Annual General Meeting

1
Annual General Meeting

• Glasgow Royal Concert Hall27 July 2001

2
Annual General Meeting

• Ian Russell,
• Chief Executive

July 2001
3
Agenda

• Results for 2000/01
• Strategy structure
• Operational performance

4
Results for 2000/01

• A tough year
• Earnings per share of 27.9p, down 27
• Two key reasons
• - UK Regulation
• - Outage at Hunter power plant

post-deferred tax, before goodwill amortisation
and exceptional items
5
Reasons for results - UK Regulation

• This translates to a reduction in EPS of
  approximately 7 pence

6
Reason for the results - US wholesale prices

• Normal prices average 40/MWh
• PacifiCorp is normally balanced
• Dry winter
• Lost 5 of Generation
• Obliged to buy in high priced market

Palo Verdes, Jan. 00-Jul. 01, historical prices.
7
ScottishPower relative to the FTSE Electricity
sector

• During this period the FTSE Electricity sector
  increased by 9
• In the same period ScottishPowers share price
  fell by 8

The period referred to is Fri 31/03/00 - Fri
30/03/01
8
ScottishPower relative to the FTSE Electricity
sector
120
115
110
105
100
95
Scottish Power
90
ScottishPower Prelims may 3rd
Electricity Sector
85
30/03/01
06/04/01
13/04/01
20/04/01
27/04/01
04/05/01
11/05/01
18/05/01
25/05/01
01/06/01
08/06/01
15/06/01
22/06/01
29/06/01
06/07/01
13/07/01
20/07/01

• Since 1st April the FTSE Electricity sector
  increased by 3
• In the same period ScottishPowers share price
  increased by 4

9
Total shareholder return - 12 months to 31/03/01
Against the benchmark of total shareholder
return, this years performance has been
lacklustre

• ScottishPower met its commitment to increase
  dividends by 5
• Total shareholder return down 3

10
Agenda

• Results for 2000/01
• Strategy Structure
• Operational performance

11
Strategic context

• Reshape and improve existing businesses
• Focused expansion across energy value chain
• Transform and integrate new businesses

Focus on value creation
12
Divisional structure
Sharper focus on growth of earnings
13
Agenda

• Results for 2000/01
• Strategy structure
• Operational performance

14
US division

• Transition plan
• Regulatory recovery
• New generation

15
2000/01 US Transition Plan stretch targets
exceeded

• Over 120 initiatives commenced
• Workforce reductionsof approximately 420, ahead
  of Year 1 target of 234
• 85m of transition relatedsavings delivered in
  2000/01

16
Regulatory recovery

• Filed in 5 states for 292m
• In addition further filings for excess power
  costs
• Recovered 102m to date
• Expecting the outcomes to be spread over a number
  of years

As at 3rd May 2001, Preliminary Results
17
Rapid expansionof generation capacity

• Previously announced additions - By Q2 -
  Gadsby 100 MW - West Valley 160 MW - Klamath
  JV 227 MW
• - By Q3 - Stateline wind 300 MW - Wyoming
  wind 50 MW
• Further plant in Q3 - New Klamath gas 100 MW
• Other plants in pipeline
• Long term contracts for output available

Significant addition to length and value
potential
18
UK division

• New generation plant
• Combined commercial trading
• Energy Supply

19
Shoreham Power Station

• 400 MW CCGT station
• Joint venture with AEP
• We own 50 of it

20
Rye House Power Station

• Located northof London
• Purchased on8 March 2001
• 715 MW CCGT station

21
Energy Supply

• Sharper focus on supply of energy products
• Arrested decline in customer numbers
• Improve customer standards and performance

22
Infrastructure division

• Power systems, business change plan
• Southern Water, Way Ahead plan

23
Power Systems

• Cash savings of 75m by 2003 on target
• Further removalof duplication
• Reduced procurement costs
• More rigorous contract management

Streamlined and focused business
24
Southern Water

• Cash savings of 67m by 2003 on target
• Continued improvement in service levels
• Substantial achievement of investment outputs

Continue to explore options to release value
25
Summary

• 2000/01 has been a challenging year
• Firm action taken to restore Hunter and
  strengthen PacifiCorps position in the market
• Three divisions focused on earnings growth and
  value creation

Sharper focus on growth of shareholder value
26
Annual General Meeting

• Glasgow Royal Concert Hall27 July 2001

27
Questions Answers

• Glasgow Royal Concert Hall27 July 2001

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Annual General Meeting

• Glasgow Royal Concert Hall27 July 2001

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(No Transcript)
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• Resolution 1
• To receive the Annual Report and Accounts for the
  year ended31 March 2001

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(No Transcript)
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Resolution 1
In favour
98.0
879.9m
Against
0.3
2.8m
Abstain
1.7
15.2m
33
(No Transcript)
34

• Resolution 2
• To elect Euan Baird as a director

35
(No Transcript)
36
Resolution 2
In favour
96.9
869.9m
Against
0.6
5.5m
Abstain
2.5
22.5m
37
(No Transcript)
38

• Resolution 3
• To elect Allan Leighton as a director

39
(No Transcript)
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Resolution 3
In favour
96.9
869.7m
Against
0.6
5.9m
Abstain
2.5
22.3m
41
(No Transcript)
42

• Resolution 4
• To re-elect Mair Barnes as a director

43
(No Transcript)
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Resolution 4
In favour
95.8
860.1m
Against
1.6
14.8m
Abstain
2.6
23.1m
45
(No Transcript)
46

• Resolution 5
• To re-elect Ian Russell as a director

47
(No Transcript)
48
Resolution 5
In favour
90.7
814.1m
Against
1.7
15.3m
Abstain
7.6
68.4m
49
(No Transcript)
50

• Resolution 6
• To re-appoint PricewaterhouseCoopers as auditors
  of the Company and to authorise the directors to
  determine the remuneration of the auditors

51
(No Transcript)
52
Resolution 6
In favour
96.7
868.2m
Against
1.7
15.3m
Abstain
1.6
14.4m
53
(No Transcript)
54

• Resolution 7
• To grant authority to establish a new Executive
  Share Option Plan

55
(No Transcript)
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Resolution 7
In favour
77.2
693.1m
Against
15.6
139.9m
Abstain
7.2
64.9m
57
(No Transcript)
58

• Resolution 8
• To authorise the Company to make donations to EU
  political organisations and to incur EU political
  expenditure

59
(No Transcript)
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Resolution 8
In favour
87.4
785.2m
Against
8.0
71.8m
Abstain
4.6
40.9m
61
Annual General Meeting

• Glasgow Royal Concert Hall27 July 2001