIL contribution more than compensated EUR339 million of negative FX impact. As the Chairman has pointed out, net operating expenses improve 4.5% driven by efficiency measures as well as overall comparison with 2015 that included one-offs due to the Longannet closure and the UIL transaction costs that were accounted in the fourth quarter of 2015. The consolidation of UIL added EUR253 million partially compensated by the FX impact than lowered expenses by EUR114 million. On a like-for-like basis and excluding UIL and the FX impact, net operating expenses improved 6.8%. I would like to stress the efficiency improvements implemented in the Iberdrola’s all business before UIL with a reduction of EUR253 million in costs. Net personnel expenses fell 2.5% and 7.5% excluding FX and UIL. And net external services improved 6.6% and 6.2% excluding both impacts. The Group EBITDA grew 5.5% to EUR7,870 million including EUR142 million non-recurring positive results due to the social bonus reversal accounted for in the fourth quarter of 2016, partially compensated by minus EUR80 million linked to several non-recurring results. Some positives has got rulings in Spain, but mainly negative due to costs of efficiency measures U.S. IFRS one-offs finds another minor FX. As a result, net typical EBITDA impact only accounts for EUR54 million. Analyzing the different business and starting by networks, it’s reported EBITDA grew 12.5% reaching close to EUR4.1 billion with the U.S. and Spain as main drivers, compensating a weaker performance of the UK, Brazil and currency depreciation in both countries. Net operating expenses rose 4% driven mainly by the UIL consolidation which is EUR253 million. Taxes were up 28% also due to the above mentioned new perimeter. In Spain, EBITDA rose 10% reaching EUR1.6 billion and improving the nine months, 6.6% increase. The 2.5% increase of the remuneration according to the new framework, incentives and cost control more than offset the EUR33 million impact of positive settlements accounted for in last year. In the UK, EBITDA fell 3.3% to GBP799 million, with a 3% decrease in gross margin affected by the profiling of the RIIOs as well as some delays implant investments. Net operating expenses improved 4.5% due to larger works for third parties. In the U.S., EBITDA was up 62% to EUR1.4 billion, including $1.4 billion including $448 million coming from the UIL consolidation and better margins. Excluding UIL, EBITDA was up 7%. Still the IFRS number is close to $50 million below the one reported in U.S. GAAP. Finally, Elektro’s EBITDA fell 3.6% to BRL899 million with 1.4% lower energy distributed and lower tariff due to the August 2015 full-year review which impacted was minus 5% that has been partially compensated by the 9% increase in the Annual August review of this year. Net operating expenses improved 28% including EUR32 million of our positive one-off accounted for in this quarter. Generation and supply EBITDA fell 3% reaching EUR2,253 million. Growth in Spain is offset by the UK also affected by the FX and weaker than expected performance in Mexico. In Spain, EBITDA grew 1.1% reaching over EUR1.5 billion, 16% higher output driven by a 48% increase in hydro production, a 5% in nuclear, together with higher retail activity more than offset the lower gas results which were minus EUR75 million compared to last year. Net operating expenses were up 16% are still affected by the EUR103 million of non-recurring positive results in 2015. Levies were down 3%, as positive court rulings in 2016 were higher than in 2015 by EUR64 million. In the UK, EBITDA fell 22% to GBP240 million with 13.8 decrease in gross margin not compensated by a 6.7% increase improvement in net operating expenses and a 24% decrease in levies due to lower ECO costs. In the retail business, gross margin fell 11% driven by a 16% lower gross margin in the retail power due to the rise in non-energy related cost basically government obligations. And our reduction in retail gas of 8% or lower volumes due to milder weather conditions than last year. Expenses included an OFGEM customer compensation ruling of EUR23 million, and as a result, the EBITDA fell EUR92 million to GBP204 million. In the wholesale and generation business, gross margin decreased 28% due to a lower output and higher carbon tax, but it is more than compensated by the improvement in net operating expenses following the Longannet closure. As a result, the EBITDA increased by GBP26 million to only GBP36 million. So the EBITDA of the whole generation and wholesale business is GBP36 million. In Mexico, EBITDA fell by $23 million to $483 million affected by the CFE lower tariffs to both customers and delays in the Monterrey and Baca California plants now in operation. Renewables EBITDA was down 8.9% or EUR147 million less to EUR1.5 billion driven by weaker performance in the U.K. that lower this contribution by EUR171 million due to the FX impact and wind conditions. Gross margin fell 7.7% and net operating expenses improved by 4.1%. In Spain, EBITDA reached EUR497 million, EUR24 million higher than last year as a result of higher output and including EUR45 million of an account receivable due to low prices in the market versus expected price on the regulated wind farms. In the UK, EBITDA fell by GBP100 million to GBP299 million as a consequence of 17% lower output, lower prices and the LECs removal. .: In Latin America, EBITDA increased 10% to EUR77 million. Mexico EBITDA improved 21% to EUR52 million as a consequence of additional capacity. Brazil was down 7% to EUR25 million affected by the real devaluation on higher costs. Finally, in the Rest of the World EBITDA reached EUR95 million, 0.3% up thanks to slightly higher prices. EBIT increased 18.9% to EUR4,554 million. Amortizations were almost flat to EUR376 million with the closure of Longannet the extension of the useful life of wind farms and FX compensate the UIL consolidation and the increasing depreciations due to the larger investments. Provisions fell by EUR360 million to EUR178 million driven as you remember by the Longannet impairment that we accounted for in the fourth quarter of 2015 that amounted EUR288 million, and the reversal of some provisions made in previous years are on our renewables pipeline in the U.S. as we are accelerating the building of more renewables in the U.S. Net financial expenses improved 11.7% to EUR 903million thanks first to a EUR65 million reduction in debt related cost driven by a cost improvement from 405% to 349% and despite the EUR2.4 billion increase in the net average debt balance mainly due to the UIL consolidation. I would like to stress that 2016 average cost of debt would have been even lower, we will have include cost for bond repurchases executed in the fourth quarter. Second, thanks to the EUR55 million of lower non-debt related costs including EUR100 million of positive differences of FX hedges in 2015 mainly due to the coverage of the British pound devaluation. Reported net profit grew 11.7% to EUR2,705 million thanks to the already explained improvement in operating results and in net financial expenses and despite lowered non-recurring results and equity contribution as well as higher minorities contributing and higher taxes with EUR193 million lower non-recurring in tax gains. Our net debt total EUR29.4 billion as there has been a one billion additional one-off payments with no impact on the P&L due to the anticipation of renewal investments basically the safe-harbor in the US and some non-offshore anticipated payments for EUR320 million and one-off tax payments for EUR720 million as a consequence mainly of the Spanish royal increase to 2016 that force companies to anticipate tax payments to reduce the Spanish budget deficit in 2016. The one billion of additional debt, especially compensated by EUR490 million on FX contribution to lower debt. Nevertheless despite this one-off impact our credit metrics remain at very solid levels. Our net debt EBITDA was 3.77 times, our FFO or net debt 21.5%. Our return cash flow net debt reached 18.8% with a leverage ratio of 42%. Thank you very much. A - Ignacio Cuenca: Okay we are going to start with the Q&A session on the results 2016 is there any question from the hall, from the room sorry, Alberto Gandolfi then José Javier Ruiz and afterwards Carolina.

Thank you. Good morning. It's Alberto Gandolfi from Goldman Sachs. I'll stick to three questions backward looking. The first one is, I guess for Pepe and can you please detail some extra non-recurring items that maybe you don't define as non-recurring items, what is mean by that. The cost of bond repurchases, can you quantify how much is that in the financial result and for instance can you talk about any restructuring provisions you've put in the P&L which actually compressed EBTIDA, the EBTIDA will be higher without those? Second question is about maybe comparing and contrasting retail margins in Spain versus the UK, if you can give us your perspective on the debate that is going on particular in the UK on that topic. You don't make that much money, so probably there is one exception in the UK, it's not you, and so I wonder, can you give us maybe some sense for EBITDA margin euro per megawatt hour EBITDA between the two countries and your views on what should be sustainable profitability for this business? And the final-final question is more philosophical I guess for again for the Chairman, would be - can you may be summarize your views on the performance of your U.S. activities in 2016, the year started with a couple of sleeps that say on the earnings guidance, but then it concluded much better and the plan presented yesterday was quite welcome, but by the market it seems you know quite solid, and so can you maybe give us lessons learned from the U.S. last year, and what have you done to turn it around? Thank you. José Sainz Armada: The impact of the extra cost of repurchasing is EUR15 million, for example the efficiency measures that we've taken and especially in the fourth quarter accounted for EUR42 million. We have also provisioned some question mark that we have in some of our projects for EUR74 million. In the U.S. the negative one-off impact which is accounted in the IFRS versus the U.S GAAP is EUR50 million. We have also a EUR60 million negative if impact this year on the UK that will hopefully this appear next year and has to do with the OFGEM fine and some others and to compensate that we have a positive controlling so far around EUR100 million. So all in all the negative impact that we are of extraordinary measures that we take you know to improve following years, as I was mentioned have been EUR88 million. Not including the EUR50 million of the bond repurchases, which is below the EBITDA obviously, this is the other side on top of EBITDA.

So Neil Clitheroe which is the Marketing Director of the Group is there he can already explained the comparison between both so, Neal just add please Neal?

Okay. Sorry, so in terms of the UK I think our position is the same as it's been for the last sort of five years that our net margin of 4% being achieved in the UK is we think is a good return for those customer assets. In terms of the price change that we put through recently on standard in terms of the competitiveness of the market, and in terms of the rise that we've seen in non-energy cost. That's the level that we’re trying to maintain the whole time in the UK, and I think that is pretty much well understood as we've seen through the CMA, and CMA studies that went through over the last couple of years. In Spain, that the margins are still strong, there still an offset between the regulated tariff in the market tariffs, but we are competing strongly there and seeing our market share maintaining that market. So the UK's probably the main area of focus but 4% is what we see as our long term margin in that market.

Aitor if you want to add.

We monitor the margins to whether with the generation portfolio and so the specific margin productive activities something that is managed together. So we don't have this with us. I think I will add that the margin, the gross margin in United Kingdom is the leader over there, we have in Spain by the new thing we are suffering and we maintain obligations together with some additional cost that have generated by the complexity of the industry procedure.

So I think related to the last question, related United States performance. So first of all, I’d say last week we have a meeting in Boston. And I think 12 months ago or 14 months ago Avangrid doesn't exist. So I think in 12 months we have already merger two companies. We were one listed company, other listed company with the press in 24 American states with a distribution in the state from New York, Connecticut, Massachusetts, Maine with a lot of prayers going in renewable and with people which isn't already - which is already managing the company pressing, yes all your regulated mining, I think we have to understand what has already been done in 12 months. So in 10 months I think we moved from the headquarters from Maine to the headquarters in Connecticut. We have already started the construction of 800 megawatt to renewables. We have already signed several contracts of PPAs with customers like Apple or like whatever. So only thing has been done, and these people has not ready - has not there's been explain properly in the presentation on February last year. So February last year were just two months after the merger was happened and I think they took already two plants, they put together and that is we're forced to then to present something. So I think during this 12 month to learn, how the company how to operate, have they really integrated the company, and look what has really happened. So therefore we’ve succeed in signing an agreement rate case in New York for three years, they've really succeed in presenting and agreed for January the rate case from Connecticut. They’ve already signed a lot of PTAs with different customers and they’ve already understood our philosophy how to reduce cost, how to become more efficient, and this actually to reducing and improving the efficiency ratios by 5% as I mentioned. And then already committed in this moment, because they know the business better they all together business to continue making these efficiency things. So also I think in last quarter, so we blocked, the first three quarter we doesn't blow much. So all together makes then the result of the last quarter were much better than the previous quarters, and now especially they've been able to explain the natural of the business they are managing. So it's a new team, as I think we know the business and he's committed with the business et cetera, et cetera. So and that's why I think is therefore most straight that even in many of best condition. In the middle of the integration process they have to be able to deliver, we have already deliver, now they are much more comfort to present and to planning to explain, what they have plan to do for now 2020 than last year that they take two plants they put together in the present that's it. So I think that is a management plan, and I think that is I was not yesterday in the presentation, but the inputs I got is, they has been able to present and explain much better the thing they did and I think that is the consequence, because now they know what to do, they have already plans to do, and already two important thing which are their rate cases were they provide and the stability of 2020. So which I think is much easier to explain and I think when you're in the middle of a negotiation you cannot say very many things, where you have already renegotiated we are able to explain the things in months better condition. Knowing as they know now the natural of the business they had not. So I think that is the difference. I can say that I was very well impressed of the presentation they make the board last week. I think all the areas, all the head of area and not only this year, but all the head of areas they are very committed what they already present. In terms of efficiency in terms of new product and service, and in terms of some new investment they are really very solid presentation to us. I think you know we have already a board with majority how independent, so which I think they are not already yes presented ourselves, in our way we feel very, very comfortably what they have presented to us.

Okay, now José Porta here in the fifth row and afterwards Carolina Dores. José Javier Ruiz: Yeah, José Ruiz from Macquarie. Just two questions in one. Could you share with us the split of the cost cutting by geographies and businesses? And the second question in 2016 which cost cutting plans did you conclude and which are still ongoing by geographies and business activities? Thank you.

Either not Pepe you are able to explain that one, I think as much as I concern, I think they are not ready from the web everybody have to reduce, I think the target of a gross margin, the cost on the gross margin everybody has they has an areas where they are much more challenge which is the case United State we imagine give already more opportunities there already which are more efficient, but everybody has the same thing and all together I think efficiencies is already - is a must in the group, and I think in the payroll everybody that's included. So which I think is I don't know you are able to speak one by one, but I think I’m telling you as my concern is everybody is already at that one, same thing I think there more room. So I think the case of the state and that's why they are already committed to made that one because they are a lot of things to be done but do you have some excess of the staff and the other tests of resources et cetera, et cetera where they can really make, but everybody has already committed with that one. I think Spain, Britain, Mexico, Mexico is more difficult, because it brand everything but as well they have some efficiency thing in this way. And Brazil in due time they will make things as well. But I don’t know Pepe you are able to explain that. José Sainz Armada: Well, we will send it to you country by country, and business by business. But I think that in general terms, I think the UK has made an important effort in reducing costs. Spain is also driving costs below and I think and in the U.S. that has started improving cost, but as Chairman as said there's still room for improvement. The countries where I would say there is less, less, less so as a Chairman was saying is Mexico they are improving efficiency, but obviously in a country that you are growing fast obviously the costs cannot come down. But we will give you the details you know country by country and business by business.

One example of this thing non-stop but cost cutting strategy we followed, last year we did anybody looks at the hotel this one is lovely modest. José Sainz Armada: Before that yes he was already decide because the room is so small I said well I can look to the financial director then he is really trying to control the cost, he never know what he said, he was already decide that.

Hi, hello Carolina Dores from Morgan Stanley. I have two questions on the 2017 guidance. First one is just to confirm if the EBITDA and net income it’s reported and not especially the EBITDA, because you’ve said the adjusted was EUR50 million lower. It's usually reported, but I want to know if that continues to be the case? And second you expect flat generation in supply what assumption you're making on specifically on hydrology in Spain?

I think in the phase one, I think in terms to the second one I understood very well the first one - okay. So in the second one is, I think last year we beat our record of hydro production. We never in the history in the group, we have already produced as much as we produced last year because of this extraordinary as special hydro conditions. So this year I think is what we call average year, in average year is on the range we can make - it’s in the range of 13, 14 that has now 13, 14. José Sainz Armada: Yeah, in the upstream.

Yeah but I feel the normal thing is the averages on the 13, 14 last year it was on the range of 20 or something else, okay. So we just finish extraordinary situation. So we move to the normal one, so that one normal one even we have already adding some more power which is already producing still more and production in result, we have to deduct to move from the extraordinary one to normal one, and that one we are putting already similar thing one is compensated to another one. José Sainz Armada: It is based on reported. EBITDA and reported net profit.

Okay next question. So we don’t have questions from the web. So we can stop here and then to take a coffee for 15 minutes. Thank you. We’re going to coffee break and then to start with a presentation. Okay. Well, thank you again we are ready to start with the part corresponding to the update on this strategic outlook 2016/2020 which will be developed by Mr. Ignacio Galán, Mr. Francisco Martínez Córcoles and Mr. José Sainz. Please Mr. Galan.

So after our 2016 result presentation let me now present the update of 2016/2020 outlook. First of all, I would like to briefly review the current needs of the global NEX scenario and the competitive advantage of our business model within this context. I will then quickly go about the achievement in our 2014, 2016 plan we’ve just completed. And finally, I will give an update of the Iberdrola financial update of 2020 which is the review. This will be further detailed by the business CEO, Francisco Martínez Córcoles and Pepe Sainz. Our vision is then globally amount will continue to increase over the next decades while at the same time they need to reduce emission to take climatic change remains order. This will lead that to for the electrification of economy as the way to combine these two trends because the electricity sectors has great potential to contribute to carbonization of the economy things to high look technologies which is so. Therefore a low carbon sources will be needed utility scale are distributed both of them. The intermediate the natural renewable will require more storage capacity. The system will be more complex the money and more digitalize integrate additional centralized and the centralize generation in storage capacity. And finally, thanks to the information supplied by the digitalize networks active custom and management is possible and will be key for to achieve greater customer engagement in any efficient improvement. All these relating to what is called utility the futures, as we will explain later by the Professor Berger from the MIT. Iberdrola anticipate the global energy transition 50 years ago, we first started to focus in development of renewables, hydro pump and in storage more investment in [indiscernible] in our active customer solutions. And so we can say the utilities which are it’s mostly today Iberdrola. Almost 60% of our generation capacity in operation it’s really renewable and we have additional 7000 megawatts in construction and 1.5 gigawatts which will be commissioned during this year. As a consequence, we are the world leaders in onshore wind. And we are investing in a strong in offshore wind as well. Disparities that below during the last decade by our company at very high value at this technology required very specialized engineering skill, they take long to develop. Any re-storage become increasingly fundamental in early scenario we take growing share of inter-meeting renewable generation. Being hydro pump in this storage capacity they can be implemented on the largest scale in an economical efficient basis. Our overall hydro pump in a storage capacity in operation and construction amounts 4500 megawatts equivalent to five million domestic batteries of 40 kilowatts each, which are now being commercialized in the large generation devices for the domestic storage. So the existing one is the same thing five million homes with batteries, so the size of the capacities stored in this moment. In networks we have invested in the last three years over the EUR3 billion in the extension of digitalization of the grid and to optimize operation and efficiency. In high and medium voltage grid we have achieved 100% digitalization of automation in Spain, UK and Brazil and we are working in our 2016/2020 plan of the mission in Maine, Connecticut and in Massachusetts and we are in talks with the regulator in New York in this moment. We have also made important progress with low voltage grid on smart meters. In Spain, we have 200,000 kilometers of low voltage of smart grid where we have also installed nine million smart meters. In U.K. we have beaten the regulatory of that is for in smart installation in 2016, and United States 100% smart meters are already installed in Maine, 63% in Connecticut. Last December also we made the feeling for the New York army plan part of a Roman energy business strategy for the full development of smart meters and related in energy infrastructure. Finally, we have 100% of our generation plant digitalize in our technologies. An example, is our renewable operation center in Toldeo from we all of our almost 11,000 wind turbines are run remotely. Through analysis of the big data for nowadays smart grids, we are continually testing and developing new services to increase customer satisfaction and loyalty and improve their energy efficiency. So an example of those services managed to ATPs or tailored tough tariff based on time of use to that different customer needs, remote control of heating, distributed generation in the storage, and next month we are launching a pilot phase [ph] for the service we call energy bank which consists of energy packages that can be both controlled by manage easily. But these are just one example numinous product in services that we are continually developing as we anticipate the customer needs. Our business models combined this focus on activities link into the energy transition with a geographical and currency diversification fundamentally in countries with eight ratings allowing us to provide attractive shareholder remuneration today and future growth visibility. In the United States our subsidy of Avangrid is our platform to meet future growth opportunities mainly in energy infrastructure. Through our eight regulated utilities in New York, Connecticut, Maine and Massachusetts we invested in improvement in expansion. As of 2015, we had regulated that’s it value of a $8,700 million and expect to reach $11 billion by 2020. Our energy activity is as well in A rating country is close to zero emission. We are the second wind energy producer in our renewable of premiums growing increasingly investment to add more megawatt on offshore capacity and up to 2020 to reach 7700 then of the period. In UK, a Scottish Power is leading in renewables and growing in adverse. Iberdrola is the first wind producer in all trends this A rating country within existing offshore wind have in NRC where we are constructing 714 East Anglia 1 wind farm to be commission between 2019 and 2020. I have informed opportunities to build three other offshore wind farm in the future. Overall renewable offshore and onshore wind capacity is expected to reach about 3500 in UK by 2020 also we have already a hydro pump in a storage capacity of 140 megawatt in Scotland. Growth and digitalization of the grid in the UK continues and going as well as the deployment of a smart meters. Of 2015, our networks had that regulated asset value of GBP5400 million with unexpected increase almost 26% by 2020 to GBP6.8 billion. In retail, we’re increasingly offer new a smart customer solution to input customer experience with services such as the Scottish Power application called Power-Up which enable customers to buy their energy in daily units from their mobile phones. In Continental Europe, we have 67% lower emission intensity than peers average, leading renewables with 16,500 megawatt capacity in operation. We are the number one onshore wind producing in Spain and we have an offshore wind have in the Baltic Sea in Germany, but the first 350 megawatt Wikinger wind farming construction today will be commissioned by this year end. And in France and Brieuc offshore wind farm with 500 megawatts of expected capacity will be commissioned as well in 2022. We have achieved almost full network digitalization in Spain where we have a regulatory asset value of EUR9 billion. And we are leaders in hydro pump it is storage in Europe we 3200 megawatts in operation and 880 megawatts in construction. Finally, we are constantly below the new value added services for our customers having reached five million contracts of non-energy products and services. In Mexico, we have the advantage of being the first mover to meet the opportunities or the energy reform liberalization. We are the largest private producer with a total of 10,000 megawatts of the capacity in operation or commissions before 2020 with a long term dollarized PTI contracts. We are also increase our renewal capacity to reach 1000 megawatts by 2020. In Brazil, we are well positioned for a potential restructuring of the sector since we are the first distributor of in the country by number of customers. We have spread geographical present alone there North East and South of the country and regulated asset value in 2015 or BRL12,400 million expecting to reach BRL23,300 million by then of the plan in addition to 4770 of renewable capacity that is included 100% of New Energía you know that we already managing. Briefly, the delivery of our 2014 to 2016 plan has exceed our initial estimate we have already seem today in the presentation. With componential growth rates of 5.9% in EBITDA is 7.8% in that profit level that was the plan 4%. So total profit generated exceed outlook by EUR188 million for 2016 and has translate to dividend growth of 11.4% in the total shareholder return of 55% in the period. Well above of all of the reference in this is such a [indiscernible]. Now, I will talk a bit to the new outlook for 2016/2020. Given the important progress made during the first year of our plan. The good financial condition and the existence of new investment opportunities we have accelerated our investment commitments. With an increase of initial investment plan by EUR1 billion most of which is to be allocated to new renewable capacity in the United States to benefit from the PTC extension up to 2020. Around 19% of the investment will be focused in regulated or long-term contracted activities and 17% allocated to A grade rating countries. Business by business renewable investment will be represent 39% of the total by currency U.S. will grow by 40% of the - will represent 40% of the total, this investment good result in 6.5 gigawatts of additional renewable capacity in over six billion of additional regulated asset value by 2020 to reach almost EUR34 billion. As a result of our 2020 renewable EBITDA will represent 25% of networks and networks 48% by currency more than 60% will be generated that will A rating countries. We expect to continue improving our cash flow generation capacity with a total operating cash flow reaching 35 billion over the period. All businesses will be sale, finance investment with a cash flow generated through their activity except renewables were so in large investment will be commissioned after 2020 as I mentioned for instance St. Brieuc for us. In brief, these update confirm in an acceleration of growth for the remaining years of the plan. As a consequence EBITDA grown expectation increases slightly to reach EUR10 billion by 2020. And net profit growth further increases significantly to an average of 7.5% to reach around EUR3.5 billion by 2020. I will also highlight then we have a business model in which 35% of EBITDA generated is relating to the net profit. I think most of the operation is already yes with very high control of the activities. This investment plan will be compatible with our financial strength maintenance improvement return. In these sense, return on equity is expected to increase above 8.5% and return on capital employee of 6%. We intend as well to maintain our commitment to growing shareholder remuneration in line with our growing result. With a payout between mid-60s and mind-70’s leading to a 2020 dividend per share between EUR0.37 and EUR0.40 that means 20% - minimum 20% more than that one with we had already announced in this year, in establishing a floor of EUR0.31 per share. We also continue with a scrip dividend program offering in to our shareholders and possibility to receive either in class of in shares. And we will carry on with the share buyback to avoid the dilution maintaining the number of shares in EUR6,240 million. To conclude, I would like to underline that our history of sustainable growth is a result of our vision back to 2001 when it was clear to us then the board need more energy cleaner and more sustainable. Energy strategy, focused on renewable energy regulated business in oriented to international expansion in countries we take a rate in preserving our financial strength. Having them more straight it our delivery operational efficiency, financial management and clear customer focus. Our 2016/2020 plan now look reinforces this pillar in our frame commitment with increasing shareholder return and economic in social development for the benefit of all the stakeholders continue with the nation of employment investment and purchases the fulfillment of our environmental world in our fiscal contribution. So thank you very much, and now all my colleagues will already explained more detail on this plan. Thank you.

Okay. Now we are starting with a presentation regarding the different businesses with efficient, we share with all of you by our business currently business CEO Francisco Martínez Córcoles, that he’s a companion by his business general manager, network Mr. Armando Martínez, and Mr. Aitor Moso and finally and renewables Mr. Xabier Viteri. Thank you. Francisco Martínez Córcoles: Thank you, Ignacio. During my presentation I will review our outlook of the industry over the coming years. Explain the main elements of our strategic plan 2016/2020 and show however that all is well positioned to meet future challenges. But before getting into details let me summarize by saying that since Iberdrola’s outlook presentation last February, we are able to bring forward capacity growth by one year so we will have more than 7 gigawatts installed by 2019. And we have increased our capacity growth for the plan by almost 20% up to 8200 megawatts by 2020. In terms of networks, we are strongly hold the view that agree these essential element of the system and therefore regulator are seeking to find a stable or long term frameworks to support their growth and resilience. That is why our networks activity has such high visibility across the blend. From last year I would like to highlight improvements in Spain with the release of the new remuneration of scheme until 2019 when it will be reviewed. In the United States, we have stability through our three states with new rate cases in both New York and Connecticut in line with our expectations. In Brazil, we are finalizing the details of the new framework scheme in Pernambuco which is also in line with our estimations. Regarding wholesale markets, our view is that the full dimension has not substantially change demand expectations are slightly weaker than foreseen last February, but there is still need for a new capacity in the UK due to a cold winter in Mexico due to the fuel oil plan substitution. In terms of prices and despite the ups and downs of commodities over the last two years we maintain our estimates of EUR48 per megawatt hour in Spain as a low demand on competition as the market price. These estimate of course consider forward prices in the long run, because of the way we hit our sales, but as weaker recently seen the market may see huge short term deviations because of hydro and wind conditions, big demands and temporary situation in Europe, and January is a perfect example of what I'm just saying. In the UK and Mexico we increase prices slightly driven by the gas [ph] rally. However the change in praise will not be reflected that’s an improvement in our results, because those prices are quite similar and additionally because of the variation on the UK exchange rate from the outlook last year. To explain these another way, we can’t see in this slide our forecasts update for the period in comparison to the prices estimated by the analysts. As shown in the graphs, in Spain the industry sentiment has moved down to our position much closer to us, whereas in the UK the movement has been the opposite. Iberdrola has raised the average forecast in line with analyst due to the increase in prices we have already registered. Regarding supply mature markets such as Spain and UK have the key drivers to compete in the industry and to preserve customer loyalty including customized products, goods services and competitive prices. Through these three factors our essential requirements to be a player in the retail market, so choose dynamism and flexibility and harnessing digitalization to the well sophisticated products and remain competitive. On the other hand, Mexico is just starting to introduce competition, these offers the potential for significant growth. So we will take advantage of our growing the skills in competitive markets to get the best out of retail in Mexico. In renewable, we have seen not significant change related to development of capacities in last February. There are two ways of getting by ability to new projects. Either of the plans wins and auctions on the pertains our regulated price as in UK, Spain, Mexico and Brazil or their whole development is private and the prices so through an agreement with customer. We do see high competition in both the schemes, but in the PPAs price is not only - is not the only driver and it is essential to offer additional volume that is the case in Mexico where Iberdrola sound position enabled us to grow more renewables in our private way with higher profitability by offering a cleaner mix of energy to the customer that demanded or by providing green certificates to our retail activity. I will now explain in more detail the key operating on economic metrics of our updated plan. As the Chairman said, networks will invest more than EUR10 billion in the period. 79% in A rating countries. The U.S. is the main destination with half of these investments due to the strong growth up to 2020. Distributed energy we almost reached 300 terawatt hours at the end of the period whereas they RAP will increase 22% accounting for EUR33.7 billion. As you can see in the graphs there is a balanced and diversified means by countries. Regarding growth in networks, Iberdrola is focus on high voltage projects and the smart meters deployment, in this slide you can see the key dates for current developments. In a smart meters let me just highlight that by 2018 we will finish the deployment in Spain, the largest program of the group that is currently 85% implemented. At the end of that period, we expect to have more than five million smart meters installed in the UK whereas you know the deployment is being done by retailers, regarding high voltage projects you can see that all of them are located in the U.S. as said the Western Link in the UK that will be completed later this year. In terms of generation the investment in the period will be close to EUR5 billion and is distributed almost equally in thirds. In Mexico the investment will allow us to install 3600 megawatts almost all of them operational by 2019. The growth in Mexico has total visibility as 97% of the capacity is already commission or in construction. The main entry will be in 2019 with two new combined cycle gas turbines in place one for CFE and one for private customers. They investment in renewables which has increased up to EUR9.5 billion, EUR9.5 billion in order to take advantage of new opportunities that will allow us to install 4600 megawatts. The UK will be the main destination of these investments due to the offshore projects in construction. We can gear an East Anglia 1 closely followed by the U.S. In terms of growth, we also have high visibility and renewable projects, as 76% of the total capacity is already commission or in construction. The main entry will be registered this year with almost 1500 megawatts. Let me briefly summarize the whole position in generation, in terms of capacity we will commission more than eight gigawatts of new renewables and combined cycles. While you closing the majority part of our coal fleet and those achieving more than 50.5 gigawatts of managed capacity by 2020. As a result we will improve our emissions free mix to reach 65% of the capacity at the end of the period. With this new capacity the production of Iberdrola will increase by asset in 2020 almost reaching 175 terawatt hours. Regarding the visibility of the growth, I will highlight that seven gigawatts is already commissioned or in construction, some 85 of the plan, 85% of the plan. For the remaining 1200 megawatts let me say that Iberdrola has 800 in a very advanced state and the other 400 have projects identified already Additionally we have almost 1700 megawatts in construction that will be commission after 2020 coming hydro projects in Portugal and St. Brieuc offshore project France. Lastly, I will like comment on the growth of Iberdrola in the retail business. As you know we have a consolidated position in Spain and the UK and our aim is to grow mainly in Mexico in the industrial segment, and in some countries such as Portugal and specially Italy. By 2020 we expect the high growth in both sales and contracts for exceeding 200 terawatts hours in sales in order to supply close to 25 million customers. I will now spend a few minutes explaining the position of Iberdrola’s businesses by country. As an overview, here is a mob with highlights of each business and region during the plan. Detailing the new investment in the period they have the capacity and expected EBITDA growth - the famous fly is coming surprising. Sorry. Never happened to me this, but I promise you there is a fly around here. I will comment on the relevant topics in detail, but let me point out that 71% of the investments will be address to A rating countries whereas the main growth drivers will be renewables and in terms of geography the U.S. and Mexico. Starting with the networks business in Spain, it is worth mentioning the stability of the new regulatory framework as well as the potential opportunities derive it from the end of the smart meters program install. At the beginning of the low voltage digitalization to get smart grades; Spain has always been our technological state of they are in networks and our objective is to transfer all the knowledge and learn lessons into the new projects. In the UK the most relevant aspect in the increase is RAP - excuse me in the in the UK the most relevant aspect is the increasing RAP both in distribution and transmissions. Thanks to the investment of GBP2.3 billion, we expect a combined growth of 26% in the period. Networks U.S. is one of the main growth drivers of the company during this plan, with investment close to EUR6 billion. Iberdrola will accomplish all the economic and quality outputs agreed with in the different rate cases and we'll develop high voltage projects in our areas. As a result we expect an overall 26% increase of RAP. Additionally let me highlight the opportunity to get a smarter and more efficient grid which we plan to achieve with the smart meters program in New York, AMI together with a comprehensive efficiency plan. In Brazil we expect the significant growth of distribution grab by 2020 with a rise of 60%. Additionally we will be analyzing potential opportunities in a high voltage grid. For our generation and customer businesses in the Spain we expect not significant change in the wholesale market, but the increase in our customers’ activity will resulting shorter electricity position that will be hedge to avoid risks. In terms of retail contracts, we expect to maintain our current leadership in the industry, increasing our position through our other value products like time of use tariff and our efficient back office that at least eastern Europe concern the lower than the estimated industry average based on public information. These two drivers will allow us to retain existing customers and to compete hard for new ones. In the UK and especially after the closure of Longannet we cover a sure electricity position which will be progressively reduced by at the entry of new renewable capacity. Our combined cycles locate in New London are perfectly positioned to capital divest opportunities of the market either by his spreads or by ancillary services contracts with National Grid. For customers, I would like to point out the relevant improvement in our retail operation, which has consolidated our leadership in cost to serve currently estimated as GBP13 per contract lower than the industry average, as I mentioned based on public information. During the period we will sustain our effort in this area reducing our cost to serve by 35%. In addition, last year we have started the deployment of smart meters, as you know an obligation for retailers in the UK. We close the year ahead of our commitment with OFGEM and we are increasing the installation rhythm in order to comply with a program. There is not significant change in terms of our debt balance as we will maintain our serve position policy throughout the period. Long term contracts will reduce by almost 40% by 2020 reinforcing that our participation in gas is limited to achieving a flexible and secure supply to our customers and combined cycles. Mexico is the key growth driver in the generation and customer business. Thanks to the leadership position gain ahead of our competitors since 2001. I mean the first move in the country has enabled us to compete better in the combined standard resulting in our some mix of regulated contracts with CFE, more than 80% and industrial customers. During the plan we will invest EUR2 billion to commission 3600 megawatts of new capacity reaching almost 8.7 gigawatts by 2020. The growth in capacities large, but also selective in order to maximize profitability, in terms of thermal generation 2000 megawatts are for CFE and the rest development for private customers. This thermal production together with the whole renewable portfolio allows us to offer the best mix of products for our customers. Regarding Green Energy and guarantee of supply and steam, therefore we expect an increase of sales up to 66 terawatts hours by the end of the plan which in place of growth of 80% from last year. In the renewable business the U.S. is the country with a larger increase of new capacity during that period to gigawatts, which will result in a total installed capacity of 7.7 gigawatts by 2020. New capacity will be developed and the scheme and through long term contract with private customers improving the income mix coming from regulated prices. Renewals UK will have an increase of almost 500 megawatts when insure wind farms during the plan. Almost half of them are recently commission and the rest will be operational later this year. Apart from these wind farms, we have a portfolio of good quality projects waiting for the new remuneration a scheme to be defined. In offshore, we have almost 1600 megawatts in construction also all the Wikinger and East Anglia 1 projects will be commission during the plan, with St. Brieuc at initial stages. We have stricter our offshore growth ops of capacity so our developments will take advantage of the maximum construction and operational synergies. At this moment we have our portfolio of more than 800 megawatts ready to compete in the next Baltic Sea auction and close to three gigawatts for the UK auctions. In Spain, we have a large portfolio ready to be developed once the returns conditional unmet. In Mexico and Brazil, we will also lean growth to profitability avoiding auction with two low prices. As an example in Mexico, we have currently 600 megawatts in construction and the private scheme to provide Green Energy and certificates to our industrial customers. In Brazil, we will add more than 300 megawatts during that period, which are already or will be commissioned this year. Let me now explain our concept of a smart energy in which the utilization is the essential element to transform the businesses faster competitiveness, preserve customers loyalty and improve the quality of supply and operational efficiency as well. As far units seen as more energy we have invested close to EUR5 billion up to now, been the assets the main destination with 66% of the investments. In 2017/2020 digitalization investment will exceed EUR3 billion more devoted to offering new services and more control to the customer in order to preserve loyalty and improve competitiveness. It is also worth mentioning our continuous effort and efficiency. As we have been doing for the last year and despite the activity increase we always keep a strong focus and optimize in recurring cost. For this period we have launched an efficiency plan to 2020 in order to capture all the cost reductions coming from business transformation due to digitalization investment on best practice exchange. As a result we expect to save an average of more than EUR250 million every year and to increase our EBITDA per employee by 43% close to 360,000 slightly better than our estimation last February. Let me conclude. The updated strategic plan 2016/2020 will be a cycle of a strong investment EUR25 billion. As a result by 2020 our company will manage a RAP of almost three - excuse EUR34 billion, and installed capacity of more than fifty gigawatts and a portfolio of almost 25 million customers. This will consolidate not only as the leader in the industry, but also as the utility of the future as the Chairman said thanks to our vision positioning ahead of time and delivery. As you will see later the utility of the future will have four main characteristics; digitalization, capitalization, distribution operate or more focus on services on a more sophisticated customer with more control and customized opportunities. Our company already complains with these requirements also some of them will be further developed in line with the rhythm of regulation. Iberdrola will know we’ll have 100% of small meter has installed by 2022 providing the needed the input for our big data models. We will improve the generation mix even more reaching close to 30 gigawatts of renewable capacity including hydro. We already offer some of the distributor services like information related to incidents or the active network management. And we will further develop the product we already offer to our customers, time of use tariffs, small solar banking resulting in our larger and more sophisticated range of products. Thank you very much.

Okay, thank you, Paco. Now we are entering in the last speech before the round of Q&A and the lunch. With us Pepe Sainz talking about the financial and rich policies just to remind you that the Q&A session will just start immediately after his intervention, thank you very much. Pepe? José Sainz Armada: Okay, good morning again. Let me start with the quick review of our base scenario that maintains an assumption of a moderate economic recovery only slightly lower than the official plan. In a global context of higher uncertainty due to the Brexit and possible changes in global trained link the measures under the new U.S. administrations and elections throughout Europe. The Eurozone will see a progressive GDP recovery reaching 1.5% growth over the period supported by stable commodity prices and an ECV commodity policy in a context of inflation below they started collaborates. In the U.S. we think that it will grow around 2% although it could improve in the short term due to fiscal and trade policies of the new administration. And our forecast is that good employment level will continue and inflation would reach around 2.5% and the Fed will raise interest rates during the period reaching 2.5% or 3% by 2020. The UK growth is expected to recover towards 2% at the latter part of the plan with inflation raising in the short term and Bank of England's monetary policy normalization from 2019 on words. For Brazil the economic outlook is improving GDP growth recovery is now expected to begin in 2017 with inflation falling a lower interest rate cuts by the Brazilian Central Bank in order to support the economy. In Mexico GDP growth could slow down due to the new trade policies of the U.S. with higher inflation affected by a weaker currency that could lead to higher interest rates. Nevertheless the impact in Iberdrola’s projections will be limited as our revenues are dollarized. So during 2017/2020 period interest rates will gradually increase except for Brazil. Our updated forecast is that interested levels will be around 50 basis points lower than what we expect that one year ago. Iberdrola Group financing spreads should be stable for the period as you can see in this slide. Due to political uncertainty affecting the Eurozone and other countries and it's possible impacts in the FX market we have used January FX as spot rate for the whole period. On average today we are assuming 107 of the US dollar against the euro, 0.87 for the British pound, and 364 for the Brazilian real. We have marginally hits the 2017 net profit. But there are levels that what do you see in this as like. Passing to the financial strategy and before explaining what are we going to be doing, for the next years, I would like to stress the main financial milestones achieved in 2016. We have been able to reduce our financial cost to 349%, 37 basis points below our 2016 plan taking advantage of low interest rates. We've issued EUR2.7 billion in the EMTN market with an average cost below 1%, 91% of this in green bonds where we have been the largest issuer in the world. We have refinanced with banks more than EUR2 billion had very good margins with more than 30 banks involved. We have increased our fixed rate part of our debt, we have closed up to EUR3.8 billion of new fix debt an extended its average life. Apart from that we have completed EUR3.1 billion of our interest rate swaps to be hedge new debt. And we have managed successfully exchange free straight risk in a volatile environment with positive results of EUR100 million. For the two 2017 and 2020 strategy is the following. We are increasing our fixed rate financing to above 6% and very attractive levels, in order to equate the financial structure to the business revenues and the new economic cycle, protecting the company from the future interest rate rises. We have - we are planning to optimize liquidity reducing our financial cost on maintaining 18 months coverage for our stressed scenario. Continue with or FX risk management strategy, preserving our credit quality maintaining solid levels in our solvency ratios. Asset rotation or hybrid will be use needed to maintain financial strength. And we will maintain our strong diversification and sources of finance that provide access to many markets, banks and supranational lenders. Up to 220, 91% of the plan needs will be covered by funds from operations, and 8% by new debt. We will maintain 65% of our sources dedicated to investments, 25% to dividends and 10% to capitalized costs. With higher investments at the beginning of the plan cash flow will accelerate as growth investments pay off. Annual cash flow generation will exceed net investments by EUR2 billion. Our average FFO will reach EUR7.1 billion per year, along the period accelerating versus the EUR6.9 billion of the initial plan. Average net investments will be around EUR5.1 billion. This is strong cash flow generation will allow the group to maintain a sustainable dividend policy while preserving the financial solidity that will grow further at the end of the period. Our net debt will raise on an average of around EUR1 billion per year in line with our cash flow generation up to 2019 to finish around EUR32 billion by 2020. In line with what I mentioned in the previous slide with the current investment plan, solvency ratios will remain stable up to 2019 and then improve funds to growth in EBITDA and operating cash flow. So there will be room for more investments in 2019 and 2020 to consolidate growth into the next decade. From 2013 to 2015 we increased floating rate debt from 37% to 55% mainly in Euros taking advantage of economic cycle and low interest rate environment. In 2016, we started to fix interest rates at very low levels to protect the company from future interest rate raises and that equate our financial structure to business revenues and a new economic cycle. Along with the plan our goal is to maintain 62% fix debt. And so for that we have had EUR4 billion of forward swaps already closed during 2016 and the first two months of 2017, where we have already the 60% of our debt fixed for 2020. Thanks to our funding and prefixing, our average cost of net debt for the plan will be around 25 basis points below 2016 improving more than 50 basis points that cost we estimated that last year. Currently there is a risk of rising inflation and interest rates more quickly in the U.S. and the UK and less so in the Eurozone. Given the business as structure Iberdrola is well positioned to absorb the increase in inflation and interest rates in the medium term. As you can see in this slide in the regulated business, in the UK and Brazil inflation component is fully recognized on a yearly basis, while in the U.S. it is learn when rate cases are reviewed. In Spain, it will reviewed on 2020 onwards although there is a limited impact on a yearly basis of 0.5% variance and drop around EUR45 million. In addition we will try to negotiate with the Spanish administration assistant that takes into account weighted average cost of capital as a benchmark. The liberalize business should to reflect in prices the rise of commodities and non-energy costs, renewals as also a protection to inflation. The UK see this and rocks are updated with it. In the U.S. 50% of the PPAs are re-priced with inflation. Revenues based on market prices will behave in line with what as we mentioned in the liberalized business. Both networks and renewables relatively low net operating expenses of our revenues ratio, especially if you compare it with other utilities, so impact of inflation in non-energy costs is limited and can be absorbed through efficiency measures of which Iberdrola as either. So as you can see our revenue structure will be updated with inflation and will reflect the increase of capital costs. The average duration of our regulatory cycles is around five to six years. An average life of debt of over six years guarantees the re-pricing of the company debt taking into account regulatory changes that they need to the new interest rates scenario. Regarding of our analysis of fix some float in data structure, we make a bottom up approach by countries, businesses and currencies, looking to match it with our revenue structure under regulatory requirements. Mostly fixed in our U.S. business and less so in the euro and in the British pound, well in the real there is no market for long term fix issues. So gradual fixing to 62% of our debt is allying with our business profile. Although when analyzing the fixed floating in structure we also have taken into account the current economic cycle and the central bank policies. Our financial model is designed to follow current or structural subordination guidance. Currently, debt is mainly at the holding level, our external debt other than holding is mainly raised at the regulated subsidiaries. Over there plan, our model give us flexibility to optimize non-holding company debt by country based on each country situation and the regulatory requirements well maintaining the 30% threshold. Our sources of financing are highly diversified. Currently, the bond market is 73% of all debt of thus sources. Bank financing is around 15% giving us an opportunity to increase this kind of financing if required. We keep our stable commercial paper exposure of around 5%, and supranational lenders have another 6% share. Currently Green financing represents 10% of our total financing. During the plan, we will maintain the strong diversification with an increasing importance of Green financing in all our financing sources, capital and banks. Eurobond will still be our main source of financing maintaining the target to have a complete secondary curve with two benchmark references each year. In addition, we are well known in other bond markets with more than 40 references open and plenty of access. Supranational lenders will continue to support our investment plans being Iberdrola one of their most important partners especially with the European investment banks. We expect to continue that the interactive liquidity management to the market conditions keeping EUR8 billion to EUR9 billion of liquidity with room to increase if needed, maintaining 18 months coverage of financial needs on the stress tests scenario and 24 months in our base case scenario. We will optimize our liquidity position through other quick cash balances and extending the maturity of our credit lines with a target of minimizing the overall liquidity cost while complying with rating agencies liquidity requirements so maintaining adequate liquidity levels in every country. Our current debt average maturity is 6.5 years and we keep a comfortable maturity profile of around EUR3 billion per year. We will probably increase our average life target around seven years during that period. Our Treasury new needs in that period will be around EUR2.8 billion. Around 60% of our operating cash flow will be generated in currencies different from the Euro. The FX risk management as we have always said these are key factor for the group. Structurally we minimize FFO net debt ratio volatility adjusting the amount of debt in the different currencies to the funds generated in its currency aiming to protect it, to protect the FFO or net debt ratio except in the Brazilian real were this strategy is very costly. It is worth noting that by 2020, one third of our FFO will be in dollars close to 25% in British pounds and Euro cash flow will diminish from 47% to around 35%. Yearly, the target is to reduce as much as possible the volatility of our net profit due to currency movements. We mitigate the FX P&L risk derivatives. In 2017, our position is more than 90% hedge in all the currencies and better levels than what we expected. Regarding the dividends we will maintain the scrip dividend in the structure due to the tax advantages and the optionality given to shareholders although, we are starting formulas to allow shareholders to get it in cash if they choose to. Currently, an investor can take one of the three following options. Receiving shares that will be - that will not be subject to withholding stocks, selling rights to Iberdrola that will be subject of withholding tax, and selling rights in the market consider as a capital gain from 2017 onwards but only subject to withholding tax for resident retail shareholders. I would like to stress the increase in acceptance of the option to receive shares. An average of 72% of the capital opted for new shares in the last four scripts. We will also maintain our buyback program with 6,240 million shares target avoiding the dilution for our shareholders. And also as the Chairman has already pointed out we are introducing a new floor of $0.31 per share that signals our confidence in the plan that it is being presented today. Very bravely some risk analysis. Our risk mark has changed from the initial plan. So we have updated the risk analysis, political risk has lowered significantly in Spain after the new government was formed last November. The focus has moved to the UK due to the Brexit, the uncertainty about new policies in the U.S. and the potential outcomes in elections in France, Italy, Germany and other countries. This could result in an increasing volatility in FX rates. The increasing in interest rates in the U.S. and UK is likely and in the euro zone less so. But a possible scenario also in the medium term and as we explained later we are managing it by increasing our fixed debt ways. We’ve also seen increased competition in our business putting pressure on returns. Higher interest rates should elevate somehow this pressure. On the positive side, I would highlight the progress made in the plan execution as 90% of our projects are already on track and we see this risk as being reduced. Economic outlook in general looks better than last year and pressure on energy prices has hits also. Regarding the regulation as already explained no minor rate case will be reviewed until 2019, 2020, providing revenue stability these years although political pressure is mounting in bond research as the UK. We have assessed the risk in our EBITDA, assuming in our scenario with a 95% interval confidence considering an adverse evolution of commodity prices demand. On weather conditions in the liberalized business under renewables and in the case of distribution worst performance in return on equities, investments and costs. In these analysis we have excluded the FX risk. As you can see the impact is a small even in this adverse scenario which make us confident about the stability of our earnings and cash flows and confident it achieving that 2017/2020 targets. Thank you.

Okay. Thank you, Pepe. Now we are going to start with the question Q&A in the room, Javier Garrido first, Manuel Palomo then, Alberto, Stefano, Carolina and more, later I will try to drive everything.

No offense, Javier Garrido from JP Morgan Securities. I have three questions. First question is on the UK business. There were a question before road margins in the UK supply business, but in general what is your strategic stance that was liberalize UK business which continues to drop in profitability. Do you really need a liberalize UK business to manage your renewable portfolio or would it be open to coming to strategic consideration in the future as gas business in the U.S. has come down? The second question would be on New Energia we have seen in your charts there will be significant growth in RAP in Brazil by New Energia is still makes a very small contribution to your P&L. Are you targeting any specific change in New Energia in order to increase the profitabilities there any way you can do that given the restrictions of your shareholders’ agreement or again you see a potential candidate for strategic reconsideration? And final question talking out yesterday considerations M&A in the U.S. you are very used to this question how do you see the outlook for the U.S. market, today you are increasing your targets for 2020, so I guess you will say you don't need any M&A, but how good the U.S. M&A fit into these plan, how do you see financing any potential U.S. deal to come out? Thank you.

So well, I think related to the UK, I think as you know UK has already a problem of very low reserve margin. So this country requires more power generation install because as in the situation is can be critical in something is not done soon. So the auctions, the last auction as represented has not already succeed and achieving what the government lives which is to build new power generation. It’s almost is really succeed in this to avoid to close some of the obsolete power plant we normally have to be closed. I think in certain core tradition for one side they would like to close all the coal power plant another I will show in the last auction is already has paying some amount for keeping those top line, because the system is required those one. So I think now we're planning in terms of power generation is to go we have certain period, we already been for this, but if the capacity payment which is already achieving the assumption is not good, now we will not built as anybody doing. So they changed the model, we incentivize the construction any ones at the end we are going to do to make any goodness, we have already seen in this moment, that no one is already almost no one is really building new combined cycle new power plant. In our - that in renewable we are continue very active in this country. So I think we had already yes, in onshore we are completely in those one we've been allowed to complete. So I think now is already in the government is not to ready encouraging to build new onshore ones, back to school and now has already in energy plan which is already encouraging to build someone, so we would see what is there is. We have we have already sites for building one for building some more if the environment permit to make sure now is not to ready a very much, the government is not very much enthusiastic, it is not very much encouraged to be in the onshore, but in offshore they are. So I think we are in this moment in construction in East Anglia one which is a huge wind farm is 120 megawatt is almost GBP3 billion investment, which is going to be completed as I mentioned between 2019 and 2020, but we have already more room in this hub for making more I think, the next year is going to be some more auctions for this run and we are going to bid for some more of that as well. So we are ready to build more power generation in a combined cycle if the capacity payment option is already provide a good price and in the case of renewables we are ready to doing our salary to participate in the future of auction what we expect to have successful as we were already in the last one East Anglia. Related to energy I would like to clarify that was already Paco was already commented, we had already - we in our data, financial data is not at all including the contribution at tense of EBITDA of New Energia is only we are relating for in power et cetera, what we are really managing, I should probably understand very well. So about what is happening in Energia. They are happening in two things. One, we are working very hard Armando has already a good large team of people they are already helping to New Energia with together with the people of electro to improve the efficiency in all these in all the three operation in Pernambuco which is already providing much better results in all times. And second, we have already as Paco was mentioning is already the regulatory and systematic review I think is in Pernambuco I think we are expecting by in a couple of months I think April I think we have already the new remuneration rate case for the next three years, five years is now no, four years, so which we are expecting a very high increase, because we are already been pay all the investment during the last period and that is going to reflect in few year. By year it is going to be revised during next year as well, so which is - this year to starting next year as well. So which I think that is going to provide the positive one. So I've seen increases in remuneration together we deficiency things which is already been made makes then our expectation in this one is going to proof in Elektro I think the reviews done, and I think we are as well in this process. Related outlook to USA want to make money et cetera. So I think when you are a company which is already planning of investing almost $10 billion in the next four years or three years, 2017, 2018 and 2020 - to 2019, 2020. We've already organic possibilities which can already provide the growth between 8% to 10%, which means is going to be a company with I call less and less to me there is some number, and billion Euros company that profit in the next few years. So we are not already answer for opportunities saying that Pedro is here, his obligation is to talk with everybody, and that if he's not talking with everybody, he’s not doing his job, but I think our ambition in this moment is to make already an organic growth, because we have a lot of operations to make in that one. Second thing is the price in United State is to hike. I think we have demonstrated that across on our history. We are able to - we are able to measure with anybody else in whatever condition if the conditional logical reasonable to pay multiples I don't want to change the state, I finished what we feel, is out of what we consider is reasonable prices, that why as our ambition in the plan is only contemplating organic growth up to 2020 which are lower ourselves to have already a company within four years’ time a billion let’s say a rough number, $1 billion net profit company with a growth - average growth of 8% to 10% per annum and thing has been explained very clearly what are the project we are involved, what are the business coming from and what the things we can do during. Okay.

Now, yes Carolina. Not Carolina sorry. So these Spanish gentlemen are not very good. So it is not be like…

I have three questions. First one you mentioned as you mentioned looking at Italy for supply. It's in a country that you don't have operations or the renewables are just interest if you can give more information on what's the strategy there? Second looking at your investments, I've noticed that there was a reduction in investments in networks in UK and the U.S. and it was replaced by high investments in renewables is this a postponement of investments, and this remain in the UK or you just think the outlook for investments in networks has been slightly reduced? And my third question is if it all the network - sorry all the renewables that are included in your plan are already contributing to update 2020 or there some carryover for 2021?

So Paco you talk about on Italy? Francisco Martínez Córcoles: Yeah, I start with the last one. All of the projects will contribute within the 2020 limit period one, and we have section of somebody or somebody agrees and part - small part of EastAnglia 3 that is going to be developed right now, but this is not even mentioned because is just you know they're small quantities in compression with the whole investment we have to do that we have to the world to development in the coming years. That East 3 - East Anglia 3 and St. Brieuc is the only one that is going to be heavily invested during the period, and will contribute after this year. If we can consider hydro renewables as we do the timing of period will be in the same case as St. Brieuc, but is the figures are not - their financial figures are not included in their renewable business as you know very well according with our way of informing. So that's concerning the last one on the pre contribution. The UK and U.S. reduction.

I think to make very brief in terms of UK is the most important part of it is rate of exchange, the pound. I think the pound has been developing to 50%. So in Euros the investment is 50% because of that. So the second thing, I think you said, and we have diminished the investment in UK. So we diminish in Europe, because of the rate of exchange of pound to our euro has been the chance already change. Second thing is slightly reduction in certainty because the number of prior renewable was contemplated in the previous plan. Now he's been already made list for everybody. So our networks company is not need to build the transmission and we were required in the previous plan. Related to United States I use a single work has been more prudent related transmission project. We have learning that the project in United State in transmission is taking longer. Then we expect they are going to - is going to happen, but these are going to happen not as quick as we were expecting and that’s why is not really included, I said those one has not even included. Probably it would happen, but I think the timing for those one we have already learning that is not as fast as we were expecting. And in terms of renewable the main increase is in Europe is related to St. Brieuc, France what we already accelerating this project to be already completed before who are expecting to certain amount is doing this plan, which is going not to produce returns before 2020, but I think the money is going to be put in mostly in this period. I think that there's everything. Okay.

Okay, now Italy you reply.

Italy, as you know in terms of the renewables we have sold what we have there with I think we have still 10 megawatts that are in the process would be sold. So Italy for us is a great opportunity in retail. Our expertise in Spain where we have been able to build up our business, a substantial business in 10 years seen since 2006 to now is a great opportunity also to apply in these to other countries. We have done these also in Portugal, and we are amazing how high we are there in terms of contribution to the market, and there for sure in Mexico, but this is the industrial segment for the time being as above one megawatt. And Italy is a great opportunity, there is probably no chance or let's say few chances in France and Germany where we have offices too, but in Italy there is substantial opportunity, because Italy is a market - there is - there are substantial opportunities because the market is quite similar to the Spanish one. So the potential margins and our opportunities in back office, we can manage to back office since just one place as we are doing here for sure. UK is also benchmark for us and we know a lot of things new products, so many things and we will like to try ourselves if we are a capable of build up by a business as substantial at this Spanish one, this will take time, we have to invest on getting these markets, so it's not something that will happen in five years, but we should start investing in. Okay the Chairman is always more braver than I am, so probably we’ll have something more relevant.

I know very well Italy, I know the chances we’re currently making in Italy, let’s see what happen.

I know more than the Chairman, but he's the chairman. You know.

Hi good morning everyone. Manuel Palomo from Exane BNP. I've got two questions, one is Mexico and the other one is on M&A a follow-up, small follow-up on M&A. On Mexico, I've seen that it remains as one of the growth sources for the group for the coming few years. And I wonder whether you have any concern about the potential implications from times policy and I know the energy demand and therefore those investments that you're going to deploy there? As second one it’s a small follow-up on M&A as you mentioned. In recent weeks and months we've read several articles about company doing in M&A in the U.S., but also in Australia. I wonder whether Australia I mean fits in Iberdrola or whether you could be thinking to the something there? That's it. Thank you.

I'm going to make a joke. I think during the last 12 months we have already according with media we have been involved in several things, we has already help to the certain CEO's and certain companies get the bonuses, because this year we’re up, so you would have to know they know how it is when somebody is already the CRS is not already performing very well, they just say that the knowledge going to buy, in ultimately offset the shares rose up. So I think today a part of the talks of Pedro with everybody, everywhere. So which is this is the job. So our goal and our ambition for years I think to look to the west and need not change, saying that we look to the south to the west to the east to the north he look so many. But I think our view, our goal and our target is looking for the west. So we have already said, then our strategy is Atlantica strategy. And that was and that we’re making from the last 15 years, saying that Pedro you have to continue looking everywhere. And looking everybody, you have a good chance and somewhere else we would look at it, but our study, our money and that is the we have already done in the last 15 years, 16 years is to look to the west, look to the Atlanitca that was our vision is no change. So in Mexico, so I think Mexico the demand is growing, Paco mentioned and they really closing all our oil power plants. Most of that coal power plant and they already, they need according with the energy plan they have been already published recently they're required for now to do 2030 correct to me is 57,000 new megawatts. So they could be 48 or 61, but I think they need a huge among our new power plant to cover the demand of the country. The second thing is this country has been liberalized the energy. So now they are dozens of thousands of customers which are allowed to buy energy in the free market. I think is over 100, 1000 kilowatt hours which are today 100 terawatts which are in the market, on hours, so and that is going to be we are getting. So the company has been there for the last 20 or 15 years we know everybody, that we have today 20% or 25% of the electricity in Mexico. That with our reputation is maximum and I think we already customer which is knocking the door, there are certain power brand really now is still is not it start to the construction, almost all the electricity side. So that is our reality. So and that is what we already profiting. What is going to happen with one side and now I wonder the board, so the Mexican will continue needing electricity for whatever else is because the existing power plants they are going to close the demands continue growing. So it's not a country with is going to be to follow the international trends of electrification, they are going to be more electrified as all emerging countries in this moment. So and that is well your profit and I think is first mover in this country well known, very good reputation, very good to skill, very people in the country will include in a business which is mostly dollarized and that is what we playing. Next Alberto.

Thanks again. Alberto Gandolfi from Goldman Sachs. I have three questions please. The first one, can we talk a bit about returns in renewable you are less exposed to auctions, because the U.S. when you know PPA is sort of an auction process, but can you talk about what are you seeing, what are you assuming in the plan and perhaps there is structurally longer term. Are you concerned about the recent developments in offshore whereby the oil companies have started to use spare capacity and almost treating offshore as a research and development of size and so returns have been compressed by that? The second question is on returns in networks. In Spain and in the U.S. these nominal frameworks, so how can you try and effectively hedge the inflation increase that pretty much everybody from a macro perspective foreseen. I know you rate cases coming, I know you can lobby with the government, but can you maybe give us a bit more of a flavor of the discussion, are you trying to ask Spain for instance to move to a real framework or not? And my very final one on digitalization, you are quite ahead of the curve together we probably another couple of competitors in Europe I would say on this, however it seems to me be the tip of the iceberg steel for what's to come next, which could be the electrification of transport perhaps electrification of heating. So if you batteries we're talking with what we're hearing from the MIT later on in the day. So if you were to think 20 years ahead or something like that. What do you think is the percentage of digitalization you have done and the percentage of digitalization that is left to do to really think about utility of the future? Thank you.

So I think the first one is there is in terms of returns of offshore. So what I can say is what these in the plan is not a dream is those offshore wind farm which is today we have already agreed terms for returns from that one, is Anglia is already again the auction, St. Brieuc which are going to be it's already done, and we can get is already done. So saying that probably is going to be more completion, but as well the cost is moving down. So I think the first wind farm we have already in the area see what you think three megawatts to lined. The second one is using similar to lines and then there’s one is going to use 7.6 megawatts to rise, and probably then the management 10 or 12 megawatts one means the foundation in all logistics is going to divide by half. So in that make ultimately in the cost is going to be diminished. So there is going to be more, but I think what we can say today is that we’re EUR7 billion fully committed in offshore what we will deliver from now to 2022, so that’s it. So if the new auction they are competition it’s not return properly not in that case we are not forced to go to those lines. But I think EUR7 billion is today fully committed good returns. Good returns and that is what we are today. Second thing, please note this to be build the capability for making difference. That is not solar panels. So solar panels go to the shop you buy and you stop, that you revive a lot of knowledge in a marine in geology, in biology, in a calculation, in electricity. So it is not so easy. It looks to us the year as we’ll start doing these things monthly and not. So is not something that you can really make for tomorrow. So I think people are interesting no doubt, but I think which will see the result of those runs in what is going to happen, but saying that I think we have EUR7 billion already committed, a very good returns. So that’s it. So I think in our plan is from the EUR27 billion it’s around 5 is still to be done is going to produce returns in the following way; and related to the networks Paco all these hedging and all those things.

But Okay. No I think that well as assume you in New York the cost of debt or in the in the U.S. the cost of debt that these are direct us through the redemption equity are nominal, but obviously there is an efficiency there under obviously you can costs higher returns in new year we can go up to 10, 15 share in 50% for the last and correct me if I am wrong if suddenly there is an extraordinary situation in terms of interest rates or inflation whatever and there is always the possibility to dock with the red case some reopening given the change in circumstances. So for business as usual for the three years I think that we will have a very good case it does with return equities that could be over 10% with a 50-50 share which also is important with about a complete pass through of debt. Okay, and if there is a big changing in the market conditions you can always reopen. In Spain, what I wanted to mention is that even if there is not a change on yearly basis. The negative impact is limited to 0.5% of the RAP on yearly basis for 2020. We are talking about that in the worst case scenario we’re talking about EUR45 million. Okay. I think personally as a financial director, Spain should converse through our model similar to other countries in which the cost of capital whether there was cost of capital is that is the system, but I’m not talking directly with the Spanish administration, I suppose that’s something that you will address in the next times knowing Paco return on. Francisco Martínez Córcoles: Yeah. For sure I think they have to stick for a while in their regulatory system they made that least for the first review but you are completely right. So it makes no sense to be out of there were with funny things has this funniest one-offs as a reference instead of the cost of capital for the companies.

So I think you can make a very, very easy analysis. How much is being paid in Spain per kilometer hour distributed, how much is paid already in the old countries around in Britain and United State even Brazil. So they what we have been paid for our network in the Spain is less than we think we’re not going to Brazil is less than half will be repaid for over United State and he’s almost 30% less when he’s been paying our networks in Britain, and I think you made this analysis rest of the countries we have been probably saved from a couple of years ago by PricewaterhouseCoopers I know the additional price is another one. Keep chancing so you will see what is their reality. So I think my feeling is that we have to contemplate the situation of regulation in Spain in a moment then they are right on a country was already in a real mess on the real energy sector. They have been forced to take decisions in a manner which is probably they were not convenient these the best way to do, but they need to do. So in there but I think is now one day sold the big problem of the deficit. So I think they are trying to come back to a level which is standard are more Russian in all levels of the sector. Do you see already during these we winter let’s say crisis of prices where has been already the comments of the government related to this one. So is and what is their report has been made already by the CN commission on the American CN mean C so about this Spanish market in terms of competition, the needs of cleaning up the tariff et cetera say that which precisely almost the same thing we’ve seen the European Union with the pockets of their analysis. So I think we have not to leave a stress for what has been done because it has been forced to do something to try to make already as to come to the society they are not doing nothing. So now my expectation is they are moving to a situation much more logic, more rational on times. So related to the digitalization let me bit engineer for a while. So how an engineer we just spent part of his life in the battery business. So which I think have two things so my skill and my initial knowledge as engineer was already precisely designing and manufacture and selling a stationary battery for the sustaining proposes for strategies. So it still remind something in my mind of these times the young engineer, so how else in this situation. I was saying the conclusion is simple. I think if they were is going to become more electrified that means we’ve got more electricity equipments [ph], so all the associates will be needed. If they are already cleaner, renewable and sustainable in efficiency in economic times, so there are more stuffs that means more grid will be needed to manage on this electricity for this because their powered plan is been two years bigger and it was in the budget going to be large planned medium and small and whatever type of those way. So that requires more grid and the grid with more capabilities of managing all these sources. But these inter-meeting sources which is renewables, our inter-meeting, inter-meeting means not always that matching the demand with offer so you need zone system in the middle to try to do to combine the demand in the offering when they are excited to take it when they are already deficit to put that they have not only in terms of power itself, in terms of frequencies. So because if you are not doing money properly that wind you can really generate a mess as already happened how if you will know. So what is my feeling, my feeling is that the grid is going to be more standard is required close to the grid in the first step more digitalized in close to these centers of consumption and production in versus scale of a storage, what they call already can already been located. I’ve not seen everybody a battery in their house, sorry I’d be delighted in my battery times to have such an opportunity. But I think that distressed fans is my opinion and noise the most efficient same thing today we have not really a capacitor one inch in our house beside the engine with the motor we have in our house. So we have already a system diffract if energy we manage from the service station. So we will manage the situation the excess and demand in there as close as all of the sources of production. Closeness of the demand areas with certain devices of the storage let’s in the service closer to those one. I said service station because they help you obviously not used today the capacitors. But I think that these for the let’s say is small powered for a small period of time. When you require large storage for a large period of time you require another step much, much big center and that is what we’ve been doing already in the last few years. So making these pump in your study because is the most efficient if tomorrow somebody invent another one which is as efficient another one that to give you an idea because he’s around 10 times less than the batteries in terms of the studies got bigger whatever. So I think we are talking not 20% the same time. So I think what you require and you can already have sort of massive amounts of it, massive. So I think in our case is fine. Is this is the power of final glide power plant. So that you are able, we are able in is standard week you can already be producing electricity and if we with a study you have already there. So these are two steps. That makes what is going to happen in the future it depends, it depends of this passion of the electric vehicle surely it's going to come to electric vehicle by more, so that would require a certain things. In what we can really say I think we've been ahead many years in seeing then that is going to happen. Really many years ahead make an investment in storage, so when we complete three years ago the extension of [indiscernible] or now we are building in Portugal so somebody can say was that we would see because, we have seen that already happen. So what about the digitalization, we've been already ahead of all that one, I think we are not really talking about this smart meters. We have talking about smart grid, and what this meant means efficiency energy efficiency, better quality of service to the customer, better relationship with the customer is not only a device for customer relation is efficiency means for already providing to the customer a better service with a better use of the electricity and to make more efficient, in that it was we have remain. I'm very proud to say that we are already the benchmark worldwide in a country which is fully digitalize our network which is Spain and people from everywhere is coming to see what we’ve been doing for many years. So I think we are starting with a prototype because six or seven years ago with different type of meters, and now we sustained it all across the country in thinking we are trying to be repeat that very well. So that's why - your answer is simple. Greed is going to be even more greed. Is going to require more digitalization degree is going to require more a storage in my opinion in two steps, one is the closer to the center of consumption and production, and another is the massive storage we today the only one which is efficient is that one, but if tomorrow somebody invented another one we have to look at that one. But I’ve not seen a battery in beside for each sorry, for that one I don’t know probably –perhaps somebody invented another kind of batter they coming to me I know that in the future, but I think we might not it's battery for many years, I seen the batteries is going to be needed in a manner which is can already mounted these frequencies, not only to have already been filling in the future for everybody. Sorry for making these in your speech, sorry.

Okay, Stefano and then Antonella, sorry, hurry up.

Hi good morning Stefano Bezzato with Credit Suisse. Two questions, first one going back on the return topics, at the group level I see from your presentation you're targeting an improvement in return on capital employed from 5.2% to 6%. What is the major driving force behind that, is it fine tuning of the activity mix, is a deficiency as you just said or is it you see that lately pressure or return easing up in the next few years? And the second question for this year for to help and understand - help us understand the evolution of your cost of debt going forward to 2020, can you maybe give us an indication of what you expect being the cost on the fix debt on the fixed portion in the floating portion of the debt? Thank you. José Sainz Armada: I can’t tell the numbers, but basically we are expecting to finish the percent this plan with a cost of debt of around 3.2%, okay. Basically I think that more than their fixed part of the variable part has to do with the mix between different currencies, so basically the dollar is mainly fixed with our cost of debt of around 5%. This is the heritage of long dated issues that you know that still are there. And that is mainly fixed as we have commented most of the debt or the majority of that in the U.S. business is in the regulated companies. So that is a pure pass through, but it is true that is a pure pass through with a higher debt and what we could have been able to get these years. And the renewables level and the holding level or that this is very small. Okay, so I would say all of that is the regulated business. In the UK we have a similar situation and it is that we carry that are relatively high cost of that from very long term dated issues, and the cost of debt in the pound is around 4%, okay. And that is not a pure pass through that as you know it's a reference to what is the evolution of that, so obviously there are some margin for improvement there. The Euro we are talking about our cost of debt of below 2% given their refinancing that we've been able to do and our variable cost of that there is close to zero. What we have done is to take advantage of the low interest rates in the short period of in the next years what done is a pre-hedge. So we have hedge that post 2019, 2020 a low interest rates. So actually we are going to still do benefit from lower interest rates in the euro in 2017 and 2018. The cost of these pre-hedges have been around 1.5% something like that, the cost of debt for the Euro is below 2%. I know usually in the Brazilian real our cost of debt is very high. So they have reduce interest rates we are at 13%, but we could be around 13%, 14% except for all the finance which is relatively high for the coming from there BNDS that has a lower debt. So I think the cost of debt for the Brazilian real today is around 11%. The optimization of all these that reduction of our cost of debt in pounds have some of the maturities are going under the fixing the interest rates in the euro is what makes us, give target of around 3.2% of the cost of debt versus a target of around 4% that we had in for 2020 in the previous plan. The average cost will be somewhere around 60 basis points below what we had in our previous plan. I think that the return on capital investment basically comes from the fact that this is an organic growth plan so basically we are improving that return obviously when you have had some M&A obviously there had been some - there is always some impact in the returns, and so actually being able to develop organically investments obviously increases the returns and obviously the efficiency has also an impact. On the regulatory side there is no impact, because we have - we don’t expect any changes on our regulated allowances for this period.

Virginia and then Antonella.

Yes hello, I have three questions, one would be again on the returns. I would like to understand right now in the five countries of presence you are with the place where you are making the highest return on equity at the moment. And with the cost cutting opportunities you see and the CapEx plans you have the different players coming in how do you see that they evolving into 2020 if you would see the current country with the highest returns still being the one in 2020? Then my second question relates to CapEx, you have said that with the plan you have presented you will have room for additional CapEx in 2019 and 2020 and yesterday mentioned possibly the chance to raise a CapEx probably another $2 billion, probably if you would go to any of the UK offshore auctions you won’t have possibilities to deal something there additionally. I want to understand if EUR4 billion, EUR5 billion of additional CapEx is too much and that would require asset rotation that would bring you to a net debt to EBITDA of around 3.6 times by 2020 or as said if that would require asset rotation as you mentioned in one of your slides. And last what have you assumed for the tax rate for Iberdrola for the plan have you assumed any downgrades in the U.S.? Thank you.

So well, I think on the on the countries correct to me Pepe group to me if I'm not wrong that’s in the base country is Mexico. So why because we have been the first mover for long time, we have a lot asset where has been already won in an environment it was very different of the competitive environment, which is today and we already benefiting this situation. Related CapEx, I think your question always as good that's always, so what we tried to trust me is thing we have pretty enough to secure what we are saying, the plan is the plan will be presented. But for recent shunting fails, I think we have another thing what we can be learnt. So in the case for instance of Anglia 3 the auction, so you mention. So we are going to be for it, but probably is going not to a start in to be a ready requiring important amount of money not before 2020. So but I think the message is that we are not already yes this one for any reason fails so that is - we are not one what we can already put beside. So I think we try to define a plan with these numbers. I think what Pepe was already mentioned is something which is today and they are something else which is not already started. So for any reason is what everything happens, so that we can use another one in the portfolio, I think that is, that is the message. Saying that the condition in the returns is so good in 2020 that some of those projects can already accelerated but today I would like to emphasize is this is the plan, is EUR25 billion until 2020 the term we’re defining with April will define. If another reason those one of these projects which is 10% or 15% of the total which is to rein projection, these 10% or 15% which has still has not been contraction for whatever reason is delay or postpone we can take another one for the portfolio to go there. And the second one is then their life is not ending in 2020. So the company has a lot of project we can be already generate more growth for 2020 and that is the message, we would like to tell me with this one. And related to the tax rate Pepe? José Sainz Armada: No we haven’t assumed any change in the in the U.S. tax rates or I think that our average tax rate for the plan is around 25%, 26%. Obviously if there is a change in the tax rates will explain we will have to analyze because it will come also with probably impacts also an interest rate to all this sort of thing. In any case what we can say is that tax rate reduction in the U.S. if it happens will have positive one off effect which is significant.

Antonella in the back of the room and afterwards José Porta.

Hello good morning it’s Antonella from Citi. Just two quick questions. The first one is on EBITDA you upgrade your target to 2020 to EUR10 billion from EUR9.8 billion considering the weakness of the pound it's a material upgrade. Can you highlight where is the upgrade coming from and watches from power prices assumption in the UK on watches new CapEx and if there is any finance support in the earnings? The second question is on the debt, as well the debt is higher is 42.3 and that you were targeting 30.3 again with the weakness of the pound, but is a material increase in the debt level if you can breach that what is a change in this business plan? Thank you. José Sainz Armada: Okay in the debt we have explained that we have a one-off EUR720 million coming from some Spanish stock decisions which is a one-off, but obviously the prices ready by EUR720 million. There's been some acceleration in the - also in the renewable projects, as you know we've paid almost EUR200 million for the safe harbor in the U.S. to secure these things and there is some payments that are coming on renewable and that has been compensated by the FX. If you have - you would have adjusted everything would have had a debt below EUR29 billion which is more or less what we were expecting and what the market as expecting, obviously these acceleration in the projects in renewable are also going to help to answer the second - the first question which is EBITDA growth. So actually I think that we are expecting now that some of the renewal projects especially in offshore ones will start to contribute earlier than what we expected take into account that we are also putting our 600 megawatts more than we were expecting in the U.S. in renewables. And also take into account that we are also putting in operation two plants in Mexico, okay. So all of that you know justifies increase in EBITDA despite the thing and the other element also and you have to take into account is that we are upgrading our targets of efficiency and costs. So we are not only having better increasing those margins, but also we are also improving our cost base for the for the plan. José Javier Ruiz: Hi José Ruiz from Macquarie. Just following up on your answer, could specify in Slide number 69, what is the growth in the cost base, because I see it increases despite the cost saving plan. And secondly just on disposals you haven't spoken on your presentation, but you have it, you keep any wild card that you could use disposals, disposal in the plan? Thank you. José Sainz Armada: They are not, is not contemplated any disposal in the plan. In the first one, the first question it related - you said the page 69 - is what is the… José Javier Ruiz: Then net operating expenses in the first year. José Sainz Armada: The trend of this one, is business as usual to what we are doing, I understand. Francisco Martínez Córcoles: Yes we have projected the business as usual without doing anything special, because we usually do things and also to gaining to govern new activity, so we have projected these we have a start efficiency plan 2020 called 2020 in all countries, all businesses and the projection of we can get from out from this plan is these value for EUR250 million per year or reduction. That reference is very difficult to establish because we are going to have 20 something 30 more activity in the incoming three year - four, five years, so it's very difficult to know exactly their reference. I mean what is going to be the final reduction these are kind of projection, but the plan is already there and was mentioned yesterday by AVANGRID people and is including also no energy other there is not a control company for the time being. So that's it. José Sainz Armada: Number we are assuming that there will be around EUR200 million less expenses what we had in the 2016 plan.

Next question, Alejandro Vigil.

Hello good morning, Alejandro Vigil from Cygnus Asset Management. My question is I'm understanding your thoughts about the solar is one of the fastest growing energy which is Iberdrola’s strategy in solar, and also related to that we are seeing a very significant success in sun business models particularly in the U.S. of distributed energy base again in solar if Iberdrola plans to play a role in this strategy of distributed energy? Thank you

So I think for years I've seen have been criticized because I was not supporting solar, and I was not supporting solar, because I will support in technology is pay times more than other renewable technologies, but then nothing against solar and nothing against any technology, if they are ready sustainable and not fully depended of political decision process. So I think now solar in certain places is absolutely competitive with other sources. So I think is you are in an area which is very hard and coal and close to the connection center is competitive where we in, and I think that's why we are making new some cases with winds some cases with solar. It is a big difference. So in the case of solar so the competition in the case of function is huge, because the added value you can make its minimal, because already is semi kind, which I think you buy the panel and you already would supply of pan solar panel and still and you have somebody which is already turning with you screwdriver, I think you can make it that you don't require much of skill on this one, so that way the access of competitive, the competition is much larger that values of prices is coming down. So by 2013 it depends of the countries, as in their places in countries with that is a competitive and the one more compete under one in another places which is not, but I think that that is what we changed our mind on that one. I think today in certain for certain applications, solar is absolutely competitive and I think it can really fulfill our needs. So now we saying that I think when you have enough so it is much easier and the competition for to go competitors for making solar to make greener, to make a hydro to make whatever thing, so I think that is the point. The second question was?

The distributed energy by solar in the U.S. with successful experience.

No. I think we are already. Okay. Francisco Martínez Córcoles: In the second part you mentioned that there have been a great success on this, but there have been also big failures as you know very well lastly. So our strategy there is to offer all the opportunities, all the compact products to the customers. So if they want to use it, we will be there. We are not going to do is to take risk trying to push these activity cost because, we really know with that the utility scale would be more competitive always than the domestic scale of that products. But this is a question of desires, if the customer want to have these we offer everything not just the panels, but also the whole product, so we have these smart solar. But we are not going to do today risk as the company that you probably were thinking of that cost filing in the Unites States. And there is other example if you allow me gentlemen, that is there certificated of clean energy in Mexico. So for us is mandatory to have and to provide so-called, CAL, Green effort in Mexico market and we need to provide these for our customers in the name of our customers. So we are seeing what are the best opportunities either or for that we have developed in these as a private approach with this purpose.

Sorry. I don’t see you.

Hi. [indiscernible] from Citi. Just your view or an update on the long term gas contracts that Iberdrola has especially coming out of the U.S. and how do you see that low impacting the gas and power market in Europe in general and Iberdrola’s performance and what’s your plan later? José Sainz Armada: .:

Okay. So having finished with the question here, we are moving now to the web because a couple of the last two couple of question coming from [indiscernible] from our point of view on how instead of this asking about the possible impact in medium terms of the BREXIT network targets in the U.K. The second question is so we can give more color on how we can benefit from their new reforming Mexico. The third one corresponding to Brazil we can deliver more details on how can we complete these potential sector restructuring and finally to related to debt one is the when we see the debt picking through the plan in period 60, 20 what is the debt picking and finally if we maintain certain targets of the net debt to EBITDA and if they forward a net debt in 2018?

I don’t know how many times I already replied the first question related to BREXIT. So but I think I will reply again. So I think we’ve been already during this year already all potential scenarios we have already have in our back. So I think in Britain was the referendum in United State election in Brazil the president goes to already remove in a where without government for the period then two election in the period. So I think all the scenario as we’ve been already and even with those things I think we have already been able to the deliver results and we have already seen today. What how that affect the Brexit, I think Pepe goes very clear saying that all of our business in this countries in pound. All our debt is in pound and I think the fact is related to the potential pound evaluation which I think largely affected EBITDA term but because we had is not affecting their profit level. This year we have already hedge our as well, our results and I think is certain is to hedge with the price lower than previous year. So what is the maintain apart to these rate of a change the potential increase in the inflation. Pepe has already mentioned then we are covered return because of our most of our business regulatory business has been close of review of inflation on this one. Related Mexico, Mexico well I think I tried to explain. I think in Mexico, we are already moving from 5000 megawatts to 10,000 megawatts in for almost zero or very few renewable 2000 megawatts renewables in the plan. And for almost doubling the energy sold to the customers and from these energy almost 35% of 40% of these energy is going to be sold to private customers. So what in the past, it was not possible to benefit that one because we’re not the really liberalized. So that is how we are benefiting that one, every form us liberalization, we have already a strong present in the country and that way we are already increasing our presence with more power generation with more renewable and with more let say commercial activities in the country. Brazil?

The potentiality …

Well. I’ve seen I think we will see the same thing in the Mexico. We are in Brazil in the last 20 years, we have already a strong present we have the fact, we manage the largest distribution companies in the country 13 million connection in five states and I think we have already has it potentiality of seen whatever opportunity. But the thing, we will benefit if their opportunity and we will hear those opportunities but I think what we have already is a better position that another one because we know better the country, the more present in their country but I think they are not in the hand in this moment that we can say what to do look, what you achieve and what to make because it is not that one. The another one is? José Sainz Armada: I think basically the ratios obviously now for 2018 will be more or less in line of the ratios that we had in 2016, that is what we are expecting right now. The ratios will start to improve as the net debt to EBITDA as you can see in 2018 and 2019 despite the fact that the peak of debt will be around EUR 30 to around EUR 32.5 billion of debt by, we are assuming that this study is a peak of that. Nevertheless, I would like to stress the fact that the business profile of the group is dramatically changing during these years. I mean we are going to have around 60% of our cash flow generation which is going to come from countries such as the U.S. and the U.K. and around 90% of is coming from regulated or quarterly regulated business. So this means that obviously we have a little bit more of that but this is basically invested in regulated business and in countries with a high rating profile. And also in that sense if you look to our peers, you have you know people they are able to have higher that even with better ratings than us due to the business mix. In that sense, I think that we are comfortable with the current financial position of the group. Looking forward obviously for the 2020 the targets is we will half our net debt to EBITDA for around 3.3 times on a FFO of net of around on 24%.

That is precisely the question which is already made there. I think the page 88 is clearly replied, I think with current investment plan 2017 and 2018 we have 17 ratios in line with 26 and will it translate in 2019 and 2020, so I think is clear in the presentation.

Okay before going to the lunch break, some closing remark for our Chairman to say.

I think, I don't know you notice you are quite happy and satisfy all the result of this year. So we acquire and let’s say relax about the capabilities of delivering what we have presented today, so and I think is they are not already very many stories, we kind of ready to say what we already saying and doing at same time. There are people which are saying and not doing and we are saying and doing and that is got is what when as again we have demonstrated. So that's why I thank you very much for your always attendance and your - and not good analysis and good to compression what the things we are making and we continue as always absolutely open with the whole transparency to clarify whatever doubt because I think is the company and the company performance already gone well and I’ve seen the expectation that as positive we were presented to you today. So that's it and thank you very much and now we would share whatever thing together you would like to have a dream together and stick with yourself. Thank you very much.