IFRS presentation to analysts and investors - About United Utilities

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Major IFRS adjustments representing materialdifferences from UK GAAP• Infrastructure Accounting (IAS 16)• Interests in Joint Ventures (IAS 31)• Defined Benefit Pension Scheme Accounting (IAS 19)• Business Combinations (IAS 38 / IFRS 3)• Deferred Tax (IAS 12)• Dividends (IAS 10)• Accounting for Derivatives (IAS 39)30Now, moving on to deferred tax.
Deferred Tax (IAS 12)• IAS 12 does not permit discounting of deferred tax– increases the deferred tax position by £952m; and– increases the 2004/05 tax charge by £66m• Increase in deferred tax liability reduces consolidated retained profit by acorresponding £952m• However, this does not affect the United Utilities PLC parent companybalance sheet and therefore does not impact on payment of dividends toshareholders• Also, the regulatory determinations set prices allowing for tax on ananticipated cash basis and are therefore unaffected by deferred tax• In addition, deferred tax restatements arise on other IFRS adjustments31The major impact for the group under IAS 12 is that the discounting of deferredtax is not permitted. This is of particular significance to a utility company, whichtends to have long asset lives, and therefore the cash impact of the reversal oftiming differences is likely to be deferred long into the future.The reversal of discounting will result in a significant increase in the balancesheet deferred tax liability of £952m, with a corresponding reduction in reserves.However, let me underline the fact that this does not affect the United UtilitiesPLC parent company balance sheet and therefore does not impact on payment ofdividends to shareholders.It is also worth reminding you that the regulatory determinations set pricesallowing for tax on an anticipated cash basis and are therefore unaffected bydeferred tax.The 2004/05 tax charge also increases by £66 million. Whilst this affectsreported earnings, it is a non-cash adjustment.In addition, deferred tax restatements arise in relation to other IFRS adjustments.
Page 1 and 2: United Utilities PLCInternational F
Page 3 and 4: Simon BateyGroup Finance DirectorGo
Page 5 and 6: IFRS conversion timetable31/03/04 3
Page 7 and 8: IFRS headlines - effect on 2004/05
Page 9 and 10: Segmental operating profit£mIFRS 1
Page 11 and 12: United Utilities’ basis of prepar
Page 13 and 14: Infrastructure Accounting (IAS 16)
Page 15 and 16: Infrastructure Accounting (IAS 16)I
Page 17 and 18: IFRS impact - net assets at 31 Marc
Page 19 and 20: Interests in Joint Ventures (IAS 31
Page 21 and 22: Interests in Joint Ventures (IAS 31
Page 23 and 24: Defined Benefit Pension Scheme Acco
Page 27 and 28: Business Combinations (IAS 38 / IFR
Page 29: IFRS impact - net assets at 31 Marc
Page 33 and 34: Major IFRS adjustments representing
Page 37 and 38: Accounting for Derivatives (IAS 39)
Page 39 and 40: Accounting for Derivatives (IAS 39)
Page 41 and 42: Operating Profit (£m)IFRS impact -
Page 45 and 46: IFRS impact - 2004/05 earnings per
Page 47 and 48: Retained Earnings• The consolidat
Page 49 and 50: IFRS impact on key ratios and finan
Page 51 and 52: Summary• Overall impact on profit

IFRS presentation to analysts and investors - About United Utilities

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