National Grid 2008 Annual Report Download - page 550

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 34821
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: 33
Description: EXHIBIT 15.1
0/5229.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/229/5*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 34821
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: 33 Description: EXHIBIT 15.1
0/5229.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/229/5*
Table of Contents
Annual Report and Accounts 2007/08
41
Earnings per share from continuing operations increased from 48.1
pence per share in 2006/07 to 60.5 pence per share in 2007/08
reflecting the increase in adjusted earnings per share, combined
with the hi
g
her net exceptional items, remeasurements and stranded
cost recoveries on a per share basis (2006/07: increase from 41.6
pence per share in 2005/06 to earnings of 48.1 pence per share).
Diluted earnings per share from continuing operations were 60.1
pence per share in 2007/08, 0.4 pence lower than basic earnings
per share, compared with 47.8 pence per share in 2006/07 (0.3
pence lower) and 41.4 pence per share in 2005/06 (0.2 pence
lower). The principal reason for the dilution in 2007/08, 2006/07 and
2005/06 relates to employee share plans.
Adjusted profit measures
The following tables reconcile the adjusted profit measure to the
corresponding total profit measure in accordance with IFRS.
a) Reconciliation of adjusted operating profit to total operating profit
Adjusted operating profit is presented on the face of the
income statement under the heading ‘Operating profit before
exceptional items, remeasurements and stranded cost
recoveries’.
b) Reconciliation of adjusted profit before taxation to profit
before taxation
Adjusted profit before taxation is presented on the face of the
income statement under the heading ‘Profit before taxation
before exceptional items, remeasurements and stranded
cost recoveries’.
c) Reconciliation of adjusted earnings to earnings (profit for
the year from continuing operations attributable to equity
shareholders of the parent)
Adjusted earnings is presented in note 10 to the
consolidated financial statements, under the heading
‘Adjusted earnings – continuing operations’.
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Ad
j
usted o
p
eratin
g
p
rofit 2,595 2,031 1,968
Exce
p
tional items
(
242
)
(
22
)
(
34
)
Commodit
y
contract 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
Adjusted profit before taxation 1,839 1,486 1,369
Exce
p
tional items
(
242
)
(
67
)
(
83
)
Commodit
y
contract remeasurements 223 62
(
63
)
Derivative financial remeasurements
(
7
)
(
153
)
6
Stranded cost recoveries 379 423 489
Total
p
rofit before taxation 2,192 1,751 1,718
Years ended 31 March
2008 2007 2006
Continuing operations £m £m £m
Adjusted earnings 1,253 1,042 998
Exce
p
tional items
(
2
)
(
41
)
(
61
)
Commodit
y
contract remeasurements 133 37
(
38
)
Derivative financial remeasurements
(
35
)
16
(
11
)
Stranded cost recoveries 229 254 293
Earnin
g
s 1,578 1,308 1,181
Discontinued operations
Discontinued operations at 31 March 2008 comprised the
Ravenswood generation station, KeySpan Communications
and KeySpan Engineering Associates, all of which were
acquired with KeySpan on 24 Au
g
ust 2007 and are classified
as businesses held for sale. During 2007/08, discontinued
operations also included our wireless infrastructure
operations in the UK and the US that we sold on 3 April 2007
and 15 August 2007 respectively and the electricity
interconnector in Australia that we sold on 31 August 2007,
as a consequence the results of these operations for
2006/07 and 2005/06 have also been included within
discontinued operations. Further information on the results of
these operations is included on page 73.
On 31 March 2008 we agreed to sell the Ravenswood
generation station for $2.9 billion (£1.4 billion). The sale is
subject to approval from the various regulatory bodies and
completion is expected by summer 2008.
The results of discontinued operations for 2005/06 also
includes two months of trading for the four regional gas
distribution networks that we sold on 1 June 2005. The
exceptional charge of £20 million in 2005/06 arose from the
payment of a £15 million fine relating to one of the sold
networks and £5 million of restructuring costs.
The gain on disposal of discontinued operations in 2005/06
relates to the sales of gas distribution networks.
Earnings per share from discontinued operations in 2007/08
was 62.0 pence per share, includin
g
60.6 pence per share
relating to gains on the businesses sold during the year,
compared with 3.2 pence per share in 2006/07 with no gains
from disposals, and 94.0 pence per share in 2005/06 of
which 91.8 pence per share related to the disposal of the
four regional gas distribution networks.
Net profit and total earnings per share for the year
Net profit from both continuing and discontinued operations
was £3,199 million in 2007/08, compared with £1,396 million
in 2006/07 and £3,850 million in 2005/06.
Total earnings per share from both continuing and
discontinued operations were 122.5 pence per share in
2007/08, 51.3 pence per share in 2006/07 and 135.6 pence
p
er share in 2005/06.
Years ended 31 March
2008 2007 2006
Discontinued operations £m £m £m
Revenue 201 383 493
O
p
eratin
g
costs before exce
p
tional items
(
166
)
(
266
)
(
362
)
Ad
j
usted o
p
eratin
g
p
rofit 35 117 131
Exceptional items – (55) (20)
O
p
eratin
g
p
rofit 35 62 111
Remeasurement finance income 8 37
–
Net finance costs – (2) (4)
Profit from discontinued o
p
erations before tax 43 97 107
Taxation (7) (11) (45)
Profit from discontinued o
p
erations 36 86 62
Gain on disposal of discontinued
operations 1,582 – 2,605
Profit for the
y
ear 1,618 86 2,667