Scottish Power plc 2002/03 1st Quarter Results From 1 April - 30 June 2002.Business Editors GLASGOW Glasgow, city, Scotland Glasgow (glăs`gō, –kō, glăz`gō), city (1991 pop. 688,500) and council area, S central Scotland, on the river Clyde. , Scotland--(BUSINESS WIRE)--July 25, 2002 ScottishPower (NYSE NYSE See: New York Stock Exchange : SPI (1) (Stateful Packet Inspection) See stateful inspection. (2) (Service Provider Interface) The programming interface for developing Windows drivers under WOSA. ), a leading international utility, today announced its first quarter results from 1 April to 30 June June: see month. 2002. - any regulatory changes (including changes in environmental regulations) that may increase the operating costs of the group, may require the group to make unforeseen capital expenditures or may prevent the regulated business of the group from achieving acceptable returns; - future levels of industry generation and supply, demand and pricing, political stability, competition and economic growth in the relevant areas in which the group has operations; - the success of reorganizational and cost-saving efforts; - development and use of technology, the actions of competitors, natural disasters and other changes to business conditions. --------------------------------------------------------------------- Full Year Quarter to Quarter to to 31 March 02 30 June 01 30 June 02 --------------------------------------------------------------------- 6,314.1 Turnover ((pound)million) 1,684.6 1,237.6 --------- ----------------------------------- -------- -------------- 944.1 Operating profit ((pound)million) 200.3 223.1 --------- ----------------------------------- -------- -------------- 567.1 Profit before tax ((pound)million) 105.3 152.1 --------- ----------------------------------- -------- -------------- 26.12 Earnings per share (pence) 4.90 6.21 --------- ----------------------------------- -------- -------------- 27.34(A)Dividends per share (pence) 6.835 7.177 --------- ----------------------------------- -------- -------------- The figures above, and in the narrative below, are before the impact of goodwill amortisation and, in the prior year, exceptional items unless otherwise stated. (A) Excludes Thus dividend in specie arising on its demerger Ian Russell Ian Russell may refer to:
n. Chiefly British A plural of penny. pence Noun a plural of penny USAGE: Since the decimalization of British currency and the introduction of the abbreviation p, , an increase of 27% compared with the first quarter of last year". Financial Overview ScottishPower's improved first quarter performance was led by PacifiCorp PacifiCorp is an electric power company in the north-western United States. PacifiCorp has three primary subsidiaries: Pacific Power is a regulated electric utility with service territory throughout Oregon, northern California, and southeastern Washington. , our US regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. business, reflecting lower power costs, increased regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. recoveries and continued progress in delivering Transition Plan cost savings. The reduced contribution from the UK Division due to lower wholesale prices was more than offset by operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. improvement at both PacifiCorp and PacifiCorp Power Marketing (PPM) and by increased regulatory revenues and operating cost reductions in the Infrastructure Division. Group turnover in the quarter fell to (pound)1,238 million, (pound)447 million (27%) lower than the first quarter of the previous year. Of this decrease, (pound)204 million relates to discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in the UK, principally Southern Water, and (pound)243 million relates to continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the . In the US, PacifiCorp's revenues decreased by (pound)258 million (29%) due to reductions in wholesale prices in the western US, offset in part by favourable volumes and increased regulatory recoveries. PPM's revenues increased by (pound)43 million as a result of the development of its renewable and thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. generation and gas storage businesses. In the UK, turnover in our Infrastructure Division has increased by (pound)17 million mainly as a result of increased regulatory income from higher external sales, and in the UK Division the fall of (pound)45 million reflects the impact of lower UK wholesale prices and competition in our supply home areas. Group operating profit increased by (pound)23 million (11%) to (pound)223 million with operating profit from continuing operations up (pound)35 million (20%) at (pound)209 million. PacifiCorp reported operating profit of (pound)134 million, an increase of (pound)44 million (48%) on the first quarter of the previous year, and PPM reported operating profit of (pound)4 million, (pound)2 million higher than the corresponding period last year. This, together with the increase of (pound)2 million in the Infrastructure Division, more than offset the decrease of (pound)13 million in the contribution to operating profit from the UK Division and the (pound)12 million reduction from discontinued operations, mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Southern Water. The net interest charge in the quarter decreased by (pound)27 million to (pound)69 million. This was due to the reduction in net debt following the finalisation n. 1. same as finalization. Noun 1. finalisation - the act of finalizing finalization mop up, windup, completion, culmination, closing - a concluding action of the sale of Southern Water, which realised gross proceeds of (pound)2,050 million, including debt assumed by the purchaser. Profit before tax increased by (pound)47 million to (pound)152 million and the tax charge of (pound)37 million represents an effective tax rate of 24%, increased from the prior year rate of 22.5% on profits before goodwill amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. and exceptional item. Earnings per share were 6.21 pence, an increase of 1.31 pence (27%) on the equivalent period last year. Continuing operations contributed earnings per share of 5.80 pence compared with 3.88 pence for the first quarter of the previous year, an increase of 49%. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. increased by (pound)101 million in the quarter to (pound)253 million principally due to the increase in operating profit and lower volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in market prices in the US. Investment in capital projects was (pound)179 million, a decrease of (pound)58 million, including a decrease of (pound)63 million in discontinued operations and an increase of (pound)5 million in continuing operations. The (pound)179 million of capital spend comprised (pound)94 million in PacifiCorp, (pound)5 million in PPM, (pound)48 million in the Infrastructure Division, (pound)17 million in UK Division and (pound)15 million in Southern Water. Net cash inflows from disposals of (pound)1,946 million mainly represent the proceeds from sale of Southern Water, being the sale price of (pound)2,050 million less debt of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. (pound)100 million assumed by the purchaser. Net debt as at 30 June 2002 of (pound)4,158 million was (pound)2,050 million lower than at 31 March 2002, after the benefit of a weaker dollar reducing the sterling value of debt. Gearing (net debt/shareholders' funds) decreased to 89%, from 131% at 31 March 2002. As part of a long term hedge programme we have substantially hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. , at below current market rates, the translation of dollar earnings from PacifiCorp for the year to 31 March 2003 and approximately 80% of our US dollar net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. . We continue to enter into hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. arrangements to minimise Verb 1. minimise - represent as less significant or important downplay, understate, minimize inform - impart knowledge of some fact, state or affairs, or event to; "I informed him of his rights" the impact on reported earnings from volatility in exchange rates. The first quarter dividend of 7.177 pence per share payable on 16 September September: see month. 2002 is consistent with our stated aim of a 5% annual increase in dividends to March 2003. The ADS dividend rate is $0.4472 which has been determined by the directors with reference to the sterling / dollar exchange rate ruling in 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. on 24 July July: see month. 2002, the last business day preceding the dividend announcement. PacifiCorp PacifiCorp is our regulated US business and its strategic priorities are to: - any regulatory changes (including changes in environmental regulations) that may increase the operating costs of the group, may require the group to make unforeseen capital expenditures or may prevent the regulated business of the group from achieving acceptable returns; - future levels of industry generation and supply, demand and pricing, political stability, competition and economic growth in the relevant areas in which the group has operations; - the success of reorganizational and cost-saving efforts; - development and use of technology, the actions of competitors, natural disasters and other changes to business conditions. PacifiCorp demonstrated another quarter of improving financial performance, consistent with its goal of increasing operating profit over the next three years to approximately $1 billion. PacifiCorp is targeting to achieve its authorised Adj. 1. authorised - endowed with authority authorized lawful - conformable to or allowed by law; "lawful methods of dissent" legitimate - of marriages and offspring; recognized as lawful return on equity, currently approximately 11%, through a combination of operating efficiencies, investments and rate filings. PacifiCorp is presently earning approximately half its authorised rate of return and is seeking to recover costs prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. incurred but not yet in rates. Operating profit in PacifiCorp was (pound)134 million, an increase of (pound)44 million (48%). This improved financial performance was mainly as a result of regulatory rate increases of (pound)17 million, rate recoveries of excess power costs of (pound)15 million, lower power costs of (pound)57 million and continued progress with the Transition Plan cost savings of (pound)9 million. These contributions to operating profit were partly offset by (pound)12 million in reduced transmission revenues due to lower transmission volumes, planned additional costs, primarily risk mitigation MITIGATION. To make less rigorous or penal. 2. Crimes are frequently committed under circumstances which are not justifiable nor excusable, yet they show that the offender has been greatly tempted; as, for example, when a starving man steals bread to satisfy initiatives, of (pound)16 million and depreciation arising from new investment activities amounting to (pound)8 million. The previous year's results included a gain on a loan receivable, previously partially provided against, of (pound)18 million which was not recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. in this year. Capital spend in the quarter was (pound)94 million, an increase of (pound)12 million compared to the equivalent period last year, and comprised new generation spend of (pound)11 million, including construction of the Gadsby Gadsby could refer to:
gas-fired adj → au gaz gas-fired adj (heater etc) → Gas- generation peaking plant, network growth of (pound)26 million, refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur of (pound)49 million and other capital projects of (pound)8 million. Under UK GAAP UK GAAP United Kingdom Generally Accepted Accounting Principles , all of PacifiCorp's net power costs are charged to the profit and loss account when incurred. The regulatory recovery of deferred excess power costs charged to the profit and loss account is recognised as income under UK GAAP when billed to customers. PacifiCorp continues to seek regulatory recovery for costs incurred on behalf of customers. Filings include general rate cases, deferred accounting requests, and other filings as needed as needed prn. See prn order. . Details of expected hearing dates for these and other regulatory actions are set out in an appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. to this announcement. General Rate Cases: To maximise Verb 1. maximise - make the most of; "He maximized his role" maximize exploit, tap - draw from; make good use of; "we must exploit the resources we are given wisely" 2. regulatory returns, on 7 May 2002 PacifiCorp filed with Wyoming Wyoming, city, United States Wyoming, city (1990 pop. 63,891), Kent co., W Mich., in the greater Grand Rapids metropolitan area, on the Grand River; settled 1832, inc. 1959. regulators for a $30.7 million general rate case, representing an increase of 9.8% in revenues from customers within the state. On 20 May 2002, Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. regulators made a one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. award of $15.4 million one off principally related to excess power costs to be incurred this summer. On 27 June 2002, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). regulators approved an interim rate increase of approximately 9%, or $4.7 million in annual revenues. The increase is subject to review as part of the permanent general rate case filing pending before the California Public Utilities Commission The California Public Utilities Commission (CPUC; also often commonly referred to as simply the PUC) [1] is a state Public Utilities Commission which regulates privately-owned utilities in the state of California, including electric power, . PacifiCorp is considering making general rate case filings in other states during the current financial year. Deferred Cost Recovery: To recover costs incurred on behalf of customers, regulators awarded recovery of approximately $147 million in deferred power costs in Utah on 1 May 2002, and in Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). a further $25 million was awarded on 7 June 2002, both at a recovery level of approximately 70% of amounts deferred or requested. In Oregon our request to recover $136.5 million in deferred excess power costs was approved by the Oregon Public Utility Commission (OPUC OPUC Oregon Public Utility Commission OPUC Old Pc Users Club ) on 18 July 2002. PacifiCorp expects to file a request in August 2002 with the OPUC to raise the annual surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. level to recover these costs to 6% from the 3% currently being received. In Wyoming, in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the general rate case in that state discussed above, PacifiCorp has requested recovery of $91 million in deferred excess power costs, including the costs of the Hunter Hun·ter , John 1728-1793. British surgeon who founded pathological anatomy in England. hunter a horse used for hunting. outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. , to be recovered through two surcharges over three years. Transition Plan: To help the regulated US business reach its financial goal, a further $13 million in Transition Plan cost savings were realised during the quarter toward the overall target of $300 million savings by 2004/05. Cumulative annual savings now total approximately $130 million, and the programme remains on track. Reflecting PacifiCorp's strong operational focus, the quarter also included a generation maintenance programme designed to ensure a high level of plant availability during the summer period and implementation of a fuel mix strategy that optimises fuel content for each plant to ensure peak operating performance. Increased costs resulted from these risk mitigation initiatives, as well as upward pressure on various insurance premiums and employee medical benefits which are also being experienced by many other US companies. Energy markets: The western US energy markets were stable in the first quarter with adequate capacity. The fill level of hydro-electric Hy`dro-e`lec´tric a. 1. Pertaining to, employed in, or produced by, the evolution of electricity by means of a battery in which water or steam is used. dams is also back to normal historic levels. Although demand has increased in the western US, PacifiCorp is well positioned for this summer and beyond through a combination of its flexible generation fleet, and the risk management steps implemented over the past 12-18 months. Physical additions of peaking plant to meet summer demand - such as the 120 MW Gadsby gas-fired peaking plant in Utah, scheduled to come on-line in late summer 2002, and the lease from PPM of a 200 MW peaking plant in Utah, 160 MW of which are now operational, and other flexible physical hedge products, will help maintain PacifiCorp's balanced net energy position through this financial year. Risk mitigation: In addition to adding new plant, financial hedge instruments such as temperature and weather-related hedges are expected to provide protection against abnormal abnormal /ab·nor·mal/ (ab-nor´mal) not normal; contrary to the usual structure, position, condition, behavior, or rule. abnormal, adj events. Longer-term initiatives on resource planning Resource planning may refer to:
Customer Service: PacifiCorp continues to focus on delivering improved customer service levels. Plans have been prepared to gain further efficiencies from the call centre technologies implemented last year. The goal of these technology enhancements, combined with ongoing investment in training, is to handle calls more quickly and efficiently. We continue to answer 80% of customer calls in 20 seconds or less, with an emphasis on improving quality. Further improvements are targeted at customer self-service options as well as improvements for handling network faults. In the past few months, PacifiCorp experienced a number of unplanned outages in Utah as a result of higher than normal temperatures, continuing customer growth and increasing demand for electricity. In targeting these problem areas of the network, PacifiCorp had planned and is investing more than $34 million this year along the Wasatch Front The Wasatch Front (Or Greater Wasatch) is an urban area in the U.S. state of Utah. It consists of a chain of cities and towns stretched along the Wasatch Range from approximately Santaquin in the south to Brigham City in the north. in Utah to upgrade lines, add substations and increase the capacity of the distribution system. Other investments to provide for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. system reliability, stability and growth are being considered by PacifiCorp as part of various strategic and regulatory initiatives. These projects are designed to address the challenges faced by PacifiCorp as a multi-state utility and to anticipate and plan for long-term transmission and generation requirements. Resulting investments through participation in the Multi State Process, the Integrated Resource Plan, hydro-electric relicensing, new air quality standards, and participation in a Regional Transmission Organization  This August 2006 is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. will seek to meet system and customer needs, while assuring full recovery of prudently incurred new costs. During the quarter, PacifiCorp responded to data requests from the Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ) regarding trading practices connected with the California power crisis of 2000 and 2001. We were able to confirm positively that PacifiCorp did not engage in any trading practices intended to manipulate manipulate To cause a security to sell at an artificial price. Although investment bankers are permitted to manipulate temporarily the stock they underwrite, most other forms of manipulation are illegal. the market as described in FERC's request. PacifiCorp Power Marketing, Inc. The strategic priorities of PPM, our competitive US energy business, are to: - any regulatory changes (including changes in environmental regulations) that may increase the operating costs of the group, may require the group to make unforeseen capital expenditures or may prevent the regulated business of the group from achieving acceptable returns; - future levels of industry generation and supply, demand and pricing, political stability, competition and economic growth in the relevant areas in which the group has operations; - the success of reorganizational and cost-saving efforts; - development and use of technology, the actions of competitors, natural disasters and other changes to business conditions. PPM is growing its renewable/thermal energy portfolio and gas storage/hub services businesses through a regional approach with selective investments. PPM reported an operating profit of (pound)4 million, an increase of (pound)2 million, with sales up (pound)43 million (197%) to (pound)65 million, which included revenues from our 40% share of the gas storage and hub services facility in Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , acquired in January January: see month. 2002. Net capital expenditure in PPM was (pound)5 million, a decrease of (pound)22 million, to expand its energy portfolio, with spend of (pound)4 million on the West Valley City gas turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. plant in Utah, as well as gas storage assets and business control systems. As part of its development of thermal generation, PPM brought on-line in June 2002 two new combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. gas turbine facilities, the 100 MW gas-fired Klamath Klamath, indigenous people of North America Klamath (klăm`əth), Native North Americans who in the 19th cent. lived in SW Oregon. expansion plant adjacent to the existing 484 MW Klamath Cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. Plant in Oregon and the first 160 MW of the 200 MW gas-fired West Valley Generation Plant near Salt Lake City, Utah For ships of the United States Navy of the same name, see . Salt Lake City is the capital and the most populous city of the U.S. state of Utah. The name of the city is often shortened to Salt Lake, or its initials, S.L.C. , which is providing electricity to PacifiCorp under a lease of up to 15 years. To continue growing its renewable generation business, PPM signed a 25-year transaction on 11 May 2002 to sell 25 MW of wind power to the Eugene Eugene, city (1990 pop. 112,669), seat of Lane co., W Oregon, on the Willamette River; inc. 1862. A processing and shipping center in a farming area, the "Emerald City" has lumbering, food-processing, and microchip and other electronics industries. Water & Electric Board (EWEB EWEB Eugene Water and Electric Board (Oregon) ) in Oregon. The $93 million EWEB contract is similar to recent sales to Seattle City Light Seattle City Light is the public utility providing electrical power to Seattle, Washington and parts of its metropolitan area, including all of Shoreline and Lake Forest Park and parts of unincorporated King County, Burien, Normandy Park, Seatac, Renton, and Tukwila. and the Bonneville Power Administration The Bonneville Power Administration (BPA) is a U.S. self-financed federal agency which transmits and sells wholesale electricity in Washington, Oregon, Idaho, and western Montana. The BPA is part of the U.S. Department of Energy, and is headquartered in Portland, Oregon. , locking in long-term value from PPM's output of the Stateline Stateline is used in many ways including:
Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. . In June 2002, the American Wind Energy Association The American Wind Energy Association (AWEA), which formed in 1974, is the national trade association of the U.S. wind energy industry. The association's membership includes turbine manufacturers, wind project developers, utilities, academicians, and interested individuals. named PPM national "Market Maker" of the year for 2002 for helping build a market for wind in the US. PPM continues to develop power generating and supply arrangements and has under consideration 15-20 mostly wind opportunities in strategic locations in the western and midwestern Mid·west or Middle West A region of the north-central United States around the Great Lakes and the upper Mississippi Valley. It is generally considered to include Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, Kansas, and US. PPM expects to approve about 300 MW of new wind projects this year. Similarly, PPM is developing a number of gas storage assets in key locations. During the quarter, PPM responded to data requests from the FERC regarding trading practices connected with the California power crisis of 2000 and 2001. We were able to confirm positively that PPM did not engage in any trading practices intended to manipulate the market as described in FERC's request. UK Division In the UK Division, our competitive generation, trading and retail business, our strategic priorities are to: - any regulatory changes (including changes in environmental regulations) that may increase the operating costs of the group, may require the group to make unforeseen capital expenditures or may prevent the regulated business of the group from achieving acceptable returns; - future levels of industry generation and supply, demand and pricing, political stability, competition and economic growth in the relevant areas in which the group has operations; - the success of reorganizational and cost-saving efforts; - development and use of technology, the actions of competitors, natural disasters and other changes to business conditions. The UK Division reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of (pound)8 million, compared to a (pound)4 million profit in the previous year. In what is seasonally a poor quarter for UK performance, there has been increased supply profitability of (pound)20 million arising from improved margins primarily due to lower wholesale electricity prices. Home and out of area electricity profits increased by (pound)4 million and (pound)15 million respectively due to lower wholesale prices whilst gas margins improved by (pound)1 million as a result of customer growth. However, this improvement has been more than offset by a decrease in margins from generation of (pound)32 million, where wholesale prices have fallen by approximately 24% year-on-year. Our integrated approach to management of the energy value chain helps protect us from some aspects of falling wholesale prices, but sales out of Scotland Scotland, political division of Great Britain (1991 pop. 4,957,000), 30,414 sq mi (78,772 sq km), comprising the northern portion of the island of Great Britain and many surrounding islands. , and sales to other suppliers in Scotland, are subject to market conditions. On 15 July 2002 we agreed revised terms to the Nuclear Energy Agreement (NEA NEA abbr. 1. National Education Association 2. National Endowment for the Arts NEA (US) n abbr (= National Education Association) → Verband für das Erziehungswesen ) with British Energy British Energy plc (LSE: BGY) is the UK's largest electricity generator by volume and a constituent company of FTSE 100. It is primarily an operator of formerly state-owned nuclear power stations. and Scottish and Southern Energy. The revised terms are subject to regulatory approval but legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. have been suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. . We will purchase electricity from British Energy under arrangements much more closely linked to market prices and terms for base load energy in England and Wales England and Wales are both constituent countries of the United Kingdom, that together share a single legal system: English law. Legislatively, England and Wales are treated as a single unit (see State (law)) for the conflict of laws. . The amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. NEA will continue in operation until the introduction of the British Electricity Transmission and Trading Arrangements (BETTA) or, if earlier, 1 April 2006. Beyond that date we have an option to purchase reduced volumes from British Energy after BETTA up to 2011. Prudently, the financial benefit of the revised terms will not be recognised in our accounts until regulatory approval of the contract is given. The settlement is satisfactory to all sides and the companies believe it represents a fair and reasonable basis on which to resolve the dispute between them. Net capital expenditure in UK Division was (pound)17 million, a decrease of (pound)10 million and included (pound)9 million on coal and gas-fired generation assets. In our Generation business, working in partnership with trade unions, a programme is in place that will see approximately 95, (13%), of staff leaving the business on a phased basis over the next nine months, with new structures in place to reflect the changing business environment. Customer numbers remain at 3.5 million, however, we are seeing modest monthly growth reflecting continuing lower levels of churn churn: see butter. and improved sales performance. We were pleased to receive a World Billing Award in April 2002 in the "Best Billing Implementation - Utilities" category, following our successful migration to a single billing platform. Process improvement and cost reduction projects are underway and are expected to improve our cost to serve in the second half of the year. In terms of our priority to make selective investments, we continued during the quarter with our ambitious programme of windfarm developments. We secured planning consent for a 29 MW installation located in Cowal Cowal is a peninsula in Argyll and Bute in the Scottish Highlands. The northern part of Cowal is mostly the mountainous Argyll Forest Park. Cowal is separated from the Kintyre peninsula to the west by Loch Fyne, and from Inverclyde and North Ayrshire to the east by the Firth of , Argyll Argyll or Argyllshire, former county, W central Scotland. Under the Local Government Act of 1973, Argyll was divided between the new Highland and Strathclyde regions in 1975, with most of the county becoming part of Strathclyde. and submitted planning applications for a further three windfarms comprising 134 MW at Black Law in South Lanarkshire South Lanarkshire (Siorrachd Lannraig a Deas in Gaelic)m is one of 32 unitary council regions in Scotland, covering the southern part of the traditional county of Lanarkshire. , 29 MW at Beinn Tharsuinn and 18 MW at Dounreay Dounreay (d  n`rā, dnrā`), village, Highland, N Scotland. Several nuclear breeder reactors are located nearby. , both in
Highland Highland.1 City (1990 pop. 34,439), San Bernardino co., SE Calif., in a citrus-grove area at the foot of the San Bernardino Mts. It has citrus-packing plants and some light industry. Region. The proposed 240 MW windfarm at Whitelee near Eaglesham Coordinates: Eaglesham (pronounced "Eagles-ham") is a village in East Renfrewshire, Scotland. Today it is chiefly a dormitory town for commuters to nearby Glasgow and other parts of the traditional Renfrewshire. has received planning recommendations from all three local authorities involved in the planning process. The proposal is now with the Scottish Executive for final approval. Our trading strategy In finance, a trading strategy (see also trading system) is a predefined set of rules to apply. Usually, this refers to a means used to replicate an option in order to give it an arbitrage free value in the sense that the cost of buying some financial assets to give the same has focused on reducing our exposure to falling wholesale electricity prices and on benefiting from the flexibility of our generation assets. In our opinion, we continue to be one of the leaders in the Balancing Mechanism despite intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition, and we estimate we achieved the highest contribution per Balancing Mechanism Unit for the first quarter of 2002/03 as well as for the year ended 31 March 2002. Our flexible generation plant is working well under the new one-hour NETA NETA New Electricity Trading Arrangements NETA Network Associates, Inc. (stock abbreviation, AMEX) NETA National Educational Telecommunications Association NETA International Electrical Testing Association NETA Norethisterone Acetate gate closure period which started on 2 July 2002. Infrastructure Division In the Infrastructure Division, our regulated UK wires business, our strategic priorities are to: - Be at or near the regulatory frontier frontier, in U.S. history, the border area of settlement of Europeans and their descendants; it was vital in the conquest of the land between the Atlantic and the Pacific. - outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. operating cost targets - achieve better than planned output from capex - Achieve high standards of customer service - Invest consistently to add value The Infrastructure Division reported operating profit of (pound)79 million, (pound)2 million higher than the equivalent period last year. The ongoing restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programme contributed cost reductions of (pound)3 million. These, together with increased regulatory revenues due to a higher percentage of sales to external suppliers, were in part offset by increased depreciation from capital investment and higher insurance premiums. Capital investment for the quarter increased by (pound)24 million to (pound)48 million, of which (pound)33 million related to upgrading and renewing re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. the network, (pound)10 million related to new infrastructure to increase the capacity of the system and (pound)5 million related to other capital projects. We remain firmly on target to deliver (pound)75 million of cash cost savings by March 2003, having achieved (pound)73 million to date, and to make progress toward the further (pound)33 million of operating cost reductions in the Infrastructure Division by March 2004, as previously announced. Savings are being targeted in areas such as procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , metering and transport as well as operating practice efficiencies. We are supporting Ofgem's BETTA project and are involved with industry working groups examining the assignment of responsibilities between the System Operator and the Transmission Owner. We are focused on driving down customer minutes lost and customer interruptions to achieve higher standards of customer service. To achieve these improvements, and consistent with our strategy, we will also make investments in our Regulatory Asset Base that contribute value. Our investment programme involves substantial upgrading in the Scottish Borders The Scottish Borders, often referred to simply as the Borders, is one of 32 local government council areas of Scotland.[1] It is bordered by Dumfries and Galloway in the west, South Lanarkshire and West Lothian in the north west, City of Edinburgh, East Lothian, area and our Urban Automation Project commenced in the first quarter. Both projects are aimed at providing our customers with a better and more secure supply and at improving our performance. In respect of our Scottish Borders scheme, (pound)4 million of investment has been made to date, (pound)2 million in the quarter, on construction of overhead line and a number of packaged substations. The Urban Automation Project involves the installation of new 11 kV switchgear The term switchgear, used in association with the electric power system, or grid, refers to the combination of electrical disconnects, fuses and/or circuit breakers used to isolate electrical equipment. equipped with modern protection aimed at benefiting customers. Discontinued operations Operating profit from discontinued operations of (pound)14 million represents the operating profit of Southern Water to 23 April 2002, when its sale to First Aqua Limited was finalised. This represents a decrease of (pound)12 million, over the first quarter of the previous year, which included a full quarter's results for Southern Water as well as the results of UK Appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. Retailing and Thus. Corporate Social Responsibility Our track record in the area of health and safety is generally good but we have set an ambitious target for this year to reduce by 25% the accident total for last year. All of our businesses were on course to achieve this target at the end of the first quarter. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite our track record and progress in this area, we are saddened to report the deaths of two colleagues in fatal accidents in July 2002, one in the US and one in the UK. In July 2002 ScottishPower won the Best Company of the Year Award by Business in the Community (BitC). BitC is a leading organisation that promotes social responsibility and facilitates sustainability and social improvement efforts between the Government, UK corporations and the not-for-profit Not-for-profit An organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses. community. We were also honoured with the Award for Excellence for ScottishPower Learning's SkillSeekers Programme, which assists unemployed young people find jobs in the community. In addition, we received a highly commended citation Citation (foaled 1945) U.S. Thoroughbred racehorse. In four seasons he won 32 of 45 races, finished second in ten, and third in two. He won the 1948 Triple Crown, and became the first horse to win $1 million. He set a world record in 1950 by running a mile in 1:33 3/5. for our work on having a positive environmental impact. In the US, PacifiCorp was named a 2002 Winter Games
Investor Calendar
26 July 2002 Annual General Meeting
31 July 2002 Ordinary and American Depositary Shares go
ex-dividend for the 1st quarter
2 August 2002 Last date for registering transfers to receive 1st
quarter dividend
16 September 2002 1st quarter dividend payable
5 November 2002 2nd quarter results
16 December 2002 2nd quarter dividend payable
5 February 2003 3rd quarter results
14 March 2003 3rd quarter dividend payable
7 May 2003 Full year results
16 June 2003 4th quarter dividend payable
APPENDIX - RECENT US RATE FILINGS AND SCHEDULE DATES General Filings Since 31 March 2002, activity on general rate cases has comprised of the following: - Wyoming On 7 May 2002, PacifiCorp filed a general rate case in Wyoming for $30.7 million in ongoing general rate case relief. This filing also requested $91 million of deferred excess net power costs described under the deferred costs section that follows. - Oregon On 20 May 2002, the Oregon Public Utilities Commission (OPUC) awarded $18.7 million related to excess power costs to be incurred this summer. Combined with other rate case issues, the net impact in Oregon is $15.4 million. - California On 27 June 2002 the California Public Utilities Commission (CPUC CPUC California Public Utilities Commission CPUC Current Procurement Unit Cost ) granted PacifiCorp's request for an interim increase in its prices of approximately $4.7 million. The increase is subject to review as part of a general rate increase request PacifiCorp filed late in 2001 with the CPUC. No decision is expected on this request until later in 2002. Deferred Excess Power Costs Under US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , excess net power costs, where approved by regulators, are initially deferred as regulatory assets and recovery is sought through subsequent rate filings. Allowable excess net power costs are only charged to income under US GAAP when regulatory mechanisms for recovery have been established. There is therefore a time lag between the recognition of allowable excess power costs under UK GAAP compared to US GAAP, which will benefit future UK GAAP reported earnings.
----------------------------------------------------------------------
At 30 June 2002
31 March 2002 Other 30 June 2002
Amounts Quarter 1 Quarter 1 Amounts
$m Deferred Collection Movement Deferred
--------------------- ------------ ---------- --------- ------------
Deferred Excess Power
Costs
Oregon 154.8 (5.6) (12.1) 137.1
Utah 109.1 (4.1) (46.9) 58.1
Wyoming 91.0 -- 1.1 92.1
Idaho 37.4 (0.7) (14.7) 22.0
California -- -- -- --
Washington -- -- -- --
------- ------- ------- -------
Subtotal 392.3 (10.4) (72.6) 309.3
Other Deferred Costs
All States - Trail Mountain
(investment & mine
closure costs) (1) -- -- 34.8 34.8
Oregon (SB 1149 costs)(2) 22.6 (0.8) 1.6 23.4
---- ---- ----- ----
Total 414.9 (11.2) (36.2) 367.5
(1) At 31 March 2002, PacifiCorp had no amounts deferred for Trail
Mountain investment and mine closure costs. During Quarter 1,
PacifiCorp deferred the full closure costs of the Trail Mountain
mine of $46.4 million and amortised $11.6 million, resulting in a
deferral at 30 June 2002 of $34.8 million.
(2) At 31 March 2002, PacifiCorp had $22.6 million deferred for SB
1149 costs incurred in Oregon. During Quarter 1, PacifiCorp
collected $0.8 million of these costs, deferred an additional $1.2
million in costs and added $0.4 million in carrying charges,
resulting in a deferral remaining to be collected at 30 June 2002
of $23.4 million.
----------------------------------------------------------------------
At 30 June 2002, PacifiCorp had $367.5 million of amounts deferred, $47.4 million lower than at 31 March 2002 due to collecting $11.2 million of revenues and $36.2 million of other movements and disallowances. Total excess net power cost amounts awarded to PacifiCorp to 30 June 2002 were $206.6 million, with a further $192.9 million under consideration. Further excess net power cost information is described below concerning deferred accounts, as well as recovery requests and awards. In Oregon, PacifiCorp has deferred $137.1 million including carrying charges Payments made to satisfy expenses incurred as a result of ownership of property, such as land taxes and mortgage payments. Disbursements paid to creditors, in addition to interest, for extending credit. Consumer Protection laws require full disclosure of all carrying charges. , net of costs recovered through amortisation. A change from the $154.8 million deferred at 31 March 2002 resulted from amounts collected in the first quarter of $5.6 million and adjustments based on calculations under the deferral deferral - Waiting for quiet on the Ethernet. mechanism of $15.3 million, offset by carrying charges of $3.2 million. On 18 July 2002, the OPUC approved recovery of $136.5 million. PacifiCorp is currently receiving $22.8 million per year of this amount pursuant to a 3% surcharge. A total of $29.9 million has been recovered to date. In August 2002, PacifiCorp plans to request the surcharge be increased to a 6% annual rate, or $45.0 million per year, which is the current maximum recovery level allowed in Oregon. In Utah, PacifiCorp has a net deferral of $58.1 million at 30 June 2002, a change from the $109.1 million deferred at 31 March 2002. PacifiCorp requested recovery of $205 million in costs related to excess net power costs from the Utah Public Service Commission (UPSC UPSC Union Public Service Commission (India) UPSC Uterine Papillary Serous Carcinoma UPSC Urban Planning Society of China ) and on 1 May 2002, the UPSC approved a settlement among PacifiCorp, utility regulators and consumer groups totaling approximately $147 million that resolved outstanding power cost issues related to the Hunter power station outage and summer 2001 excess net power costs. As a result of the order, PacifiCorp will not be required to credit customer bills for the remaining Utah proceeds from the sale of its Centralia Centralia (sĕntrā`lēə). 1 City (1990 pop. 14,274), Clinton and Marion counties, S Ill., in an oil, natural gas, coal, farm, and fruit region; inc. 1859. Plant, or the merger credits in Utah, which results in a total benefit to PacifiCorp of $46.9 million. During the quarter, PacifiCorp collected $4.1 million of these costs. In Wyoming, on 7 May 2002, PacifiCorp filed a case with the Wyoming Public Service Commission requesting recovery of $91.0 million of deferred excess net power costs, including the Hunter plant outage-related costs. PacifiCorp has a net deferral of $92.1 million at 30 June 2002, a change from the $91.0 million deferred at 31 March 2002 resulting from the addition of $1.1 million in carrying charges. In Idaho, PacifiCorp had a net deferral of $37.4 million at 31 March 2002. On 7 June 2002, the Idaho Public Utilities Commission approved an agreement for PacifiCorp to recover $25.0 million of excess net power costs, which resulted in a write off of $12.4 million. Also as a result of this approval, PacifiCorp will not be required to credit customer bills for merger credits in Idaho, which results in a benefit of $2.3 million During the quarter, PacifiCorp collected $0.7 million of these costs, resulting in a net deferral of $22.0 million at 30 June 2002. Other Filings A request to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. excess power costs for one year beginning 1 June 2002 in Washington was filed on 5 April 2002. Under these mechanisms, if granted by the commissions, all or part of actual power costs above or below the level in rates will be shared with customers. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Cautionary Statement Regarding Forward Looking Statements Certain statements contained herein are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements in this document include, but are not limited to, statements in: "PacifiCorp" relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc PacifiCorp's aim to achieve 11% return on equity by 2004/05, make additional general rate case filings, file a request with the Oregon Public Utility Commission to recover additional deferred excess power costs, take risk management steps to protect against abnormal events, improve customer service levels and invest to provide for long-term system reliability, stability and growth; "PacifiCorp Power Marketing, Inc." relating to growing a thermal/renewable energy portfolio and gas storage/hub services and integrating assets, trading and commercial activities; "UK Division" relating to process improvement and cost-reduction projects, continuing the windfarm development programme, improving customer service and making selective investments; "Infrastructure Division" relating to delivering (pound)75 million of cash cost savings by March 2003, making progress toward the further (pound)33 million of operating cost reductions to the Infrastructure Division by March 2004 and investing in our Regulatory Asset Base that contribute value. ScottishPower wishes to caution readers, and others to whom forward-looking statements are addressed, that any such forward-looking statements are not guarantees of future performance and that actual results may differ materially from estimates in the forward-looking statements. ScottishPower undertakes no obligation to revise these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . In addition to the important factors described elsewhere in this document, the following important factors, among others, could affect the group's actual future:
- any regulatory changes (including changes in environmental regulations) that may increase the operating costs of the group, may require the group to make unforeseen capital expenditures or may prevent the regulated business of the group from achieving acceptable returns;
- future levels of industry generation and supply, demand and pricing, political stability, competition and economic growth in the relevant areas in which the group has operations;
- the success of reorganizational and cost-saving efforts;
- development and use of technology, the actions of competitors, natural disasters and other changes to business conditions.
Group Profit and Loss Account
for the three months ended 30 June 2002
Three months ended 30 June 2002
Contin Discont
-uing -inued
opera opera
-tions -tions Total
2002 2002 2002
Notes (pound)m (pound)m (pound)m
Turnover:
group and share of
joint ventures
and associates 1,214.6 26.7 1,241.3
Less: share
of turnover
in joint ventures (3.6) - (3.6)
Less: share
of turnover
in associates (0.1) - (0.1)
------- ------ -------
Group turnover 2 1,210.9 26.7 1,237.6
Cost of sales (749.4) (11.4) (760.8)
------- ------ -------
Gross profit 461.5 15.3 476.8
Transmission
and distribution
costs (118.7) - (118.7)
Administrative
expenses
(including
goodwill
amortisation) (175.7) (1.3) (177.0)
Other
operating income 5.3 - 5.3
------- ------ -------
Operating profit
before goodwill
amortisation 209.1 14.0 223.1
Goodwill amortisation (36.7) - (36.7)
Operating profit 2 172.4 14.0 186.4
Share of operating
loss in joint ventures (1.8) - (1.8)
Profit on ordinary
activities before
interest 170.6 14.0 184.6
Net interest and
similar charges
-Group (64.7) (3.0) (67.7)
-Joint ventures (1.5) - (1.5)
------- ------ -------
(66.2) (3.0) (69.2)
Profit on ordinary
activities before
goodwill amortisation
and taxation 141.1 11.0 152.1
Goodwill amortisation (36.7) - (36.7)
------- ------ -------
Profit on ordinary
activities before
taxation 104.4 11.0 115.4
Taxation 4 (33.1) (3.4) (36.5)
------- ------ -------
Profit after taxation 71.3 7.6 78.9
Minority interests (1.2) - (1.2)
------- ------ -------
Profit for the period 70.1 7.6 77.7
Cash dividends (132.5) - (132.5)
------- ------ -------
Loss retained (62.4) 7.6 (54.8)
------- ------ -------
Earnings per ordinary
share 5 3.81p 0.41p 4.22p
Adjusting item
- goodwill amortisation 1.99p - 1.99p
------- ------ -------
Earnings per ordinary
share before
goodwill
amortisation 5 5.80p 0.41p 6.21p
------- ------ -------
Diluted earnings per
ordinary share 5 4.21p
Adjusting item
- goodwill amortisation 1.99p
-------
Diluted earnings per
ordinary share
before goodwill
amortisation 5 6.20p
-------
Cash dividend per
ordinary share 6 7.177p
-------
The Notes on pages x to x form part of these Accounts.
Group Profit and Loss Account
for the three months ended 30 June 2001
Three months ended 30 June 2001
Excep
-tional
item-
discon Total
Contin Discon -tinued discon
-uing -tinued opera -tinued
opera opera -tions opera
-tions -tions (Note 3) -tions Total
2001 2001 2001 2001 2001
Notes (pound)m (pound)m (pound)m (pound)m (pound)m
Turnover:
group and
share of
joint
ventures
and
associates 1,458.3 230.4 - 230.4 1,688.7
Less: share
of turnover
in joint
ventures (4.0) - - - (4.0)
Less: share
of turnover
in associates (0.1) - - - (0.1)
------- ------ ------ ------ -------
Group turnover 2 1,454.2 230.4 - 230.4 1,684.6
Cost of sales (1,088.5) (146.2) - (146.2) (1,234.7)
------- ------ ------ ------ -------
Gross profit 365.7 84.2 - 84.2 449.9
Transmission
and
distribution
costs (137.0) (8.1) - (8.1) (145.1)
Administrative
expenses
(including goodwill
amortisation) (102.4) (50.7) - (50.7) (153.1)
Other
operating
income 10.8 0.3 - 0.3 11.1
------- ------ ------ ------ -------
Operating
profit
before
goodwill
amortisation 174.0 26.3 - 26.3 200.3
Goodwill
amortisation (36.9) (0.6) - (0.6) (37.5)
------- ------ ------ ------ -------
Operating
profit 2 137.1 25.7 - 25.7 162.8
Share of
operating
profit
in joint
ventures 1.1 - - - 1.1
------- ------ ------ ------ -------
138.2 25.7 - 25.7 163.9
------- ------ ------ ------ -------
Provision for
loss on disposal
of and withdrawal
from Appliance
Retailing before
goodwill write back - - (105.0) (105.0) (105.0)
Goodwill write back - - (15.1) (15.1) (15.1)
------- ------ ------ ------ -------
Provision
for loss on
disposal
of and
withdrawal
from
Appliance
Retailing - - (120.1) (120.1) (120.1)
------- ------ ------ ------ -------
Profit on
ordinary
activities
before
interest 138.2 25.7 (120.1) (94.4) 43.8
Net interest and
similar charges
-Group (84.2) (10.1) - (10.1) (94.3)
-Joint
ventures (1.8) - - - (1.8)
------- ------ ------ ------ -------
(86.0) (10.1) - (10.1) (96.1)
------- ------ ------ ------ -------
Profit/(loss)
on ordinary
activities
before
goodwill
amortisation
and taxation 89.1 16.2 (120.1) (103.9) (14.8)
Goodwill
amortisation (36.9) (0.6) - (0.6) (37.5)
------- ------ ------ ------ -------
Profit/(loss)
on ordinary
activities
before
taxation 52.2 15.6 (120.1) (104.5) (52.3)
Taxation 4 (15.3) (8.4) 21.0 12.6 (2.7)
------- ------ ------ ------ -------
Profit/(loss)
after
taxation 36.9 7.2 (99.1) (91.9) (55.0)
Minority
interests (2.7) 11.0 - 11.0 8.3
------- ------ ------ ------ -------
Profit/(loss)
for
the period 34.2 18.2 (99.1) (80.9) (46.7)
Cash dividends (125.4) - - - (125.4)
------- ------ ------ ------ -------
Loss retained (91.2) 18.2 (99.1) (80.9) (172.1)
------- ------ ------ ------ -------
Earnings/(loss)
per ordinary
share 5 1.87p 0.99p (5.41)p (4.42)p (2.55)p
Adjusting
items
- exceptional
item - - 5.41p 5.41p 5.41p
- goodwill
amortisation 2.01p 0.03p - 0.03p 2.04p
------- ------ ------ ------ -------
Earnings per
ordinary
share before
exceptional
item
and goodwill
amortisation 5 3.88p 1.02p - 1.02p 4.90p
------- ------ ------ ------ -------
Diluted
loss per
ordinary share 5 (2.54)p
Adjusting items
- exceptional
item 5.39p
- goodwill
amortisation 2.04p
-------
Diluted
earnings per
ordinary share
before
exceptional
item and
goodwill
amortisation 5 4.89p
-------
Cash dividend
per ordinary
share 6 6.835p
-------
The Notes on pages x to x form part of these Accounts.
Group Cash Flow Statement
for the three months ended 30 June 2002
Three months
ended
30 June
2002 2001
(pound)m (pound)m
Cash inflow from operating activities 252.7 152.2
Returns on investments and
servicing of finance (81.5) (82.1)
Taxation (36.0) (7.5)
------ ------
Free cash flow 135.2 62.6
Capital expenditure and
financial investment (194.1) (311.1)
------ ------
Cash flow before acquisitions
and disposals (58.9) (248.5)
Acquisitions and disposals 1,946.5 150.1
Equity dividends paid (126.1) (119.4)
------ ------
Cash inflow/(outflow) before use of
liquid resources and financing 1,761.5 (217.8)
Management of liquid resources (847.0) (3.2)
Financing
-Issue of ordinary share capital 3.5 3.9
-Redemption of preferred stock of PacifiCorp (5.1) -
-(Decrease)/increase in debt (708.5) 277.1
------ ------
(710.1) 281.0
------ ------
Increase in cash in period 204.4 60.0
------ ------
Free cash flow represents cash flow from operating activities
after adjusting for returns on investments and servicing of finance
and taxation.
Reconciliation of Net Cash Flow to Movement in Net Debt for the
three months ended 30 June 2002
Three months
ended
30 June
2002 2001
(pound)m (pound)m
Increase in cash in period 204.4 60.0
Cash outflow/(inflow)
from decrease/(increase)in debt 708.5 (277.1)
Cash outflow from movement
in liquid resources 847.0 3.2
------ ------
Change in net debt resulting
from cash flows 1,759.9 (213.9)
Net debt disposed 100.0 -
Exchange 190.3 (9.9)
Other non-cash movements (0.2) (0.9)
------ ------
Movement in net debt in period 2,050.0 (224.7)
Net debt at end of previous period (6,208.4) (5,285.1)
------ ------
Net debt at end of period (4,158.4) (5,509.8)
------- -------
The Notes on pages x to x form part of these Accounts.
Group Balance Sheet
as at 30 June 2002
30 June 30 June 31 March
2002 2001 2002
Notes (pound)m (pound)m (pound)m
Fixed assets
Intangible assets - goodwill 2,455.2 2,814.6 2,658.9
Tangible assets 8,877.0 12,036.7 11,652.3
Investments
-Investments in joint ventures:
Share of gross assets 110.6 113.6 119.3
Share of gross liabilities (71.7) (70.6) (82.4)
------- ------- -------
38.9 43.0 36.9
-Investments in associates 3.4 5.0 5.2
-Other investments 264.1 253.5 223.5
------- ------- -------
306.4 301.5 265.6
------- ------- -------
11,638.6 15,152.8 14,576.8
-------- -------- --------
Current assets
Stocks 171.4 209.3 167.0
Debtors
- Gross debtors 1,476.4 1,667.7 1,448.2
- Less non-recourse financing (239.7) (273.8) (257.4)
------- ------- -------
1,236.7 1,393.9 1,190.8
Short-term bank and other deposits 1,405.8 319.9 380.8
------- ------- -------
2,813.9 1,923.1 1,738.6
Creditors: amounts falling due
within one year
Loans and other borrowings (547.4) (812.4) (1,226.8)
Other creditors (1,678.4) (2,251.7) (1,951.9)
------- ------- -------
(2,225.8) (3,064.1) (3,178.7)
------- ------- -------
Net current assets/(liabilities) 588.1 (1,141.0) (1,440.1)
------- ------- -------
Total assets less current liabilities 12,226.7 14,011.8 13,136.7
Creditors: amounts falling due after
more than one year
Loans and other borrowings (5,016.8) (5,017.3) (5,362.4)
Provisions for liabilities and charges
-Deferred tax (1,280.5) (1,632.9) (1,691.2)
-Other provisions (679.6) (822.0) (713.8)
------- ------- -------
(1,960.1) (2,454.9) (2,405.0)
Deferred income (518.7) (519.2) (551.2)
------- ------- -------
Net assets 2 4,731.1 6,020.4 4,818.1
------- ------- -------
Called up share capital 926.8 924.9 926.3
Share premium 2,257.1 3,743.2 2,254.1
Revaluation reserve 45.0 216.3 45.5
Capital redemption reserve 18.3 18.3 18.3
Merger reserve 406.4 406.4 406.4
Profit and loss account 1,001.5 437.6 1,080.8
------- ------- -------
Equity shareholders' funds 4,655.1 5,746.7 4,731.4
Minority interests (including
non-equity) 76.0 273.7 86.7
------- ------- -------
Capital employed 4,731.1 6,020.4 4,818.1
------- ------- -------
Net asset value per ordinary share 5 250.5p 310.5p 254.8p
------- ------- -------
The Notes on pages x to x form part of these Accounts.
Approved by the Board on 25 July 2002 and signed on its behalf by
Charles Miller Smith David Nish
Chairman Finance Director
Notes to the Quarterly Accounts
for the three months ended 30 June 2002
1 Basis of preparation
(a) These quarterly Accounts have been prepared on the basis of
accounting policies consistent with those set out in the
Directors' Report and Accounts for the year ended 31 March 2002.
(b) The quarterly Accounts are unaudited but have been formally
reviewed by the auditors and their report to the company is set
out on page x. The information shown for the year ended 31 March
2002 does not constitute statutory Accounts within the meaning of
Section 240 of the Companies Act 1985 and has been extracted from
the full Accounts for the year ended 31 March 2002 filed with the
Registrar of Companies. The report of the auditors on these
Accounts was unqualified and did not contain a statement under
either Section 237(2) or Section 237(3) of the Companies Act 1985.
(c) The relevant exchange rates applied in the preparation of these
quarterly Accounts were $1.46/(pound)(average for the three month
period to 30 June 2002), $1.52/(pound)(closing rate as at 30 June
2002), $1.42/(pound)(average for the three month period to 30 June
2001), $1.42/(pound)(closing rate as at 30 June 2001)and
$1.42/(pound)(closing rate as at 31 March 2002).
2 Segmental information
(a) Turnover by segment
Three months ended 30 June
Total Inter-segment External
turnover turnover turnover
2002 2001 2002 2001 2002 2001
Notes (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m
United
Kingdom
- continuing
operations
UK Division-
Generation,
Trading
and Supply 434.8 481.5 8.3 9.9 426.5 471.6
Infrastructure
Division-
Power
Systems 157.3 151.8 84.1 95.6 73.2 56.2
------ ------ ------ ------ ------ -----
United Kingdom
total-
continuing
operations 499.7 527.8
United States
- continuing
operations
US Division
Pacifi-
Corp (i) 646.5 904.4 0.7 - 645.8 904.4
PacifiCorp
Power
Marketing(i) 65.8 22.0 0.4 - 65.4 22.0
------ ------ ------ ------ ------ -----
United
States
total -
continuing
operations 711.2 926.4
----- -----
Total
continuing
operations 1,210.9 1,454.2
------- -------
United Kingdom-
discontinued
operations
Southern
Water 26.7 105.8 - 0.4 26.7 105.4
Thus - 67.0 - 8.0 - 59.0
Appliance
Retailing - 67.1 - 1.1 - 66.0
------ ------ ------ ------ ------ -----
United Kingdom
total-
discontinued
operations 26.7 230.4
------ ------ ------ ------ ------ -----
Total (ii) 1,237.6 1,684.6
------- -------
(b) Operating profit/(loss) by segment
Three months ended 30 June
Before Before
goodwill Goodwill goodwill Goodwill
amorti amorti amorti amorti
-sation -sation -sation -sation
2002 2002 2002 2001 2001 2001
Note (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m
United
Kingdom
- continuing
operations
UK Division-
Generation,
Trading
and Supply (8.4) (1.3) (9.7) 4.2 (1.2) 3.0
Infrastructure
Division-
Power
Systems 79.0 - 79.0 77.1 - 77.1
------ ------ ------ ------ ------ -----
United
Kingdom
total-
continuing
operations 70.6 (1.3) 69.3 81.3 (1.2) 80.1
------ ------ ------ ------ ------ -----
United
States-
continuing
operations
US Division
PacifiCorp(i) 134.1 (35.4) 98.7 90.5 (35.7) 54.8
PacifiCorp
Power
Marketing(i) 4.4 - 4.4 2.2 - 2.2
------ ------ ------ ------ ------ -----
United
States
total -
continuing
operations 138.5 (35.4) 103.1 92.7 (35.7) 57.0
------ ------ ------ ------ ------ -----
Total
continuing
operations 209.1 (36.7) 172.4 174.0 (36.9) 137.1
------ ------ ------ ------ ------ -----
United Kingdom-
discontinued
operations
Southern
Water 14.0 - 14.0 51.9 - 51.9
Thus - - - (16.6) (0.6) (17.2)
Appliance
Retailing - - - (9.0) - (9.0)
------ ------ ------ ------ ------ -----
United Kingdom
total-
discontinued
operations 14.0 - 14.0 26.3 (0.6) 25.7
------ ------ ------ ------ ------ -----
Total 223.1 (36.7) 186.4 200.3 (37.5) 162.8
------ ------ ------ ------ ------ -----
(c) Net assets by segment
30 June 30 June 31 March
2002 2001 2002
Notes (pound)m (pound)m (pound)m
United Kingdom
- continuing
operations
UK Division-
Generation, Trading and
Supply (iii) 866.2 744.2 873.4
Infrastructure
Division-
Power Systems (iii) 2,092.6 1,981.4 2,070.7
------- ------- -------
United Kingdom total-
continuing operations 2,958.8 2,725.6 2,944.1
------- ------- -------
United States-
continuing
operations
US Division
PacifiCorp (i),(iii) 7,048.9 7,528.2 7,521.9
PacifiCorp
Power
Marketing (i),(iii) 252.9 123.4 254.1
------- ------- -------
United States total-
continuing operations 7,301.8 7,651.6 7,776.0
------- ------- -------
Total continuing operations 10,260.6 10,377.2 10,720.1
-------- -------- --------
United Kingdom-
discontinued
operations
Southern Water (iii) - 2,639.7 2,347.6
Thus (iii) - 485.7 -
Appliance Retailing (iii) - (44.0) -
------- ------- -------
United Kingdom
total-
discontinued
operations - 3,081.4 2,347.6
------- ------- --------
Unallocated net liabilities (iv) (5,529.5) (7,438.2) (8,249.6)
--------- ------- --------
Total 4,731.1 6,020.4 4,818.1
------- ------- --------
(i) The former `PacifiCorp' segment has been separated into two
reporting segments, PacifiCorp, the US regulated business and
PacifiCorp Power Marketing, the competitive US energy
business, which commenced substantive operations during 2001.
(ii) In the segmental analysis turnover is shown by geographical
origin. Turnover analysed by geographical destination is not
materially different.
(iii) The net assets by segment figures for 30 June 2001 have been
restated in line with the revised basis of presentation
adopted in the 2001/02 Annual Report and Accounts.
(iv) Unallocated net liabilities include net debt, dividends
payable, tax liabilities and investments.
3 Exceptional item
An exceptional charge of (pound)120.1 million in the three months
ended 30 June 2001, recognised after operating profit, related to the
provision for loss on disposal of and withdrawal from the group's
Appliance Retailing operations. This charge included (pound)15.1
million of goodwill previously written off to reserves.
4 Taxation
The charge for taxation, including deferred tax, for the period ended
30 June 2002, reflects the anticipated effective rate for the year
ending 31 March 2003 of 24% on the profit before goodwill amortisation
and taxation. The charge for the three months ended 30 June 2001
reflected the anticipated effective rate for the year ending 31 March
2002 of 22.5% on the profit before goodwill amortisation, exceptional
item and taxation as detailed below:
Three months
ended 30 June
2002 2001
(pound)m (pound)m
Profit/(loss) on ordinary
activities before taxation 115.4 (52.3)
Adjusting items
-exceptional item before taxation - 120.1
-goodwill amortisation 36.7 37.5
------ ------
Profit on ordinary activities before
goodwill amortisation, exceptional item
and taxation 152.1 105.3
------ ------
5 Earnings/(loss) and net asset value per ordinary share
(a) Earnings/(loss) per ordinary share have been calculated for all
periods by dividing the profit/(loss) for the period by the weighted
average number of ordinary shares in issue during the period, based on
the following information:
Three months
ended 30 June
2002 2001
Profit/(loss) for the period((pound)million) 77.7 (46.7)
Basic weighted average share capital
(number of shares, million) 1,842.2 1,833.4
Diluted weighted average share capital
(number of shares, million) 1,845.6 1,838.6
------- -------
The difference between the basic and the diluted weighted average
share capital is wholly attributable to outstanding share options and
shares held in trust for the group's Employee Share Ownership Plan.
These share options are dilutive by reference to continuing operations
and accordingly a diluted EPS has been calculated which has the impact
of reducing the net earnings/(loss) per ordinary share.
(b) The calculation of earnings/(loss) per ordinary share, on a basis
which excludes the exceptional item and goodwill amortisation, is
based on the following adjusted earnings:
Three months ended 30 June
Contin Discon Contin Discon
-uing -tinued -uing -tinued
opera opera opera opera
-tions -tions Total -tions -tions Total
2002 2002 2002 2001 2001 2001
(pound)m(pound)m(pound)m(pound)m(pound)m(pound)m
Profit/(loss)
for the period 70.1 7.6 77.7 34.2 (80.9) (46.7)
Adjusting items
- exceptional item
(net of attributable
taxation) - - - - 99.1 99.1
- goodwill amortisation 36.7 - 36.7 36.9 0.6 37.5
----- ----- ----- ----- ----- -----
Adjusted earnings 106.8 7.6 114.4 71.1 18.8 89.9
----- ----- ----- ----- ----- -----
Adjusted earnings per share has been presented in addition to earnings
per share calculated in accordance with FRS 14 in order that more
meaningful comparisons of financial performance can be made.
(c) Net asset value per ordinary share has been calculated based on
the following net assets and the number of shares in issue at the end
of the respective financial periods (after adjusting for the effect of
shares held in trust for the group's Sharesave Schemes and Employee
Share Ownership Plan):
30 June 30 June 31 March
2002 2001 2002
Net assets (as adjusted)((pound)million) 4,615.0 5,694.3 4,692.5
Number of ordinary shares in issue
at the period end (as adjusted)
(number of shares, million) 1,842.4 1,833.7 1,841.9
------- ------- -------
6 Dividend per ordinary share
The first interim dividend of 7.177 pence per ordinary share is
payable on 16 September 2002 to shareholders on the register at 2
August 2002. A first interim dividend of 6.835 pence per share was
declared in respect of the three months ended 30 June 2001.
7 Statement of total recognised gains and losses
Three months
ended 30 June
2002 2001
(pound)m (pound)m
Profit/(loss) for the period 77.7 (46.7)
Exchange movement on translation of overseas
results and net assets (242.6) 6.6
Currency translation differences on foreign
currency hedging 217.6 -
------ ------
Total recognised gains and losses for the period 52.7 (40.1)
------ ------
8 Southern Water
On 23 April 2002, the group completed the sale of Aspen 4 Limited (the
holding company of Southern Water plc) to First Aqua Limited for a
total consideration, before expenses, of (pound)2.05 billion including
repayment and acquisition of intra-group non-trading indebtedness and
assumption by First Aqua Limited of Southern Water's non-trading debt
due to third parties. In the group's Accounts for the year ended 31
March 2002, an exceptional impairment provision was made to reduce the
carrying value of Southern Water's net assets to their recoverable
amount. In addition, a further exceptional charge was recognised
representing the goodwill on the acquisition of Southern Water
previously written off to reserves. As a consequence of these charges
to profits in the year ended 31 March 2002, there is no further gain
or loss required to be recognised on completion of the sale in the
group's Accounts for the quarter ended 30 June 2002.
9 Summary of differences between UK and US Generally Accepted
Accounting Principles (`GAAP')
The consolidated Accounts of the group are prepared in accordance with
UK GAAP which differs in certain significant respects from US GAAP.
The effect of the US GAAP adjustments to profit/(loss) for the period
and equity shareholders' funds are set out in the tables below.
(a) Reconciliation of profit/(loss) for the financial period to US
GAAP:
Three months
ended 30 June
2002 2001
(pound)m (pound)m
Profit/(loss) for the financial period
under UK GAAP 77.7 (46.7)
US GAAP adjustments:
Amortisation of goodwill 36.7 (5.9)
US regulatory net assets (30.0) 24.3
Pensions (14.5) (0.1)
Depreciation on
revaluation uplift 0.5 0.9
Decommissioning and mine
reclamation liabilities 2.6 (6.3)
PacifiCorp Transition Plan costs (4.4) (5.2)
FAS 133 adjustment 116.3 48.0
Other (5.0) (0.5)
------ ------
179.9 8.5
Deferred tax effect of
US GAAP adjustments (9.0) (10.0)
Profit/(loss) for the ------ ------
period under US GAAP before
cumulative adjustment for C15 and C16(2001 FAS 133) 170.9 (1.5)
Cumulative adjustment for C15 and C16(2001 FAS 133) 141.1 (61.6)
------ ------
Profit/(loss) for the period
under US GAAP 312.0 (63.1)
------ ------
Earnings/(loss) per share under US GAAP 16.94p (3.44)p
------ ------
Diluted earnings/(loss) per share under US GAAP 16.91p (3.44)p
------ ------
The cumulative adjustment to the loss under US GAAP for the three
months ended 30 June 2001 of (pound)61.6 million (net of tax)
represented the cumulative effect on US GAAP earnings of adopting FAS
133 `Accounting for Derivative Instruments and Hedging Activities' at
1 April 2001. The cumulative adjustment to profit under US GAAP for
the three months ended 30 June 2002 of (pound)141.1 million (net of
tax) represents the cumulative effect on US GAAP earnings of adopting
revised FAS 133 guidance effective from 1 April 2002 issued by the
Derivatives Implementation Group ('DIG') under Issue C15 `Normal
Purchase and Normal Sales Exception for Certain Option - Type
Contracts and Forward Contracts in Electricity' and Issue C16
`Applying the Normal Purchases and Normal Sales Exception to Contracts
that Combine a Forward Contract and Purchased Option Contract'.
FAS 142 `Goodwill and Other Intangible Assets' was effective for
the group from 1 April 2002. This statement prohibits the amortisation
of goodwill under US GAAP and requires that goodwill will be tested
for impairment. The adjustment within `Amortisation of goodwill' for
the three months ended 30 June 2002 represents the reversal of
amortisation of goodwill charged under UK GAAP.
(b)Effect on equity shareholders' funds of differences between UK
GAAP and US GAAP:
30 30 31
June June March
2002 2001 2002
(pound)m (pound)m (pound)m
Equity shareholders' funds
under UK GAAP 4,655.1 5,746.7 4,731.4
US GAAP adjustments:
Goodwill 572.3 1,334.8 572.3
Business combinations (163.5) (189.1) (174.2)
Amortisation of goodwill (49.4) (175.6) (84.2)
ESOP shares held in trust (40.1) (52.4) (38.9)
US regulatory net assets 979.0 998.2 1,042.8
Pensions 210.8 244.8 222.9
Cash dividends 132.5 125.4 126.1
Revaluation of fixed assets (54.0) (229.0) (54.0)
Depreciation on revaluation uplift 9.0 12.8 8.5
Decommissioning and mine
reclamation liabilities 42.9 76.5 60.7
PacifiCorp Transition Plan costs 73.5 112.5 86.9
FAS 133 adjustment (61.8) (476.3) (308.2)
Other (7.1) 10.1 (3.4)
Deferred tax:
Effect of US GAAP adjustments (403.5) (303.0) (316.9)
Effect of differences in methodology (24.9) (14.0) (21.3)
------ ------- -------
Equity shareholders' funds under US
GAAP 5,870.8 7,222.4 5,850.5
------- ------- -------
The FAS 133 adjustment represents the difference between
accounting for derivatives under UK and US GAAP. FAS 133 requires all
derivatives, as defined by the standard, to be marked to market value,
except those which qualify for specific exemption under the standard
or associated DIG guidance, for example those defined as normal
purchases and normal sales. The derivatives which are being marked to
market value in accordance with FAS 133 include only certain of the
group's commercial contractual arrangements as many of these
arrangements are outside the scope of FAS 133. In addition, the effect
of changes in the fair value of certain long term contracts entered
into to hedge PacificCorp's future retail energy resource
requirements, which are being marked to market value in accordance
with FAS 133, are subject to regulation in the US and are therefore
deferred as regulatory assets or regulatory liabilities pursuant to
FAS 71 'Accounting for the Effects of Certain Types of Regulation'.
The total FAS 133 adjustment included within equity shareholders'
funds at 30 June 2002 of (pound)61.8 million is offset by a US
regulatory net asset of (pound)313.2 million included within 'US
regulatory net assets' above.
10 Contingent Liabilities
There have been no material changes to the group's contingent
liabilities disclosed in the 2001/02 Annual Report and Accounts.
Independent Review Report to Scottish Power plc
Introduction
We have been instructed by the company to review the financial
information, contained in the quarterly report, which comprises the
Group Profit and Loss Accounts, the Group Cash Flow Statement, the
Reconciliation of Net Cash Flow to Movement in Net Debt, the Group
Balance Sheet and the related notes. We have read the other
information contained in the quarterly report and considered whether
it contains any apparent misstatements or material inconsistencies
with the financial information.
Directors' responsibilities
The quarterly 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
require that the accounting polices and presentation applied to the
quarterly figures should be consistent with those applied in preparing
the preceding annual accounts except where any changes, and the
reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board for use in the
United Kingdom. A review consists principally of making enquires of
group management and applying analytical procedures to the financial
information and underlying financial data and, based thereon,
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 of assets,
liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with United Kingdom 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 three months ended 30 June 2002.
PricewaterhouseCoopers
Chartered Accountants
Glasgow
25 July 2002
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