21 May 2015

National Grid plc

Results for the year ended 31 March 2015

Steve Holliday, Chief Executive, said: 'National Grid delivered another successful year. Overall, our businesses achieved a strong operating performance and we developed new strategic growth opportunities in transmission and interconnection. We invested around £3.5bn in essential infrastructure during another year of strong network reliability, safety and resilience. Effective regulation continues to drive efficient investment. In the UK, for example, savings generated in the first two years of the RIIO price controls will reduce future customer bills by around £200m.'

Good operational and strategic progress led by efficiencies and investment

UK regulated: Ongoing benefit from 2013 restructuring, improved efficiency and incentive performance

 RIIO incentive performance contributed 270bp (2013/14: 180bp) to UK Return on Equity with pre- determined additional allowances contributing a further 90bp (2013/14: 80bp)

 Capital investment of £1.8bn with regulated asset value up 2% to £25.4bn.

US regulated: Profits maintained, supported by additional revenues from existing rate plans

 Return on Equity 8.4% (2013: 9.0%) reflecting increased rate base and additional winter costs

 Record capital investment of $2.4bn; $0.9bn total (7% underlying) growth in rate base to $17.2bn

 Completed financial systems upgrade and now preparing for important rate filings in 2015/16

New business activities: Good strategic progress with new investments approved

 €1.4bn planned investments approved for Norway and Belgium interconnector projects

 London property joint venture agreed; first site transfer expected during 2015/16

 Continued progress developing multiple US transmission investment opportunities

Strong overall financial performance maintaining robust financial position

Group Return on Equity 11.8% (2013/14: 11.4%); Value Added1of £1.7bn or 44.7p per share

 Adj. operating profit, excl. timing, up 5% to £3,927m (2013/14: £3,731m) at constant currency

 Adj. EPS, excl. timing, up 10% to 59.6p (2013/14: 54.4p)

 Strong balance sheet and cash flows; sustained financial metrics consistent with A- credit rating

 Recommended final dividend of 28.16p/share (2013/14: 27.54p); full year dividend up 2.0% to

42.87p (2013/14: 42.03p), in line with inflation and policy

Financial results for continuing operations

Commenting on the outlook for 2015/16, Steve Holliday added: 'We finished the year in a solid position, with a strong cash flow performance, good growth in our asset base and healthy gearing. We are on track with our programme of rate filings, operational efficiencies and enhancements to customer service. At the same time, we continue to invest in our UK and US businesses, driving organic growth, which together with strong returns, support our commitment to a sustainable, growing dividend.'

1 'Adjusted results', 'Value Added' and a number of other terms and performance measures used in this document are not defined within accounting standards or may be applied differently by other organisations. For clarity, we have provided definitions of these terms, descriptions of restatements and, where relevant, proforma calculations on pages 36 to 40. Prior year EPS has been adjusted to reflect the additional shares issued as scrip dividends, refer to note 6 on page 55.

1

National Grid 2014/15 Full Year Results Statement

CONTACTS

Investors

Media

Chris Mostyn +44 (0)20 7004 3149 +44 (0)7774 827710 (m)

Brunswick

Tom Burns, Mike Smith or Emma Walsh +44 (0)20 7404 5959

CONFERENCE CALL DETAILS

An analyst presentation will be held at the London Stock Exchange, 10 Paternoster Square, London
EC4M 7LS at 09:00 (BST) today.
There will be a live webcast of the results presentation available to view at investors.nationalgrid.com. The presentation will be available through the same link as a replay this afternoon.

Live telephone coverage of the analyst presentation at 09:00

In addition, John Dawson, Head of Investor Relations, will host a conference call with Q&A at 14:00 (BST) this afternoon for those unable to take part in the earlier presentation. Please use the same dial in details.

Download our app: National Grid has an iPad app for investors. Visit the App store and search

'National Grid IR'

Twitter: Follow our investor updates @nationalgridIR

National Grid image library available at www.nationalgridmedia.com
The 2014/15 Annual Report and Accounts (ARA) is expected to be publicly available on 5 June 2015. You can view or download copies of the latest ARA and Shareholder Information leaflet from National Grid's website atwww.nationalgrid.com/investorsor request a free printed copy by contacting [email protected].

2

National Grid 2014/15 Full Year Results Statement

STRATEGIC AND OPERATIONAL REVIEW OF THE YEAR

A year of successful delivery for stakeholders in 2014/15

During 2014/15, National Grid delivered a number of important objectives on behalf of customers and the wider industry. The UK regulated business successfully implemented the first capacity auctions and contracts for difference allocation process on behalf of the UK government. It also completed the tunnelling activities on the £900m London tunnels project and began cable laying on the c. £1bn Western Link HVDC (high voltage direct current) project. The US regulated business invested at record levels, completed the final stabilisation upgrade of its financial systems and delivered its goal of a step improvement in safety performance. At the same time, collaborative engagement with UK and US regulators, government and state officials around future energy policy and network modernisation have kept National Grid at the heart of the energy debate.
After significant development activity, in some cases spanning several years, the Group reached final investment decisions on two new UK interconnectors, agreed a joint venture to unlock value from its London property portfolio and made progress towards investment decisions in a number of US transmission opportunities.
At the same time, the business continued to deliver on programmes to improve operational efficiency and drive good overall group returns, customer benefits and continued balance sheet strength. National Grid's achievements during 2014/15 have positioned the Group well to deliver further success in
2015/16 and beyond.
The Group's performance during 2014/15 was underpinned by the sustainable and ethical way that National Grid conducts its business and relationships with its employees, customers, communities and other stakeholder groups. National Grid was pleased that this approach was recognised through the award of Responsible Business of the Year, 2014, by the UK's Business in the Community.
Overall during 2014/15, National Grid continued to deliver the essential operational performance elements that underpin sustainable financial performance by the Group: safe operations, strong customer service and reliable networks.

Strong reliability and safety performance demonstrate effectiveness of targeted programmes

Over the course of the year, National Grid delivered high standards of network reliability and availability for customers across its electricity and gas transmission and distribution infrastructure. This included a challenging period of very high snowfall in the Northeast US, including record levels in Boston and Buffalo.
The UK business made a number of process improvements to ensure that networks were well prepared for the winter. Investment to increase availability on the French interconnector also contributed to a strong financial performance in that business. National Grid also successfully implemented new electricity system balancing products to address a reduced supply margin. Now trialled, these services are again expected to be procured for the winter of 2015/16, with supply margins expected to be somewhat tighter than in winter 2014/15.
Overall performance in the UK benefited from the groundwork laid by its new operating model. This enabled good early results from performance excellence initiatives, streamlined processes and developments in design, planning, contracting and procurement. These in turn helped to deliver further efficiencies in operations and, importantly, within the UK regulated businesses' significant investment programme (£1.8bn total investment in 2014/15). The business remains focused on delivering the lowest sustainable cost solutions, and the benefits of totex (total operating and capital expenditure) savings will be shared with consumers. Following the first two years of the RIIO price controls around
£200m of the savings generated by National Grid will contribute to reducing future electricity and gas bills for consumers.

3

National Grid 2014/15 Full Year Results Statement

National Grid's share of totex efficiency savings is also key to the delivery of appropriate returns for investors and a healthy balance sheet to finance future investment. In this respect it has been another strong year.
The US business again achieved good underlying operating performance throughout the year. This included a second consecutive period of exceptional winter weather in the Northeast US, characterised by very heavy snowfall and high gas volumes during February and March. These challenges clearly demonstrated the benefit of investments made in new infrastructure and emergency response, and helped deliver another year of strong network reliability.
The US business completed the stabilisation upgrade of its financial systems in the first half of the year. The new systems are designed to facilitate future regulatory filings in order to capture the benefit of the increased investments in asset replacement, network reliability and customer growth. With good quality information now being made available, the businesses have started to compile a suitable 'test year' of data to support future filings.
Operations in the US have experienced a number of cost pressures during 2014/15, including higher costs associated with gas main leakages and repair activities. These were exacerbated by high system demand due to the exceptionally cold winters of 2013/14 and 2014/15. The related impact on customers' bills also resulted in increased levels of bad debts. Despite these pressures, profitability has remained steady and National Grid believes the business is well positioned to secure appropriate rate case outcomes from its future filings.
Group safety performance has again been good with the UK continuing to achieve world class standards. For 2014/15, the US business set stretching targets for improved safety performance, to help achieve similarly high standards. Against this backdrop, and despite the challenging working conditions caused by the extreme winter weather, the US business achieved good internal progress, delivering a 21% improvement in lost time injury frequency rate. However, further work will continue with various contractors and suppliers to ensure they consistently meet National Grid's rigorous standards.

Record year of US investment and new business opportunities support long-term growth

The Group continues to operate in a positive environment for future long term growth, led by improvements to environmental, safety and operational performance of existing assets together with investment to connect new customers, new generation and interconnectors.
During the year, National Grid successfully ran both the UK's Capacity Market Auction for delivery year
2018 and the allocation of contracts for difference on behalf of the Department of Energy and Climate
Change (DECC). These provided additional clarity on likely new generation investment in the near future and the results are consistent with the investment forecasts within the RIIO Stakeholder
documents that National Grid published in September 2014. These featured a range of investment
scenarios including a lower case, where UK investment continues broadly in line with 2013/14 levels in real terms throughout the RIIO-T1 period, and a higher case, in which new generation investment drives an increase in transmission spend in the later RIIO-T1 years of up to £1bn per annum.
In aggregate these scenarios would see National Grid's UK regulated businesses, including both transmission and distribution, investing between £16bn and £20bn over the eight year RIIO period in new capital projects to sustain the essential energy infrastructure in Great Britain. Overall, UK regulated asset growth in these scenarios would be 5% to 6% per annum on average.
During 2014/15, National Grid's UK regulated businesses have invested slightly below the levels expected under these scenarios, in part driven by delays to the Western Link project which were highlighted at the time of the half-year results in November 2014. Combined with a period of lower RPI inflation during 2014/15 this has resulted in a reduction in the rate of UK regulated asset growth compared to the Company's medium term expectations. Non-load related and replacement spend of

4

National Grid 2014/15 Full Year Results Statement

£1.2bn and load related spend of £0.6bn contributed to UK regulated asset value growth of £0.5bn
(2%) in the year.
In US regulated operations, the Company again increased investment activity, delivering a record year of network investment of nearly $2.4bn. This included accelerated gas main replacement activities, new gas connections and electricity system reinforcement. Regulators in the Northeast US are generally acknowledging the need for, and benefit of, such increased investment and as a result have been supportive of capital tracker mechanisms that encourage such investments. These benefits include bringing low-carbon, affordable energy to existing and new customers, environmental and safety benefits from increased gas distribution pipe replacement and increased electricity system resilience and accessibility for embedded generation.
Increased US investment in 2014/15 contributed to increased underlying US rate base growth of 7% (excluding working capital movements) compared to 5% last year on the same basis. This was slightly above the Group's medium term expectation of underlying US rate base growth of around 5% per annum and National Grid now expects core US rate base growth to exceed 5% for the next several years.
Investment in other activities and joint ventures increased to £213m in 2014/15 compared to £184m in
2013/14. National Grid expects this level of investment to increase significantly over the next few years. The Group has reached final investment decisions on two new UK electricity interconnectors and is
working towards decisions on a further two. National Grid has also progressed a number of
opportunities for transmission joint ventures and interconnector investments in the US, discussed later in the business sections. In addition, in November 2014 the Group announced a joint venture with the Berkeley Group designed to unlock additional value from National Grid's property portfolio. The structure of the project has the potential to realise a materially higher value for National Grid than direct land sales. In addition, it should accelerate the development of the portfolio, making valuable brownfield sites available for the wider community.
These developments provide additional short to medium term growth opportunities and, longer term, the potential for additional earnings and cash flow to support further growth opportunities.

Consistent strategy designed to deliver added value and cash returns

The Group's strategy is unchanged. National Grid focuses on owning and operating gas and electricity transmission and distribution infrastructure in the UK and the Northeast US. This strategy is designed to deliver Value Added through attractive returns to shareholders from a healthy, growing, dividend combined with sustainable growth in the per share value of equity assets. To achieve this, the business must deliver efficient operational and financing performance and maintain an appropriate balance between debt and equity funding, in part by targeting an asset portfolio with a suitable mix of cash yield and growth.
National Grid invests in assets that can add value by earning good returns while managing risk on behalf of shareholders, customers and other stakeholders. The Group aims to provide high standards of customer service through the efficient, safe and reliable operation of its networks. Driving these benefits for customers enables the continuation and further development of appropriate regulatory arrangements including a reasonable balance of remuneration between immediate cash yield and regulated asset growth that generates future cash returns.
Overall, the Group believes that its current portfolio of businesses delivers a good mix of cash yield and growth and that the Group has the financial capacity to fund organic growth and invest in other related transmission opportunities. These are expected to begin to deliver additional cash, and support shareholder returns, from around the start of the next decade.

5

National Grid 2014/15 Full Year Results Statement

Underlying performance in the year demonstrates efficiency and portfolio balance

National Grid measures the overall level of operational and financing performance using two principal metrics; Return on Equity, and Value Added. Return on Equity provides a measure of the efficiency of the Group's operations and Value Added demonstrates the level of regulated asset growth and yield within shareholder returns and also the balance of funding between debt and equity. These two metrics are now incorporated into the long term incentive arrangements for the management team.

Group Return on Equity improved to 11.8% driven by strong UK performance and financing

During the year, the UK regulated businesses delivered good returns of 13.7% in aggregate in the second year of their new price controls (2013/14: 12.7%), including the assumed 3% long run average RPI inflation. US Return on Equity (on a higher average equity ratio than the UK) of 8.4% was down on last year, reflecting the additional maintenance and bad debt costs highlighted earlier and the increased level of rate base growth since 2013. Overall, other activities in the Group delivered a good performance, including an improved result from the French interconnector and lower US system costs following the successful upgrade in the first half of the year. Treasury performance also helped the result, partly assisted by lower RPI accretions on the Group's index linked debt. Together with favourable UK legal settlements, these helped to offset the headwind from lower cost of debt allowances under the tracker within the new UK price controls. As a result, overall post-tax Group Return on Equity was 11.8% (2013/14: 11.4%), with the improved regulated financial performance this year more than covering the effect of the strong growth in assets in 2013/14.

Value Added of £1.7bn, held back by around £500m headwind of lower inflation

The Value Added metric reflects the key components of value delivery to shareholders of dividend and growth in the value of National Grid's assets net of the growth in net debt. The per share measure also reflects the funding of this growth and any dilution of the equity investment through, for example, scrip dividend take-up.
Overall Valued Added in the year was £1.7bn or 44.7p per share.

1 Consists of the regulated asset values and other regulatory assets and liabilities of the UK businesses regulated under the

RIIO price controls, i.e, UK Transmission Owner and System Operator and Gas Distribution assets

2 US regulated assets increased from $18.7bn to $20.0bn in the year. These represent rate base plus assets outside of rate base including working capital

3 Based on 3,766m weighted average shares for 2014/15 (2013/14: 3,729m)

Value Added in the year was lower than 2013/14, primarily led by the impact of lower RPI on UK regulated asset growth and the impact of debt buybacks in the year. This was partly offset by reduced cash interest payments and lower accretions on index linked borrowings, reflected in a net debt increase only around £150m higher than in 2013/14. This was despite an increased level of capital investment and an increased level of cash returned to shareholders in 2014/15. RPI inflation for March
2015 was 0.9% compared to 2.5% in March 2014. Removing the impact of debt buybacks and normalising for National Grid's long run assumption of 3% RPI for both years, Value Added for 2014/15
would have been around £600m higher, in line with the normalised 2013/14 level.

6

National Grid 2014/15 Full Year Results Statement

Of the £1.7bn Value Added in 2014/15, £1,271m was paid to shareholders as cash dividends and
£335m as share repurchases (offsetting the scrip issuance during the year), with £0.1bn retained in the business. This compared with a £1bn increase in net debt (before currency impacts). As a result,
despite the lower UK inflation in the year, the Group was still able to fund asset growth for the year with a mix of debt and equity and was comfortably able to maintain a strong balance sheet consistent with
an A-/A3 group credit rating.

Asset growth 3% across the Group, £1.1bn in total at constant currency

During the course of 2014/15 National Grid grew its total regulated and other assets by £1.1bn to over
£40bn. This reflected a net increase of £350m (2013/14: £1.0bn) in UK regulated assets and a £934m increase in the value of US regulated assets at constant currency. Within the UK business, asset growth included capitalised efficiencies or 'performance RAV' of an estimated £111m in the year.
The effects of lower year-end inflation on the value of the UK regulated asset growth held back overall growth in Group total regulated and other assets to 3%. National Grid expects UK inflation to return to long-run levels closer to 3% per annum by the end of 2016, contributing to expected higher levels of asset growth in the medium term.
Investment in assets outside of the principal regulated activities was £213m in the year. This included
£46m in Metering and £43m in the LNG facility on the Isle of Grain. National Grid is involved in a number of other strategic investment opportunities in the UK and US and expects investment and asset growth in this area to step up considerably over the second half of this decade.

Credit metrics remain strong enabling effective elimination of scrip dilution for 2014/15

Group gearing, measured as net debt as a proportion of total regulated assets, was 62% at 31 March
2015, compared with 61% a year before (restated at March 2015 FX levels). The Board believes that gearing remains at a comfortable level for the current credit rating. Retained cash flow (RCF) / adjusted
net debt was 11.2%, or around 9.9% after deducting share buyback costs; both measures comfortably above the 9% level currently indicated by Moody's as consistent with an A3 rating.
On average, National Grid expects to issue £2bn to £3bn of long-term debt each year to fund the expansion of the business and to refinance maturing debt. The current credit ratings of the Group are an important factor in the businesses' ability to access funding at attractive rates and in a wide range of currencies and markets. The Board believes that maintaining these credit ratings, with the resultant access to liquidity and attractive funding costs, is a key driver of value for the Group.
In May 2014, the Board decided to take a more active approach towards managing the dilution arising through the operation of its scrip dividend programme. The scrip dividend programme is an efficient means for many investors to reinvest cash dividends in National Grid shares and can provide balance sheet support during a period of higher asset growth. However, excess take-up, over and above that required to make an effective and timely contribution toward the long-term financing of the Group, is undesirable. Given the strong underlying performance of the business, current financial position and medium term expectations, the Group has been able to repurchase the 37.4m shares issued over the course of the year under the scrip programme and still retain an appropriately financed balance sheet.

Dividend increase of 2.0% recommended for 2014/15

National Grid's dividend policy aims to grow the ordinary dividend at least in line with the rate of RPI
inflation each year for the foreseeable future.
The Board has recommended an increase in the final dividend to 28.16p per ordinary share ($2.1866 per American Depositary Share). If approved, this will bring the full year dividend to 42.87p per ordinary share, an increase of 2.0% over the 42.03p per ordinary share in respect of the financial year ending
31 March 2014. This 2.0% rise is in line with the increase in average UK RPI for the twelve months to

7

National Grid 2014/15 Full Year Results Statement

31 March 2015 compared with the average for 2013/14 and as set out in the policy announcement of
28 March 2013.
The decision to grow the dividend at the rate of RPI inflation this year is consistent with the Board's wish to deliver healthy dividend growth combined with a considered approach to long term financing as discussed above.
If approved the final dividend for 2014/15 will be paid on 5 August 2015 to shareholders on the register as at 5 June 2015. A scrip dividend alternative will again be offered. At the AGM, the Directors will again be seeking authority to allot and buy-back shares as is normal practice and the Board expects to continue the active approach towards managing any impact of a lower than desired take up or any excess dilution arising through the operation of its scrip dividend programme.

Board changes

On 23 October 2014, National Grid announced that Tom King, Executive Director, US, would be standing down from the Board and leaving the Company on 31 March 2015. Tom has been succeeded by Dean Seavers who joined the Company in December 2014 and joined the Board as Executive Director, US with effect from 1 April 2015.
In July 2014, John Pettigrew, who joined the Board in April 2014, became Executive Director, UK and, as previously announced, Nick Winser, formerly Executive Director, UK, and Maria Richter, Non- executive Director and Finance Committee chairman, stood down from the Board. Therese Esperdy was appointed as chairman of the Finance Committee with effect from 28 July 2014 and as a member of the Audit Committee on 22 April 2015.
Philip Aiken stepped down from the Board in February 2015. Following his departure, Paul Golby was appointed as chairman of the Safety, Environment and Health Committee, as well as a member of the Audit Committee. Paul remains a member of the Nominations and Remuneration Committees.

OUTLOOK

The Group has finished the year in a solid position, with a strong cash flow performance, good growth in asset base and healthy gearing. National Grid is on track with a programme of rate filings, operational efficiencies and enhancements to customer service. At the same time, the Group continues to invest in its UK and US businesses, driving organic growth, which together with strong returns, support the commitment to a sustainable, growing dividend.

8

National Grid 2014/15 Full Year Results Statement

FINANCIAL REVIEW

Unless otherwise stated, all financial commentaries in this release are given on an adjusted basis at actual exchange rates. For definitions see the definitions and metrics section on pages 36 to 40 of this statement.

Operating profit excluding timing Year ended 31 March

Operating profit Year ended 31 March

Other selected financial information Year ended 31 March

Other selected financial information Year ended 31 March

9

National Grid 2014/15 Full Year Results Statement

Operating profit and controllable costs

Operating profit was £3,863m, up £199m (up 5%) compared with last year at actual exchange rates. The year on year movement in exchange rates had a £25m positive impact on operating profit. On a constant currency basis, operating profit was up £174m (up 5%). This included a negative year on year timing movement of £22m:

*restated to reflect finalisation of UK timing balances

Operating profit excluding timing increased by £196m (up 5%) on a constant currency basis. Operating profit from regulated activities increased by £123m on a constant currency basis, excluding

the impact of timing. Net regulated income increased by £342m, due to the impact of RPI indexation
and revenue increases in the second year of the RIIO price controls on UK regulated revenues combined with US revenue growth from existing rate plans and gas customer growth. Regulated
controllable costs increased by £61m while post-retirement costs increased by £2m and bad debts
increased by £62m. Depreciation and amortisation increased by £70m and other costs, including the impact of year on year changes in environmental liabilities and the impact of smaller storms, increased by £24m.
The Group's other activities contributed £73m more to operating profit than last year on a constant currency basis, primarily due to increased revenues in the French Interconnector business and a reduction in costs relating to the implementation of new US financial systems and processes.
As above, regulated controllable costs increased by £61m on a constant currency basis compared with last year. This included around £56m of additional costs associated with maintenance, both in the US, relating to gas mains repair and vegetation management, and in the UK with additional maintenance expenditure delivering overall totex benefits by reducing capex requirements. Excluding these costs, and some offsetting net year on year benefits, underlying regulated controllable costs increased by around £54m, around 2.7%, reflecting inflationary impacts on salaries and other costs partly offset by a continued drive for efficiency across National Grid's businesses.

Interest and taxation

Net finance costs were £1,033m, £75m lower than 2013/14 at actual exchange rates and £92m lower than 2013/14 at constant currency.

Continued refinancing of debt at lower prevailing interest rates and strong treasury management combined with reduced cash balances and lower accretions on index linked borrowings reduced overall finance costs. Pension related interest charges also reduced. These effects were partly offset by £62m lower capitalisation of interest.
The effective interest rate on Treasury managed debt for the year was 4.3% compared with 4.9% in
2013/14.

10

National Grid 2014/15 Full Year Results Statement

Profit before tax and taxation

The Company's share of post tax results of joint ventures and associates was £46m, up £18m from
2013/14, following an increased contribution from the BritNed interconnector.

Profit before tax was up 11% at actual exchange rates to £2,876m. Excluding the impact of timing, profit before tax was up 12% to £2,940m.

The tax charge on profits was £695m, £114m higher than 2013/14 at actual exchange rates, principally reflecting increased operating profits, lower interest charges and the non-recurrence of prior year adjustments, partly offset by a reduction in the UK corporation tax rate. As a result, the reported effective tax rate increased to 24.2% from 22.5% in the previous year.
Corporation tax paid in the UK in 2014/15 increased by £24m to £353m.

Other earnings metrics, EPS, exceptional and statutory earnings

Earnings attributable to non-controlling interests (minority interests) were £(8)m (2013/14 £(12)m), principally representing the impact of consolidating National Grid's investment in Clean Line, a US transmission business.
As a result, earnings attributable to equity shareholders were £2,189m, up £174m compared with
2013/14. Earnings per share increased 9% from 53.5p last year (restated for the impact of shares issued under the scrip dividend programme) to 58.1p.
Excluding the impact of timing, earnings attributable to equity shareholders were £2,245m, up £196m compared with 2013/14, and earnings per share increased by 10% year on year to 59.6p.
Exceptional items and remeasurements decreased statutory earnings by £170m after tax. A detailed breakdown of these items can be found on page 51. After these items and non-controlling interests, statutory earnings for continuing operations attributable to equity shareholders were £2,019m.
Statutory basic earnings per share were 53.6p compared with 65.7p (restated) last year. The reduction (compared to the increase in adjusted EPS) reflected a large exceptional pension credit in 2013/14 related to the discontinuation of the LIPA arrangements, a large exceptional deferred tax credit in
2013/14 related to a reduction in UK corporation tax rates and exceptional debt redemption costs in
2014/15.

Cash flow

Operating cash flow, before exceptional items, remeasurements and taxation, was £5,367m, £798m higher than 2013/14, principally reflecting higher operating profits and working capital inflows in the US following the cold winter of 2013/14.

Funding and Net Debt

Net debt as at 31 March 2015 increased by £2.7bn to £23.9bn (2014: £21.2bn). As at 31 March 2014 the Group maintained approximately $23bn of its total financial liabilities denominated in US dollars as a substantial hedge of foreign exchange movements in the value of its US businesses. As a result, the movements resulting from the relative strength of the US dollar against the pound compared with a year ago increased net debt by around £1.7bn.
The remaining increase was the result of £4.1bn of cash inflow before capex and shareholder returns, more than offset by dividends and share buybacks of £1.6bn, capital investment of £3.3bn and other non-cash and fair value movements of £0.2bn. This included £133m of accretions on index linked debt,
£48m lower than 2013/14.

11