National Grid Plc · LSE:NG.
National Grid — Debt Investor Presentation (November 2007)
24 slides from National Grid's debt investor presentation, November 2007
Slide 1: European Roadshow November 2007
European Roadshow November 2007
Slide 2: Cautionary statement
Cautionary statement This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securit
Slide 3: National Grid: a leading international electricity and gas company
National Grid… … a leading international electricity and gas company Overview Geographically diversified cash flows* Owner/operator of gas/electricity networks in UK/US UK 52% UK - Largest utility i US - 2nd largest utility ii Electricity T&D Generation Market cap – c. £20bn $4 trillion $4 trillion
Slide 4: We have just released our half year results
National Grid… … we have just released our half year results Operating profit up 19%* Very strong results EPS up 23%* Wireless (UK & US) and Basslink completed Disposals Ravenswood announced, Property under consideration Completed 24th August 2007 KeySpan acquisition Hit the ground running for $200m
Slide 5: The acquisition of KeySpan increases the size of the Group
National Grid… … the acquisition of KeySpan increases the size of the Group Gas distribution – 11.8m before, 14.4m after Customers Electricity distribution – 3.4m before, 4.4m after Net Debt* £10.4bn before, £16.4bn after UK RAV c. £15bn at March 2007Electricity T&D Generation $4 trillion $4 trillio
Slide 6: Increases the number of regulated utility businesses in our corporate structure
National Grid… … and increases the number of regulated utility businesses in our corporate structure National Grid plc Guarantee over preference shares Baa1 / BBB+ / BBB+ National Grid USA National Grid Holdings One plc NGG Finance plc A3 / BBB+ / NR NR / BBB+ / NR KeySpan Corp Baa1 / A- / A- Nation
Slide 7: A reminder of what those businesses do: Transmission
A reminder of what those businesses do …Transmission 4,300 miles of high pressure gas pipeline; 4,500 circuit miles of high-voltage Over 10,000 miles of electricity transmission overhead line; 420 miles of underground electricity cable network; 139-mile direct current transmission line Note: In the
Slide 8: A reminder of what those businesses do: Gas distribution
A reminder of what those businesses do …Gas distribution Over 3.4 million customers; nearly 32,000 miles of main and distribution pipe 82,000 miles of distribution pipelines; Distributes gas on behalf of gas shippers and suppliers to 11m customers 8
Slide 9: A reminder of what those businesses do: Electricity distribution and generation
A reminder of what those businesses do …Electricity distribution and generation 4.4 million electricity customers; Distribution network of 122,000 circuit miles; 6,650 MW of generation capacity 9
Slide 10: Substantially all of the Group is regulated businesses
Substantially all of the Group is regulated businesses …stability Regulated asset base, ~95% of revenues regulated, stable cash flows* remainder under long term contracts Transmission Gas Distribution 43% 32% Regulated ~95% Non-regulated 4% Electricity Distribution & Non-regulated Generation 21% ~5%
Slide 11: Forecast asset base growth over 35% in UK and over 25% in US
And we expect this to continue and grow… …forecast asset base growth over 35% in UK & over 25% in US £19.2bn £14bn $18.2bn $14.3bn* 2006/07 2011/12 2006/07 2011/12 *Excludes US stranded costs ($1.7bn) UK - opening 2006/07 RAV. US - average rate base for 2006 calendar year 11
Slide 12: Over 85% of planned investment in regulated pipes and wires
With over 85% of our planned investment being in regulated pipes and wires... …~£16bn* capital investment through to 2012 £ billion KeySpan 16 £1.5bn 14 12 £5.6bn £4.9bn 10 £12.0bn 8 6 £1.4bn £1.6bn 4 2 £2.3bn 0 Transmission Gas Distribution 2006 - 2012 Electricity Distribution and Generation Non-re
Slide 13: Features of regulation
Features of regulation … many common elements to rate agreements Return on asset base Opex allowance Pensions and tax allowance No commodity exposure associated with supply/generation commitments Incentive mechanisms Some residual volume No volume exposure drivers Indexation Protection from Capex re
Slide 14: Regulatory settlements
Regulatory settlements …staggered rate plans provide further stability 2007 2008 2009 2010 2011 2012 2013 2014 NIMO Electric New NIMO Gas Preparing rate filing York KEDNY KEDLI MECO To 2019 Massa- Boston Gas chusetts Essex Gas Colonial Gas Narragansett To 2019 Rhode (Electric) Island Narragansett Pr
Slide 15: Group credit ratings
Predictability of regulated cash flows is a key factor in our ratings… … Group credit ratings Moody’s S&P Fitch National Grid plc Baa1/P2 BBB+/A2 BBB+/F2 National Grid Electricity Transmission plc A3/P2 A-/A2 A/F2 National Grid Holdings One plc Not rated BBB+/A2 Not rated National Grid Gas plc A3/P2
Slide 16: Target metrics linked to credit ratings: interest cover
Target metrics linked to credit ratings… …interest cover Providing metric for the first time Interest cover (times) Indicator of balance sheet efficiency 4.25 4.25 Annual reporting at each full-year results 4.00 4.00 3.75 3.75 Interest cover 3.50 3.50 Reflects the calculation used by our credit 3.25
Slide 17: Funding the group: gross debt as at September 2007
funding the group… …gross debt* as at 30 September 2007 Debt (£’m) IFRS US Debt ($’m) National Grid plc and NGG Finance plc 4,916 National Grid USA 148 National Grid Electricity Transmission plc 3,817 KeySpan Corporation 2,376 National Grid Gas plc 5,838 Niagara Mohawk Power Corporation 1,250 Isle o
Slide 18: Debt maturities and regulated investment drive issuance
funding the group… ... debt maturities and regulated investment drive issuance Net debt expected to increase from Along with maturities of £6bn, means a £16.3bn at September 2007 to around total of c. £13bn of funding required over £18bn by March 2008 and £23bn by the next 4 to 5 years 2011/2012 c.
Slide 19: We may fund as follows
We may fund as follows £1bn £2bn £3bn £3.75bn £1,000m £400m £750m £1,600m NGGas NGET NGUSA NG plc Wrapped/Unwrapped Wrapped/Unwrapped A Benchmark shorter Two Benchmark € index-linked bonds index-linked bonds dated € issue and issues across the curve (£150m) with the (£300m) with the EMTNs with with
Slide 20: Introducing our newest issuer: National Grid USA
Introducing our newest issuer… …National Grid USA Holding company for the expanded US group National Grid plc & NGG Finance plc new €4bn EMTN programme expected to be effective November 2007 Similar terms and conditions to NG plc National Grid USA National Grid Holdings One rating of A3 / BBB+ New E
Slide 21: Funding the group: liquidity
funding the group… …liquidity Minimal impact from the credit crunch Limited exposure to institutions impacted by the credit crunch spreads to LIBOR have risen but rates have fallen no direct exposure to US subprime mortgage market CP markets have remained open to National Grid throughout the summer
Slide 22: Next steps
National Grid… …next steps UK Gas Distribution price control review Decision on sale of National Grid Property Sale of Ravenswood US gas rate plan filings Deliver KeySpan integration Continue to implement global operating model Deliver capital investment plans and Rate Base growth Continued commitme
Slide 23: Treasury Contacts
Treasury Contacts Malcolm Cooper (Group Tax and Treasury Director): D: +44 (0)20 7004 3340 [email protected] Andrew Kluth (Assistant Treasurer, Funding): D: +44 (0)20 7004 3365 [email protected] Andy Mead (Manager, Corporate Banking): D: +44 (0)20 7004 3369 [email protected] David Bona
Slide 24: National Grid
nationalgrid
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