IFRS presentation to analysts and investors - About United Utilities

Commercial impact• Regulatory contracts not affected– regulated on a cash tax basis, therefore no deferred tax impact– explicit allowance is made for funding of the relevant elements of thepension scheme deficits• No cash flow or financing implications• No impact on financial covenants• Increase in reported net debt primarily reflects joint venture debt• No impact on dividend policy50In this presentation we’ve provided details of the effects of IFRS on ouraccounting statements.It is also important to consider the commercial impact on the group.A key point to make is that our regulatory contracts are not affected by IFRS.We’re regulated on a cash tax basis and therefore deferred tax has no impact. It’salso worth reminding you that the regulators make explicit allowance for fundingof the relevant elements of the pension scheme deficits.IFRS presents no cash flow or financing implications. Also, there’s no impact onour financial covenants which continue to be calculated in accordance with UKGAAP.As discussed on the previous slide, the increase in reported net debt primarilyreflects joint venture debt, which is typically non-recourse to United Utilities.And, finally, there’s no impact on our dividend policy.So, as you can see, there is very little commercial impact on the group as a resultof IFRS.