National Grid 2008 Annual Report Download - page 672

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 38641
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: 145
Description: EXHIBIT 15.1
0/6341.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/341/6*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 38641
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: 145 Description: EXHIBIT 15.1
0/6341.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/341/6*
Table of Contents
Annual Report and Accounts 2007/08
153
Notes to the consolidated financial statements –
supplementary information
28. Acquisitions
On 24 August 2007, the acquisition of KeySpan was completed, with 100% of the shares acquired for total cash consideration
of £3.8bn, including acquisition costs of £25m. The provisional amount of goodwill that arose on the acquisition was £2.3bn,
however, this is subject to change as the exercise of establishing fair values of the assets and liabilities acquired is not final at
this stage. Provisional goodwill principally relates to the market and regulatory position and retail customer relationships of the
acquired operations, the opportunity to make future capital investment, expected synergies and opportunities for further cost
improvements in the future, to the assembled workforce and to the potential for future growth. The fair values of the assets and
liabilities acquired have been updated from the provisional fair values reported in our half year results for the six months ended
30 September 2007.
Fair values of assets and liabilities remain provisional and are subject to further adjustment within one year of acquisition dates.
The principal items outstanding include the fair values of tax liabilities, contingent and unrecorded liabilities and businesses
held for sale.
The majority of the acquired operations relate to gas distribution and electricity distribution and generation activities and so are
presented within the Gas Distribution US and Electricity Distribution & Generation US segments. Certain acquired activities,
comprising the Ravenswood electricity generation station in New York City, KeySpan Communications and KeySpan
Engineering Associates operations are disclosed as discontinued operations in the income statement as we plan, and expect,
to dispose of these activities.
*Provisional fair value subject to adjustment
The total consideration net of cash acquired (£260m) was £3,502m.
The KeySpan acquired activities contributed revenue of £2,498m to our continuing operations; contributed a profit from
continuing operations after taxation of £225m; and reported an adjusted profit (before exceptional items, remeasurements and
stranded cost recoveries) from continuing operations after taxation of £174m for the period from 24 August 2007 to 31
March 2008. Exceptional items, remeasurements and stranded cost recoveries included pre-tax costs of £53m relating to
restructuring costs and pre-tax gains on remeasurements of £138m.
IFRS
book value at
acquisition Fair value*
£m £m
Other intan
g
ible assets 42 135
Pro
p
ert
y
,
p
lant and e
q
ui
p
ment 3,152 3,282
Financial and other investments – non-current 129 129
Inventories and current intan
g
ibles 505 505
Trade and other receivables 767 748
Financial and other investments
–
current 33 33
Cash and cash equivalents 260 260
Assets of businesses held for sale 472 1,487
Borrowin
g
s
–
current
(
545
)
(
545
)
Trade and other
p
a
y
ables
(
713
)
(
749
)
Borrowings – non-current (1,852) (1,934)
Other non-current liabilities
(
169
)
(
169
)
Deferred tax liabilities
(
132
)
(
591
)
Pensions and other
p
ost-retirement benefit obli
g
ations
(
440
)
(
440
)
Provisions (649) (643)
Liabilities of businesses held for sale
(
73
)
(
73
)
Minorit
y
interest
(
8
)
(
8
)
Net assets acquired 779 1,427
Goodwill arisin
g
on ac
q
uisition 2,335
Total consideration 3,762