+ All Categories
Home > Documents > EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin %...

EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin %...

Date post: 11-Aug-2021
Category:
Upload: others
View: 4 times
Download: 0 times
Share this document with a friend
68
First Quarter
Transcript
Page 1: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter

IBERDROLA, S.A.Investor relationsPhone: 00 34 91 784 2804Fax: 00 34 91 784 [email protected]

www.iberdrola.com

Available on GooglePlay

Available on the Available on the

Download the IBERDROLA Investor Relations app:

Page 2: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664
Page 3: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 1 / Results 2016

DisclaimerThis document has been prepared by Iberdrola, S.A. exclusively for use during the presentation of financial results of the first quarter of the 2016 fiscal year. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity, for any other reason without the express and prior written consent of Iberdrola, S.A.

Iberdrola, S.A. does not assume liability for this document if it is used with a purpose other than the above.The information and any opinions or statements made in this document have not been verified by independent third parties; therefore, no

express or implied warranty is made as to the impartiality, accuracy, completeness or correctness of the information or the opinions or statements expressed herein.

Neither Iberdrola, S.A. nor its subsidiaries or other companies of the Iberdrola Group or its affiliates assume liability of any kind, whether for negligence or any other reason, for any damage or loss arising from any use of this document or its contents.

Neither this document nor any part of it constitutes a contract, nor may it be used for incorporation into or construction of any contract or agreement.

Information in this document about the price at which securities issued by Iberdrola, S.A. have been bought or sold in the past or about the yield on securities issued by Iberdrola, S.A. cannot be relied upon as a guide to future performance.

Important InformationThis document does not constitute an offer or an invitation to acquire or subscribe shares, in accordance with the content of the consolidated text of the Securities Market Law, approved by Royal Legislative Decree 4/2015, of 23 October, in Royal Decree -Law 5/2005, of 11 March, and/or in Royal Decree 1310/2005, of 4 November, and in its executive regulations.

In addition, this document does not constitute an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, nor a request for any vote or approval in any other jurisdiction.

The shares of Iberdrola, S.A. may not be offered or sold in the United States of America except pursuant to an effective registration statement under the Securities Act of 1933 or pursuant to a valid exemption from registration.

Forward-Looking StatementsThis communication contains forward-looking information and statements about Iberdrola, S.A., including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capital expendi-tures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates” and similar expressions.

Although Iberdrola, S.A. believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Iberdrola, S.A. shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Iberdrola, S.A., that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the documents sent by Iberdrola, S.A. to the Comisión Nacional del Mercado de Valores, which are accessible to the public.

Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Iberdrola, S.A. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Iberdrola, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included herein are based on information available to Iberdrola, S.A. on the date hereof. Except as required by applicable law, Iberdrola, S.A. does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Legal notice

Page 4: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

2 / First Quarter Results 2016 /

Índex

LEGAL NOTICE _____________________________________________________________________ 1

CORE BUSINESS FIGURES ____________________________________________________________ 3

OPERATING HIGHLIGHTS FOR THE PERIOD _____________________________________________ 7

OPERATIONAL PERFORMANCE FOR THE PERIOD ________________________________________ 9

ANALYSIS OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT ________________________22

RESULTS BY BUSINESS ______________________________________________________________26

BALANCE SHEET ANALYSIS __________________________________________________________33

INANCIAL STATEMENTS TABLES ______________________________________________________41

Balance Sheet ____________________________________________________________________________ 41

Profit and Loss ___________________________________________________________________________ 43

Results by Business ________________________________________________________________________ 44

Networks Business ________________________________________________________________________ 45

Generation and Supply ____________________________________________________________________ 46

Renewable Business _______________________________________________________________________ 47

Statement of Origin and Use of Funds ________________________________________________________ 48

STOCK MARKET EVOLUTION ________________________________________________________49

APPENDIX.- IBERDROLA AND SUSTAINABILITY _________________________________________50

Page 5: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 3 / Results 2016

Operating Data Q1 2016 Q1 2015 %

Net production GWh 37,533 36,651 2.4

Hydro GWh 6,684 4,729 41.3

Nuclear GWh 5,880 6,491 -9.4

Coal GWh 1,923 2,957 -35.0

Gas Combined Cycle GWh 11,078 11,317 -2.1

Cogeneration GWh 1,712 1,525 12.2

Renewables GWh 10,257 9,632 6.5

Installed capacity MW 44,392 45,375 -2.2

Hydro MW 11,076 10,171 8.9

Nuclear* MW 3,410 3,410 -

Coal** MW 874 3,178 -72,5

Gas Combined Cycle MW 12,962 12,708 2.0

Cogeneration MW 1,258 1,256 -

Renewables MW 14,812 14,652 1.1

Distributed Electricity GWh 56,874 57,416 -0.9

Electricity users (managed supply points) Nº (mil) 29.8 29.1 2.5

Electricity customers Nº (mil) 13.5 13.6 -0.7

Gas users (managed supply points) Nº (mil) 4.03 3.61 11.4

Gas supplies GWh 47,922 43,320 10.6

Gas storage bcm 2.52 2.50 0.8

Employees Nº 28,494 27,265 4.5

(*) Includes Garoña plant.(**) Longannet closure at the end of March 2016

Core Business Figures

Page 6: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Core Business Figures

4 / First Quarter Results 2016 /

Operating Data Q1 2016 Q1 2015 %

Spain    

Net Production GWh 17,148 16,143 6.2Hydro GWh 5,605 4,058 38.1

Nuclear GWh 5,880 6,491 -9.4

Coal GWh 194 689 -71.8

Gas combined cycle GWh 464 275 68.9

Cogeneration GWh 534 542 -1.5

Renewables GWh 4,471 4,088 9.4

Installed capacity MW 26,187 25,283 3.6Hydro MW 9,712 8,807 10.3

Nuclear MW 3,410 3,410 -

Coal MW 874 874 -

Gas combined cycle MW 5,695 5,695 -

Cogeneration MW 390 388 0.5

Renewables MW 6,106 6,109 -0.1

Distributed Electricity GWh 23,626 24,194 -2.4Gas Supplies GWh 6,496 5,716 13.6

Consumers GWh 5,172 4,867 6.3

Gas combined cycle GWh 1,324 849 55.9

Electricity Users (managed supply points) No (mill.) 10.9 10.9 0.4Electricity Customers No (mill.) 10.3 10.3 -Gas users (managed supply points) No (mill.) 0.92 0.83 10.8

United Kingdom

Production GWh 4,850 5,289 -8.3Hydro GWh 237 222 6.6

Coal GWh 1,729 2,268 -23.8

Gas combined cycle GWh 1,970 1,549 27.1

Cogeneration GWh - - -

Renewables GWh 914 1,249 -26.8

Installed Capacity MW 4,186 6,462 -32.5Hydro MW 563 563 -

Coal* MW - 2,304 -100.0

Gas combined cycle MW 1,967 1,967 -

Cogeneration MW 1 1 -

Renewables MW 1,655 1,627 -

Distributed Electricity GWh 9,922 10,138 -2.1Gas Supplies GWh 17,912 17,358 3.19

Consumers GWh 13,350 13,935 -4.20

Gas Combined Cycle GWh 4,562 3,423 33.27

Electricity users (managed supply points) No (mill.) 3.5 3.5 0.02 Electricity users customers No (mill.) 3.2 3.3 -0.50Gas users (customers) No (mill.) 2.1 2.2 0.60

* Longannet closure at the end of March 2016

Page 7: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Core Business Figures

First Quarter / 5 / Results 2016

Operating Data Q1 2016 Q1 2015 %

USA

Production GWh 4,754 4,060 17.1Hydro GWh 112 66 67.9Gas combined cycle GWh 2.3 29.3 -92.3Cogeneration GWh 744 540 37.9Renewables GWh 3,896 3,424 13.8

Installed capacity MW 6,658 6,458 3.1Hydro MW 118 118 -Gas combined cycle MW 209 9 N/ACogeneration MW 636 636 -Renewables MW 5,695 5,695 -

Distributed Electricity GWh 9,652 9,037 6.8Gas supplies GWh 23,514 20,246 16.1Electricity users (managed supply points) No (mill.) 2.2 1.9 17.8Gas users (managed supply points) No (mill.) 1.0 0.6 72.5

Brazil

Production GWh 1,335 914 46.0Hydro GWh 730 382 90.9Gas combined cycle GWh 395 346 14.3Cogeneration GWh 39 44 -10.7Renewables GWh 171 143 20.0

Installed capacity MW 1,169 1,169 -Hydro MW 682 682 -Gas combined cycle MW 211 211 -Cogeneration MW 31 31 -Renewables MW 246 246 -

Distributed Electricity (under management)* GWh 13,675 14,047 -2.7Customers (managed supply points)* No (mill.) 13.2 12.8 2.8

Mexico

Production GWh 8,976 9,760 -8.0Gas combined cycle GWh 8,247 9,117 -9.5Cogeneration GWh 394 400 -1.3Renewables MW 335 243 37.9

Installed capacity MW 5,449 5,259 3.6Gas combined cycle MW 4,881 4,827 1.1Cogeneration MW 201 201 -Renewables MW 367.1 231.1 58.8

Rest of the World

Production GWh 470 485 -3.2Renewables MW 470 485 -3.2

Installed capacity MW 744 744 -Renewables MW 744 744 -

Note: In terms of operational data, IRFS11 do not apply (see details under Operational Performance for the period).(*) Includes 100% of Neoenergía.

Page 8: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Core Business Figures

6 / First Quarter Results 2016 /

Stock Market Data Q1 2016 Q1 2015

Market capitalisation EUR (MM) 37,685 38,344

Earnings per share (6,397,197,000 shares at 03/31/16 and 6,388,483,000 shares, at 03/31/2015) € 0.14 0.13

Net operating cash flow per share € 0.27 0.26

P.E.R. Times 15.31 16.53

Price/Book value (capitalisation to NBV at the end of the period) Times 0.93 1.10

Economic/Financial Data

Income Statement Q1 2016 Q1 2015

Revenues EUR (MM) 8,184.8 8,780.7

Gross Margin EUR (MM) 3,649.9 3,613.7

EBITDA EUR (MM) 2,008.0 2,136.3

EBIT EUR (MM) 1,249.5 1,343.8

Net Profit EUR (MM) 868.7 840.8

Net Operating Expenses/Gross Margin % 26.04 23.63

Balance Sheet March 2016 Dec. 2015*

Total Assets EUR (MM) 104,242 104,664

Shareholders’ Equity EUR (MM) 40,167 40,956

Net Financial Debt (1) EUR (MM) 28,274 28,067

ROE % 6.3 6.4

Financial Leverage (2) % 41.3 40.7

Net Debt/Equity Ratio % 70.4 68.5(1) Including TEI (2) Net Debt/(Net Debt + Shareholder’s Equity).

Credit Rating of IBERDROLA Senior Debt

Agency Rating Outlook Date

Moody’s Baa1 Positive 25 April 2015

Fitch IBCA BBB+ Stable 25 March 2014

Standard & Poors BBB+ Stable 22 April 2016

Page 9: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 7 / Results 2016

Iberdrola’s results in the period must be framed within the implementation of the company strategy, which is defined by the growing weight of regulated activities (transport and distribution) and the renewables business, both in the exploitation of investment opportunities and in the contribution to the Group’s profits, with an increasing emphasis on said contribution of business in the United Kingdom and the United States.

Furthermore, the first quarter of 2016 is positively affected by the performance of Iberdrola’s two reference currencies compared with first quarter 2015. The depreciation of the British Pound and the Brazilian Real has been partially offset by the appreciation of the US Dollar.In this respect, it is worth noting the following:- In Spain, the period has been characterised by

lower hydroelectric production compared to the previous year (+23%) given that 2015 was a year of low hydraulicity, together with a drop in the electricity demand of 1.3% equivalent to a 0.6% in terms adjusted to the number of working days and temperature, afected by the decrease of the industrial sector demand, although in annual terms it would grow a 2%. In this regard, it is important to note the evolution of the industrial sector of large energy consumers, showing a 2.0% growth in the last 12 months.

- In the United Kingdom, the electricity demand dropped by 3.0% compared to 2015, whereas customers’ gas demand (which does not include generation consumption) decreased by 3.1%, due to the low temperatures in the first quarter of the year.

- Avangrid area of influence on the East Coast of the United States saw a 7.1% decrease in electricity demand and a 20.9% decrease in gas demand.

- In Brazil, the demand in Iberdrola’s area of influence dropped by 2.7% compared to the same period of the previous year. Similarly, the demand in Elektro dropped by 7.2%, afected by the industrial sector demand in this area, whilst the demand in Neoenergia fell by 0.6%.

- During the first quarter of 2016, international markets commodities materials evolved as follows:•TheaveragepriceofBrentoilwasfixedat$33.9perbarrelcomparedwith$53.9perbarrellastyear (-37%).

•Theaveragepriceofgas(TTF)overtheperiodwas €12.9/MWh, compared with €21.4/MWh in the first quarter of 2015 (-40%).

•TheaveragepriceofAPI2coalstandsatUS$45.5/MT,comparedtoUS$61.0/MT(-25%)last year.

•TheaveragecostofCO2rightsdroppedfrom€7.1/MT in Q1 of 2015 to €5.7/MT in 2016 (-20%).

- The average movement of Iberdrola’s main reference currencies against the Euro during the first quarter of 2016 compared to the same period last year was as follows: the British Pound has depreciated by 3.5% and the Brazilian Real by 39.1%, whereas the US Dollar has risen in value by 4.2%.

- The following exceptional highlights should be noted with regard to the period analysed, and compared to the same period of the previous financial year: •FirstfullquarterofUILconsolidationintheUnited

States, which has mainly had an effect in the country’s Networks business.

•TheSpanishNetworkBusinesshassufferedtheeffects of the positive resettlements that took place in the first quarter of 2015 (+€29 million).

•LiberalizedbusinessinSpainhasbeenaffectedby the positive rulings in Q1 of 2015 (€57 million), corresponding to the reversals of the sanction of the CNMC and the Extremadura Eco-tax, and the drop in gas trading activities in 2016 (€65 million).

•TheGroup’samortisationsfellby6.2%inthequarter, compared to the same period of the previous year, due to the impairments in 2015 related to the closure of the Longannet power station in the United Kingdom (€32 million) and the extension, in 2016, by 40 years of the useful

Operating Highlights for the period

Page 10: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operating Highlights for the period

8 / First Quarter Results 2016 /

life of the towers and other components of the civil works on the wind farms (€37 million).

•TheNetFinancialIncomehasimprovedbyalmost 53%, thanks to the market value of FX hedges done at the beginning of the year on the British Pound and the US Dollar.

The main items of the Profit and Loss Account have evolved as follows:

M Eur Q1 2016 VsQ1 2015

Gross Margin 3,649.9 1.0%

Ebitda 2,008.0 -6.0%

Ebit 1,249.5 -7.0%

Recurring net profit 836.8 5.1%

Net profit 868.7 3.3%

The optimisation of financial soundness and liquidity as strategic priorities are summarised as follows:•NetDebtstandsat€28,274million,increasing

by EUR 1,969 million since March 2015 mainly due to the impact of the UIL consolidation. Eventhough financial leverage remains almost flat at 41.3% compared to 41.2% in the previous year.

•FundsfromOperationsattheendofthequartergrew by 2.3% and amounted to €1,696 million.

•Solvencyratiosimprovedtakingintoaccountpro-forma terms (including UIL contribution).

Page 11: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 9 / Results 2016

Operational performance for the period

1. Networks Business

1.1. Spain

At the end of March 2016, Iberdrola Distribución Eléctrica had 10.9 million supply points under management, and its energy distribution from the beginning of the year amounted to 23,626 GWh, a 2.3% decrease compared to the previous year as a result of milder temperatures and the drop of the industrial activity.

At the end of the first quarter of 2016, the CAIDI supply quality indicator stood at 14.0 minutes, a 13.3% decrease compared to the same period of 2015.

The table below shows the CAIDI (interruption time) and SAIFI (number of interruptions) values compared with 2015:

Year CAIDIaccumulated SAIFI acumulated

2015 16.1 0.29

2016 14.0 0.25

During this financial year the investment made by the business in Spain has made it possible to commission the facilities included in the following table:

Physical Units commissioned (March 2016) Total

Voltage

Very high High

Me- dium Low

Lines Overhead (km) 9 0.3 0.8 -39.8 47.7

Underground (km) 163.1 2 0.2 96.8 64

Substations Transformers (units) 2 2  

Capacity increase (MVA) 270.5 265 5.5  

Substations (units) (1) 1        

Secondary sub-stations

Secondary sub-stations (units) 63        

Capacity increase (MVA) (2) -22.4        

(1) On February the new substation ST Villanueva de la Torre de 132 kV in Guadalajara started to be operational.

(2) Transformers were taken to warehouses allocated in the Center, East and Madrid Regions.

In addition, during this quarter 572,668 smart-meters with a remote management system were installed as part of the STAR smart network project, with more than 7.1 million of smart-meters installed at the end of March 2016.

1.2. United Kingdom

At 31 March 2016, Scottish Power Energy Networks (SPEN) had more than 3.5 million supply points. The volume of energy distributed in the first quarter of 2016 was 9,922 GWh, representing a 2.1% decline in relation to the same period of the previous year because of the mild temperatures.

Customer Minutes Lost, CML was as follows:

CML (minutes) Jan-mar 2016

Jan-mar 2015

Scottish Power Distribution (SPD) 9.1 9.3

Scottish Power Manweb (SPM) 8.6 10.7

Page 12: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

10 / First Quarter Results 2016 /

The number of customers affected by interruptions per every 100 customers (Customer Interruptions, CI) was as follows:

CI (No of interruptions) Jan-mar 2016

Jan-mar 2015

Scottish Power Distribution (SPD) 12.2 10.5

Scottish Power Manweb (SPM) 7.8 9.1

Both the CI and CML comply with the quality limits established in the regulations.

1.3. United States - AVANGRID

1.3.1. Electricity Distribution

At the end of March 2016, Avangrid Networks had 2.2 million supply points. The distributed electricity volume for the first quarter of 2016 was 9,652 GWh, a 6.8% increase compared with the previous year, due to Iberdrola USA and UIL integration at the end of year 2015, to constitute Avangrid.

The System Average Interruption Frequency Index (SAIFI) was as follows:

SAIFI Jan-mar 2016

Jan-mar 2015

Central Maine Power (CMP) 0.38 0.32

NY State Electric & Gas (NYSEG) 0.23 0.21

Rochester Gas & Electric (RGE) 0.12 0.20

United Illuminating Company (UIL) 0.13 0.08

The Customer Average Interruption Duration Index (CAIDI) was as follows:

CAIDI (h) Jan-mar 2016

Jan-mar 2015

Central Maine Power (CMP) 2.31 1.77

NY State Electric & Gas (NYSEG) 2.28 1.73

Rochester Gas & Electric (RGE) 1.58 1.57

The System Average Interruption Duration Index (SAIDI) for UIL was as follows:

SAIDI (min.) Jan-mar 2016

Jan-mar 2015

United Illuminating Company (UIL) 12.30 6.90

1.3.2 Transmission

Maine Power Reliability Program Project The construction work for the MPRP project has been completed. Works continue on a small additional extension to this project, the Lewiston Loop Project, with a budget of 41 million dollars.

1.3.3. Gas

The number of gas users in the United States at the end of the first quarter of 2016 was more than 1 million (0.4 million from UIL), who were supplied 23,514 GWh over this quarter, up to a 16.1% from the same period the previous year, due to UIL consolidation.

1.4. Brazil

At the end of March 2016, Neoenergia had close to 10.7 million supply points in Brazil and Elektro had 2.5 million. The distributed electricity volume for 2016 was 9,608 GWh by Neoenergia and 4,067 GWh by Elektro, an average decrease of 2.7% compared with the previous year.

Page 13: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

First Quarter / 11 / Results 2016

The average interruption duration per customer (duração equivalente de interrupção por unidade consumidora, DEC) was as follows:

DEC (hrs) Jan-mar 2016

Jan-mar 2015

Elektro 2.42 2.44

Coelba 7.03 7.64

Cosern 3.53 4.50

Celpe 4.92 6.73

With regard to regulated electricity generation, the capacity of the projects in operation at the end of the first quarter of the year was as follows:

Central MW * MW Attributable**

Termope 540 211

Itapebi 450 176

Afluente 18 8

Rio PCH 39 11

Sitio Grande 25 10

Baguari 140 28

Corumbá III 94 24

Goias Sul 48 19

Dardanelos 261 52

Teles Pires 1,820 356

Total 3,435 892

* MW equivalent to 100 % of the power of the central. ** MW equivalent to the % of Iberdrola stake

The capacity of the Neoenergia projects under construction at the end of the period was as follows:

Central MW * MWAttributable ** Date

Baixo Iguaçu 350 96 2018

Belo Monte 11,233 438 2016-2018

Total 11,583 534

* MW equivalent to 100 % of the power of the central.* MW equivalent to the % of Iberdrola stake.

2. Generation business and customers

Iberdrola¹s Liberalized business production (corresponding to the total of MW managed *) increased in the period by 1% to 27,277 GWh. This figure includes 12,677 GWh in Spain (+ 5.2%), 3,936 GWh (-2.6%) in the UK, 858 GWh in the United States (+ 35.0%), 1,164 GWh in Brazil (+ 50.8%), and 8,641 GWh in Mexico (-9.2%).

* 39% of Neoenergía

2.1 Spain and Portugal

At the close of the first quarter of 2016, Iberdrola’s installed capacity in Spain totalled 20,081 MW, broken down as follows:

Page 14: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

12 / First Quarter Results 2016 /

SPAINConsolidated installed MW

Investee companies TOTAL

Hydro 9,712 9,712

Nuclear* 3,166 244 3,410

Coal 874 874

Gas C.C. 5,695 5,695

Cogeneration 298 92 390

Total 19,745 336 20,081

*Includes Garoña

Of the 20,081 MW, Iberdrola consolidated 19,745 MW and managed a further 336 MW through investee companies. Since the entry into force of IFRS11, they are now accounted for by the equity method.

Furthermore, Spanish Mainland Energy Production in the first quarter of 2016 was characterised by a high production of renewables (50.6% of the total) and a lower thermal production compared to the same period of 2015, both of coal (-42.4%) and gas (-20.2%). There was a 1.3% decrease in demand, although in terms adjusted to number of working days and temperature, the drop was 0.6%. It is worth noting the trend in electricity consumption of the segment of companies and industries, which increased by 1.6% over the last 12 months, broken down as +2.0% for industrial consumers and -0.5% for the service sector.

With regard to Iberdrola, during the first quarter of 2016, production increased by 5.2% to 12,677 GWh. The trend broken down by types of technology was as follows:• Hydroelectric production amounted to 5,605 GWh,

representing a 38.1% increase compared with the previous year. As at 31 March 2016, hydroelectric reserve levels were at 76.8% (equivalent to 8,656 GWh).• Nuclear production totalled 5,880 GWh,

representing a decline of 9.4%.

• Coal-fired thermal power stations totalled 194 GWh, compared to 689 GWh the previous year.• Meanwhile, combined-cycle production rose by

68.9% to 464 GWh.• Cogeneration plants registered a 1.5% drop in

production to 534 GWh.Of the 12,677 GWh produced, Iberdrola consolidated 12,566 GWh at EBITDA level, with 111 GWh being consolidated by the equity method in accordance with IFRS 11.

GWhConsolidated at

EBITDA level

GWh Investee

companies (equity method) TOTAL

Hydro 5,605 5,605

Nuclear 5,859 21 5,880

Coal 194 194

Gas C. Cycle 464 464

Cogeneration 443 90 534

Total 12,566 111 12,677

Page 15: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

First Quarter / 13 / Results 2016

Comparatively speaking, Iberdrola’s Energy Production figures can be broken down as follows:

2016 2015

Hydro 44.2% 33.7%

Nuclear 46.4% 53.8%

Coal 1.5% 5.7%

Gas combined cycle 3.7% 2.3%

Cogeneration 4.2% 4.5%

Total 100% 100%

Note: IFRS 11 is not applied.

As for sales, as at 31 March 2016, the portfolio managed by Iberdrola included 16,140,987 contracts, 560,088 more contracts than in the same period in 2015 (+3,6%). The breakdown is as follows:

Contracts %

Electricity contracts 10,295,681

Gas contracts 917,039

Contracts for other prod. & serv. 4,928,267

Total contracts 16,140,987 +3.6%

By market type they can be split into the following:

Contracts %

Liberalised market 12,242,131 76%

Last resort tariff 3,898,856 24%

Total 16,140,987 100%

Iberdrola’s electricity sales in the first quarter of 2016 came to 22.8 TWh measured at substation busbars, of which 14.1 TWh were sold on the deregulated market, 2.8 TWh correspond to energy at the voluntary price for small consumers (PVPC) and 5.9 TWh to other markets.

With regard to gas, in the first quarter of 2016 Iberdrola managed a total gas volume of 1.32 bcm, of which 0.76 bcm were sold in wholesale transactions, 0.33 bcm were sold to end customers and 0.23 bcm went towards electricity production.

2.2. United Kingdom

At the close of the first quarter of 2016, the installed capacity in the United Kingdom was 4,835 MW, after the closure of the Longannet power station at the end of March (2,304 MW). The breakdown of installed capacity is as follows:

United Kingdom (SPW) MW

Hydro 563

Coal 0

Gas combined cycle 1,967

Cogeneration 1

Total 2,531

With regard to production from Iberdrola’s traditional electricity generation in the United Kingdom, there was a 2.6% drop in the first quarter of 2016 to 3,936 GWh, compared to 4,040 GWh in the same period of the previous year.

The market share of the UK generation business in Q1 2016 was 6.0%, compared to 6.1% in the previous year. The highlights are as follows, broken down by production technology:• Coal plant production dropped by 23.8% to 1,729

GWh compared to 2,268 GWh in the same period of the previous year, due to the high ancillary services activity in Longannet lowering production

Page 16: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

14 / First Quarter Results 2016 /

and the drop in spreads, due to the increase in costs derived from the Carbon Tax and lower electricity prices. A major event was the closure of the Longannet coal plant at the end of March.• Combined cycle gas production rose by 27.1 % to

1,970 GWh compared to 1,549 GWh in the same period of 2015.• Hydroelectric production increased by 6.6 % to

237 GWh, compared to 222 GWh in 2015.Regarding sales, in Q1 2016 customers were sold 6,228 GWh of electricity and 13,350 GWh of gas, compared to the figures for Q1 2015: 6,254 GWh of electricity and 13,935 GWh of gas.

At the close of the first quarter of 2016, Scottish Power had 3.2 million electricity customers and 2.1 million gas customers, remaining at similiar levels that the previous year.

2.3. Mexico

The operational capacity of combined-cycle and cogeneration plants was 5,082 MW in the first quarter of 2016, remaining unchanged from the close of 2015.

Capacity (MW) MW

Monterrey 1,040

Altamira 1,036

Enertek 160

La Laguna 538

El Golfo 1,121

Tamazunchale 1,187

Total 5,082

A major event during the quarter was the award by Mexico’s Federal Electricity Commission (CFE) of the north-eastern plant (Topolobampo II) under the Independent Power Producer method, with a 25-year contract for 887 MW in the municipality of Ahome

to the north of the state of Sinaloa. This plant will be operational in 2018.

Through the project above, there are seven new plants in the construction phase, of which three will already be operational in 2016: the 300 MW Baja California III combined-cycle plant for the CFE with a 25-year contract, a 50 MW cogeneration plant, which is in the final start-up phase, and a new 300 MW combined-cycle unit in the Dulces Nombres plant in Monterrey for private customers.

With this award, the capacity contracted with CFE, Iberdrola’s largest client worldwide, under 25-year contracts (regulated generation) totals 6,277 MW.

Through all this, by 2018, in fully consolidated projects, Iberdrola’s operational thermal capacity in Mexico will reach 7,600 MW, where in addition to long-term capacity under contract, already indicated with the CFE, there are long-term contracts with top-tier private customers.

The development of new projects consolidates Iberdrola’s position in Mexico as the number two company after the CFE, and the number one private company with a considerable lead compared to the rest of the industry players.

The electricity sold in Mexico by combined-cycle and cogeneration plants totalled 8,642 GWh.

The plant load factor is 83%, given that the Iberdrola plants in Mexico play an essential role in baseload generation in Mexico. Reliability has been 99.6%, which is excellent within comparable combined-cycle parameters worldwide.

Page 17: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

First Quarter / 15 / Results 2016

3. Renewables

At the end of the first quarter of 2016, the Renewables Business had an installed capacity of 14,812 MW.

Over the last 12 months, Iberdrola installed 164 MW (and decommissioned 3.4 MW in mini-hydroelectric). Of the 14,812 MW, Iberdrola consolidated 14,211 MW and managed a further 601 MW through investee companies.

Installed MW Consolidated at EBITDA level (*)

MW managed by investee

companies (**) Total

Wind Energy Spain 5,508 244 5,753Wind Energy USA 5,484 161 5,645Wind Energy U.K. 1,640 15 1,655

Onshore 1,445 15 1,461

Offshore 194 0 194

Wind Energy Brazil 187 59 246Wind Energy Mexico 367 0 367Wind Energy RoW 615 122 737Total Wind Energy 13,802 601 14,403 Total Onshore Wind 13,607 601 14,208

Total Offshore Wind 194 0 194

Other Renewables 409 0 409

Total Inst. capacity 14,211 601 14,812

(*) IFRS11, figures rounded to the nearest unit.(**) Includes Neoenergia.

Production in the period associated to the installed and managed capacity was as follows:

GWhConsolidated at EBITDA level (*)

MW managed by investee

companies (**) Total

Wind Energy Spain 4,126 152 4,278Wind Energy USA 3,747 123 3,870Wind Energy U.K. 909 4 914 Onshore 700 4 704

Offshore 210 0 210

Wind Energy Brazil 117 54 171Wind Energy Mexico 335 0 335Wind Energy RoW 397 71 468Total Wind Energy 9,631 404 10,035

Total Onshore Wind 9,421 404 9,825

Total Offshore Wind 210 0 210

Other Renowables 222 0 222

Total Renew. Prod. 9,852 350 10,203

(*) IFRS11, figures rounded to the nearest unit.(**) Includes Neoenergia

Operational consolidated capacity reached 14,812 MW after adding the 192 MW in operation in the last 12 months.

Operative and Installed Capacity

MW

13,991

ConsolidatedInstalled

Operative 1Q 2015

Total Installed

192 14,18328 14,211

601 14,812

Operative 1Q 2016

Adiditions Testing Managed

Note: Figures rounded to the nearest unit

Page 18: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

16 / First Quarter Results 2016 /

At the close of Q1 2016, the geographical breakdown of the installed capacity of 14,812 MW was as follows:

Installed Capacity breakdown

MW

WindSpain

39 %

38 %Wind USA

Other Renewables 3 %Wind RoW 5 %

Wind Brazil 2 %Wind Mexico 2 %

Wind UK 11 %

Onshore wind energy

Iberdrola reached an installed onshore wind capacity of 14,208 MW (of which 13,607 MW are fully consolidated) following the addition of 164 MW in onshore wind power over the last twelve months.

Spain

Installed capacity at the end of the first quarter of 2016 amounted to 5,753 MW. Of this capacity, Iberdrola consolidated 5,509 MW and managed the remaining 244 MW through investee companies.

United States (Integrated as Avangrid)

The Company has a presence in 18 states, with a total of 5,645 MW, of which 161 MW are managed through investee companies. The works for Desert Wind (208 MW) are in progress with a PPA signed with Amazon in North Carolina, and a total of 460 MW is approved to begin construction in 2016 as follows: Tule (132 MW) in California, Deerfield (30

MW) in Vermont, and El Cabo (298 MW) in New Mexico.

The Company has 744 MW under construction and a pipeline of 1,700 MW of wind and 600 MW of solar, in order to sucessfully develop the remaining 600 MW established in the investment plan until 2020.

United Kingdom

The installed capacity in the United Kingdom totalled 1,461 MW. Of this capacity, 1,445 MW were consolidated and 15 were managed through investee companies.

Works are being carried out on the wind farms of Black Law Extension Phase I (45 MW), Ewe Hill 6WTG (13.8 MW), Dersalloch (69 MW), Killgallioch (239 MW) and Hare Hill extension (29.75 MW), Ewe Hill Phase 2 (36.8 MW), Black Law Ext Phase 2 (18.4 MW), due to be commissioned between 2016 and 2017. The Glen App wind farm (22 MW) is currently in preconstruction phase.

This entails a total of 474 MW additional, subject to the ROC system.

Brazil

In Brazil, Iberdrola has six wind farms with a total installed capacity of 246MW, of which 187 MW are fully consolidated and 59 MW are managed through Neoenergia.

Furthermore, six projects for a total of 174 MW in wind energy won the ‘Leilãos’ (tenders) that took place in 2014. Works are under way on the wind farms of Calango 6 (30 MW), Santana I (30 MW) and Santana II (24 MW).

Mexico

In Mexico, installed capacity totalled 367 MW following the completion of the Pier II wind farm (66 MW) in the state of Puebla, and the consolidation of capacity at Dos Arbolitos (70 MW).

Page 19: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

First Quarter / 17 / Results 2016

Rest of the World

Installed capacity at the end of 2015 was 738 MW, of which 616 MW corresponded to consolidated capacity and 122 MW were managed through investee companies, broken down as follows:

MW consolidated at

EBITDA level

MW managed by investee companies Total

Italy 10 122 132

Portugal 92 92

Greece 255 255

Cyprus 20 20

Hungary 158 158

Romania 80 80

Total 616 122 738

Offshore wind energy

The renewables business is currently developing offshore wind energy projects, mainly in the United Kingdom, Germany and France.

In 2014, the company launched the West of Duddon Sands project in the United Kingdom, located on the Irish Sea. The attributable installed capacity was 194 MW. The wind farm has completed its first full year of operation, exceeding its budget in terms of production by 13% and with a load factor for the first quarter 2016 around the 50%.

Iberdrola continues to implement the 350 MW Wikinger offshore project in the Baltic Sea (Germany). Offshore installation works have begun for this project. In parallel, progress is being made as planned with the manufacturing of components (turbines, jackets, OSS and electrical cable). Commissioning is expected in late 2017.

In the United Kingdom, Iberdrola is also developing the “East Anglia” project on the North Sea. In February 2015, the East Anglia I project was

awarded with a Contract for Difference in the first auction of its kind in the United Kingdom, for a maximum capacity of 714 MW. Progress was made in the project during 2015, with a view to meeting the Significant Financial Commitment required in March 2016. During the first quarter of 2016, the company made a final investment decision and signed the contract with Siemens for the supply of 102 wind turbines of 7 MW. During the rest of 2016, work on the project will continue with the selection of suppliers for the rest of the packages and signature of the necessary contracts.

In April 2012, the French Government awarded the consortium formed by Iberdrola and the French company EOLE-RES the exclusive rights for the operation of the offshore wind farm of Saint-Brieuc, with a capacity of 500 MW. The project was redefined technically in 2013 with the objective of using a more modern machine, with a unit capacity of 8 MW. The project filed a building permit application in October 2015. In 2016, the company will work towards answering the requests from the French administration as part of the process for approval of said permit, as well as on the consolidation of the main supply agreements for the future farm.

Other renewable technologies

The Renewables business has installations of other renewable technologies in several countries, amounting to a total of 409 MW, broken down as shown in the following table:

Technology MW Country

Mini Hydro 303 Spain

Photovoltaic 56 USA (50 MW) and Greece (6 MW)

Hybrid Thermo-solar 50 Spain

Total mw 409

Page 20: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

18 / First Quarter Results 2016 /

4. Shareholder remuneration

Iberdrola Scrip Dividend

The General Shareholders’ Meeting held on 8 April 2016 approved the Board of Director’s proposal for shareholder remuneration for 2015 of 0.28 euros gross per share. This is equivalent to a 4% increase in shareholder remuneration.

In addition, under point 6 of the agenda, two increases in paid-up share capital were approved for the purpose of implementing two new editions of the “Iberdrola Scrip Dividend” system for the free allocation of new shares to Company shareholders. Through the Scrip Dividend programme, shareholders are offered the chance to receive dividends in cash or in shares.

Reduction of Iberdrola’s share capital

Furthermore, at said General Shareholders’ Meeting, under point 12 of the agenda, approval was given to a reduction of share capital by the amortisation of a maximum of 157,197,000 treasury shares representing 2.46% of the Share Capital. The purpose of this capital reduction is to keep the number of shares at 6,240 million as a way to prevent the dilution of the “Iberdrola Scrip Dividend” programme.

5. Other significant events

5.1 Regulation in Spain

On 21 January, the Resolution of 18 January 2016 by the General Directorate of Energy and Mining Policy was published, resolving the auction for the allocation of the specific remuneration regime to new biomass-based electricity production facilities within the mainland power system and to wind technology facilities, pursuant to the provisions of Royal Decree 947/2015, of 16 October. Royal Decree 947/2015 stipulates a call for the granting of the specific remuneration regime to new biomass-based electricity production facilities

within the mainland power system and to wind technology facilities (200 MW of biomass and 500 MW of wind). The allocation procedure and the remuneration parameters are set out in ministerial order IET/2212/2015, and the auction was called by the State Secretariat for Energy’s Resolution of 30 November 2015. Said auction was held on 14 January. All of the MW, both wind and biomass, were awarded, with the peculiarity that in both technologies, the discount proved to be 100%, so that no awardee will receive remuneration for investment costs.

On 13 January, the Resolution by the General Directorate for Energy and Mining Policy was published, which determines the annual payment for 2015 and the amount pending offsetting at 26 October 2015 for the nuclear plant projects permanently stopped under additional provision seven of Law 54/1997, of 27 December, on the Electricity Sector. This resolution entails the permanent closure of the nuclear moratorium, since as of 26 October 2016, the Fund for securitisation of assets remaining from the nuclear moratorium, settles all of its payment commitments, leaving at zero the amount pending offsetting for the Lemóniz, Valdecaballeros and Trillo II plants (plants included in the nuclear moratorium).

5.2 Regulation in the United Kingdom

On 1 March 2016, DECC announced a consultation of proposals for the reform of Capacity Mechanisms (CM) strengthening penalties for non-fulfilment of the construction of committed plants and increasing the volume of capacity at auctions. The Government also announced that air quality aspects would have to be reconsidered for integrated diesel generation. In parallel, OFGEM announced that it is reviewing the costs reflected for such integrated generation, which may distort the outcomes of capacity auctions.

In the budgets submitted on 16 March 2016, the Government announced that there will be another three auctions for offshore wind farms by 2020, with an overall budget for the three of £730 million.

Page 21: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

First Quarter / 19 / Results 2016

The first auction, which is expected towards the end of 2016, has a budget of £290 million and a limit of £105/MWh. The objective is to reduce the price to £85/MWh for plants commissioned in 2026. The budgets also confirm the freezing of the Carbon Floor Price tax (CFP) at £18/tonne, although this cost is indexed in the RPI. The new calculations for the Levy Control Framework are presented, showing a reduction of £300 million in the planned over-expenditure at 2020 by £1,100 million. This is included in the permitted margin of £1,500 million.

On 17 March 2016, the Competition and Markets Authority (CMA) published the Provisional Decision on Remedies (PDR). In this publication, the CMA reduces the general proposal for price control in standard variable tariffs but also proposes a control in prepaid meters. It also includes the creation of a database to allow for competition on the market for capturing customers who have been on the standard variable tariff for more than three years and a proposal for allowing those with complex meters access to flat rates. The package of measures also includes the expected proposals for improving transparency in sales to SMEs, improving the industry code modification response capacity, reducing the restrictions of regulated tariffs, increasing the responsibilities of OFGEM (Office of Gas and Electricity Markets) and introducing zone-related charges for losses. Companies are asked to send their comments by early April.

5.3 Regulation in Brazil

Distributor exemption from liability: according to Resolution 706/2016, ANEEL has decided that it considers distributors to have involuntary exposure from the allocation of electricity “quotas” from generating plants that extended their concession pursuant to Law 12.783/2013, with such supply consequently not generating any loss for the distributors, who can pass the cost on to customers.

Tariff categories: In January, ANEEL reviewed Tariff Category amounts for 2016 and the time when each one should be activated. ANEEL also divided the

red category into two levels to better reflect different generation scenarios. Currently, the Tariff Categories are as follows: • Green category It is activated when the variable

cost per unit (VCU) of the last coal-fired plant dispatchedislessthan211.28R$/MWh.Itdoesnot entail any additional cost for the customer. • Yellow category: It is activated when the VCU of

the last coal-fired plant dispatched is greater than 211.28R$/MWhandlessthan422.56R$/MWh.Itimpliesasurchargeof15R$/MWhforthe customer.• Red 1 category: It is activated when the VCU of the

last coal-fired plant dispatched ranges from 422.56 R$/MWhto610.00R$/MWh.Thisimpliesasurchargeof30R$/MWhforthecustomer.• Red 2 category: It is activated when the VCU of

the last coal-fired plant dispatched is greater than 610.00R$/MWh.Itimpliesasurchargeof45R$/MWh for the customer.

In recent months, the country’s improved water situation has enabled dispatch from fewer coal-fired plants than necessary previously for energy security reasons. This has enabled a progression from the red category in February 2016 to the yellow category in March and finally to green in April.

GSF: ANEEL and the Chamber of Commerce for Power (CCEE) have defined the terms for implementing hydrologic risk renegotiation. Generators who, during the last year, had precautionary measures concerning hydroelectric plant guaranteed power output (GSF), may divide the payment that they must make into up to 6 instalments, with the appropriate adjustments. As a result, between April and May, CCEE may make the financial payments for months in arrears for 2016. This agreement is the result of a discussion that extended throughout 2015, and will allow payment creditors to receive the arrearages and to regularize transactions on the energy market.

Page 22: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

20 / First Quarter Results 2016 /

5.4 Regulation in the United States

On 18 December, Congress approved legislation extending and gradually reducing tax credits for renewable production (PTC) and solar investment (ITC). Any developers starting building works on a wind farm before 2017 will receive the credit in full, whereas those starting construction between 2017 and 2019 will receive a reduced credit. Developers starting building works on a solar project before 2020 will access an investment credit (ITC) of 30%. Projects starting construction after 2019 will be entitled to a lower ITC. The Treasury Department is expected to issue a guide soon with the procedure for the election of tax credits for renewable energy.

The Governor of Oregon approved legislation raising Oregon’s Renewable Portfolio Standard (RPS) up to 50% in 2040 and requiring the elimination of practically all coal generation by utilities in 2030. The RPS intermediate stages are 27% in 2025 (being above 25% in 2025 according to the previous law), 35% in 2030 and 45% in 2035. This law also encourages early purchasing of renewable energy, including the energy necessary to meet the requirements of Portland General Electric, which is preparing to decommission the Boardman coal plant in 2020.

On 9 February, the Supreme Court overturned a decision by the D.C. Circuit Court of Appeals granting a suspension in the implementation of the Clean Power Plan until said court resolves the dispute. The Appeals Court has received reports from several parties and plans to issue a decision this coming 2 June. The Environmental Protection Agency (EPA) estimates that this plan will reduce CO2 emissions in the USA by 32% compared to 2005 levels.

On 19 February, NYSEG and RG&E sent the New York Public Service Commission (NYPSC) their three-year Settlement Agreement, known as the “Joint Proposal”, with the electricity and gas price plan. Public hearings are in progress. Members of the PSC Commission are expected to deliberate on 19 May and the plan should be effective starting 1 May (the new tariffs would apply from 1 June).

Agreement with the Regulator

Duration 3 years

Shareholder¹s Return on Equity / Equity Ratio 9.0% / 48%

Efficiency sharing mechanism year 1(Company/Customers)

<9.5% 100%/0%>9.5% 50%/50%>10% 25%/75%10.5% 10%/90%

Up to 50% Equity Ratio

Efficiency sharing mechanism year 2 and 3 (Company/Customers)

Year 2 increase of 15 bp (up to 9.65%)

Year 3 increase of 25 bp (up to 9.75%)

On 9 March, FERC gave conditional approval to the proposal to keep the Ginna nuclear plant in operation until March 2017, thus protecting the New York electricity grid from possible failures that could arise if the plant is decommissioned for economic reasons. The commission determined that the terms of the Reliability Support Services Agreement between R.E. Ginna and RG&E, approved on 23 February by the NYPSC, are fair and reasonable.

On 22 March, an administrative judge of the Federal Energy Regulation Commission (FERC) issued an initial decision on Return on Equity (ROE) in New England, finding that the base ROE for each one of the periods was unfair and hardly reasonable but arguing “abnormal conditions in the capital markets” which are considered to guarantee a higher base ROE than the one proposed by the plaintiffs. The judge recommends a base ROE of 9.59% with a maximum limit of 10.42% for the first claim dated December 2012. For the claim covering the period from 2014-2015, the judge recommends a base ROE of 10.90% with a maximum limit of 12.19%. The decision is subject to approval by the Commission, which is expected in late 2016 or early 2017.

5.5 Regulation in Mexico

Wholesale Electricity Market: On 27 January 2016, the Short-term Energy Market for the Baja California

Page 23: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Operational performance for the period

First Quarter / 21 / Results 2016

Interconnected System came into effect, followed by the National Interconnected System two days later. For its part, the Baja California Sur Interconnected System did not begin to operate as the Advance Day Market until 22 March.Throughout March, the Secretariat of Energy (SENER) has officially published the following manuals:• Account Statement, Invoicing and Payments Manual

which sets out the business processes carried out by the CENACE and the participants for the financial settlement process for transactions on and off the market. • Dispute Resolution Manual which creates a

committee to resolve disputes arising between the CENACE, market participants, transporters and distributors; it also determines the procedures for resolving disputes.• Performance Guarantees Manual stipulating the

procedures for estimating potential charges for market participants and the transactions carried out on the wholesale electricity market, considering possible default on obligations assumed with the CENACE.

Legal separation of the Federal Electricity Commission (CFE): On 11 January, the SENER published the terms for the strict legal separation that establishes what the CFE must comply with to engage in the generation, transportation, distribution, sales and supply of primary inputs in the DOF (Mexican Official Gazette). On 28 January, the CRE granted the CFE permission to provide the Basic Supply Service. Subsequently, on 29 March the CFE published in the DOF the resolutions establishing the creation of Subsidiary Production Companies (EPS) for generation, the supply of basic services, transportation and distribution. One of the generation companies created will have the rights of administration of contracts corresponding to the 29 plants owned by Independent Energy Producers with installed capacity of 12,952 MW. All the EPS shall commence operations by no later than 28 June 2016 unless the SENER decides on a different date.

Long-term Auctions: On 30 March, the first long-term auction was awarded, covering approximately 85% of the clean energy needs and Clean Energy Certificates (CELs) of the Basic Services Supplier (currently CFE). Awardees included 18 bids corresponding to 11 companies. In this first auction, capacity needs were not covered and will be accumulated for the next auction. Obligations and Clean Energy Certificates: On 30 March, the CRE published in the DOF Resolution RES/174/2016, establishing the General Administrative Provisions for the functioning of the System of Management of Clean Energy Certificates and Fulfilment of Obligations. The flexibility mechanism already announced in the Energy Transition Act is established, stipulating that obliged participants may defer settlement of up to 50% for up to two years when there is not enough of a market for clean energy certificates. The deadline for enrolling in the Obliged Participants System will be 30 November 2017. The CELs obligation is 5% consumption for 2018, and 5.8% for 2019.

5.6 Regulation in the European Union

In January, the OJEU published Delegated Regulation 2016/89 amending Regulation 347/2013, concerning the Union’s list of projects of common interest. It is an update of the first list of Projects of Common Interest of 2013. New projects are added and others disappear (basically those for which implementation has begun). This list was published for the first time by the European Commission on 18 November 2015, at the time of the State of the Energy Union Report.

Page 24: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

22 / First Quarter Results 2016 /

1. Relevant Information

1.1 AVANGRID

The merger of Iberdrola USA and the US company UIL, and its subsequent establishment as AVANGRID has been effective since 16 December 2015.

In the first quarter of 2016, UIL contribution to Gross Margin is Eur 228 million and Eur 107 million in Ebitda.

2. Analysis of the Consolidated Profit and Loss Account

The most notable figures for the first quarter of 2016 are as follows:

Eur Millions Jan-Mar 2016

Jan-Mar 2015 %

Revenue 8,184.8 8,780.7 -6.8%

Gross margin 3,649.9 3,613.7 +1.0%

Ebitda 2,008.0 2,136.3 -6.0%

Ebit 1,249.5 1,343.8 -7.0%

Recurring net profit 836.8 796.1 +5.1%

Net Profit 868.7 840.8 +3.3%

Operating cash flow 1,695.9 1,658.5 +2.3%

2.1 Gross Margin

The Gross Margin rose to EUR 3,649.9 million, up 1.0% from the first quarter of 2015. The benchmark average currency variation reduces the gross margin by EUR 23 million.

EBITDA by business

Renewables

LiberalisedGen and Supply

RegulatedGeneration

Networks

45,0%

18%

4%

33%

Its growth is mainly the result of the following: • The Networks business increased by 8.6%

compared to 2015, reaching EUR 1,635.3 million primarily as a result of the consolidation of UIL. The operating highlights of the year were as follows: - Spain reached EUR 509.8 million (-0.6%) as a

result of greater income generated in the sum of EUR 26 million, which was not enough to fully offset the effect of settlements in previous financial years recorded in the first quarter of 2015 (+EUR 29 million).

- The United Kingdom totalled EUR 363.3 million (-8.0%) due to the income profile defined in the new regulatory framework for the RIIO-ED1 Distribution price control that came into effect in April 2015 (-EUR 13 million), along with the impact of the depreciation of the British Pound (-EUR 13 million).

- The contribution of USA in the period was EUR 682.2 million (+40.5%). To the positive effect of the consolidation of UIL (+EUR 219 million) we must add the appreciation of the US Dollar (+EUR 29 million), which overcomes the seasonal effect of a warmer climate than in the previous financial year (affecting IFRS accounting, but which will recover in the next quarters).

Analysis of the consolidated profit and loss account

Page 25: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Analysis of the consolidated profit and loss account

First Quarter / 23 / Results 2016

- Brazil’s Gross Margin (Elektro) stood at EUR 80.0 million (-28.9%), which was affected by the depreciation of the Real (-39% compared to changes in mid-March 2015; -EUR 31 million), which explains almost the entire drop experienced.

• The Wholesale and Supply Business decreased by 5.7% to EUR 1,344.0 million.- Spain reached EUR 724.9 million (-10.2%)

despite the greater volume of energy sold that fails to offset the lower income for wholesale gas activities given the current state of the market.

- The United Kingdom’s Gross Margin stood at EUR 457.2 million, which is almost identical to the figure for the first quarter of 2015, and was negatively affected by the depreciation of the British Pound. In local currency, this item increased 3.5%.

The generation business increased its contribution related to the lower procurement costs which offsets the increase in costs related to the Carbon Tax. The Retail business deteriorated slightly due to reduced sales as a result of a warmer quarter, as well as due to the increase in regulated costs (ROCs).

- Mexico contributed EUR 132.5 million to the Gross Margin (-9.8%) as a result of the reduced margins in contracts with private clients, which contracts are linked to the CFE rate. The CFE rate recovered during April, with an USD 8/MWh increase compared to March, reaching USD 63/MWh.

- Gas activities in the United States and Canada contributed EUR 27.9 million (+105.3%) as a result of improved trading transactions and gas storage contracted.

• The Renewables Business placed its Gross Margin at EUR 647.3 million (-0.7%). The main causes of this trend were:- Greater production in Spain (+9.4%) has

improved the gross margin, to reach EUR 258.1 million (+13.1%).

- The United States made a greater contribution, reaching EUR 197.7 million (+12.9%) as a result of better wind resource (production: +13.8%).

- A significant drop in the gross margin in the United Kingdom to EUR 123.9 million, caused by the adverse wind conditions (production: -26.8%), lower market prices and the elimination of LECs (Levy Exemption Certificates) in August 2015.

- Latin America and the Rest of the World contributed EUR 67.4 million.

• The contribution of Other Businesses totalled EUR 43.6 million (-17.0%).

2.2 Gross Operating Income - EBITDA

Consolidated EBITDA was down 6.0% compared to the first quarter of 2015, to reach EUR 2,008.0 million, despite the positive impact of UIL´s contribution (EUR 107 million).

In addition to the already explained Gross Margin, Net Operating Expenses increased by 11.3% to EUR 950.5 million, affected mainly by the inclusion of expenses as of 1 January of the North American company UIL (+EUR 94 million), excluding this effect this figure will remain flat. Furthermore, negative effects were experienced due to the reversal of a provision from a CNMC sanction in March 2015 (EUR 21 million) and by the implementation of the IT system on the previous year (Ofgem´s decision) EUR 23 million impact in the first quarter of 2016, which largely outweigh the fact that the payment of the General Shareholders’ Meeting attendance fees still has not been registered this year compared with EUR 25 million in first quarter of 2015.

The Tax item increased by 10.9% to EUR 691.5 million, due to the impact recorded in 2015 of EUR 41 million for the favourable ruling on the Extremadura Eco-Tax and the derogation of the CO2 rights, which affects the year-on-year comparison. UIL’s consolidation represents EUR 22 million more in Taxes.

Page 26: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Analysis of the consolidated profit and loss account

24 / First Quarter Results 2016 /

2.3 Net Operating Income - EBIT

EBIT was EUR 1,249.5 million, down 7.0% compared with 2015. Depreciations and Provisions dropped by 4.3%, totalling EUR 758.5 million:- The Depreciations item saw a decrease of 6.2% to

EUR 707.6 million, a reflection of the impact of the write down of Longannet at the end of 2015 in light of its closure in March of this financial year, and also due to the extension to 40 years of the useful life of the towers and civil works of the onshore wind farms in accordance with sector standards (+ EUR 37 million).

- The Provisions item came to EUR 50.9 million, with a higher expense of EUR 13 million, representing a 34% increase.

2.4. Financial Income

The net financial income was -EUR 140.1 million, which is an improvement of EUR 155.4 million compared to last year.- The decrease in the average cost of debt, down to

3.55% (68 basis points less than the previous year) has contributed to the 7% reduction in the financial result relating to debt.

- The hedges carried out linked to FX results generate a positive result derived from the depreciation of the US Dollar and the British Pound against the Euro from the beginning of 2016 until the close of March.

- Other non-recurring contingencies, such as the recognition of financial result derived from the 2012 deficit and the restatement of provisions, have contributed to the improved financial income.

Q1 2015

Q1 2016 Dif.

Debt Result -268.7 -249.5 +19.2

Derivatives and exchange differences -30.5 +79.9 +110.4

Others +3.7 +29.5 +25.8

Financial income(/loss) -295.5 -140.1 +155.4

2.5 Income from Companies Consolidated by the Equity Method

The item Income from Companies Consolidated by the Equity Method amounted to EUR 10 million (-46.7%), primarily as a result of the restructuring of the wind farm business in Italy (-EUR 11 million).

Neoenergia contributes to results with EUR 16 million by equity method.

2.6 Income from Non-Current Assets

Income from Non-Current Assets amounted to EUR 29.1 million, down 59.6% compared to 2015. In the first quarter of 2016, the most significant transaction was the sale of Iroquois (a minority share in a local gas network) in the United States.

Page 27: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Analysis of the consolidated profit and loss account

First Quarter / 25 / Results 2016

2.7 Net Profit

Lastly, Net Profit rose to EUR 868.7 million, up 3.3% compared to 2015. Recurring Net Profit amounted to EUR 836.8 million (+5.1%).

Corporate income tax decreased by EUR 35 million, due to a lower tax rate in Spain (from 28% to 25%) and United Kingdom, and EUR 37 million from tax corrections of previous years.

Funds from Operations at 31 March 2016 were at EUR 1,695.9 million compared with the EUR 1,658.5 million at the same period of the previous year. The evolution of the benchmark credit ratios is as follows:

Q1 2016 Q1 2015* Q1 2015Reported

Funds Generated from Operations (FFO)***/ Net Debt**

21.8% 20.3% 21.1%

Retained Cash Flow (RCF)****/Net Debt** 19.2% 17.2% 17.8%

Net Debt**/EBITDA 3.9x 3,81x 3.69x

* Pro-forma including UIL contribution** Including TEI. *** Net Profit + Minority Results + Amort. and Prov. - Equity

Accounting - Net Non-Recurring Results - Financial Provisions + Dividends of companies consolidated by the equity method – Adjustment of tax deductible items and other effects – Removal of tax effect of revaluation of balance sheets.

**** FFO – Dividends

Page 28: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

26 / First Quarter Results 2016 /

1. Networks business

The key figures for the Networks business are as follows:

(Eur M) Q1 2016 vs Q1 2015

Revenues 2,397.1 6.9%

Gross Margin 1,635.3 8.6%

EBITDA 932.4 -3.7%

EBIT 622.4 -5.7%

The Networks business increased Gross Margin by 8.6% as a result of the consolidation of UIL, despite a non-recurrents negative impacts (EUR 89 million) that would be reversed during the year.

1.1 Spain

(Eur M) Q1 2016 vs Q1 2015

Revenues 510.9 -0.8%

Gross Margin 509.8 -0.6%

EBITDA 387.4 -2.9%

EBIT 277.0 -6.1%

a) Gross Margin

The Gross Margin of the Networks Business in Spain fell slightly (-0.8%) to EUR 509.8 million as a result of increased investment income from previous years (EUR 26.3 million), surpassed by positive resettlements accounted for in the first quarter of 2015 (EUR 29.3 million), which penalises the comparison.

b) Operating Profit / EBIT:

EBITDA for this Business totalled EUR 387.4 million, down 2.9%.

Net Operating Expenses increased by 6.9% to EUR 96.3 million, increased by intercompany turnover.

EBIT for the Networks Business in Spain totalled EUR 277.0 million (-6.1%). Amortisations and Provisions came to EUR 110.4 million (+6.4%), as a result of the commissioning of new assets.

Depreciations and Provisions came to EUR 110.4 million (+6.4%), as a result of the commissioning of new assets, which mainly included meters and measurement devices.

1.2 United Kingdom

(Eur M) 1Q 2016 vs 1Q 2015

Revenues 378.9 -7.4%

Gross Margin 363.3 -8.0%

EBITDA 288.5 -6.9%

EBIT 214.9 -9.3%

a) Gross Margin

The Gross Margin of the Networks Business in the United Kingdom (Scottish Power Energy Networks-SPEN) reached EUR 363.3 million (-8.0%), negatively affected by the exchange rate which left EUR 12.9 million, and by the revenue profiling in the Distribution business after the entry into force of RIIO-ED1 as from 1 April 2015 (-EUR 13 million).

b) Operating Profit / EBIT:

EBITDA amounted to EUR 288.5 million (-6.9%) with a decrease in Operating Expenses of 16.7% to EUR 48.3 million, due to fewer net external services and the depreciation of the pound. Taxes decreased 2.9% to EUR 26.5 million, being also afected by FX.Depreciations and Provisions totalled EUR 73.6 million (+1.1%) affected by the new assets commissioned.

Results by business

Page 29: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Results by business

First Quarter / 27 / Results 2016

1.3 United States

(Eur M) Q1 2016 vs Q1 2015

Revenues 1,168.0 44.5%

Gross Margin 682.2 40.5%

EBITDA 206.6 10.5%

EBIT 105.1 24.7%

a) Gross Margin

The merger of Iberdrola USA and UIL, and its subsequent establishment as Avangrid has been efective since 16 December 2015. The resultant Company increased its contribution to the Gross Margin by 40.5%, to reach EUR 682.2 million, not only as a result of the consolidation of UIL (EUR 228 million), but also by the appreciation of the dollar (+4.2%). These effects were partially offset by warmer weather compared with the first quarter last year, resulting in lower demand (-7.1% in electricity and -20.9% of gas in Avangrid reference area), with an impact on the accounts in IFRS that will recover over the coming quarters.

b) Operating Profit / EBIT

EBITDA increased by 10.5% to EUR 206.6 million. Net Operating Expenses of EUR 243.1 million, should be added to the change in Gross Margin due to the aforementioned effects of the UIL consolidation, FX and other non-recurrent one-offs in this quarter which effect that would be dilute during the year.

EBIT totalled EUR 105.1 million (+24.7%), following the deduction of Depreciations and Provisions totalling EUR 101.5 million, which were down 1.1% due the reclassification of asset decommissioning items, from depreciations to external services.

1.4 Brazil

Following the application of IFRS 11 in 2014, only Elektro is included in this section, as Neoenergia is now consolidated by the equity method.

(Eur M) Q1 2016 vs Q1 2015

Revenues 339.2 -33.4%

Gross Margin 80.0 -28.9%

EBITDA 49.8 -31.7%

EBIT 25.4 -41.6%

a) Gross Margin

In Brazil, the Gross Margin totalled EUR 80.0 million (-28.9%), mainly impacted by the 39% depreciation of the Brazilian Real (-EUR 31.2 million), which accounts for almost the entire decline suffered.

b) Operating Profit / EBIT

EBITDA for the area amounted to EUR 49.8 million, down 31.7%.

Net Operating Expenses totalled EUR 29.4 million and decreased by 23.9% compared to the first quarter of 2015, due to depreciation of the Brazilian Real.

Depreciation and Provisions represent EUR 24.5 million (-17.1%), also affected by the exchange rate, since they increased in local currency due to a rise in delicuency provision owing to high energy prices for the end customer and the economic crisis.

As a consequence of this, EBIT amounted to EUR 25.4 million (-41.6%).

Page 30: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Results by business

28 / First Quarter Results 2016 /

2. Generation and supply business

The key figures for the Generation and Supply business are as follows:

(Eur M) Jan-Mar 2016 vs Jan-Mar 2015

Revenues 5,349.9 -12.7%

Gross Margin 1,344.0 -5.7%

EBITDA 640.6 -18.1%

EBIT 406.6 -21.7%

The Generation and Client business decreases its contribution to Gross Margin and EBITDA as a result of the lower contribution of the Spanish business impacted by positive line items in 2015 without correspondence in this fiscal year, and to the lower revenues from gas wholesale operations given the current market situation, the customers compensation stablished by Ofgem in the United Kingdom and lower margins on contracts with private clients in Mexico, which conditions are linked to the evolution of the CFE rate and which effect will be reduced during the year. All this effects impact negatively first quarter results, however would be diluted in the following quarters.

2.1 Spain

(Eur M) Jan-Mar 2016 vs Jan-Mar 2015

Revenues 3,016.3 -15.0%

Gross Margin 724.9 -10.2%

EBITDA 296.1 -31.5%

EBIT 163.2 -45.3%

a) Gross Margin

Gross Margin for Iberdrola’s Generation and Supply Business in Spain was down 10.2%, totalling EUR 724.9 million. The following can be highlighted:• Higher production of 5.2%, caused by the rise in

hydroelectric generation (+38.1%). The production cycle for gas grew by 68.9%, while coal-derived and cogeneration decreased by 71.8% and 1.5%, respectively. Nuclear power plants produced 9.4% less for scheduled maintenance and refuelling stoppages.• As a result of this production mix, the cost of

supplies decreased by 16.4%.• At 31 March 2016, hydraulic reserves account for

8,656 GWh, which translates to a 76.8% degree of filling of the reservoirs. • With respect to the application of the energy, 76%

corresponded with forward sales while 24% related to spot market sales.• There was a negative impact due to lower gas

trading activity in the first quarter of 2015, the differential effect of which was EUR 65 million.

b) Operating Profit /EBIT

EBITDA decreased 31.5% to EUR 296.1 million. Operating Expenses increased by 15.1% to EUR

182.1 million, mainly due to the effect in 2015 of the reversal of a provision for non-recurring items related CNMC ruling (EUR 20.5 million), which negatively affects the comparison.

The Tax item increased by 13.9% to EUR 246.7 million, where it is worth noting the extraordinary impact of the court ruling regarding the Extremadura Ecology Tax (EUR 37 million recognised in 2015), and which explains virtually the entirety of the increase.

The Depreciations and Provisions item remained flat (-0.6%), totalling EUR 132.9 million.

Page 31: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Results by business

First Quarter / 29 / Results 2016

As a result of the above, EBIT recorded a decrease of 45.3% compared to the same period of 2015, totalling EUR 163.2 million.

2.2 United Kingdom

(Eur M) Jan-Mar 2016 vs Jan-Mar 2015

Revenues 2,029.4 -12.7%

Gross Margin 457.2 -

EBITDA 224.6 -3.5%

EBIT 154.2 16.2%

a) Gross Margin

Gross Margin for Scottish Power’s Generation and Supply Business (Energy Wholesale & Retail) was EUR 457.2 million (0.0%). In local currency, this item grew by 3.5%. The following can be highlighted:- The Energy Wholesale & Retail Business improves

its contribution to the Gross Margin thanks to a higher production of gas and the lower procurement costs, which compensate the increase in the Carbon Tax that, since 1 April 2015, increased its price from £9.55/MWh to £18.08/MWh (+89%).

- Retail Business drops driven by lower sales of gas and electricity due to a warmer climate together with the higher non-energy costs due to the rise of the unit price of the ROCs (£16 m) and to the greater percentage of renewable energy that must be purchased (29%).

b) Operating Profit / EBIT

EBITDA for the Liberalized Business in the United Kingdom amounted to EUR 224.6 million (-3.5%). The pound remained stable.

Net Operating Expenses represented EUR 181.6 million (+8.2%), affected by the customers compensation stablished by Ofgem amounting to EUR

23 million, related to the implementation of the IT system on the previous year. In recurring terms and in local currency, there was a decrease of 2.4%.

Taxes totalled EUR 51.0 million (-10.3%), due to lower ECO costs as a result of the drop in total costs of the obligation.

Depreciation and Provisions represented EUR 70.4 million and were down 29.6%, due to lower depreciation in Longannet after the plant writte-off carried out in 2015 and the closure of which took place at the end of March this year.

2.3 Mexico

(Eur M) Jan-Mar 2016 vs Jan-Mar 2015

Revenues 314.2 -15.8%

Gross Margin 132.5 -9.8%

EBITDA 103.1 -9.3%

EBIT 80.4 -13.0%

a) Gross Margin

In Mexico, the Gross Margin totalled EUR 132.5 million (-9.8%) due to lower margins on contracts with private clients, the conditions of which are linked to the evolution of the CFE rate, although the impact of the latter will be gradually corrected throughout the year. The CFE rate recovered during April, with an USD 8/MWh increase compared to March, reaching USD 63/MWh.

b) Operating Profit / EBIT

EBITDA amounted to EUR 103.1 million (-9.3%). Net Personnel Expenses decreased by 12.2% to reach EUR 28.4 million. The Depreciations and Provisions item increased by 6.8% to EUR 22.7 million due to the aforementioned evolution of the US Dollar.

Lastly, EBIT of the business totalled EUR 80.4 million, with a 13.0% decrease.

Page 32: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Results by business

30 / First Quarter Results 2016 /

2.4 Others. Gas storage

(Eur M) Jan-Mar 2016 vs Jan-Mar 2015

Revenues 28.1 102.8%

Gross Margin 27.9 105.3%

EBITDA 16.9 487.6%

EBIT 9.0 N/A

a) Gross Margin

In this area, the Gross Margin totalled EUR 27.9 million, compared to EUR 13.6 million in Q1 2015, due to the improvement of both gas trading and contracted gas storage.

b) Operating Profit / EBIT

EBITDA of the gas business in the US and Canada obtained an outcome of EUR 16.9 million. Meanwhile, Net Operating Expenses stood at EUR 8.6 million.

Finally, the business achieved an EBIT of EUR 9.0 million compared to -EUR 4.8 million in 2015, increasing depreciation and provisions 3.3% to reach a total of EUR 7.9 million.

3. Renewables

(Eur M) Q1 2016 vs Q1 2015

Revenues 713.8 +0.9%

Gross Margin 647.3 -0.7%

EBITDA 441.6 +3.1%

EBIT 247.8 +19.2%

a) Gross Margin

During the first quarter of 2016 the Gross Margin stood at EUR 647.3 million, a figure slightly lower than that recorded for the previous period. It is necessary to analyse the trends in results separately for each market in which the company operates. In particular, the figures that stand out are those from Spain and the United States, which offset, among other factors, the weak wind resource in the UK after an extraordinary 2015. From the point of view of the consolidated results, the gross margin is explained by:- The average selling price of renewable production

stands at EUR 65/MWh, a decrease of 7%, which includes among others, a higher sales price for Spanish wind energy production, which not fully compensates the falling prices in the United States and the United Kingdom.

- Operating capacity at the end of the period stands at 14,182 MW, showing an increase of 1.4% from its value at 31 March 2015. The average operating capacity during the period increased by 2.2%. Production was at 9,852 GWh (+7.1%) due to the greater load factors, especially in the US.

- The consolidated load factor stood at 31.8%, up 1.1 percentage points compared to the same period last year, and also above the current long-term reference values. The wind load factor in Spain was very high, coming to 34.3%, 3.5 percentage points higher than the same period of the previous year. United States has a wind load factor of 31.3%, higher (+2.9 pp) than the previous period, despite the fact that wind resources have been lower than expected in the first quarter. In the United Kingdom (onshore wind power), a load factor of 22.6% lower than that of 2015 (-10.3 pp) was recorded, considerably lower than historical measurements. In Mexico and Brazil, both countries of strong wind resources, the load factors reached 41.8% and 28.6% respectively. The Rest of the World (RoW) registered a load factor of 29.5%.

Page 33: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Results by business

First Quarter / 31 / Results 2016

The company’s first offshore farm, ‘West of Duddon Sands’ recorded a load factor close to 50%.

By business, the Gross Margin trend was as follows:•Wind Energy Spain: Gross margin for the period

stood at EUR 251.5 million, up 19% due to a production increase of 13% and a price increase of 6% following the posting of a regulatory asset due to low prices in the market.

•Wind Energy USA: Gross Margin increased by 15% to reach EUR 187.3 million. Production increased by 14%, offsetting a decrease in the average dollar price of 3%. Meanwhile, Gross Margin reflected a 4% average appreciation of the dollar.

•Wind Energy United Kingdom - onshore: Gross Margin fell 32% to reach EUR 93.52 million, as a result of the 30% drop in production caused by, as already mentioned, highly unfavourable weather conditions during the quarter. Prices in local currency fell approximately GBP 5/MWh, and the pound depreciated by about 3%.

•Wind Energy United Kingdom - offshore: The West of Duddon farm contributed EUR 30.4 million to the Gross Margin of the business in the first half of the year, which represents a decrease of EUR 11 million compared to the previous year. Half of this decline is explained by the drop in production (-10%) compared to the previous year, which had unusually high resources; and the remainder is explained by a decrease in prices in pounds and for assuming the cost of transmission, as was expected following the sale of the offshore transmission line to a third party.

•Wind Energy Mexico: The increase in average operating capacity (+59%) offset the lower wind resources, and led to an increase in production of 38%. The appreciation of the dollar by 4% partially offset the drop in price in local currency (-19%) due to falling commodities that are part of the benchmark index of contracts with CFE. Taking all of these effects into consideration, Gross Margin totalled EUR 23.6 million (+15%).

•Wind Energy Brazil: The commissioning of several farms in Brazil increased the average operating capacity by 47%, which, in addition to a load factor 6.2 pp lower/higher [sic] than the previous year, led to a 22.1% increase in production. The average price billed has dropped by 11% in local currency, and the Real has been subject to an average depreciation of 39%. After these effects, Gross Margin in the country totalled EUR 8 million (-22%).

•Wind Energy Rest of the World: Production decreased by 3.4% as a direct result of a load factor that was slightly lower than the previous year, reaching 29.5%. The price variation added -4% and, in turn, the gross margin decreased by 7% to EUR 35.5 million.

•Mini-Hydro and Other Renewables: Gross Margin stood at EUR 10.5 million, impacted by income reassessment for the years 2009-2011 of the Puertollano solar thermal power station, amounting to approximately -EUR 10 million.

•Thermal Business in the United States: The Gross Margin for the country amounted to EUR 7 million.

b) Operating Profit / EBIT

- EBITDA registered a 3.1% increase, totalling EUR 441.6 million. In addition to the aforementioned Gross Margin (-0.7%), a decrease in Net Operating Expenses of 13.9%, as a result of the recording of non recurrent income from transmission rights in US and United Kingdom (Eur 20 million), should be noted. Excluding this effect, the Net Operating Expenses have risen only 2.2% and eliminating the exchange rate effect, would have risen only 1.1%.

- The Depreciation and Provisions item stands at EUR 193.8 million, down 12.1% since the previous year. The company has reassessed the useful life of assets in operation and, as a result, has changed its depreciation policy. As a result it now depreciates the cost of the civil works on the farms and the value of wind turbine towers over a term

Page 34: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Results by business

32 / First Quarter Results 2016 /

of 40 years. This measure has reduced expenditure on depreciation for the quarter by some EUR 37 million.

- Lastly, taking into account all of the above, EBIT amounted to EUR 247.8 million, up 19.2%.

4. Other businesses

(Eur M) 1Q 2016 Vs 1Q 2015

Revenues 186.0 -8.7%

Gross Margin 43.6 -17.0%

EBITDA -7.3 -48%

EBIT -10.1 -33%

a) Gross Margin

Gross Margin amounted to EUR 43.6 million, 17.0% lower than in the first half of 2015, due to the decrease in Engineering sales and the lower contribution of Real Estate.

b) Operating Profit/EBIT

EBITDA totalled EUR -7.3 million. Net Operating Expenses of these businesses amounted to EUR 50.4 million (-9.3%).

Depreciations and Provisions amounted to EUR 2.8 million and EBIT stood at -EUR 10.1 million.

5. Corporation

The Corporation item includes the costs of the structure of the Group and the administration services of the corporate areas that are subsequently billed to the other companies. It is worth highlighting the Taxes item, as it includes Spain’s Bono Social (Social Bonos).

Page 35: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 33 / Results 2016

Balance Sheet Analysis

January-March 2016

Mar. 2016 Vs Dec. 2015

Total assets 104,242 -0.4%

Fixed assets 62,293 0.04%

Intangible assets 19,819 -4.5%

Long-term investments 3,703 -0.22%

Shareholders’ equity 40,167 -1.93%

Adjusted net debt * 28,274 0.7%

* Including TEI

Iberdrola’s Balance Sheet at 31 March 2016 shows Total Assets of EUR 104,242 million, highlighting the maintenance of its solid asset strength.

1. Fixed assets

Total net investments in January to March 2016 period totalled EUR 895.6 million. These can be broken down as follows:

(Euros M) Jan-Mar. 2016 %

Networks Business 321.9 35.9%

Spain 55.4

UK 139.6

Iberdrola USA 115.1

Brazil 11.8

Renewables Business 403.6 45.1%

Spain 3.1

UK 302.5

USA 98.1

Generation and Supply Business 141.6 15.8%

Spain 38.0

UK 15.5

Mexico 87.5

USA and Canada 0.6

Other Business 11.2 1.3%

Corporation and Adjustments 17.3 1.9%

Total investment 895.6 100.0%

Investments in the period were focused on the Renewables Business and Networks activities. These items account for 81% of total investments in the period.

Page 36: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

34 / First Quarter Results 2016 /

Investments by businesses (January-March 2016)

Generationand Supply

Corporation and Adjustments

1.9%

Other Businesses 1.3%

Networks

Renewables

35.9%

45.1%15.8%

By geographic areas, investment for the period was spread according to the following graph:

Investments by geographical areas (Jan-Mar. 2016)

USA

UnitedKingdom

Brazil 1.3%

Mexico Spain13.7%

51.3%

9.8%

23.9%

As regards the Renewables Business, investments in the period amounted to a total of EUR 403.6 million, representing 45.1% of total investments, highlighting the Eur 236 million was aimed at Offshore projects.

Under the “Networks Business”, Scottish Power Networks made investments worth EUR 139.6 million. Networks investments in the US reached EUR 115.1 million in the period.

2. Share Capital

Following the implementation of the paid-up capital increase for the Scrip Dividend on 26 January 2016, the Company´s Share Capital totalled 6,397,197,000 bearer shares with a nominal value of EUR 0.75 each.

In line with the commitment announced in the Outlook for 2016-2020 to maintain the number of shares stable at 6,240 million, the General Shareholders’ Meeting approved the amortisation of 157,179,000 shares, representing 2.46% of the current share capital.

3. Financial Debt

Adjusted net financial debt to 31 March 2016 decreased by EUR 351 million to EUR 28,274 million compared to EUR 28,625 million at 31 March 2015 (pro-forma including UIL contribution). Financial leverage remains almost flat to 41.3% from 41.2% of the same period of the previous year.

The rating is broken down as follows:

Credit Rating of IBERDROLA Senior Debt

Agency Rating Outlook Date

Moody´s Baa1 Positive 25 April 2016

Fitch IBCA BBB+ Stable 25 March 2014

Standard & Poor’s BBB+ Stable 22 April 2016

As regards the evolution of the financial cost of the Company, at 31 March 2016 it was 3.55%, 67 b.p. below that the previous year.

The debt structure can be broken down by currency* and interest rate** as follows:

Page 37: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

First Quarter / 35 / Results 2016

March 2016 March 2015

Euro 49.0% 53.0%

British pound 22.0% 23.3%

Dollar 27.8% 23.1%

Brazilian Real and other currencies 1.2% 0.7%

Fixed Rate 44.3% 43.3%

Variable Rate 55.5% 56.6%

Capped Rate 0.2% 0.2%

(*) Net Debt including TEI and forwards (**) Gross Debt

In accordance with the policy of minimising the financial risks of the Company, the foreign currency risk has continued to be mitigated through the financing of the international businesses in local currencies (British pound, Brazilian real, US dollar, etc.) or in their functional currencies (US dollar, in the case of Mexico). The net debt in US dollar increases to 27.8% from 23.1% due to UIL consolidation.

The debt* structure by subordination is shown in the following Table:

March 2016 March 2015

Corporation 69.3% 74.5%

UK 9.1% 10.1%

USA 15.1% 9.3%

Brazil 2.6% 3.3%

Mexico 2.4% 1.8%

Others 1.5% 1.0%

Total 100% 100%

(*) Net Debt.

This debt* can be broken down by financing source as follows:

March 2016 March 2015

Euro market 33.2% 38.9%

Dollar market 24.3% 19.4%

British pound market 11.8% 13.4%

Remaining bonds 1.1% 1.4%

Notes 6.7% 4.9%

EIB 6.6% 7.2%

Project Finance 1.9% 3.9%

Bank loans 13.7% 10.0%

TEI 0.7% 1.0%

Total 100% 100%

(*) Gross Debt.

Iberdrola has a strong liquidity position at 31 March 2016, exceeding EUR 8,500 million, equivalent to more than 24 months of the company’s financing needs.

Credit Line Maturities Available

2017 & onwards 7,198

Total Credit Lines 7,618

Cash & Short Term. Fin. Invest. 963

Total Adjustment Liquidity 8,581

Iberdrola has a good debt maturity profile, around 6.5 years of average debt life. The following chart shows the debt maturity profile* of Iberdrola at 31 March 2016.

Page 38: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

36 / First Quarter Results 2016 /

Debt maturity profile Eur M

2016 2017 2018 2019 2020 2021+

2.0 2.2

15.5

3.33.4 2.9

Lastly, the change in financial leverage was as follows:

Mar. 2016

Mar. 2015*

Mar. 2015reported

Shareholder’s Equity 40,167 40,028 37,506

Gross Debt** 30,383 31,348 29,550

Cash flow 972 1,430 1,952

Asset derivates and s/t Fin. Invest. 1,137 1,293 1,293

Net Debt ** 28,274 28,625 26,305

Leverage 41.3% 41,7% 41.2%

(*) Pro-forma including UIL contribution(**) Including TEI

Page 39: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

First Quarter / 37 / Results 2016

4. Working capital

Working capital shows a drop of EUR 22 million since March 2015, mainly as a result of several different effects: - Asset and liability balances with Public

Administrations amount to, all together, an increase of working capital of EUR 200 million.

- A drop in inventories of EUR 196 million that reduces the working capital.

- Other effects of minor relevance.

CURRENT ASSETS Mar-16 Mar-15 Variation

Assets held for sale 44 - 44

Nuclear Fuel 337 320 17

Inventories 1,670 1,883 (213)

Commercial debtors and other accounts receivable 6,229 6,376 (147)

Current financial investments 649 776 (127)

Asset derivative financial instruments 231 168 63

Public Administrations 632 719 (87)

Total current assets*: 9,791 10,242 (451)

* Does not include cash or debt asset derivatives.

CURRENT LIABILITIES Mar-16 Mar-15 Variation

Provisions 260 240 20

Liability derivative financial instruments 291 272 19

Commercial creditors and other accounts payable 7,211 7,392 (181)

Public Administrations 1,662 1,949 (287)

Total current liabilities**: 9,423 9,853 (430)

** Does not include financial debt and debt liabilities derivatives.

Net working capital 367 389 (22)

Page 40: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

38 / First Quarter Results 2016 /

5. Funds generated from operations

The Funds Generated from Operations as at 31 March 2016 totalled EUR 1,695.9 million, compared with EUR 1,658.5 million in the same period of the previous year.

Jan-Mar.

2016Jan-Mar.

2015 Variation

Net Profit (+) 868.7 840.8 3.3%

Amortisations (-) -758.5 -792.5 -4.3%

P/L Equity (-) 10.0 18.7 -46.7%

Extraordinary results, net of taxes (-) 29.1 72.1 -59.6%

Extraordinary Corporate Taxes (-) -10.7 -26.9 -60.2%

Financial provisions capitalized (-) -26.7 -33.7 -20.6%

Minority P/L (-) -25.5 -9.0 182.8%

Adjustment of tax deductible items * (+) 44.9 44.9 -

Equity Dividends (+) - 1.5 -100.0%

FFO 1,695.9 1,658.5 2.26%

Note: the signs of the figures (positive or negative) make reference to their condition of income or book expense.

* Cash flow

Page 41: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

First Quarter / 39 / Results 2016

6. Financial transactionsSummary of the main financial transactions carried out in 2016

Borrower Transaction Amount Currency Coupon Maturity dateIberdrola International BV EMTN 50 EUR €6m+0.75% 7 yearsIberdrola International BV Green Bond 1,000 EUR 1.125% 10 yearsIberdrola Distribución * EIB loans 325 EUR - 7 yearsIberdrola SA Syndicated loan 1,900 EUR - +1 year (5 years)Iberdrola SA Syndicated loan 2,500 EUR - +1 year (5 years)Iberdrola México * Bank loan 300 USD - 2 yearsIberdrola SA Bilateral loan 49.5 EUR - 3+1+1 yearsAvangrid Revolving loan 1,500 USD - 5+1+1 years

* Financing agreement signed in 2015, not entailing new debt.

First Quarter Financing

MONEY MARKET

Bond Issues on the Euromarket

On 15 February, Iberdrola made a private issue in the amount of EUR 50 million with a coupon of 6-month Euribor + 0.75% and a maturity of 2023.

On 14 April, Iberdrola Group successfully closed the second issue of green bonds, after the one made in 2014, amounted to EUR 1,000 million with a 1.125% coupon and 2026 maturity. This issue, in which Iberdrola obtained the lowest cost in ten years, was four times oversubscribed, placing a 68% to Socially Responsible Investment (SRI) Funds. The funds obtained will be used to refinance investments in wind farms in Spain, Portugal and the United Kingdom.

BANKING MARKET

On 4 January, Iberdrola Distribución had a new direct loan disbursed that was signed with the EIB in 2015 in the amount of EUR 325 million maturing in 2023.

On 13 February, Iberdrola extended the term of two syndicated loans in the amount of EUR 4,243 million, postponing their maturity by a year until February 2021. All of the lenders except one (EUR 157 million) approved the extension.

On 25 February, Iberdrola México S.A. de C.V. had a syndicated bank loan disbursed that was signed in 2015 in the amount of USD 300 million with a maturity of March 2018.

On 17 March, Iberdrola signed two bilateral loans for a total of EUR 49.5 million with a three-year maturity and possible extension of 1+1 years to meet the Group’s financing needs.

On 5 April Avangrid, the Group’s subsidiary in the U.S., carried out a reconfiguration of its lines of credit in order to strengthen its liquidity position. The company signed a revolving loan in the amount of USD 1,500 million with a five-year maturity and possible extension of 1 + 1 years, at the same time cancelling three lines already in existence. The transaction involved increasing liquidity, postponing maturity and improving the financing terms. The loan had the participation of 19 financial institutions and was 50% oversubscribed.

Page 42: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet Analysis

40 / First Quarter Results 2016 /

7. Credit Ratings

Moody’s Standard and Poor’s Fitch Ibca

Rating Outlook Date Rating Outlook Date Rating Outlook Date

Iberdrola S.A. Baa1 Positive April 2016 BBB+ Stable April 2016 BBB+ Stable Mar. 2014

Iberdrola Finance Ireland Ltd.(*) Baa1 Positive April 2016 BBB+ April 2016 BBB+ Stable Mar. 2014

Iberdrola Finanzas S.A.U.(*) Baa1 Positive April 2016 BBB+ April 2016 BBB+ Stable Mar. 2014

Iberdrola Finanzas S.A.U. (national scale)(*) Aaa(mex) Stable Nov 2012 mxAAA April 2016 AAA (mex) Stable Mar. 2014

Iberdrola International B.V.(*) Baa1 Positive April 2016 BBB+ April 2016 BBB+ Stable Mar. 2014

Avangrid Baa1 Stable April 2015 BBB+ Stable April 2016 BBB Positive Dec. 2014

CMP A3 Positive Febr. 2015 A- Stable April 2016 BBB+ Stable Nov. 2013

NYSEG A3 Stable Jan. 2014 A- Stable April 2016 BBB+ Stable Nov. 2013

RG&E Baa1 Stable Jan. 2014 A- Stable April 2016 BBB Positive Dec. 2014

UI Baa1 Stable April 2015 BBB+ Stable April 2016 BBB Positive Dec. 2014

CNG Baa1 Stable April 2015 BBB+ Stable April 2016 BBB Positive Dec. 2014

SCG Baa1 Stable April 2015 BBB+ Stable April 2016 BBB Positive Dec. 2014

BCG Baa1 Stable April 2015 BBB+ Stable April 2016 BBB Positive Dec. 2014

Scottish Power Ltd Baa1 Positive April 2016 BBB+ Stable April 2016 BBB+ Stable Mar. 2014

Scottish Power UK Plc Baa1 Positive April 2016 BBB+ Stable April 2016 BBB+ Stable Mar. 2014

Scottish Power UK Holdings Ltd. Baa1 Positive April 2016 BBB+ Stable April 2016

Scottish Power Finance US Inc Baa1 Positive April 2016 BBB+ Stable April 2016

Scottish Power Energy Networks Holdings Ltd BBB+ Stable April 2016

ScottishPower Generation Ltd. Baa1 Positive April 2016 BBB+ Stable April 2016

SP Transmission Ltd Baa1 Positive April 2016 BBB+ Stable April 2016

SP Manweb plc Baa1 Positive April 2016 BBB+ Stable April 2016

SP Distribution plc Baa1 Positive April 2016 BBB+ Stable April 2016

ScottishPower Energy Management Ltd. Baa1 Positive April 2016 BBB+ Stable April 2016

ScottishPower Energy Retail Ltd. Baa1 Positive April 2016 BBB+ Stable April 2016

Scottish Power Investment Ltd Baa1 Positive April 2016 BBB+ Stable April 2016

Neoenergia S.A. BB Negative Feb 2016

Celpe BB Negative Feb 2016

Coelba Ba2 Negative Feb 2016 BB Negative Feb 2016

Cosern BB Negative Feb 2016

Neoenergía (national scale) brAA- Negative Feb 2016

Celpe (national scale) brAA- Negative Feb 2016

Coelba (national scale) brAA- Negative Feb 2016

Cosern (national scale) brAA- Negative Feb 2016

Elektro (national scale) brAA- Negative Feb 2016

(*) Guaranteed by Iberdrola S.A.

Page 43: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 41 / Results 2016

Balance Sheet (Unaudited)

M Eur

ASSETS March 2016 December 2015 Variation 

Non-Current Assets: 93,074 93,985 -911

Intangible assets 19,819 20,760 -940

Goodwill 9,026 9,353 -327

Other intagible assets 10,793 11,407 -614

Real Estate properties 480 481 -1

Property, plant and equipment 61,813 61,789 24

Property, plant and equipment in use 55,997 56,827 -831

Property, plant and equipment in the course of construction 5,816 4,961 855

Non current financial investments 3,703 3,711 -8

Investments accounted by equity method 2,005 2,050 -45

Non-current financial assets 68 92 -23

Other non-current financial assets 730 609 121

Derivative financial instruments 900 960 -60

Non-current receivables 600 615 -15

Deferred tax assets 6,660 6,630 30

Current Assets: 11,168 10,679 488

Assets held for sale 44 44 -

Nuclear fuel 336 350 -14

Inventories 1,670 1,797 -127

Current trade and other receivables 6,861 6,048 813

Tax receivables 270 411 -141

Other tax receivables 362 267 95

Trade and other receivables 6,229 5,370 859

Current financial assets 1,237 1,288 -51

Current financial assets 5 5 -

Other current financial assets 644 683 -39

Derivative financial instruments 588 600 -12

Cash and cash equivalents 1,021 1,153 -133

Total Assets 104,242 104,664 -423

Page 44: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

Balance Sheet (Unaudited)

42 / First Quarter Results 2016 /

M Eur

EQUITY AND LIABILITIES March 2016 Dec.2015 Variation

Equity: 40,167 40,956 -790

Of shareholders of the parent 36,371 37,159 -788

Share capital 4,798 4,753 45

Unrealised assets and liabilities revaluation reserve -264 -222 -42

Other reserves 33,249 31,305 1,944

Treasury stock -1,040 -639 -401

Translation differences -1,240 -459 -781

Net profit of the year 869 2,422 -1,553

Hybrid Capital 529 551 -23

Of minority interests 3,267 3,246 21

Equity instruments having the substance of a financial liability 103 117 -14

Non-current liabilities: 48,727 49,002 -275

Deferred income 6,465 6,511 -47

Provisions 4,961 5,005 -44

Provisions for pensions and similar obligations 2,218 2,233 -15

Other provisions 2,743 2,772 -29

Financial Debt 24,608 24,899 -291

Loans and others 24,216 24,567 -352

Derivative financial instruments 392 332 61

Other non-current payables 811 690 122

Deferred tax liabilities 11,882 11,896 -15

Equity instruments having the substance of a financial liability 99 99 -

Current liabilities: 15,146 14,490 656

Provisions 260 245 14

Provisions for pensions and similar obligations 10 10 -1

Other provisions 250 235 15

Financial Debt 6,014 5,662 352

Loans and others 5,508 4,877 630

Derivative financial instruments 507 785 -278

Trade and other payables 8,873 8,583 291

Trade payables 5,152 5,577 -425

Current tax liabilities and other tax payables 662 250 412

Other tax payables 999 1,001 -1

Other current liabilities 2,059 1,754 305

Total equity and liabilities 104,242 104,664 -423

Page 45: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 43 / Results 2016

Profit and Loss (Unaudited)

M Eur

March 2016 March 2015 %

Revenues 8,184.8 8,780.7 (6.8)

Procurements (4,534.9) (5,167.0) (12.2)

Gross Margin 3,649.9 3,613.7 1.0

Net operating expenses (950.5) (853.7) 11.3

Net Personnel Expense (511.2) (446.7) 14.4

Personnel (648.0) (557.9) 16.1

Capitalized personnel costs 136.8 111.3 22.9

Net External Services (439.3) (407.1) 7.9

External Services (574.4) (517.1) 11.1

Other operating income 135.1 110.0 22.8

Levies (691.5) (623.7) 10.9

EBITDA 2,008.0 2,136.3 (6.0)

Amortisations and provisions (758.5) (792.5) (4.3)

EBIT 1,249.5 1,343.8 (7.0)

Financial Expenses (470.2) (1,026.3) (54.2)

Financial Income 330.0 730.8 (54.8)

Financial Result (140.1) (295.5) (52.6)

Results of Companies consolidated by equity method 10.0 18.7 (46.7)

Results from non-current Assets 29.1 72.1 (59.6)

PBT 1,148.5 1,139.1 0.8

Corporate Tax (254.3) (289.3) (12.1)

Minorities (25.5) (9.0) 182.8

Net Profit 868.7 840.8 3.3

Page 46: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

44 / First Quarter Results 2016 /

Results by Business (Unaudited)

Eur M

March 2016 Networks Generation and supply Renewables Other

Businesses Corporation

and adjustments Revenues 2,397.1 5,349.9 713.8 186.0 (462.0)Procurement (761.8) (4,005.8) (66.5) (142.5) 441.7Gross Margin 1,635.3 1,344.0 647.3 43.6 (20.3)

NET OPERATING EXPENSES (417.0) (402.2) (126.0) (50.4) 45.2

Net Personnel Expenses (248.8) (126.7) (46.1) (36.3) (53.3)Personnel (364.2) (134.0) (51.5) (36.3) (61.8)

Capitalized personnel costs 115.5 7.3 5.4 - 8.5

Net External Services (168.3) (275.5) (79.9) (14.1) 98.5External Services (240.7) (311.3) (110.7) (14.3) 102.7

Other operating income 72.5 35.8 30.7 0.3 (4.2)

LEVIES (285.9) (301.2) (79.7) (0.5) (24.1)

EBITDA 932.4 640.6 441.6 (7.3) 0.8 Amortisation and Provisions (310.0) (234.0) (193.8) (2.8) (17.9)EBIT / Operating Profit 622.4 406.6 247.8 (10.1) (17.1)

Financial Result (105.8) (2.3) (38.7) 0.5 6.2

Results of companies consolidated by equity method 11.2 9.4 (14.3) 9.3 (5.6)

Results of non-current assets - - (0.6) - 29.7

PBT 527.9 413.7 194.1 (.4) 13.1Corporate tax and minority shareholders (128.4) (89.2) (57.9) 5.3 (9.6)Net Profit 399.5 324.5 136.3 5.0 3.5

Eur M

March 2015Networks Generation

and supply Renewables Other Businesses

Corporation and adjustments

Revenues 2,241.7 6,128.8 707.4 203.7 (500.9)Procurement (735.8) (4,702.9) (55.8) (151.2) 478.6Gross Margin 1,505.9 1,425.9 651.7 52.5 (-22.2)

NET OPERATING EXPENSES (296.8) (366.6) (146.2) (55.5) 11.4

Net Personnel Expenses (185.5) (128.1) (47.7) (39.8) (45.5)Personnel (277.9) (135.2) (51.6) (39.8) (53.5)

Capitalized personnel costs 92.4 7.0 3.8 - 8.0

Net External Services (111.4) (238.5) (98.5) (15.7) 56.9External Services (194.5) (263.6) (104.3) (16.1) 61.3

Other operating income 83.1 25.1 5.8 0.4 (4.4)

LEVIES (240.5) (277.1) (77.2) (1.9) (27.0)

EBITDA 968.6 782.2 428.3 (5.0) (37.8) Amortisation and Provisions (308.8) (262.6) (220.5) (2.6) 2.1EBIT / Operating Profit 659.8 519.6 207.8 (7.6) (35.7)

Financial Result (87.8) (35.9) (26.0) (0.3) (145.5)

Results of companies consolidated by equity method 15.6 (9.4) 4.5 10.6 (2.6)

Results of non-current assets (2.6) - (.1) 0.4 74.3

PBT 585.0 474.3 186.3 3.1 (109.6)Corporate tax and minority shareholders (156.5) (121.3) (45.2) 2.2 22.5

Net Profit 428.5 353.0 141.1 5.3 (87.1)

Page 47: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 45 / Results 2016

Networks Business (Unaudited)

Eur M

March 2016 SPAIN U.K. US* BRAZIL Revenues 510.9 378.9 1,168.0 339.2Procurement (1.1) (15.6) (485.9) (259.2)Gross Margin 509.8 363.3 682.2 80.0

NET OPERATING EXPENSES (96.3) (48.3) (243.1) (29.4)

Net Personnel Expenses (59.2) (27.2) (144.6) (17.7)Personnel (85.8) (65.4) (190.3) (22.8)

Capitalized personnel costs 26.5 38.2 45.6 5.1

Net External Services (37.0) (21.1) (98.4) (11.8)External Services (69.1) (43.3) (112.9) (15.6)

Other operating income 32.1 22.2 14.5 3.9

LEVIES (26.1) (26.5) (232.5) (0.7)

EBITDA 387.4 288.5 206.6 49.8 Amortisation and Provisions (110.4) (73.6) (101.5) (24.5)EBIT / Operating Profit 277.0 214.9 105.1 25.4

Financial Result (25.8) (28.0) (41.5) (10.5)

Results of companies consolidated by equity method 0.4 - 3.2 7.7

Results of non-current assets - - - -

PBT 251.6 186.9 66.8 22.6Corporate tax and minority shareholders (59.1) (39.3) (24.3) (5.7)Net Profit 192.5 147.6 42.4 16.9

Eur M

March 2015 SPAIN U.K. US** BRAZIL Revenues 515.0 409.2 808.4 509.1Procurement (2.0) (14.2) (323.0) (396.6)Gross Margin 513.0 395.0 485.4 112.5

NET OPERATING EXPENSES (90.1) (57.9) (110.1) (38.7)

Net Personnel Expenses (57.4) (25.6) (79.2) (23.3)Personnel (84.9) (62.7) (100.6) (29.8)

Capitalized personnel costs 27.5 37.1 21.3 6.5

Net External Services (32.7) (32.4) (30.9) (15.4)External Services (65.0) (47.9) (62.0) (19.7)

Other operating income 32.3 15.5 31.1 4.3

LEVIES (24.0) (27.3) (188.4) (0.9)

EBITDA 398.9 309.8 186.9 72.9 Amortisation and Provisions (103.8) (72.8) (102.7) (29.5)EBIT / Operating Profit 295.1 237.0 84.3 43.4

Financial Result (35.6) (23.6) (26.3) (2.3)

Results of companies consolidated by equity method 0.4 - - 15.3

Results of non-current assets - - (2.6) -

PBT 259.9 213.3 55.3 56.4Corporate tax and minority shareholders (72.8) (45.4) (23.5) (14.8)

Net Profit 187.1 168.0 31.8 41.6

* Avangrid ** Iberdrola US

Page 48: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

46 / First Quarter Results 2016 /

Generation and Supply (Unaudited)

Eur M

March 2016 SPAIN U.K. MEXICO OTHER Revenues 3,016.3 2,029.4 314.2 (10,0)Procurement (2,291.4) (1,572.2) (181.6) 39.3Gross Margin 724.9 457.2 132.5 29.3

NET OPERATING EXPENSES (182.1) (181.6) (28.4) (10.1)

Net Personnel Expenses (73.5) (43.0) (5.0) (5.3)Personnel (78.2) (43.7) (6.7) (5.5)

Capitalized personnel costs 4.7 0.8 1.6 0.2

Net External Services (108.6) (138.7) (23.4) (4.9)External Services (128.0) (153.2) (25.4) (4.6)

Other operating income 19.4 14.6 2.1 (0.2)

LEVIES (246.7) (51.0) (1.0) (2.5)

EBITDA 296.1 224.6 103.1 16.8 Amortisation, Provisions and other (132.9) (70.4) (22.7) (7.9)EBIT / Operating Profit 163.2 154.2 80.4 8.8

Financial Result 8.0 0.4 (4.4) (6.3)

Results of companies consolidated by equity method (3.2) - - 12.5

Results of non-current assets - - - -

PBT 168.1 154.6 76.0 15.0Corporate tax and minority shareholders (25.0) (39.0) (24.1) (1.1)Net Profit 143.1 115.6 51.9 13.9

Eur M

March 2015 SPAIN U.K. MEXICO OTHER Revenues 3,549.4 2,324.1 373.2 (117.9)Procurement (2,742.4) (1,866.7) (226.2) 132.5Gross Margin 807.0 457.4 146.9 14.5

NET OPERATING EXPENSES (158.2) (167.9) (32.4) (8.1)

Net Personnel Expenses (73.3) (43.4) (6.0) (5.4)Personnel (78.4) (45.0) (6.3) (5.5)

Capitalized personnel costs 5.1 1.6 0.3 0.1

Net External Services (84.8) (124.5) (26.4) (2.7)External Services (91.8) (140.0) (26.6) (5.2)

Other operating income 7.0 15.5 0.2 2.5

LEVIES (216.6) (56.9) (0.9) (2.7)

EBITDA 432.2 232.6 113.7 3.7 Amortisation, Provisions and other (133.7) (100.0) (21.3) (7.7)EBIT / Operating Profit 298.6 132.6 92.4 (4.0)

Financial Result (23.0) 3.0 (8.4) (7.5)

Results of companies consolidated by equity method (8.6) - - (0.8)

Results of non-current assets - - - -

PBT 267.0 135.7 84.0 (12.4)Corporate tax and minority shareholders (72.8) (29.8) (22.5) 3.8Net Profit 194.2 105.9 61.5 (8.6)

Page 49: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 47 / Results 2016

Renewable Business (Unaudited)

Eur M

March 2016 SPAIN U.K. USA* LATAM RoW Revenues 261.4 136.7 246.6 33.0 36.2Procurement (3.3) (12.7) (48.9) (1.4) (0.2)Gross Margin 258.1 123.9 197.7 31.5 36.0

NET OPERATING EXPENSES (46.7) (10.9) (55.8) (6.8) (5.8)

Net Personnel Expenses (13.6) (3.8) (26.7) (0.6) (1.3)Personnel (13.6) (8.0) (28.0) (0.6) (1.3)

Capitalized personnel costs - 4.2 1.3 - -

Net External Services (33.1) (7.1) (29.0) (6.3) (4.4)External Services (40.6) (23.3) (41.7) (6.3) (4.7)

Other operating income 7.5 16.2 12.6 - 0.3

LEVIES (37.1) (4.6) (36.8) (0.2) (0.9)

EBITDA 174.3 108.4 105.1 24.5 29.3 Amortisation, Provisions and other (58.6) (35.4) (82.0) (9.5) (8.4)EBIT / Operating Profit 115.7 73.1 23.1 15.0 20.9

Financial Result (23.5) (4.4) (5.8) (4.4) (0.6)

Results of companies consolidated by equity method (0.2) 0.6 (4.5) 0.9 (11.1)

Results of non-current assets (0.5) - (0.1) - -

PBT 91.4 69.3 12.7 11.5 9.2Corporate tax and minority shareholders (24.9) (19.6) (6.0) (0.7) (6.7)Net Profit 66.4 49.8 6.7 10.9 2.5

Eur M

March 2015 SPAIN U.K. USA** LATAM RoW Revenues 232.8 189.4 214.5 31.8 38.9Procurement (4.6) (10.5) (39.4) (1.2) (0.1)Gross Margin 228.3 178.9 175.0 30.6 38.8

NET OPERATING EXPENSES (42.6) (25.8) (62.0) (6.0) (9.8)

Net Personnel Expenses (14.6) (5.0) (26.5) (0.5) (1.2)Personnel (14.6) (7.9) (27.3) (0.6) (1.2)

Capitalized personnel costs - 2.9 0.9 0.1 -

Net External Services (28.1) (20.8) (35.5) (5.5) (8.6)External Services (39.9) (22.5) (37.8) (5.5) (8.6)

Other operating income 11.8 1.8 2.3 - -

LEVIES (36.5) (4.0) (35.7) (0.1) (0.8)

EBITDA 149.2 149.1 77.4 24.5 28.2 Amortisation, Provisions and other (66.0) (44.3) (94.0) (7.9) (8.3)EBIT / Operating Profit 83.2 104.8 (16.7) 16.6 19.9

Financial Result (16.2) (4.5) (1.4) (2.2) (1.6)

Results of companies consolidated by equity method 2.4 0.3 (1.2) 1.3 1.8

Results of non-current assets (0.1) - - - -

PBT 69.3 100.6 (19.3) 15.6 20.0Corporate tax and minority shareholders (21.6) (21.7) 8.4 (4.3) (6.0)Net Profit 47.7 78.9 (10.9) 11.4 14.0

* Avangrid ** Iberdrola US

Page 50: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

48 / First Quarter Results 2016 /

March 2016 March 2015 Variation

EBITDA 2,008.0 2,136.3 (128.3)

Adjustments to results and others (167.4) (140.3) (27.1)

Financial payments and cash receipts (220.9) (237.9) 17.0

Corporate Tax Payment 202.4 4.3 198.1

Provision payments (net of normal expenses) (39.8) (40.3) 0.6

Operating Cash Flow 1,782.4 1,722.0 60.3

Dividends Paid (421.7) - (421.7)

Retained Cash Flow 1,360.7 1,722.0 (361.4)

Total Cash Flow allocations: (1,170.3) (690.2) (480.2)

Net Investments (896.0) (592.5) (303.5)

Divestments 49.3 - 49.3

Treasury stock (293.1) (67.4) (225.7)

Capital issue (0.4) (0.1) (0.3)

Hybrid (30.2) (30.2) -

Exchange rate differentials 458.3 (931.0) 1,389.3

Change in regulatory receivables (34.2) 76.4 (110.6)

Working capital variations and other variations (821.1) (863.9) 42.8

Decrease/(Increase) in net debt (206.6) (686.6) 480.0

Statement of Origin and Use of Funds (Unaudited)

Page 51: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter / 49 / Results 2016

Eurostoxx Utilities -5.5% Eurostoxx50 -8% IBERDROLA -10.5% Ibex35 -8.6%

-20%

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

IBERDROLA Stock Performance v. index

jan-16

feb-16

mar-16

IBERDROLA Share Q1 2016 Q1 2015

Number of outstanding shares 6,397,197,000 6,388,483,000

Price at the end of the period 5.86 6.00

Average price of the period 6.15 5.91

Average daily volume 33,252,748 37,292,319

Maximum volume (01-01-2016 / 03-20-2015) 86,439,332 86,811,970

Minimum volume (02-22-2016 / 02-23-2015) 14,176,856 15,286,837

Dividends paid (€) (1) 0.127 0.127

Gross Final dividend (29-01-2016 /19-12-2015) 0.127 0.127

Dividend yield (2) 4.51% 4.60%(1) Iberdrola fixed guaranteed price for the rights.(2) Dividends paid in the last 12 months and Shareholder´Meeting attendance bonus/price at the end of period.

Stock Market Evolution

Page 52: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

50 / First Quarter Results 2016 /

Iberdrola´s contribution to sustainable development is reflected in several corporate responsibility practices that meet the needs and expectations of its interest groups, with whom the Company maintains a combination of open communication channels are used for communicating goals, activities and successes achieved in the three areas of sustainable development (economic, enviromental and social), as well as receiving evaluations and requests from the parties involved.

1. Sustainability indicators

Sustainability Indicators Q1 2016 Q1 2015

Contribution to GDP (Gross Margin) (*) 0.54% 0.55%

Contribution to GDP (Net Revenues) (*) 1.37% 1.39%

Net profit (EUR million) 868.7 840.8

Dividend yield (%) (**) 4.51% 4.60%

CO2 emissions in the period (gr. CO2/kWh). Total 173 203

CO2 emissions in the period (gr. CO2/kWh). Spain 33 59

CO2 emissions in the period (gr. CO2/kWh). United Kingdom 495 520

CO2 emissions in the period (gr. CO2/kWh). US 59 53

Emission-free production (Gwh): Total 22,821 20,851

Emission-free production (Gwh): Spain 15,956 14,637

Ratio output emission-free production out of production (%): Total 61% 57%

Ratio output emission-free production out of production (%): Spain 93% 91%

Total emission-free installed capacity (MW) 29,298 28,232

Spain emission-free installed capacity (MW) 19,230 18,326

Emission-free production out of production (%): Total 66% 62%

Emission-free production out of production (%): Spain 73% 72%

Ratio output with total high emissions technologies (%) 5% 8%

Ratio output with total low emissions technologies (%) 34% 35%

(*) Soruce: Iberdrola Results and National Quarterly Accounting for Spain – INE (Last data published in Q4 2015)(**) Dividends paid in the last 12 months and Shareholder´Meeting attendance bonus/price at the end of period.

APPENDIX.- IBERDROLA and Sustainability

Page 53: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

First Quarter / 51 / Results 2016

Development of specific thermal mix emissions, Global: CO2, SO2, particles and NOx.

33

59

1Q 2016 1Q 2015

0.002

0.006

1Q 2016 1Q 2015

0.019

0.069

1Q 2016 1Q 2015

0.065

0.138

1Q 2016 1Q 2015

Specific particulate emissions Mix GLOBAL

(g/kWh)

CO2 specific emissions mix GLOBAL

(g/kWh)

SO2 specific emissions mix GLOBAL

(g/kWh)

ENOx specific emissions Mix GLOBAL

(g/kWh)

Page 54: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

52 / First Quarter Results 2016 /

2. Indies, Rankings and Recognitions

Presence of Iberdrola in Indices and Rankings of Sustainability, Reputation and Corporate Governance.

Sustainability and Corporate ReputationRating/Situación

Dow Jones Sustainability World Index 13 Iberdrola member in all editionsGlobal 100 Selected in 2016

FTSE 4Good First utility with nuclear assets to meet standards for FTSE 4Good. Selected since five years

Carbon Diclosure Leadership Index 2015 100/100Global Roundtable on Climate Change A CategorySustainability Yearbook Robeco Sam 2013 Classified as "Silver Class” in the electricity sector.OEKOM Research 2013 Prime CategoryEuropean Business Awards 2013-2014 Ruban D´Honeur 2013 in the Environment and Sustainability category.Award for leadership in New Energy 2013 Leadership in New Energy.MERCO 2015 Leader among Spanish utilities: electricity, gas, and water industryNew York Stock Exchange, NYSE Euronext & Vigeo Iberdrola selectedET Global 800 Carbon Ranking Iberdrola first Spanish utilityNesweek and Green Rankings 2015 Iberdrola first Spanish utility and fourth in the world MSCI Global Sustainability Index Series Iberdrola selected AAA

2015 World's Most Ethical Company Iberdrola selected. The only Spanish utility

Fortune Global 500 Iberdrola selected

Stoxx ESG Leaders Iberdrola selected

IBERDROLA: Model for a sustainable company in the energy sector

Page 55: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

First Quarter / 53 / Results 2016

3. Contribution to social development

IBERDROLA’s most significant actions with regard to social commitment in the Jan-Mar 2016 period have been:

3.1 Corporate Social Responsibility (CSR) Recognition

• IBERDROLA recognised as one of the World’s Most Ethical Companies

IBERDROLA has been included in the 2016 World’s Most Ethical Company rankings, prepared by the Ethisphere Institute, which recognises organisations contributing ethical leadership and behaviour at corporate level. Our Company has earned this recognition for the third year in a row and is the only Spanish company amongst the world’s most ethical companies in 2016.

• IBERDROLA, recognised for its Corporate Governance

IBERDROLA was spotlighted in 2016, for the third year in a row, as the European utility company that carries out the best corporate governance practices, according to the prestigious Ethical Boardroom journal, which presents the Corporate Governance Awards 2016.

• IBERDROLA, the IBEX 35 leader in fiscal transparency

Our Company is at the top of the IBEX 35 as regards fiscal transparency in 2015, according to the Transparency Report on the Fiscal Responsibility of Companies, drafted by the Fundación Compromiso y Transparencia (Commitment and Transparency Foundation).

• Ignacio Galán named the best European Utility Company CEO, and IBERDROLA crowned best company for its investor relations

IBERDROLA has won all four categories assessed: best investor relations, and best CEO, CFO and Director of Investor Relations, according to the 2016 All-European Executive Team ranking of the prestigious Institutional Investor Research Group.

• IBERDROLA honoured in the European Business Awards for the Environment of the Basque Country 2016

IBERDROLA won the prize in the special “biodiversity” category and second prize for environmental management in the “European Business Awards for the Environment of the Basque Country 2016”, granted by the Basque Government.

3.2.- Relations with Stakeholders

• IBERDROLA supports the conclusions of the COP21 held in Paris

The Company has committed to working, along with other companies, towards limiting global warming to up to 2ºC and providing real and tangible solutions in the fight against climate change, during the Conference of the Parties of the UN Framework Convention on Climate Change (COP21), by means of the Just2Challenge initiative.

• Campaign for the Promotion of Youth Employment

IBERDROLA was the first IBEX 35 company to adhere to the campaign for the UN to declare 2016-2025 the “Youth Employment Decade”, by means of the Pegasus Programme, coordinated by the Novia Salcedo Foundation. The aim of this programme is to place youth employment on the

Page 56: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

54 / First Quarter Results 2016 /

Global Human Development Agenda, by means of its declaration by the General Assembly of the United Nations.

• 1st Iberdrola Solidarity Awards Ceremony

The Chairman of Iberdrola, Ignacio Galán, presented the 1st Iberdrola Solidarity Awards to the Menudos Corazones, Plena Inclusión and Save the Children organisations. The Chairman declared that the values these organisations put into practice and the results they achieve “are a stimulus that encourages others to continue working towards a more humane and more charitable society that makes the world better for everyone”.

3.3.- Staff

• IBERDROLA Mexico, recognised for its work to promote safety in the workplace

IBERDROLA Mexico has received the latest international prize for the Prevention of Occupational Hazards (“Prever 2015”), granted by the Spanish General Council for Industrial Relations and Workplace Science, in recognition for the “excellent” progress made in this field over the last three years, during which time no accidents involving leave have been recorded.

• Cultural Exchange Programmes

The latest editions of the cultural exchange programmes known as Hello-Hola and Mi Invitado (My Guest) have been launched, offering the children of employees the opportunity of an international experience in the various “Iberdrola countries”.

• Corporate Volunteer Programme

Within IBERDROLA’s Volunteer Programme, organised through the International Volunteer

Portal, the following can be highlighted for this period:• 9th IBERDROLA Tree Day The ninth Tree Day

was celebrated in Muxika (Biscay), combining environmental tasks with the promotion of people with disabilities, in collaboration with the Asociación Gorabide and the Fundación Lurgaia.• Initiatives to help the underprivileged Various

activities have been launched in the countries in which the Company is present, such as:- “IBERDROLA Operation Kilo” initiative A

charity project designed to collect food with the aim of helping to alleviate the difficult situation of vulnerable families. The food is distributed through different aid organisations.

- Human Warmth Week, during which employees of the companies NYSEG and RG&E, of AVANGRID, collected warm clothing to help children and families in vulnerable situations.

• INVOLVE (INternational VOLunteering Vacation for Education) Initiative Now in its fifth edition, this corporate volunteering programme gives IBERDROLA employees from other regions the opportunity to travel to Brazil and Mexico during their holidays to help teenagers improve their employability, by means of IT and web application training.

3.4 Community Action

a) Training and Research

2015 Call for Research Scholarships and Grants

The Scholarship and Grants Programme of Fundación Iberdrola España, the goal of which is to promote a new generation of professionals capable of driving the transformation towards a sustainable energy model, has grown this year as a result of the Foundation’s international scope. Thus, thanks to the joint effort of these countries,

Page 57: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

First Quarter / 55 / Results 2016

young people of all five nationalities (Spain, United Kingdom, United States, Mexico and Brazil) are able to study masters courses in energy and environmental studies at Spanish, British and US universities, in areas related to renewable energies, energy efficiency, biodiversity, clean technologies, emissions management, energy storage, electric vehicles, smart networks, Information and Communications Technology (ICT), Big Data and cybersecurity. The International Scholarship Programme also includes grants for research into energy and the environment in renowned universities and institutions in Spain.

The first quarter of 2016 saw the publication of the calls for scholarships for masters level studies in energy and the environment in Spain, the United States and the United Kingdom, in addition to the call for research grants in Spain, covering the whole period of receipt of applications. In 2016, a total of 130 research scholarships and grants are expected to be awarded, with an overall investment of €3.4 million.

The Scholarship Programme also includes collaborations with prestigious academic institutions, such as the Iberdrola Fulbright Scholarships or those awarded by the Carolina Foundation. The programme also finances Restoration Scholarships for students at the Prado Museum in Madrid and Bilbao Fine Arts Museum as part of the collaboration programme in place with both museums.

b) Sustainability and Biodiversity

Bird migration monitoring programme (MIGRA)

Fundación Iberdrola collaborates with the Sociedad Española de Ornitología (Spanish Society of Ornithology), SEO/BirdLife, in an innovative initiative aimed at studying the migratory movements of the birds found in Spain. The main aim of

this project is to describe the movements of each species over one or more years, to learn about their migratory routes, resting areas during the journey and hibernation areas, among other aspects. The annual tagging plan has been prepared, with a total of 146 taggings envisaged using a series of monitoring devices, 56 of which were financed by Fundación Iberdrola España. In February, the first red kite was tagged in Toledo. All of the migratory journeys of the various species can be followed in real time on the project’s website (www.migraciondeaves.org)

LIFE+ Cantabrian Capercaillie Project

The main aim of the LIFE+ Cantabrian Capercaillie Project is to slow down the decline of this subspecies exclusive to the Northwest of the Iberian Peninsula and to foster its recovery. The area of action comprises 16 Special Bird Protection Areas along the Cantabrian Mountain Range. In addition to receiving funding from the European Union and Fundación Iberdrola, the Project is coordinated by the Biodiversidad Foundation and enjoys the participation of the Autonomous Communities of Cantabria, the Principality of Asturias and Castile-Leon, as well as the National Parks Autonomous Agency (Organismo Autónomo Parques Nacionales) and SEO/BirdLife.In the final year of the project, in the first quarter progress was made on improving habitats and controlling predators as well as reviewing and signposting livestock enclosures. Amongst the awareness-raising actions, it should be noted that the travelling exhibition on the Cantabrian Capercaillie visited the Municipalities of Muro de Nalón, Castropol and Soto del Barco.

Page 58: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

56 / First Quarter Results 2016 /

c) Art and Culture

Restoration Programme

The Foundation supports unique projects for the recovery and conservation of historical and artistic heritage, always in collaboration with agencies and institutions of renown, both public and private. The Atlantic Romanesque Programme is the most significant programme of this kind. It is carried out in collaboration with the Portuguese Ministry for Culture and the Regional Government of Castile-Leon, and is an ambitious project to restore and maintain Romanesque monuments in both countries, including places of worship located in the North of Portugal, Salamanca and Zamora, specifically in the vicinity of the Duero and Támega rivers. Thanks to this joint initiative, it is possible to recover the cultural, natural and social heritage of the region, by means of socio-economic revitalisation work that contributes to local development, fostering cross-border ties between Spain and Portugal. The Atlantic Romanesque transcends the mere dimension of artistic restoration, and also acts as a driving force for social revitalisation. Thus, the Second Phase of the Programme includes educational, cultural and tourism projects with the aim of weaving a network of synergies and contributing to achieving another series of aims, such as the execution of RDI projects, the creation of research networks and exchanges of experiences, and the strengthening of a common European identity.In January, the work carried out in San Martín de Tours Church in Salamanca was inaugurated. It provided renewed access to the Northern door following resolution of the problems with the inner vault. The state of repair of the church was also monitored, the lighting in the Carmen chapel

upgraded and an information point established to provide insights not only into the history of the church, located in the heart of Salamanca, but also into the other work being undertaken as part of the Atlantic Romanesque Programme. During the Easter holidays the church broke all records, receiving in excess of 20,000 visitors.For further information please visit www.romanicoatlantico.org

Museo del Prado [National Prado Museum] Restoration Workshop

Fundación Iberdrola is a ‘Benefactor of the Museo del Prado’ through the support it provides for the Restoration Workshop at the Museum in addition to three annual scholarships for young restorers. In 2014, the ‘Iluminando el Prado / Lighting the Prado’ Project was launched, the aim of which is to provide the Museum’s exhibition rooms, both permanent collection and temporary exhibition rooms, with a new LED lighting system replacing the current halogen lighting system. The advantages offered by this project include the improvement of the conservation of the works exhibited, as a result of the absence of infrared and ultraviolet rays thanks to the new technology. LED light is very similar to natural light, facilitating the viewing of the works and improving their presentation. Furthermore, on average, it is 75% more efficient, providing significant savings in annual consumption. In the first quarter of 2016, progress was made in the planning of the rooms that will have new lighting installed over the course of the year.

Lighting Programme

January saw the inauguration of the partial lighting of the Walls of Vilafamés Castle in Castellón, which was attended by the mayor of the municipality,

Page 59: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

First Quarter / 57 / Results 2016

the Regional Minister for Housing in the Valencia Community and the President of the Valencia Tourism Agency along with representatives of Iberdrola and its Foundation. The design meets the highest standards of efficiency and uses cutting edge lamps (LED). With this the aim is to avoid undesired dazzling and light pollution, while at the same time highlighting and showcasing the pictures on the walls.In the first quarter, interior lighting work was carried out at the Santa María La Blanca Synagogue in Toledo along with the lighting of ten rooms at the San Fernando Fine Arts Royal Academy in Madrid. This museum has works of art spanning five centuries and a range of schools, providing a journey through the history of art from the Renaissance to 21st century movements through paintings, sculptures, drawings and photographs, in addition to prints, furniture, silverware, porcelain and other decorative arts.

Linguistic immersion programmes

These are designed to foster bilingualism (Spanish-English) in rural towns with poor access to summer English courses for children and teenagers, building on the language classes provided during the school year.Through this initiative, in March, the second immersion course was held for teachers in the Extremadura compulsory secondary school system, teaching non-linguistic subjects in a bilingual manner. The course was held at the Iberdrola facilities in the town of Alcántara, Cáceres

c) Cooperation and Solidarity

Social Grants

The main aims of Fundación Iberdrola España include contributing actively to the improvement of the quality of life of the most vulnerable people

and groups. In its annual call for social projects, it selects projects by non-profit organisations working in Spain. These initiatives deal with situations such as poverty and social exclusion, the quality of life of people who are seriously ill, dependent or with functional diversity. On 1 January, work began on the 32 projects selected as part of the 2015 Call for Social Grants. These projects, which focus their efforts in terms of social and labour inclusion with a direct impact on children and teenagers, will continue until December 2016.In the first quarter of the year, the first Iberdrola Solidarity Awards were held, with the Health and Quality of Life Award being given to Menudos Corazones, the Equal Opportunities Award to Plena Inclusión and the Social Inclusion Award to Save the Children España. This event aims to recognise the work done by the partners in the projects selected as part of the annual Call for Social Grants by Fundación Iberdrola España.Cooperation for Development: Save the Children and Energy Without Borders project: The collaboration project was undertaken with Save the Children and Energy Without Borders to electrify and supply drinking water to rural communities in Oaxaca (Mexico) in order to improve the quality of life of young people and families in the town of Coatecas Altas. In the first quarter of the year, an assessment of the Community and area was carried out in order to identify the water and energy needs. This process is key to the success of a cooperation project. This project is part of the third action area of Iberdrola’s “Electricidad para todos” (“Electricity for all”) programme, which involves working through NGOs to develop projects with a high social component.

Page 60: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

58 / First Quarter Results 2016 /

Institutional Collaborations Lastly, Fundación Iberdrola España continues to collaborate with and support significant cultural, social, scientific and cooperation institutions of renown in Spain, such as the Elcano Institute, the Carolina Foundation, the Royal Spanish Academy of Language and History, Instituto Cervantes, the Atapuerca Foundation, Casa de América, the Red Cross Foundation and Energy Without Borders, among others. These collaborations are mainly financial and to provide support to their activities, and amount to more than one million euros per year.

Corporate governance

The Corporate Governance highlights during the first quarter of financial year 2016 were as follows:– On 20 October 2015, the Board of Directors

approved the implementation of the second increase of paid-up capital approved by the General Shareholders’ Meeting held on 27 March 2015, under section B, point six of the agenda.

On 8 January 2016, the Company sent the National Securities Commission (CNMV) a supplement to the information memorandum regarding the second increase of paid-up capital approved by the General Shareholders’ Meeting held on 27 March 2015.

Lastly, IBERDROLA reported on 26 January 2016 the implementation of the second increase of paid-up capital, through which the Iberdrola Scrip Dividend is implemented.

– On 13 January 2016, IBERDROLA published the financial calendar for 2016.

– On 29 January, the Company submitted its energy production figures for the financial year 2015.

– The Board of Directors of IBERDROLA, in its meeting on 23 February 2016, prepared the individual annual accounts and management reports of the Company and the consolidated ones with its subsidiaries, corresponding to the financial

year ending 31 December 2015, as well as the proposals to distribute a cash dividend of EUR 0.030 gross per share with rights to such payment and to approve an increase of paid-up capital for the free-of-charge allocation of new shares to the shareholders of the Company, within the framework of the shareholder compensation scheme named Iberdrola Scrip Dividend.

Furthermore, the CNMV was informed of the offer to workers of the Iberdrola Group in Spain to receive all or part of the annual variable remuneration for 2015 in shares.

Also on 23 February, IBERDROLA notified the CNMV of the agreement to carry out a buyback programme of the Company’s own shares in accordance with the authorisation conferred by the General Shareholders’ Meeting held on 28 March 2014, under point nine of the agenda. In relation with this, from that date IBERDROLA periodically reported to the CNMV on the share buyback programme until 31 March 2016, the date when it ended. As a result, the Company acquired a total of 8,351,173 own shares, representing approximately 0.131% of the share capital.

– On 24 February 2016, the Company submitted to the CNMV its Presentation of Results for the financial year ending on 31 December 2015.

– On 26 February 2016, IBERDROLA sent to the CNMV the Annual Corporate Governance Report, the Annual Report on Remuneration of Directors and the statistical information corresponding to financial year 2015.

General Shareholders’ Meeting

In its meeting on 23 February 2016, the Board of Directors of IBERDROLA agreed to convene the General Shareholders’ Meeting to be held on 8 April 2016. Moreover, payment was approved for a gross attendance bonus of 0.005 Euros per share to the shareholders present or represented in the General Shareholders’ Meeting.

Page 61: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

First Quarter / 59 / Results 2016

The announcement of the call for the General Shareholders’ Meeting was published by the Company in the Official Bulletin of the Commercial Registry on 26 February 2016.

On 28 April 2016, the General Shareholders’ Meeting of the Company held its first session, with a quorum of 77.91% of the share capital (8.23% present and 69.68% represented), and it approved every single resolution put to vote that had been included in the meeting agenda, as detailed below:

Resolutions relating to the annual financial statements, corporate management and re-election of the Company Auditor

The General Shareholders’ Meeting approved the individual annual accounts of Iberdrola and the consolidated accounts with its subsidiaries, corresponding to financial year 2015, as well as the Company’s individual management report and the consolidated management report with its subsidiaries, in addition to corporate management and performance of the Board of Directors during financial year 2015.

Furthermore, the General Shareholders’ Meeting approved the re-election of Ernst & Young, S.L. as the accounts auditor of the Company and its consolidated group for financial year 2016, including the delegation in favour of the Board of Directors, with full powers of substitution, of the powers necessary to enter into the corresponding service contract with Ernst & Young, S.L.

Resolutions relating to shareholder compensation

The General Shareholders’ Meeting approved the appropriation of earnings proposed by the Board of Directors, which includes the payment of a dividend corresponding to financial year 2015 of EUR 0.03 gross per IBERDROLA share.

In addition, under sections A and B of point six of the agenda, the General Shareholders’ Meeting approved two increases in paid-up share capital by issuing new ordinary shares of the Company,

with a maximum reference market value of EUR 855 and 985 million, respectively, for the free-of-charge allocation of the new shares to the Company’s shareholders. Said resolutions include the delegation to the Board of Directors, with full powers of substitution, of the powers required to execute capital increases, including that of newly drafting the article of the Articles of Association that regulates the share capital.

These capital increases were agreed in order to implement the two new editions of the Iberdrola Scrip Dividend scheme and offer all the Company’s shareholders new issue paid-up shares or, eventually, the acquisition of free-of-charge allocation rights that shareholders receive for the shares they hold at a guaranteed fixed price.

Resolution relating to the renewal of the Board of Directors

The General Shareholders’ Meeting approved the re-election of the directors, for a statutory term of four years, with Mr Iñigo Víctor de Oriol Ibarra being qualified as other external director, as well as Mrs Inés Macho Stadler, Mr Braulio Medel Cámara and Mrs Samantha Barber, all qualified as independent.

Likewise, the General Shareholders’ Meeting approved the appointment of Mr Xabier Sagredo Ormaza as director, upon a report by the Appointments Committee, for a statutory term of four years, being qualified as an external director.

Resolution relating to the update of the Corporate Governance system

The General Shareholders’ Meeting approved:a) The amendment of the Articles of Association

to formalise the introduction of the Iberdrola Group’s Mission, Vision and Values and influence Company’s commitment to its corporate values, social returns and the involvement of all stakeholder groups, and the creation of a new Preliminary Title and the restructuring of Title I. Furthermore, this amendment clarifies

Page 62: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

60 / First Quarter Results 2016 /

the distribution of the responsibilities of the Appointments Committee and of the Remuneration Committee, and introduces other improvements of a technical nature.

b) The amendment of the Regulation of the General Shareholders’ Meeting to formalise the Company’s commitment to the sustainable management of the General Shareholders’ Meeting as an event, encourage environmentally friendly communication channels, regulate the bonus to the General Shareholders’ Meeting and introduce improvements of a technical nature.

Resolution relating to the capital decrease

The General Shareholders’ Meeting approved a capital decrease through the amortisation of a maximum of 157,197,000 own shares representing 2.46% of the share capital.

Resolution relating to general matters

In point thirteen of the agenda, the General Shareholders’ Meeting agreed, without prejudice to the delegations included in the previous resolutions, to jointly empower the Board of Directors, the Executive Committee, the Chairman and CEO and the Secretary of the Board of Directors for the formalisation and execution of all the resolutions adopted by the General Shareholders’ Meeting, for their formal recording in a public instrument and for their interpretation, correction, supplementation, development and recording.

Resolution relating to the resolution submitted for advisory voting

Lastly, the Annual Report on Director Remuneration for financial year 2015 was submitted for advisory voting.

Corporate Governance System

IBERDROLA continually updates its Corporate Governance System, which is the set of documents comprising the Articles of Association, the Iberdrola

Group Mission, Vision and Values, the Corporate Policies, the internal corporate governance regulations and other internal codes and procedures approved by the Company’s competent governing bodies. In their drafting, the good governance recommendations generally recognised in international markets have been taken into account.

The development, review and continuous improvement of corporate governance rules responds to the strategy that the Company and the companies forming part of the IBERDROLA Group have now been following for years.

Since the beginning of financial year 2016, the following updates and reviews of the Corporate Governance System of IBERDROLA have been carried out:– On 23 February 2016, the Iberdrola Group’s

Mission, Vision and Values was approved as a separate regulation comprising the Company’s corporate governance system, and the amendment of the Introduction of the Corporate Governance System was agreed.

In order to reflect this new Iberdrola Group Mission, Vision and Values, as well as develop the Company’s focus on social returns, endow the corporate web with a greater role, strengthen the compliance system in terms of the criminal liability of legal entities, introduce new legal developments associated with audit activity, adjust the position of secretary of the Board of Directors, and perform the annual review of the Risk Policies, it was decided to amend and update the following documents that form part of the Corporate Governance System: General Corporate Governance Policy, Shareholder Involvement Policy, Policy on Communication and Contact with Shareholders, Institutional Investors and Proxy Advisors, Policy on Choosing Candidates for Director, Policy on Engagement of the Auditor which became known as Policy on Engagement and Relations with the Auditor and Policy for Prevention of Crime and Fraud. As for revision of the Risk Policies, this concerned the

Page 63: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

First Quarter / 61 / Results 2016

General Risk Control and Management Policy, the Corporate Risk Policies and the Specific Risk Policies of the Different Group Businesses. As for Social Responsibility Policies, revisions were made to the General Corporate Social Responsibility Policy, the Policy on Relations with Stakeholders, the Innovation Policy, the Framework Human Resources Policy, the Recruitment and Hiring Policy, the Equal Opportunities and Conciliation Policy and the Sustainability Policy. In addition, new consolidated drafts were approved for the Board of Directors Regulation, the Audit and Risk Supervision Committee, the Appointments Committee Regulation and the Corporate Social Responsibility Committee Regulation. Lastly, the Director Code of Ethics, the Compliance Unit Regulation and the Protocol of Action for Managing News and Rumours were also amended.

– On 6 April, IBERDROLA decided on the amendment of several rules of the Corporate Governance System intended to renew the commitment on climate change and to develop a new sustainable energy model, develop gender equality policies and encourage a work-life balance, as well as other improvements of a technical nature. The amendments affected the General Corporate Governance Policy, the Policy on Choosing Candidates for Director, the Recruitment and Hiring Policy, the Equal Opportunities and Conciliation Policy, the Environmental Policy, the Policy on Climate Change, the Biodiversity Policy, the Appointments Committee Regulations, the Remuneration Committee Regulations, the Code of Ethics and the Internal Rules on Operating Committee Composition and Functions.

– As mentioned in the section on the resolutions of the General Shareholders’ Meeting on 8 April 2016, the amendment of the Articles of Association and the Regulations of the General Shareholders’ Meeting was approved.

On that same date, the updating of the Introduction to the Company’s Corporate Governance System was announced.

All documents that comprise the Corporate Governance System are published (in their full or summarised version) both in Spanish and in English on the company website www.iberdrola.com, from which it is also possible to download them for consultation onto e-book readers or any other mobile device.

Information Transparency

One of the core principles underlying IBERDROLA’s corporate governance practices is to ensure maximum transparency in financial and non-financial information provided to shareholders, investors and markets. In this respect, there has been a high level of activity during financial year 2016 to ensure that institutional investors and financial analysts are kept fully informed.

On-Line Shareholders (OLS)

Since January 2012, the On-Line Shareholders (OLS) interactive system has been available through the company website, allowing shareholders to make confidential or public enquiries to the other shareholders, with the option of addressing them to any of the committees of the Board of Directors, as well as notifying the Compliance Unit of any conduct that may imply non-compliance with the Corporate Governance System, through the Shareholders’ Ethics Mailbox.

Page 64: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

APPENDIX.- IBERDROLA and Sustainability

62 / First Quarter Results 2016 /

CNMV: Significant Events from January to March 2016

Date Event Registration No.

08/01/201620/10/2015

The Company announces a supplement to the information memorandum relating to the first increase in paid-up share capital approved by the General Shareholders’ Meeting of Iberdrola, S.A. on 27 March 2015.

233855229877

13/01/2016 Iberdrola submits the Financial Calendar for 2016. 233898

26/01/2016 Within the framework of the execution of the first increase in paid-up share capital approved by the General Shareholders' Meeting of Iberdrola, S.A. on 27 March 2015, a total of 60,327,000 new shares will be issued.

234308

29/01/2016 The Company submits the 2015 Energy Balance. 234441

16/02/2016 The Company announces the date of Presentation of Results for financial year 2015. 234917

23/02/2016 Partial reform of the Corporate Governance System of the Company. 235154

23/02/2016 Offering of Iberdrola shares to group employees as part of the annual variable remuneration for financial year 2015. 235155

23/02/2016 Drafting of the annual accounts for 2015 and proposal for the allocation of profits and call for General Shareholders’ Meeting.

235163

23/02/201617/03/2016

Share repurchasing programme of Iberdrola, S.A. in respect of a maximum of 0.131% of the share capital.

235168236391

24/02/2016 The Company announces the 2015 results 235204

24/02/2016 The Company presents the results for financial year 2015 235205

24/02/2016 2016 Investor Day - 1. 2016-20 Strategic Pillars 235219

24/02/2016 2016 Investor Day - 2. Business Overview 235221

24/02/2016 2016 Investor Day - 3. Networks 235224

24/02/2016 2016 Investor Day - 4. Generation and Supply 235226

24/02/2016 2016 Investor Day- 5. Renewables 235228

24/02/2016 2016 Investor Day - 6. Financial Management 235229

26/02/2016 The Company publishes the notice of the call to meeting of the General Shareholders' Meeting and of the documents that will be made available to shareholders.

235444

26/02/2016 The Company reports on the results of the second half of 2015 235540

26/02/2016 The company publishes the Annual Corporate Governance Report for financial year 2015. 235541

26/02/2016 The company publishes the Annual Report on Director Remuneration in financial year 2015. 235542

03/03/2016 The Company reports on the operations carried out by Iberdrola, S.A. under its share repurchasing programme between 24 February and 2 March 2016. 235885

10/03/2016 Transactions carried out by Iberdrola, S.A. under its share repurchasing programme between 3 and 9 March 2016. 236093

17/03/201623/02/2016

Transactions carried out by Iberdrola, S.A. under its share repurchasing programme between 10 and 16 March 2016.

236391235168

23/03/2016 Transactions carried out by Iberdrola, S.A. under its share repurchasing programme between 17 and 23 March 2016. 236675

31/03/201623/02/2016

Transactions carried out by Iberdrola, S.A. under its share repurchasing programme between 24 and 30 March 2016. Finalisation of the programme.

236796235168

Page 65: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664
Page 66: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

IBERDROLA informs you that the data used to send you this information are included in a file property of IBERDROLA, S.A., with the only purpose of sending you financial information about the Company. Such data were included in our file either at your request or due to previous relations held between you and Iberdrola.

As stated by the Organic Law 15/1999 of 13 December on the Protection of Personal Data (Ley Orgánica de Protección de Datos de Carácter Personal, LO 15/1999), you can at any time exercise your rights of access, rectification, objection and cancellation on your personal data. Should this be the case, you must send a letter, with a photocopy of your identity card or passport attached, to the following address:

IBERDROLA, S.A.Investor relationsC/ Tomás Redondo, 128033 – Madrid (Spain)

Notwithstanding this, if you are not interested in receiving any more information related to IBERDROLA, please let us know by calling the toll free line +34 900 10 00 19.

Page 67: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

IBERDROLA informs you that the data used to send you this information are included in a file property of IBERDROLA, S.A., with the only purpose of sending you financial information about the Company. Such data were included in our file either at your request or due to previous relations held between you and Iberdrola.

As stated by the Organic Law 15/1999 of 13 December on the Protection of Personal Data (Ley Orgánica de Protección de Datos de Carácter Personal, LO 15/1999), you can at any time exercise your rights of access, rectification, objection and cancellation on your personal data. Should this be the case, you must send a letter, with a photocopy of your identity card or passport attached, to the following address:

IBERDROLA, S.A.Investor relationsC/ Tomás Redondo, 128033 – Madrid (Spain)

Notwithstanding this, if you are not interested in receiving any more information related to IBERDROLA, please let us know by calling the toll free line +34 900 10 00 19.

Page 68: EBIT EUR (MM) 1,249.5 1,343.8 Net Profit EUR (MM) 868.7 840.8 Net Operating Expenses/Gross Margin % 26.04 23.63 Balance Sheet March 2016 Dec. 2015* Total Assets EUR (MM) 104,242 104,664

First Quarter

IBERDROLA, S.A.Investor relationsPhone: 00 34 91 784 2804Fax: 00 34 91 784 [email protected]

www.iberdrola.com

Available on GooglePlay

Available on the Available on the

Download the IBERDROLA Investor Relations app:


Recommended