National Grid 2008 Annual Report Download - page 549

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 47033
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: 32
Description: EXHIBIT 15.1
0/4228.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/228/4*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 47033
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: 32 Description: EXHIBIT 15.1
0/4228.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/228/4*
Table of Contents
40
Performance a
g
ainst our ob
j
ectives continued
National Grid plc
Taxation
A net charge of £611 million arose in 2007/08 comprising
£583 million on profit before tax excluding exceptional items,
remeasurements and stranded cost recoveries and
£28 million on exceptional items, remeasurements and
stranded cost recoveries, compared with £441 million in
2006/07 (comprising £442 million and a credit of £1 million
respectively) and £535 million in 2005/06 (comprising
£369 million and £166 million respectively). This reflected an
exceptional tax credit in 2007/08 of £170 million relating to
the release of deferred tax provisions arising from the
change in the UK corporation tax rate from 30% to 28%
enacted during the year and which takes effect from 1
April 2008.
The effective tax rate before and after exceptional items,
remeasurements and stranded cost recoveries was 31.7%
and 27.9% respectively (2006/07: 29.7% and 25.2%,
2005/06: 27.0% and 31.1%).
Profit for the year from continuing operations
Profit for the year from continuing operations increased from
£1,310 million in 2006/07 to £1,581 million in 2007/08 (from
£1,183 million in 2005/06 to £1,310 million in 2006/07) as a
consequence of the above changes.
Earnings from continuing operations
Adjusted earnings
Earnings
Earnings per share from continuing operations
The following table sets out the adjusted earnings per share
and earnings per share from continuing operations for
2007/08, 2006/07 and 2005/06 and reconciles the
differences between them. Reconciling items are net of tax.
Adjusted earnings per share for 2007/08 increased by 9.7
pence, an increase of 25% compared with 2006/07 (2006/07:
increased by 3.1 pence, an increase of 9% compared with
2005/06).
This reflected the increase in adjusted profit for the year from
continuing operations, the effects of the share repurchase
programme that returned £1.5 billion of value to
shareholders (2006/07: the increase in adjusted profit for the
year from continuing operations and the share consolidation
in August 2005).
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Adjusted operating profit 2,595 2,031 1,968
Net finance costs excluding exceptional
items and remeasurements
(
760
)
(
547
)
(
602
)
Share of
p
ost-tax results of
j
oint ventures 4 2 3
Ad
j
usted
p
rofit before taxation 1,839 1,486 1,369
Taxation excluding tax on exceptional
items, remeasurements and stranded
cost recoveries (583) (442) (369)
Ad
j
usted
p
rofit from continuin
g
o
p
erations 1,256 1,044 1,000
pence pence pence
Adjusted earnings per share from
continuing operations 48.0 38.3 35.2
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Total o
p
eratin
g
p
rofit 2,964 2,513 2,374
Net finance costs (776) (764) (659)
Share of
p
ost-tax results of
j
oint ventures 4 2 3
Profit before taxation 2,192 1,751 1,718
Taxation (611) (441) (535)
Profit from continuin
g
o
p
erations 1,581 1,310 1,183
pence pence pence
Earnings per share from continuing
operations 60.5 48.1 41.6
Years ended 31 March
2008 2007 2006
Continuing operations pence pence pence
Ad
j
usted earnin
g
s
p
er share 48.0 38.3 35.2
Exce
p
tional items
(
0.1
)
(
1.5
)
(
2.2
)
Commodit
y
cost remeasurements 5.1 1.3
(
1.3
)
Derivative financial instruments
remeasurements
(
1.3
)
0.6
(
0.4
)
Stranded cost recoveries 8.8 9.4 10.3
Earnin
g
s
p
er share
–
continuin
g
o
p
erations 60.5 48.1 41.6