Ignacio Cuenca Arambarri - Head, IR Ignacio Galán - Chairman and CEO Pepe Sainz - CFO

Carolina Dores - Morgan Stanley Javier Suarez - Mediobanca Jorge Alonso - Societe Generale Carolina Dores - Morgan Stanley Jorge Guimarães - Haitong Manuel Palomo - Exane BNP Paribas Alberto Gandolfi - Goldman Sachs Meike Becker - Bernstein Rui Diaz - UBS

Good afternoon, ladies and gentlemen. First of all, we will like to offer a warm welcome to all of you who have joined us today. We would like as well to apologize for the problems that we are having currently with the -- forward in the presentation. But probably in few minutes, you will have in your e-mail box. We are delighted you are able to be with us for the presentation for our 2018 first quarter results. The presentation will, as usual, follow our customary format. Firstly, we will begin with an overview of the results and the main developments during the period given by the top management that usually we have with us our Chairman and CEO, Mr. Ignacio Galán; Mr. Francisco Martínez Córcoles, Business CEO; and finally, the CFO, Mr. Pepe Sainz. Afterwards, we will move on to the Q&A session. We’d also like to point out that we are only going to take questions submitted via the web. So please ask your question only through our webpage, www.iberdrola.com. We expect the event will last no more than 60 minutes. Hoping that you find this presentation both useful and informative. Now without further ado, I will hand over to our Chairman and CEO, Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán. Ignacio Galán: So, thank you, Ignacio. Good afternoon, everyone. Thank you very much for your participation today’s conference call. I will like to begin by saying that this result demonstrated capacity of our model to deliver growth and resilient results and show already remarkable progress in the implementation of the plan we presented you in February. EBIT in the period totaled €2,323 million, increasing by 24% compared to the first quarter of 2017, thanks to investment, which grew 14.1% to €1,185 million this quarter and efficiency improvement. Operating net profit increased 28.5% and reporting the profit improved to €813 million despite capital gains of €256 million registered in the first quarter of 2017. The growth registered in our operating result has been possible despite the impact of foreign exchange rates, mainly against the dollar and Brazilian real. Excluding these, EBITDA will have increased by 32.6%. This evolution has been driven by the good performance of all of our business, of which registered double-digit increase in result compared to last year. Net gross EBITDA is up 17.5%, thanks to the consolidation of Neoenergia and the positive impact of our investment in our geographies, especially in United States, driven by the rate plans in Connecticut and New York. Excluding foreign exchange impact, EBITDA growths in Networks -- would be -- almost 10 points higher, reaching 27.3%. Renewables EBITDA increased by 14%, thanks to the higher output resulting from the normalization of wind resource in the first quarter, 2018. This was particular remarkable in the spring, where production grew by 24%, and in the UK, which registered 32% increase in output. In offshore wind, the commission of our 350 megawatts Wikinger wind farm in Germany has driven 60% growth in total output from this technology in the first quarter. This has even improved in the last month, resulting in a 90% increase in output year-to-date. [At regards,] hydro production increased by 6%, up to March in Spain. Let me highlight that as the result of the heavy rainfall in the past weeks, output is already 22% higher than last year up to today. Our hydro reserves have about 20 years average levels. Generation and Supply EBITDA has increased over 50%, thanks to the higher retail activity in Spain and the normalization of productional condition in the U.K. which were extraordinary low in the same period last year, both in terms of demand and margins. The contribution of our contracted generation in Mexico was affected by a temporary lower margin in the contracts of customers, with prices linking to the CFE tariffs, which had been transitioning to a full additive-type model. New tariffs will be approved in the next days, compensating the lower revenue the last months during the year. Overall, foreign exchange has impacted negative for all currencies, but most significantly for the Brazilian real and the dollar. We had fallen 90% and 60%, respectively, against the euro over the last 12 months. Net investment have reached €1,185 million in the first quarter, 40% more than last year. Networks business represent 40% of the total investment with 37% coming from Renewables and the 23% from Generation and Supply. In 2018, we expect to put in service 1,105 megawatt -- new megawatts, which added to the capacity already committed, total 7,790 megawatts to be commissioned by 2020. These figures include our 714-megawatt East Anglia, 1 offshore wind farm in North Sea in Britain, 1.5 gigawatt -- 1,500 megawatt of onshore wind and over 3,500 megawatt of contracted generation in Mexico. We have also 1,300 megawatt committed of -- or in construction for 2021 and 2022, which correspond mainly to our Hydro pump in historic project in Támega in Portugal. In the last three months, the company has achieved real-level milestone in the execution of the investment plan. In Networks, our green New England Clean Energy Connect Transmission project was finally selected by the Massachusetts Department of Energy. This $950 million project includes 1,200 megawatts of high-voltage direct current transmission line linking the grids in Québec and New England, and this is expected to come online by 2022. In Connecticut, the new Southern Connecticut Gas rate plan approved in December, and the annual tariff revision for United Illuminated went into effect on January 1. In Spain, we have completed successfully our MEDGAZ project, almost one year ahead of our regulatory obligation, having reaching 10,540 million meters installed. As regard to renewables, the German offshore Wikinger wind farm was fully commissioned and its 70 turbines are currently in operation. Our new offshore wind farm East Anglia 1 in the U.K. is progressing according to our expectation. Onshore civil works for both cable installation and substation construction have commenced as well as the installation of foundation. And in Brazil, 61 new megawatt of hydro capacity has been added. In Generation and Supply, ScottishPower has already completed 20% of its smart meters installation program, ahead of our plans. And in Mexico, the co-generation plant of San Juan has been commissioned and the repowering of Monterey combined cycle has been finalized, and there is an additional 3,500 megawatts in construction. Our efficiency measured by the net operating expenses to gross margin ratio has improved by 80 basis points to 25%. This project has been achieved even before Neoenergia synergy start to materialize. AVANGRID increased adjusted net profit by 7% in the period to $243 million, mainly thanks to the implementation of best practices, the impact of rate plans in Networks and additional 590 megawatt of renewable capacity put in operation during 2017. The company continues executing on its strategic plan, with investment worth $290 million up to March. The investment of non-core gas business and the new projects such as I mentioned before, New England Clean Energy Connect, or the Wikinger offshore wind farm has been allowed to the company to present a bid for 190 megawatt in Connecticut, in addition to the two bids for 400 and 800 megawatt presented last December in Massachusetts. Given the first quarter result and this expectation for the rest of 2018, AVANGRID has reaffirmed its adjusted EPS outlook in the range of $2.22 and $2.25 per share. In Brazil, Neoenergia raised an EBITDA of BRL1,034 in the period, growing 34%. And then net profit reached BRL290 million, increasing 98%, thanks to the operational performance and the lower financial expenses. In other words, the new five year study review for our distribution companies in Bahía and Río Grande do Norte, and so Coelba and Cosern, the brands, were approved last week and enter into force on the 22 of April. This framework, which will be enforced until 2023 includes the new allowed return of 8.09%, multiplying by two day, regulated as it paid by 2023 in operational improvement. Combined EBITDA for both companies will increase over BRL700 million only the next year. Also, Neoenergia remains focused on securing long-term growth opportunity. In other words, the company was awarded for new transmission line in one substation, which are expected to be in operation in 2021 and 2022. And in renewable, the company secured nine additional wind farms for the total capacity of 200 megawatts, with commission date in 2022 and PPAs for 20 years. The company integration process is well on track with synergies identified above those initially expected. Finally, as you know, Neoenergia made an offer for Eletropaulo, which has its service area right in the middle of the distribution area of Elektro and Neoenergia subsidiary. We understand both companies having geographical and strategic fit and the potential for synergies is significant. In any case, it’s always we adapt along this process in the best interest of all our shareholders. In Spain, the commission of Expert created to advice on the climatic change in Energy Transition Law published its final report on April 2. This commission, with members proposed by the Government or Parliamentary groups and social agents, has reached a remarkable degree of consensus on the most appropriate ways to achieve in Spain long-term decarbonization objectives. In this respect, the report, which covered to its scenarios 2030 and 2050 indicates that nuclear generation should be maintained to reach emission reduction targets for a period, always under a framework that make this technology economically viable. Virtually, all coal capacity will be closed before 2030. Capacity markets are necessary. A fiscal reform is essential to distribute environmental cost based on the polluter pays principal, no charging cost only to the electric sectors -- electricity sector. Also, to eliminate non-energy cost from the tariffs, clean up the tariffs from all those costs. And finally, the report highlights the need to encourage investment in networks infrastructure, in line with the recent report published by Deloitte. This recommendation is fully aligned with the European polices and directives, and set a clear basis for the definition of the future climatic change in Energy Transition Law and has the consensus of all the political parties, Trade Union and industrial organization. Last, April 13th, we held our Annual General Meeting with registered quorum of 76.1%. All items of the agenda were approved by an average of 98.5%. I would like to have this opportunity to reiterate my gratitude to all of our shareholders for their participation and support. Following the General assembly, the Board of Directors approved today. We had the vote this morning. The execution of the new program, Iberdrola Retribución Flexible in July, which will amount to at least €0.183 per share, either in cash or shares. With this, annual shareholder remuneration reached €0.323 per share, 4.2% more than the previous year. Moreover, for those we choose these shares, to avoid the dilution effect, a share buyback program will be executed to maintain the number of shares outstanding at 6.24 billion shares. So now, Pepe Sainz will present the group result in further detail.

Thank you, Chairman. Good afternoon to everybody. Before getting into the details, let me explain that 2018 results include two reclassifications moving forward. 2017 results had been restated accordingly for comparison basis. First, results from hydroelectric generation are now included in renewable business, instead of in the Liberalized Business. Second, the engineering results are now included only at the equity line with no EBITDA contribution. In addition, it is worth mentioning that two new IFRS accounting rules are in place from January 1st. IFRS 15 that says that customer acquisition costs are now capitalized, reducing net operating expenses, but increasing amortizations who has a neutral effect at the net profit level. IFRS 9, which increases the interest expenses linked to previous liability management, increasing our cost of debt on an accounting basis. As the Chairman has stated, 2018 first quarter EBITDA grew by 24% to €2,323, positively impacted by the NEO consolidation, better operating conditions and new installed capacity, partially compensated by negative FX impact, as a result of the valuation of our basket of currencies; The U.S. dollar, 16%; the pound, 3.5%; and the Brazilian real, 19%. Excluding NEO and FX, EBITDA grew by 19%. Q1 2007 results included 256 million of nonrecurring results, that are offset by our strong operating results. As a consequence, reported net operating profit grew by 1.2% to €893 million but our operating net profit grew by 28% and our operating cash flow was up 13%. Revenues increased 14% to €9.3 billion, and procurements grew in line to €5.3 billion. Gross margin rose by 13% to €4 billion. Neoenergia Global consolidation accounted for €388 million, more than compensating FX negative impact that lower gross margin by €221 million. Net operating expenses were up by 9% to €1 billion, driven by the Brazilian reorganization. FX had a €59 million of positive impact. Excluding this effect, net operating expenses improved 2%. Our efficiency plans announced and provisioned in the fourth quarter of 2017, are beginning to deliver results. Levies improved by 10.3%, €79 million less to €684 million. Thanks to €43 million positive FX impact, 23 million lower U.S. taxes following recalculation through the year of the real estate taxes and €14 million lower Spanish taxes on generation, as there was a big spike in prices last January, as you’ll remember. We have had less nuclear production in Q1 2018, compared to Q1 2017. Analyzing the results of the different business and starting with networks. It’s EBITDA was up 17.5% to €1.2 billion with positive evolution in most of the geographies. As you can see in the slide Spain contributed 35%; the U.S., 27%; UK, 20%; and Brazil, 18%. In Spain, EBITDA grew almost 10% to €425 million, thanks to positive settlements from previous years and a 2017 positive court ruling on assets given by customers. In the U.S, EBITDA was up 19% to $399 million, as a consequence of the rate plans, IFRS impacts, partially compensated by storm costs with no impact under the U.S. GAAP. In Q1, according to IFRS rules, we have not accounted for the reduction in the EBITDA as a consequence of the tax reform, until regulators officially adjust the tariffs now under discussion. In Brazil, EBITDA grew BRL 621 million to BRL 856 million, driven by the Brazilian reorganization. Finally, in the U.K, EBITDA fell 1.6% to £207 million, with higher revenues in transmission, compensated by lower revenues in distribution. Renewable EBITDA grew 14% to €603 million, driven by the growth in Spain, the U.K. and the rest of the world, with a better load factor and a 5% larger installed capacity that reaches now 29,275 megawatts that drove production up 15% to 15,000 gig watt hours. Gross margin grew 10.2% and net operating expenses increased by 9%. As I mentioned before, hydroelectric generation is reported now in this area and restated in 2017 results. As a result, Spain now is the main contributor to the renewable EBITDA, with a 40% stake, followed by: the U.K, 24%; the U.S, 19%; rest of the world, 9%; Brazil, 6%; and Mexico. In Spain, EBITDA reached €242 million, 4.9% higher than last year, driven by a 24% higher output in wind and 6% higher output in Hydro, partially compensated by lower prices versus Q1, 2017 that as I mentioned before, had a big spike in January of last year and affect more hydro results. In the U.S, EBITDA grew 4.3% to $140 million, due to a 14% higher output with 9% larger installed capacity and better wind conditions, but affected by lower prices and the positive impact of $25 million power hedges accounted for in the first quarter of 2017. In the U.K, EBITDA grew 30% to £128 million, as a consequence of a 23% higher output with 242 megawatts increasing average operating capacity and higher load factor that boosted gross margin by 24%. Brazil, EBITDAs grew BRL111 million to BRL140 million, due to the corporate restructuring. Hydro contributes, with Brazilian -- with BRL63 million and wind with BRL76 million. In Mexico, EBITDA decreased 24% to $60 million, with higher output not compensating lower prices. Finally, in the rest of the world, as the Chairman has said, EBITDA doubled, reaching €53 million due to the ramp-up of Wikinger during the first semester of this year, with 209 megawatts average capacity in operation. But at the end of the quarter, the full 350 megawatts are already in operation. Generation and Supply EBITDA improved 52% to €504 million, as a consequence of the recovery in the U.K. and Spain, following the adverse operating environment in 2017, helped by lower costs and taxes. As you can see in the slide Spain accounts for 45% of the EBITDA; the UK, 30%; Mexico, 19%; and Brazil, 6%. In Spain, the EBITDA grew 46% to €225 million, thanks to higher margins, following the fall in procurement costs. The already mentioned fall in generation taxes and higher retail activity more than compensating the 6.7% output decrease in our thermal mix, due to less nuclear and coal, not compensated by higher production of our combined cycles. In the U.K, EBITDA improved £94 million to £132 million with a 37% increase in gross margins, thanks to better demand. Normalization of margins, the smart meters are beginning to give us results plus capacity payments. In addition, net operating expenses fell 16% as our internal operation conditions improved significantly and customer acquisition costs are now included in our depreciation account. In Mexico, EBITDA fell 16% to $119 million, affected by lower tariffs to private customers, that as the Chairman has said, we are expecting to recover along the year. And Brazil added BRL128 million to the EBITDA. As a consequence of all this, EBITDA -- EBIT, sorry, increased 33% to €1,387 million. Depreciation and provisions increased 12.3% mainly due to the Brazil reorganization and higher activity. Net financial expenses reached €289 million, €82 million more than previous years, mainly due to the full consolidation of NEO financial expenses, that’s €52 million. Lower positive FX hedges compared to last year and IFRS 9 that adds € 9 million to our net financial expenses. Our average net financial cost was 3.59%, as the higher Brazilian real worth increases the average cost of debt. As you can see in the slide, year-on-year net debt grew by €3.3 billion to 33 billion, of which 2.7 billion comes from the corporate reorganization in Brazil. And the rest of the increase comes from higher investments, partially compensated by FX and the hybrid issues and our strong cash flow generation that nevertheless, is negatively affected by a 700 million payment to the tax authorities in Q1 that we expect to recover sooner than later. Compared to 2017 closing, net debt stands around the €33 billion. Our ratios improved versus the 2017 closing. FFO-over-net-debt reached 21.4%, net debt-to-EBITDA was 3.9 times, retained cash over net debt reached 19% and leverage ratio reached 43.6%. Operating net profit grew 28% to €770 million, while reported net profit reduced its growth to 1.2% to 893 million. As in Q1 2017, we included 256 million net after taxes of nonrecurring positive result. Taxes improved due to lower corporate taxes in U.S. and positive final adjustment and tax reform in the U.S. accounted in this quarter. In the annex, you will see the calendar for the next script dividend payable in July, that incorporates from now on the cash option. Ignacio Galán: Thank you, Pepe. To conclude, I would like to highlight our investment plan, the normalization of the output and the efficiency measures as the main drivers of growth during 2018. Our investment plan is already starting to deliver growth in results, thanks to the 4,000 megawatts of capacity added between 2017 and 2018 mostly in renewables and combined cycles. In addition, the impact of normalization of hydro and wind output, our hydro reserve already have about 20 years average. Prices are higher than last year. And in Networks the effect of our New York and Connecticut rate plans in the use as well as the rate increases in Brazil will lead a positive evolution of result. Finally, efficiency measures implemented in 2017 and synergy in Neoenergia are expected to start producing results during the following quarter this year. All these factors lead to an outlook of EBITDA above €9 billion, over 20% more than last year and close to €3 billion as reported net profit level in the year in which we expect less non-recurring results. So thank you very much for your attention. Now we are ready to answer all questions you may have. A - Ignacio Cuenca Arambarri: Okay. We are moving towards the Q&A session. The first question comes from Carolina Dores Morgan Stanley. And said the following. At this point, do you expect Hydro condition in Spain to normalize? What does your guidance assume in terms of Hydro production? Ignacio Galán: So, I can already give you the date -- the data of yesterday. I think, the Hydro production in Spain grows by 27% toward previous year. The global group is in the range of 17%. But I think Spain which was the most affected, 27%. The whole Renewables in Spain, I think, off -- onshore as well is around 27% up. And all Renewables is on the range of 21% at the group level. So, which I think that makes then in the last, I think the date -- the information we reported on 30 of March saw an increase in the total output on the six -- around 6%. And now the total output today is 9% more than the previous. So means during April, the performance has been very good. So what we can expect on that one? I think we mentioned in our reserves in this moment are above the average. The production is, I think, higher than previous year. And what we are expecting and foreseeing in our plans, is to have already in the, let’s say a normal year, so an average year as a whole, which I think is 13 around 13-kilowatt hours -- 13-terawatt hours.

The second question comes from Javier Suarez, Mediobanca and Jorge Alonso, Societe Generale. And is asking them both about the IRRs on the U.S. offshore project of [Foreign Language]. Ignacio Galán: The offshore project? So I think in the case of their two projects. There is one project, which is -- both are located in the South of Martha’s Vineyard. They are a project -- they are for Massachusetts is an offer, a -- two different option 400 and 800 megawatt alternatives for wind farms -- offshore wind farms and there is another one, which is Connecticut, which is already another option, 490 megawatt as well from the same place. I think this one is -- they had a choice 400 or 800 megawatts for Massachusetts. And the 190 megawatts for Connecticut. I think in both cases, I think the dates for those one is in the year 2022, 2023 around.

We have a set of three questions. Number five, six and seven from Jorge Alonso, Societe Generale. The first one is the -- is regarding the expected capital gains, if any, due to the gas asset disposal. And are those ones included in the new guidance of net profit circa €3 billion? The second question is our view about the potential Renewables glut or digest in the Spain, as apparently 23 gigawatts of solar PV who have asked for permission to be installed in the coming years. And the third -- and the last and the third one is, are improving the expectation for new Renewables capacity in the U.S. despite the end of PTCs in 2020? Due to RPS or expectation of PPI with private companies, what is -- which is our view on this development in the U.S. in Renewables? Ignacio Galán: So unfortunately, our gas exposure has not already capital gain. I think we make a huge provision in the last year account, but that makes that -- in our case, I think that was -- a business was in a loss. So I think this year have a positive effect because it will not already have that negative effect. So I think is -- but it was not any capital gain. Yes, therefore it was a negative effect last year, and this, the only effect is already that losses we were incurring is going not to happen. Related to Renewables in Spain, I think that is consistent, what has already made by the expert group, which is already recommending to move toward more Renewables. So I think they have to close, you have to be closed, the coal-powered plants, and nuclear is going to remain for a while. So if there are already enough remuneration, so in that case, it’s needed another power, and I think it’s normal. Then this sort of project will be there. So what is our build, which I think is logic, then they are already interested in -- already in investing in this sector, because I think energy is going to be needed in the future. We have few of those projects that I think we are part of those one which is already asking for permit as well, which I think, in due time, we will put already -- we will make investment in those one as well. Related PTCs and expectation PPAs, well, I think activity in the country continues in decent manner. I think, as you know, they are initially most of our buyers of electricity. We have already utilities in different state, just a consequence of the renewable obligation that the regulators in different state or imposing. So afterwards, it were already quite cities, towns, et cetera, who are requesting this. And now most of the customers are already long-time PPAs. We have a large customer. And then recently I heard that Google has already said that all their needs of energy has been fully covered with renewable energy. [More noted], we are already one of their suppliers, so which I think -- and that continue in the same line. Certain, I think, the themes are already -- the rules are slightly changing, because I think the capability of generating tax credit diminished. So I think it will be -- the access of those one is going to be different than it was. But I think the life continue, and the demand continues in green energies, in clean energies. Because I think, in the -- you see, for instance, in this case, of the announcement of different states of the interest in making already offshore wind farm, which was not the case in the past. And now it’s not only Massachusetts. It’s Massachusetts, it’s Connecticut, it’s North Carolina, it’s different states, which are all of them are ready in this point, so which I think we continues on this -- on the line.

Now we are moving towards the questions regarding the Brazilian deal made by Neoenergia and the group of analysts that are interested in these questions are Carolina Dores from Morgan Stanley; Jorge Guimarães from Haitong; Javier Suarez, Mediobanca; Manuel Palomo, Exane BNP; Meike Becker from Bernstein; and Alberto Gandolfi from Goldman Sachs. Basically, the questioner regarding the rationale to acquire Eletropaulo from Neoenergia side. And if Neoenergia win the bid -- wins finally the bid, would you still -- will you still interested in other acquisition in the country? The second is the size of synergies. Do we expect it in this possible merger between Neoenergia and Eletropaulo? The maximum exposure in terms of FFO, EBITDA that we can have limits in exposure to the Brazilian reals. I’m showing indications if we can do it about multiples regarding the offer of Neoenergia. Ignacio Galán: Well, as much I can say is that the Board of Neoenergia, that is a Neoenergia deal. So I think it’s the first thing. That is not an Iberdrola deal, that is an Neoenergia. And Neoenergia is a joint company, but we have already our panels [Foreign Language] I think that we are already -- since last year, we took the majority, but I think we have already just shareholders’ agreement with very joined, committed manner of taking decision. I think the board of Neoenergia was already meeting a few days ago, and I think the management of Neoenergia, which I think is full professional which has been already working in the -- in both parts of the company, in that all Neoenergia and in Elektro, and I think they are joining together. I think they make the integration, as I mentioned, they make a real, very good job. I think almost -- most of the target of the interviewers has been achieved. I think we were expecting the integration -- a level of synergies on the range of 5%. Probably, that is going to be more close to 10% than close to 5%. So I think they are making a good thing. So I think it’s a very powerful management team, and this management team presented already the recommendation and the reason why they would like to bid for this one. It was a meeting in which we -- all the board members, we have already debated this strategy fit. And the complementarities, I present to you, is geographically, Eletropaulo is just in the middle of the concession of Elektro. It’s just in the center. I think it’s -- there are certain roads which, I think, the left side is Eletropaulo, the right side is Elektro, which I think they are already fitting. They present all those things, the complementarities, which they have already with these Neoenergia distribution subsidiaries. Eight are operational in terms of management point of view because being the center of this geographical area. So I think we approve -- the Board, we approved the deal. And I think the management of Neoenergia is doing what they have to do, is doing all they needed, task in a friendly way, as is traditional in Brazil. I think, in Brazilian, all the things have to be made in a very friendly manner, which is a common manner. And they are doing all the necessary to complete their transaction. I feel like -- I think it’s -- most I can really say, that is, I insist it’s an operation of Neoenergia. It’s not an operation of Iberdrola, and I think it’s -- and we are, as one of -- part of the Board, we are already supporting as -- the deal, and that is what was approved.

Next question is a set of them, comes from Rui Diaz, UBS. First one is the -- regarding the second quarter outlook for power generation and supply in Spain. Based on the current market condition, how do you see the Q2 evolving relative to last year? The second question is about the sector consolidation in Europe. Could you give us your thoughts regarding the corporate reorganization recently announced in Germany? Do you think that specialization could be the way forward? And finally, with something that is similar to another one that we have previously, solar in Spain. If we can provide some color on the new solar project that Iberdrola is building or is going to build in Spain and how attractive are the projects in terms of economics. Ignacio Galán: So I think related to power generation in Spain, of course, it will depend of the demand. The demand is going very well this year, and but I think we expect then that this will continue. The country is growing at level of 3%, the economy is doing very well. I think the number of tourists which are coming to the country, we are beating records. I think those had already forced, then, the hotels, restaurants, etcetera, require more electricity. And I think, together with the export of the country would continue booming. I think the last report I got of the country is they continue the export this quarter. It is continue growing at the range of 4%, 5% per annum. So I think we are moving -- in the last five years, I think the trend continues and continues growing. Now that one is making the demand, I think, is growing. And that is one of the reason why that even during this quarter, the demand has been already increased. I think the prices has not been affected, because we need all the power generation we produce and continue already, I think, producing with another sources with -- I think to help and to support the demand with their -- our expectation is that it’s going to continue. I think, I don’t know in which manner, but it’s going to continue, and we are in a good shape for that one, either because we’re reservicing in case of Hydro are already above the average, which is normal for this period of the year. Second, because the first -- let’s say, almost this April is already booming. I think I mentioned to you that we increased our production in the 20 days of April in a very significant manner, in such a way that we moved as a whole group from 6% increase toward the previous year to 9% increase only in 23 days. So it means that our increase in production is very important. So I think our expectation is, if the demand continues, we are in a much better shape than the previous year for that one. And second, I think the April performance looks very good, either in production, either in the mix of power generation, but we are making that one. Second, related to the consolidation in Germany. So I think it’s a German solution, which I think is -- yes, yes, I think it’s a German solution where they decide to put all the things which are related with access to the customer in one company and, I think, related with generation in another company, which I think I wish for them to be successful on that one, but I think that is a German solution, which I think is not bad, is not good. It’s not bad, that is not worse, then there’s another solution. We feel that we are already companies which are fully integrated, and we are companies, we’re fully already -- only network, so which I think it depends in each of the places, and they took this choice. I think we are, in Spain, vertically integrated. In other countries, we are not vertically integrated. It depends where the place is, and I think that is a solution which I hope that it will be successful, and I wish for my colleagues there where they will make already great success with the deal they did. Solar, the question was solar in Spain, so which our projects. So I think we have certain of them. They are one of them in [Foreign Language], which is already 500 megawatts of VNLs but we are already ask permitting for that one. We have several other one, but that is the most advanced, that probably, if we achieve the permit, we will start the construction probably by the end of the year to be completed, I think, by 2020, probably 2019, 2020. I think most of the energy is going to be sold to long-term PPAs to final customers where we have already good demand for those ones.

Next is a set of question comes from Manuel Palomo, Exane BNP Paribas. The first one is an update on the Massachusetts offshore auctions, the rationale for the delay, and if we are still positive from being awarded the project. And the second is, what is the capacity we will be willing to get out of the 800 megawatts that are already announced? And the second one is regarding the production in Spain and the Hydro production. Concretely, the output, 6% up year-on-year, and it’s significantly below the country average of 21% year-on-year. Does it have anything to do with your Hydro fleet, mostly pumping and storage with the basin that you’re exposed to? Should you -- we expect, as a result, a better-than-average Hydro -- Iberdrola Hydro output in the coming quarters? Ignacio Galán: So I think the second one has been responded to already. I think that we are expecting -- I think we have reserves above the average, but our expectation in our plan is that we have provision in line with average, which is 13, 14 terawatt hours. So which I think, at present, I can tell you the key figures, let me check in my computer, is -- up to now on the yesterday, we have five.123 terawatts. I think we need to make for now to the end of the year, are only 8 terawatt hours. So which I think, that is almost what we have today in our reservoirs. So which I think is -- we are already very, very, let’s say, conservative in our approach. Related to Massachusetts, well, we are -- the expected date was already to take the decision by end of this month. I think we -- were announced yesterday or day before yesterday that probably they will delay their decision within three or four weeks by the end of May or middle of May, because I think they are, in this moment, involved precisely the same team of evaluation is the team that we are negotiating our transmission line from Canada. I think the Department of Energy of Massachusetts are evaluating both things. I think, in the case of the transmission from Canada to Massachusetts, I think we are already negotiating the other terms of the deal because we are the only one I will remind, that has been selected for them. And I think they are making all the paperwork on that one. And that one, they say -- they announced that they’re going to delay the decision. So probably that will be already by middle of May, or by the end of May, they finally issue on that one. You mentioned if we have another project. I think the -- this site has already potential up to 2,500, 2,400 megawatt, much bigger than that one. So I think we are able to make not only this 400 or 800, but I think we are able to make three times that one. So which I think we have plenty of space for making more one. That’s why we are already planning, if we are already selected in Connecticut, to make already as well to supply from this area as well if we can farm for and supplying to Connecticut as well.

Next question comes from Meike Becker from Bernstein. Regarding the EBITDA improvements in UK retail, is Q1 2018 a representative run rate? What we also we do need to be aware of and what do you expect from the price cut? Ignacio Galán: So well, I don’t know how many times I mentioned during my speech about normalization. The word I used several times is normalization. In the case of Britain, same thing last year in the case of Spain, we were really suffering very exceptional circumstances. In the case of Britain, have been affected by very extraordinary low rates, low margins mostly because of several reasons. One of them is because we had to -- we implemented a new billing system, and the billing system has already we suffer, we have a lot of problem with it. And I think it cost a lot of money as a consequence of that one. So I think that means that our margins were already very much deteriorated. We are coming to the normal condition with -- and I cannot say high margin because the British margins are always very low, but I think low normal rates. Low normal margins, so which I think -- but positive margin. With -- we were already negative margins in the past. So, I think that is what we are already expected. So I think that was the question, no, Ignacio?

Yes, that’s right. Finally, we have a couple of questions from Alberto Gandolfi, Goldman Sachs. The first one is regarding of the latest position on nuclear assets in Spain. And finally, is there -- if we are seeing any opportunities in the U.S. in terms of M&A. Ignacio Galán: What about nuclear?

Yes, what is the latest news on nuclear… Ignacio Galán: So I think the latest is what has been said by the expert committee. What they are saying that from -- they feel they’re full achieving the emission targets, with Spain has already signed. Nuclear will be needed, but will be needed if they’re already receiving a reasonable return because for the stand-in, the operational life will require huge investment. And I think that is the position, the latest news is that one. So needed, but have to be accordingly remunerated to make the investment, which will be require for this life extension. And another one was?

Possible M&A opportunities, M&A the -- of M&A in the U.S. Ignacio Galán: Well, I think it’s -- you know our target in United States was already doing things in all levels. I think we are not ready in this moment, leading with no one in this respect, but if, sometime, somebody appear, I think we are always open to talk and to listen and to negotiate, as we did with UIL. I think, certain I can already tell you, and I think you know us very well, that we are not coming with deep pockets, paying a huge amount of money for that one. We are always negotiating to make deals, as we did with UIL, in which we -- using our currency, which is our asset, our shares of AVANGRID to make already something on that one. But in this moment, I can say we have not already talked with nobody else.

Okay. 55 minutes of result presentations, other promise, but Iberdrola fulfills. Please let me now give the floor to Mr. Galán to conclude this event. Ignacio Galán: Well, thank you very much for the -- for attending this one. As I mentioned to you in February that I think we are a company, when we make plans, we do our best for fulfilling. I think that is the first sign that we are in line for achieving what we have already committed. I think the first quarter results are already encouraging ourselves to continue in this line. What we expect, as I mentioned, that we are already expecting this year EBITDA growing in the range of 20%, up to €9 billion, and to -- make without extraordinaries, as we had last year. So to achieve probably a record result -- record of net profits of this company since ever, which I think that is what we are working for, and we expect that, that should be already what we can already win during the following quarters, reporting to you seeing that the things are going in this line. So thank you very much, and see you soon. Thank you.