National Grid Plc · LSE:NG.
National Grid — Debt Investor Presentation (June 2008)
24 slides from National Grid's debt investor presentation, June 2008
Slide 1: European Roadshow
European Roadshow June / July 2008
Slide 2: Cautionary statement
Cautionary statement Unless otherwise stated, all financial data of National Grid contained in this presentation is as reported under IFRS. This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking
Slide 3: National Grid… a leading international electricity and gas company
National Grid… … a leading international electricity and gas company Overview UK regulated asset base** Owner/operator of gas/electricity networks in 38% gas distribution 38% electricity UK/US transmission £17.2bn UK - Largest utility i US - 2nd largest utility ii 24% gas transmission 95% of our act
Slide 4: National Grid… facts and figures on the Group (IFRS)
National Grid… … facts and figures on the Group (IFRS) Revenue (£bn)* Gross External Debt1 at March 31 2008 (£m) (£m) 12.0 IFRS IFRS 8.0 4.0 National Grid plc and NGG Finance plc 5,277 National Grid Electricity Transmission plc 3,864 0.0 2004/05 2005/06 2006/07 2007/08 National Grid Gas plc 6,0332 N
Slide 5: Evolution of the Group
Evolution of the Group Sale of Ravenswood c. $2.9bn expected proceeds Generation EV c.$11.8bn KeySpan Sale of wireless and Basslink c. £3.2bn ($6.4bn) proceeds assets Rhode Island Sale of 4 UK EV c. $575m gas gas distribution c. £5.8bn ($11.6bn) proceeds distribution networks National Grid Crown Cas
Slide 6: National Grid… multiple regulated utility businesses in our corporate structure
National Grid… … multiple regulated utility businesses in our corporate structure National Grid plc Guarantee over preference shares Baa1 / BBB+ / BBB+ National Grid USA National Grid Holdings One plc NGG Finance plc A3 / BBB+ / NR NR / BBB+ / NR KeySpan Corp Baa1 / A- / A- National Grid Lattice Gro
Slide 7: What our core businesses do… Transmission
What our core businesses do… … Transmission c.7,400 km of high pressure gas pipeline; c.7,200 circuit kilometres of high-voltage c.13,800 km of electricity transmission network; overhead line; c.675 km of underground electricity cable 224 km direct current transmission line Note: In the US National
Slide 8: What our core businesses do… Gas distribution
What our core businesses do… … Gas distribution c.132,000 km of distribution pipelines; Distributes gas on Around 3.5 million customers; nearly 58,000 km of main and distribution pipe behalf of gas shippers and suppliers to 10.8m consumers 8
Slide 9: What our core businesses do… Electricity distribution and generation
What our core businesses do… … Electricity distribution and generation 3.4 million electricity customers; Distribution network of 116,000 circuit kilometres; 4,119 MW of generation capacity (excluding Ravenswood which is to be sold) 9
Slide 10: Non-regulated businesses
Non-regulated businesses National Grid’s non-regulated businesses and other operations are located in the UK and either operate in the market related to those of its principal businesses or provide support to its businesses. Key facts UK Property National Grid Metering and Onstream provide metering
Slide 11: Regulatory overview
Regulatory overview In the US, for regulatory purposes, we maintain several separate In the UK, services are provided Public Utility Companies, a number of which have more than one through 2 separate regulated entities rate plan with distinct price controls Electric transmission Electric transmissio
Slide 12: Regulatory process… many common elements to rate agreements in UK and US
Regulatory process… … many common elements to rate agreements in UK and US Return on asset base Opex allowance Pensions and tax allowance No commodity exposure Incentive mechanisms No volume exposure Some residual volume Indexation drivers Capex revenue drivers Protection from uncontrollable costs V
Slide 13: Valuing our regulated businesses… main value drivers same
Valuing our regulated businesses… … main value drivers same SAME VALUE DRIVERS Growth in asset / rate base Asset replacement Load related investment Financial outperformance Local cost of capital Investment efficiencies Operating outperformance Global operating model Global IS & Shared Services 13
Slide 14: Valuing our regulated businesses… forecast asset base growth
Valuing our regulated businesses… … forecast asset base growth over 35% in UK & over 25% in US £19.2bn £14bn $18.2bn $14.3bn* 2006/07 2011/12 2006/07 2011/12 *Excludes US stranded costs ($1.7bn) UK - opening 2006/07 RAV. US - average rate base for 2006 calendar year 14
Slide 15: Regulatory settlements… staggered rate plans provide further stability
Regulatory settlements… … staggered rate plans provide further stability 2007 2008 2009 2010 2011 2012 2013 2014 Ofgem Transmission (2) Gas Distribution (4) NiMo (electric) New York NiMo (gas) Rate case in progress Brooklyn Union Gas KeySpan Gas East MECO to 2019 chusetts Massa- Boston Gas Essex Gas
Slide 16: Investment… capital expenditure in regulated businesses and infrastructure projects
Investment… ... capital expenditure in regulated businesses and infrastructure projects has increased over the past 3 years £ billion Drivers of capital expenditure to 2012 and beyond 15 Continued Continued asset asset replacement replacement ~£7.5bn 10 Wind Wind Nuclear Nuclear ~£3.0bn More Increas
Slide 17: Funding the Group… debt maturities and regulated investment drive issuance
Funding the Group… ... debt maturities and regulated investment drive issuance Net debt is expected to rise from £17.6bn at 31st March Outstanding requirement for net new funding of 2008 to c.£19bn at March 2009 and £22bn - £23bn at approximately £4bn by 31st March 2012. March 2012. Around £1.5bn is
Slide 18: Funding the Group… liquidity
Funding the Group… … liquidity Minimal impact from the credit crunch Limited exposure to institutions spreads to LIBOR have risen but rates impacted by the credit crunch have fallen no direct exposure to US subprime mortgage market Commercial Paper markets have remained open to National Grid cash ba
Slide 19: Group borrowing facilities and liquidity as at 15th May 2008
Group borrowing facilities and liquidity as at 15th May 2008 National Grid plc National Grid Gas plc $1.5bn 364-day undrawn syndicated loan facility with 12-month term out; £810m undrawn committed bank lines – 5 year duration; minimal terminates 12th November 2008 with no MAC event of default or rat
Slide 20: Predictability of regulated cash flows is a key factor in our ratings
Predictability of regulated cash flows is a key factor in our ratings… … Group credit ratings Senior Unsecured / Short-Term ratings Moody’s1 S&P Fitch National Grid plc Baa1/P2 BBB+/A2 BBB+/F2 National Grid Electricity Transmission plc A3/P2 A-/A2 A/F2 National Grid Holdings One plc Not rated BBB+/A
Slide 21: 2008/09 financing metric
2008/09 financing metric Interest cover 4.00 4.00 Reflects the calculation used by our credit rating agencies 3.75 3.75 3.2x for the year 3.50 3.50 Aim to manage within a range of 3.0 – 3.5x 3.25 3.25 3.00 3.00 2.75 2.75 2.50 2.50 2005/06 2006/07 2007/08 Target range Interest cover 21
Slide 22: National Grid… what to look out for
National Grid… … what to look out for Sale of Ravenswood US gas rate plan agreements Deliver KeySpan integration and update on synergies against target Continue to implement global operating model Dialogue with NYPSC over additional New York investment Deliver capital investment plans and Rate Base
Slide 23: Treasury Contacts
Treasury Contacts Malcolm Cooper (Group Tax and Treasury Director): D: +44 (0)20 7004 3340 malcolm.cooper@ngrid.com Andrew Kluth (Assistant Treasurer, Funding): D: +44 (0)20 7004 3365 andrew.kluth@ngrid.com Andy Mead (Manager, Corporate Banking): D: +44 (0)20 7004 3369 andy.mead@ngrid.com David Bona
Slide 24: nationalgrid
nationalgrid
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