Powergen plc Unaudited Interim Results for the Six Months Ended July 2, 2000.Business Editors LONDON--(BUSINESS WIRE)--Sept. 6, 2000 Powergen plc (NYSE NYSE See: New York Stock Exchange : PWG PWG Pro Wrestling Guerrilla (Los Angeles, California, USA) PWG Permanent Working Group PWG Project Working Group PWG Peoples War Group (India) PWG Post Weaning Gain PWG Pedalwertgeber ), the international power company, today announced its interim results for the six months ended July July: see month. 2, 2000.
- Profits (pound)300 million(1), earnings 38.0 pence per share(2) and dividend
10.8 pence per share
- Retail customer accounts up 7.8%, new retail products launched
- Output from retained UK power plant up by 4.3%
- LG&E Energy acquisition on track to complete by year end, asset sales
progressing to plan
- Plan to move to quarterly reporting and dividends
Financial Performance 6 months 6 months 6 months 12 months
to June to June to June to Dec 99
(2000) 2000(a) 1999
(Unaudited)
Turnover (pound)2,050m $3103m (pound)1,904m (pound)3,746m
Profit before tax,
exceptional items
and goodwill
amortization (pound)300m $454m (pound)322m (pound)580m
Earnings per share,
before exceptional
items and goodwill
amortization 38.0p 57.5(cent) 42.2p 73.4p
Dividend per share 10.8p 16.3(cent) 10.8p 34.8p
(1) Before tax, exceptional items and goodwill amortization
(2) Before exceptional items and goodwill amortization
(a) As of July 2, 2000 rate (pound)1 = $1.51350
Powergen Chairman, Ed Wallis, said:
"Powergen has produced a solid performance in the first half of
the year, despite the divestment of Fiddler's Ferry and Ferrybridge
power stations which contributed to last year's profit.
"Good progress is being made towards completing our acquisition of
LG&E Energy Corp. (LG&E). This acquisition is now dependent upon the
approval of the US Securities and Exchange Commission which is
expected to provide clearance by the year end.
"We are also on track with our program of selling selected assets
in the UK and overseas.
"The result of this strategic activity will be a business focused
on the UK and US providing a lower risk, higher quality and more
diversified earnings base with a reduced dependency on profits from UK
generation.
"In the UK, Powergen has continued to develop its business to meet
the challenges of the rapidly changing UK market-place. Our retail
business has made good use of the Powergen brand, with steady growth
in customer accounts during the period. In the production business,
high availability allowed us to maintain market share in what is now a
highly competitive sector. We benefited both from higher volumes than
expected and from contracts entered into at the end of last year. Our
distribution business is achieving its drive for best practice more
rapidly than planned and is on track to deliver (pound)75 million of
cost savings by 2002. The energy trading business is nearing the end
of a two-year change management program to have people and systems in
place for the introduction of the New Electricity Trading Arrangements
(NETA).
"Group turnover for the six months was (pound)2,050 million, up
(pound)146 million on last year, largely due to increased turnover in
our retail business and in Powergen International. Profit before tax,
exceptional items and goodwill amortization was (pound)300 million
compared with (pound)322 million in the same period in 1999. This fall
was due to lower profits from Electricity - Wholesale and Trading, and
Distribution, offset by recognition of deferred income relating to
services under warranty arrangements entered into as part of the sale
of Fiddler's Ferry and Ferrybridge and higher international profits.
"Earnings per share on a similar basis were 38.0 pence, compared
to 42.2 pence last year. After (pound)35 million of goodwill
amortization ((pound)33 million last half year) profit before tax and
exceptional items was (pound)265 million. An exceptional interest
charge of (pound)24 million was made in the period relating to US
acquisition costs.
"The interim dividend for the period has been held at 10.8 pence
per share. The Board intends to decide on the appropriate level of any
increase at the time of the final dividend in the light of the initial
impact of NETA and the shape of the group following both the
acquisition of LG&E and the completion of the disposal program. The
interim dividend will be paid on November 3, 2000 to shareholders on
the record on September 22, 2000.
"Following our acquisition of LG&E, we intend to report our
results and pay dividends on a quarterly basis. This will take effect
from the later of the first quarter 2001 or completion of the LG&E
acquisition. The move to quarterly dividends will benefit shareholders
and lead to a smoothing of dividend payments over the four quarters.
"The first four months of this year saw a sharp decline in
electricity prices in the UK, with EFA annual baseload prices falling
by 15%. Since April, prices have stabilized at these lower levels.
Powergen's electricity hedging policy meant that the first half of
this year was not adversely affected by these falls. In the second
half, however, the effect of lower contract prices will increasingly
feed through into our numbers, although some output has been hedged at
higher prices through to the end of the year.
"The introduction of NETA, scheduled for November, will change
market behavior. For Powergen, the shape of our business, with
flexible generation and customer assets and our integrated trading
strategy, means that we see NETA as a business opportunity.
"We will also continue to exploit our updated national brand to
further grow our retail business. Building on our current product
offering of gas, electricity and telecoms, we are confident of
increasing our 2.85 million UK customer accounts to achieve our target
of five million by the end of 2002.
"Across the Atlantic, we expect to see the acquisition of LG&E
completed by year end and to benefit from a full year's consolidation
in 2001. At the same time, our asset sale program continues. We expect
to be in a position to make announcements on asset sales from the
fourth quarter of 2000. We are confident of meeting our stated debt
reduction target of (pound)1 billion from these sales so that, by the
end of 2001, the strategic focus for Powergen will be the UK and the
US."
REVIEW OF OPERATIONS
THE UK BUSINESS
There has been a solid performance from the UK business. Operating
profit before interest, exceptional items and goodwill amortization
was (pound)373 million, down (pound)51 million year on year, a fall of
12%.
PRODUCTION
System demand was up 2.4% year on year for the six month period,
to 152.9 TWh. High availability from Powergen plant, together with an
increase in outages from competitors, allowed for an increase in
output. Powergen generated 21.8 TWh, a market share of 14.3% compared
with 14.0% from the same plant in the first six months of last year.
Before the divestment of Fiddler's Ferry and Ferrybridge, Powergen's
market share last year was 17.0%.
During the period, Powergen entered into agreements to purchase a
50% interest in Corby Power Limited (Corby) for a net consideration of
(pound)32.8 million. Corby owns a 350 MW gas fired CCGT power station
in Northamptonshire and Powergen already purchases the power output
from Corby under a long term electricity supply contract. The
transaction should ease the transition to NETA for Corby and will not
increase Powergen's exposure to the electricity wholesale market. This
acquisition is expected to be completed later this year.
Earn-out arrangements on the 2 GW of plant sold in 1996 to Eastern
ended in March of this year with the capacity element due to end in
June 2001. This will result in lower profits from this lease in 2000
and 2001.
COMBINED HEAT AND POWER
In August, Powergen successfully commissioned one of the UK's
largest CHP plant at Winnington in Cheshire. The 130 MWe and 400 MWth
project was completed on schedule and within budget. Construction has
started on a further 56 MWe and 40 MWth plant in Stoke-on-Trent and
agreement has been reached to build a further 24 MWth plant at Kemsley
in Kent. These plants are due to be commissioned at the end of 2001
and in Summer 2002, respectively, with a combined investment of
(pound)60 million.
DISTRIBUTION
The distribution business had a network reliability of 99.99% and
was ahead of the key system performance targets set by Ofgem. The sale
of the contracting business was completed in February and offers have
now been invited for the sale of the metering business. It is expected
that the sale of the metering business will be completed in December
2000. Overall, Powergen is now delivering (pound)42 million per annum
savings in cash costs compared to 1998, and is on track to produce a
total of (pound)75 million per annum of savings by 2002.
RETAIL
The retail business has been re-organized into three
customer-facing business segments: Residential, Small and Medium
Enterprise and Corporate Clients. Growth in customer accounts has
continued steadily during the period with a total of 2.85 million
customer accounts by the end of June, up 7.8% since the beginning of
the period.
Residential
Powergen had 2.55 million residential customer accounts by the end
of June representing growth of approximately 1% per month over the
period. This total is now over 2.6 million.
Building on the home essential services offering, a telecoms
product was launched on April 17 and has approximately 40,000
customers to date. GreenPlan and No Standing Charge products were also
launched during the period. Powergen's sales capability has been
substantially increased with the opening of a new telemarketing center
on July 17 that should allow for an acceleration in customer
acquisitions.
Small and Medium Enterprise
Powergen has the fastest growing SME business in the industry with
3% growth per month resulting in 250,000 SME customer accounts by the
end of June. The SME customer base now stands at 270,000. In addition
to existing gas and electricity products, a telecoms product was
launched at the beginning of July as well as a major affinity deal
with Legal and General at the end of the same month. This strategic
alliance will allow both parties to provide business services and
products to their respective business and residential customers.
Corporate Clients
The Corporate Clients sector sales operation continued to build
upon its market leadership position for the sale of electricity and
has established Powergen as one of the leading suppliers in the gas
market. Annualized sales at the end of the period were 19 TWh
electricity (26,000 sites) and 20 TWh gas (25,000 sites). Powergen
continues to differentiate itself from its main competitors by
focusing on the cross sale of complete energy solutions to its
existing customers. This includes adding value through the provision
of advanced energy tariffs, site energy surveys and bureau monitoring
services.
ENERGY TRADING
Electricity prices continued their downward trend during the
period, falling more rapidly than expected in the first four months
and then remaining at lower levels even though capacity margins were
tight leading to higher levels of LOLP payments. The underlying levels
of System Marginal Price show a fall of some 16% year on year and even
with higher levels of LOLP the Pool Purchase Price was 1.1% lower than
during the same period in 1999. LOLP increased to (pound)17.08/kW over
the period due to low availability from competitor plant. Powergen
plant availability was high during the period. Lower prices in the
pool have fed through to the wholesale contract markets with EFA
annual baseload contract prices presently being around (pound)19 per
MWh. Although market prices for gas have risen over the past six
months, this affects only approximately 17% of Powergen's gas fired
plant that is not supplied through long term supply contracts. This
had a negative effect on margins during the first half of the year.
Powergen's generation is 100% hedged through supply contracts to
October 2000 and over 90% hedged for the full year. The fall in prices
in the first quarter will only begin to impact in the fourth quarter
2000.
NETA is scheduled for implementation on November 21, 2000.
Powergen has been preparing for the introduction of NETA for two years
and will have the systems and people ready ahead of the NETA deadline.
NETA will not change the fundamental demand supply balance in the UK,
but will change the market structure, leading to more transparency and
better risk apportionment between market participants. Powergen is
confident that the shape and flexibility of its UK business leaves it
well placed to manage the new challenges of NETA.
INTERNATIONAL
Construction in Hungary and Korea is proceeding to plan with full
plant commissioning expected in November 2000 and April 2001,
respectively. The situation in Indonesia continues to improve having
commissioned the first unit at Jawa Power in July and full
commissioning scheduled for December 2000. Although market conditions
in Australia have improved with an increase in Victorian pool prices,
other factors had an adverse impact on profits. Overall, trading
profit during the period increased by 56% to (pound)56 million due to
good performance from GPEC in India and European assets.
Copies of this press release, slides and a film of the
presentation of these results being made to analysts and institutional
shareholders will be available today on the Powergen web site at
www.powergenplc.com
Powergen's ADR, equivalent to four ordinary shares, trades on the
New York Stock Exchange under the symbol PWG. Powergen's ordinary
shares trade on the London Stock Exchange and prices may be accessed
on Bloomberg under the symbol PWG LN, on the Reuter Equities 2000
Service under PWGN.L and on Quotron under PWGPU.EU. Web site:
www.powergen.co.uk
FINANCIAL INFORMATION
Consolidated Profit and Loss Account
Unaudited Half year ended July 2, 2000
Before Exceptional
Exceptional items
Items (note 4) Total Total
(pound)m (pound)m (pound)m $(a)
Turnover - continuing
activities 2,185 -- 2,185 3,307
Group's share of associates'
turnover (135) -- (135) (204)
Group turnover - continuing
activities 2,050 -- 2,050 3,103
Operating costs (1,823) -- (1,823) (2,759)
Other operating income 99 -- 99 149
Group operating profit
- continuing activities 326 -- 326 493
Group's share of associates'
operating profit 34 -- 34 52
Disposal of fixed assets and
investments -- -- -- --
Net interest payable
- Group (68) (24) (92) (139)
- associates (27) -- (27) (41)
Profit on ordinary activities
before taxation 265 (24) 241 365
Tax on profit on ordinary
activities (45) 7 (38) (58)
Profit on ordinary activities
after taxation 220 (17) 203 307
Minority interest (8) -- (8) (12)
Profit attributable to
shareholders 212 (17) 195 295
Dividends (70) (106)
Retained profit for the period 125 189
Earnings per ordinary share 30.0p 45.4(cent)
Earnings per ordinary share
(excluding goodwill
amortization and exceptional 38.0p 57.5(cent)
items)
Diluted earnings per ordinary
share 29.8p 45.1(cent)
Dividends per ordinary share 10.8p 16.3(cent)
Audited
Year ended
January 2,
2000
Unaudited Half year ended July 4, 1999
Before Exceptional
Exceptional items
Items (note 4) Total Total
(pound)m (pound)m (pound)m (pound)m
Turnover - continuing
activities 2,029 -- 2,029 3,989
Group's share of associates'
turnover (125) -- (125) (243)
Group turnover - continuing
activities 1,904 -- 1,904 3,746
Operating costs (1,609) -- (1,609) (3,590)
Other operating income 71 -- 71 191
Group operating profit
- continuing activities 366 -- 366 347
Group's share of associates'
operating profit 38 -- 38 83
Disposal of fixed assets and
investments -- -- -- 543
Net interest payable
- Group (85) -- (85) (156)
- associates (30) -- (30) (55)
Profit on ordinary activities
before taxation 289 -- 289 762
Tax on profit on ordinary
activities (48) -- (48) (50)
Profit on ordinary activities
after taxation 241 -- 241 712
Minority interest -- -- -- (4)
Profit attributable to
shareholders 241 -- 241 708
Dividends (70) (226)
Retained profit for the period 171 482
Earnings per ordinary share 37.1p 109.0p
Earnings per ordinary share
(excluding goodwill
amortization and exceptional
items) 42.2p 73.4p
Diluted earnings per ordinary
share 37.0p 108.5p
Dividends per ordinary share 10.8p 34.8p
Statement of Total Recognized Gains and Losses
Unaudited Unaudited Audited
Half year Half year Year
ended ended ended
July 2, July 4, January 2,
2000 $m(a) 1999 2000
(pound)m (pound)m (pound)m
Profit attributable to
shareholders 195 295 241 708
Revaluation of fixed assets
on acquisition - - 25
Currency translation differences
on foreign currency net
investments 5 8 78 63
Total Recognized gains for
the period 200 303 319 796
(a) As of July 2, 2000 rate(pound)1 = $1.51350
Consolidated Balance Sheet
Unaudited Unaudited Unaudited Audited
at at at at
July 2, July 2, July 4, January 2,
2000 2000 1999 2000
(pound)m $m(a) (pound)m (pound)m
Fixed assets
Goodwill 1,270 1,922 1,268 1,309
Tangible assets 3,247 4,914 3,091 3,232
Investments 493 746 517 470
5,010 7,582 4,876 5,011
Current assets
Stocks 104 157 196 127
Debtors: amounts falling due
after more than one year 38 58 31 11
Debtors: amounts falling due
within one year 561 849 478 722
Cash and short-term deposits 407 616 548 646
1,110 1,680 1,253 1,506
Creditors: amounts falling due
within one year
Loans and overdrafts (65) (98) (590) (98)
Trade and other creditors (942) (1,426) (837) (1,106)
Net current assets/(liabilities) 103 156 (174) 302
Total assets less current
liabilities 5,113 7,738 4,702 5,313
Creditors: amounts falling due
after more than one year
Long-term loans (2,267) (3,431) (2,647) (2,572)
Other creditors (379) (574) (96) (415)
Provisions for liabilities and
charges (293) (443) (322) (295)
Deferred tax (47) (71) (40) (47)
Net assets 2,127 3,219 1,597 1,984
Capital and reserves
Called-up share capital 326 494 325 325
Share premium account 8 12 3 4
Other reserves 656 993 656 656
Revaluation reserve 24 36 - 25
Profit and loss account 1,040 1,574 613 909
Shareholders' funds (including
non-equity shareholders'
funds) 2,054 3,109 1,597 1,919
Equity minority interests 73 110 - 65
2,127 3,219 1,597 1,984
(a) As of July 2, 2000 rate(pound)1 = $1.51350
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Half year Half year Year
ended ended ended
July 2, July 4, January 2,
2000 1999 2000
(pound)m (pound)m (pound)m
Cash flow from operating activities 441 35 (27)
Dividends from associated undertakings - - 1
Interest received 43 14 56
Interest paid (141) (132) (210)
(98) (118) (154)
Taxation 33 (12) 26
Capital expenditure and financial
investment
Purchase of tangible fixed assets (127) (142) (329)
Purchase of fixed asset investments (33) (18) (53)
Repayment of/(new) loans to associated
undertakings 7 4 (5)
Sale of fixed asset investments 11 145 203
Sale of tangible fixed assets 23 9 18
Net receipts from disposal of power
stations - - 1,282
(119) (2) 1,116
Acquisitions and disposals
Purchase of subsidiary undertakings - (95) (261)
Receipts from sale of subsidiary
undertakings - - 5
- (95) (256)
Equity dividends paid (156) (92) (162)
Net cash inflow/(outflow) before use
of liquid resources 101 (284) 544
Management of liquid resources
Cash withdrawn from/(paid for)
short-term deposits 228 (448) (493)
Financing
Issue of ordinary share capital 5 3 4
Debt due within one year:
Movement in short-term loans (50) 512 (76)
Debt due beyond one year:
Repayment of sterling term facility (300) - (600)
Issue of 6.25% Sterling Eurobond 2024 - 244 244
Issue of 5% Euro Eurobond 2009 - - 326
Movement in sterling equivalent
long-term loans - (10) 41
(345) 749 (61)
(Decrease)/Increase in cash in the period (16) 17 (10)
NOTES
1. Basis of preparation of accounts
The results for the six months to July 2, 2000 are unaudited. The
accounting policies are as stated in the Report and Accounts for the
year ended January 2, 2000. The figures for the year ended January 2,
2000 are an extract from the full published financial statements that
have been delivered to the Registrar of Companies, and on which the
auditors have issued an unqualified report which contained no
statement therein under S237(2) or S237(3) of the Companies Act 1985.
2. Dividends
An interim dividend of 10.8p per ordinary share in respect of the
year ending December 31, 2000 will be paid on November 3, 2000 to
shareholders registered on September 22, 2000. During the six months
ended July 4, 1999 an interim dividend of 10.8p per ordinary share in
respect of the year ending January 2, 2000 was declared, and paid on
October 29, 1999.
3. Operating costs and income
Unaudited Unaudited
Half year Half year
ended ended
July 2, July 4,
Operating costs 2000 1999
(pound)m (pound)m
Fuel costs 346 357
Pool purchases and other costs of sales 1,027 831
Staff costs 100 112
Depreciation 103 101
Goodwill amortization 35 33
Other operating charges 212 175
1,823 1,609
Other operating income includes (pound)30 million of income from
operating leases (1999 (pound)45 million), and (pound)40 million (1999
(pound)nil) of deferred income in respect of the provision of services
under warranty arrangements following the sale of Fiddler's Ferry and
Ferrybridge C power stations in 1999.
4. Exceptional items
On February 28, 2000, Powergen announced the proposed acquisition
of 100% of LG&E Energy Corp a vertically integrated electricity and
gas utility based in Louisville, Kentucky in the United States.
Powergen will pay $24.85 in cash per ordinary share valuing the equity
at $3,233 million on a fully diluted basis. This acquisition will
principally be financed from a $4,000 million term and revolving
credit facility which was signed on February 27, 2000.
During the six months ended July 2, 2000 Powergen has incurred
certain arrangement and commitment fees in respect of the term and
revolving credit facility, of which (pound)11 million have been
charged as an exceptional interest cost in these accounts. In
addition, Powergen has entered into an interest rate swaption
arrangement which allows it to cap the interest rate payable under
this facility, over four years on an amortizing repayment profile. The
premium payable for this swap of (pound)13 million has also been
charged as an exceptional interest cost in these accounts, leading to
a total exceptional interest charge of (pound)24 million. No amounts
have been drawn down under the facility during the period.
5. Profit on ordinary activities before taxation
Unaudited Unaudited
Half year Half year
ended ended
July 2, July 4,
2000 1999
(pound)m (pound)m
UK Operations
Electricity and gas - wholesale and trading 217 273
Electricity - distribution 60 81
Electricity and gas - retail 22 18
Cogeneration and renewables 4 7
Lease and other income 70 45
373 424
International Operations 56 36
Corporate costs (34) (23)
395 437
Net interest payable
- Group (68) (85)
- associates (27) (30)
300 322
Goodwill amortization (35) (33)
Exceptional interest payable (24) -
241 289
Net assets at July 2, 2000 of (pound)2,127 million (July 4, 1999
(pound)1,597 million) include (pound)620 million (1999 (pound)330
million) relating to assets employed in International Operations.
6. Taxation
The taxation charge is (pound)45 million and represents an
effective rate of tax for the six month period of 15.0% on profits,
before goodwill amortization and exceptionals, of (pound)300 million.
In addition, a tax credit of (pound)7 million arises on the
exceptional item (see note 4). The prior period taxation charge was
(pound)48 million. The effective rate for the six months to July 4,
1999, based on profits, before goodwill amortization and exceptionals,
of (pound)322 million was therefore 14.9%.
7. Earnings per ordinary share
Earnings per ordinary share has been calculated by dividing the
profit attributable to shareholders for the six months to July 2, 2000
of (pound)195 million (six months to July 4, 1999 (pound)241 million)
by 650,666,515 ordinary shares (1999 649,424,644 ordinary shares),
being the weighted average number of ordinary shares in issue.
Earnings per ordinary share before goodwill amortization and
exceptional items is calculated as follows:
Unaudited Unaudited
Half year Half year
ended ended
July 2, July 4,
2000 1999
(pound)m (pound)m
Profit attributable to shareholders 195 241
Exceptional items (net of tax) 17 -
Goodwill amortization 35 33
Adjusted earnings 247 274
Earnings per share (before goodwill
amortization and exceptional items) 38.0p 42.2p
8. Debtors: amounts falling due within one year
Unaudited at Unaudited at
July 2, July 4,
2000 1999
(pound)m (pound)m
Trade debtors 383 306
Other debtors 112 122
Prepayments and accrued income 66 50
561 478
9. Trade and other creditors falling due within one year
Unaudited at Unaudited at
July 2, July 4,
2000 1999
(pound)m (pound)m
Trade creditors 297 421
Corporation tax 154 19
Other taxation and social security 17 12
Accruals and other creditors 304 315
Deferred income 100 -
Proposed dividend 70 70
942 837
10. Cash flow
a) Reconciliation of operating profit to net cash inflow from
operating activities:
Unaudited Unaudited
Half year Half year
ended ended
July 2, July 4,
2000 1999
(pound)m (pound)m
Operating Profit 326 366
Depreciation 103 101
Profit on sale of tangible fixed assets (13) (3)
Loss on sale of investments - 3
Goodwill amortization 35 33
Decrease/(Increase) in stocks 23 (23)
Decrease in debtors 112 250
Decrease in creditors (147) (692)
Increase in provisions 2 -
441 35
b) Analysis of changes in net debt in the period:
Unaudited at Non-cash 2000 Exchange Audited
July 2, charges Change adjust- at
2000 in period ments Jan. 2,
2000
2000
(pound)m (pound)m (pound)m (pound)m (pound)m
Cash at bank and
in hand 17 - (11) - 28
Overdrafts (42) - (5) - (37)
(25) - (16) - (9)
Debt due after one
year (2,267) 17 300 (12) (2,572)
Debt due within one
year:
Short-term loans (23) (12) 50 - (61)
Short-term deposits 390 - (228) - 618
(1,925) 5 106 (12) (2,024)
11. Reconciliation to US Accounting Principles
Powergen's consolidated financial statements have been prepared in
accordance with UK GAAP which differs in certain significant respects
from US GAAP. These differences relate principally to the following
items, and the effect of the adjustments to net income and equity
shareholders' funds which would be required under US GAAP are set out
below.
Unaudited Unaudited Audited
Half year ended Half year ended Year ended
July 2, July 4, January 2,
Effect on net income
of differences 2000 1999 2000
between UK GAAP and
US GAAP (pound)m (pound)m (pound)m
Net income under UK GAAP 195 241 708
US GAAP adjustments:
Pension costs 46 23 48
Severance costs (6) (5) (3)
Capitalized interest,
net of related
depreciation 6 6 7
Goodwill amortization (2) (3) (5)
Share option scheme (1) (2) (1) (1)
Fixed asset impairment - - 30
Deferred income (28) - 308
Decommissioning costs (1) - (2)
Taxation effects on the
foregoing adjustments (11) (6) (36)
Deferred taxation (24) (5) 71
Net Income under US GAAP 173 250 1,125
Unaudited at Unaudited at Audited at
July 2, July 4, January 2,
Effect on equity
shareholders' funds
of differences 2000 1999 2000
between UK GAAP and
US GAAP (pound)m (pound)m (pound)m
Equity shareholders'
funds under UK GAAP 2,054 1,597 1,919
US GAAP adjustments:
Pension costs 222 151 176
Severance costs 2 6 8
Capitalized interest,
net of related
depreciation 88 81 82
Goodwill 91 95 93
Investment (1) 2 (2) 2
Dividends 70 70 156
Fixed asset impairment - (30) -
Deferred income 280 - 308
Decommissioning costs (3) - (2)
Taxation effects on the
foregoing adjustments (96) (55) (85)
Deferred taxation (368) (420) (344)
Equity shareholders'
funds under US GAAP 2,342 1,493 2,313
(1) The movement on these adjustments is posted to retained earnings
Independent Review Report to Powergen plc Introduction We have been instructed by the Company to review the financial information set out under the heading "FINANCIAL INFORMATION" above and we have read the other information contained in the interim report for any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The Listing Rules of the Financial Services Authority The Financial Services Authority ("FSA") is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. Its main office is based in Canary Wharf, London, with another office in Edinburgh. require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). . Review work performed We conducted our review in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of Group management and applying analytical procedures Analytical Procedures is one of financial audit skill which help an auditor understand the client's business and changes in the business, to identify potential risk areas and to plan other audit procedures. to the financial information and underlying financial data, and based thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that , assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification See verify. verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended July 2, 2000. PricewaterhouseCoopers Chartered Accountants char·tered accountant n. Chiefly British Abbr. CA A member of one of the institutes of accountants granted a royal charter. London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. September September: see month. 5, 2000 |
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