Definitions and glossary of terms

A set of financial statements, including all the associated notes.

Securities of National Grid listed on the New York Stock Exchange, each of which represents five ordinary shares.

Non-cumulative preference shares of 10 pence nominal value each that were issued in 2004 in connection with a £2 billion return of capital to shareholders. The last remaining B shares were converted into ordinary shares in September 2007.

The British Electricity Trading and Transmission Arrangements, being the regulations that govern our role as operator of the electricity networks in Great Britain, together with those of other market participants.

The Board of Directors of the Company (for more information see here).

The Balancing Services Incentive Scheme, an incentive arrangement applicable to our UK electricity transmission operations.

Financial statements that include the results and financial position of the Company and its subsidiaries together as if they are a single entity.

Shares (common stock) that have been issued and have been fully paid for.

Depreciation or amortisation charges that are allowed as deductions for tax purposes. This often differs from the amount of depreciation or amortisation recorded for accounting purposes, resulting in the recognition of deferred tax.

For most assets and liabilities, this is the difference between the carrying value for accounting purposes in the balance sheet and the amount of tax that will be deductible (or payable) for that asset or liability in future tax returns.

An amount of energy equal to 1 million British thermal units (BTUs), equivalent to approximately 293 kWh.

A financial instrument or other contract where the value is linked to an underlying index, such as exchange rates, interest rates or commodity prices. In most cases, contracts for the sale or purchase of commodities that are used to supply customers or for our own needs are excluded from this definition.

In financial statements, the amount of net assets attributable to shareholders.

The US Federal Energy Regulatory Commission.

A lease where the asset is treated as if it was owned for the period of the lease and the obligation to pay future rentals is treated as if they were borrowings. Also known as a capital lease.

For National Grid this is an accounting year ending on 31 March. Also known as a fiscal year.

A UK Financial Reporting Standard as issued by the UK Accounting Standards Board. These apply to the Company’s individual financial statements, which are prepared in accordance with UK GAAP.

The UK Financial Services Authority, the financial markets regulator, which includes regulation of companies with listed securities in the UK, including National Grid and certain of its subsidiaries.

England, Wales and Scotland.

Gigawatt, being an amount of power equal to 1 billion watts (10⁹ watts).

Gigawatt hours, being an amount of energy equal to delivering 1 billion watts of power for one hour (equivalent to 3.6 million joules).

Health & Safety Executive, the main safety regulator in the UK.

An International Accounting Standard or International Financial Reporting Standard, as issued by the International Accounting Standards Board. IFRS is also used as the term to describe international generally accepted accounting principles as a whole. The Company’s consolidated financial statements are prepared in accordance with IFRS.

Financial statements of a company on its own, not including its subsidiaries or joint ventures.

The International Financial Reporting Interpretations Committee, which provides guidance on how to apply accounting standards.

A company or other entity which is controlled jointly with other parties.

KeySpan Corporation and its subsidiaries, acquired by National Grid on 24 August 2007.

Kilovolt, being an amount of electric force equal to 1,000 volts.

Kilowatts, being an amount of power equal to 1,000 watts.

Kilowatt hours, being an amount of energy equal to delivering 1,000 watts of power for a period of one hour.

The lifetime allowance is an overall ceiling allowance on the amount of UK tax privileged pension savings that any one individual can draw.

Liquefied natural gas, being natural gas that has been condensed into a liquid form, typically at temperatures at or below -163°C (-260°F).

An incident arising out of National Grid’s operations which leads to an injury where the employee or contractor normally has time off the following day or shift following the incident. It relates to one specific (acute) identifiable incident which arises as a result of National Grid’s premises, plant or activities, which was reported to the supervisor at the time and was subject to appropriate investigation.

A cubic metre.

Million standard cubic metres, equivalent to approximately 35.3 million standard cubic feet.

Million standard cubic metres per day.

Megawatts, being an amount of power equal to 1 million watts.

Megawatt hours, being an amount of energy equal to delivering 1 million watts of power for a period of one hour.

In financial statements, the amount by which total assets exceeds total liabilities at their carrying values.

The states of Massachusetts, New Hampshire, Vermont and Maine.

The northeastern region of the US, comprising the states of New York, Massachusetts, Rhode Island, New Hampshire, Maine, Vermont, Connecticut, New Jersey and Pennsylvania.

The UK Office of Gas and Electricity Markets, part of the UK Gas and Electricity Markets Authority (GEMA), which regulates the energy markets in the UK.

The Occupational Safety & Health Administration, the main federal agency charged with the enforcement of safety and health legislation in the US.

Voting shares entitling the holder to part-ownership of a company. Also known as common stock. National Grid’s ordinary shares have a nominal value of 11 17/43 pence.

The lifetime allowance applicable to individuals who registered their pre-6 April 2006 UK pension benefits for protection.

A liability of uncertain timing or amount, arising from a past event, that has not yet become due for payment.

The accounting process of aligning the accounting policies of an acquired business with those of National Grid and of adjusting the carrying value of assets and liabilities acquired from their previous accounting book value to their fair values at the date control was acquired by National Grid.

Petawatt hour, being an amount of energy equal to delivering 1 billion watts of power for 1 million hours.

Standard cubic metre, a quantity of gas which at 15°C and atmospheric pressure (1.013 bar) occupies the volume of 1m³.

The US Securities and Exchange Commission, the financial regulator for companies with registered securities in the US, including National Grid and certain of its subsidiaries.

The difference between the amounts shares are issued for and the nominal value of those shares.

A company or other entity that is controlled by National Grid.

An amount of energy equal to 10,000 British Thermal Units (BTUs), equivalent to approximately 29.3 kWh, primarily used to measure natural gas.

Amounts invoiced by suppliers for services received for which payment has yet to be made.

Amounts billed to customers for services provided for which payment has yet to be received.

Shares that have been repurchased but not cancelled.

A unit of mass equal to 1,000 kilograms, equivalent to approximately 2,205 pounds.

A measure of greenhouse gas emissions in terms of the equivalent amount of carbon dioxide.

Terawatt hours, being an amount of energy equal to delivering 1 billion watts of power for 1,000 hours.

The United Kingdom, comprising England, Wales, Scotland and Northern Ireland.

Generally accepted accounting principles in the UK. These differ from IFRS and from US GAAP.

The legal and contractual framework for the supply and transport of gas in the UK, comprising a common set of rules for all industry participants which ensure competition can be facilitated on level terms.

The United States of America.

Generally accepted accounting principles in the US. These differ from IFRS and from UK GAAP.