Good morning, ladies and gentlemen, and thank you for joining us in this presentation of Enagás results for the third quarter of 2016. The results were presented today before the market opening and are available in our website, www.enagas.es.

Mr. Antonio Llardén, which -- or myself, I will try to mention how things have gone in the third quarter.

First of all, we confirm the good performance of Enagás. We are going to meet the commitments we have for this exercise for this year.

And in fact, we will be able to improve the most important results. These results, in our opinion, ratify the flexibility, the strength and the ability to adapt in times of high volatility and uncertainty.

The good performance of Enagás this year is reflected in the positive financial results and also in 3 important events that took place in the third quarter.

First, the confirmation of our A- rating with stable outlook by Standard & Poor's in July. Second, our inclusion or our presence in the Dow Jones Sustainability Index that recognize Enagás in 2016 as a world leader in the gas utilities sector.

And third, the recognition from the Council of European Energy Regulators, which has included Enagás as one of the most efficient European TSOs in the management and maintenance of gas infrastructures with an efficiency rating of 100%. This confirms, in our opinion, the high levels of efficiency in our company's operations.

I will now briefly mention the most important figures that you can take a look in the presentation that accompanies the conference call. Funds from operations at the end of September totals EUR 611.5 million, which is 1.5% higher than in the same period last year.

This has led us to reach a leverage ratio funds from operations on a net debt of 15.9%, which is higher than what is needed to maintain our stand-alone credit ratings. This trend of our funds from operations posts [ph], in part, the dividends received from our subsidiaries in the first 9 months of the year.

These dividends accounted for EUR 53 million compared to EUR 22.2 million on the same date last year.

The evolution of this figure is very important as it clearly offsets the slowdown of cash flows from the businesses or domestic businesses that we have foreseen since the regulations were changed 2 years -- 2.5 years ago. It's very important to highlight the strength and security of these dividend flows from our subsidiaries due to several reasons.

First, the quality in solvency of the off-takers we have signed long-term take-or-pay contracts with, with no exposure to commodity prices or volumes. Second, we are talking about the subsidiaries in Peru, Mexico and Chile that are indexed to U.S.

industrial prices and they operate in dollars. And third, we have a long-term debt financing taken out at optimal cost and also maturity.

The increase and strength of our cash flow is key to understanding the company's business performance because, as you know, our EBITDA does not include the contribution from the international business. However, the efforts we are making to adapt the company's resources to the requirements of international expansion are reflected in our costs.

On the other hand, net profit was EUR 317.4 million, up 1.5% to the net profit we got last year. So 1.5% above the same period we had last year.

This increase was mainly due to the higher contribution from our investees, as we mentioned, especially the brownfields acquired throughout 2015 and 2016. I would like to highlight the fact that the contribution to net profit made by our investees was close to 15% compared to 9% at September 30, 2015.

During the first 9 months of 2016, Enagás invested total of EUR 598 million, at which 29% of it corresponds to investments made in Spain and 71% to international investments. This investment volume includes 3 -- or national and international investments include 3 operations that have already been closed that have allowed us to increase our stakes in assets in which Enagás was already present and which fit with the company's core business and also with the profitability targets and our debt levels.

the acquisition of an additional 20% in the Chilean plant of GNL Quintero and the purchase to entry of 2.96% of Transportadora de Gas de Perú, TgP, that we announced last week. These acquisitions are subject to the terms applicable in these types of transactions such as the possible exercise of preemptive subscription rights by other shareholders.

Our financial position is sound and solid and one of our main strengths. And I will now mention the key figures.

Net financial debt at September 30 of EUR 4.431 billion with more than 80% of the debt at fixed rates. At the end of the third quarter, the average net cost of debt was still 2.5% compared to 2.8% at the same date in 2015.

On the other hand, the liquidity of Enagás by the end of third quarter was EUR 2.6 billion, which allows us to maintain high solvency levels and comfortably meet our upcoming debt maturities, which, as you can see from the presentation, do not become significant until 2022.

Enagás has diversified funding sources, you very well know about it. 64% of our debt has been arranged on a couple of markets; and 30% is financed with institutional loans, mainly through the ICO, the Spanish state finance agency, and the European Investment Bank.

As I have already mentioned, we have a leverage ratio, that's funds from operations to net debt of 15.9%, that's higher than necessary to maintain our current stand-alone credit ratings.

In terms of our ratings, well, it's great news, as we mentioned in the beginning of the presentation, with the confirmation by Standard & Poor's of our A- credit rating with stable outlook. And in its reports, the rating agency recognizes Enagás' sound business and low risk.

This places us at the highest level, which is excellent, in the methodology used by Standard & Poor's to analyze companies' business risk profiles.

In terms of our dividend policy, we increased, which is increasing our dividend in a sustainable and sustained ways, one of our priorities. Therefore, we reiterate our target to achieve a growth of 5% each year until 2020.

As proof of this commitment, in July, within the third quarter we are analyzing right now, the final dividend was paid out against 2015 for the amount of EUR 0.792 per share, which implies a total dividend of EUR 1.32 per share before taking out a few of the captives [ph].

For the year, I would like to summarize, as we normally do, the evolution of gas demand in Spain. Industrial demand, which is one that best reflects the evolution of economy and very important and interesting, well, in this political uncertainty moments in Europe for several reasons.

Well, this industrial demand is still strong and has increased until September 30 by 2.2% compared to the previous year, which is in line with Spanish economic growth and the official -- or the forecast of most financial institutions in terms of Spanish GDP.

This performance slightly outstrips the trend marked by this segment of demand, which, in June, rose by 2%. In fact, in September and October, this growth has been even a bit higher.

And so we are feeling quite optimistic until the end of -- the evolution of industrial gas demand until the end of the year and so, in a certain measure, also the Spanish economy. And in fact, as a bit of interesting information, last week, on September 30, last Thursday, we reached the peak of industrial demand out of a winter market in the past 3 years.

We reached a maximum natural gas production for 2016, which means that the demand figures in the third quarter occurred. And if we were only to take a look to the past 50 days, so end of August, early September and month of October, the evolution of gas demand has been extremely positive.

We will now take a look at a very important element, which might not be financial, but it is important for us, which is our commitment with sustainability that has been integrated in the company's strategy and operations. In September, as I mentioned earlier, and for ninth year in a row, we are part of the Dow Jones Sustainability Index, which is a global benchmark for sustainability.

We are the leader in the gas utilities sector with 91 points out of 100. And we have the best possible score in several aspects, like climate change policy, environmental management and stakeholder management.

We are also leaders in some other areas such as health and safety, corporate governance and development of human capital. These results acknowledge, in our opinion, the company's pledge to sustainability as one of the drivers of its strategic plan.

And as you can see, it's not just a formal declaration on paper, but it has been systematically confirmed by entities -- international entities that measure these areas.

So at last, talking about our target. The results we are offering today show that we are on track to meet and even surpass the tangibles [ph] we said in early 2016.

In terms of our investment volumes, the figures we are presenting are above our annual investment target, as I explained in the last conference in July. In 2016, we have had, well, good opportunities, and we have reinforced our position in assets that Enagás knows extremely well and in which we play a key role as an industrial partner.

These acquisitions will allow us to improve results from equity accounted investees as well as raise the dividends received from our subsidiaries in 2016 and future years.

But nonetheless, and as I mentioned in July, we would like to reiterate that as a company, we have very clear objectives such as paying a dividend. We have promised to pay and to maintain our stand-alone ratings.

And also, achieve and -- well, achieving on a specific investment figure, it's not a target in itself. We have invested and we continue to invest in projects that fit with our strategic criteria that contribute with several returns and that create value for our shareholders.

And by the way, that's quite hard in the present market conditions. This is a fundamental goal for Enagás and its management team.

At the start of the year, we included in our budget and our objectives an average net cost of 7.7 -- 2.7%. The financial transactions made during 2016, and only 3 months left to run and to finish 2016, will allow us to close the year with a lower-than-expected average net cost of debt that is more in line with 2.4% that we ended the third quarter with.

Therefore, despite the complicated and volatile macroeconomic environment, we think that the net profit growth by the end of 2016 could be around 1.5%, which is therefore higher than the target of 0.5% we said at the start of the year.

And last and to wrap up my presentation, I simply would like to add 3 different aspects for the whole company and for the management team at Enagás. The commitment we had made to investors, analysts and rating agencies are our priority, and we never lose sight of the fact that our company has 95% free flow for international activities have enabled us to increase our earnings and dividends.

And lastly, we have a very strong financial position with well-diversified funding sources and a high level of liquidity. We are committed to maintain our current stand-alone credit ratings.

And in this context in which analysts and financial experts agree that the volatility of global markets is going to remain as it is for a certain time. We believe that Enagás we have been able to, first, increase our operating efficiency to become a leader in efficiency compared to our peers.

We have been able to reduce our funding costs to even below our forecast levels. As you have seen, we have long-term debt maturities.

We still have solid funds from operations. With an annual average until 2020 of around EUR 700 million, our growth is sustainable and well, with regular performance of dividends, which enables us to face future challenges from a stronger position.

Thank you for your attention. And if you have any questions, feel free to ask them now, and we will try to answer them as -- well, the whole team will try to answer them as fully as we can.

Thank you very much, indeed.

I have 3 questions. The first one refers to the IPS guidance.

The Chairman has explained that the goal has gone up 0.5 -- from 0.5% to 1.5%. I'd like to know the reasons for this growth and why you have made the decisions to raise this guidance?

And also, in the last conference calls, we heard an EBITDA guidance between EUR 890 million, EUR 895 million. I would like to know the figures behind that.

And also, as for the MidCat, we have seen that the French regulator have made some comments different to the ones of the European Commission on the relevance of MidCat. And I'd like to know how important EBITDA is in Europe and how relevant is that we complete this project?

Also, it's very interesting the industrial demand growth. Actually, the demand is weak now, and I would like to know the effect of this on the working capital of the company or on the final standardization of the EBITDA and other figures.

I'd like to know anything about this, it would be very helpful.

[Foreign Language] Thanks. For your first question, these details will be explained by Borja García, the CFO.

For the whole year, the growth -- the difference to the guidance of the first quarter is due to Saggas mainly. The forecast of EUR 4.8 million and as for the EBITDA figure related to this growth is EUR 5 million less associated to the evolution of the DRS.

As for the second question, the relevance of the MidCat for Europe is due to 2 reasons. One is to secure the supply, having more capacity to move gas flows from North to South or the other way around whenever there is a problem in Europe.

And there's a second effect, which is not so well-known, that it will help to have a real European natural gas market fixed in prices, which are similar in most of Central Europe, European countries. This difference of physical flows between North and South or South and North impact the prices in different areas or regions of the countries, which are not so good practice.

It is happening in France where the prices from the Northern region are different to the prices on the South, which are higher, and this is within the same country. So from the point of view of the European Union and the European Commission, they have to say that the MidCat is one of the main targets.

And we -- but we know that these international agreements need time and patience. We think we'll be able to complete this within this time, the deadline, 2020.

And as for the third question, I remind you that the growth of industrial demand is very important, not only because it gives you an idea of the evolution of the Spanish economy, but also because it represents between 2/3 and 70% of the gas demand in Spain. This is different to other European countries where the weight of the commercial and domestic demand is higher, and this is due to the cold weather and to the use of the heating systems in homes.

So there's a difference in Spain and therefore, this is why the industrial demand is most -- more significant. And with the figures that we have and that we have recently shared with the regulator, we believe that the calculations made on 2014 to absorb the gas tariff deficit until 2020 are perfectly in line, but we have seen that there is no structural price [ph] deficit, no serious one.

So in this regard, we are optimistic. And we confirm, with the evolution of the market at the end of -- by the year 2020, we will have perfectly controlled the targets set by the regulator, which is eliminating the tariff deficits.

Take into account that it was forecasted in the years 2016 and 2017, it would include some costs. So we have planned these, and we are optimistic that we will be able to do this.

I'm Fernando Lafuente. Two questions.

The first one, referring to the GSP, how is the situation, the investment of Odebrecht as partner? So an overview of the project.

And the second question is about the investment in international markets. I think it's interesting what the Chairman has said that investment is not our goal.

So I'd like to know which are the other options, I mean, which other options are now contemplated? And also, I'd like to know what are you expecting in Spain for the upcoming years, if there's something that we can purchase or something else?

Thanks for the questions. As for the GSP, I'll give the floor to the CEO, Marcelino Oreja.

The project is going on. The investment is -- we are selling.

There's a buyer already. They are negotiating with the consortium made by Sempra and [indiscernible].

So during the following days, probably we will complete this acquisition. That will be related to the financial closing in November.

At the same time, we are working with the government to sign a bank debt that will be signed in the following weeks. So I think that in November, we will receive the funding and the agreement is advanced and this project has also started.

So the management has already been made by Enagás and the manager has been designated by Enagás in Peru.

Thanks, Marcelino. I'll answer the second question.

As for the international investments, we follow with our criteria of [indiscernible] to make decisions. We have observed over the last year that there was a very low or negative types and also very low value performances that can turn into bonds of financial products that usually have a high amount to be invested.

So probably, some of them, not all of them, are eager to invest with a return of the investment that, in our view, and this is not only my opinion, other companies think as we do, they are not sustainable in the mid and long term. So I can give you -- can tell you that Enagás, we try to make no mistakes in this decision.

We only invest if some criteria are met. One of them is that the return of investment, the final return of investment is proportional to the type and to the risk.

And this is now because the types are low for investment with the life cycle from 20 to 40 years, we don't accept very low returns of investment. That cannot be justified in the long -- in the mid to long term.

In the international field, in Europe, answering your question, we are involved in 2 basic issues. One is a greenfield by [indiscernible], one, this is a project, a pipeline which is a higher scale ongoing project in Europe.

And today, in Spain, there is a meeting of the board of Trans Adriatic, and we are one of the partners, the hosting partner. And this morning, we are having here this meeting here.

This is the most important project in Europe now, where Enagás is one of the main partners, not only a financial partner, but also with a very active penetration in all the technical and financial aspects of the project. And the other project has also been mentioned, which is the MidCat, which is a third connection between Spain and France.

And we expect that until 2020, we will be able to finish this project. And for Spain, maybe the most important thing that we have for the next year is organic investment, but not at the level that we used to have, like 5 years ago, but we have the project of re-gas -- of the gas plant of Tenerife.

And I can give you a figure now about this. After the summer, it has been confirmed by the Ministry of Industry that they already have the documentation of the environmental impact analysis performed by the environment ministry.

And at this point, we know that the Ministry of Industry is drafting the ministerial order to authorize the beginning of these works. Due to some administrative reasons, maybe this order will only -- can only be in effect when we have a new government that we don't have now in Spain.

So probably by the end of the year, we will already have the official authorization to start the investment of EUR 300 million for the financial years '17, '18 and '19, so we will finish within the deadline 2020. It will be the most important investment that we contemplate in Spain and the Iberian Peninsula.

I have 2 questions. The first one is on the regulated returns, which is above the 2% year-after-year, which is a little bit lower than the normal value.

Is this due to the gas demand or are there any other reasons? And how do you plan to recover this in 2017?

The second question. As for the guidance for 2016 and the lower tax, how do you see the guidance to 2020?

Can you give us -- can you explain a little bit about this?

[Sorry, they're not using the microphone, so we cannot provide a translation.]

Thank you, Carolina. Our regulated earnings after the regulation change in 2014 are not due to the variable gas demand, but mainly because there's no new investment in enough volume that balance out this asset amortization.

You should remember that in that regulation change, we had around EUR 120 million less a year, which has balanced down, and due to the increase of life expectancy of the series of assets and, of course, due to the international activity that allows us to recover it. But in terms of the drop of regulated earnings, this is news we give every quarter, we have a forecast until 2020.

And I believe we won't be wrong by over plus or less EUR 5 million. This is more a factor, which is RCS, that, well, makes it a bit variable depending on demand, but that small variable is actually very limited.

So if the demand is positive, we might have an increase of earnings of between EUR 5 million to EUR 10 million a year. And if the demand drops, we might have EUR 5 million to EUR 10 million less a year.

But then a change -- the main changes are due to basically sort of I mentioned, which is the existence of a strong asset which is running big [ph]. And it depreciates slowly, and that's why we have an activity out of the Iberian Peninsula to be able to balance it out.

And in terms of the second question, well, in debt in euros, which is most of the debt we've got, we do believe that with the present rates -- interest rates, the kind of debt we've got until 2020. And I'm saying it out loud.

I haven't got -- well, I haven't got the detail. But we could keep the cost of 2.4%, which we believe is quite good in terms of average rate, average debt rate.

As you know, some of our debt is in dollars. And with that case, well, the exchange rates of dollars are a bit less, given that throughout -- well, until probably from now until 2020, the proportion of dollars is going to be a bit higher than the one we've got now, not necessarily much higher.

But in that case, the mix of our average debt rate is a bit higher. But we believe that we, with that, we have limited the costs in both currencies.

Thank you.

Just 2 questions, first of which is if you could clarify something in your reading the results, you're saying that the group of projects companies, GSP and Saggas, have a good contribution and have a good -- probably a contribution of EUR 9.5 million. I'd like to mention, given those projects that are on flight, how can they have a positive contribution?

Second question is about the sales of in terms of 42% of Medgaz, what's going to be your position? It seems you've been interested on that company.

[Foreign Language] Thank you, José Javier Ruiz. First question, my Financial Director is saying that he can explain it in detail.

Please?

On greenfield projects, most of them, or for most of them, companies have a margin per construction that can generate earnings, and costs can be capitalized, that's why we have a benefit.

Thank you. And -- well, in the second question you were asking, within the team that's answering the questions, we've got the director general of new businesses.

And all the projects or operations in the world of core business could be -- there might be 20, 25 projects that are alive and throughout the world. We always had them also in this operation.

And we do follow the operation of what could happen. Given the information we've got, I must say, we don't -- well, we don't think they have made a final decision to sell.

This is just a process in which they are going to do some research. And we, of course, have followed with us just as we follow some other projects.

And of course, this is an interesting asset. But one, having said that, we do follow this by our operation as we follow many others, one that we could bore you with a number of projects and operations we do study.

And I also like to remind you what we always say when we analyze these topics, the director general of new business knows that they have to go through some filters of some profitability risk analysis, without which the company will not make an investment. That's why throughout the year, we carry out some operations but, I mean, José Javier, we kind of show you that we do study 20, 25, 30 operations a year, but we don't carry them all out.

Thank you.

My question is linked to international projects. In this environment, there's been a lot of noise about a yield increase in the United States.

Could you please tell us how those projects have been covered for in case the yields were to rise? Especially for the most important projects, I'd like to know that you update them according to the American inflation and the debt of those projects to know the -- or for how long you've got, like, close to funding and which is the impact or how covered you are if eventually yields were to increase?

Yes. Thank you, Mr.

Jorge Alonso. All the projects we've got now have these guarantees.

And I like to ask the Financial Director to review or answer the questions.

Yes, these projects, most of them are funded through project finance. Well, there have to be long-term funding or the short-term one, we do a swap; with the last time of the asset of the TgP, that has a 15-year maturity.

And in GDP, we have long-term maturity. In GSP, the funding will be in a bond, but there's a swap for the life cycle of the asset.

So the protection for the yield is complete, both in labor and all the other assets. And in fact, they are USAD [ph] indexed.

So one, then, we're talking about exchange rate risk. And while the investment and the debt is in the same currency and the time has been preset in that currency, so coverage in terms of [indiscernible] is complete.

Thank you.

I had some questions about the comment you made on the fact that international investments are being done through an equivalent ratio, but we also see an increase of funds. I'd like to know if you have already captured all the increase in the past few months or if we are still going to have more pressure?

And about CapEx for next year, out of the investments, you haven't yet reflected, but you have announced which are the -- well, which is going to be the increase for this year still?

[Foreign Language] Thank you, Virginia. Well, in terms of the costs linked to new investments, we have captured all the costs because it isn't just staff costs, so overhead costs.

By this kind of operation, we have external services, lawyers and so on, and they are all in. I mean, they are a onetime cost, really.

So once it's been done, it won't appear again. So we believe that we're going to follow the costs we've had.

And they will not increase in the next quarter. In terms of the investments left for 2016, they are basically the ones we have already announced.

We have to close the purchase of around 3% of TPG (sic) [TgP], which is 60 -- will be about $65 million. We are doing it jointly with the other big shareholder of the company, which is Canadian Pension Plan Investment Board from Canada.

And we -- well, we are going to -- well, we've -- that 8% of the [indiscernible], well, we have to evaluate that on both companies. And the other one is about the -- is around EUR 200 million from Quintero GNL.

And that's the second operation we are closing now, and we expect to be able to have it done by late November, early December. These operations are the ones that we've mentioned previously are going to give us for 2017 and the following years an increase of our benefits and accounts in general that have not been included in the figures that we explained in the beginning of the year.

That's why when we close the year in January or February, we will have a presentation with an update of all the data for 2017, 2020 or 2017, 2021. We'll see the time frame afterwards.

Thank you.

I have 3 remaining. The first one would be again coming back to the international acquisitions.

Once you finalize and you get approval for the last 2 deals that you've announced, you will probably have invested already about half of the EUR 925 million of leeway that you flagged you would have for international M&A over 2016 until '20. So I was wondering if you think that potentially you would have an option to exceed that amount in terms of potential international investments over that period?

Second one is to ask if you could please confirm how Saggas and LNG Quintero will be consolidated going forward after you will have the majority stakes in those businesses? And then the final one, apologies if you have confirmed this already, but you had given a guidance of 2% compounded earnings growth expected between 2015 and 2020.

You have now implicitly well raised the guidance for 2016 a little bit. I was wondering what your thoughts were for this longer-term guidance of 2% growth as well.

[Foreign Language] Thanks, Olivier. First of all, I'd like to confirm what I have said in other conference calls that the period until 2020 and investment figure is total for the whole period.

And now we are going faster now. So in the future, we would go slower, but this figure will not be raised.

So we keep our investment goal for the period 2016, 2020, as we said in the presentation 1 year ago. As for Saggas, we do have a very relevant investment there.

But in order to consolidate, as you know, it's not only a percentage of participation, but also the different agreements of investors. And we have proposed the other investors to restructure during 2017 all the participations and societies in order to be able to consolidate.

So we will do this, but it won't be immediate as we need to change some agreements between historic investors that represent different societies there. So in 2017, we think that we will be able to do this in agreement with the other partners.

And last, as I've said before, with the acquisitions that we have made this year that are included in the acquisition volume for the period 2020, it is true that we have accelerated the investment average of each year. That means that our growth forecast for this period will be improved.

We will explain this into detail at the beginning of 2017 when we have finished the entire process of, let's say, taking in all these acquisitions that we've made during 2016. As I've said, there is still 2 operations that we expect to close before the end of this year.

So when we have all the figures, and all figures are audited, we will make a new review of the growth for the period 2017, 2020, that obviously would be better than our initial

[Audio Gap]

[Foreign Language] Thanks for your attention, and we'll be glad to answer any questions you might have. Thanks for attending.