John Dawson Steven John Holliday - Group Chief Executive Officer, Group Director of Uk Gas Distribution & Business Services, Director, Chairman of Executive Committee, Member of Finance Committee, Chief Executive of National Grid Transco and Director of National Grid Transco Andrew R. J. Bonfield - Finance Director, Executive Director, Chairman of Disclosure Committee, Member of Executive Committee and Member of Finance Committee Nicholas Paul Winser - Executive Director of Transmission, Executive Director and Member of Executive Committee Thomas B. King - Executive Director of Electircity Distribution & Generation, Executive Director, Member of Executive Committee and President of U.S. Business

Edmund Reid - JP Morgan Chase & Co, Research Division Dominic Nash - Macquarie Research Verity Mitchell - HSBC, Research Division Mark Freshney - Crédit Suisse AG, Research Division Peter Bisztyga - Barclays Capital, Research Division Bobby Chada - Morgan Stanley, Research Division Iain Turner - Exane BNP Paribas, Research Division Peter Atherton - Liberum Capital Limited, Research Division

Good morning, ladies and gentlemen. Welcome to you here at the London Stock Exchange and to those joining online. I am John Dawson, Head of Investor Relations at National Grid, and it is my pleasure to introduce our full year results presentation for 2012, '13. Before we start, can I ask you to switch off your mobile phones? Steve and Andrew will take you through our results, and we'll have a question-and-answer session as usual at the end. During today's presentation, we will refer to profit and other measures unless indicated -- and unless indicated otherwise, we're adjusting for timing and storms. And our operating profit and interest costs will be normally a constant currency. Our presentation may contain forward-looking remarks. Please refer to our cautionary statement when considering our comments today. Just a reminder, you will find all the materials in today's presentation and additional fact sheets on our website and through the Investor Relations app. Thank you. Let me now hand you over to our Chief Executive, Steve Holliday.

Thank you, John. Good morning, everyone. The completion of our financial year 2012, '13 marks the close of a really important 2 years for National Grid. It's been a period of business-wide change, successful step change in the performance of our U.S. businesses and increasing our capital investments and a focus on securing necessary improvements to our regulatory arrangements, in fact, that cover over 80% of our asset base. The last 2 years have really been about laying down the foundations for our future, and we're entering a period now of exceptional clarity, clarity for the vast majority of our regulated businesses, clarity around financing our growth and clarity for us as a leadership team around what we need to do to deliver that growth and attractive returns. In fact, that list pretty much sets the agenda for our remarks this morning. I'm going to start with some of the key financial highlights. I want to then reflect, on the past 2 years, the delivery of the strategic priorities that we set, priorities that were all focus on building these foundations for delivering improvements in performance. I'll then hand over to Andrew to take you through the details of the last year's financial results with an update on returns for all of our businesses, as well as his thoughts on some of our financial priorities going forward. And I'll come back and close them by outlining our plans for the next year as we focus on growth and returns. And as John said, Andrew and I will take any questions. Nick Winser and Tom King are here this morning as well to take part in the Q&A session. But before I talk about the strategic progress of the past few years, let's look at results, another strong set of results…

Thank you, Steve, and good morning, everybody. I'm pleased to be here to continue Steve's discussion about the good progress the group continues to make. Today, I'll be covering a look back at our results, an update on our technical guidance for next year and finally, our total shareholder return and what will continue to distinguish National Grid as an investment proposition. First, the results. Operating profit in our U.K. Transmission business was up 14%, reflecting increased fees and revenues driven by the rollover year, growth in the asset base and the linkage to RPI. This was partially offset by increases and depreciation and controllable costs due to continued investment in our technical workforce and costs supporting reform of the U.K. and European energy markets. We continue to perform well under most of our incentive schemes that currently includes a one-off benefit of GBP 50 million from timely delivery of gas entry capacity arrangements over the previous price control. This was partially offset by the expected loss in the second year of the Balancing Services Incentive Scheme. That scheme finished at the end of March, and we're in the process of bringing a new one with the Ofgem as we speak. Gas Distribution profits were up 9%, again reflecting the benefit of RPI. Depreciation and controllable costs increased during the year, driven by inflation and reduced benefit from metering work. There were also a number of one-off charges relating to contract renegotiations and remediation work. On an IFRS basis, profitability in our U.S. operations grew by 3%. This improved performance was largely driven by income from a full year of the Niagara Mohawk deferral recoveries and FERC-regulated income. Offsetting this, costs were increased as a result of investment in our information systems, environmental costs and higher depreciation. Overall, U.S. returns…

Thanks, Andrew. So to sum up, last year was another good year. We have a clear framework in place which we can now invest in and develop our business going forward. The conclusion of these regulatory reviews for over 80% of our business provides unique visibility of our investment agenda for the next few years. Today, we have a combined regulated asset value of around GBP 35 billion, financed roughly 60-40 debt equity. If we invest in line with our expectations, just as an example, in 5 years' time, the asset value will have risen to well over GBP 45 billion, compound annual growth rate of 6%. As Andrew set out, we are confident that, that level of growth is financeable within our current credit ratings. Because if we perform strongly, any improvement in financial capacity will allow us to review our funding plans, increase the rate of dividend growth or consider further asset investments, ultimately whatever best maximizes total shareholder return. It's against that backdrop we were delighted to announce a new long-term dividend policy to apply for this new financial year 2014 onwards, targeting real growth, at least real growth. And we tested that against a range of performance and investment scenarios. And we're confident that it is sustainable for the foreseeable future. So as we enter this new period of clarity, we've also updated the internal framework we use inside the company extensively around goals and behaviors. We call it our line of sight. Some of you who have visited our facilities may well have seen it. While we have a strong regulatory platform in place and essential investments that would drive growth, we're also well aware, in order to maximize the value from these opportunities, we need to enforce and reinforce a culture of performance, increases…

The RCF debt, I think, was 11.4%, Ed.

Okay. And in the U.S., Ed, the number that we're talking about, GBP 1.3 billion or USD 2 billion, is all in the new rate plans. Every time we go in and file a new rate plan, we believe, clearly, that regulators are supporting the need to increase the level of investment. And that's around reinforcing this system, replacing lots of old assets and particularly in the gas businesses, replacing old gas pipe, and more in the future of tying more people into gas in Massachusetts and on Long Island. So there is an upward trend because the way the system works in the U.S., that immediately feeds into rates and returns with nominal returns. We'll work our way down, Peter. Could you slide that across that same side? Thank you.

Dominic Nash from Macquarie. Two questions, please. The first is on your dividend policy. When you talk about foreseeable future, we all have, I guess, different ideas of what foreseeable is. Is that the entire 8 years? Or how do you -- is there a shorter period than that? Secondly, on U.K. Transmission on the uncertainty mechanism, I know that Ofgem is looking at introducing competition in onshore transmission and any of your CapEx that's in the uncertainty mechanisms at risk. Could you just give us sort of more sort of color on when and how this could be posing an impact on National Grid, please?

Sure. How long is foreseeable? We've got more clarity than we've ever had in our history, actually. Clearly, the U.K. is 8 years. The way the U.S. is set up to deliver now and the fact that we're constantly, with 14 entities, filing something every couple of years gives us the confidence that we can give investors a big savings of about -- this is going to serve us very well for a long time to come. It's intentionally not 4 years, 5 years or 6 years. So it's far ahead as we can see right now. I don't think that any of the business has given somebody that much clarity into the future. And as I said, we stress test this against performance and against some changes. We believe it's very robust and sustainable for quite a long time. In terms of the CapEx in the U.K., there is a desire to try if it can bring some competition in here. It's very little on our onshore plans that we believe is covered by that at all. But actually, we welcome that in many ways, Dominic, as well. I mean, it's a test of our ability to deliver investment on time as well as anybody else can. Maybe you want to add to that at all, Nick?

Yes, thanks. The only thing I would add is Ofgem have put out a couple of documents on competition on assets, and there is some interesting stuff in there in terms of how they look at that. So they've talked about a set of criteria in a couple of documents. In particular, the sorts of things that they'd be looking to increase competition around would have to sort of pass tests like not too deeply meshed into the system. If it's an integrated investment, that's obviously more difficult to include competition and, in particular, things that they've said that they would be very aware of the possibility of delays to essential infrastructures to deliver government goals with the implication that if there's a long consenting process and then a significant process of builds and the timescales are tight in terms of connecting up, for example, nukes or wind, that Ofgem would take that into account. And potentially, if the competitive pressure is going to make that longer, they wouldn't produce in the competitive arena. So by and large, we -- as Steve said, we sort of welcome this. But we should expect it to be around the edges of the investment plan rather than central to it.

Verity, can I just pass or come forward here?

I'll just keep this. If you had mic, I'll hold onto it. I wanted to ask about the other activities and the U.S systems cost. I mean, clearly, the, I guess, the IT systems themselves will -- the cost will be recovered in rate cases, as I understand. But how many -- how much more of this cost will be recoverable with the regulated entities in the U.S.?

The CapEx associated with implementation of the systems has been followed in many of our rate cases because this is replacement of the systems that sit behind our business, actually. So understandably, that's how the regulated support. The cost that we've incurred because we've had a full implementation of our cost actually quite clearly, we would not be expecting those to be recovered. The base system cost, as Andrew said in his remarks, on fixing those, there is final issues at the moment. There will be a small cost again in this year, but nothing of that magnitude. Mark? Mark Freshney - Crédit Suisse AG, Research Division: It's Mark Freshney from Credit Suisse. Just on returns in the U.S., I think you'd agree that 9.2% is closer to disappointing than satisfactory. What are your aspirations? And over what period do you hope to get to close to those 10% returns, I guess, that you flagged in the past? And secondly, I think in the capital investment plan that you laid out, I think, 3 years ago, the run rate for the coming year looks to be about 20% lower. If CapEx were to step up, i.e. if you were to have clarity from government on the EMR, could you handle that uplift in CapEx and maintain the dividend, i.e. if CapEx were to go to GBP 5 billion?

Let me take your positive first question. It's measurable. 9.2% is a hell of a sight better than 6.9% quite clearly. And we've been driving returns up consistently year on year on year. Although I agree with you it's not 9.8%. Our objective is to earn our allowed returns. And you can trust us that, that is totally our focus. And we talked about the new rates that are in place and the new jurisdictions. And that's where we'll hold ourselves to account. But I'm very pleased with the progress we've made. It's a significant progress over the last few years. The U.K., our capital plans are assuming the successful implementation extent of the EMR and the fact that there's, obviously, some timing issues around when some of the generation will be built over the 8-year time frame. But our GBP 25 billion is associated with the need to tie in a whole series of new generators, a need to reinforce and de-bottleneck the system to get power flows particularly north to south. Andrew mentioned the Western link is already under construction, which is part and parcel of that. There's a potential for an Eastern link as well in this time frame and some changes on the gas system. So it is absolutely consistent with that. The reason why the CapEx is down slightly versus our forecast 3 years ago is predominantly to do with unregulated. We had assumed 3 years ago in that number that we'd been investing about GBP 2 billion into unregulated opportunities. We have not. And you should be pleased that we haven't in the sense because the reason we haven't is our discipline around returns and cash have meant that we have said no to a whole series of opportunities. Now on the other hand, I wish the answer had been yes. But we haven't found things across our threshold. And therefore, we said no to it. I think that's a good place to be. But the CapEx that we've got in front of us for the 8 years is GBP 25 billion. It's clearly financeable and maintaining our credit rating. If we outperformed, which, of course, would be our intention, we will create extra financial headroom. And then we have options about how we will use that headroom to drive total shareholder return. Mark Freshney - Crédit Suisse AG, Research Division: And to what level of CapEx can the current dividend policy handle, i.e. if it were to go GBP 5 billion, would you be able to maintain the dividend?

But how far in the future are you? We've got a total of GBP 25 billion in the U.K. in 8 years. We've got GBP 1.5 billion in the U.S. and that's forecasted to go up slightly. That's easily manageable within the credit ratings that they are today, making assumptions as you'd expect when you put the dividend policy out there, not as you're banking on everything in terms of incentives. So making sensible assumptions about what we can do with this business, with clearly a desire to want to actually do better than that.

Mark, I mean, the other thing I would say is, I mean, the credit rating metric that we are always the one that most challenges us is the RCF-to-debt ratio, which CapEx doesn't affect. So that's one point to note and just to remind you on that. Second thing is, obviously, if there is additional CapEx, there's additional revenues, which helps see our metrics and drives those and helps the growth of our profile as we move forward. And then finally, if it was an actual increase and a significant increase in CapEx, there is the opportunity for us to look at other funding mechanisms. We talked about the hybrid. We've done GBP 2.1 billion of hybrid bonds. We have the capacity to do GBP 5 billion. So there are other -- definitely other options, which we will continue to look at. And as we always go back to that list of 10 items that we've spoken about in the past, all the options, we will continue to look through those if we needed to find additional sources of cash. So I think before we'd ever get into that debate, the hypothetical you're asking, I think, is quite a long way down that list.

Peter?

It's Peter Bisztyga from Barclays. A question on dividend policy again. There are certain scenarios where an improving balance sheet headroom may not necessarily translate into higher EPS growth. And I'm just wondering where the constraint on your dividend growth is. In other words, is there a certain level of dividend payout ratio you won't go above even if you could afford faster dividend growth because of your balance sheet?

Yes. I think if you look at the ratios of coverage, the 1.3 ratio that is pretty consistent when they're at the lowest, that's a place that we're comfortable at. And when I said -- on my remarks on how we stress-tested this means that under all the scenarios that we can think about, they are probably even worse than some of Mark's scenarios, I suspect. And we're very comfortable. We wouldn't put out the statement about the foreseeable future and at least real growth unless we were that comfortable. It's a sustainable policy. Bobby?

It's Bobby Chada from Morgan Stanley. The first question is on the U.S. rate base and the assets outside of rate base. Can you just give us a feel for how they break down between spend that you think will definitely go into rate base and spend that is effectively OpEx that you're going to get back because, obviously, they have a different value? And then secondly, you've given us a kind of interesting teaser about incentives and how they're going to -- how the incentive scheme should positively impact performance. So I'm assuming by performance, you mean profitability. Can you give any more color? I know you're saving all the firepower for August 2, but could you just give us a little bit more about some of the bigger schemes that you think will affect performance?

A little. I'll leave Andrew to come back on the rate base question in a moment which -- but I would say you'll see that the rate base itself actually has grown by 5% year-on-year. So some of those things have got straight into rate base in the course of this year. What we're going to do in August is a number of things. The first thing we're going to do is, with all due respect, just take people through the way RIIO works, particularly TotEx and the assumptions around cash and the sharing between the theoretical how much of that is CapEx and OpEx. And therefore, if we reduce our cash spend, how does that flow into profit and how does that flow into returns? So a little bit of understanding, first of all before we then dive down into -- so let's now talk about the way we set the organization up. Let's look at some of the tools and mechanisms we put in place that will deliver that outperformance. The biggest of those is TotEx actually delivering a set of defined outputs at a lower cash cost, so finding ways to invest more cleverly, procure more cleverly. At times, as Andrew was alluding to, spending more operating costs in a year to defer capital expenditure creates huge value, profitability and enhanced returns for us. That's what we're going to run through on the 6th of August. Rate base?

And on the rate base, about 60% of the rate base -- assets outside rate base are interest bearing. That was actually the largest single part of the increase. Most of that was capital work in progress. We tend to move across into rate base by the end of the year mainly due to delays as a result of -- actually, it wasn't just the 2 storms. There were a couple of other minor storms as well that the U.S. had to deal with towards the end of the year, which had an impact on timing of moving that through. The assets outside that aren't interest-bearing actually stayed broadly flat at around 40%. About half of that is -- as you know, is working capital. And about the other half is deferrals, which will be recovered over a period of time, storm cost and so forth.

The work in progress in there as well in those [indiscernible] not in yet. That number -- if we get a year with 0 storms, eventually, that number is going to go down, as long as we get a storm and something else has gone into this bucket, which we then need to get a recovery on, clearly. John?

Can I ask on the treatment of the implementation cost on the U.S. systems. Just a justification for why that sits in your other segment and not against the U.S. businesses and then not against the U.S. returns that you've reported for this year?

It's a strategic...

[indiscernible] their own tools to the U.S. operations.

They are, but they're hugely related to our financials systems at the corporate center as a group as a whole. We believe that's the right treatment.

Yes, that's also -- John, there a couple of things that you have to think, one which is what is recoverable from regulators. The part of the cost that is recoverable is the capital cost. That actually then will be charged out and actually built into the U.S. rate base as we move forward. So that actually will be recoverable, and that reflects the returns. If it's an asset, something that's been done, which is required for regulatory purposes but actually could never actually be recovered from regulators, is a need to catch up. So some of this is training cost, et cetera, related to a new systems implementation. It would be unfair to penalize the U.S. business because effectively, you'll have a one-term debt and a one big increase the following year. So we'll just create a little bit of volatility. So for clarity purposes, that's why we put it in the other segment. It's completely transparent. It's very clear for people what we've done. I think if we had actually then been trying to explain to you why how it would be spread across the different entities and there are 14 different legal entities we would have that spread across, you would then struggle to understand exactly how it was impacting U.S. results.

It's Iain Turner from Exane. Can I just ask on the actual cash tax you've been paying? I think it's a couple of hundred million this year, a couple of hundred million last year. I think if memory serves me right, the year before, you didn't pay any cash tax at all. Would you expect the amount of cash tax to be paid to increase to get near your tax charge and over time? And then just secondly, you have quite a big over-recovery position in the U.S. Over what sort of period of time would you expect that to unwind?

Well, the cash tax is GBP 243 million, Andrew, isn't it?

In the U.K.

In the U.K?

Yes. I mean, the impact to taxes is broadly -- the lower level of cash tax paid actually is in the U.S., and that's as a result of bonus depreciation. As long as bonus depreciation remains, the cash tax, obviously, stays as it is. So for planning assumption, it can reverse in the event that Congress makes a decision to reverse bonus depreciation. That's the biggest driver of the cash tax charge. This year, we paid about GBP 243 million of U.K. taxes, corporation tax. And that compares to GBP 176 million last year. It will go up again next year as a result of the rises in the U.K. profitability. So that element of it is less deferral in the U.K. versus the U.S.

Sorry, I forgot your second question.

Just the recovery of the...

Oh, the storms. Yes, well, we filed...

[indiscernible] the overall recovery.

The overall recovery in total. It's not all in the U.S., actually. It's in the U.K. as well. So the combination across the businesses here, and we will plan to pay that back over the next few years. As you can see, we were over-recovered last year. And despite an attempt to pay some of that back with revenues coming in, we remained in an over-recovered position. But it keeps getting readjusted each year as well. So if you go into entity by entity in the U.S. -- and Tom, you might answer this actually. There were trackers and true-ups. So we close the year with an over-recovery. Then because of a pension tracker or a CapEx tracker or a property tax we then owe. So that actually negates off the overall recovery. So it doesn't necessarily all go back dollar for dollar in that sense. Tom, is there?

Yes. That's right, Steve. I think the only thing that I would add is there is -- when you get through the 4 rate cases that we did this year, the bulk of those balances would be true-up as part of the overall settlement. Then we'll go into the next round, we'll have Long Island gas business, Massachusetts electric business. And those will go through the same process. So I think it is a fairly quick true-up based on operating entity by, operating entity.

And in the U.K., as we set our prices for the forward year, we'd intend to get back to normal. Peter?

Peter Atherton from Liberum Capital. Two questions, quick one on the U.S. As the U.S. CapEx rises, can we expect the same sort of ratios we saw last year in terms of CapEx going straight into the rate base? And then on the U.K., without both SSC and Ofgem raise issues around security supply for the next couple of winters, what's your thinking on to go to supply at the moment?

One of the characteristics of the new rate plans, and I don't need these opportunities to go through so much of the mechanics behind them. But one of the things that we've been able to do in all of the recent rate cases is get a mechanism that ensures that CapEx gets into rate base faster. You're seeing that. It's self-evident in the fact that the rate base has gone up by 5% this year. So we would expect that to go pretty much in line with our CapEx, Peter. As opposed to the observations on power supply in the U.K., I thought you were the, actually, resident expert and commentator on this, more generally. So we should pass -- I should listen to your view on this.

I think prices will go up.

It's pretty clear. It's pretty clear that we knew the generation shutdowns in the course of next 5 or 6 years. It's pretty clear some of those have happened faster than we assumed particularly in the coal plant. It's pretty clear with the economics of gas, and some of the less efficient gas plant has come off at the moment. Now the government and Ofgem will look very closely at what the situation is looking like. And we'll get involved with that as well and how do we make sure we've got all the mechanisms in place that we need. There is no doubt it's tighter than it was a year ago. Because in times of winter, we get pretty comfortably as well. Who's over here? Nothing more at all? Bobby? Just as I was about to -- that's okay.

It's one for Tom, really. U.S. treasuries have been at very, very low levels in terms of yield for quite a long time now. But it seems that the allowed ROEs, although they've come down somewhat, are not tracking down nearly as far as you might expect particularly given that some of your jurisdictions have quite mechanistic process for setting the allowed return on equity. So do you see these sorts of levels as a floor? Do you see the staff particularly in New York kind of flexing the model they've used historically? Can you just give us a bit of color around that?

Yes, I think the one on your stuff, Tom, right. There's a graph on the U.S. that shows this, which is always lagging. So I think the last thing I saw was that fourth quarter of 2012 was about 9%, 8%. It was the U.S. average. It's been tracking down, down, down. We've just done these cases in New York. So it's very clear the way that New York sees these returns. They have been tracking down. There is no question. But one of the challenges is how far do you go down before you realize that treasuries are going to come back up again and there will be a whole plethora of rate filings coming in across the whole of the U.S.

Yes. So Bobby, the -- it's a great example to build on further that you're pointing out. There is no question that the trends are certainly lower than where we're ending up. So I think that is directly attributable to where we've built a part of the strategic focus on building the relationships and the trust. So as you step back and you look at the list of things we think we need to deliver on and we need commission alignment on, then they have their list of activities, including a very keen focus on managing the overall bill impacts. So as we'd land on overall settlement versus a commission decision, the settlement allows us to balance a lot of the pluses and minuses in order to help us manage a return that we're comfortable with but also help the commission manage the overall cost and the outcome on bills. So it's a balancing between what they need and what we need. And we're very comfortable with the outcome because it increases our probability on delivering on the allowed return. And we get a return that gets us comfortable that we're operating in the right jurisdiction.

And just to add a little flow, too. There's been understanding or enthusiasm to convert more oil to gas in the northeast of the U.S., in many of our jurisdictions actually. So we've been asked and we're working with it. So what does that mean for ratemaking going forward? But back to Thomas' point, it's because the bill allows it to an extent now. Reduction in gas prices has created the opportunity in the bill to think about how you can extend at the networks and get more people on gas, alignment of objectives there.

So Steve just to add to that especially at the gas piece of it, when you look at the downstate New York settlement, there is roughly $300 million of incremental capital. The bulk of that is upgrading of the existing pipe infrastructure, as well the new connection. And certainly, as you're aware, New York City and Brooklyn, significant growth taking place there. So we're trying to balance a couple of things in enhancement and upgrading, modernizing the infrastructure, as well as the new connects. And then for upstate New York, out of that settlement, the 3-year plan lands on $1.6 billion of CapEx. And a lot of that is modernization of the infrastructure. So there is a definite balancing there. We're trying to think through and discuss with them in a very open, transparent manner of how best we bring all those needs together but be very conscious about bill impacts.

Thank you, Tom. Ed, at the back? Edmund Reid - JP Morgan Chase & Co, Research Division: Two questions also on the U.S. Would you expect the achieved ROE in the U.S. to be up this year on last? And then secondly, I think in the statement, you talk about the difference between the IFRS and U.S. GAAP treatment and the fact that this year in the U.S., the rate cases that you've got won't necessarily impact the IFRS numbers for the U.S. And I just wondered if you can talk us through a bit more why that's the case?

Well, that -- I mean, they were partly actually, but we've lost the deferral recoveries in NiMo. It was about GBP 130 million, I think.

$150 million.

$150 million. Some of that has gone into base rates, but not all of it. So there was a reduction in IFRS in NiMo until we actually get all the benefits. So it's a little bit of both. We don't forecast ROEs, Ed. We've been pretty clear, I think, in answering Mark's question. You would hold us to account and expect us to continue to improve. And we're not going to rest until we're delivering what you rightly should hold us to account for, which is delivering our allowed returns. Do you want to add anything to the IFRS?

I mean, the other element of the IFRS discussion is one of the things with OpEx trackers, pension fund trackers is obviously in this period of time. Actually, when pension -- actually, cost actually has declined in Niagara Mohawk, interestingly, in revenues, we basically defer and offset against the deferral account this year, which goes away next year because it comes into rates. So it actually reduces IFRS. That's one of the other factors as well when you're looking at it. So although we've got a good increase in base rates and good increase in the allowances against our cost of service, they are mitigating some of those impacts. So you wouldn't necessarily just add year-on-year the improvement in the cost of service in Niagara Mohawk. That's what we're trying to make there.

If I take you back 3 years, we set up trackers and true-ups intentionally to make sure that the customers didn't get such swings on their bills every time there was a big rate case but also protect the investors actually about under-recovery. This is an example actually where pension costs have gone down. So rightly, we've been over-collecting. But that then offsets the deferral, otherwise, we were going to have to collect. So this system is working very well actually, as Tom says, helping to smooth bills, helping us manage our own cash flows. Edmund Reid - JP Morgan Chase & Co, Research Division: I was just really trying to understand the sort of impact on your statutory numbers for the U.S. going forward because it feels -- I think consensus has quite material increase in U.S. operating profits for this year '13, '14 versus '12, '13. And it just seems that maybe that might not be correct given some of the things that you talked about.

The other fact that you also have to look at is what is your base assumption around storms, Ed. And obviously, in the U.S. results this year, that's GBP 87 million of storm cost, which you don't necessarily expect to recur. So again, it's about taking all those parts. And my suggestion is if you speak to the IR team afterwards, they'll take you through all the different implications of how that all flows through.

And one thing on storms, we have already got agreement in Massachusetts to collect $40 million, which we're collecting this year, as part of already collecting back for Sandy and Irene, et cetera. Okay. Thank you very much. Thanks for joining us this morning.