Alliander - Faq

Frequently Asked Questions

Below you find some frequently asked financial questions and the answers.

Who are Alliander's shareholders?

Alliander's largest shareholders are the provinces of Gelderland, Noord-Holland, the municipality of Amsterdam and bv Houdstermaatschappij Falcon, whose shares are held by the province of Fryslân. They represent together some 76%. The other shareholders, with each less than 3% of the shares, are 53 smaller municipalities and the province of Flevoland.

The authorized share capital of the company is divided into 350 million shares each having a nominal value of Euro 5. At end of June 2011, 136,795,000 shares had been issued.

What is Alliander's value?

The shareholders' equity of Alliander at end of June 2011 amounted to EUR 2.9 billion.

What is Alliander's financial framework?

Alliander's financial policy, which is part of its general policy and strategy, is to obtain an adequate return for shareholders and protect the interests of bondholders and other lenders, while maintaining the flexibility to grow and invest in the business.

• The financial framework within which Alliander aims to operate is:
• A ratio of net profit plus depreciation and amortization to net debt of at least 30%
• A ratio of net profit (excluding non-recurring tax effects) plus depreciation and amortization plus net financial income and expenses to net financial income and expenses (interest cover) of at least 3.5
• A ratio of financial debt minus free cash (net debt) to net debt plus equity of maximum 60%
• To maintain a solid A rating profile

Our dividend policy:

• To distribute a stable cash dividend over the years
• A pay-out ratio of 45% of net profit after tax, adjusted for exceptional items unless Capex from regulatory obligations or financial criteria require higher retained earnings
• Subject to a minimum solvency ratio of 30%, where solvency is Equity divided by total assets net of capitalization accounts

What is Alliander's target credit rating?

We strive to maintain a solid A credit rating profile. This has a direct impact on the cost of debt and will allow easier access to capital markets.

Furthermore, our rating determines the need to issue Letters of Credit relating to cross-border leases.

What are Alliander's main financing sources?

The following sources of financing are available to Alliander:

• An EUR 600 million committed back-up credit facility (expiring July 2016). This facility has thus far remained unused.
• The EUR 1.5 billion ECP (European Commercial Paper) programme for short-term financing needs (<18 months).
• The EUR 3.0 billion EMTN (Euro Medium Term Notes) programme for medium term financing needs (>18 months)
• EUR 500 million subordinated perpetual bonds
• Project financing.

Alliander will use these instruments based upon the type and tenor of projects to be financed.

What are the x-factors that have been assigned to Alliander by the Office of Energy Regulation?

Current regulatory period (1 Jan 2011 - 31 Dec 2013)
The Office of Energy Regulation (Energiekamer) is the supervisory authority for the energy market in the Netherlands and is part of the Ministry of Economic Affairs. The x-factor is the compulsory reduction in permitted turnover for the regulated market of gas and power transportation in the Netherlands and is imposed by the Energiekamer. The reduction is compulsory in order to enforce the regulated energy transportation market in the Netherlands to function more efficiently.

However, the x-factors for the current regulation period 2011-2013 are negative. Negative x-factors allow for a tariff level increase. Main reason for this tariff increase is that tariff levels in the regulatory period 2008-2010 were considered too low to cover for regulated costs.

As per January 1, 2011, the x-factor for power transportation for the period from 2008-2010 is -7.0 (negative) for Liander and -5.5 (negative) for Endinet.

As per January 1, 2011 the x-factor for gas transportation for the period from 2008-2010 is -2.7 (negative) for Liander and -1.6 (negative) for Endinet

For 2011, the inflation has been set at 1.5% allowing the nominal tariff levels for 2011 to be raised with 8.5% (E) and 4.2% (G) by Liander and 7.0% (E) and 3.1% (G) by Endinet

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