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Definition and Calculation of Non GAAP Measures

RETURN ON AVERAGE CAPITAL EMPLOYED (ROCE)

Definition:

Calculated by dividing operating profit for a period by the average net operating assets at 1 January, 30 June and 31 December.

CALCULATION:

 

Accounts reference

December 2013

£ million

December 2012

£ million

Operating profit

Income statement

358

385
       

Average net operating assets

      

1 January

Note 4(g) of 2013 & 2012 Accounts

1,708

1,354

30 June

Refer to Note (a) below

1,773

1,667

31 December

Note 4(g) of 2013 & 2012 Accounts

1,598

1,708

Average (i.e. total of 1 Jan, 30 June
and 31 Dec divided by 3)

1,693

1,576
       

ROCE (operating profit divided by average operating assets)

21%

24%
       

Note (a):

      

Per June 2013 Interim Accounts

      

Note 6(e)

      

Assets

  

2,131

2,121

Liabilities

  

(358)

(454)

Net operating assets

  

1,773

1,667

RATIO OF REVENUE TO AVERAGE GROSS RENTAL ASSETS

DEFINITION:

Revenue for the period (excluding pass through fuel) divided by the average gross rental assets at 1 January, 30 June and 31 December.

CALCULATION:

 

Accounts reference

December 2013

£ million

December 2012

£ million

Revenue

Income statement

1,573

1,583

Less pass-through fuel (Note 1)

(42)

(40)

Revenue excl. pass-through fuel

1,531

1,543

Average gross rental assets

1 January

Note 14

2,328

2,013

30 June

Note 11 of June 13 Interim Accounts

2,508

2,219

31 December

Note 14

2,373

2,328

Average (i.e. total of 1 Jan, 30 June
and 31 Dec divided by 3)

2,403

2,187

Revenue/gross rental assets

64%

71%

Note 1: Pass-through fuel relates to three contracts in our Power Projects business where we provide fuel on a pass-through basis.

ENTERPRISE VALUE

DEFINITION:

Market value plus net debt.

CALCULATION:

 

Accounts reference

December 2013

Issued share capital (number of shares, millions)

Note 22

269

Share price (£)

  

17.09

Market value (issued share capital times share price) (£m)

  

4,598

Net debt (£m)

Cash flow statement

363

Enterprise value (£m)

4,961

EARNINGS BEFORE INTEREST, TAXES,  DEPRECIATION AND AMORTISATION (EBITDA)

CALCULATION:

 

Accounts reference

December 2013

£ million

December 2012

£ million

Operating profit (Earnings Before Interest
and Taxation)

Income statement

358

385

Depreciation

Note 5

273

236

Amortisation

Note 5

5

5

EBITDA

636

626

INTEREST COVER: EBITDA DIVIDED BY NET FINANCE COSTS

CALCULATION:

 

Accounts reference

December 2013

December 2012

EBITDA (£ million)

Per above

636

626

Net finance cost (£ million)

Income statement

25

25

Interest cover (times)

26

25

NET DEBT TO EBITDA 

CALCULATION:

 

Accounts reference

December 2013

December 2012

Net debt (£ million)

Cash flow statement

363

593

EBITDA (£ million)

Per above

636

626

Net debt/EBITDA (times)

0.6

0.9

GEARING 

DEFINITION:

Net debt as a percentage of equity.

CALCULATION:

 

Accounts reference

December 2013

December 2012

Net debt (£ million)

Cash flow statement

363

593

Shareholders' equity (£ million)

Balance sheet

1,140

1,045

Gearing (percentage)

32%

57%

DIVIDEND COVER 

DEFINITION:

Basic earnings per share (EPS) divided by full year declared dividend. 

CALCULATION:

 

Accounts reference

December 2013

December 2012

Basic EPS (pence)

Income statement

92.15

100.67

Full year declared dividend

      

Interim dividend (pence)

Note 10

9.11

8.28

Final dividend (pence)

Note 10

17.19

15.63
   

26.30

23.91
       

Dividend cover (times)

  

3.5

4.2

UNDERLYING REVENUE 

DEFINITION:

Underlying excludes pass-through fuel revenue from Power Projects and revenue from London Olympics and the Poit Energia acquisition from the Local business as well as currency. A bridge between reported and underlying revenue and trading profit is provided in the Financial Review section. As an example of how underlying is calculated in more detail the table below reconciles reported and underlying revenue. 

CALCULATION:

 

2013

£ million

2012

£ million

Change

%

As reported

1,573

1,583

–

Adjustments:

Pass-through fuel

(42)

(40)

Poit Energia acquisition

(12)

–

2012 London Olympics

–

(60)

Currency1

–

(10)

 

Underlying

1,519

1,473

4%

1 Currency is calculated by taking local currency numbers in 2012 at 2013 exchange rates and comparing this to 2012 numbers at 2012 actual exchange rates.