National Grid 2008 Annual Report Download - page 547

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 43844
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 30
Description: EXHIBIT 15.1
0/3226.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/226/3*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 43844
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 30 Description: EXHIBIT 15.1
0/3226.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/226/3*
Table of Contents
38
Performance a
g
ainst our ob
j
ectives continued
National Grid plc
Our actual financial performance compared to the pro forma
performance illustrates the seasonality effect reflected in the
timing of the KeySpan acquisition. The actual results of
KeySpan that have been consolidated from 24 August 2008
provide a larger contribution on a time apportioned basis
compared to a full year contribution. Weather driven
seasonality results in higher revenues and operating profit in
the second half of the financial year. This seasonality is due
to higher energy demands during the colder winter period.
The following tables set out the consolidated revenue,
adjusted operating profit and operating profit by business
segment.
Revenue by business segment
Segmental operating profit before exceptional items,
remeasurements and stranded cost recoveries
Segmental total operating profit
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Revenue 11,423 8,695 8,868
Other o
p
eratin
g
income 75 83 80
Operating costs (8,534) (6,265) (6,574)
Total o
p
eratin
g
p
rofit 2,964 2,513 2,374
Analysed as:
Ad
j
usted o
p
eratin
g
p
rofit 2,595 2,031 1,968
Exce
p
tional items
(
242
)
(
22
)
(
34
)
Remeasurements 232 81
(
49
)
Stranded cost recoveries 379 423 489
Total o
p
eratin
g
p
rofit 2,964 2,513 2,374
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Transmission UK 2,956 2,816 2,710
Transmission US 299 270 310
Gas Distribution UK 1,383 1,193 1,222
Gas Distribution US 2,845 638 571
Electricit
y
Distribution & Generation US 3,508 3,430 3,651
Other activities 642 567 701
Total se
g
mental revenues 11,633 8,914 9,165
Less: sales between business se
g
ments
(
210
)
(
219
)
(
297
)
Total 11,423 8,695 8,868
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Transmission UK 1,021 946 844
Transmission US 128 108 127
Gas Distribution UK 595 409 483
Gas Distribution US 392 71 47
Electricity Distribution & Generation US 330 364 317
Other activities 129 133 150
Ad
j
usted o
p
eratin
g
p
rofit 2,595 2,031 1,968
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Transmission UK 1,013 936 843
Transmission US 122 107 127
Gas Distribution UK 574 412 432
Gas Distribution US 487 67 47
Electricit
y
Distribution & Generation US 696 859 757
Other activities 72 132 168
Total o
p
eratin
g
p
rofit 2,964 2,513 2,374
2007/08 compared with 2006/07
Changes in revenue and other operating income, operating
costs and operating profit for 2007/08 compared with
2006/07 can be summarised as follows:
Revenue and other operating income excluding stranded
cost recoveries was £2,764 million higher than in 2006/07,
reflecting a £193 million decrease as a result of exchange
movements on US operations and a £2,957 million increase
in revenue and other operating income on a constant
currency basis. KeySpan contributed £2,498 million to this
increase in revenue. There was a decrease of £8 million in
other operating income, which primarily relates to reduced
gains on the sales of property by our property management
business in the UK. Operating costs excluding exceptional
items, remeasurements and stranded cost recoveries
increased by £2,200 million, reflecting a £167 million
decrease as a result of exchange movements on US
operations and a £2,367 million increase in operating costs
on a constant currency basis. KeySpan contributed
£2,130 million to this increase in operating costs.
Excluding the significant uplift in revenue and costs
associated with KeySpan there was a £459 million increase
in revenue and other operating income and a £237 million
increase in costs on a constant currency basis. This primarily
related to higher allowed revenues in Transmission UK, and
from Gas Distribution US with the first full year of contribution
from the Rhode Island gas business.
Adjusted operating profit in 2007/08 was £564 million higher
than 2006/07, comprising a £26 million decrease as a result
of exchange on US operations and an increase of
£590 million from the movements in revenue, other operatin
g
income and costs on a constant currency basis.
Net operating exceptional charges of £242 million in 2007/08
related to restructuring costs incurred in the UK and US and
to increases in environmental provisions, also in the UK and
the US. The majority of the restructuring costs related to the
current integration programme underway following the
KeySpan acquisition.
Revenue
and other
operating Operating Operating
income costs profit
£m £m £m
2006/07 results 8,778
(
6,265
)
2,513
Add back exceptional items and
remeasurements
–
(
59
)
(
59
)
Deduct stranded cost recoveries
(
426
)
3
(
423
)
2006/07 adjusted results 8,352 (6,321) 2,031
Exchan
g
e on US o
p
erations
(
193
)
167
(
26
)
2006/07 constant currenc
y
results 8,159
(
6,154
)
2,005
Transmission UK 134 (59) 75
Transmission US 42
(
17
)
25
Gas Distribution UK 192
(
6
)
186
Gas Distribution US 2,239
(
1,915
)
324
Electricity Distribution & Generation US 272 (288) (16)
Other activities 71
(
75
)
(
4
)
Sales between businesses 7
(
7
)
–
2007/08 ad
j
usted results 11,116
(
8,521
)
2,595
2007/08 exceptional items and
remeasurements
–
(
10
)
(
10
)
2007/08 stranded cost recoveries 382 (3) 379
2007/08 results 11,498
(
8,534
)
2,964