(UU-.L) United Utilities Group PLC Buy/Sell

For filings with the FSA include the annex For filings with issuer exclude the annex

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi

1. Identity of the issuer or the underlying United Utilities Group PLC

issuer of existing shares to which voting rights are attached: ii

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights x

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached
An acquisition or disposal of instruments with similar economic effect x

to qualifying financial instruments An event changing the breakdown of voting rights Other (please specify):

3. Full name of person(s) subject to BlackRock, Inc

the notification obligation: iii 4. Full name of shareholder(s) (if different from 3.):iv
5. Date of the transaction and date 5th February 2010

on which the threshold is crossed or reached: v
6. Date on which issuer notified: 8th February 2010

7. Threshold(s) that is/are crossed Holding has gone above 5%

or reached: vi, vii

8. Notified details: A: Voting rights attached to shares viii, ix

Class/type of Situation previous Resulting situation after
shares to the triggering the triggering
transaction transaction

if possible Number Number Number Number of % of voting
using of of of voting rights x
the ISIN CODE Shares Voting shares rights
Rights

Direct Direct Indirect Direct Indirect
xi xii

GB00B39J2M42 33,837,432 33,837,432 N/A N/A 34,939,308 N/A 5.13%

B: Qualifying Financial Instruments Resulting situation after the triggering transaction
Type of financial Expiration Exercise/ Number of voting % of voting
instrument date xiii Conversion Period rights that may be rights
xiv acquired if the
instrument is
exercised/
converted.

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi Resulting situation after the triggering transaction
Type of Exercise Expiration Exercise/ Number of voting % of voting
financial price date xvii Conversion rights instrument rights xix, xx
instrument period refers to
xviii

Nominal Delta

Total (A+B+C)
Number of voting rights Percentage of voting rights

34,939,308 5.13%

9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable: xxi BlackRock Investment Management (UK) Limited - 34,939,308 (5.13%)

Proxy Voting: 10. Name of the proxy holder: 11. Number of voting rights proxy holder will cease to hold: 12. Date on which proxy holder will cease to hold voting rights:

13. Additional information: BlackRock Compliance Disclosures Team

14. Contact name: Stuart Watchorn

15. Contact telephone number: 020 7743 5741;
stuart.watchorn@blackrock.com

Note: Annex should only be submitted to the FSA not the issuer Annex: Notification of major interests in sharesxxii

A: Identity of the persons or legal entity subject to the notification obligation

Full name BlackRock, Inc

(including legal form of legal entities)
Contact address 33 King William Street, London, EC4R
(registered office for legal entities) 9AS

Phone number & email 020 7743 5741;
stuart.watchorn@blackrock.com

Other useful information Stuart Watchorn

(at least legal representative for legal persons)

B: Identity of the notifier, if applicable

Full name Contact address Phone number & email Other useful information(e.g. functional relationship with the person or legal entity subject to the notification obligation)

C: Additional information

For notes on how to complete form TR-1 please see the FSA website.

END

For filings with the FSA include the annex For filings with issuer exclude the annex

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi

1. Identity of the issuer or the underlying United Utilities Group PLC

issuer of existing shares to which voting rights are attached: ii

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights x

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached
An acquisition or disposal of instruments with similar economic effect x

to qualifying financial instruments An event changing the breakdown of voting rights Other (please specify):

3. Full name of person(s) subject to BlackRock, Inc

the notification obligation: iii 4. Full name of shareholder(s) (if different from 3.):iv
5. Date of the transaction and date 3rd February 2010

on which the threshold is crossed or reached: v
6. Date on which issuer notified: 4th February 2010

7. Threshold(s) that is/are crossed Holding has gone below 5%

or reached: vi, vii

8. Notified details: A: Voting rights attached to shares viii, ix

Class/type of Situation previous Resulting situation after
shares to the triggering the triggering
transaction transaction

if possible Number Number Number Number of % of voting
using of of of voting rights x
the ISIN CODE Shares Voting shares rights
Rights

Direct Direct Indirect Direct Indirect
xi xii

GB00B39J2M42 33,650,655 33,650,655 N/A N/A 33,837,432 N/A 4.96%

B: Qualifying Financial Instruments Resulting situation after the triggering transaction
Type of financial Expiration Exercise/ Number of voting % of voting
instrument date xiii Conversion Period rights that may be rights
xiv acquired if the
instrument is
exercised/
converted.

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi Resulting situation after the triggering transaction
Type of Exercise Expiration Exercise/ Number of voting % of voting
financial price date xvii Conversion rights instrument rights xix, xx
instrument period refers to
xviii

Nominal Delta

CFD N/A N/A N/A 127,445 0.02% 0.02%

Total (A+B+C)
Number of voting rights Percentage of voting rights

33,964,877 4.98%

9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable: xxi BlackRock Investment Management (UK) Limited - 33,964,877 (4.98%)

Proxy Voting: 10. Name of the proxy holder: 11. Number of voting rights proxy holder will cease to hold: 12. Date on which proxy holder will cease to hold voting rights:

13. Additional information: BlackRock Compliance Disclosures Team

14. Contact name: Stuart Watchorn

15. Contact telephone number: 020 7743 5741;
stuart.watchorn@blackrock.com

Note: Annex should only be submitted to the FSA not the issuer Annex: Notification of major interests in sharesxxii

A: Identity of the persons or legal entity subject to the notification obligation

Full name Blackrock, Inc

(including legal form of legal entities)
Contact address 33 King William Street, London, EC4R
(registered office for legal entities) 9AS

Phone number & email 020 7743 5741;
stuart.watchorn@blackrock.com

Other useful information Stuart Watchorn

(at least legal representative for legal persons)

B: Identity of the notifier, if applicable

Full name Contact address Phone number & email Other useful information(e.g. functional relationship with the person or legal entity subject to the notification obligation)

C: Additional information

For notes on how to complete form TR-1 please see the FSA website.

END

UNITED UTILITIES GROUP PLC

DIRECTORS' AND PDMR'S SHAREHOLDINGS

Performance Share Plan

Under the rules of the performance share plan, awards are subject to uplift for notional dividends made or paid during the performance period. Accordingly, the dividend shares shown below have been notionally added to and form part of the award. In respect of the final dividend of 11.17 pence per share paid on 3 February 2010, the number of additional shares granted has been calculated using the closing share price on 3 February 2010 of 531 pence per share. The figures reflect the maximum number of shares over which the option might be exercised. The actual number will depend upon the extent to which the established performance conditions are satisfied over the performance period. The awards are issued for nil consideration and may be exercised at nil cost to the participant.

Awarded12 June 2007 - Performance period1 April 2007 to 31 March 2010

Name of person Original Cumulative Shares added Balance
discharging no. of balance on for dividend carried
managerial Ordinary which paid 3 forward
responsibilities shares notional February 2010
awarded dividend paid

Philip Green 92,359 110,153 2,317 112,470

Alison Clarke 19,934 23,772 500 24,272

Charlie Cornish 45,183 53,886 1,133 55,019

Gaynor Kenyon 11,961 14,263 300 14,563

Tim Weller 53,157 63,397 1,333 64,730

Awarded 14 December 2007 - Performance period 1 April 2007 to 31 March 2010

Name of person Original Cumulative Shares added Balance
discharging no. of balance on for dividend carried
managerial Ordinary which paid 3 forward
responsibilities shares notional February 2010
awarded dividend paid

Tom Keevil 21,811 26,011 547 26,558

Awarded 5 August 2008 - Performance period 1 April 2008 to 31 March 2011

Name of person Original Cumulative Shares added Balance
discharging no. of balance on for dividend carried
managerial Ordinary which paid 3 forward
responsibilities shares notional February 2010
awarded dividend paid

Philip Green 75,121 83,905 1,765 85,670

Tim Weller 43,185 48,233 1,014 49,247

Charlie Cornish 36,355 40,605 854 41,459

Gaynor Kenyon 11,872 13,258 278 13,536

Alison Clarke 19,368 21,631 455 22,086

Tom Keevil 20,803 23,235 488 23,723

Matthew Wright 15,602 17,425 366 17,791

Martin Bradbury 17,767 19,844 417 20,261

Awarded 23 June 2009 - Performance period 1 April 2009 to 31 March 2012

Name of person Original Cumulative Shares added Balance
discharging managerial balance on for dividend carried
responsibilities no. of which paid 3 forward
Ordinary notional February 2010
shares dividend paid
awarded

Philip Green 111,164 116,570 2,452 119,022

Martin Bradbury 24,644 25,842 543 26,385

Charlie Cornish 53,771 56,385 1,186 57,571

Gaynor Kenyon 16,467 17,267 363 17,630

Tim Weller 64,636 67,779 1,425 69,204

Tom Keevil 28,855 30,258 636 30,894

Alison Clarke 26,865 28,171 592 28,763

Ian McAulay 21,641 22,693 477 23,170

Matthew Wright 23,631 24,780 521 25,301

Steven Fraser 19,900 20,867 438 21,305

Matching Share Plan

Under the rules of the matching share plan, awards are subject to uplift for notional dividends made or paid during the performance period. Accordingly, the dividend shares shown below have been notionally added to and form part of the award. In respect of the interim dividend of 11.17 pence per share paid on 3 February 2010, the number of additional shares granted has been calculated using the closing share price on 3 February 2010 of 531 pence per share. The figures reflect the maximum number of shares over which the option might be exercised. The actual number will depend upon the extent to which the established performance conditions are satisfied over the performance period. The awards are issued for nil consideration and may be exercised at nil cost to the participant.

Awarded 30 July 2007 - Performance period 1 April 2007 to 31 March 2010

Name of director/ No. of Cumulative Shares added Balance
senior manager Ordinary balance on for dividend carried
discharging shares which paid 3 forward
managerial awarded notional February 2010
responsibilities dividend paid

Charlie Cornish 14,606 17,418 366 17,784

Philip Green 51,624 61,568 1,295 62,863

Gaynor Kenyon 4,858 5,792 121 5,913

Tim Weller 22,015 26,254 552 26,806

Awarded 5 August 2008 Performance period 1 April 2008 to 31 March 2011

Name of director/ No. of Cumulative Shares added Balance
senior manager Ordinary balance on for dividend carried
discharging shares which paid 3 forward
managerial awarded notional February 2010
responsibilities dividend paid

Charlie Cornish 18,475 20,634 434 21,068

Philip Green 65,755 73,444 1,544 74,988

Gaynor Kenyon 5,305 5,923 124 6,047

Tim Weller 41,929 46,831 985 47,816

Alison Clarke 8,273 9,239 194 9,433

Tom Keevil 3,082 3,440 72 3,512

Awarded 23 June 2009 Performance period 1 April 2009 to 31 March 2012

Name of director/ No. of Cumulative Shares added Balance
senior manager Ordinary balance on for dividend carried
discharging managerial shares which paid 3 forward
responsibilities awarded notional February
dividend paid 2010

Philip Green 33,956 35,607 749 36,356

Tim Weller 29,651 31,092 654 31,746

Alison Clarke 4,073 4,271 89 4,360

Martin Bradbury 2,995 3,140 66 3,206

Matthew Wright 2,595 2,721 57 2,778

Retention Awards

As part of the terms of Philip Green's recruitment, the company established a matched share incentive scheme for him as sole participant by which the company undertook to match (on 16 January 2007) an investment of 100,000 shares made by Mr Green himself upon his appointment provided he remains with the group until 12 February 2011. The award is subject to a dividend enhancement mechanism by which further shares are notionally added to the award on each intervening dividend payment date.

As part of the terms of Tim Weller's recruitment, the company established a matched share incentive scheme for him as sole participant by which the company undertook to match an investment of 39,000 shares made by Mr Weller himself upon his appointment (on 1 July 2006) provided he remains with the group up to and beyond the implementation of the next regulatory reviews. The award is subject to a dividend enhancement mechanism by which further shares are notionally added to the award on each intervening dividend payment date.

In order to facilitate the retention of Charlie Cornish up to and beyond the next regulatory reviews the company established a special long-term incentive scheme for him as sole participant. Under the scheme an award equal to his annual salary was granted to him in the form of an option over 47,027 shares on 16 March 2007. The award is subject to performance conditions and is also subject to a dividend enhancement mechanism by which further shares are notionally added to the award on each intervening dividend payment date.

The dividend shares shown below have been notionally added to and form part of the awards. In respect of the final dividend of 11.17 pence per share paid on 3 February 2010, the number of additional shares granted has been calculated using the closing share price on 3 February 2010 of 531pence per share.

Philip Tim Charlie
Green Weller Cornish

Original award ordinary shares 100,000 39,000 47,027

Shares added re dividend paid 25 August 4,398 1,715 2,068

2006
Shares added re dividend paid 12 Feb 2007 1,973 769 927

Shares added re dividend paid 24 August 4,757 1,855 2,237

2007
Shares added re dividend paid 11 February 2,455 957 1,154

2008
Shares added re dividend paid 8 August 2008 5,154 2,010 2,423

Shares added re dividend paid 4 February 2,245 875 1,056

2009
Shares added re dividend paid 3 August 2009 5,883 2,294 2,766

Shares added re dividend paid 3 February 2,668 1,040 1,254

2010
Balance carried forward 129,533 50,515 60,912

Deferred Share Award Plan

Under the rules of the deferred share award scheme (`the scheme') awards are subject to uplift for notional dividends made or paid during the vesting period. Accordingly the dividend shares shown below have been notionally added to and form part of the award. In respect of the final dividend of 11.17 pence per share paid on 3 February 2010, the number of additional shares awarded has been calculated using the closing share price on 3 February 2010 of 531 pence per share. Under the terms of the scheme, awards will (which are structured as options to acquire shares in the company with a zero exercise price) be satisfied by using shares purchased in the market or by payment of a cash amount equal to the market value, on the date of exercise, of the shares (including dividend equivalent shares) held. Newly issued or treasury shares cannot be used to satisfy awards under this plan. No directors of the company

can participate in the scheme. The awards will normally become capable of exercise after the end of the vesting period and must be exercised within 90 days thereafter. The ability to exercise an award is not subject to satisfying a performance target.

Vesting period - 30 January 2009 - 11 June 2010

Name of director/ No. of Cumulative Shares Balance
senior manager Ordinary balance on added for carried
discharging managerial shares which dividend forward
responsibilities awarded notional paid 3
dividend paid February

Steven Fraser 6,674 7,130 149 7,279

Matthew Wright 8,899 9,507 199 9,706

Vesting period - 30 January 2009 - 5 August 2011

Name of director/ No. of Cumulative Shares Balance
senior manager Ordinary balance on added for carried
discharging managerial shares which dividend forward
responsibilities awarded notional paid 3
dividend paid February

Steven Fraser 6,767 7,230 152 7,382

Matthew Wright 8,555 9,139 192 9,331

Vesting period - 23 June 2009 - 23 June 2012

Name of director/ No. of Cumulative Shares added Balance
senior manager Ordinary balance on for dividend carried
discharging shares which paid 3 forward
managerial awarded notional February 2010
responsibilities dividend paid

Steven Fraser 6,766 7,095 149 7,244

Share Incentive Plan

Notification was been received today that the Trustee, Equiniti Trustees Limited, purchased ordinary shares of 5p each on behalf of the following directors/PDMRs on 3 February 2010, as dividend reinvestment shares in accordance with the rules of the Company's Inland Revenue approved share incentive plan. The shares were purchased at a price of 536.5 pence per share.

Director Balance held No. of Shares Revised balance
prior to purchased
dividend
purchase

Alison Clarke 704 14 718

Steven Fraser 1,197 24 1,221

Philip Green 1,1305 26 1,331

Tom Keevil 808 16 824

Gaynor Kenyon 952 18 970

__________________________________________________________________________

Further information can be obtained from Jane Gilmore, Deputy Company Secretary 44 1 925 237052.

-

United Utilities Group's ordinary shares trade on the London Stock Exchange and its ADRs, each equal to two ordinary shares, trade OTC in the USA under the Trading Symbol "UUGRY".

END

United Utilities Group PLC

21 January 2010

UNITED UTILITIES ACCEPTANCE OF FINAL DETERMINATION OF PRICE LIMITS AND INTERIM 
                             MANAGEMENT STATEMENT                              

Acceptance of final determination

On 26 November 2009, Ofwat published its final determination of price limits
for the period 1 April 2010 to 31 March 2015. United Utilities Group PLC (UUG)
today announces that its subsidiary, United Utilities Water PLC (UUW), has
decided to accept the final determination.

Philip Green, Chief Executive, said:

"This is a challenging price review which sees our customers benefiting from a
combination of lower bills and a major investment programme. The review
requires us to invest £3.6 billion in our infrastructure over the next five
years, an increase of some £400 million in real terms compared with the 2005-10
period.

"With the efficiency plans we are already implementing and the low cost of the
group's debt portfolio, we believe that, on balance, it is not in the best
interests of our shareholders and customers to seek a referral to the
Competition Commission. In light of our efficiency plans, we are well prepared
to meet the requirements of the review. In addition, we believe we can deliver
outperformance in a number of areas, particularly financing.

"In order to meet the requirements of the price review, we need to retain a
robust and sustainable capital structure whilst providing an attractive return
for shareholders. In view of this, the group board intends to rebase the
dividend to 30 pence per share for the 2010/11 financial year and thereafter
continue with our policy of targeting real dividend growth of 2% per annum."

Capital structure and dividend policy

As the company starts the new price review period, the UUG board is confident
that the group has a robust capital structure and will be able to finance
itself effectively through the 2010-15 regulatory period, with expected real
growth of 12% in UUW's regulatory capital value over the five years. The group
already has headroom to cover its projected financing needs until early 2012.

United Utilities has approximately £2 billion of long dated, index-linked debt
at an average cost of 1.8% real. In line with its policy, the group has now
also fixed the interest rates on a significant proportion of the remainder of
its existing debt portfolio, for the 2010-15 regulatory period, at an average
nominal rate in the range 5.0% to 5.5%. This provides more clarity on UUW's
ability to outperform the final determination.

The group intends to continue to target an A3 credit rating with Moody's
Investors Service for UUW, which it believes best mirrors the regulatory
assumptions underpinning the final determination and remains appropriate to
maintain efficient access to debt capital markets.

The group expects that Moody's Investors Service is highly likely to maintain
an A3 credit rating for UUW, whilst it is probable that Standard & Poor's will
assign a lower credit rating due to differing methodologies (as explained in
the notes section at the end of this announcement). This was fully considered
in the UUG board's assessment of capital structure.

In line with United Utilities' existing policy to grow dividends by RPI+2% per
annum, the UUG board expects to grow the final dividend for 2009/10 by 5%. The
final dividend for 2009/10 is therefore forecast to be 23.13 pence per ordinary
share. Together with the interim dividend of 11.17 pence, this provides a
forecast total dividend per ordinary share for 2009/10 of 34.3 pence.

Following detailed analysis and assessment of the final determination,
including the impact of the 4.3% real price decrease in the first year of the
2010-15 period, the UUG board intends to rebase the dividend per share to 30.0
pence for the 2010/11 financial year. Thereafter, the intention is to continue
to target a dividend per share growth rate of RPI+2% per annum through to 2015.

The UUG board believes that this represents an appropriate balance, recognising
the challenges of the final determination, the importance of income to
shareholders and the need for United Utilities to retain a robust and
sustainable financial profile.

The decisions in relation to capital structure and dividends are not dependent
on any potential opportunities to crystallise further value from the group's
non-regulated business.

Efficiency initiatives

The group is well prepared for the next price review period. Over the last
year, United Utilities has undertaken a comprehensive review of the business,
challenging working practices across the group, and is implementing detailed
plans to improve performance and reduce its cost base. The group is
streamlining its processes as it aims to become a leaner, more efficient
company and has signed new supplier contracts for the 2010-15 period, which
will deliver significant savings and help improve operational and capital
efficiency.

Trading update

Trading for the period from 1 October 2009 to 20 January 2010 is in line with
the group's expectations of delivering a sound underlying financial performance
over the remainder of 2009/10.

The regulated business is allowed a 6.0% regulatory price increase (including
inflation) for 2009/10, to help fund the high levels of essential investment in
its assets to meet strict environmental standards and deliver an improved
service for customers. The economic pressures the group experienced in the
first half of 2009/10 are continuing. Regulated revenue growth for the year
ending 31 March 2010 is expected to continue at a similar rate to that outlined
in the group's 2009/10 half year results, published on 25 November 2009.

United Utilities' balance sheet remains robust and its asset base continues to
grow in line with management's expectations. Group net debt has reduced
slightly since the position at 30 September 2009, reflecting the cash inflow
from the divestment of United Utilities' holding in Northern Gas Networks and
the sale of its economic interest in Manila Water Company.

On 25 November 2009, the UUG board declared an interim dividend of 11.17 pence
per ordinary share, in respect of the six months ended 30 September 2009, which
represents growth of 5%. The interim dividend payment is scheduled for 3
February 2010 and is expected to amount to approximately £76 million.

Regulatory developments

United Utilities had indicated previously that there was potential for
additional investment in respect of the North East Irish Sea, which was
dependent on a European court case decision involving the UK government. A
ruling by the European Court of Justice on 10 December 2009 indicated that
United Utilities will not be required to undertake this additional investment.

Non-regulated activities

During the period, United Utilities disposed of its investment in Northern Gas
Networks Holdings Limited for approximately £86 million in cash and agreed the
sale of its economic interest in Manila Water Company for approximately £44
million in cash. The intention is to retain these proceeds within the group.

As part of United Utilities' continuing focus on its core activities, in its
half year results on 25 November 2009, the group announced that it planned to
assess further opportunities to crystallise value from its non-regulated
business. Since then, United Utilities has received several preliminary
expressions of interest. Although no decision has been taken to sell any
further non-regulated businesses, the group will continue to evaluate these
expressions of interest.

Board change

On 10 December 2009, United Utilities announced that Tim Weller, Chief
Financial Officer, has decided to leave the group in May 2010, after almost
four years in the role. Tim will be taking up a new position with Cable&
Wireless Worldwide as its Chief Financial Officer. The search for his successor
is underway.

Outlook

Looking ahead, management is confident of delivering a sound underlying
financial performance for the year ending 31 March 2010. The group will
continue with its strong focus on operational performance and cost efficiency
and aims to build on the improvements already achieved.

In line with its usual practice, United Utilities intends to issue a pre-close
trading update on 25 March 2010.

Investor and analyst conference call

A conference call for investors and analysts starts at 8.30am this morning,
hosted by Chief Executive, Philip Green, and Chief Financial Officer, Tim
Weller. The call can be accessed by dialling: +44 (0) 20 7906 4157 or 0800 376
4706, access code 668653#. A recording of the call will be available for 30
days following 21 January 2010 on +44 (0) 20 7075 6589 or 0800 376 5689, access
code 255567#.

United Utilities contacts

For further information please contact:

Philip Green, Chief Executive                        +44 (0) 1925 237000     
                                                                             
Tim Weller, Chief Financial Officer                  +44 (0) 1925 237000     
                                                                             
Gaynor Kenyon, Communications Director               +44 (0) 7753 622282     
                                                                             
Darren Jameson, Head of Investor Relations           +44 (0) 1925 237033     
                                                                             
Rob Hughes, Investor Relations Manager               +44 (0) 1925 237019     
                                                                             
James Bradley / Tom Murray, Tulchan Communications   +44 (0) 20 7353 4200    

Notes

Price review

Ofwat published its final determination of price limits, for the period 1 April
2010 to 31 March 2015, on 26 November 2009 which for UUW included:

  * a £3.6 billion capital investment programme (2007/08 prices);
   
  * real growth of 12% in the regulatory capital value over the five year

period;
   
  * an average annual underlying operating efficiency of 1.2% for the water

service and 2.4% for the wastewater service;
   
  * a return on capital of 4.5% (post-tax, real); and
   
  * an average annual real price decrease of 0.4% across the five-year period,

with a real price decrease of 4.3% in the first year.
   
Credit ratings

A key difference in Moody's Investors Service and Standard & Poor's (S&P)
approach is expected to be the treatment of infrastructure renewals expenditure
(IRE), which following the introduction of International Financial Reporting
Standards (IFRS), has been treated as an operating expense rather than
depreciation by S&P. This results in a material reduction in S&P's assessment
of the group's funds from operations (FFO), and hence has an impact on key
credit ratios such as FFO to debt, without any compensating change to S&P's
target threshold levels.

In contrast, Ofwat has continued to assess financial ratios on a UK GAAP basis
for the 2009 price review. The difference in approach between that expected to
be applied by S&P and that modelled by Ofwat is likely to result in a lower
actual credit rating from S&P than that implied by regulatory assumptions.

END