Pennon Group Plc

Annual General Meeting. The annual meeting for shareholders at which routine matters, such as the election of directors and the laying of reports and accounts are put to the vote of shareholders.

Fixed assets include land, machinery, equipment and buildings; current assets consist of cash, money owed, stock, investments and work in progress; intangible assets are goodwill, trade marks, patents, etc; liquid assets are funds kept in cash or in a form that can be quickly and easily turned into cash.

Interest rate on which lending charges are calculated by British banks.

Usually one hundredth of a percentage point (0.01 per cent), used in quoting movements in interest rates or yields on securities.

A person who expects prices of shares and/or stock markets to fall.

A period of falling share prices; a pessimistic state of affairs. See also bull market.

The price at which market makers will bid for stock, ie the price at which investors sell their shares to the market maker.

A stock considered reliable with regard to dividend income and capital value.

A certificate of debt issued to raise funds. Bonds typically pay a fixed rate of interest and are repayable at a fixed date.

Estimates of future company performance issued by stockbrokers and bank analysts.

A person who expects the price of shares, and/or stock markets, to rise.

A period of rising share prices; an optimistic state of affairs. See also bear market.

Compound Annual Growth Rate, being the rate of growth over a period, expressed as a single annual average figure.

Profit made on the sale of shares, commodities, property or land; In the UK, capital gains tax may be payable on the profit.

Measure of the actual cash generated by a business rather than the accounting profit. In the UK typically pre-tax profit plus depreciation, amortisation and other non-cash charges. In the US, net income with depreciation charges added back.

The period prior to the company's release of its half yearly or Preliminary results, during which the directors and some members of senior management are not permitted to trade in the shares of the company. Normally two months, or, if shorter, the period from the relevant financial period end up to and including the time of such publication.

Investment funds with a fixed share capital. As opposed to open-ended funds which expand or contract according to investor demand.

A market average of stockbrokers' and bank analysts' forecasts of the future financial performance of a company.

A tax assessed on corporate profits after adjustment for items such as depreciation, capital allowances, provisions, etc.

The rate of interest payable on a fixed-interest security (bond), traditionally a detachable coupon.

Purchase of a share cum dividend means that the buyer of a share is entitled to the next dividend payment. Opposite of ex: dividend

Assets of a company which can be realised in cash, sold or consumed within one year. Typically the sum of cash, cash equivalents, receivables, stocks, prepaid expenses and other current assets.

Liabilities of a company that the company expects to satisfy within one year. Typically accounts payable, short term debt, notes payable, taxes payable, dividends payable and other current liabilities.

A ratio which describes the leverage or gearing of the company and is calculated as total debt divided by shareholders' equity expressed as a percentage.

An accounting entry that recognises that taxable profits are different from accounting profits by smoothing out the effective tax rate over time. In the water industry, by virtue of its long life assets, the reversal of timing differences arising between taxable profits and accounting profits is permitted to be discounted thereby recognizing the time value of money.

Department for Environment, Food and Rural Affairs

The reduction in the balance sheet value of a company asset to reflect its loss of value through usage in the business.

The price limits and expenditure plans determined by Ofwat for South West Water for a five year period

The number of times a company could pay its most recent dividend out of its net profit (profit after tax).

If offered by the company, shareholders can sign a mandate to the effect that all future dividends be used to purchase additional shares in the company on the stock market and added to their existing holding.

The proportion of a company's profit that it pays to its shareholders, usually declared as a dividend per share (DPS). In the UK the dividend is normally paid in two parts; an interim dividend payment, and a final dividend once the final results are known.

Drinking Water Inspectorate

Environment Agency

Profit available to ordinary shareholders, after all operating expenses, interest charges and taxes have been deducted.

Earnings divided by the number of ordinary shares outstanding.

Energy from Waste

Extraordinary General Meeting. A meeting of shareholders which may be called to approve special events such as a take-over, or a major acquisition.

Environmental Management System

The equity share capital, plus retained profits and all other reserve.

The proportion of the issued share capital (normally referred to as ordinary share capital) of a company carrying an unrestricted right to participate in any distributable profits.

Purchase of a share Ex dividend means that the buyer of a share is not entitled to the next dividend payment. Opposite of cum.

Financial year of the Group ending 31 March

The process of listing a company's shares on a stock exchange.

Used to describe the relationship between debt and equity and is calculated by dividing the company debt by the shareholders' equity. A highly geared company is one that carries a lot of debt.

Gigawatt hours

First half trading results which provide an indication of the company's trading and profit performance since the last full year accounting period.

Company whose main assets are shareholdings (usually controlling) in other companies.

Household waste recycling sites

International Financial Reporting Standards

Large financial institutions such as pension funds, unit or investment trusts and insurance companies.

Describes assets that do not have a physical existence. An example of intangible assets is goodwill, when purchasing a business.

This is the interest that is calculated and due to be paid on a company's borrowings.

Interim Determination of K (IDOK)

International environmental management accreditation standard

Co-operation on a business between two corporate bodies.

The annual return to Ofwat made by South West Water on its performance during the previous financial year

Key Performance Indicators

Landfill Allowance Trading Scheme

Local Authority Waste Disposal Company

The debts of a company and other financial obligations; the opposite of assets.

The proportion of cash or cash equivalents in a company's assets. Sometimes used as a measure of the near term financial health of a company. Also a measure of the volume of shares being traded, which may affect the ability of buyers or sellers to build/unwind large holdings without a substantial impact on the price.

All interest-bearing financial obligations which mature in more than a year.

Long-term incentive plan for senior managers of the Group. Awards under the Plan, involving the release of Ordinary Shares in the Company to participants, is dependent upon performance criteria being met. Further details can be found in the Annual Report.

London Stock Exchange.

Profit margin is profit as a percentage of revenue (or turnover). Normally calculated before tax.

Value at current market prices of a company's equity capital. It is calculated by multiplying the current share price by the number of shares outstanding.

The price at which a share can currently be traded in the market.

The mid point between the bid and offer price quote in the market.

Megalitres

Materials Recycling Facility

Megawatts

Income (profit) shown after all operating and non-operating income and expenses, after taxes but before ordinary dividends.

Non Fossil Fuel Obligation

Return that takes no account of the effects of inflation.

An open-ended investment company, with a single price for buying and selling.

The price at which market makers offer shares, ie the price at which investors buy shares from the market maker.

Water Services Regulatory Authority

The difference between revenue (or turnover) and the costs incurred during operations (total operating expenses).

The right (but not the obligation) to buy or sell securities at a given price (exercise or strike price) before a given date (expiry date).

The most common class of share representing the shareholders' interest in a company.

Ratio or multiple calculated by dividing the price per share (p) by the earnings per share (e). A simple measure for comparing the relative valuations of different companies.

Waste water treatment works loadings from domestic, industrial and diffuse sources, averaged and stated as a population equivalent load, expressed as a percentage

The process of determining the water industry's price limits and expenditure plans for five-year regulatory periods

Private Finance Initiative

Pollution, Prevention and Control

Public Private Partnership

The first release of a company's results for the full financial year to the stock exchange (unaudited).

Income before tax.

The surplus of revenue generated over expenses incurred for a particular accounting period. Operating profit refers to the profit generated before interest and tax have been taken into account.

A document, published prior to the issue of shares to the public, which explains all aspects of a company's business, detailing financial and other information about the company and the securities being offered for sale.

Return adjusted to take account of inflation.

A current asset that represents amounts due to the company from the sale of goods and services on credit.

The Regulatory Capital Value (RCV) is the capital base remunerated by Ofwat at price reviews. It is derived from the market valuation (including debt) of the company around the time of initial price setting in 1989, with the addition of net new capital expenditure (after allowing for current cost depreciation) assumed at the time of initial price setting and at subsequent price reviews.

A broad basket of goods/services whose price is calculated monthly and which provides a broad measure of the level of inflation.

Ratio which measures the return a company generates from its total assets.

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (1995)

Offer of shares to existing shareholders to raise money.

The excess return over a risk-free asset (eg a gilt) which investors will require to compensate themselves for the higher risk associated with holding an asset like an equity.

Renewables Obligation Certificates

If offered by the company, new shares issued by the company can be acquired by investors in lieu of a dividend payment. In addition, shareholders will know in advance how many shares they will receive if they elect for the scrip alternative thereby avoiding market uncertainty.

A book keeping transaction that does not affect the value of the shareholder's interest or raise any money for the company; it is a means for a company to transfer money from reserves into permanent capital.

A financial instrument issued by a company and traded on a stock exchange.

The Regulatory body for the securities and futures markets in the UK. Formed in 1991 through a merger of the Securities Association and the Association of Futures Brokers and Dealers.

Scottish Environment Protection Agency

The original cost of shares outstanding.

See Option.

The portion of debt that is payable within one year. Falls under current liabilities on the company balance sheet.

Usually the difference between the Bid and Offer prices.

The term used to describe the division of shares into a larger number of shares with lower unit value. There is no change to the proportional holding of shares.

Tangible fixed assets represents property, plant and equipment, after the deduction of depreciation.

United Kingdom Generally Accepted Accounting Principles

Viridor Limited (subsidiary of Pennon Group Plc) or a Viridor Limited operating subsidiary, depending on the nature of the activity described

Waste electrical and electronic equipment

The rate of return gained on an investment. It also refers to the dividend payable on a share (and is expressed as a percentage of the market price).