National Grid Plc · LSE:NG.
National Grid — Non-Deal Roadshow (August 2006)
19 slides from National Grid's roadshow presentation, August 2006
Slide 1: Japanese Roadshow
Japanese Roadshow National Grid plc August 2006
Slide 2: Cautionary statement
Cautionary statement This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securit
Slide 3: Introduction
Introduction Headlines Corporate Structure Strategy Regulation Funding Our Businesses 3
Slide 4: Headlines
Headlines 2005/06 Preliminary Results Looking ahead 11% Growth in pre-tax profit* £12bn Group-wide investment projected over Increased annual investment in our existing the five years to March 2011 businesses by over one third to over £2 billion Group net debt expected to rise by around Co
Slide 5: Summary corporate structure
Summary corporate structure: Including external net debt as at 31 March 2006 National Grid plc & NGG Finance plc (£2.0bn) National Grid USA National Grid Holdings One (£1.4bn) in US group Lattice Group National Grid National Grid Niagara Mohawk £0.3bn (cash) Holdings Wireless New England Power Grani
Slide 6: National Grid plc - strategy
National Grid plc - strategy Asset based network provider focused on ownership and operation of large complex networks: Operational expertise – to outperform benchmarks Shareholder value and regulatory targets Managing regulatory relations – to benefit customers Operational and shareholders expe
Slide 7: Growth through investment
Growth through investment £12bn Group-wide investment projected over the Breakdown of £12bn investment five years to March 2011 Annual investment of around £2.5bn, mainly driven by: Changing UK energy infrastructure requirements UK government renewable energy policy UK transmission asset rep
Slide 8: Growth through operational performance
Growth through operational performance 35% real cost reduction in UK gas distribution* UK gas distribution controllable costs* 500 Target reduction on March 2002 controllable costs 450 17% real reduction in 2005/06 400 Achieved one year early Actual £m 350 Target 300 23% profit growth in Wirel
Slide 9: Strategic growth
Strategic growth Agreed acquisition of KeySpan for $7.3bn cash Assumption of $4.5bn of debt Growth expected from KeySpan $200m synergy savings identified Rhode Island Investment in additional gas gas distribution Sale of 4 UK gas installations distribution networks Non-regulated portfolio
Slide 10: Acquisition of KeySpan and Rhode Island gas assets: Excellent operational fit
Acquisition of KeySpan and Rhode Island gas assets: Excellent operational fit National Grid USA KeySpan Maine Rhode Island gas distribution Vermont New National Grid USA KeySpan (New England) Hampshire 900,000 gas customers 3.3 million electricity customers 565,000 gas customers New York Massachuset
Slide 11: US and UK regulation
US and UK regulation National Grid plc & NGG Finance plc National Grid Holdings One National Grid USA National Grid National Grid Lattice Group Holdings Wireless Niagara Mohawk New England Power Granite State Electric Massachusetts Electric National Grid Electricity National Grid Nantucket Electric
Slide 12: UK regulation
UK regulation Features 5 year duration Transmission Owner (TO) price controls Regulatory Asset Value (RAV) UK Transmission estimated RAV at April 2006: £8.3bn Electricity – £5.5bn Gas – £2.8bn UK Gas distribution estimated RAV at April 2006: £5.9bn Incentive mechanisms Investment a
Slide 13: US regulation
US regulation Features Long duration rate plans (10 years in NY, 20 years in New England) ROE targets and sharing Stranded cost recovery Commodity cost pass through Incentive mechanisms volumes service quality Financial requirements credit rating minimum capitalisation Pensio
Slide 14: Borrowings: external gross debt as at March 2006
Borrowings: external gross debt as at 31 March 2006 National Grid plc & NGG Finance plc (£3.2bn) National Grid USA National Grid Holdings One (£1.5bn) in US group National Grid National Grid Lattice Group Niagara Mohawk Holdings Wireless New England Power Granite State Electric Massachusetts Electri
Slide 15: Credit ratings
Credit ratings Long term senior unsecured debt and short term debt credit ratings Moody’s1 S&P2 Fitch1 National Grid plc Baa1/P2 A-/A1 A-/F2 National Grid Electricity Transmission plc A23/P1 A/A1 A5/F2 National Grid Holdings One plc ---- A-/A1 Not rated National Grid Gas plc A23/P1 A/A1 A+/F1 Nation
Slide 16: Expected ratings movements on completion of KeySpan acquisition
Expected ratings movements for active debt issuers on completion of KeySpan acquisition Long term senior unsecured bond ratings (LT) and short term ratings (ST) Agency NG plc NGET NGGas S&P LT: A- → BBB+ LT: A to A- LT: A to A- ST: A1 → A2 ST: A1 → A2 ST: A1 → A2 Moody’s LT: Baa1 → Baa2 LT: Stay a
Slide 17: Long term debt maturity profile
Long term debt National Grid long term debt maturity profile 30/06/2006 2500 NG Australia & Grain LNG National Grid USA 2000 National Grid/NGGF National Grid Electricity Transmission £ equiv (m) 1500 National Grid Gas Holdings Group 1000 500 0 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Slide 18: Group borrowing facilities and liquidity as at June 2006
Group borrowing facilities and liquidity as at 30 June 2006 National Grid plc National Grid Gas plc $1.55bn undrawn syndicated loan facility; no £870m undrawn committed bank lines – 5 MAC event of default or ratings related year duration covenants minimal covenants Considering increase to
Slide 19: Summary
Summary Asset based network provider focused on ownership and operation of large complex networks Regulated utility network businesses represent the bulk of cash flows and operating profits for the group Significant funding requirements over the next year 19