TIDMNG. TIDM35DT TIDM46QK TIDM71GP TIDM87QJ 
 
RNS Number : 2215S 
National Grid PLC 
14 May 2009 
 

 
 
 
14 May 2009 
 
 
National Grid plc 
Results for the year ended 31 March 2009 
 
 
HIGHLIGHTS 
 
 
  *  Strong performance 
  *  
    *  Earnings per share up 14% (on a pro forma basis) 1 
    *  8% increase recommended in full year dividend 
 
 
  *  Clear strategy delivering results 
  *  
    *  Good progress with US gas rate case filings 
    *  Strong capital investment of GBP3.2bn; in line with plans 
    *  Successful funding programme - GBP1.9bn funding issued or agreed for 2009/10 
 
 
  *  Outlook for 2009/10 is positive with current trading in line with our 
  expectations. 
 
 
 
FINANCIAL RESULTS FOR CONTINUING OPERATIONS 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| (GBPm, at actual exchange rate)                      |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
|                                                      |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Business performance2                                |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                       |     2,915 |     2,595 |        12 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Pre-tax profit                         |     1,770 |     1,829 |       (3) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Earnings                               |     1,250 |     1,247 |         - | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Earnings per share                     |     50.9p |     47.8p |         6 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Earnings per share (pro forma basis)1  |     50.9p |     44.5p |        14 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|                                                      |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Statutory results                                    |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                       |     2,623 |     2,964 |      (12) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Pre-tax profit                         |     1,394 |     2,182 |      (36) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Earnings                               |       919 |     1,572 |      (42) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Earnings per share                     |     37.4p |     60.3p |      (38) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|                                                      |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Dividend per share                                   |    35.64p |     33.0p |         8 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
Steve Holliday, Chief Executive, said: 
 
 
"We have delivered over the year a strong financial and operational performance. 
Operating profit increased by 12%, pro forma earnings per share increased by 14% 
and we are recommending an 8% increase in our dividend per share. Operationally 
we remain focused on our investment plans and driving further efficiency.  I am 
delighted that we exceeded the $100m targeted run rate of synergies from 
KeySpan. 
 
 
These results are excellent and show that, even in these difficult economic 
times, National Grid's low-risk business model is robust. We have had a good 
start to 2009/10 and are confident that it will be another strong year for us". 
 
CHIEF EXECUTIVE'S REVIEW 
 
 
Last year I stated that our priorities for 2008/09 focused on execution and 
operational delivery, in particular on investment, and the regulatory agenda, 
together with making real progress on the longer term issues of climate change 
and security of supply. 
 
 
 
 
Future policy and regulatory framework 
 
 
We continue to make good regulatory progress in the US, filing gas rate cases 
for Rhode Island, New Hampshire and New York in 2008/09. On 24 November 2008 the 
Rhode Island Public Utilities Commission agreed the Narragansett Gas 
Distribution rate case. This provided for a 10.9% increase in revenues and an 
allowed return on equity of 10.5%.  The new rates came into effect in Rhode 
Island on 1 December 2008.In New Hampshire, we filed a settlement with the New 
Hampshire Public Utilities Commission on 23 January 2009. All issues were 
addressed in the settlement except the allowed return on equity. A temporary 
rate increase of 3.75% has been in effect since 23 August 2008. A final decision 
from the New Hampshire Public Utilities Commission is pending.  In the Niagara 
Mohawk gas rate case, which we filed in May 2008, we have reached an agreement 
with the New York Public Services Commission (NYPSC) Staff and we expect a 
decision from the NYPSC on the filing imminently. 
 
 
These rate cases were nearing the end of their assumed terms and were no longer 
appropriate for the current economic and investment climate. We expect these 
filings to result in an improvement in achieved returns during 2009/10.  They 
include increased operating and capital expenditure allowances and the 
recognition of historic capital expenditure in the rate base. Other mechanisms 
in these rate cases, such as the inclusion of bad debt allowances and a true up 
on additional operational and capital expenditure, will further mitigate risk to 
the businesses. 
 
On 16 July 2008 the NYPSC agreed that the 2008 tranche of the Niagara Mohawk 
$1.47bn five year electricity capital investment plan qualified for recovery 
through our deferral account.We will make further filings for recovery of 
investment in each year, recovering the balance as part of our next rate plan. 
 
 
This year we will make electric rate case filings for Massachusetts Electric 
Company and Narragansett.New electricity rates are expected to come into effect 
in January 2010.  In addition, in August 2008, we filed with the Massachusetts 
Department of Public Utilities a 'notice of intent' setting out our plans to 
file a new consolidated gas distribution rate case during spring 2010 - in this 
rate case we intend to make a consolidated filing, combining our Boston, 
Colonial and Essex gas businesses into a single rate plan, greatly simplifying 
and improving the transparency of our Massachusetts gas regulatory arrangements. 
 
 
 
In March 2008, Ofgem announced a review of the regulatory approach for energy 
networks in the UK, the 'RPI-X @ 20' project.  This review will influence UK 
Transmission and UK Distribution price controls which will run from April 2012 
and April 2013 respectively.  We believe that this review affords an opportunity 
to make necessary changes to deliver a stable and reliable regulatory framework 
that meets the challenges of climate change and security of supply, and 
encourages the necessary investment.  I have been appointed as a member of 
Ofgem's 'RPI-X @ 20' Advisory Panel. 
 
 
 
Disciplined investment programme 
 
 
In 2008/09, we delivered on target our planned GBP3.2bn investment programme. 
 This has increased our UK and US asset bases by 3% and 4% respectively.  In 
2009/10 we plan to invest around GBP3.4bn, supported by our current rate plans 
and long term contracts.  Going forward we plan a similar level of investment 
each year until 2012. 
 
We finance our capital investment programme through a combination of internal 
cash flows and borrowings. In 2008/09 we raised GBP4.9bn of long term debt to 
cover both the refinancing of existing debt and to fund our capital investment 
programme. Our funding requirements for 2008/09 were completed in December 2008 
and we are making significant progress in meeting our expected GBP2.5bn funding 
requirement for 2009/10, having issued or agreed c.GBP1.9bn of long term debt 
since 1 January 2009.  We are confident that we can continue to access the debt 
markets to fund investment. 
 
 
Our effective group interest rate for 2008/09 was 5.7%, a reduction of 60 basis 
points compared to 2007/08.For 2009/10 we expect our effective interest rate to 
continue to reduce, as a result of our variable rate debt benefiting from low 
interest rates and our index-linked debt benefiting from lower levels of 
inflation. 
 
 
We are committed to financing our business in a manner consistent with 
maintaining an efficient balance sheet and optimising our cost of 
capital.We confirm our aim to manage the long-term trend for interest 
cover within a range of around 3.0 - 3.5 times, which we believe is consistent 
with single A range ratings for our main UK operating companies.Our interest 
cover for 2008/09 was 3.1 times and we expect all credit rating metrics to 
improve in 2009/10, as interest rates fall. 
 
 
 
 
Driving efficiency via the global operating model 
 
 
Our global operating model continues to be embedded into the business.  We are 
standardising processes across the business in order to improve efficiency and 
productivity. 
 
 
 We have made solid progress against our targets in 2008/09. As stated in our 
interim management statement in February the integration of KeySpan is 
progressing ahead of plan and we achieved the $100m synergy savings run rate 
ahead of the original 31 March 2009 target. At 31 March 2009, the run rate was 
$129m. 
 
 
Our investment programme in 2008/09 has seen our regulatory asset base grow by 
around 3%. Despite this growth in our asset base our real regulated controllable 
cost base, excluding bad debts, has remained broadly flat at GBP2.2bn.We have a 
clear strategy to mitigate the impact of bad debts in our US distribution 
businesses, where bad debt write-offs for the year amounted to 1.51% of billed 
revenues ($212m), only a 7 basis points increase over last year.  In addition, 
we have increased our US bad debt provision by $73m.  Regulated controllable 
costs (excluding bad debts) as a proportion of our asset base were 8.1%3 in 
2008/09. 
 
 
In October 2008 we announced our cumulative global procurement operating and 
capital expenditure savings target of between GBP170m - GBP350m over a three 
year period. We expect to be at the upper end of this range. We are driving 
procurement costs down through a combination of leveraging National Grid's 
scale, unit price reductions and a decrease in the number of our suppliers. 
Collectively, contracts have already been negotiated that will deliver a savings 
run rate exceeding GBP100m a year. 
 
 
 
 
Climate change and security of supply 
 
 
We remain focused on playing a leading role in addressing the longer term issues 
of climate change and security of supply facing the energy industry. We continue 
to work closely with regulators and policy makers to deliver energy networks of 
the future. 
 
 
In the US we have submitted energy efficiency programmes in New York, 
Massachusetts and Rhode Island. In September 2008, the NYPSC agreed a three year 
electric and gas energy efficiency programme in upstate New York.  Cost recovery 
began in October 2008, with achieved savings forecast to be around $19m over the 
three year period.  National Grid is currently working with Federal and State 
regulators in developing the best approach to access stimulus funding to benefit 
both shareholders and customers. In response to an NYPSC request National Grid 
has filed for two smart grid demonstration projects in the Syracuse and Capital 
district areas covering 80,000 customers.  In addition National Grid has also 
filed a proposal with the Massachusetts Department of Public Utilities for a 
similar trial smart grid programme in Massachusetts. 
 
 
In the UK we are working closely with Ofgem to develop frameworks to facilitate 
earlier renewable generation connections and following successful discussions 
with Ofgem, GBP10m has been provided to National Grid for preliminary works to 
be carried out as part of the strategic investment that we proposed through the 
Electricity Network Strategy Group. In our Gas Distribution business we are at 
the early stages of renewable gas demonstration projects to inject biogas into 
our distribution networks. 
 
 
DIVIDEND AND SHARE REPURCHASE 
 
 
Our dividend policy targets an 8% increase annually through to March 2012. In 
line with this policy, the Board has recommended a final dividend of 23p per 
ordinary share ($1.7437 per American Depository share (ADS)), bringing the 
full-year dividend to 35.64p per ordinary share ($2.6913 per ADS).  The final 
dividend is to be paid on 19 August 2009 to shareholders on the register as at 5 
June 2009.Subject to shareholder approval at the 2009 Annual General Meeting we 
also propose to replace the existing dividend re-investment plan with an 
optional scrip dividend scheme, to commence with the 2008/09 final dividend. 
 
 
Under our US rate plans, cash flows from stranded assets in our Electricity 
Distribution business are scheduled to end in 2011 and do not form part of our 
core on-going business. We have to date returned these cashflows to shareholders 
via an on-market share repurchase programme. In May 2007, we extended this share 
repurchase programme to return GBP1.8bn of proceeds from the sale of our 
Wireless businesses. 
 
 
Since 1 April 2008 we have repurchased 85.5m shares at a value of GBP594m. This 
completes the return of the US stranded asset post-tax cash flows for 2008/09 
and the return following the sale of our Wireless businesses. However, in the 
current financial environment we believe that it is now sensible to suspend our 
share repurchase programme. 
 
 
OUTLOOK 
 
 
We expect another good year in 2009/10 across all our businesses. In particular 
we expect a strong performance from our Transmission and Electricity 
Distribution and Generation businesses.  In Electricity Distribution and 
Generation we incurred a number of one-off costs in 2008/09, including a severe 
ice storm across our New York and New England service territories.Our UK 
regulated revenues are subject to an RPI + X indexation at the start of each 
financial year. For the purpose of setting revenue for 2009/10 the average RPI + 
X element of the rate increases was 5.2%4. 
 
Significant progress has already been made in meeting our funding requirements 
for 2009/10. To date we have issued or agreed GBP1.9bn of long term debt and 
need to raise only a further GBP600m5 to complete our funding requirements for 
2009/10.  This is covered more than 3 times by our committed bank lines.  We 
actively manage our interest rate risk with over 50% of our debt exposed to 
floating or index-linked rates in the longer term.  We expect our financing 
costs in 2009/10 to benefit from lower interest rates, some of which have 
already been locked in, and inflation. In 2009/10 we plan to invest around 
GBP3.4 bn, supported by our current rate plans and long term contracts. 
 
 
Overall we are well positioned to deliver a year of strong performance, 
supporting our progressive dividend policy. 
 
 
  BASIS OF PRESENTATION 
 
 
Unless otherwise stated, all financial commentaries are given on a business 
performance basis, at actual exchange rates. Business performance represents the 
results for continuing operations before exceptional items, mark-to-market 
remeasurements of commodity contracts and financial instruments that are held 
for economic hedging purposes but did not achieve hedge accounting, and US 
stranded cost recoveries. Commentary provided in respect of results after 
exceptional items, mark-to-market remeasurements and US stranded cost recoveries 
is described as 'statutory'. 
 
 
REVIEW OF RESULTS AND FINANCIAL POSITION 
 
 
Operating profit was GBP2,915m, up 12% on the prior year (up 2% on a constant 
currency basis6). This was primarily driven by strong results in our 
Transmission and Gas Distribution businesses and the strengthening of the US 
dollar. 
 
 
Net finance costs were GBP1,150m, GBP380m higher than the prior year, mainly as 
a result of an increase in average net debt due to the inclusion of a full year 
of KeySpan related debt and further issuance to fund our capital expenditure 
programme. Profit before tax was down 3% to GBP1,770m. The tax charge on profit 
was GBP517m, GBP62m lower than the prior year, resulting in an effective tax 
rate for the year of 29.2% (down from 31.7% in 2007/08). 
 
 
Earnings were flat on the prior year at GBP1,250m.  Earnings per share increased 
6% from 47.8p last year to 50.9p. 
 
 
Exceptional items and remeasurements for continuing operations decreased 
earnings by GBP587m after tax.  These mainly relate to restructuring costs and 
commodity contract remeasurements.  A detailed breakdown of exceptional items 
and remeasurements can be found on page 24. 
 
 
Operating cash flows from continuing operations, before exceptional items, 
remeasurements, stranded cost recoveries and taxation, were GBP217m higher than 
the prior year at GBP3,336m. 
 
 
Organic investment in our continuing businesses increased by 6% to GBP3.2bn, 
largely reflecting increased capital expenditure in Gas Distribution as a result 
of the acquisition of KeySpan. 
 
 
Our net debt rose to GBP22.7bn at 31 March 2009 compared with GBP17.6bn at 31 
March 2008. This  mainly reflects the strong appreciation of the US dollar in 
the period since April 2008, together with  our investment programme for 
2008/09. The appreciation of the dollar has increased the sterling value of our 
US net assets (excluding net debt) by around GBP4.5bn and dollar denominated net 
debt by around GBP4bn compared with the position reported at 31 March 2008. 
 
Our average return on equity7 was 10.8% over the three year period ending 31 
March 2009, compared with 11.8% over the three year period ending 31 March 2008. 
 In 2008/09 the annual return was 6.6%, down on the prior year, largely 
reflecting lower RPI inflation.  Interest cover7 at 31 March 2009 was 3.1x, 
down from 3.2x at 31 March 2008, mainly reflecting the inclusion of a full year 
of KeySpan related debt. 
  REVIEW OF TRANSMISSION OPERATIONS 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Summary results                                      |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm)                                               |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Revenue and other operating income     |     3,937 |     3,255 |        21 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating costs                        |   (2,227) |   (1,694) |      (31) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Depreciation and amortisation          |     (409) |     (412) |       (1) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit - actual exchange     |     1,301 |     1,149 |        13 | 
|               rate                                   |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit - constant currency   |     1,301 |     1,188 |        10 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Operating profit by geographical segment             |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at constant currency)                         |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK                                     |     1,126 |     1,021 |        10 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US                                     |       175 |       167 |         5 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                       |     1,301 |     1,188 |        10 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Capital investment                                   |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at actual exchange rate)                      |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK                                     |     1,259 |     1,600 |      (21) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US                                     |       182 |       111 |        64 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Capital investment                     |     1,441 |     1,711 |      (16) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Rate base*                                           |                       |           | 
+------------------------------------------------------+-----------------------+-----------+ 
|                                                      |   2008/09 |   2007/08 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK regulatory asset value (GBPm)       |    11,001 |    10,559 |         4 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US rate base ($m)                      |     1,032 |     1,007 |         2 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Returns                                              |                       |           | 
+------------------------------------------------------+-----------------------+-----------+ 
|                                                      |   2008/09 |   2007/08 |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK operational return (real)           |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Electricity transmission               |      4.7% |      5.2% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Gas transmission                       |      6.9% |      6.9% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US regulatory return on equity**       |           |           |           | 
|               (nominal)                              |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New England ***                        |     11.8% |     11.9% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
*  Details of returns and rate base for all rate plans can be found at 
www.nationalgrid.com. 
** Weighted average return on equity based on regulatory asset value. 
*** In New York, our electricity, transmission and distribution activities 
(including our stranded cost recoveries) make a combined regulatory filing each 
calendar year. The combined New York rate base and returns are reported in our 
Electricity Distribution and Generation business line. 
 
 
 
 
 
 
 
 
  Transmission delivered a very strong performance during the year. Operating 
profit increased to GBP1,301m, up 13%. This was primarily driven by allowed 
increases in regulated income of GBP140m.  UK regulated income increased by 
GBP111m, largely as a result of above-inflation revenue increases under the 
price control allowance.  An under-recovery of income of GBP42m will be carried 
forward to 2009/10.  US regulated income increased by GBP29m.Other items led to 
a net reduction of GBP27m.Movement in exchange rates had a GBP39m year-on-year 
positive impact on operating profit. 
 
Capital investment in Transmission was GBP1,441m.This mainly related to UK 
electricity transmission investment and the major projects included Thames 
Estuary reinforcement, our London cable tunnels project and underground cabling 
work associated with the Olympic site preparation. The balance of the UK 
investment was principally driven by new load-related infrastructure on our gas 
transmission systems.  In the US we are investing in regional reliability 
programmes; the largest project in the year related to the ongoing upgrade of 
the electricity transmission system in the north-east Massachusetts area.  These 
investments resulted in increases in our Transmission UK regulatory asset value 
and US rate base by 4%, and 2% respectively, as compared to the prior year. 
 
 
In UK Transmission we outperformed against our network reliability scheme in 
2008/09, earning GBP9m.  Incentivised losses of supply totalled 51.5MWh. 
 
 
We measure the financial performance of our UK regulated business using an 
operational return metric.  In our Electricity Transmission business we achieved 
a 4.7% operational return, in line with regulatory assumptions for the year. In 
our gas transmission business we achieved a 6.9% operational return, 
significantly outperforming regulatory assumptions, largely as a result of 
strong incentive scheme performance. 
 
 
In the US we measure our financial performance against the allowed regulatory 
return on equity, the basis used by our regulators in the US for setting rates. 
In New England we achieved a weighted average 11.8% return on equity, broadly in 
line with the prior year. Our New York electricity transmission and distribution 
businesses currently operate under a single rate plan; this rate base and return 
are reported in our Electricity Distribution and Generation line of business. 
 
 
In July, the NYPSC agreed that the 2008 portion of our $1.47bn five year 
investment plans qualified for partial recovery under our deferral account. We 
expect to make further filings for partial recovery of investment in each of the 
next three years, recovering the balance as part of our next rate plan. Around 
one third of this investment is in transmission assets.  In November, the 
Federal Energy Regulatory Commission (FERC) approved a package of incentives in 
relation to the New England East-West Solution (NEEWS) project.  We expect that 
our investment in the NEEWS project will total around $650m over the medium 
term, and will earn an enhanced FERC return on equity of 12.89%. 
 
 
 
 
  REVIEW OF GAS DISTRIBUTION OPERATIONS 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Summary results                                      |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm)                                               |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Revenue and other operating income     |     6,254 |     4,236 |        48 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating costs                        |   (4,621) |   (2,977) |      (55) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Depreciation and amortisation          |     (349) |     (272) |      (28) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit - actual exchange     |     1,284 |       987 |        30 | 
|               rate                                   |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit - constant currency   |     1,284 |     1,107 |        16 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Operating profit by geographical segment             |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at constant currency)                         |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK                                     |       672 |       595 |        13 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US                                     |       612 |       512 |        20 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                       |     1,284 |     1,107 |        16 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Capital investment                                   |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at actual exchange rate)                      |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK capex                               |       173 |       161 |         7 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK repex                               |       425 |       353 |        20 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US                                     |       421 |       188 |       124 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Capital investment                     |     1,019 |       702 |        45 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Rate base*                                           |                       |           | 
+------------------------------------------------------+-----------------------+-----------+ 
|                                                      |   2008/09 |   2007/08 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK regulatory asset value (GBPm)       |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Gas Distribution                       |     6,550 |     6,498 |         1 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US rate base ($m)                      |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New York                               |     5,156 |     5,038 |         2 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New England                            |     2,953 |     2,651 |        11 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Returns                                              |                       |           | 
+------------------------------------------------------+-----------------------+-----------+ 
|                                                      |   2008/09 |   2007/08 |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               UK operational return (real)           |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Gas distribution                       |      5.8% |      5.1% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US regulatory return on                |           |           |           | 
|               equity (nominal)**                     |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New York                               |     10.2% |     11.4% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New England                            |      8.0% |      8.1% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
*  Details of returns and rate base for all rate plans can be found at 
www.nationalgrid.com. 
** Weighted average return on equity based on regulatory asset value 
  Gas Distribution has also achieved a very strong performance for the year, 
with operating profit of GBP1,284m, up 30%.  This was primarily driven by an 
increase in US regulated net income. Rate increases in New York and Long Island, 
together with colder weather and increased energy efficiency incentives combined 
to increase US regulated net income by GBP140m.  The beneficial effect of timing 
on the recovery of income has resulted in an over-recovery of revenues in 
2008/09 of GBP46m.  UK regulated net income increased by GBP63m. This was 
largely as a result of above-inflation revenue increases under the price control 
allowance.The UK regulated business will carry forward an under recovery of 
GBP10m of income to 2009/10.  Other items reduced operating profit by GBP26m, 
largely relating to an increase in bad debt reflecting the downturn in the US 
economy.  The year-on-year movement in exchange rates increased operating profit 
by GBP120m. 
 
During the period, together with our gas distribution alliance partners, we have 
replaced over 1,900km of gas mains in the UK, resulting in total replacement 
expenditure (repex) of GBP425m.Since the beginning of the programme in 2002, we 
have now replaced 24% of our metallic gas mains.  In the US, in addition to 
investment in replacing ageing network infrastructure, we added around 60,000 
new gas customers during 2008/09.  Overall, our investment in network 
infrastructure projects in the UK and US resulted in total capital expenditure 
(including repex) of GBP1,019m. 
 
 
We measure the financial performance of our UK regulated business using an 
operational return metric. We achieved a 5.8% operational return, outperforming 
regulatory assumptions.This was mainly as a result of outperformance on 
incentives and operating expenditure. 
 
 
In New York, we achieved a weighted average 10.2% regulatory return on equity, 
ahead of our weighted average base regulatory allowance.  This is largely as a 
result of outperformance of base allowed returns in our 'downstate' New York gas 
businesses.  Following new rate plan agreements, new gas rates went into effect 
for KeySpan Energy Delivery New York (KEDNY) and KeySpan Energy Delivery Long 
Island (KEDLI) in January 2008.In New England, we achieved a weighted average 
return of 8% - these networks are not currently earning their allowed returns 
and we expect the filings we made in 2008/09 in New Hampshire and Rhode Island 
to improve returns during 2009/10. 
 
 
We are at the early stages of a renewable gas demonstration project to inject 
biogas into our UK distribution grid.  In the US, we are at the early stages of 
a similar project at Newton Creek waste water treatment site in New York. 
  REVIEW OF ELECTRICITY DISTRIBUTION AND GENERATION OPERATIONS 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Summary results                                      |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm)                                               |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Revenue and other operating income*    |     4,537 |     3,126 |        45 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating costs                        |   (4,049) |   (2,650) |      (53) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Depreciation and amortization          |     (223) |     (146) |      (49) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit - actual exchange     |       265 |       330 |      (20) | 
|               rate                                   |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit - constant currency   |       265 |       431 |      (39) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Operating profit by principal activities             |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at constant currency)                         |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Electricity distribution               |       210 |       398 |      (47) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Long Island transmission and           |        24 |        12 |       100 | 
|               distribution services                  |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Long Island generation                 |        31 |        21 |        48 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                       |       265 |       431 |      (39) | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Capital investment                                   |   Year ended 31 March |           | 
+------------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at actual exchange rate)                      |      2009 |      2008 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Electricity distribution               |       317 |       244 |        30 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Long Island generation                 |      38   |        13 |       192 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               Capital investment                     |       355 |       257 |        38 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Rate base**                                          |                                   | 
+------------------------------------------------------+-----------------------------------+ 
|                                                      |   2008/09 |   2007/08 |  % change | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US rate base ($m)                      |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New York                               |     4,124 |     4,103 |         1 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New England                            |     2,190 |     2,047 |         7 | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
+------------------------------------------------------+-----------+-----------+-----------+ 
| Returns                                              |                                   | 
+------------------------------------------------------+-----------------------------------+ 
|                                                      |   2008/09 |   2007/08 |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               US regulatory return on                |           |           |           | 
|               equity (nominal)***                    |           |           |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New York                               |      6.7% |      9.1% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
|               New England                            |      5.9% |      8.8% |           | 
+------------------------------------------------------+-----------+-----------+-----------+ 
 
 
* Excludes revenue from stranded cost recoveries. 
** Details of returns and rate base for all rate plans can be found at 
www.nationalgrid.com. 
***Weighted average return on equity based on regulatory asset value. 
 
 
 
 
 
 
  Electricity Distribution and Generation operating profit decreased by 20% 
during the year to GBP265m.  Higher storm costs reduced operating profit by 
GBP74m, mainly relating to a severe ice storm across our service territory in 
December 2008. The majority of these costs are recoverable under our New York 
deferral account and Massachusetts storm fund. One-off items reduced operating 
profit by GBP45m, the largest component of this being a non-cash one-off item 
relating to historic transmission charges. Other items, including an increase in 
reliability and other service related costs, reduced operating profit by GBP47m. 
 The strengthening of the dollar had a GBP101m year-on-year positive impact on 
operating profit. 
 
 
National Grid gained national recognition for its response to the ice storms in 
December, winning the Edison Electric Institutes emergency recovery award. With 
states of emergency declared in Massachusetts, New York and New Hampshire, 
National Grid restored power to more than 550,000 customers in eight days.  Last 
year also saw National Grid deliver its best reliability performance since the 
acquisition of KeySpan.  We achieved our reliability targets for 99.6% of our 
electricity customer base. 
 
 
Capital expenditure was up 38% on the prior year at GBP355m.This increase mainly 
relates to movements in exchange rates. The balance of the investment was 
principally driven by higher generation spend, incurred as a result of a full 
year of KeySpan related investment.  On 16 July 2008 the New York Public Service 
Commission agreed that the 2008 tranche of the Niagara Mohawk $1.47bn five year 
electricity capital investment plan qualified for recovery through our deferral 
account.  We will make further filings for recovery of investment in each year, 
recovering the balance as part of our next rate plan. 
 
 
We measure our US financial performance against the allowed regulatory returns 
on equity, the basis used by our regulators in the US for setting rates.  In New 
England we achieved a weighted average 5.9%. In New York we achieved a weighted 
average of 6.7%.  These networks are not currently earning their allowed returns 
and in May and June we plan to make electric rate case filings for Massachusetts 
Electric Company and Narragansett respectively.  Features of these filings will 
include reconciliation of costs ("true up") for pensions and employee benefits, 
decoupling of revenue from delivery volumes and full recovery of commodity 
related bad debts.New electricity rates under these plans are expected to come 
into effect in January 2010.  In early 2010 we plan to make a filing for the 
Niagara Mohawk electric business to seek new rates from January 2011. 
 
 
This year we expect a significant improvement in the financial performance of 
Electricity Distribution and Generation, largely because of the number of 
one-off costs incurred in 2008/09.In addition we expect revenue 
increases, reflecting our rate case filings in New England. 
 
 
 
 
  REVIEW OF NON-REGULATED AND OTHER ACTIVITIES 
 
 
+-----------------------------------------------------+-----------+-----------+-----------+ 
| Summary results                                     |   Year ended 31 March |           | 
+-----------------------------------------------------+-----------------------+-----------+ 
| (GBPm)                                              |      2009 |      2008 |  % change | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Revenue and other operating income    |       750 |       709 |         6 | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Operating costs                       |     (539) |     (416) |      (30) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Depreciation and amortisation         |     (146) |     (164) |      (11) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                      |        65 |       129 |      (50) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
 
 
+-----------------------------------------------------+-----------+-----------+-----------+ 
| Operating profit by principal activities            |   Year ended 31 March |           | 
+-----------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at actual exchange rate)                     |      2009 |      2008 |  % change | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Metering                              |       133 |       104 |        28 | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Grain LNG                             |        21 |        12 |        75 | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Property                              |         1 |        93 |      (99) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Sub-total operating profit            |       155 |       209 |      (26) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Corporate and other activities        |      (90) |      (80) |      (13) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Operating profit                      |        65 |       129 |      (50) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
 
 
+-----------------------------------------------------+-----------+-----------+-----------+ 
| Capital investment                                  |   Year ended 31 March |           | 
+-----------------------------------------------------+-----------------------+-----------+ 
| (GBPm, at actual exchange rate)                     |      2009 |      2008 |  % change | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Metering                              |       137 |       126 |         9 | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Grain LNG                             |       213 |       221 |       (4) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Property                              |         9 |        19 |      (53) | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Other                                 |        68 |        17 |       300 | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
|               Capital investment                    |       427 |       383 |        11 | 
+-----------------------------------------------------+-----------+-----------+-----------+ 
 
 
  Operating profit from our Non-regulated and other activities decreased by 50% 
during the year to GBP65m. This mainly reflected a reduction in operating profit 
in our Property business, partially offset by planned improvements in our 
Metering and Grain LNG businesses.  As reported in February, in the current 
challenging market conditions, we have taken action to defer property sales in 
order to preserve value.  This has resulted in operating profit decreasing by 
GBP92m. We are continuing to carry out site remediation on our property 
portfolio and these assets will be retained until market conditions improve. 
 
 
Operating profits in our Metering business increased by GBP29m.This was 
primarily driven by inflationary price increases and lower controllable costs.In 
February 2008, the Gas and Electricity Markets Authority (GEMA) issued a 
decision to fine us GBP41.6m for a breach of the UK Competition Act 1998 in 
respect of term contracts with gas suppliers entered into by our UK metering 
services business in 2004. We subsequently appealed this decision to the 
Competition Appeal Tribunal (the Tribunal). On 29 April 2009 the Tribunal 
overturned the decision in part and reduced the fine to GBP30m but also upheld 
the original decision in part. We continue to review the Tribunal's ruling and 
are considering our legal position including potential grounds for appeal. 
 
Our Grain LNG business delivered an operating profit of GBP21m, an increase of 
75% on the prior year, as a result of Phase II becoming operational. Capital 
expenditure remained broadly flat at GBP213m. Phase III construction commenced 
in July and is planned to complete in 2010.  This will add a further LNG tank 
and a second unloading jetty, increasing the total annual capacity of the 
terminal to around 15m tonnes, representing around 20% of total UK gas demand. 
These investments are underpinned by long-term, take-or-pay contracts, which 
deliver an index-linked revenue stream. 
 
 
 
 
 
JOINT VENTURES 
 
 
BritNed, a 50/50 joint venture with TenneT (the Dutch electricity transmission 
owner), is on target for completion of the 260 km electricity link between the 
UK and the Netherlands by December 2010 and commercial operations in April 
2011.  Construction of the landing sites at Maasvlakte and the Isle of Grain is 
well under way. In addition, the land cable manufacture is now complete and 50% 
of the marine cable has now been manufactured and tested. 
 
 
We have made progress towards generating sustainable power and heat at our 
pressure reduction stations via Blue-NG, our joint venture with the renewable 
generation company, 2oC. In August 2008, we received consent from Ofgem for 
Blue-NG to trial the technology at eight of our sites. The first site, at 
Beckton, London, received planning permission for a 20MW plant in January 2008. 
Planning permission for the second site, at Southall, was applied for in January 
2009.  The construction contract for the first two sites should be signed in 
mid-2009, with both sites expected to commence operations in late 2011. 
 
 
The Millennium pipeline went into full service on time in December 2008. 
Millennium is the centerpiece of a larger project involving expansion of the 
existing Empire Pipeline, Algonquin Pipeline and Iroquois Pipeline that received 
FERC approval in December 2006. 
  PRO FORMA FINANCIAL RESULTS FOR CONTINUING OPERATIONS 
 
 
On 24 August 2007, we completed the acquisition of KeySpan, significantly 
growing our footprint in North America and positioning National Grid as the 
second largest energy delivery company in the US (by number of customers). 
 
 
The timing of the completion of this acquisition benefited our reported results 
for 2007/08, and to provide a like for like view of the continued underlying 
growth in our business, we have provided comparative results in the table below 
that illustrate the impact of the KeySpan acquisition as if it had completed on 
1 April 2007. 
 
 
These adjustments are included for illustrative purposes only. They are prepared 
on a business performance basis, representing the results for continuing 
operations before exceptional items, remeasurements, and US stranded cost 
recoveries. 
 
 
+-----------------------------+---------+--------+-------------+--------+ 
| Business                    | Year ended 31 March                     | 
| performance                 |                                         | 
+-----------------------------+-----------------------------------------+ 
| (GBPm,                      |    2009 |   2008 | adjustment* |  2008* | 
| at                          |  actual | actual |             |    pro | 
| actual                      |         |        |             |  forma | 
| exchange                    |         |        |             |        | 
| rate)                       |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Transmission  |   1,301 |  1,149 |           - |  1,149 | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Gas           |   1,284 |    987 |          +4 |    991 | 
|               Distribution  |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Electricity   |     265 |    330 |         +19 |    349 | 
|               Distribution  |         |        |             |        | 
|               & Generation  |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Non-regulated |      65 |    129 |          +7 |    136 | 
|               & other       |         |        |             |        | 
|               activities    |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Operating     |   2,915 |  2,595 |         +30 |  2,625 | 
|               profit        |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Net           | (1,150) |  (770) |       (160) |  (930) | 
|               finance       |         |        |             |        | 
|               costs         |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Share         |       5 |      4 |          +3 |      7 | 
|               of            |         |        |             |        | 
|               post-tax      |         |        |             |        | 
|               joint         |         |        |             |        | 
|               ventures      |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Pre-tax       |   1,770 |  1,829 |       (127) |  1,702 | 
|               profit        |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Taxation      |   (517) |  (579) |         +42 |  (537) | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Minority      |     (3) |    (3) |           - |    (3) | 
|               interests     |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Earnings      |   1,250 |  1,247 |        (85) |  1,162 | 
+-----------------------------+---------+--------+-------------+--------+ 
|               Earnings      |   50.9p |  47.8p |      (3.3)p |  44.5p | 
|               per           |         |        |             |        | 
|               share         |         |        |             |        | 
+-----------------------------+---------+--------+-------------+--------+ 
 
 
 
 
* Comparatives have been restated for the finalisation of the fair value 
exercise on the acquisition of KeySpan Corporation as noted above. 
  BOARD CHANGES 
 
 
Robert Catell retired as an Executive Director of the Company on 31 March 2009. 
He will continue as a Non-executive Director and Deputy Chairman of National 
Grid, as well as Non-executive Chairman of National Grid USA, until the 
conclusion of the Company's Annual General Meeting on 27 July 2009. 
 
 
METRIC DEFINITIONS 
 
 
The financial metrics we have reported today are designed to give greater 
transparency on National Grid's relative performance and our performance against 
regulatory contracts. 
 
 
NATIONAL GRID RETURN ON EQUITY (nominal) 
This metric captures the total operational and financial performance of the 
company. 
Calculation: IFRS adjusted profit after tax divided by the equity base. 
  *  IFRS adjusted operating profit after tax is as reported on a business 
  performance basis, adjusted for: regulatory depreciation; capitalisation, mainly 
  relating to gas distribution mains replacement (repex) in the UK; pensions; 
  indexation of our UK regulatory asset value; and discontinued operations. 
  *  Equity base is equal to the total UK regulatory asset value; plus total capital 
  invested in our US businesses; plus net assets for our Non-regulated and other 
  businesses; minus net debt as reported under IFRS. 
 
 
 
UK OPERATIONAL RETURN (real) 
(Transmission - UK; Gas Distribution - UK) 
This metric is comparable to the "vanilla return" used by Ofgem. 
Calculation: (IFRS adjusted operating profit minus current tax), divided by 
regulatory asset value 
  *  IFRS adjusted operating profit is as reported on a business performance basis, 
  adjusted for: regulatory depreciation; capitalisation of gas distribution mains 
  replacement (repex); and pensions. 
  *  Current tax is the tax charge as reported on a regulatory basis. 
 
 
 
US REGULATED RETURN ON EQUITY (nominal) 
(Transmission - US; Gas Distribution - US; Electricity Distribution & 
Generation) 
This is a US GAAP metric as calculated annually (financial year to 31 March for 
New England Power; calendar year to 31 December in Massachusetts and New York) 
and reported to our regulators. 
Calculation: Regulated net income divided by equity rate base. 
  *  Regulated net income is adjusted for earned savings in New York. 
  *  Equity rate base is as reported to our regulators. For New England Power the 
  rate base applied is the common equity excluding goodwill. 
 
 
 
INTEREST COVER 
This is an IFRS metric and reflects the calculation used by our credit rating 
agencies.  It is used as an indicator of balance sheet efficiency. 
Calculation: Adjusted funds from operations divided by adjusted interest 
expense. 
 
 
EFFICIENCY METRIC 
Calculation: Adjusted regulated controllable costs divided by asset base. 
  *  Regulated controllable costs excluding bad debts. 
  *  Asset base is the estimated mid year UK regulatory asset value and US rate base. 
 
 
 
Worked examples are available at www.nationalgrid.com. 
  CONTACTS 
 
 
National Grid: 
 
Investors 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| David Rees                           | +44 (0)20 7004 3170                  | +44 (0)7901 511322(m)                | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| George Laskaris                      | +1 718 403 2526                      | +1 917 375 0989(m)                   | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| Richard Smith                        | +44 (0)20 7004 3172                  | +44 (0)7747 006321(m)                | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| Victoria Davies                      | +44 (0)20 7004 3171                  | +44 (0)7771 973447(m)                | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
 
Media 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| Clive Hawkins                        | +44 (0)20 7004 3147                  | +44 (0)7836 357173(m)                | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| Chris Mostyn                         | +1 718 403 2747                      | +1 347 702 3740(m)                   | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| Gemma Stokes                         | +44 (0)1926 65 3555                  | +44 (0)7974 198333(m)                | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
| Brunswick: Paul Scott                | +44 (0)20 7396 5333                  | +44 (0)7974 982333(m)                | 
+--------------------------------------+--------------------------------------+--------------------------------------+ 
 
An analyst presentation will be held at the London Stock Exchange, 10 
Paternoster Square, London EC4M 7LS at 9:15am (UK time) today. 
 
Live telephone coverage of the analyst presentation - password National Grid 
+-------------------------+------------------------------------+-------------------------+----------------------------+ 
| UK dial in number       | +44 (0) 203 023 4488               | US dial in number       | +1 866 966 5335            | 
+-------------------------+------------------------------------+-------------------------+----------------------------+ 
Telephone replay of the analyst presentation (available until 11 June 2009) 
+-------------------------+------------------------------------+-------------------------+----------------------------+ 
| Dial in number          | +44 (0) 208196 1998                | Account number          | 682162#                    | 
+-------------------------+------------------------------------+-------------------------+----------------------------+ 
|                         |                                    |                         |                            | 
+-------------------------+------------------------------------+-------------------------+----------------------------+ 
 
A short video of Steve Holliday talking about these results is available on 
www.cantos.com. A live web cast of the presentation will also be available at 
www.nationalgrid.com. 
 
Photographs are available on www.newscast.co.uk. 
 
You can view or download copies of our latest Annual Report or the Annual Review 
from our website at www.nationalgrid.com/corporate/Investor+Relations/ or 
request a free printed copy by contacting investor.relations@ngrid.com. 
 
 
CAUTIONARY STATEMENT 
 
 
This announcement 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 Securities Exchange Act of 1934, 
as amended. These statements include information with respect to National Grid's 
financial condition, National Grid's results of operations and businesses, 
strategy, plans and objectives. Words such as "anticipates", "expects", 
"intends", "plans", "believes", "seeks", "estimates", "may", "will", "continue", 
"project" and similar expressions, as well as statements in the future tense, 
identify forward-looking statements. These forward-looking statements are not 
guarantees of National Grid's future performance and are subject to assumptions, 
risks and uncertainties that could cause actual future results to differ 
materially from those expressed in or implied by such forward-looking 
statements. Many of these assumptions, risks and uncertainties relate to factors 
that are beyond National Grid's ability to control or estimate precisely, such 
as delays in obtaining, or adverse conditions contained in, regulatory approvals 
and contractual consents, unseasonable weather affecting the demand for 
electricity and gas, competition and industry restructuring, changes in economic 
conditions, currency fluctuations, changes in interest and tax rates, changes in 
energy market prices, changes in historical weather patterns, changes in laws, 
regulations or regulatory policies, developments in legal or public policy 
doctrines, the impact of changes to accounting standards,  technological 
developments and the ability to access capital markets and other sources of 
credit in a timely manner on acceptable terms, especially considering the recent 
deterioration of market conditions in the global economy and financial markets. 
 Other factors that could cause actual results to differ materially from those 
described in this announcement include the ability to integrate the businesses 
relating to announced or recently completed acquisitions with National Grid's 
existing business to realise the expected synergies from such integration, the 
availability of new acquisition opportunities and the timing and success of 
future acquisition opportunities, the timing and success or other impact of the 
sales of National Grid's non-core businesses, the failure for any reason to 
achieve reductions in costs or to achieve operational efficiencies, the failure 
to retain key management, the behaviour of UK electricity market participants on 
system balancing, the timing of amendments in prices to shippers in the UK gas 
market, the performance of National Grid's pension schemes and the regulatory 
treatment of pension costs, and any adverse consequences arising from outages on 
or otherwise affecting energy networks, including gas pipelines owned or 
operated by National Grid. For a more detailed description of some of these 
assumptions, risks and uncertainties, together with any other risk factors, 
please see National Grid's filings with and submissions to the US Securities and 
Exchange Commission (the "SEC") (and in particular the "Risk Factors" and 
"Operating and Financial Review" sections in its most recent Annual Report on 
Form 20-F). Except as may be required by law or regulation, National Grid 
undertakes no obligation to update any of its forward-looking statements. The 
effects of these factors are difficult to predict. New factors emerge from time 
to time and National Grid cannot assess the potential impact of any such factor 
on its activities or the extent to which any factor, or combination of factors, 
may cause results to differ materially from those contained in any 
forward-looking statement.  The contents of any website referenced herein do not 
form part of this document. 
 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| CONSOLIDATED INCOME STATEMENT                      |  |       |  |     2009 |  |    2008* |  | 
| for the years ended 31 March                       |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |Notes  |  |     GBPm |  |     GBPm |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Revenue                                            |  |  2a   |  |   15,624 |  |   11,423 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Other operating income                             |  |       |  |       63 |  |       75 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Operating costs                                    |  |       |  | (13,064) |  |  (8,534) |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Operating profit                                   |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Before exceptional items, remeasurements and     |  |  2b   |  |    2,915 |  |    2,595 |  | 
| stranded cost recoveries                           |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Exceptional items, remeasurements and stranded   |  |  3    |  |    (292) |  |      369 |  | 
| cost recoveries                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Total operating profit                             |  |  2c   |  |    2,623 |  |    2,964 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Interest income and similar income                 |  |  4    |  |    1,315 |  |    1,275 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Interest expense and other finance costs           |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Before exceptional items and remeasurements      |  |       |  |  (2,465) |  |  (2,045) |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Exceptional items and remeasurements             |  |  3    |  |     (84) |  |     (16) |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |  4    |  |  (2,549) |  |  (2,061) |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Share of post-tax results of joint ventures and    |  |       |  |        5 |  |        4 |  | 
| associates                                         |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Profit before taxation                             |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Before exceptional items, remeasurements and     |  |       |  |    1,770 |  |    1,829 |  | 
| stranded cost recoveries                           |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Exceptional items, remeasurements and stranded   |  |  3    |  |    (376) |  |      353 |  | 
| cost recoveries                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Total profit before taxation                       |  |       |  |    1,394 |  |    2,182 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Taxation                                           |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Before exceptional items, remeasurements and     |  |  5    |  |    (517) |  |    (579) |  | 
| stranded cost recoveries                           |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Exceptional items, remeasurements and stranded   |  |  3    |  |       45 |  |     (28) |  | 
| cost recoveries                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Total taxation                                     |  |       |  |    (472) |  |    (607) |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Profit from continuing operations after taxation   |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Before exceptional items, remeasurements and     |  |       |  |    1,253 |  |    1,250 |  | 
| stranded cost recoveries                           |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Exceptional items, remeasurements and stranded   |  |  3    |  |    (331) |  |      325 |  | 
| cost recoveries                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Profit for the year from continuing operations     |  |       |  |      922 |  |    1,575 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Profit for the year from discontinued operations   |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Before exceptional items and remeasurements      |  |  6    |  |        9 |  |       28 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Exceptional items and remeasurements             |  |  6    |  |       16 |  |    1,590 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |       25 |  |    1,618 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Profit for the year                                |  |       |  |      947 |  |    3,193 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Attributable to:                                   |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Equity shareholders of the parent                |  |       |  |      944 |  |    3,190 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Minority interests                               |  |       |  |        3 |  |        3 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |      947 |  |    3,193 |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Earnings per share from continuing operations      |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Basic                                            |  |  7a   |  |    37.4p |  |    60.3p |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Diluted                                          |  |  7b   |  |    37.1p |  |    59.9p |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Earnings per share                                 |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Basic                                            |  |  7a   |  |    38.5p |  |   122.3p |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| - Diluted                                          |  |  7b   |  |    38.2p |  |   121.6p |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Dividends per ordinary share: paid during the year |  |  8    |  |   33.94p |  |   29.50p |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
| Dividends per ordinary share: for the year(i)      |  |       |  |   35.64p |  |   33.00p |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
|                                                    |  |       |  |          |  |          |  | 
+----------------------------------------------------+--+-------+--+----------+--+----------+--+ 
 
 
* Comparatives have been restated for the finalisation of the fair value 
exercise on the acquisition of KeySpan Corporation (see note 9) 
i) Approved or proposed to be paid. 
 
 
 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| CONSOLIDATED BALANCE SHEET                         |  |      |  |     2009 |  |    2008* |  | 
| at 31 March                                        |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |Note  |  |     GBPm |  |     GBPm |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Non-current assets                                 |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Goodwill                                           |  |      |  |    5,391 |  |    3,904 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Other intangible assets                            |  |      |  |      370 |  |      271 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Property, plant and equipment                      |  |      |  |   29,545 |  |   24,331 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Deferred tax assets                                |  |      |  |      137 |  |        - |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Pension asset                                      |  |      |  |      269 |  |      846 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Other non-current assets                           |  |      |  |      106 |  |      164 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Financial and other investments                    |  |      |  |      361 |  |      251 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Derivative financial assets                        |  |      |  |    1,533 |  |    1,063 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total non-current assets                           |  |      |  |   37,712 |  |   30,830 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Current assets                                     |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Inventories and current intangible assets          |  |      |  |      556 |  |      438 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Trade and other receivables                        |  |      |  |    2,672 |  |    2,265 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Financial and other investments                    |  |      |  |    2,197 |  |    2,095 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Derivative financial assets                        |  |      |  |      593 |  |      463 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Cash and cash equivalents                          |  |      |  |      737 |  |      174 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total current assets                               |  |      |  |    6,755 |  |    5,435 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Assets of businesses held for sale                 |  |      |  |        - |  |    1,506 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total assets                                       |  |      |  |   44,467 |  |   37,771 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Current liabilities                                |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Borrowings                                         |  |      |  |  (3,253) |  |  (3,882) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Derivative financial liabilities                   |  |      |  |    (307) |  |    (114) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Trade and other payables                           |  |      |  |  (2,835) |  |  (2,480) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Current tax liabilities                            |  |      |  |    (383) |  |    (295) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Provisions                                         |  |      |  |    (248) |  |    (375) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total current liabilities                          |  |      |  |  (7,026) |  |  (7,146) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Non-current liabilities                            |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Borrowings                                         |  |      |  | (23,540) |  | (17,121) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Derivative financial liabilities                   |  |      |  |    (633) |  |    (319) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Other non-current liabilities                      |  |      |  |  (2,092) |  |  (1,721) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Deferred tax liabilities                           |  |      |  |  (2,661) |  |  (3,259) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Pensions and other post-retirement benefit         |  |      |  |  (3,080) |  |  (1,746) |  | 
| obligations                                        |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Provisions                                         |  |      |  |  (1,451) |  |  (1,022) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total non-current liabilities                      |  |      |  | (33,457) |  | (25,188) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Liabilities of businesses held for sale            |  |      |  |        - |  |     (63) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total liabilities                                  |  |      |  | (40,483) |  | (32,397) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Net assets                                         |  |      |  |    3,984 |  |    5,374 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Equity                                             |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Called up share capital                            |  |      |  |      294 |  |      294 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Share premium account                              |  |      |  |    1,371 |  |    1,371 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Retained earnings                                  |  |      |  |    7,135 |  |    8,943 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Other equity reserves                              |  |      |  |  (4,830) |  |  (5,252) |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Shareholders' equity                               |  |      |  |    3,970 |  |    5,356 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Minority interests                                 |  |      |  |       14 |  |       18 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
| Total equity                                       |  |  10  |  |    3,984 |  |    5,374 |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
|                                                    |  |      |  |          |  |          |  | 
+----------------------------------------------------+--+------+--+----------+--+----------+--+ 
 
 
* Comparatives have been restated for the finalisation of the fair value 
exercise on the acquisition of KeySpan Corporation (see note 9) 
 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| CONSOLIDATED STATEMENT OF RECOGNISED                 |      |  |     2009 |  |    2008* |  | 
| INCOME AND EXPENSE                                   |      |  |          |  |          |  | 
| for the years ended 31 March                         |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |     GBPm |  |     GBPm |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Exchange adjustments                                 |      |  |      464 |  |     (25) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Actuarial net (loss)/gain                            |      |  |  (2,018) |  |      432 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Deferred tax on actuarial net gains and losses       |      |  |      678 |  |     (98) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net losses taken to equity in respect of cash flow   |      |  |      (1) |  |     (32) |  | 
| hedges                                               |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Transferred to profit or loss on cash flow hedges    |      |  |     (53) |  |      (7) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Deferred tax on cash flow hedges                     |      |  |       19 |  |        2 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net gains taken to equity on available-for-sale      |      |  |        9 |  |        6 |  | 
| investments                                          |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Transferred to profit or loss on sale of             |      |  |     (18) |  |        - |  | 
| available-for-sale investments                       |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Deferred tax on available-for-sale investments       |      |  |        7 |  |        2 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net (expense)/income recognised directly in equity   |      |  |    (913) |  |      280 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Profit for the year                                  |      |  |      947 |  |    3,193 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Total recognised income and expense for the year     |      |  |       34 |  |    3,473 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Attributable to:                                     |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| - Equity shareholders of the parent                  |      |  |       26 |  |    3,470 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| - Minority interests                                 |      |  |        8 |  |        3 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |       34 |  |    3,473 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
 
 
* Comparatives have been restated for the finalisation of the fair value 
exercise on the acquisition of KeySpan Corporation (see note 9) 
 
 
 
 
 
 
 
 
 
 
 
 
 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| CONSOLIDATED CASH FLOW STATEMENT                     |      |  |     2009 |  |     2008 |  | 
| for the years ended 31 March                         |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |     GBPm |  |     GBPm |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows from operating activities                 |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Total operating profit                               |      |  |    2,623 |  |    2,964 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Adjustments for:                                     |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|        Exceptional items, remeasurements and         |      |  |      292 |  |    (369) |  | 
|        stranded cost recoveries                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|        Depreciation and amortisation                 |      |  |    1,122 |  |      994 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|        Share-based payment charge                    |      |  |       22 |  |       18 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|        Changes in working capital                    |      |  |       54 |  |    (150) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|        Changes in provisions                         |      |  |     (99) |  |      (5) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|        Changes in pensions and other post-retirement |      |  |    (678) |  |    (333) |  | 
|        benefit obligations                           |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows relating to exceptional items             |      |  |    (131) |  |    (132) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows relating to stranded cost recoveries      |      |  |      359 |  |      278 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows generated from continuing operations      |      |  |    3,564 |  |    3,265 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows relating to discontinued operations       |      |  |      (8) |  |       10 |  | 
| (excluding tax)                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash generated from operations                       |      |  |    3,556 |  |    3,275 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Tax paid                                             |      |  |    (143) |  |    (110) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net cash inflow from operating activities            |      |  |    3,413 |  |    3,165 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows from investing activities                 |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Acquisition of subsidiaries (net of cash acquired)   |      |  |     (73) |  |  (3,528) |  | 
| and other investments                                |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Sale of investments in subsidiaries and other        |      |  |        - |  |       55 |  | 
| investments                                          |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Purchases of intangible assets                       |      |  |     (78) |  |     (45) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Purchases of property, plant and equipment           |      |  |  (3,107) |  |  (2,832) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Disposals of property, plant and equipment           |      |  |       27 |  |       26 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Interest received                                    |      |  |       85 |  |      206 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net movements in financial investments               |      |  |       99 |  |       45 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows used in continuing operations - investing |      |  |  (3,047) |  |  (6,073) |  | 
| activities                                           |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows relating to discontinued operations       |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|  - disposal proceeds (net of tax) (i)                |      |  |    1,053 |  |    3,064 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|  - other investing activities                        |      |  |      (4) |  |     (14) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net cash flow used in investing activities           |      |  |  (1,998) |  |  (3,023) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash flows from financing activities                 |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Proceeds from issue of share capital and sale of     |      |  |        8 |  |       23 |  | 
| treasury shares                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Increase in borrowings and related derivatives       |      |  |    1,641 |  |    1,563 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Interest paid                                        |      |  |  (1,061) |  |    (900) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Dividends paid to shareholders                       |      |  |    (838) |  |    (780) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Repurchase of share capital and purchase of treasury |      |  |    (627) |  |  (1,498) |  | 
| shares                                               |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net cash flow used in financing activities           |      |  |    (877) |  |  (1,592) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net increase/(decrease) in cash and cash equivalents |      |  |      538 |  |  (1,450) |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Exchange movements                                   |      |  |       18 |  |        4 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Cash included within assets of businesses held for   |      |  |        - |  |       23 |  | 
| sale                                                 |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net cash and cash equivalents at start of year       |      |  |      164 |  |    1,587 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
| Net cash and cash equivalents at end of year (ii)    |      |  |      720 |  |      164 |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
|                                                      |      |  |          |  |          |  | 
+------------------------------------------------------+------+--+----------+--+----------+--+ 
 
 
  *  2009 includes payment of tax arising on disposal of the Ravenswood generation 
  station and other businesses of GBP564m. 
  *  Net of bank overdrafts of GBP17m (2008: GBP10m). 
 
 
 
 
NOTES TO THE PRELIMINARY ANNOUNCEMENT 
 
 
1. Basis of preparation and new accounting standards, amendments and 
interpretations 
 
 
a) Basis of preparation 
The financial information contained in this announcement, which does not 
constitute statutory accounts as defined in Section 240 of the Companies Act 
1985, has been derived from the statutory accounts for the year ended 31 March 
2009, which will be filed with the Registrar of Companies in due course. 
Statutory accounts for the year ended 31 March 2008 have been filed with the 
Registrar of Companies. The auditors' reports on both these statutory accounts 
were unqualified and did not contain a statement under Section 237(2) or (3) of 
the Companies Act 1985. 
 
 
The financial information included in this announcement has been prepared in 
accordance with the accounting policies applicable for the year ended 31 March 
2009 as set out in National Grid's Annual Report and Accounts for the year ended 
31 March 2009. These accounting policies are consistent with those that applied 
in the preparation of our accounts for the year ended 31 March 2008. 
 
 
The following interpretations and amendments, issued by the International 
Financial Reporting Interpretations Committee (IFRIC) and the International 
Accounting Standards Board (IASB) respectively, have been adopted during the 
year ended 31 March 2009, none of which had a material impact on consolidated 
results or assets and liabilities. 
 
 
  *  IFRIC 12 on service concession arrangements 
 
  *  IFRIC 14 on defined benefit assets and minimum funding requirements 
  *  Amendments to IAS 39 Financial Instruments: Recognition and measurement and IFRS 
  7 Financial Instruments: Disclosures: on reclassification of Financial Assets 
 
 
 
In November 2008, a further amendment to IAS 39 was issued on the 
reclassification of financial assets. This further amendment clarifies the 
effective date and transition requirements of the amendments to IAS 39 and IFRS 
7 adopted during the year. It is effective under IFRS 1 July 2008, but is still 
subject to endorsement by the European Union. The amendment relating to the 
reclassification of financial assets does not have an impact on the consolidated 
results or assets and liabilities of the Company. 
 
Following a review of the useful economic lives of property, plant and 
equipment, the depreciation periods of certain assets within the category Gas 
plant - mains, services and regulating equipment have been amended. This has 
resulted in a decrease in the depreciation charge and a corresponding increase 
in operating profit for the year ended 31 March 2009 of GBP43m. 
 
As required under IFRS 3 'Business Combinations' the comparative amounts 
presented within the full year results have been restated for the finalisation 
of the fair values in respect of the acquisition of KeySpan Corporation (see 
note 9). 
 
 
Date of approval 
This announcement was approved by the Board of Directors on 13 May 2009. 
  2. Segmental analysis 
 
 
The following segmental analysis is presented in accordance with management 
responsibilities and economic characteristics, including consideration of the 
risks and returns, of our business activities. The Company assesses the 
performance of its businesses principally on the basis of operating profit 
before exceptional items, remeasurements and stranded cost recoveries. The 
primary reporting format is by business and the secondary reporting format is by 
geographical area. The following table describes the main activities for each 
business segment: 
 
 
+------------------------------+------------------------------------------------------+ 
| Transmission  UK             | High-voltage electricity transmission networks, the  | 
|                              | gas transmission network in the UK, UK liquefied     | 
|                              | natural gas (LNG) storage activities and the French  | 
|                              | electricity interconnector.                          | 
+------------------------------+------------------------------------------------------+ 
| Transmission  US             | High-voltage electricity transmission networks in    | 
|                              | New York and New England.                            | 
+------------------------------+------------------------------------------------------+ 
| Gas Distribution  UK         | Four of the eight regional networks of Great         | 
|                              | Britain's gas distribution system.                   | 
+------------------------------+------------------------------------------------------+ 
| Gas Distribution  US         | Gas distribution in New York and New England.        | 
+------------------------------+------------------------------------------------------+ 
| Electricity Distribution and | Electricity distribution in New York and New England | 
| Generation  US               | and electricity generation in New York.              | 
+------------------------------+------------------------------------------------------+ 
 
 
Other activities primarily relate to non-regulated businesses and other 
commercial operations not included within the above segments, including UK-based 
gas metering activities; UK property management; a UK LNG import terminal; other 
LNG operations; US unregulated transmission pipelines; US home energy services; 
US gas fields; together with corporate activities, including business 
development. 
 
 
Discontinued operations comprise the Ravenswood generation station in New York 
City and the engineering and communications operations in the US acquired as 
part of the KeySpan acquisition. The Ravenswood generation station was sold on 
26 August 2008, KeySpan Communications was sold on 25 July 2008 and one of our 
KeySpan engineering companies was sold on 11 July 2008. Subsequent to the year 
end two further engineering companies were sold. For the year ended 31 March 
2008, discontinued operations also include the wireless infrastructure and 
communications operations in the UK and the US and an electricity interconnector 
in Australia. The wireless infrastructure operations in the UK were sold on 3 
April 2007; the US wireless operations were sold on the 15 August 2007; and the 
Basslink electricity interconnector in Australia was sold on 31 August 2007. The 
results for discontinued operations are disclosed in note 6. 
 
 
Sales between businesses are priced having regard to the regulatory and legal 
requirements to which the businesses are subject. 
 
 
a.   Revenue 
 
+--------------------------------------------------------+----------+----------+----------+ 
| Year ended 31 March                                    |          |     2009 |     2008 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Business segments - continuing operations              |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|   Transmission  UK                                     |          |    3,487 |    2,956 | 
+--------------------------------------------------------+----------+----------+----------+ 
|   Transmission  US                                     |          |      420 |      299 | 
+--------------------------------------------------------+----------+----------+----------+ 
|   Gas Distribution  UK                                 |          |    1,466 |    1,383 | 
+--------------------------------------------------------+----------+----------+----------+ 
|   Gas Distribution  US                                 |          |    4,786 |    2,845 | 
+--------------------------------------------------------+----------+----------+----------+ 
|   Electricity Distribution and Generation  US          |          |    4,972 |    3,508 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Other activities                                       |          |      719 |      642 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Sales between businesses                               |          |    (226) |    (210) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |   15,624 |   11,423 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Total excluding stranded cost recoveries               |          |   15,189 |   11,041 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Stranded cost recoveries                               |          |      435 |      382 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |   15,624 |   11,423 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Geographical segments                                  |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| UK                                                     |          |    5,334 |    4,787 | 
+--------------------------------------------------------+----------+----------+----------+ 
| US                                                     |          |   10,290 |    6,636 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |   15,624 |   11,423 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
 
b. Operating profit - before exceptional items, remeasurements and stranded cost 
recoveries 
+------------------------------------------------------------+-----+----------+----------+ 
| Year ended 31 March                                        |     |     2009 |     2008 | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |     GBPm |     GBPm | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Business segments - continuing operations                  |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Transmission  UK                                         |     |    1,126 |    1,021 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Transmission  US                                         |     |      175 |      128 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Gas Distribution  UK                                     |     |      672 |      595 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Gas Distribution  US                                     |     |      612 |      392 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Electricity Distribution and Generation  US              |     |      265 |      330 | 
+------------------------------------------------------------+-----+----------+----------+ 
| Other activities                                           |     |       65 |      129 | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Operating profit before exceptional items, remeasurements  |     |    2,915 |    2,595 | 
| and stranded cost recoveries                               |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Geographical segments                                      |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| UK                                                         |     |    1,875 |    1,752 | 
+------------------------------------------------------------+-----+----------+----------+ 
| US                                                         |     |    1,040 |      843 | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Operating profit before exceptional items, remeasurements  |     |    2,915 |    2,595 | 
| and stranded cost recoveries                               |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
 
c.  Operating profit - after exceptional items, remeasurements and stranded cost 
recoveries 
 
+------------------------------------------------------------+-----+----------+----------+ 
| Year ended 31 March                                        |     |     2009 |          | 
|                                                            |     |          |     2008 | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |     GBPm |     GBPm | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Business segments - continuing operations                  |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Transmission  UK                                         |     |    1,063 |    1,013 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Transmission  US                                         |     |      173 |      122 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Gas Distribution  UK                                     |     |      629 |      574 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Gas Distribution  US                                     |     |      226 |      487 | 
+------------------------------------------------------------+-----+----------+----------+ 
|   Electricity Distribution and Generation  US              |     |      531 |      696 | 
+------------------------------------------------------------+-----+----------+----------+ 
| Other activities                                           |     |        1 |       72 | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Operating profit after exceptional items, remeasurements   |     |    2,623 |    2,964 | 
| and stranded cost recoveries                               |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Geographical segments                                      |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| UK                                                         |     |    1,729 |    1,667 | 
+------------------------------------------------------------+-----+----------+----------+ 
| US                                                         |     |      894 |    1,297 | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
| Operating profit after exceptional items, remeasurements   |     |    2,623 |    2,964 | 
| and stranded cost recoveries                               |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
|                                                            |     |          |          | 
+------------------------------------------------------------+-----+----------+----------+ 
 
 
 
 
 
 
 
 
  3. Exceptional items, remeasurements and stranded cost recoveries 
Exceptional items, remeasurements and stranded cost recoveries are items of 
income and expenditure that, in the judgment of management, should be disclosed 
separately on the basis that they are material, either by their nature or their 
size, to an understanding of our financial performance and significantly distort 
the comparability of financial performance between periods. Items of income or 
expense that are considered by management for designation as exceptional items 
include such items as significant restructurings, write-downs or impairments of 
non-current assets, material changes in environmental or decommissioning 
provisions, integration of acquired businesses and gains or losses on disposals 
of businesses or investments. 
 
 
Remeasurements comprise gains or losses recorded in the income statement arising 
from changes in the fair value of commodity contracts and of derivative 
financial instruments to the extent that hedge accounting is not achieved or is 
not effective. 
 
 
Stranded cost recoveries represent the recovery of historic generation related 
costs in the US related to generation assets that are no longer owned. Such 
costs can be recovered from customers as permitted by regulatory agreements. 
+----------------------------------------------------------------+-+----------+----------+ 
| Year ended 31 March                                            | |     2009 |          | 
|                                                                | |          |     2008 | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |     GBPm |     GBPm | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Exceptional items - restructuring costs (i)                    | |    (192) |    (133) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Exceptional items - environmental related provisions (ii)      | |     (78) |     (92) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Exceptional items - gain on disposal of subsidiary             | |        - |        6 | 
+----------------------------------------------------------------+-+----------+----------+ 
| Exceptional items - other (iii)                                | |      (5) |     (23) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Remeasurements - commodity contracts (iv)                      | |    (443) |      232 | 
+----------------------------------------------------------------+-+----------+----------+ 
| Stranded cost recoveries (v)                                   | |      426 |      379 | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total exceptional items, remeasurements and stranded cost      | |    (292) |      369 | 
| recoveries included within operating profit                    | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Remeasurements - commodity contracts (iv)                      | |      (2) |      (9) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Remeasurements - net gains/(losses) on derivative financial    | |     (82) |      (7) | 
| instruments (vi)                                               | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total exceptional items and remeasurements included within     | |     (84) |     (16) | 
| finance costs                                                  | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total exceptional items, remeasurements and stranded cost      | |    (376) |      353 | 
| recoveries before taxation                                     | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Exceptional tax item - deferred tax credit arising from        | |        - |      170 | 
| reduction in UK tax rate (vii)                                 | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Exceptional tax item - deferred tax charge arising from change | |     (49) |        - | 
| in UK industrial building allowance regime (viii)              | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on exceptional items - restructuring costs (i)             | |       59 |       49 | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on exceptional items - environmental related provisions    | |       16 |       20 | 
| (ii)                                                           | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on exceptional items - gain on disposal of subsidiary      | |        - |      (4) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on exceptional items - other (iii)                         | |        2 |        5 | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on remeasurements - commodity contracts (iv)               | |      179 |     (90) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on remeasurements - derivative financial instruments (vi)  | |        8 |     (28) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on stranded cost recoveries (v)                            | |    (170) |    (150) | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Tax on exceptional items, remeasurements and stranded cost     | |       45 |     (28) | 
| recoveries                                                     | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total exceptional items, remeasurements and stranded cost      | |    (331) |      325 | 
| recoveries                                                     | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total exceptional items after taxation                         | |    (247) |      (2) | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total commodity contract remeasurements after taxation         | |    (266) |      133 | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total derivative financial instrument remeasurements after     | |     (74) |     (35) | 
| taxation                                                       | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total stranded cost recoveries after taxation                  | |      256 |      229 | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
| Total exceptional items, remeasurements and stranded cost      | |    (331) |      325 | 
| recoveries after taxation                                      | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
|                                                                | |          |          | 
+----------------------------------------------------------------+-+----------+----------+ 
 
 
 
 
 
  *  Restructuring costs include costs related to the integration of KeySpan 
  (GBP53m), planned cost reduction programmes in our UK businesses (GBP21m), the 
  restructuring of our Liquefied Natural Gas (LNG) Storage facilities (GBP50m), 
  and transformation related initiatives (GBP68m). For the year ended 31 March 
  2008, restructuring costs included pension related costs of GBP83m arising as a 
  result of actual and planned redundancies. 
  *  Environmental charges include GBP42m due to significant movements in discount 
  rates arising from reductions in market risk free rates due to the current 
  economic conditions together with GBP25m arising from changes in landfill tax 
  legislation in the UK. For the year ended 31 March 2009, the UK charge was 
  GBP37m and the US charge GBP41m. For 2008, the revision of cost estimates for 
  environmental provisions resulted in a charge in the UK of GBP44m and a charge 
  of GBP48m in the US.  Costs incurred with respect to US environmental provisions 
  are substantially recoverable from customers. 
  *  Other costs for the year ended 31 March 2009 include an amortisation charge on 
  acquisition-related intangibles of GBP5m (2008: GBP4m). 
  *  Remeasurements - commodity contracts represent mark-to-market movements on 
  certain physical and financial commodity contract obligations in the US. These 
  contracts primarily relate to the forward purchase of energy for supply to 
  customers, or to the economic hedging thereof, that are required to be measured 
  at fair value and that do not qualify for hedge accounting. Under the existing 
  rate plans in the US, commodity costs are recoverable from customers although 
  the timing of recovery may differ from the pattern of costs incurred. These 
  movements are comprised of those impacting operating profit which are based on 
  the change in the commodity contract liability and those impacting finance costs 
  as a result of the time value of money. 
  *  Stranded cost recoveries include the recovery of some of our historical 
  investments in generating plants that were divested as part of the restructuring 
  and wholesale power deregulation process in New England and New York during the 
  1990s. Stranded cost recoveries on a pre-tax basis consist of revenue of GBP435m 
  (2008: GBP382m) and operating costs of GBP9m (2008: GBP3m). 
  *  Remeasurements - net gains/(losses) on derivative financial instruments comprise 
  gains/(losses) arising on derivative financial instruments reported in the 
  income statement. These exclude gains and losses for which hedge accounting has 
  been effective, which have been recognised directly in equity or which are 
  offset by adjustments to the carrying value of debt. 
  *  The exceptional tax credit in the prior period of GBP170m arose from a reduction 
  in the UK corporation tax rate from 30% to 28% included in the 2007 Finance Act. 
  This resulted in a reduction in deferred tax liabilities. 
  *  The exceptional tax charge of GBP49m in the period arose from a change in the UK 
  industrial building allowance regime arising in the 2008 Finance Act. This 
  resulted in an increase in deferred tax liabilities. 
 
 
 
4. Finance income and costs 
 
 
+--------------------------------------------------------+----------+----------+----------+ 
| Year ended 31 March                                    |          |     2009 |          | 
|                                                        |          |          |    2008* | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Interest income on financial instruments               |          |       79 |      211 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Expected return on pension and other post-retirement   |          |    1,236 |    1,064 | 
| benefit plan assets (i)                                |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Interest income and similar income                     |          |    1,315 |    1,275 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Interest expense on financial instruments              |          |  (1,280) |  (1,118) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Interest on pension and other post-retirement benefit  |          |  (1,250) |  (1,001) | 
| plan liabilities (i)                                   |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Unwinding of discounts on provisions                   |          |     (68) |     (45) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Less: interest capitalised                             |          |      133 |      119 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Interest expense                                       |          |  (2,465) |  (2,045) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net losses on derivative financial instruments and     |          |     (84) |     (16) | 
| commodity contracts                                    |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Interest expense and other finance costs               |          |  (2,549) |  (2,061) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net finance costs                                      |          |  (1,234) |    (786) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Comprising:                                            |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net finance costs excluding exceptional finance costs  |          |  (1,150) |    (770) | 
| and remeasurements                                     |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Exceptional items and remeasurements (note 3)          |          |     (84) |     (16) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |  (1,234) |    (786) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
* Comparatives have been restated for the finalisation of the fair value 
exercise on the acquisition of KeySpan Corporation (see note 9) 
 
 
i) The difference between actual and expected investment return on pension 
assets is reported as an actuarial gain or loss within the statement of 
recognised income and expense. 
 
 
 
 
  5. Taxation 
 
 
 
 
+---------------------------------------------------------------+--+----------+----------+ 
| Year ended 31 March                                           |  |     2009 |    2008* | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |     GBPm |     GBPm | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Taxation before exceptional items, remeasurements and         |  |      517 |      579 | 
| stranded cost recoveries                                      |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Exceptional tax items                                         |  |       49 |    (170) | 
+---------------------------------------------------------------+--+----------+----------+ 
| Taxation on other exceptional items, remeasurements and       |  |     (94) |      198 | 
| stranded cost recoveries                                      |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Taxation on total exceptional items, remeasurements and       |  |     (45) |       28 | 
| stranded cost recoveries (note 3)                             |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Total taxation                                                |  |      472 |      607 | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Taxation as a percentage of profit before taxation:           |  |   %      |     %    | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Before exceptional items, remeasurements and stranded cost    |  |     29.2 |     31.7 | 
| recoveries                                                    |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| After exceptional items, remeasurements and stranded cost     |  |     33.9 |     27.8 | 
| recoveries                                                    |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| The tax charge for the year can be analysed as follows:       |  |     GBPm |     GBPm | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| United Kingdom                                                |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Corporation tax at 28% (2008: 30%)                            |  |       37 |      214 | 
+---------------------------------------------------------------+--+----------+----------+ 
| Corporation tax adjustment in respect of prior years (i)      |  |     (54) |    (156) | 
+---------------------------------------------------------------+--+----------+----------+ 
| Deferred tax                                                  |  |      339 |       42 | 
+---------------------------------------------------------------+--+----------+----------+ 
| Deferred tax adjustment in respect of prior years (ii)        |  |        - |       67 | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |      322 |      167 | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Overseas                                                      |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Corporate tax                                                 |  |      105 |      209 | 
+---------------------------------------------------------------+--+----------+----------+ 
| Corporate tax adjustment in respect of prior years            |  |       38 |       31 | 
+---------------------------------------------------------------+--+----------+----------+ 
| Deferred tax                                                  |  |       37 |      191 | 
+---------------------------------------------------------------+--+----------+----------+ 
| Deferred tax adjustment in respect of prior years             |  |     (30) |        9 | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |      150 |      440 | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
| Total tax charge                                              |  |      472 |      607 | 
+---------------------------------------------------------------+--+----------+----------+ 
|                                                               |  |          |          | 
+---------------------------------------------------------------+--+----------+----------+ 
 
 
*Comparatives have been restated for the finalisation of the fair value exercise 
on the acquisition of KeySpan Corporation (see note 9) 
 
 
i) The UK corporation tax adjustment in respect of prior years includes a GBP2m 
credit (2008: GBP9m charge) that relates to exceptional items, remeasurements 
and stranded cost recoveries. 
ii) The UK deferred tax adjustment in respect of prior years includes a GBP1m 
charge (2008: GBP2m charge) that relates to exceptional items, remeasurements 
and stranded cost recoveries. 
 
 
  6. Discontinued operations 
 
 
Discontinued operations are businesses that have been sold, or which are held 
for sale. Discontinued operations comprise the Ravenswood generation station in 
New York City and the engineering and communications operations in the US 
acquired as part of the KeySpan acquisition. The Ravenswood generation station 
was sold on 26 August 2008, KeySpan Communications was sold on 25 July 2008 and 
one of our KeySpan engineering companies was sold on 11 July 2008. Subsequent to 
the year end two further engineering companies were sold. 
 
 
For comparative periods, discontinued operations also include our former 
wireless infrastructure operations in the UK and US, and the Basslink 
electricity interconnector in Australia. The wireless infrastructure operations 
in the UK and US were sold on 3 April 2007 and 15 August 2007 respectively, 
while the Basslink electricity interconnector business was sold on 31 August 
2007. 
 
 
Results of discontinued operations 
+--------------------------------------------------------+----------+----------+----------+ 
| Year ended 31 March                                    |          |     2009 |          | 
|                                                        |          |          |     2008 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Revenue                                                |          |       97 |      201 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Operating costs                                        |          |     (84) |    (166) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Total operating profit from discontinued operations    |          |       13 |       35 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Remeasurement finance income                           |          |        - |        8 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Profit before tax from discontinued operations         |          |       13 |       43 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Taxation                                               |          |      (4) |      (7) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Profit after tax from discontinued operations          |          |        9 |       36 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Gain on disposal of Ravenswood                         |          |       27 |        - | 
+--------------------------------------------------------+----------+----------+----------+ 
| Gains on disposals of UK and US wireless               |          |        - |    1,506 | 
| infrastructure operations                              |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Gain on disposal of Basslink                           |          |        - |       80 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Gain on disposal of discontinued operations before tax |          |       27 |    1,586 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Taxation                                               |          |     (11) |      (4) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Gain on disposal after tax of discontinued operations  |          |       16 |    1,582 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Total profit for the year from discontinued operations |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| - Before exceptional items, remeasurements and         |          |        9 |       28 | 
| stranded cost recoveries                               |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| - Exceptional items, remeasurements and stranded cost  |          |       16 |    1,590 | 
| recoveries                                             |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |       25 |    1,618 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
 
 
 
 
 
 
 
 
  7. Earnings per share 
 
 
a) Basic earnings per share 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Year ended 31 March              |        |        |          | Earnings |          | Earnings | 
|                                  |        |        | Earnings |      per | Earnings |      per | 
|                                  |        |        |          |    share |          |    share | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |     2009 |     2009 |    2008* |    2008* | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |     GBPm |    pence |     GBPm |    pence | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Adjusted - continuing operations |        |        |    1,250 |     50.9 |    1,247 |     47.8 | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Exceptional items after taxation |        |        |    (247) |   (10.1) |      (2) |    (0.1) | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Commodity contract               |        |        |    (266) |   (10.8) |      133 |      5.1 | 
| remeasurements after taxation    |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Derivative remeasurements after  |        |        |     (74) |    (3.0) |     (35) |    (1.3) | 
| taxation                         |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Stranded cost recoveries after   |        |        |      256 |     10.4 |      229 |      8.8 | 
| taxation                         |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Continuing operations            |        |        |      919 |     37.4 |    1,572 |     60.3 | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Adjusted - discontinued          |        |        |        9 |      0.4 |       28 |      1.1 | 
| operations                       |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Gains on disposal of operations  |        |        |       16 |      0.7 |    1,582 |     60.6 | 
| after taxation                   |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Derivative remeasurements after  |        |        |        - |        - |        8 |      0.3 | 
| taxation                         |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Discontinued operations          |        |        |       25 |      1.1 |    1,618 |     62.0 | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Basic                            |        |        |      944 |     38.5 |    3,190 |    122.3 | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          | millions |          | millions | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Weighted average number of       |        |        |          |    2,455 |          |    2,609 | 
| shares - basic                   |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
 
 
b) Diluted earnings per share 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Year ended 31 March              |        |        |          | Earnings | Earnings | Earnings | 
|                                  |        |        | Earnings |      per |          |      per | 
|                                  |        |        |          |    share |          |    share | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |     2009 |     2009 |    2008* |    2008* | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |     GBPm |    pence |     GBPm |    pence | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Adjusted diluted - continuing    |        |        |    1,250 |     50.6 |    1,247 |     47.5 | 
| operations                       |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Exceptional items after taxation |        |        |    (247) |   (10.1) |      (2) |    (0.1) | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Commodity contract               |        |        |    (266) |   (10.8) |      133 |      5.1 | 
| remeasurements after taxation    |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Derivative remeasurements after  |        |        |     (74) |    (3.0) |     (35) |    (1.3) | 
| taxation                         |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Stranded cost recoveries after   |        |        |      256 |     10.4 |      229 |      8.7 | 
| taxation                         |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Diluted - continuing operations  |        |        |      919 |     37.1 |    1,572 |     59.9 | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Adjusted diluted - discontinued  |        |        |        9 |      0.4 |       28 |      1.1 | 
| operations                       |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Gains on disposal of operations  |        |        |       16 |      0.7 |    1,582 |     60.3 | 
| after taxation                   |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Derivative remeasurements after  |        |        |        - |        - |        8 |      0.3 | 
| taxation                         |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Diluted - discontinued           |        |        |       25 |      1.1 |    1,618 |     61.7 | 
| operations                       |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Diluted                          |        |        |      944 |     38.2 |    3,190 |    121.6 | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          | millions |          | millions | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
| Weighted average number of       |        |        |          |    2,472 |          |    2,624 | 
| shares - diluted                 |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
|                                  |        |        |          |          |          |          | 
+----------------------------------+--------+--------+----------+----------+----------+----------+ 
 
 
*Comparatives have been restated for the finalisation of the fair value exercise 
on the acquisition of KeySpan Corporation (see note 9) 
 
 
  8. Dividends 
 
 
The following table shows the dividends paid to equity shareholders: 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
| Year ended 31 March                    |    |     |     2009 |    2009 |          |         | 
|                                        |    |     |          |         |     2008 |    2008 | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
|                                        |    |     |    pence |    GBPm |    pence |    GBPm | 
|                                        |    |     |      per |         |      per |         | 
|                                        |    |     | ordinary |         | ordinary |         | 
|                                        |    |     |    share |         |    share |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
|                                        |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
| Ordinary dividends                     |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
| Interim dividend for the year ended 31 |    |     |    12.64 |     307 |        - |       - | 
| March 2009                             |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
| Final dividend for the year ended 31   |    |     |    21.30 |     531 |        - |       - | 
| March 2008                             |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
| Interim dividend for the year ended 31 |    |     |        - |       - |    11.70 |     300 | 
| March 2008                             |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
| Final dividend for the year ended 31   |    |     |        - |       - |    17.80 |     480 | 
| March 2007                             |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
|                                        |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
|                                        |    |     |    33.94 |     838 |    29.50 |     780 | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
|                                        |    |     |          |         |          |         | 
+----------------------------------------+----+-----+----------+---------+----------+---------+ 
In addition, the Directors are proposing a final dividend of 23.0p per share 
that will absorb approximately GBP560m of shareholders' equity (assuming all 
amounts are settled in cash) to be paid in respect of the year ended 31 March 
2009. A scrip dividend alternative (i.e. shares in lieu of cash) will be offered 
subject to shareholder approval at the Annual General Meeting. 
 
 
9. Acquisitions 
 
 
On 24 August 2007 the acquisition of KeySpan Corporation was completed with 100% 
of the shares acquired for total cash consideration of GBP3.8bn including 
acquisition costs of GBP25m. The provisional amount of goodwill recorded on the 
acquisition was GBP2.3bn based on the provisional fair values that were 
presented in our financial statements for the year ended 31 March 2008. The fair 
value exercise has now been completed and the provisional fair values reported 
in our financial statements for the year ended 31 March 2008 were updated and 
were reported in our half-year announcement. As a result of the fair value 
adjustments the final goodwill arising on the acquisition was GBP2.4bn. These 
final fair values are presented in the table below. 
 
 
The Ravenswood merchant electricity generation business in New York City was 
sold on 26 August 2008 for consideration of $2.9bn, KeySpan Communications was 
sold on 25 July 2008 for consideration of $35m, and one of our KeySpan 
engineering companies was sold on 11 July 2008. The assets and liabilities 
related to these businesses have been included in the 'Assets of businesses held 
for sale' category in the table below and the results of these discontinued 
operations are reported in note 6. 
 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        | Provisional |      Changes |    Final | 
|                                                        |             |           to |     fair | 
|                                                        | fair values | provisional  |   values | 
|                                                        |      as at  |  fair values |          | 
|                                                        |    31 March |              |          | 
|                                                        |        2008 |              |          | 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        |        GBPm |         GBPm |     GBPm | 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        |             |              |          | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Other intangible assets                                |         135 |          (1) |      134 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Property, plant and equipment                          |       3,282 |          (2) |    3,280 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Financial and other investments - non-current          |         129 |            - |      129 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Other non-current assets                               |         271 |         (91) |      180 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Inventories and current intangibles                    |         505 |         (17) |      488 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Trade and other receivables                            |         477 |          (4) |      473 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Financial and other investments - current              |          33 |            - |       33 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Cash and cash equivalents                              |         260 |            - |      260 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Assets of businesses held for sale                     |       1,487 |          (2) |    1,485 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Borrowings - current                                   |       (545) |            - |    (545) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Trade and other payables                               |       (654) |         (35) |    (689) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Current tax liabilities                                |        (95) |          (1) |     (96) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Borrowings - non-current                               |     (1,934) |            - |  (1,934) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Other non-current liabilities                          |       (169) |            - |    (169) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Deferred tax liabilities                               |       (591) |          148 |    (443) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Pensions and other post-retirement benefit obligations |       (440) |            - |    (440) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Provisions                                             |       (643) |         (61) |    (704) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Liabilities of businesses held for sale                |        (73) |            - |     (73) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Minority interest                                      |         (8) |            - |      (8) | 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        |             |              |          | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Net assets acquired                                    |       1,427 |         (66) |    1,361 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        |             |              |          | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Goodwill arising on acquisition                        |       2,335 |           66 |    2,401 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        |             |              |          | 
+--------------------------------------------------------+-------------+--------------+----------+ 
| Total consideration                                    |       3,762 |            - |    3,762 | 
+--------------------------------------------------------+-------------+--------------+----------+ 
|                                                        |             |              |          | 
+--------------------------------------------------------+-------------+--------------+----------+ 
The acquisition exchange rate which was used to translate the US dollar fair 
values into sterling was $2.01:GBP1.00. 
 
 
 
As required under IFRS 3 'Business Combinations' the comparative amounts 
presented within the full year results have been restated for the finalisation 
of the fair values. The significant changes made to the comparative balance 
sheet represent the movements between the provisional fair values in the 
consolidated balance sheets at 31 March 2008 and final fair values, together 
with any associated reclassification adjustments. In addition the consolidated 
income statement for the year ended 31 March 2008 has been adjusted to reflect 
an increase in interest expense of GBP10m and a decrease in taxation of GBP4m 
resulting from the finalisation of the fair values. 
 
 
Pro forma information for the year ended 31 March 2008 
 
 
The following summary presents the consolidated results as if KeySpan had been 
acquired on 1 April 2007. The pro forma information includes the results of 
KeySpan for the year 1 April 2007 to 31 March 2008 as adjusted for the estimated 
effect of accounting policies adopted by National Grid and the impact of fair 
value accounting adjustments (e.g. amortisation of intangible assets) together 
with the recognition of the impact on pro forma net interest expense as a result 
of the acquisition. All of the pre-tax pro forma adjustments have been taxed 
(where appropriate) at the rate of tax pertaining to the jurisdiction in which 
the pro forma adjustment arose. The pro forma information is provided for 
comparative purposes only and does not necessarily reflect the actual results 
that would have occurred, nor is it necessarily indicative of future results of 
operations of the enlarged National Grid. 
 
 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                                   |    2008* |          | 
|                                                                   |          |    2008* | 
+-------------------------------------------------------------------+----------+----------+ 
|                                                                   |   Actual |      Pro | 
|                                                                   |          |    forma | 
+-------------------------------------------------------------------+----------+----------+ 
|                                                                   |     GBPm |     GBPm | 
+-------------------------------------------------------------------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Continuing operations                                             |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
| Revenue                                                           |   11,423 |   12,345 | 
+-------------------------------------------------------------------+----------+----------+ 
| Operating profit before exceptional items, remeasurements and     |    2,595 |    2,625 | 
| stranded cost recoveries                                          |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
| Total operating profit                                            |    2,964 |    2,901 | 
+-------------------------------------------------------------------+----------+----------+ 
| Profit after taxation                                             |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
| Before exceptional items, remeasurements and stranded cost        |    1,250 |    1,165 | 
| recoveries                                                        |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
| Exceptional items, remeasurements and stranded cost recoveries    |      325 |      268 | 
+-------------------------------------------------------------------+----------+----------+ 
| Profit for the year - continuing operations                       |    1,575 |    1,433 | 
+-------------------------------------------------------------------+----------+----------+ 
|                                                                   |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
| Attributable to:                                                  |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
|   Equity shareholders of the parent                               |    1,572 |    1,430 | 
+-------------------------------------------------------------------+----------+----------+ 
|   Minority interests                                              |        3 |        3 | 
+-------------------------------------------------------------------+----------+----------+ 
|                                                                   |          |          | 
+-------------------------------------------------------------------+----------+----------+ 
| Profit for the year - continuing operations                       |    1,575 |    1,433 | 
+-------------------------------------------------------------------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          | Earnings | Earnings | 
|                                                        |          |      per |      per | 
|                                                        |          |    share |    share | 
|                                                        |          |    pence |    pence | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Adjusted earnings - continuing operations              |          |    47.8p |    44.5p | 
+--------------------------------------------------------+----------+----------+----------+ 
| Earnings - continuing operations                       |          |    60.3p |    54.8p | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
* Restated for the finalisation of the fair value exercise on the acquisition of 
KeySpan Corporation as noted above. 
 
 
  10. Reconciliation of movements in total equity 
 
 
+--------------------------------------------------------+----------+----------+----------+ 
| Year ended 31 March                                    |          |     2009 |          | 
|                                                        |          |          |    2008* | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Opening total equity                                   |          |    5,374 |    4,136 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Changes in total equity for the period                 |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Total recognised income and expense                    |          |       34 |    3,473 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Equity dividends                                       |          |    (838) |    (780) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Issue of ordinary share capital                        |          |        - |       13 | 
+--------------------------------------------------------+----------+----------+----------+ 
| B shares converted to ordinary shares                  |          |        - |       27 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Repurchase of share capital and purchase of treasury   |          |    (603) |  (1,522) | 
| shares (i)                                             |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Other movements in minority interests                  |          |     (12) |        4 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Share-based payment                                    |          |       22 |       18 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Tax charge on share-based payment                      |          |      (1) |      (5) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Issue of treasury shares                               |          |        8 |       10 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Closing total equity                                   |          |    3,984 |    5,374 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
* Comparatives have been restated for the finalisation of the fair value 
exercise on the acquisition of KeySpan Corporation (see note 9) 
 
 
(i) From 1 April 2008 to 24 September 2008, the Company repurchased 85 million 
ordinary shares for an aggregate consideration of GBP597m (2008: GBP1,516m) 
including transaction costs. The shares repurchased have a nominal value of 11 
17/43 pence each and represented 3% of the ordinary shares in issue as at 
31 March 2009. Further purchases of shares relating to employee share schemes 
were made for aggregate consideration of GBP6m (2008: GBP6m). 
 
 
Included within total equity is a deduction of GBP1,173m for treasury shares 
(2008: GBP570m). 
 
 
11. Reconciliation of net cash flow to movement in net debt 
 
+--------------------------------------------------------+----------+----------+----------+ 
| Year ended 31 March                                    |          |     2009 |          | 
|                                                        |          |          |     2008 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Increase/(decrease) in cash and cash equivalents       |          |      538 |  (1,450) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Decrease in financial investments                      |          |     (99) |     (45) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Increase in borrowings and related derivatives (i)     |          |  (1,641) |  (1,563) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net interest paid                                      |          |      956 |      694 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Increase in net debt resulting from cash flows         |          |    (246) |  (2,364) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Changes in fair value of financial assets and          |          |  (3,625) |    (133) | 
| liabilities and exchange movements                     |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net interest charge                                    |          |  (1,161) |    (901) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Borrowings of subsidiary undertakings acquired         |          |        - |  (2,446) | 
+--------------------------------------------------------+----------+----------+----------+ 
| Amounts reclassified to businesses held for sale       |          |        - |       17 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Other non-cash movements                               |          |        - |     (26) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Movement in net debt (net of related derivative        |          |  (5,032) |  (5,853) | 
| financial instruments) in the year                     |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net debt at start of year                              |          | (17,641) | (11,788) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net debt (net of related derivative financial          |          | (22,673) | (17,641) | 
| instruments) at end of year                            |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
i) The increase in borrowings and related derivatives for the year ended 31 
March 2009 comprises proceeds from loans received of GBP4.9bn less payments to 
repay loans of GBP2.6bn and movement in short-term borrowings and derivative 
settlements of GBP0.7bn. 
 
 
  12. Net debt 
 
 
+--------------------------------------------------------+----------+----------+----------+ 
| At 31 March                                            |          |     2009 |     2008 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Cash and cash equivalents                              |          |      737 |      174 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Bank overdrafts                                        |          |     (17) |     (10) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net cash and cash equivalents                          |          |      720 |      164 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Financial investments                                  |          |    2,197 |    2,095 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Borrowings (excluding bank overdrafts)                 |          | (26,776) | (20,993) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          | (23,859) | (18,734) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net debt related derivative financial assets           |          |    2,126 |    1,526 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net debt related derivative financial liabilities      |          |    (940) |    (433) | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Net debt (net of related derivative financial          |          | (22,673) | (17,641) | 
| instruments)                                           |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
 
 
13. Commitments and contingencies 
 
 
+--------------------------------------------------------+----------+----------+----------+ 
| At 31 March                                            |          |     2009 |          | 
|                                                        |          |          |   2008 * | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |     GBPm |     GBPm | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Future capital expenditure contracted for but not      |          |    1,493 |    1,097 | 
| provided                                               |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
| Commitments under non-cancellable operating leases     |          |      946 |      737 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Energy purchase commitments (i)                        |          |    3,645 |    2,061 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Guarantees (ii)                                        |          |    1,022 |      925 | 
+--------------------------------------------------------+----------+----------+----------+ 
| Other commitments and contingencies (iii)              |          |      644 |      462 | 
+--------------------------------------------------------+----------+----------+----------+ 
|                                                        |          |          |          | 
+--------------------------------------------------------+----------+----------+----------+ 
* Comparatives have been restated to present items on a basis consistent with 
the current year classification. 
 
 
(i)    Commodity contracts that do not meet the normal purchase, sale or usage 
criteria and hence are accounted for as derivative contracts are recorded at 
fair value and incorporated in other non-current assets, trade and other 
receivables, trade and other payables and other non-current liabilities. At 
31 March 2009 these amounted to a net liability of GBP310m (2008: GBP12m net 
asset). 
 
 
        (ii)    Details of the guarantees entered into by the Company or its 
subsidiary undertakings at 31 March 2009 are shown below: 
 
 
  *  a guarantee in respect of Ravenswood Unit 40 financing amounting to 
  approximately GBP268m. This expires in 2040; 
  *  a letter of support of obligations under a shareholders' agreement relating to 
  the interconnector project between Britain and the Netherlands amounting to 
  approximately GBP264m. This expires in 2010; 
  *  guarantees of certain obligations in respect of the UK Grain LNG Import Terminal 
  amounting to approximately GBP188m. These run for varying lengths of time, 
  expiring between now and 2028; 
  *  a guarantee amounting to approximately GBP122m of half of the obligations of the 
  interconnector project between Britain and the Netherlands. This expires in 
  2010; 
  *  guarantees of the liabilities of a metering subsidiary under meter operating 
  contracts amounting to GBP53m. These are ongoing; 
  *  an uncapped guarantee, for which the maximum liability is estimated at GBP40m, 
  to The Crown Estates in support of the transfer of the interconnector between 
  France and England to National Grid Interconnectors Limited as part of the 
  Licence to Assign Lease. This is ongoing; 
  *  letters of credit in support of gas balancing obligations amounting to GBP21m, 
  lasting for less than one year; 
  *  guarantees of GBP15m relating to certain property obligations. The bulk of these 
  expire by December 2025; 
  *  collateral of GBP15m to secure syndicate insurance obligations which are 
  evergreen; 
  *  guarantees in respect of a former associate amounting to GBP14m, the bulk of 
  which relates to its obligations to supply telecommunications services. These 
  are open-ended; and 
  *  other guarantees amounting to GBP22m arising in the normal course of business 
  and entered into on normal commercial terms. These guarantees run for varying 
  lengths of time. 
 
 
 
(iii)     Includes commitments largely relating to gas purchasing and property 
remediation of GBP615m (2008: GBP432m). 
 
 
For a portion of our customers in New England the Company has entered into fixed 
price electricity requirement contracts with various counterparties. The 
contracts do not contain a determinable notional value as they are dependent on 
future customer demand. The contracts range in term from 3 to 6 months with 
monthly prices per megawatt-hour ranging from $58 to $123. These do not 
represent onerous contracts as actual prices incurred are recovered from our 
customers. 
 
 
In February 2008, the Gas and Electricity Markets Authority (GEMA) issued a 
decision to fine us GBP41.6 million for a breach of the UK Competition Act 1998 
in respect of term contracts with gas suppliers entered into by our UK metering 
services business in 2004. We subsequently appealed this decision to the 
Competition Appeal Tribunal (the Tribunal). On 29 April 2009 the Tribunal 
overturned the decision in part and reduced the fine to GBP30 million but also 
upheld the original decision in part. We continue to review the Tribunal's 
ruling and are considering our legal position including potential grounds for 
appeal. 
In October 2008, we informed Ofgem that our mains replacement activity carried 
out within the UK's West Midlands Alliance partnership may have been 
misreported. National Grid and Ofgem have jointly appointed Ernst & Young to 
carry out a full investigation to determine the extent of the issue. At present 
it is too early to determine the likely outcome of the investigation and any 
potential consequences. 
 
 
As previously reported, in May 2007 KeySpan received a civil investigative 
demand from the Antitrust Division of the United States Department of Justice, 
requesting the production of documents and information relating to its 
investigation of competitive issues in the New York City electricity capacity 
market prior to our acquisition of KeySpan. The civil investigative demand is a 
request for information in the course of an investigation and does not 
constitute the commencement of legal proceedings, and no specific allegations 
have been made against KeySpan. In April 2008, we received a second civil 
investigation demand in connection with this matter. We believe that KeySpan's 
activity in the capacity market has been consistent with all applicable laws and 
regulations. The investigation is ongoing and we continue to cooperate fully. 
 
14. Exchange rates 
 
 
The consolidated results are affected by the exchange rates used to translate 
the results of its US operations and US dollar transactions. The US dollar to 
pound sterling exchange rates used were: 
+----------------------------------------------------------+---------+---------+---------+ 
| As at 31 March                                           |         |    2009 |         | 
|                                                          |         |         |    2008 | 
+----------------------------------------------------------+---------+---------+---------+ 
|                                                          |         |         |         | 
+----------------------------------------------------------+---------+---------+---------+ 
| Closing rate applied at period end                       |         |    1.44 |    1.98 | 
+----------------------------------------------------------+---------+---------+---------+ 
| Average rate applied for the period                      |         |    1.54 |    2.01 | 
+----------------------------------------------------------+---------+---------+---------+ 
|                                                          |         |         |         | 
+----------------------------------------------------------+---------+---------+---------+ 
 
 
15. Related party transactions 
 
 
There were no significant changes in the nature and size of related party 
transactions for the period from those disclosed in the financial statements for 
the year ended 31 March 2008. 
 
 
 
 
 
 
1 A reconciliation of Business performance2 to pro forma is provided. 
2Business performance results are the primary financial performance measure used 
by National Grid, being the results for continuing operations before exceptional 
items, remeasurements and stranded cost recoveries. Remeasurements comprise 
gains or losses recorded in the income statement arising from changes in the 
fair value of commodity contracts and of derivative financial instruments to the 
extent that hedge accounting is not achieved or is not fully effective. 
Stranded cost recoveries are costs associated with historic generation 
investment and related contractual commitments that were not recovered through 
the sale of those investments - these recoveries end in 2011.  Further details 
are provided in Note 3. A reconciliation of Business performance to Statutory 
results is provided in the consolidated income statement. 
3 A description of this metric is provided. 
4Weighted average RPI + X revenue increase for UK Gas Distribution, Gas 
Transmission and Electricity Transmission based on their regulatory asset value 
at 31 March 2008. 
 
5 Based on a exchange rates of $1.5:GBP1. 
6 'Constant currency basis' refers to the reporting of the actual results 
against the prior period results which, in respect of any US$ currency 
denominated activity, have been translated using the average US$ exchange rate 
for the year ended 31 March 2009, which was $1.54 to GBP1.00. The average rate 
for the year ended 31 March 2008 was $2.01 to GBP1.00. 
 
 
7 A description of these metrics is provided. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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