National Grid 2015 Annual Report Download - page 188

Additional Information
Reconciliation of adjusted operating profit to
adjusted earnings and earnings
Adjusted earnings is presented in note 7 to the consolidated
financial statements on page111.
Year ended 31 March
2015
£m
2014
£m
2013
£m
Adjusted operating profit 3,863 3,664 3,639
Adjusted net finance costs (1,033) (1,108) (1,124)
Share of post-tax results of joint ventures
andassociates 46 28 18
Adjusted profit before tax 2,876 2,584 2,533
Adjusted tax (695) (581) (619)
Adjusted profit after tax 2 ,181 2,003 1,914
Attributable to non-controlling interests 812 (1)
Adjusted earnings 2,189 2,015 1,913
Exceptional items after tax (97) 388 75
Remeasurements after tax (73) 73 156
Stranded cost recoveries after tax –– 9
Earnings 2,019 2,476 2,15 3
Reconciliation of adjusted EPS to EPS
Adjusted EPS is presented in note 7 to the consolidated financial
statements.
Year ended 31 March
2015
pence
2014
pence
2013
pence
Adjusted EPS 58 .1 53.5 50.9
Exceptional items after tax (2.6) 10.3 2.0
Remeasurements after tax (1.9) 1.9 4.1
Stranded cost recoveries after tax ––0.2
EPS 53.6 65.7 57. 2
Reconciliation of adjusted operating profit excluding
timing differences and major storms to total
operating profit
Adjusted operating profit excluding timing differences and major
storms is discussed on page 23.
Year ended 31 March
2015
£m
2014
£m
2013
£m
Adjusted operating profit excluding timing
differences and major storms 3,927 3,706 3,759
Major storms ––(136)
Adjusted operating profit excluding timing
differences 3,927 3,706 3,623
Timing differences (64) (42) 16
Adjusted operating profit 3,863 3,664 3,639
Exceptional items, remeasurements and
stranded cost recoveries (83) 71 110
Total operating profit 3,780 3,735 3,749
Use of adjusted profit measures
In considering the financial performance of our businesses and
segments, we analyse each of our primary financial measures
ofoperating profit, profit before tax, profit for the year attributable
toequity shareholders and EPS into two components.
The first of these components is referred to as an adjusted profit
measure, also known as a business performance measure.
Thisisthe principal measure used by management to assess
theperformance of the underlying business.
Adjusted results exclude exceptional items, remeasurements and
stranded cost recoveries. These items are reported collectively
asthe second component of the financial measures. Note 4 on
page 103 explains in detail the items which are excluded from our
adjusted profit measures.
Adjusted profit measures have limitations in their usefulness
compared with the comparable total profit measures as they
exclude important elements of our financial performance.
However,we believe that by presenting our financial performance
in two components it is easier to read and interpret financial
performance between periods, as adjusted profit measures are
more comparable having removed the distorting effect of the
excluded items. Those items are more clearly understood if
separately identified and analysed.
The presentation of these two components of financial
performance is additional to, and not a substitute for, the
comparable total profit measures presented.
Management uses adjusted profit measures as the basis
formonitoring financial performance and in communicating
financial performance to investors in external presentations
andannouncements of financial results.
Internal financial reports, budgets and forecasts are primarily
prepared on the basis of adjusted profit measures, although
planned exceptional items, such as significant restructurings,
arealso reflected in budgets and forecasts. We separately monitor
and disclose the excluded items as a component of our overall
financial performance.
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.
Year ended 31 March
2015
£m
2014
£m
2013
£m
Adjusted operating profit 3,863 3,664 3,639
Exceptional items –55 (84)
Remeasurements – commodity contracts (83) 16 180
Stranded cost recoveries ––14
Total operating profit 3,780 3,735 3,749
Other unaudited financial information
Reconciliations of adjusted profit measures
186