the power 
to deliver
scottishpower annual report  accounts 200203 contents
report of the directors
1 financial highlights
2 chairman’s statement
3 chief executive’s review
12 business review
30 summary of key operating statistics
33 financial review
54 board of directorsexecutive team
57 corporate governance
61 remuneration report 
of the directors
annual accounts
70 accounting policies and deﬁnitions
74 group proﬁt and loss account
78 notes to the group proﬁt and 
loss account
84 group cash flow statement
85 notes to the group cash flow
statement
88 group balance sheet
89 notes to the group balance sheet
127 company balance sheet
128 notes to the company 
balance sheet
130 principal subsidiary undertakings and
other investments
131 independent auditors’ report
132 five year summary
133 glossary of financial terms and 
us equivalents
investor information
134 historical share prices
135 exchange rates
135 dividends
137 taxation of dividends
140 financial calendar
141 shareholder services
142 index
143 glossary of terms scottishpower annual report  accounts 200203

1
financial highlights
99
397
00
380
01
279
02
261
03
337
earnings per share pence
excluding goodwill amortisation and exceptional items
99
396
00
637
01
168
02
537
03
262
earningsloss per share pence
99
804
00
961
01
970
02
944
03
1085
operating proﬁt £m
excluding goodwill amortisation and exceptional items
99
803
00
662
01
722
02
777
03
946
operating proﬁt £m
99
2250
00
2480
01
2604
02
2734
03
2871
dividends per share pence
cash dividends excluding
‘dividend in specie’ 
on demerger of thus
99
046
00
033
01
284
02
1588
03
1390
 change in total shareholder return
percentage change in total shareholder return
index in each ﬁnancial year
source datastream
2003 2002
turnover £5274m £6314m
operating proﬁt £946m £777m
operating proﬁt excluding goodwill and exceptionals £1085m £944m
proﬁtloss before tax £697m £939m
proﬁt before tax excluding goodwill and exceptionals £836m £567m
earningsloss per share 2617p 5371p
earnings per share excluding goodwill and exceptionals 3371p 2612p
dividends per share 2871p 2734p
cash dividends excluding ‘dividend in specie’ on demerger of thus
99
046
00
079
01
207
02
1763
03
618
total shareholder return pence
capital appreciation plus dividend reinvestment
for £1 invested on 1 april 1998 
source datastream all four scottishpower businesses produced good
results during 200203 sustaining the recovery
that began in the latter months of last year this
ﬁnancial and commercial progress is especially
pleasing after the challenges the energy markets
have presented in both the us and the uk
earnings per share rose by 29 to 3371 pence
our regulated businesses in the us and uk both
performed well paciﬁcorp’s drive to increase
operational efﬁciency and improve customer
service resulted in a substantial boost to
proﬁtability and remains on track to achieve its
targeted return on equity our uk infrastructure
business delivered another strong performance
increasing sales and meeting demanding cost
savings objectives 
in the competitive sectors the uk division has
continued to face tough conditions but succeeded
in increasing sales maintaining proﬁts and
growing customer numbers our newest business
ppm reported an operating proﬁt of £28 million
and has good opportunities to grow its successful
gas storage and renewables ventures
with proﬁts and earnings up debt and interest
charges down and satisfactory cash ﬂow
scottishpower ended the year in a sound ﬁnancial
position we have announced our intention to
declare three quarterly dividend payments of 475
pence from april 2003 and will set the fourth
quarter payment to represent the balance of the
dividend for the year to 31 march 2004 after
march 2004 we shall aim to grow dividends in line
with earnings
the last weeks of 200102 saw scottishpower
refocused on energy and these results prove
clearly that this was the correct strategy the
testing period we have endured has had a positive
effect on the group’s culture today scottishpower
has an international leadership team of growing
stature and a programme of development
initiatives designed to raise our skills and
competencies further
we have had to sharpen existing skills and develop
others that will be of lasting value the california
energy crisis that followed so soon after our
merger with paciﬁcorp has given us a heightened
awareness of risk and better techniques for
managing it we are now applying this experience
in the uk wholesale market with success our
grasp and handling of detailed regulatory issues
has improved boding well for the next uk price
review in 2005 we are developing a growing
portfolio of renewable energy assets and have
successfully renegotiated the nuclear energy
agreement with british energy
against our peer groups scottishpower remains at
or near the top of the environmental and social
impact rankings and paciﬁcorp is gaining ground
in the equivalent us benchmarks surveys among
our employees who have borne the brunt of all
the change and upheaval within the businesses
show morale improving
pensions have been much in the news during the
year and neither our us nor uk pension funds
have escaped the downturn in equity markets we
have resumed contributions to our uk pension
funds and will make the recovery of increased
pension costs through regulatory processes one of
our priorities in both the us and the uk
now turning to the board there are a number of
changes to report nick rose finance director of
diageo joined the board as a nonexecutive
director in february 2003 ewen macpherson will
retire as a nonexecutive director after the agm
we thank him for his advice and wish him well i
am grateful that sir peter gregson who had
planned to retire this year has agreed to extend
his term of ofﬁce for another year
this has been an eventful but ultimately
successful year during which all our employees in
both the us and the uk have given strong support
on a daily basis on behalf of the board i want to
thank them for their efforts and goodwill
the outlook for scottishpower remains positive
with additional improvements in performance
expected from our business and good
opportunities for further growth
charles miller smith chairman
7 may 2003
scottishpower annual report  accounts 200203

2
chairman’s statement
“today scottishpower has an international
leadership team of growing stature”
charles miller smith chairman  excluding goodwill amortisation and exceptional items i am pleased to report that in the past year we
delivered a good set of results with proﬁts up
substantially and earnings per share for the
year up 29 the recovery at paciﬁcorp was
particularly pleasing with operating proﬁt up
by some 60 in the year our dividend for the
year was 2871 pence per share an increase of
5 we also delivered a total return of 139 for
shareholders during the year the sale of
southern water at the beginning of the year
enabled us to reduce our net debt by £2 billion
thus strengthening our balance sheet and
ﬁnancial ratios  
we manage regulated and competitive
businesses in the uk and us to serve gas and
electricity customers we invested over £800
million in our businesses during the year of
which some £345 million 42 was in areas of
growth such as additions to our electricity
networks new generation especially renewables
and gas storage investment of this sort is at the
heart of our strategy to become a leading
international energy company we invest only in
businesses where we can deploy proven skills
and strong market knowledge 
the safety and wellbeing of our workforce and
the public is our number one priority sadly the
year saw two of our colleagues killed at work
one fatal accident in the uk and one in the us
tragedies such as these reinforce my conviction
that we should put nothing ahead of safety and
that we all have a role and responsibility to
ensure that the highest standards are
maintained at all times 
during the past year we have made good
progress in further enhancing the underlying
quality of our business as business in the
community’s company of the year 2002 we
have continued to contribute signiﬁcantly to the
corporate social responsibility agenda in both
the uk and the us and are publishing our ﬁrst
combined environmental and social impact
report in july 2003 our robust risk
management policies and procedures were
recognised by the international ﬁnance
magazine risk with the prestigious award of
corporate risk manager of the year we have
also placed great emphasis on the talent and
performance management of our people our
top international cadre of 250 managers now
has clear incentive based performance
agreements linked directly to our strategic
objectives 
paciﬁcorp 
paciﬁcorp is our regulated us business with a
portfolio of over 8000 mw of power from coal
gas renewable and hydro resources 15000
miles of transmission lines and a distribution
system serving 15 million customers in six
states paciﬁcorp is a leading regional integrated
utility and is a key player in western energy
markets the strategic priorities of paciﬁcorp set
at the beginning of 200203 were
• achieve roe target1 billion ebit by 
200405 through
– general rate cases
–transition plan
• manage risk and reward balance
• deliver excellent customer service
operating proﬁt for paciﬁcorp increased by
£233 million to £463 million for the year to 31
march 2003 operating proﬁt excluding goodwill
amortisation for paciﬁcorp for the year grew by
£225 million to £597 million as a result of
regulatory rate increases and recoveries of
excess power costs of £80 million signiﬁcantly
lower net power costs of £257 million and
continued progress in the delivery of transition
plan beneﬁts of £64 million in the year these
improvements were partly offset by lower
transmission revenues of £19 million from
reduced use of the transmission system by third
parties higher depreciation charges of £25
million risk mitigation and project costs of £41
million insurance pensions and healthcare
costs of £46 million and oneoff gains in the
previous year and foreign exchange of £45 million
scottishpower annual report  accounts 200203

3
chief executive’s review
“this has been a year of delivery based on
our consistent focus on performance”
ian russell chief executive  excluding goodwill amortisation and exceptional items
 excluding goodwill amortisation net capital expenditure for the year decreased
by £1 million to £368 million with £111 million
invested in network growth and new generation
assets £211 million on network and generation
refurbishment and £46 million on other capital
projects including information technology  
net capital expenditure is expected to increase
in 200304 as a result of higher generation and
mining overhauls and refurbishment spend
environmental initiatives and continued
investment in expanding the network all
expenditure prudently incurred is expected to
earn its regulatory rate of return and contribute
to an increased rate base for paciﬁcorp
• achieve roe target1 billion ebit by 
200405 through
– general rate cases
–transition plan
paciﬁcorp remains on track towards its target of
1 billion ebit by 200405 through a
combination of general rate cases and beneﬁts
derived from the transition plan
general rate increases of approximately 160
million per year have been awarded to
paciﬁcorp from 1 april 2001 to 31 march 2003
with 31 million awarded during the year ended
31 march 2003 paciﬁcorp’s regulatory strategy
includes ﬁling regular rate cases to increase
revenues to recover increasing operational costs
and capital expenditure while realising our full
allowed return on investment in line with this
plan paciﬁcorp ﬁled a general rate case in
oregon in march 2003 for 58 million
representing a 7 rate increase primarily as a
result of increased costs related to insurance
premiums healthcare pensions and other costs
that are similarly affecting many other us
companies in california testimony and hearings
in paciﬁcorp’s 16 million general rate case
request have been scheduled to take place
through may and june of 2003 paciﬁcorp also
plans to ﬁle in the next few weeks for general
rate cases in wyoming and utah
during march 2003 paciﬁcorp was denied
recovery of 91 million in net excess power costs
in wyoming and is currently seeking a rehearing
of this decision additionally paciﬁcorp
continues seeking to defer and recover
approximately 16 million in net excess power
costs in washington state an order on this case
is expected by early summer 2003 
among the legislative measures approved in
paciﬁcorp’s service territory senate bill 61 in utah
will go into effect in early summer 2003 this
legislation provides an option for the utah public
service commission to use a future testyear period
in utility rate cases that more appropriately reﬂects
the cost of providing service which is necessary to
reduce the period between capital investment and
recovery in rates – referred to as “regulatory lag”
reducing regulatory lag should encourage needed
costeffective investments in utility infrastructure by
companies such as paciﬁcorp
the paciﬁcorp transition plan continues to
progress on track as a key driver towards
increasing proﬁtability and supporting
paciﬁcorp’s regulatory objectives cumulative
transition plan beneﬁts total approximately 217
million slightly ahead of this year’s target of
204 million and we are now twothirds of the
way towards our goal of 300 million by
200405 these included new call centre
technology and other process changes that
helped increase employee productivity and
improve customer service in distribution
operational efﬁciency improvements were
delivered such as home start which allows
overhead line crews to respond more effectively
to faults additionally continuing procurement
cost savings and royalties from the sale of a
synthetic fuel operation last year contributed to
paciﬁcorp’s continued delivery of the transition
plan in 200203
• manage risk and reward balance
paciﬁcorp successfully managed power demand
during the challenging summer of 2002 and
winter of 200203 through a robust
combination of existing physical resources a
weatherrelated hedge and peaking generation
facilities during the winter paciﬁcorp’s base of
coalﬁred generating resources and forward gas
purchase strategy minimised the risks of natural
gas price volatility paciﬁcorp remains well
positioned and is fundamentally balanced for
the summer of 2003 
our longterm integrated resource plan irp
which seeks to identify new resource
requirements to implement plans to deliver safe
reliable lowcost power to customers over the
next 20 years was ﬁled with state regulatory
commissions in january 2003 the irp is
progressing with the development of the request
for proposals rfp process under which
paciﬁcorp will seek bids for future generation
needs rfps will be issued for both short and
scottishpower annual report  accounts 200203

4
chief executive’s review
continued longterm electricity requirements including
renewable energy needs the rfp process is
expected to extend until spring 2004  
the irp and the resulting rfp process have
been created to identify pacificorp’s future
resource mix in a coordinated process with the
six states in which pacificorp operates as part
of these processes pacificorp is expecting to
add the equivalent of approximately 4000 mw
of capacity through a combination of sources
over the next decade these include the
addition of base load construction capacity or
purchases approximately 2100 mw peaking
resources approximately 1200 mw and
purchased “shaped” power approximately 700
mw in addition pacificorp also plans to
implement demand side management
programmes up to 450 mw on average and
acquire renewable energy approximately 1400
mw among the steps involved in the irp
process will be an evaluation of potential future
generation sources such as an additional
generating unit at the hunter station in utah
the air quality permitting process has begun to
enable pacificorp to develop this option
prudently incurred costs of such investments
are expected to be included in pacificorp’s
future rate base
• deliver excellent customer service
during 200203 paciﬁcorp continued to enhance
its customer service commitments while
maintaining retail rates that are among the lowest
in the western us improvements include
enhancing paciﬁcorp’s outage communications
technology to provide customers with the ability
to report outages directly thus helping to speed
repairs or pinpoint potential problem areas
paciﬁcorp was recognised by tqs research of
atlanta georgia for improvements with large
commercial and industrial customers overall
customer satisfaction metrics show positive
results including improved accuracy and
timeliness of customer billing in addition
paciﬁcorp successfully tested a handheld meter
reading system that will improve system
functionality and accuracy the new system is
expected to be implemented by the summer of
2003 with further productivity improvements to
follow over the next 12 months that will enhance
paciﬁcorp’s scheduling technology
based on a recent report paciﬁcorp was rated
third in the us by the department of energy as a
marketer of green energy under paciﬁcorp’s
blue sky programme in excess of 21000
customers have signed up for blue sky or other
renewable products paciﬁcorp’s green pricing
programme is one of the most progressive and
successful in the us  
to improve customer service and reliability
paciﬁcorp continues its infrastructure
improvement projects in targeted areas
particularly along utah’s wasatch front where
there is rapidly growing demand for electricity
the scope of this 200 million investment
through 2005 includes transmission line
upgrades new distribution substations upgrades
to existing distribution substations and other
system enhancements these projects will
provide additional capacity to meet future load
demands throughout paciﬁcorp’s network
especially in highgrowth areas
infrastructure division
infrastructure division our regulated uk wires
business is the uk’s third largest distribution
company and comprises the distribution and
transmission networks in our scottish service
area and the distribution network in manweb
over 110000 circuit km in total the strategic
priorities of the infrastructure division set at the
beginning of 200203 were
• be at or near the regulatory efﬁciency frontier
– outperform operating cost targets
– achieve better than planned output from capex
• achieve high standards of customer service
• invest consistently to add value
for the year to 31 march 2003 the
infrastructure division reported operating proﬁt
of £368 million an increase of £13 million on
last year higher regulated income of £9 million
and net cost reductions of £18 million were
partly offset by higher depreciation operational
rates insurance and pension costs of £14
million 
the infrastructure division invested net capital
expenditure of £230 million during the year an
increase of £32 million compared to the year to
31 march 2002 of this £141 million was
invested in network refurbishment £68 million
on network expansion and £21 million on other
capital projects  
net capital expenditure in 200304 is expected
to increase modestly with investment
concentrated on the regulatory asset base
scottishpower annual report  accounts 200203

5 delivering the regulated rate of return in
particular further investment will be undertaken
in our overhead network modernisation
programme   
• be at or near the regulatory efﬁciency frontier
– outperform operating cost targets
– achieve better than planned output from 
capex
in line with our strategic priorities we expect to
be at or near the regulatory efﬁciency frontier for
the next price review period beginning in april
2005 as previously stated targeted cash cost
savings of £75 million due by march 2003 were
achieved ahead of schedule by september 2002
reﬂecting our increased commercial focus in the
division as a result a further target of £33
million of net cost reductions was identiﬁed for
completion by 200304 with net cost reductions
of £18 million being achieved in 200203
through the initiatives set out below
we are achieving better outputs from capital
expenditure by ensuring that costs are
appropriately allocated to capital projects
through our asset managerservice provider
model and have seen procurement savings of
over 10 in a number of key purchase areas
such as distribution transformers overhead lines
and cables additionally we have conducted a
benchmark review of call centre services are
making more efﬁcient use of contractors
achieving improved staff ﬂexibility using site
start arrangements and adopting a ﬂexible day
working system
• achieve high standards of customer service
we continue to focus on delivering high
standards of customer service our network
performance as measured by customer
interruptions and customer minutes lost
indicates that we are on track to be able to
participate in ofgem’s information and
incentives programme iip when the reward
mechanism for outperforming the regulatory
targets is put in place by 200405 
our performance against ofgem’s standard for
responding to customers’ written correspondence
has improved signiﬁcantly in addition our
performance relative to the industry as measured
by ofgem’s customer satisfaction survey has
ensured we are placed in the incentive reward
band under the terms of the iip further a recent
government report recognised our good
performance during a galeforce storm in the
mersey and north wales area on 27 october 2002
we received speciﬁc praise for our performance
in emergency preparation telephone response
and regular and realistic feedback to customers
on estimated times of reconnection
• invest consistently to add value
capital expenditure to date contributes to
maintaining the value of our asset base progress
in the berwick and borders investment programme
which represents an investment of £11 million
continues to be made with 65 of the 33kv circuits
included in the programme being completed
additionally 63 of the 11kv circuits included in
the programme have been completed or are
under construction this part of the overhead
line build programme has been accelerated and
is on target for completion by march 2004 
reinforcement of the transmission network will
improve both the performance and resilience of
our network with high proﬁle projects at gretna
and chapelcross representing a £13 million
investment beneﬁts of these projects include the
strengthening of the network to deal with the
chapelcross power station closure these projects
are being delivered on time and to budget
the government target of 10 of supply from
renewable sources by 2010 is an opportunity for
infrastructure division to invest in network
capacity our transmission business has
participated in a recent network study that
explored the existing scottish and northern
england networks’ potential to support increased
volumes of new renewable generation the study
identiﬁed three progressive steps required to
upgrade our transmission network and we believe
the associated investment to be valued at roughly
£300 million – £400 million over 10 years
dependent on renewable progress we are
currently working to develop detailed plans in
relation to this opportunity in addition we
believe our distribution networks in scotland and
manweb are well positioned to develop network
investment opportunities in support of renewable
generation should government targets be met
the formal price control reviews of sp
transmission sp distribution and sp manweb
will continue during the forthcoming year we
have been working with ofgem and the rest of
the industry to develop the framework of price
controls applying to all network monopoly
companies and lay the foundations for the
formal distribution price control reviews
scottishpower annual report  accounts 200203

6
chief executive’s review
continued we believe a key issue for the reviews is the
provision of a sufﬁcient and stable return to
allow companies to attract and retain funding
from capital markets a further issue relates to
ﬁnding ways to facilitate renewable energy in line
with government targets both have implications
for the working of the regulatory regime and for
the longterm safety and integrity of the uk
electricity infrastructure  
the outcome from the price control review
should take account of guidance from the
government on social and environmental
objectives and recognise any additional
expenditure arising from such objectives our
performance in the recent asset risk
management survey demonstrated our ability to
invest efﬁciently and effectively and our cost and
storm response performances provide us with
the credibility to inﬂuence this important debate 
we should not lose sight of the fact that the
industry is entering a new phase where simple
costcutting and moderate investment leading to
price cuts for customers will no longer sustain
future performance and price increases will be
required we are committed to working with ofgem
and the rest of the industry throughout the price
control review process to deliver a successful
outcome that balances the interests of
shareholders customers and all other stakeholders 
uk division
the uk division is our competitive integrated
generation and supply business the division
manages activities across the energy value chain
maximising value from a diverse energy portfolio
of some 5000 mw of coal gas hydro and wind
powered plants through to our national
customer base of over 36 million customers via
an energy management function that acts to
balance and hedge energy needs the strategic
priorities of the uk division set at the beginning
of 200203 were
• enhance margins through our integrated 
operations
• grow customer numbers and improve 
customer service
• make selective investments using proven 
knowledge and skills
operating proﬁt for the uk division increased by
£18 million to £73 million for the year to 31
march 2003 mainly due to last year’s results
including a £19 million exceptional
reorganisation charge operating proﬁt
excluding goodwill amortisation and exceptional
items was £78 million for the year £1 million
lower compared to the previous year net energy
margins have performed strongly increasing by
£15 million before higher depreciation costs to
capture and investment in energy efﬁciency
schemes of £12 million and increased pension
costs of £4 million the impact of lower
wholesale electricity prices has been mitigated
by our integrated approach to managing the
energy value chain whereby our own electricity
production is extensively matched to our
customer demand across great britain the
renegotiation of the nuclear energy agreement
nea with british energy be at a market
related price has delivered a beneﬁt of
approximately £25 million in the current year
and provides a hedge against revenues which
have been impacted by lower wholesale prices 
during the year the uk division invested £68
million in capital projects a £41 million
reduction on the previous year £29 million was
invested in new generation and gas storage
assets £19 million in generation plant overhaul
and refurbishment and £20 million on other
projects including business transformation and
information technology
in 200304 subject to obtaining planning
permission net capital expenditure for the uk
division could increase substantially as a result
of our commitment to increase our windfarm
capacity in addition we plan to invest in gas
storage development and upgrades to generation
assets required to maintain our generating
capacity all investments are projected to have
returns signiﬁcantly in excess of the cost of
capital and enhance earnings
• enhance margins through our integrated
operations
during the year we continued to beneﬁt from the
ﬂexibility of our plant portfolio we have
maintained what we believe is a best in class
performance in the balancing mechanism in
particular from our ﬂexible ccgt plant at rye
house and our pumped storage facility at
cruachan which is being upgraded in capacity
by 10 we continue to optimise the operating
regime across our plant portfolio aiming to
deliver the lowest sustainable costs and to
position it to take maximum advantage of
commercial opportunities
scottishpower annual report  accounts 200203

7 the renegotiation of the nea relieved the division
of a signiﬁcant cost burden during the year but
the future of the remaining restructuring
contracts is still unresolved we continue to press
the government strongly on this issue whilst we
expect wholesale electricity prices to remain
depressed for the next two years there could be
upward price pressure emerging from tightening
of the capacity margin throughout great britain
and as environmental measures such as carbon
trading and the large combustion plants directive
start to take effect we may see some price
volatility before a new equilibrium is reached
retail sales revenues increased during the year
in part following an increase in prices to
customers outside our service territories in
november 2002 prices to the majority of
electricity customers in our scottish and manweb
territories were increased effective 1 april 2003
although in both instances we have preserved our
competitive dual fuel prices and provided nearly
all customers affected by the april 2003 price
increase with the opportunity of mitigating the
increase by changing to a more economical
product package
our business transformation programme which
is underpinned by 6 sigma methodology
continues to deliver signiﬁcant savings to the
business in the year to 31 march 2003 we have
delivered revenue and cost beneﬁts of £14
million across our business processes including
sales and marketing billing and debt the
utilisation of 6 sigma methodology is now being
extended throughout the uk division
• grow customer numbers and improve
customer service
we continue to be successful in growing our
customer base customer numbers now stand at
365 million up by approximately 150000 in the
year to 31 march 2003 as well as gaining new
customers we have successfully reduced overall
churn by 4 percentage points compared with the
prior year
customer retention and winback continues to be
an important part of our marketing activities and
we have deployed tv advertising to good effect
emphasising that our dual fuel customers can
beneﬁt from a competitive price by joining
scottishpower
in response to customer research we introduced
a new bill design to provide clearer and more
concise communication of charges and have
improved the level of service provided by our call
centres during the year 
scottishpower was amongst the pioneers of the
industry’s energysure accreditation scheme for
sales staff which will be governed by an external
code administrator all scottishpower’s domestic
sales teams have now been accredited to this
customer service and quality standard and we
are now rolling out the scheme to cover all the
relevant sales and marketing channels
in addition we have introduced three new energy
products during the year including capped price
and no standing charge offers which have
further enhanced the range available to customers
• make selective investments using proven
knowledge and skills
the renewables obligation has created a market
framework that allows developers to capitalise
on the uk’s rich resource of wind energy with
eligible developments attracting renewables
obligation certiﬁcates rocs currently worth
approximately £45 for every mwh produced
with our strong track record in site identiﬁcation
and development we are well placed to deliver
investments with an attractive return and
enhanced earnings and to market effectively
the energy produced from renewable sources
in the year ended 31 march 2003 we have
made planning applications for 279 mw of
windfarm capacity and we now have in excess of
546 mw awaiting planning consent we have
also begun environmental assessments on
around 300 mw of capacity at additional
potential sites progress towards planning
consent for our whitelee 240 mw and black
law 134 mw developments has been slowed by
issues related to radar at glasgow and
edinburgh airports respectively a technical
solution to this problem is being progressed and
we are conﬁdent that the issue will be resolved
with 546 mw of windfarm capacity awaiting
planning consent and the 300 mw pipeline of
projects under assessment we are making
excellent progress towards alignment with the
government target of 10 of supply from
renewable sources by 2010
we are upgrading ﬁve of our smaller hydro
generating stations totalling 45 mw to qualify
for rocs as part of this the upgrade to the 11
mw station at bonnington was completed in
200203 with the other four stations to be
upgraded over the next 15 months
scottishpower annual report  accounts 200203

8
chief executive’s review
continued our 60 million therm gas storage planning
application at byley in cheshire is presently
awaiting the result of a public inquiry expected
to be determined in 200304
ppm
ppm is our competitive us energy company
focused on providing environmentally
responsible energy products to wholesale
customers its principal assets are thermal and
renewable generation resources and gas storage
assets primarily serving western us and
canadian markets the strategic priorities of
ppm set at the beginning of 200203 were
• grow its renewablethermal energy portfolio 
and gas storagehub services
• optimise returns through the integration of 
assets and commercial activities
ppm reported an operating proﬁt of £28 million
for the year compared to a loss of £5 million last
year the growth in operating proﬁt for the year
was due to the increased contribution from long
term sales contracts and gas storage activities
and optimisation beneﬁts of £53 million partly
offset by higher depreciation charges and other
operating costs of £17 million to support
business growth and the beneﬁt from settlement
of a £3 million contract in the prior year 
ppm’s net capital expenditure for the year was
£36 million a decrease of £170 million on last
year which included investment to complete the
klamath falls and west valley generation
projects in the current year the business
invested £30 million in new generation and £6
million in other projects in addition we acquired
the katy gas storage facility for £101 million
in 200304 ppm’s net capital spend is expected
to increase primarily as a result of the
construction of new windfarms and development
opportunities including moraine and flying
cloud which are expected to deliver favourable
rates of return and enhance earnings
• grow its renewablethermal energy portfolio
and gas storagehub services
ppm continues to grow its renewable energy
business and has recently announced the
development of the 44 mw flying cloud wind
project in iowa which includes a 15 year
agreement to sell power to interstate power 
light a subsidiary of alliant energy in addition
construction of the 51 mw moraine wind project
in minnesota has commenced the moraine
project is fully contracted with a 15 year
agreement to sell power to the northern states
power company this will bring ppm’s total wind
power under contract to more than 560 mw
and total thermalrenewable resource under
ppm’s ownership or control to approximately
1350 mw
in addition to its renewable generation portfolio
ppm has a total of 37 billion cubic feet bcf of
gas storage capacity under ownership up from
14 bcf the prior year this includes the 21 bcf
acquired at the katy gas storage facility in
december 2002 and a 2 bcf expansion of the
alberta hub gas storage facility during the year
ppm has successfully integrated the katy assets
and is on target to deliver expected results ppm
intends to add to its 40 ownership in the
alberta hub gas storage facility with the
purchase of an additional ownership interest this
spring 
• optimise returns through integration of
assets and commercial activities
integration of plant operations contract dispatch
and energy management added 7 million in
the year the optimisation beneﬁts come from
displacing plant operations with lowpriced
power purchases selling the displaced gas or
placing it in storage as well as using
transmission and contract delivery ﬂexibility to
manage locational price differences in both gas
and power 
ppm has new and expanded terms for energy
supply to the sacramento municipal utility
district one of ppm’s largest customers
arrangements include revisions to original long
term contracts executed in 200203 as well as
sales of up to half the output of the 150 mw
high winds energy center in northern california
and 100 mw of summer peaking power supply
from ppm’s portfolio  
in 200203 ppm placed 319 mw under long
term contract in addition ppm has effectively
managed its commodity exposure having sold
its positions forward for 525 years fluctuating
commodity prices have little impact on ppm’s
portfolio value except where increased volatility
gives ppm an opportunity to take advantage of
plant options delivery ﬂexibility gas storage and
other tactics to maximise value 
scottishpower annual report  accounts 200203

9 regulatory and government policy issues
multistate process msp
paciﬁcorp continues work on the msp which is
designed to resolve how prudently incurred costs
are allocated among the six states in which
paciﬁcorp operates a collaborative process is
underway to identify possible solutions conduct
technical conferences with participants and meet
with key parties to examine speciﬁc issues
paciﬁcorp intends to ﬁle a ﬁnal detailed
regulatory proposal with each state utility
commission this summer  
rto west
paciﬁcorp and nine other utilities received initial
approval of their rto west proposal in
september 2002 from the federal energy
regulatory commission ferc under the
proposal which the ferc called “best in class”
among all the rto ﬁlings in terms of the
proposed design structure and thoroughness of
approach the ﬁling utilities will retain ownership
of their transmission assets but transfer
operational control of their system to rto west
as proposed rto west will help stabilise
electricity transmission and guard against
market manipulation in the western part of the
united states and canada while providing a
reasonable level of return for future transmission
investments the rto west members are
currently planning to ﬁle with the ferc this
summer and expect a response from the ferc
by the end of 2003
federal energy regulatory commission ferc
the ferc continues its various investigations
into western us market manipulation related to
the 200001 energy crisis as a regulated utility
that participated in these markets primarily to
meet the company’s own power requirements
paciﬁcorp has responded to various data
requests from the ferc and other market
participants these cases involve trading
practices connected with the california power
crisis as well as spot market refund cases and
complaints brought by paciﬁcorp against
wholesale power marketers to seek refunds for
highpriced power purchased in 2001
paciﬁcorp continues to press for economic
recovery while fully responding to requests for
information
british electricity trading and transmission
arrangements betta 
the recently announced delay by the
department of trade and industry to the
introduction of betta will not have a material
effect on scottishpower in 200304 the
ﬁnancial impact of the betta bill is broadly
neutral for scottishpower but zonal charges for
transmission access and losses would have a
negative impact on the generation business in
the uk division we were pleased to see that the
trade and industry select committee in its fifth
report recommended delay in the
implementation of transmission access reform
until the costs and beneﬁts are able to be
assessed on a great britainwide basis
scottishpower together with a number of other
companies has ﬁled for a judicial review of
ofgem’s decision to implement zonal
transmission losses in england and wales
energy white paper
the recently published white paper on energy
sets out to achieve a lower carbon energy
system proposing signiﬁcant investment in
renewable energy energy efﬁciency and in
networks the uk division is well placed to take
early mover advantage on renewable generation
and the infrastructure division should beneﬁt
from the government’s commitment to investing
in networks we are pleased that ofgem
recognises the need to plan and develop
networks to facilitate the transmission of
renewable energy from scotland to centres of
demand in the rest of great britain
looking ahead
during 200203 we reported each quarter our
progress in delivering the key strategic priorities
for each of our four businesses some of those
priorities have now been achieved and further
new priorities have been identiﬁed accordingly
looking ahead our strategic priorities are as
follows
paciﬁcorp
• achieve roe target1 billion ebit by 
200405
• manage energy risk and supplydemand 
balance
• deliver excellent customer service
• invest to grow the regulatory asset base 
including delivery of the integrated resource plan
scottishpower annual report  accounts 200203

10
chief executive’s review
continued infrastructure division
• invest consistently to add future value 
including supporting renewables
• optimise our position through the 2005 price 
control reviews and the introduction of betta
• deliver costeffective high quality customer 
service
uk division
• enhance margins through our integrated 
operations 
• increase the value of our customer base 
through targeted sales growth and improved 
customer service
• progress towards achieving 10 of electricity 
supply from renewable sources by 2010 
ppm
• continue to be a leading provider of renewable
energy products 
• grow natural gas storage and hub services 
business 
• create additional value by optimising the returns
from our capability across gas and power
conclusion
our consistent focus on performance last year
enabled us to deliver a good set of results we
will continue to place a premium on leading
operational performance to secure further
improvements in the results of our businesses
there are substantial opportunities to expand
scottishpower through incremental investments
in each of our businesses particularly in
networks generation including renewables and
gas storage with as much as 40 of our capital
investment in new assets in these areas we
believe we are well positioned to continue to
grow the outlook for scottishpower remains
positive with further improvements expected
from our businesses we also believe that our
continued focus will enable us to take advantage
of the opportunities to create shareholder value
that will over time arise from the changing
structure of our industry in the uk the rest of
europe and the us
scottishpower annual report  accounts 200203

11
ian russell chief executive
7 may 2003 description of business
scottish power plc “scottishpower” is an
international energy business listed on both
the new york and london stock exchanges
through its operating subsidiaries the
company serves in excess of 5 million
homes and businesses in the western us
and across the uk it provides electricity
generation transmission distribution and
supply services in both countries the
company’s us activities extend to coal
mining and gas storage including a gas
facility in western canada in great britain
scottishpower also stores and supplies gas
in the year to 31 march 2003 the sales
revenues of the continuing business of the
group were £52 83 billion
following its creation upon privatisation in
1991 scottishpower developed by organic
growth in the british electricity gas and
telephony markets through strategic
acquisitions in the uk and by the merger
with paciﬁcorp in the us during 200102
the group exited nonstrategic businesses in
the us and uk demerged the uk
telecommunications and internet business
thus to the company’s shareholders and in
april 2002 sold the uk water and
wastewater company southern water
thereby concluding the process of redeﬁning
scottishpower as an international energy
business in 200203 scottishpower has
focused on its strategic aim of becoming a
leading international energy company
strategic context
scottishpower’s strategy is to become a
leading international energy company
managing both regulated and competitive
businesses in the us and the uk to serve
electricity and gas customers the regulated
businesses provide a base for steady growth
through consistent investment and proven
skills in operational and regulatory
management in competitive activities in
which the group has local market
knowledge and skill advantages it seeks to
enhance margins through the integration of
generation energy management and
customer services again underpinned by
bestinclass operational performance the
aim is to deliver steady growth in earnings
per share by capitalising on the
opportunities afforded by strong positions in
both the us and uk markets organising the
skills and resources deployed in these
different marketplaces to achieve or where
the regulatory process permits to better
allowed returns from regulated businesses
build sustainable value in competitive
energy markets and actively manage risk
both operational and ﬁnancial
the strategy is delivered through four
businesses each clearly focused on its
strategic priorities
•
paciﬁcorp
•
infrastructure division
•
uk division
•
ppm energy inc
in each of the us and the uk there is one
business operating under regulation and
one in competitive market conditions
in the us paciﬁcorp operates as a
regulated electricity business with signiﬁcant
mining subsidiaries – and the competitive
energy business is ppm energy inc
“ppm” both are subsidiaries of paciﬁcorp
holdings inc “phi” a nonoperating us
holding company itself an indirect wholly
owned subsidiary of scottishpower phi is
also the parent company of paciﬁcorp
group holdings which owns the shares of
subsidiaries not regulated as domestic
electricity providers including paciﬁcorp
financial services inc “pfs” in order to
facilitate the further separation of the
company’s nonutility operations in the us
from the regulated us business paciﬁcorp
in the uk the regulated infrastructure
division operates electricity transmission
and distribution subsidiaries of the wholly
owned uk holding company scottish power
uk plc “spuk” other subsidiaries
operating in the now competitive uk energy
markets comprise the group’s competitive
energy business the uk division covering
its british isles generation assets
commercial and energy management
activities and energy supply business units
paciﬁcorp
in november 1999 paciﬁcorp and
scottishpower completed a merger under
which paciﬁcorp became an indirect
subsidiary of scottishpower as a result of
the merger paciﬁcorp developed and
commenced its transition plan to
implement signiﬁcant organisational and
operational changes arising from the
strategic decision to focus on its electricity
businesses in the western us
principal business activities
paciﬁcorp is a regulated electricity company
operating in portions of the states of utah
oregon wyoming washington idaho and
california paciﬁcorp conducts its retail
electricity utility business as paciﬁc power
and utah power and engages in electricity
production and sales on a wholesale basis
under the name paciﬁcorp the subsidiaries
of paciﬁcorp support its electricity utility
operations by providing coal mining facilities
and services environmental remediation
and ﬁnancing
the western us wholesale energy market
had substantially lower prices and was
relatively stable during 200203 compared
with the previous year paciﬁcorp took a
number of actions to maintain a balanced
net energy position through the summer
peak period and for the remainder of the
ﬁnancial year a 120 megawatt “mw” gas
ﬁred peaking plant in utah came online in
august 2002 and in may 2002 paciﬁcorp
also entered into an operating lease
arrangement with ppm for the 200 mw
west valley peaking plant also in utah
these actions as well as the use of other
ﬂexible physical and ﬁnancial hedging
instruments assisted paciﬁcorp in
maintaining a balanced energy position over
the ﬁnancial year
retail electricity sales
paciﬁcorp serves approximately 15 million
retail customers in service territories
aggregating about 136000 square miles in
portions of six western states the
geographical distribution of paciﬁcorp’s
retail electricity operating revenues for the
year ended 31 march 2003 was utah 39
oregon 32 wyoming 13 washington
8 idaho 6 and california 2 the
paciﬁcorp service area’s diverse regional
economy mitigates exposure to economic
swings in the eastern portion of the service
area customer demand peaks in the
summer when irrigation and cooling
systems are heavily used mainly in utah
and eastern idaho the principal industries
are mining and extracting coal oil natural
gas uranium and oil shale in the western
part of the service territory mainly
consisting of oregon and southeastern
washington customer demand peaks in the
scottishpower annual report  accounts 200203

12
business review – description of business winter months due to space heating
requirements and the economy generally
revolves around agriculture and
manufacturing with pulp and paper lumber
and wood products food processing and
high technology being the principal
industries during 200203 no single retail
customer accounted for more than 2 of
paciﬁcorp’s retail electricity revenues and
the 20 largest retail customers accounted
for 13 of total retail electricity revenues
trends in energy sales by class of customer
are set out in tables 3 5 and 6 page 31
retail energy sales for paciﬁcorp have
grown at a compound annual rate of 09
since 1997 however for 200203
megawatt hour “mwh” sales decreased
approximately 12 adjusting for the
impact of weather the loads for both
200203 and 200102 were relatively ﬂat
although patterns within individual states
and customer classes were different while
residential and commercial loads reﬂected
an increase of 12 and 36 respectively
as a result of increased customer numbers
the industrial class showed a 32 decrease
as a result of a decrease in industrial
customers and the effects of the economic
downturn the majority of the growth in
residential customers has been in the
eastern portion of paciﬁcorp’s service
territories whereas the western portion has
remained relatively ﬂat in terms of its
growth for the period 2004 to 2008 the
underlying annual growth in retail mwh
sales in paciﬁcorp’s franchise service
territories is estimated to be in the range of
18 to 36 dependent upon factors such
as economic recovery and growth customer
numbers weather the potential effects on
demand resulting from conservation efforts
and changes in price if prices increase in
the region demand growth over the region
may slow
power production and fuel supply
paciﬁcorp owns or has interests in
generating plants with an aggregate
nameplate rating of 8410 mw and plant net
capability of 7925 mw see table 1 page
30 during 200203 approximately 4
and 58 of paciﬁcorp’s energy
requirements were supplied by its hydro
electric and thermal generation plants
respectively the remaining 38 was
supplied by purchased power with its
present generating facilities under average
water conditions paciﬁcorp would expect
that approximately 60 and 5 of its
energy requirements for 200304 would be
supplied by its thermal and hydroelectric
plants respectively the remaining 35
being obtained through purchase
arrangements paciﬁcorp will make use of
existing longterm purchase contracts and
will choose appropriate costeffective
resources to meet the balance of its
customer demand through shortterm
purchase arrangements
at 31 march 2003 paciﬁcorp had 196
million tons of recoverable coal reserves that
are mined by paciﬁcorp or its mining
afﬁliates and are dedicated to nearby
paciﬁcorpoperated generation plants see
table 2 page 30 during 200203 these
mines supplied approximately onethird of
paciﬁcorp’s total coal requirements coal is
also acquired through longterm and short
term contracts thirteen longterm coal
contracts accounted for 60 of the overall
200203 requirements the contract terms
range from one to 20 years the remaining
7 of paciﬁcorp’s coal requirement was
supplied through shortterm purchases
paciﬁcorp has also entered into longterm
ﬁxedprice natural gas contracts to supply
its owned and leased gasﬁred generation
facilities these longterm contracts meet
100 of the expected needs for natural gas
at these facilities until april 2005
to manage future generation needs and
meet environmental objectives paciﬁcorp
has also completed an integrated resource
plan “irp” which was ﬁled in january
2003 this provides a framework and plan
for the prudent future actions required to
ensure that paciﬁcorp continues to provide
reliable and costeffective electricity service
to its customers projected growth rates and
the retirement of existing resources indicate
a need subject to ongoing review for about
4000 additional mw of capacity between
2004 and 2014 the irp and the resulting
request for proposals process have been
created to identify paciﬁcorps future
resource mix in a coordinated process with
stakeholders in the six states it serves as
part of the irp process paciﬁcorp expects
to select the optimal solution from a mix of
renewable thermal market purchase and
demand side management choices and to
guide speciﬁc “build or buy” decisions
made dependent on permitting siting
emissions cost recovery and economic
conditions costs incurred by paciﬁcorp to
provide a service to its customers are
expected to be included as allowable costs
for ratemaking purposes however there
can be no assurance that these costs will
be fully recovered through the regulatory
process
wholesale sales and purchased electricity
in addition to its base of thermal renewable
and hydroelectric generation assets
paciﬁcorp uses a mix of longterm and
shortterm ﬁrm purchases and nonﬁrm
purchases to meet its load obligations and
to make sales to other energy providers
paciﬁcorp enters into wholesale purchase
and sale transactions to provide hedges
against periods of variable generation or
variable retail load generation varies with
the level of outages or transmission
constraints and retail load varies with the
weather distribution system outages and
the level of economic activity during the
year ended 31 march 2003 retail loads
were lower than in the previous year due to
milder weather and a generally weak
western us economy paciﬁcorp’s wholesale
transactions are integral to its retail
business providing for a balanced and
economically hedged position and
enhancing the efﬁcient use of its generating
capacity over the long term paciﬁcorp’s
transmission system is available for
common use consistent with open access
regulatory requirements and connects with
market hubs in the paciﬁc northwest to
provide access to what is normally lowcost
hydroelectric generation and also to the
southwestern us which provides access to
normally highercost fossilfuel generation
under the requirements of the public utility
regulatory policies act of 1978 paciﬁcorp
purchases the output of qualifying facilities
constructed and operated by entities that
are not public utilities during 200203
paciﬁcorp purchased an average of 95 mw
from qualifying facilities compared to an
average of 104 mw in 200102
proposed asset sale
in 1998 paciﬁcorp announced its intention
to sell its california electricity service area
including its electricity distribution assets
and has since been working to complete the
sale of these properties to norcal electric
authority “norcal” various factors have
scottishpower annual report  accounts 200203

13 impeded the proposed sale in june 2002 a
validation action in the california superior
court challenged the authority of norcal to
enter into such a transaction and alleged
certain conﬂicts of interest among norcal
and its advisors this action is ongoing and
the outcome for the proposed sale remains
uncertain
infrastructure division
three whollyowned subsidiaries of spuk –
sp transmission limited sp distribution
limited and sp manweb plc – are the
“owner companies” holding the regulated
assets and transmission and distribution
licences and acting as an integrated
business unit to concentrate divisional
expertise on regulatory issues and
investment strategy a further wholly
owned subsidiary of spuk – sp power
systems limited “powersystems” –
provides asset management expertise and
conducts the daytoday operation of the
networks implementing work programmes
commissioned by and agreed with the
assetowner business strict commercial
disciplines are applied at the asset owner
service provider interface with
powersystems operating as a contractor to
the transmission and distribution business
unit 
an integrated senior management team
within the infrastructure division applies
the beneﬁts of growing expertise in asset
ownership ﬁnancing and operational
service provision to the management of the
group’s regulated networks businesses in
both the us and the uk
principal business activities – transmission
and distribution
scottishpower owns and manages a
substantial uk electricity distribution and
transmission network which extends to over
116000 km with 66800 km of
underground cables and 49900 km of
overhead lines network comprising both
the distribution system to customers in its
two authorised areas and in scotland its
high voltage transmission system 132
kilovolt “kv” and above including those
parts of the englandscotland
interconnector which are in its scottish
authorised area table 9 page 32 shows
key information with respect to the
division’s transmission and distribution
services in 200203 these networks are
operated under licences issued by the gas
and electricity markets authority “the
authority” and held by the transmission
and distribution businesses which are
entitled to charge for the use of the
systems on terms approved by the
authority under various price control
formulae the management focus of the
transmission and distribution business is to
outperform allowed regulatory returns from
the provision of efﬁcient coordinated and
economical networks which are open to
licensed users on a nondiscriminatory
basis in order to facilitate competition in
generation and supply and operated to
approved standards of safety and reliability
the income derived from the distribution
business is dependent on the demand for
electricity by customers in the authorised
areas demand for electricity is affected by
such factors as growth and movements in
population social trends economic and
business growth or decline changes in the
mix of energy sources used by customers
weather conditions and energy efﬁciency
measures tables 10 and 11 page 32 set
out the demand in gigawatthours “gwh”
by customer type within the broadly stable
levels of electricity transported over the
distribution systems in the scottishpower
and manweb home areas during the ﬁve
most recent ﬁnancial years
principal business activities – asset
management
within the powersystems business unit the
focus continues to be on reducing costs
and improving service its principal
business activities involve the construction
and refurbishment of the uk transmission
and distribution systems their maintenance
and related fault repair powersystems acts
as the major service provider to the
scottishpower transmission and
distribution business and as the primary
customer contact agent for networkrelated
matters powersystems continues to focus
strongly on the efﬁcient delivery of these
services under contract current
performance as measured by the ofﬁce of
gas and electricity markets “ofgem”
customer satisfaction survey is above
average placing scottishpower in the
“incentive” band within the ofgem
information and incentives programme
powersystems aims to maintain this
position and to continue to deliver the
associated ﬁnancial beneﬁt powersystems
has continued to maintain a joint venture
with alfred mcalpine utility services
limited called core utility solutions
limited to take advantage of the
opportunities presented by the requirement
for competitive provision of connections to
distribution networks
uk division
the uk division operates in gas and
electricity markets which became fully
competitive with the ending of residual
price controls on residential electricity on
31 march 2002 although ofgem continue
to enforce licence conditions and regulate
quality of service the division comprises
ﬁve whollyowned subsidiaries
scottishpower generation limited owns
and operates the power stations and other
generation assets in the british isles and
holds the group’s generation licence
scottishpower energy trading limited and
scottishpower energy trading agency
limited deal in gas and electricity at the
wholesale level and in the commercial
instruments and agreements which
constitute the market balancing
mechanisms for the competitive energy
market in the uk scottishpower energy
retail limited is the gas and electricity
supply company and holder of the group’s
supply licences managing pricing selling
billing and receipting for gas and electricity
supply to both business and domestic
customers and dealing with enquiries
arising in the course of this business and
sp dataserve limited is the data
management and metering company
managing the data processes which
underpin customer registration through to
billing and settlement in the competitive
energy market
the divisional management team oversees
activities across the energy value chain
maximising value from a diverse
generation portfolio through to a national
customer base of over 36 million via an
integrated commercial and energy
management activity that acts to balance
and hedge energy needs throughout
200203 wholesale energy prices have
been low by historic standards and in light
of the emphasis on a marketbased
framework for energy policy set out by the
scottishpower annual report  accounts 200203

14
business review – description of business
continued uk government in february 2003
wholesale energy markets face the
prospect of continuing structural and
contractual changes as an active market
participant the division engages fully in
regulatory and contractual debate and in
the consultation processes surrounding the
government’s review of energy policy in the
meantime the division aims to leverage the
beneﬁts of its ﬂexible generation asset base
and commercial operations to deliver
sustained earnings through improved
business processes and customer service
principal business activities
the group’s uk division operates
scottishpower’s generating stations in the
british isles manages the company’s
exposure to the wholesale electricity and
gas markets and is responsible for energy
supply the sales and marketing of
electricity and gas to customers
throughout great britain together with the
associated customer registration billing
and receipting processes and handling
enquiries in respect of these services
power plant portfolio fuel strategy and
generation sales
scottishpower has access to some 5000
mw of capacity see table 8 page 32
comprising coal gas hydroelectric and
wind power generation assets giving the
division a particularly ﬂexible portfolio
acquisition of additional thermal
generation capacity is kept under
continuing review but purchases will only
be made at valueenhancing prices and the
current market is characterised by over
capacity in 200203 the windfarm
business continued to expand and now has
operational windfarms totalling 128 mw
planning applications for a further 546 mw
and environmental assessments begun on
around 300 mw of further potential sites
to ensure that the company target of 10
of supply from renewables by 2010 is met
scottishpower’s fuel purchasing strategy is
based upon the objective of achieving
competitive fuel prices while balancing the
need for security and ﬂexibility of supply
the major components of the fuel portfolio
are coal and gas both fuels being sourced
through a combination of longterm
contracts and shorterterm trading the
division has four longterm contracts with
terms of greater than ﬁve years for supply
from major gas ﬁelds
generation output was managed in order to
hedge risk and optimise the position in the
balancing market some 18 terawatthours
“twh” were despatched both to
contribute towards the approximately 34
twh of retail and wholesale demand
provided by the division and to maintain
export volumes through the interconnectors
to england  wales and to northern ireland
energy management and commercial
arrangements
in addition to its own generation capacity
and longterm bulk gas contracts
scottishpower has access to additional
generation under contract through its
commercial and energy management
operations the division uses medium and
shortterm contractual arrangements to
complete its energy purchase requirements
and to sell its generation output into the
electricity market in scotland and through
the interconnectors to england  wales and
to northern ireland the draft bill intended
to introduce a great britainwide market
through the british electricity trading and
transmission arrangements “betta” was
published in january 2003 although the
new arrangements are not now expected to
become effective until october 2004 at the
earliest betta is expected to have only a
very modest impact on enduser prices and
the uk government is now in consultation
on transmission losses in a great britain
wide market since these could impose
higher costs on all types of generation in
scotland particularly renewables
through its activities in the electricity gas and
coal markets scottishpower’s energy
management business secures competitive
advantage for the uk division through
hedging and optimising its position across
the energy value chain continuously
evaluating and managing risk exposure
scottishpower’s hatﬁeld moors gas storage
site enhances the ﬂexibility of the division’s
energy management position both in meeting
peak demands of supply customers and
responding to the volatility of gas prices
between midweek and weekends in
addition the bulk gas contracts allow the gas
to be sold out or used in the division’s power
stations giving yet more ﬂexibility a
planning application for a 60 million therm
gas storage facility was subject to a public
inquiry in late 2002 with a decision
anticipated later in 200304
the new electricity trading arrangements
introduced into england  wales in march
2001 encourage all generators to ﬁnd
buyers for their output by offering them
competitive prices and all suppliers to 
contract with generators to purchase
sufﬁcient electricity to meet their customers’
demand imbalances between actual and
contracted positions are settled through the
balancing mechanism the payasbid and
balancing process exposes market
participants to the costs and consequences
of their actions and thus leads to more
costreﬂective prices and more effective
management of risk wholesale electricity
prices have remained low down by
approximately 10 yearonyear although
above scottishpower’s marginal cost of
generation the uk market is characterised
by overcapacity with plant being
mothballed and some companies
withdrawing from the market low wholesale
prices improve the proﬁtability of the
scottishpower energy supply business to
the extent that the group’s own generation
and market purchases are used to meet
customer demand but shortterm sales
contracts with large industrial and
commercial customers quickly reﬂect
movements in the wholesale market
restricting supply margins in this sector
under the nuclear energy agreement
“nea” of 1990 scottishpower and scottish
 southern were contracted until 2005 to
purchase the entire output from british
energy’s nuclear plants in scotland on the
basis of a pricing formula not reﬂective of
recent market conditions amendments to
the nea agreed in july 2002 were cleared
by the uk and european union authorities
by november 2002 and the full effect of the
revised terms has now been applied
throughout 200203 providing a beneﬁt of
some £25 million
energy supply
since september 1998 when competition
was extended to residential electricity
customers the strategic focus of the
scottishpower energy supply business has
been the defence of its core markets
residential and small business customers in
the scottishpower and manweb home areas
whilst seeking proﬁtable additional business
outside these historical regional boundaries
scottishpower annual report  accounts 200203

15 retention of home area residential
customers stands at 61 whilst targeted
sales efforts strategic marketing alliances
such as nestmakers the partnership with
sainsbury’s and the use of ecommerce
channels have helped develop a britainwide
customer base which now stands at 365
million energy accounts customer service
performance improved on the prior year
and there have been further system
improvements in the call centres the
business improvement programme
introduced in 2001 continues to drive
improvements across the retail supply
business and has delivered revenue and
cost beneﬁts of £14 million in the year to 31
march 2003 in areas such as billing debt
and customer registration business
processes
metering and data management
in the competitive energy market sp
dataserve limited operates endtoend
process and data management in order to
maximise efﬁciencies in the provision and
control of registration and metering data
data management covers the
establishment of new customers
maintenance of existing customers and
accuracy of energy settlement to effectively
manage gas and electricity customers sp
dataserve has been improving billing
performance and the management of the
agents who provide much of the data
ppm
ppm the group’s competitive us energy
business commenced substantive
operations in 2001 as paciﬁcorp power
marketing inc and is growing prudently
through selective expansion in renewables
and gas storage services in order to express
better the range of its activities ppm
changed its name in january 2003 to ppm
energy inc its principal assets are thermal
and renewable generation resources and
natural gas storage facilities including a gas
storage asset in western canada ppm has
more than 1100 mw currently under its
ownership or control and of that ppm has
full economic interest in 861 mw see table
7 page 31  ppm also has approximately
250 mw under construction  this will bring
ppm’s total to more than 1350 mw upon
completion of construction  in its electricity
business ppm serves a wide variety of
wholesale energy customers including
municipal agencies public utility districts
and investorowned utilities these
customers are primarily located in
wholesale energy markets served by the 18
million square mile western electricity
coordinating council service territories in
the western us in addition to its active
engagement in the west ppm is currently
developing wind generation projects in the
midwestern us ppm’s two major gas
storage facilities are in alberta canada and
texas and are each connected into
substantial pipeline networks serving well
diversiﬁed customer bases under ﬁrm long
term as well as shortterm contract
arrangements
in order to meet growing customer demand
for renewables which is supported by public
policy at the federal and certain state levels
ppm continues to grow its renewable energy
business in october 2002 ppm purchased
the output of the 150 mw high winds
windfarm in northern california and as it
did with the stateline wind energy center
along the oregonwashington border has
placed much of this highquality renewable
energy output under longterm contracts
ppm is also developing the 51 mw moraine
wind power project in southwest minnesota
in conjunction with a longterm power sales
agreement signed with the regional
regulated utility northern states power
company ppm continues to grow its
renewable energy business and has recently
announced the development of the 44 mw
flying cloud wind project in iowa which
includes a 15 year agreement to sell power
to interstate power  light a subsidiary of
alliant energy all of these projects will be
online by the end of calendar year 2003
ppm has grown its operating wind power
portfolio from 263 mw in 2002 to 324 mw
in 2003 with approximately another 250
mw under construction and expected to
come online in 200304 this will bring
ppm’s total wind power under ownership or
contract to more than 560 mw in addition
ppm continues to develop wind power
generation and supply arrangements and
has under consideration many strategically
sited windfarm opportunities it is a western
us leader in the supply of renewable energy
and is committed to sustainable and clean
energy development for the future as
demanded by the market 
in addition to its renewable generation
portfolio ppm has a total of 37 billion cubic
feet “bcf” of gas storage capacity under
ownership up from 14 bcf the prior year
this includes the 21 bcf acquired in
december 2002 at the katy gas storage
facility in texas and a 2 bcf expansion of
the alberta hub gas storage facility during
the year ppm intends to add to its 40
ownership in the alberta hub gas storage
facility with the purchase of an additional
ownership interest this spring ppm has a
number of development opportunities
underway to grow its gas storage business at
selective locations over the next several years 
ppm creates value by securing quality assets
at strategic locations and by locking in value
with longterm contracts with creditworthy
customers integration of plant operations
contract dispatch and energy management
add additional value the optimisation
beneﬁts come from displacing plant
operations with lowpriced power purchases
selling the displaced gas or placing it in
storage as well as using transmission and
contract delivery ﬂexibility to manage
locational price differences in both gas and
power ppm aims to leverage the beneﬁts of
its ﬂexible asset base and contracts to
extract value across gas and power 
discontinued activities
uk water and wastewater services –
southern water
the sale of southern water to first aqua
limited a company speciﬁcally formed to
undertake the acquisition was announced
on 8 march 2002 and concluded on 23
april 2002 net cash inﬂows from the
disposal were used primarily to reduce
group net debt
group employees
us businesses
phi and its subsidiaries had 6291
employees at 31 march 2003 of these
6130 were employed by paciﬁcorp and its
mining subsidiaries and 161 by ppm 
approximately 59 of the employees of
paciﬁcorp and its mining subsidiaries are
covered by union contracts principally with
the international brotherhood of electrical
workers the utility workers union of
america and the united mine workers of
scottishpower annual report  accounts 200203

16
business review – description of business
continued america in the company’s judgement
employee relations in the us businesses are
satisfactory
uk businesses
scottishpower and its continuing uk
subsidiaries had 7534 employees at 31
march 2003 of these 3215 were
employed in the infrastructure division and
4319 in the uk division approximately
64 of employees in the uk are union
members and 84 are covered by
collective bargaining arrangements there
are a number of different collective
agreements in place throughout the group
reﬂecting differing market conditions in
which the group’s businesses operate in
the company’s judgement employee
relations in the uk businesses are
satisfactory
human resources strategy
during 2002 the group reviewed its
human resources strategy assessing the
mutual needs of the businesses and their
employees following a “gap analysis” a
new human resources strategy was
developed and approved by the board in
july 2002 in 200304 plans will be
developed and implemented aiming to
ensure that by 2005 and wherever they
work across the group employees share a
consistent positive experience of working
for scottishpower which encourages and
supports high personal performance
during 200203 health and safety
arrangements were also reviewed
stimulated by an external audit of
business processes a new health and
safety governance process was approved
by the executive team in november 2002
and following extensive discussion and
communication a new group health and
safety strategy was developed for
implementation in 200304
further details of group workplace policy
and performance can be found in the
scottishpower environmental and social
impact report and the scottishpower
workplace performance report both will
be available on the scottishpower website
group environmental policy
scottishpower recognises the need for a
responsible business to embrace a wider
role in society and to engage fully with
shareholders staff communities
customers and other opinion formers it
aims to do this transparently through an
international framework to ensure that key
principles are translated into action this
framework comprises overall international
visionary goals and speciﬁc goals for the
us and uk performance towards meeting
these goals is tracked through carefully
chosen key performance indicators
closely related to business unit objectives
scottishpower’s strategy is to become one
of the world’s leading international energy
companies hence it must strive to achieve
a balance between various needs including
securing energy supply now and into the
future keeping energy affordable and
minimising its impact on the environment
policy frameworks in the us and uk have
common elements moves to place a value
on carbon dioxide “co
2
” for trading
tightening emission controls using market
instruments and supporting renewables
and energy efﬁciency measures in the us
president bush’s clear skies initiative
appears to have a high government
priority against a background of pressure
to move it towards a multipollutant basis
including carbon although efforts to adopt
a renewable portfolio standard at the
federal level have slowed efforts continue
to create viable markets for renewable
generation at the state level most notably
in california the european union “eu”
agreed the content of an emission trading
directive early in december 2002 which
will bring into force a mandatory emission
trading regime as soon as 2005 the uk
energy white paper published in february
2003 doubled the uk renewables target of
10 by 2010 to 20 to be achieved by
2020 energy saving and energy services
received a boost while resources were
identiﬁed to support new cleancoal in
scotland consultations have begun on a
demanding target of 40 renewables by
2020 this is being carried out at a time
when operators and the uk regulator
ofgem are engaging in discussions which
recognise the need to set network
upgrades in the context of future network
development for renewables and
embedded generation
the group continues to develop speciﬁc
policies to respond to these regulatory
challenges aiming to grow its business
sustainably in new energy markets to
invest in renewables and cleancoal
technology and to ensure that customers
beneﬁt from innovations in energy
efﬁciency it also aims to manage existing
coalﬁred assets responsibly applying
appropriate abatement technologies to
reduce its environmental footprint whilst
supporting security of supply and
affordability of power for its customers
the lines of accountability for
environmental policy have been
strengthened by forming the policy making
energy and environment committee
chaired by the chief executive and with
direct reporting lines to scottishpower’s
executive team
the work of environment forums in the us
and uk continues to provide scottishpower
with independent opinion on key
environmental policies and practices
environmental management systems
“ems” in the uk many of which are
certiﬁed are based on the iso14001
standard these systems continue to
provide appropriate controls and are
increasingly linked to business risk
management processes in the us
paciﬁcorp’s coalﬁred stations and one
gasﬁred station are all certiﬁed to
iso14001 and other parts of paciﬁcorp
continue to roll out ems programmes
paciﬁcorp’s hydro resources business unit
has completed the lewis river basin ems
which has acted as the template for
completion of the rogue and klamath
emss and subsequent ems development
at the umpqua and bear river basins
paciﬁcorp’s power transmission and
distribution business unit has embedded
ems controls at four key “hub” facilities
and has strong procedures covering bird
protection oil spills and waste
management including a well established
contaminant removal programme
research and development
scottishpower supports research into
development of the generation
transmission distribution and supply of
electricity it also continues to contribute
on an industrywide basis towards the
cost of research into electricity utilisation
and distribution developments in
financial years 200203 200102 and
scottishpower annual report  accounts 200203

17 200001 expenditure on research and
development in the group’s businesses
was £07 million £31 million and £42
million respectively
charitable donations
during 200203 donations made for
charitable purposes by scottishpower
companies totalled £32 million in addition
some £53 million of community support
activity comprising community investment
and commercial initiatives given in cash
through staff time and inkind donations
was undertaken by the company’s us and
uk operations
description of the company’s
property
us businesses
the us properties consist primarily of
generating facilities electricity transmission
and distribution facilities coal mines and a
number of ofﬁce facilities substantially all
of paciﬁcorp’s electricity plants are subject
to the lien of paciﬁcorp’s mortgage and
deed of trust
paciﬁcorp owns or has an interest in 53
hydroelectric generating plants these have
an aggregate nameplate rating of 1067 mw
and plant net capability of 1116 mw it also
owns or has interests in 17 thermal
electricity generating plants with an
aggregate nameplate rating of 7310 mw
and plant net capability of 6777 mw
paciﬁcorp also jointly owns one wind power
generating plant with an aggregate
nameplate rating of 33 mw and plant net
capability of 33 mw table 1 page 30 sets
out key aspects of paciﬁcorp’s existing
generating facilities these generating
facilities are interconnected through
paciﬁcorp’s own transmission lines or by
contract through the lines of others
substantially all of paciﬁcorp’s generating
facilities and reservoirs are managed on a
coordinated basis to obtain maximum load
carrying capability and efﬁciency portions
of paciﬁcorp’s 72000 miles of transmission
and distribution networks are located by
franchise or permit upon public lands
roads and streets and by easement or
licence upon the lands of other third
parties table 4 page 31 sets out further
information regarding the paciﬁcorp
networks
paciﬁcorp’s coal reserves are described in
table 2 page 30 most are held pursuant
to leases from the federal government
through the bureau of land management
and from certain states and private parties
the leases generally have multiyear terms
that may be renewed or extended and
require payment of rentals and royalties in
addition federal and state regulations
require that comprehensive environmental
protection and reclamation standards be
met during the course of mining operations
and upon completion of mining activities
ppm has more than 1100 mw currently
under its ownership or control and of that
ppm has full economic interest in 861 mw
see table 7 page 31 ppm also has
approximately 250 mw under construction
this will bring ppm’s total to more than
1350 mw upon completion of construction
the majority of ppm’s capacity 300 mw
contracted for a period of 25 years and 237
mw of thermal power contracted for a
period of 30 years comes from longterm
agreements while 324 mw comes from
outright ownership of one wind plant and
two thermal plants ppm also owns major
gas storage facilities in alberta canada and
texas for a total of 37 bcf of gas storage
capacity under ownership up from 14 bcf
the prior year
uk businesses
the uk properties consist of generating
stations transmission and distribution
facilities and certain nonoperational
properties in which the company holds
freehold or leasehold interests
scottishpower owns seven power stations in
scotland ﬁve of which are operational and
two in england it also owns three
windfarms in northern ireland four in
scotland and one in the republic of ireland
in addition the company has joint venture
interests in one power station in england
and three windfarms two of which are in
england and one in wales all generation
plant is owned by the group with the
exception of the nonoperational methil
power station which is held on a ground
lease that expires in 2012 and the
windfarms which are generally held on
ground leases of at least 25 years’ duration
see table 8 page 32 for further details of
operational generation assets
at 31 march 2003 the uk transmission
facilities included approximately 4150
circuit km of overhead lines and
underground cable operated at 400 kv 275
kv and 132 kv in addition the distribution
facilities included over 110000 circuit km of
overhead lines and underground cable at
voltages operating from 33 kv to 023 kv
the group holds either permanent rights or
wayleaves which entitle it to run these lines
and cables through private land see table 9
page 32 for further details
scottishpower annual report  accounts 200203

18
business review – description of business
continued as a public limited company “plc”
scottish power plc is subject to the uk
companies acts and is also registered as a
holding company under the us federal
public utility holding company act of
1935 which is administered by the us
federal securities and exchange
commission “sec” hence scottish
power plc paciﬁcorp and other
subsidiaries are subject to regulation
unless speciﬁc subsidiaries or transactions
are otherwise exempt by sec rules or
orders spuk and its subsidiaries are
exempt because spuk is an exempt foreign
utility as deﬁned in the 1935 act whereas
us federal and state regulatory
commissions generally have jurisdiction
over mergers acquisitions and the sale of
utility assets the uk government as a way
to maintain control over scottishpower and
certain of its subsidiaries required the
issuance of a scottishpower “special
share” the special share only affects the
corporate control transactions at the overall
group holding company level and has no
effect on paciﬁcorp
scottishpower’s uk operations are subject
to such eu directives as the uk
government brings into effect speciﬁcally
the eu energy liberalisation directive and
eu prohibitions on anticompetitive
agreements and the abuse of a dominant
position implemented through the
competition act 1998 which came into
effect from 1 march 2000 and also to the
provisions of the utilities act 2000
“utilities act” the utilities act introduced
a legal framework for energy company
licences based on standard ukwide
conditions and taken together with
requirements of the department of trade
and industry “dti” and licence changes
introduced by the regulators deﬁnes the
regulatory framework within which spuk
and its subsidiaries must operate
a summary of the more speciﬁc legislative
and regulatory background to the
operations of the group’s businesses is set
out below
us business regulation
paciﬁcorp is subject to the jurisdiction of
the public utility regulatory authorities of
each of the states in which it conducts
retail electricity operations as to prices
services accounting issuance of securities
and other matters commissioners are
appointed by the individual state’s
governor for varying terms paciﬁcorp is a
“licensee” and a “public utility” as those
terms are used in the federal power act
“fpa” and is therefore subject to
regulation by the federal energy regulatory
commission “ferc” as to accounting
policies and practices certain prices and
other matters
because ppm does not conduct retail
electricity operations it is not subject to the
same state public utility commission
regulation as paciﬁcorp however certain
of its wholesale activities are regulated by
the ferc and the state commissions
impose certain limitations on afﬁliate
transactions in addition ppms texan and
canadian gas storage activities are subject
to regulation by the texas railroad
commission and the alberta energy and
utilities board respectively
multistate process “msp”
paciﬁcorp continues its active involvement
in a collaborative process with stakeholders
in the six states it serves to develop
mutually acceptable solutions to the
problems faced by paciﬁcorp and the states
as a result of the operations of a multistate
utility msp seeks to clarify roles and
responsibilities including cost allocations
for future generation resources to provide
states with the ability independently to
implement state energy policy objectives
and to achieve a permanent consensus on
each state’s responsibility for the costs and
entitlement to the beneﬁts of paciﬁcorp’s
existing assets between april and
december 2002 paciﬁcorp and key parties
from the states it serves or in the case of
california a key monitoring contact
analysed over 50 options which were
narrowed to two possibilities a second
phase of the collaborative process is under
way in which the parties will further assess
the two proposals with the goal of agreeing
a single proposal by the summer of 2003
any proposal resulting from the msp would
be subject to approval by the utility
commissions in utah oregon wyoming
washington idaho and california and may
also require approvals from the ferc and
the sec additional state proceedings to
approve speciﬁc contracts and tariffs would
follow probably during 200304
regional transmission organization
“rto”
on 31 july 2002 the ferc issued a notice
of proposed rulemaking proposing a new
standard market design “smd” for
wholesale electricity markets relating to
open access transmission service and
standard electricity market design the smd
proposed a number of remedies aimed at
removing barriers to efﬁcient competitive
wholesale markets perceived by the ferc 
paciﬁcorp is one of 10 parties involved in an
effort to form an rto named rto west in
response to ferc order 2000 the ten
members of rto west would be avista
corporation british columbia hydro and
power authority bonneville power
administration idaho power company
northwestern energy llc formerly
montana power company nevada power
company paciﬁcorp portland general
electric company puget sound energy inc
and sierra paciﬁc power company creation
of rto west is subject to regulatory
approvals from the ferc and some of the
states served by these members may also
assert jurisdiction over certain matters
relating to the formation of rto west rto
west plans to operate all transmission
facilities needed for bulk power transfers
and to control the majority of the 60000
miles of transmission line owned by the
members on 18 september 2002 the
ferc voted that with some modiﬁcation
and further development of certain details
the rto west proposal satisﬁes the
requirements of the ferc order 2000 it
also recognised the proposal as providing a
basic framework for a smd for the western
us on 28 april 2003 the ferc released a
white paper on its wholesale electricity smd
proposed in july 2002 which reﬂected a
willingness to defer to regional solutions and
not adopt overlyprescriptive rules the
white paper indicates that the ferc will
refocus its forthcoming ﬁnal smd rule
around the formation of rtos and ensure
that those entities have sound market rules
additionally the ferc afﬁrmed that it would
permit phasedin implementation and
sequencing tailored to each region and
allow modiﬁcations that would beneﬁt
customers within each region the ferc has
now instituted an openended public
comment period speciﬁcally inviting
reaction to certain aspects of the paper it is
expected that the ﬁnal order will be delayed
past the initial july 2003 target release date 
scottishpower annual report  accounts 200203

19
business review – description of legislative and regulatory background ferc issues
on 26 april 2001 the ferc imposed a
price mitigation plan limiting prices on spot
market sales in california 24 hours a day
seven days a week on 19 june 2001 the
ferc issued an order that extended the
california price limits to all wholesale spot
market sales in the entire 11state western
region the 19 june 2001 order also
required that all public utility sellers and 
buyers the “party” or “parties” in the
california independent system operators’
“cal iso” markets participate in
settlement discussions to complete the
task of settling past accounts and
structuring the new arrangements for
californias energy future as a result
thereof on 12 july 2001 an administrative
law judge “alj” issued a
recommendation to the ferc based upon
the settlement conference proposing a
methodology to calculate refunds for spot
sales to the cal iso and the california
power exchange “cpx” between 2
october 2000 and 20 june 2001 the
ferc agreed with the aljproposed
methodology on 12 december 2002 a
second alj issued a certiﬁcation of
proposed findings on california refund
liability in which the alj preliminarily
determined that 12 billion was still owed
to suppliers by the cal iso and the cpx
which was calculated by offsetting a 18
billion refund from the 30 billion owed to
suppliers on 26 march 2003 the ferc
staff issued a ﬁnal report on price
manipulation in western markets “staff’s
final report” following issuance of the
staff’s final report the ferc issued an
order on proposed findings on refund
liability adopting many of the alj’s 12
december 2002 proposed findings and
clarifying the method for calculating
refunds for purchases made in the cal iso
and cpx spot markets in its order the
ferc adopted recommendations from the
staff’s final report including a new proxy
for gas prices which could increase the
amount of refunds if any owed by all
parties the ferc expects that refunds will
be distributed by the end of the summer of
2003 paciﬁcorp’s level of exposure to
refunds is dependent upon any ﬁnal order
issued by the ferc in response to the
outcome of these proceedings
the ferc has also established a second
proceeding to consider the possibility of
requiring refunds for wholesale spot market
bilateral sales in the paciﬁc northwest
between 25 december 2000 and 20 june
2001 paciﬁcorps obligation to make
refunds if any will be dependent upon any
ﬁnal order issued by the ferc in response
to the outcome of these proceedings and
cannot be determined at this time
relicensing of hydroelectric projects
paciﬁcorps hydroelectric portfolio
consists of 53 plants with a plant net
capability of 1116 mw about 13 of
paciﬁcorps total generating capacity the
majority of the hydroelectric generating
portfolio is operated under licences from
the ferc granted for periods of 30 to 50
years there is a complex regulatory
process to apply for new licences which
begins ﬁve and a half years before the
expiration of an existing licence and
involves a number of federal and state
agencies as well as other stakeholders
some state and federal agencies have
authority to require certain terms and
conditions to be included in the ferc
licence often existing licences expire prior
to the ferc’s issuing a new licence in
these cases the ferc has historically
issued annual operating licences so that
the project can continue to operate while
alternatives are evaluated the ferc is
expected to continue this practice 
many of paciﬁcorps longterm operating
licences have expired or will expire in the
next few years leaving the plants to operate
under annual licences granted by the ferc
but containing conditions requiring
paciﬁcorp to implement certain protection
mitigation and enhancement measures
primarily to address environmental
concerns relating to ﬁsheries water quality
wildlife recreation land use cultural
resources and erosion it is difﬁcult to
determine the economic impact of these
measures but capital expenditures and
operating costs are expected to increase
and instream ﬂow requirements and other
constraints on operations may result in
lower generating output and reductions in
operational ﬂexibility paciﬁcorp has
entered into settlement agreements with
stakeholders in the licensing processes
regarding measures to be included in the
new licences for the north umpqua bear
river and big fork hydroelectric projects
and has incorporated the terms of these
settlement agreements into the licence
applications to the ferc paciﬁcorp has
also analysed the costs and beneﬁts of
relicensing the condit powerdale and
american fork hydroelectric projects and
as a result entered into a settlement
agreement to remove or decommission
these projects rather than continuing to
pursue new licences
most of the commitments under these
settlement agreements are contingent on
ultimately receiving acceptable licences
from the ferc the costs of the measures
together with the costs for hydroelectric
relicensing are expected to be included in
rates and as such not to have a material
adverse impact on the groups consolidated
results or ﬁnancial position 
regulatory established returns
the regulatory commissions in the various
states where paciﬁcorp operates approve
an appropriate level of cost recovery for
debt preferred equity and common equity
which results in an allowed return on rate
base costs “ror” including an allowed
return on equity “roe” representing the
return on shareholder investment
determination of these returns and the
composition of the investment costs
included in the rate base is made by the
commissions in hearings on general rate
cases rates are then set to allow
paciﬁcorp the opportunity with no
guarantees to meet its expenses recover
its investments and earn the allowed roe
for its shareholders in recent rate cases
the utah oregon and wyoming
commissions have approved rors of 89
86 and 84 and roes of 110 108
and 108 respectively rate cases are
underway in utah oregon wyoming and
california in each case paciﬁcorp is
targeting an roe of 115 commissions in
all states served by paciﬁcorp monitor
paciﬁcorp’s achieved ror for
appropriateness in current market
conditions paciﬁcorp continues to reﬁne
its internal procedures and to work with the
commissions to ensure that all prudently
incurred costs are reﬂected in its rates and
that actual rates achieve allowable roe
levels general rate adjustments reﬂecting
changes in the regulated cost base granted
in 200203 have an annualised value of
approximately 31 million
scottishpower annual report  accounts 200203

20
business review – description of legislative and regulatory background
continued recovery of excess power costs
paciﬁcorp has made progress towards
recovering the deferred power costs
incurred during the period of extreme
volatility and unprecedented high price
levels beginning in the summer of 2000
and extending through the summer of
2001 these costs are being recovered
through rate orders amounting to 1470
million in utah 1310 million plus
ongoing carrying charges in oregon and
250 million in idaho a ﬁnal decision on a
similar request for 159 million in
washington is expected in early june of
2003 in wyoming paciﬁcorp’s request for
deferred power cost recovery was denied
although on 4 april 2003 paciﬁcorp ﬁled
for a rehearing which is expected to move
to a decision following oral arguments on 8
may 2003 and the oregon rate order is the
subject of an appeal by intervening parties
which if successful would require some
refunds under uk generally accepted
accounting principles “gaap” all
paciﬁcorp’s net power costs are charged to
the proﬁt and loss account when incurred
there is therefore a time lag between the
recognition of allowable excess power costs
under uk gaap compared to us gaap
which continues to beneﬁt future uk gaap
reported earnings 
demand side management “dsm”
paciﬁcorp continues to offer its energy
exchange programme in utah oregon
wyoming washington and idaho this
programme is an optional supplemental
service which allows participating
customers an opportunity voluntarily to
reduce electricity usage in exchange for a
payment at times and prices determined
by paciﬁcorp the programme is designed
to help all customers of one mw and
greater to address periods of high
wholesale prices and peaks in demand
when they occur
in utah paciﬁcorp is working on several
programmes including an incentive
programme to reduce summer peak loads
by encouraging installation of either
evaporative cooling or high efﬁciency also
known as unitary air conditioning
equipment which was approved by the
utah public service commission “upsc”
on 24 march 2003 in april and may 2003
paciﬁcorp ﬁled an air conditioning load
control services programme to help
manage the growth of weatherdriven peak
loads and a refrigerator recycling
programme intended to encourage
customers to remove and recycle
secondary refrigerators andor to upgrade
primary refrigerators to more energy
efﬁcient models paciﬁcorp has also ﬁled
for a dsm tariff in utah this tariff would
allow paciﬁcorp to recover dsm
expenditures through a surcharge to
customer bills several technical
conferences have been held with interested
parties and hearings have been scheduled
for midaugust 2003
on 17 march 2003 the idaho public
utilities commission “ipuc” approved an
irrigation load control credit programme
allowing participants to opt for billing
credits in exchange for prescheduled load
control events during the summer
irrigation season of 1 june to 15
september
competition and deregulation
during 200203 paciﬁcorp continued to
operate its electricity distribution and retail
business under state regulation certain
industrial customers in oregon can choose
alternative electricity suppliers however
deregulation of the retail market has not
developed widely and whilst customer
demand for choice in each state may
eventually lead to retail competition in
some form individual state legislatures
have as yet brought forward few speciﬁc
proposals for retail competition in
electricity supply in oregon where senate
bill 1149 “sb1149” required rate
unbundling and the offer of alternatives
only 26 customers representing less than
3 average mw of load elected to take an
alternative plan for calendar year 2003
paciﬁcorp is recovering approximately 24
million of sb1149 implementation costs
over a ﬁveyear period through retail rates
a summary of the outcomes and the most
signiﬁcant further regulatory and legislative
developments in the states concerned is
set out below
utah
on 1 may 2002 the upsc issued an order
approving a stipulation agreement
regarding the recovery of deferred and
nondeferred net power costs in utah the
order allows for the consolidation of a
number of individual issues into an overall
programme under which paciﬁcorp will
recover a total of 147 million of deferred
power costs and commit not to ﬁle a
general rate case that would take effect
prior to 1 january 2004 with certain
exceptions one party has opposed the rate
spread provisions of the stipulation
agreement and ﬁled a petition for review of
the order paciﬁcorp intends to make a
compliance ﬁling in utah that prepares the
way for a general rate case to be ﬁled in
july 2003 the compliance ﬁling will
establish a cap of 125 million on the
increase that will be deﬁned in more detail
when paciﬁcorp ﬁles its revenue
requirement testimony on or before 31 july
2003 as part of this ﬁling paciﬁcorp will
ﬁle its roe testimony and supporting
exhibits hearings are expected to be held
in january and february of 2004 if
approved rate changes would become
effective on 1 january 2004
oregon
on 20 may 2002 the oregon public utility
commission “opuc” approved a one
year 154 million overall rate increase
effective from 1 june 2002 and intended to
cover increases in power costs limited
reconsideration of some 12 million of the
increase was the subject of briefs ﬁled in
midapril 2003 an order is anticipated in
the summer of 2003 on 18 march 2003
paciﬁcorp ﬁled a general rate case to
recover rising costs for insurance pension
funding and healthcare among others if
approved the increase of 579 million or
74 in base rates would take effect from
january 2004
deferred accounting ﬁlings encompassing
power costs that varied from the levels in
oregon rates are the subject of continuing
hearings although partial recovery of the
deferred costs has continued under rate
increases authorised by the opuc for
implementation in february 2001 august
2002 and january 2003 the various
actions and hearings have addressed two
issues whether deferred power costs can
be amortised at 3 or 6 and the total
amount of deferred power costs to be
recovered a stipulation agreement
recognising the 6 amortisation rate was
approved by the opuc in december 2002
appeals against opuc rulings on the
amount of the recovery have been
scottishpower annual report  accounts 200203

21 consolidated into an action in the oregon
court of appeals
wyoming
on 6 march 2003 the wyoming public
service commission granted paciﬁcorp a
general rate increase of 87 million
approximately 28 but denied recovery of
all deferred power costs paciﬁcorp has
ﬁled a request for a rehearing oral
arguments on 8 may 2003 are expected to
lead to a decision on the rehearing in the
near future separately paciﬁcorp
anticipates ﬁling a general rate case in
wyoming in late may 2003
washington
on 18 october 2002 paciﬁcorp ﬁled with
the washington utilities  transportation
commission to defer and recover 175
million of excess net power costs the
deferral and recovery request was
subsequently reduced to 159 million
based on power cost data through
december 2002
idaho
on 7 january 2002 paciﬁcorp ﬁled with
the idaho public utilities commission to
recover deferred power costs the matter
was resolved in october 2002 by a 25
million package of twoyear rate surcharges
and the retirement of merger credits
california
in june 2002 the california public utilities
commission granted an interim rate
increase amounting to approximately 47
million or 88 annually subject to refund
pending the outcome of the general rate
case submitted in december 2001 the
discovery process between paciﬁcorp and
the ofﬁce of ratepayer advocates is
ongoing with evidentiary hearings
scheduled for late june 2003
regulation of the electricity and gas
industries in the uk
the uk electricity and gas industries are
regulated under the provisions of the
electricity act the gas acts and the utilities
act the electricity and gas acts provided
for the privatisation and restructuring of
the industries in the late 1980s and the
1990s including the introduction of price
regulation for electricity transmission and
distribution and gas transportation and of
competition in electricity generation gas
storage and the supply of both gas and
electricity the acts established the
licensing of industry participants and
created regulatory bodies for each of the
electricity and gas industries in 2000 the
utilities act enabled the electricity and gas
regulators to be merged as the authority
established new independent consumer
councils and provided powers for
government ministers to give statutory
guidance on social and environmental
issues and to set energy efﬁciency targets
and renewables obligations
the utilities act transferred the functions of
the previous electricity and gas industry
regulators to the authority and provided for
the appointment of a chairman and other
members of the authority by the secretary
of state for trade and industry “secretary
of state” the chairman of the authority
holds ofﬁce for renewable periods of ﬁve
years and is the managing director of
ofgem which provides administrative
support to the authority under the utilities
act the principal objective of the secretary
of state and the authority is to protect the
interest of customers wherever appropriate
by promoting effective competition in
carrying out those functions they are
required to have regard to the need to
secure that all reasonable demands for
electricity and gas are met the need to
ensure that licence holders are able to
ﬁnance their functions the interests of
individuals who are disabled or chronically
sick of pensionable age with low incomes
or residing in rural areas the authority
exercises concurrently with the director
general of fair trading certain functions
relating to monopoly situations under the
fair trading act 1973 and to anti
competitive conduct under the competition
act 1980 and the competition act 1998
the authority also manages uk compliance
with the european community
liberalisation directive which is concerned
to introduce competition in generation and
supply and nondiscriminatory access to gas
transportation and electricity transmission
and distribution across the eu
the licensing regime
the authority is responsible for granting
new licences or licence extensions for each
of the following separate activities
electricity generation – the production of
electricity at power stations hydroelectric
plants windfarms and some industrial
plants through its whollyowned
subsidiary scottishpower generation
limited the group is licensed to operate
some 5400 mw of uk generating capacity
and by contracting in the wholesale
market has access to capacity operated by
other licensed generators
electricity transmission – the bulk transfer
of electricity across a high voltage network
of overhead lines underground cables and
associated equipment typically operating at
or above 132 kv through its whollyowned
subsidiary sp transmission limited the
group owns and is licensed to operate the
transmission system in central and
southern scotland scottishpower’s
transmission system is connected to that of
scottish  southern in the north of
scotland and is linked to the national grid
in england  wales and to the northern
ireland transmission system by
interconnectors which enable the export
and import of electricity within the uk the
authority is currently conducting a review
of betta and a draft bill has been
published to facilitate revised
arrangements in respect of the
interconnector between scotland and
england these are now expected to be in
place by 2005
electricity distribution – the transfer of
electricity from the high voltage
transmission system and its delivery to
customers across a network of overhead
lines and underground cables operating at
voltages ranging from 33 kv to 023 kv the
utilities act required separate licensing of
the 14 regional distribution businesses
introduced under electricity privatisation
each public electricity distributor “ped”
licensee is required among other duties to
develop and maintain an efﬁcient co
ordinated and economical system of
electricity distribution and to offer terms
for connection to and use of its
distribution system on a non
discriminatory basis in order to ensure
competition in the supply and generation
of electricity through its whollyowned
subsidiaries sp distribution limited and
sp manweb plc the group is licensed to
distribute electricity within its two
distribution services areas for all suppliers
scottishpower annual report  accounts 200203

22
business review – description of legislative and regulatory background
continued whose customers are within the areas
charges for distribution are made to the
various suppliers as appropriate the
authority has granted a derogation which
will lapse only in certain limited
circumstances allowing the distribution
businesses in the scottishpower and
manweb ped licence areas to be managed
and operated jointly
gas transportation and storage – the
onshore transportation system most of
which is owned and operated by transco
the transportation arm of national grid
transco plc and the rest by other gas
transporters conveys gas from the beach
terminals to consumers and is
interconnected with the gas transportation
systems of continental europe northern
ireland and the republic of ireland storage
capacities are largely used to balance
supply and demand over time major
facilities are used to balance seasonal
variations in demand while diurnal storage
capacities provide ﬂexibility in meeting
changing gas demand on a daily basis
competition in storage has been
introduced progressively since 1998
through the auction of major storage
capacity owned by transco and the
provision of new capacity by independent
operators including scottishpower
through its whollyowned subsidiary sp
gas limited the group is licensed as a gas
transporter
gas shipping – gas shippers contract with
gas transporters to have gas transported
between the beach terminal and the point
of supply gas shippers can also access
storage facilities the group is licensed as a
gas shipper
supply of gas and electricity –the bulk
purchase of gas and electricity by suppliers
and its sale to customers with the
associated customer service activities
including customer registration meter
reading sales and marketing billing and
revenue collection large industrial and
commercial customers have been able to
choose their energy suppliers for a number
of years and the residential market was
opened to competition progressively
commencing in april 1996 with residual
controls on residential electricity prices
ending in march 2002 any electricity
supplier wishing to supply electricity to
domestic customers must obtain
authorisation from the authority and be
subject to additional domestic supply
obligations in its licence including having
its codes of practice statements of intent
about how the supplier will interact with
customers approved by the authority
broadly comparable arrangements allow
british gas trading to supply mains gas to
any connected customer in competition
with licensed gas suppliers customers may
continue to take supplies from the pre
privatisation monopoly supplier for the
area or may choose an alternative licensed
supplier once customers have changed a
gas or electricity supplier they are able to
change supplier again subject to the
contractual terms offered by licensed
suppliers and approved by the authority
through its wholly owned subsidiary
scottishpower energy retail limited the
group is licensed as a gas supplier and an
electricity supplier
modiﬁcation of licences – the authority is
responsible for monitoring compliance with
the conditions of licences and where
necessary enforcing them through
procedures laid down in the electricity and
gas acts under these acts as amended by
the utilities act licences consist of
standard licence conditions which apply to
all classes of licences and special
conditions particular to that licence the
authority may modify standard licence
conditions collectively through making
proposals to all relevant licence holders if
some licence holders object the
modiﬁcation may be carried out only if the
number of objectors is below a speciﬁed
minority the authority may modify a
special licence condition with the
agreement of the licence holder after due
notice public consultation and
consideration of any representations or
objections in the absence of agreement for
a special licence condition or if objections
are above the speciﬁed minority threshold
for a standard licence condition the only
means by which the authority can secure a
modiﬁcation is following a modiﬁcation
reference to the competition commission
and in the circumstances set out below a
modiﬁcation reference requires the
competition commission to investigate
having regard to the matters in relation to
which duties are imposed on the secretary
of state and the authority and report on
whether matters speciﬁed in the reference
in pursuance of a licence operate or may
be expected to operate against the public
interest and if so whether the adverse
public interest effect of these factors could
be remedied or prevented by modiﬁcation
of the conditions of the licence if the
competition commission so concludes the
authority must then make such
modiﬁcations to the licence as appear to it
requisite for the purpose of remedying or
preventing the adverse effects speciﬁed in
the report after giving due notice and
consideration to any representations and
objections the secretary of state has the
power to veto any modiﬁcation
modiﬁcations to licence conditions may
also be made in consequence of a
monopoly or merger reference under the
fair trading act 1973 or a reference under
the competition act scottishpower’s
acquisition of manweb in 1995 and of
southern water in 1996 and its merger
with paciﬁcorp in 1999 all involved
scottishpower’s giving of undertakings to
the secretary of state to agree to
modiﬁcations to the licences under which
the group operates in the uk broadly
these modiﬁcations were designed to ring
fence various uk regulated businesses to
require that the group had sufﬁcient
management and ﬁnancial resources to
fulﬁl its uk obligations and to ensure that
uk regulators would continue to have
access to the information needed to carry
out their duties
term and revocation of licences – licences
under the electricity act as modiﬁed by the
utilities act may be terminated by not less
than 25 years’ notice given by the
secretary of state and may be revoked in
certain circumstances speciﬁed in the
licence these include the insolvency of the
licensee the licensee’s failure to comply
with an enforcement order made by the
authority and the licensee’s failure to carry
on the activities authorised by the licence
price controls
it is recognised that the development of
competitive markets is not appropriate in
some areas the transmission and
distribution of electricity and the operation
of the gas transportation system in these
areas regulatory controls are deemed
necessary to protect customers in
scottishpower annual report  accounts 200203

23 monopoly markets by determining
inﬂationlimited price caps and to
encourage efﬁciency the group’s uk
transmission and distribution businesses
are subject to price controls or revenue
controls in the case of the transmission
business which restrict the average
amount or total amount charged for a
bundle of services the price caps are
expressed in terms of an “rpi – x”
constraint on charges where “rpi”
represents the annual percentage change
in the uk’s retail price index and x may be
any number determined by the authority
the x factor is used to reﬂect expected
efﬁciency gains and investment
requirements for example where rpi is
running at 3 and x is 2 a company
would be able to increase the average
charge for a bundle of services by 1 per
annum the authority from time to time
reviews the price cap formulae through
participation in and the submission of
evidence to these price control reviews
and where necessary through the
competition commission modiﬁcation
process described above companies have
the opportunity to comment on and seek to
inﬂuence the ﬁnal outcome of any price
control review
transmission price control – the revised
transmission price control for
scottishpower took effect for the ﬁve years
from 1 april 2000 the betta review which
proposes a great britainwide wholesale
market for electricity and revised
arrangements in respect of the
interconnector between scotland and
england requires primary legislation the
draft bill published in january 2003 is
expected to facilitate implementation by
2005
distribution price control – the maximum
distribution revenue is calculated from a
formula that is based on customer
numbers as well as units distributed
distribution price controls for the
scottishpower and manweb areas which
took effect for the ﬁve years from 1 april
2000 have been subject to a review by the
authority aimed at ensuring that revenues
and outputs of the business are more
closely matched and meet customers’
expectations this has involved an
examination of the appropriate information
and incentives and has led to a reﬁnement
of the price controls to place less emphasis
on periodic reviews and more emphasis on
continuous performance following
completion of the review in april 2002
companies’ future revenues can be
adjusted by up to 2 to reﬂect better or
worse than target performance and ofgem
will seek to promote the visibility of asset
risk management as a core competence in
the price review process
environmental regulation
throughout its operations scottishpower
will meet or better relevant legislative and
regulatory environmental requirements and
codes of practice scottishpower will
publish its 200203 environmental and
social impact report in july 2003 copies
will be available on request from the
company secretary
us environmental regulation
federal state and local authorities regulate
many of paciﬁcorp’s activities pursuant to
laws designed to restore protect and
enhance the quality of the environment
these laws have increased the cost of
providing electricity service and give rise to
identiﬁable contingencies principally in
respect of clean air act matters which are
subjects of discussions with the us
environmental protection agency “epa”
and state regulatory authorities paciﬁcorp
expects that future costs relating to these
matters may be signiﬁcant and consist
primarily of capital expenditure paciﬁcorp
expects these costs to be included in rates
and as such not to have a material
adverse impact on the group’s
consolidated results or ﬁnancial position
air quality
paciﬁcorp’s fossil fuelﬁred electricity
generation plants are subject to regulation
under federal state and local requirements
emission controls lowsulphur coal
environmentally conscious plant operating
practices and continuous emissions
monitoring are all used to enable coal
burning plants to comply with emission
and opacity limits visibility and other air
quality requirements the epa has initiated
a regional haze programme intended to
improve visibility at speciﬁc federally
protected areas some of which are located
near paciﬁcorp plants paciﬁcorp is
anticipating climate change challenges with
additions of renewable generation
conservation and thermal resources as
outlined in the irp co
2
emissions risk has
been anticipated in paciﬁcorp’s irp
through the use of a “carbon adder”
paciﬁcorp also supports development of
trading and other market mechanisms as
well as offset strategies where feasible to
reduce future compliance costs to
customers the us congress is currently
considering several proposed bills that
would create enforceable limits on
electricity plant emission of co
2
 sulphur
dioxide so
2
 oxides of nitrogen nox and
mercury it is not presently possible to
determine with certainty the level of capital
expenditure related to air quality and co
2
emissions it is believed these amounts
could be signiﬁcant but will be spread over
a number of years paciﬁcorp also expects
that the impact will be mitigated by
recovery through regulatory ratemaking
in 1999 the epa commenced enforcement
actions alleging violations of new source
review requirements by the owners of
certain coalﬁred generating plants in the
eastern and midwestern us paciﬁcorp is
not part of those actions however in
december 2000 the epa notiﬁed
paciﬁcorp that it is investigating
paciﬁcorp’s carbon dave johnston
huntington and naughton coalﬁred plants
and required it to provide information
about their operation maintenance
emissions utilisation and other aspects of
these plants in early may 2003 the epa
notiﬁed paciﬁcorp that it is investigating
similar issues at the bridger hunter and
wyodak plants paciﬁcorp is cooperating
with these investigations by providing
requested information to the epa no legal
proceeding has been commenced
endangered species
protection of the habitat of threatened and
endangered species makes it difﬁcult and
more costly to perform some of the core
activities of paciﬁcorp including the siting
construction maintenance and operation of
new and existing transmission and
distribution facilities as well as hydro
thermal and wind generation plants in
addition endangered species issues impact
the relicensing of existing hydroelectric
generating projects generally raising the
price paciﬁcorp must pay to purchase
scottishpower annual report  accounts 200203

24
business review – description of legislative and regulatory background
continued wholesale electricity from hydroelectric
facilities owned by others and increasing
the costs of operating paciﬁcorp’s own
hydroelectric resources 
environmental cleanups
under the federal comprehensive
environmental response compensation and
liability act and similar state statutes entities
that accidentally or intentionally disposed of
or arranged for the disposal of hazardous
materials may be liable for cleanup of the
contaminated property in addition the
current or former owners or operators of
affected sites also may be liable paciﬁcorp
has been identiﬁed as a potentially
responsible party in connection with a
number of cleanup sites because of current
or past ownership or operation of the
property or because paciﬁcorp sent
hazardous waste or other hazardous
materials to the property in the past
paciﬁcorp has completed several cleanup
actions and is actively participating in
investigations and remedial actions at other
sites the costs associated with those actions
are not expected to be material to the group’s
consolidated results or ﬁnancial position
mining
the federal surface mining and
reclamation act of 1977 and similar state
statutes establish operational reclamation
and closure standards that must be met
during the operation and upon completion
of mining activities these obligations
stipulate that mine property be restored
consistent with speciﬁc standards and the
approved reclamation plan signiﬁcant
expenditures are expected to be required
as individual paciﬁcorp mining operations
are closed and reclamation occurs the
costs associated with reclamation are
subject to the regulatory process
paciﬁcorp expects to be allowed to recover
these costs
water quality
the federal clean water act and individual
state clean water regulations require a
permit for the discharge of wastewater
including storm water runoff from the
electricity plants and coal storage areas
into surface waters paciﬁcorp believes that
it has management systems in place to
monitor performance identify problems
and take action to assure compliance with
permit requirements
uk environmental regulation
the group’s uk businesses are subject to
numerous regulatory requirements with
respect to the protection of the
environment including environmental laws
which regulate the construction operation
and decommissioning of power stations
pursuant to legislation implementing
environmental directives adopted by the eu
and protocols agreed under the auspices of
international bodies such as the united
nations economic commission for europe
“unece” the group believes that it has
taken and continues to take measures to
comply with applicable laws and
regulations for the protection of the
environment applicable regulations and
requirements pertaining to the
environment change frequently however
with the result that continued compliance
may require material investments or that
the group’s costs and results of operation
are less favourable than anticipated
electricity generation transmission
distribution and supply
the electricity act obligates the secretary
of state to take into account the effect of
electricity generation transmission
distribution and supply activities upon the
physical environment in approving
applications for the construction of
generating facilities and the location of
overhead power lines the electricity act
requires the group to take into account the
conservation of natural features of beauty
and other items of particular interest and
in terms of the environmental impact
assessment regulations to carry out an
environmental assessment when it intends
to construct signiﬁcant overhead
transmission systems or power stations of
greater capacity than 50 mw the group
also prepares formal statements on the
‘preservation of amenity and fisheries’ in
line with the requirements of the electricity
act
the utilities act provided for environmental
guidance to be given by the secretary of
state to the energy regulator ofgem and
for regulations to be drawn up which
require licensed electricity suppliers to
secure a certain percentage of their
supplies from renewable energy sources
compliance being demonstrated by
tradable ‘renewables obligation
certiﬁcates’ the current objective is that
10 of uk energy should come from
renewable sources by 2010 and a target of
20 by 2020 was included in the february
2003 government white paper on energy
scottishpower continues to develop its
windfarm business and expects to meet the
company target of 10 generation from
renewables by 2010 the utilities act also
provided for energy efﬁciency targets to be
set for licensed suppliers to be
implemented by an ‘energy efﬁciency
commitment’ and the emphasis remained
clearly on energy saving in the energy
white paper
the environmental protection act of 1990
“epa 1990” requires that potentially
polluting activities such as the operation of
combustion processes which includes
power plant requires prior authorisation
the act also provides for the licensing of
waste management and imposes certain
obligations and duties on companies which
produce handle and dispose of waste
waste generated as a result of the group’s
electricity activities is managed to ensure
compliance with legislation and waste
minimisation is undertaken where possible
generation activities
the principal emissions from fossilfuelled
electricity generation are so
2
 nox co
2
and
particulate matter such as dust with the
main waste being ash namely pulverised
fuel ash and furnace bottom ash the
primary focus of current environmental
legislation is to reduce emissions of so
2

nox and particulates the ﬁrst two of which
contribute to acid rain a number of other
power station emissions and discharges are
subject to environmental regulation
epa 1990 is the primary uk statute
governing the environmental regulation of
power stations in april 1991 it introduced
a system of integrated pollution control
“ipc” for large scale industrial processes
including power stations now enforced
with respect to emissions to atmosphere in
england  wales by the environment
agency “ea” and in scotland by the
scottish environment protection agency
“sepa” each of scottishpower’s power
stations is required to have its own ipc
authorisation issued by the ea or sepa
regulating emissions of certain pollutants
seeking to minimise pollution of the
scottishpower annual report  accounts 200203

25 environment and containing an
improvement programme each ipc
authorisation requires that a power station
uses the best available techniques not
entailing excessive cost “batneec” to
prevent the emissions described above or
to the extent this is not practicable to
minimise and render harmless any such
emissions scottishpower’s ipc
authorisations do not have an expiry date
but the ea or sepa is required to review the
conditions contained within them at least
once every four years and may impose new
conditions to prevent or reduce emissions
of pollutants subject to the application of
batneec
the eu has agreed a directive on
integrated pollution prevention and
control which introduces a system of
licensing for industrial processes such as
power stations this directive is being
implemented via the pollution prevention
and control regulations “ppc
regulations” which will bring
modiﬁcations to the ipc regime into effect
on a staged basis the eu directive will
eventually require that all emission and
pollution control measures are placed onto
a “best available techniques” basis to
control impact on the environment
the eu has adopted a framework directive
on ambient air quality assessment and
management and under the auspices of
unece protocols regarding reductions in
the emissions of so
2
and nox have been
agreed these are currently implemented in
the eu by means of the large combustion
plants directive “lcpd” the eu is
currently ﬁnalising a “ceilings directive”
which will implement the so
2
and nox
targets agreed in the unece gothenburg
protocol in the uk uncertainty remains
surrounding implementation of the lcpd
and the eu has now provided guidelines on
outstanding issues including whether
compliance will be by emission limit values
or will continue to be implemented in the
uk by means of the national air quality
strategy published in 1997 and reviewed
in 2000 the group has identiﬁed options
that given the appropriate commercial
conditions would enable it to continue the
environmental improvements required by
potential future limits arising from this
review without materially constraining
operational and commercial ﬂexibility in
particular gasreburn technology as used
at longannet offers greater potential to
reduce emissions than other technology in
use elsewhere in the uk
contaminated sites
while the nature of developments in
environmental regulation and control
cannot be predicted the group anticipates
that the direction of future changes will be
towards tightening controls in view of the
age and history of many sites owned by the
group the group may incur liability in
respect of sites which are found to be
contaminated together with increased
costs of managing or cleaning up such
sites site values could be affected and
potential liability and cleanup costs may
make disposal of potentially contaminated
sites more difﬁcult the contaminated land
regulations which implement provisions of
the environment act 1995 “ea1995”
require local authorities to identify sites
where signiﬁcant harm is being caused and
to take appropriate steps in order for harm
to be demonstrated it must be shown that
a source of pollution a receptor and a
pathway are present harm may be
eliminated by cleanup or by breaking the
source to receptor pathway cleanup is
only required to ‘ﬁt for subsequent use’
standards so that environmental
compliance is consistent with the intended
use of the site
other proposals which may impose strict
liability for environmental damage are also
under consideration by the eu and a
directive may be brought forward
scottishpower is not currently aware of any
liability which it may have under ea1995 or
proposed eu directives which will have a
materially adverse impact on its operations
employment regulation
numerous laws and related codes of
practice – international european uk and
us – ensure that companies offer equal
opportunities to all individuals regardless
of gender race disability and age
similarly both the us and the uk have
extensive legislation covering health and
safety at work  scottishpower has well
deﬁned policies in place throughout its
businesses to ensure that there are equal
opportunities in employment these
policies cover a range of speciﬁc issues
such as adoption caring and development
breaks disability disciplinary and
grievance procedures equal pay
harassment maternity and paternity
fertility treatment race and sex
discrimination ill health and stress 
a more extensive description of how the
businesses discharge their wider
responsibilities to protect the welfare
health and safety of the public and their
employees can be found in the
scottishpower environmental and social
impact report and the scottishpower
workplace performance report both will
be available on the scottishpower website
a brief overview of the two most extensively
regulated aspects of employee relations
follows
equal opportunity
us businesses
in the us equal employment opportunities
are provided without regard to race colour
sex religion creed age sexual orientation
national origin and physical or mental
disability the group provides equal
opportunity for qualiﬁed applicants and
employees and maintains a programme of
afﬁrmative action pursuant to legal
requirements in order effectively to employ
minorities and women and to encourage
workforce diversity the programme also
covers disabled persons and veterans
afﬁrmative action programmes establish
speciﬁc resultsoriented procedures
determine whether effective utilisation of
minorities and women is achieved
establish numerical goals for the hiring and
promotion of minorities and women
incorporate equal employment principles
in supervisory training embed diversity
objectives in performance reviews and
promote effective community outreach
efforts for women and minority applicants
during 200203 the washington state
family medical leave act regulation was
revised and both washington and oregon
states increased their minimum wage the
jobs for veterans act updates previous
legislation and the new regulations will be
published in december 2003 paciﬁcorp
reported data will comply with new
regulations for 2004 reporting and in
response paciﬁcorp will update the
information it provides on the vets100
report
scottishpower annual report  accounts 200203

26
business review – description of legislative and regulatory background
continued uk businesses
the uk businesses work with both outside
organisations and an internal equality
forum to consider policies for racial
equality family issues disabled people and
other key areas scottishpower is afﬁliated
with a number of organisations including
the equal opportunities commission
employer’s forum on age employer’s
forum on disability commission for racial
equality and parents at work internal
human resources staffs work with these
organisations to ﬁnd ways to incorporate
their expertise into group and business unit
policies 
the employment act 2002 brought in
requirements for ﬂexible working adoption
maternity and paternity leave tribunal
reform and trade union learning
representatives the uk businesses are in
the process of reviewing and updating
policies on these issues to ensure they
meet any new requirements they have
also issued guidelines reviewed procedures
and carried out staff training to meet the
requirements of the key areas of focus
including equal access data protection and
working time regulations and are working
to harmonise terms and conditions relating
to maternity and paternity leave working
time and family policies 
health and safety
us businesses
the us businesses have well developed
annual safety and health operational plans
with monthly reporting of safety
performance against key performance
indicators which set accident metrics for
continuing improvement yearonyear all
safety rules and policies in place across the
businesses are subject to periodic review
and update professional safety and health
departments are staffed in paciﬁcorp’s
power delivery generation and mining
businesses with an additional corporate
safety department providing policy input
and senior management support for both
employee safety and health and for public
safety the group’s us health and safety
committee provides executive oversight
and leadership in paciﬁcorp and ppm is
comprised of senior executives and meets
on a regular basis major initiatives are
under way in paciﬁcorp’s power delivery
generation and mining business units and
in ppm to reduce and prevent accidents 
in the us health and safety in mining
operations is regulated by the mine safety
and health administration “msha”
electricity utility operations are regulated
by the occupational safety and health
administration “osha” and the gas
storage business is regulated by both
osha and the ofﬁce of pipeline safety as
these apply paciﬁcorp and ppm have
safety policies and procedures in place to
comply with mhsa osha and the ofﬁce of
pipeline safety regulatory requirements
safety management systems similar to the
criteria to qualify for osha’s voluntary
protection program are also being
implemented in many of the businesses  
the us businesses participate with other
industry stakeholders in the regulatory
process on signiﬁcant osha and msha
regulatory proposals affecting the utility
and mining industries
uk businesses
the uk businesses have implemented
health and safety executive guidance on
successful health and safety management
hsg 65 and where appropriate have
adopted the royal society for the
prevention of accidents’ quality safety
audit system to drive continuous
improvement in safety performance
occupational health provision in the uk
businesses includes compliance
rehabilitation and health promotion
monitored and audited by inhouse
medical staff advice on health risk
management and early intervention has
contributed to a reduction in sickness
absence managers are encouraged to deal
effectively with health issues in the
workplace and employees are encouraged
to make lifestyle decisions that maintain
and improve their health  
in the uk the reporting of injuries
diseases and dangerous occurrences
regulations set out the requirements for
reporting of all workrelated accidents as
uk regulators and enforcement authorities
increasingly seek to raise the priority and
importance that companies give to health
and safety issues they are likely to take
action for any noncompliance
recent changes in uk health and safety
legislation include asbestos legislation
electrical safety and quality regulations
new directives covering vibration noise and
control of substances hazardous to health
all events that have scope for damage to
plant or people are investigated the major
ones being reviewed by investigating
panels normally chaired by a member of
the senior management team the results
of these investigations are communicated
and where applicable recommendations
are completed there is also increasing
focus on the issue of occupational road
risk to ensure that safe driving at work and
work on the road is addressed as part of
mainstream health and safety
management and enforcement with
publication of new health and safety
executive guidance in 2002 road risk
policies have been introduced within the
uk generation strategic transactions and
energy management business units
employees have been offered defensive
driving training and a monthly well aware
campaign on driving was held to raise the
proﬁle and employees’ understanding of
this important issue 
business risks
operating risk
operating risk is the risk that assets and
mechanical systems as well as business
processes and procedures might not
perform as expected with the result that
the group may be unable to meet a portion
of its obligations without resorting to an
unanticipated market transaction
operating risk is primarily mitigated
through a combination of sound
maintenance practices prudent and safe
operational processes and insurance
products such as business interruption
insurance 
security risk
the emergence of terrorism threats both
domestic and foreign is a risk to the entire
utility industry including scottishpower
potential disruptions to operations or
destruction of facilities from terrorism are
not readily determinable the group has
identiﬁed critical assets and developed
several levels of security to meet the
changed environment a project is
underway in the us to implement a
security plan starting with the most critical
assets to mitigate terrorism risks and to
prepare contingency plans in case the
group’s facilities are targeted additionally
scottishpower annual report  accounts 200203

27 in the us the ferc is promulgating
standards to which the group’s us
businesses will be subject
in the uk there is an established liaison
with the security services and police to
ensure that our critical assets are protected
against potential threat of terrorism
pension risk
as a result of the decline in the equity
markets and low interest rates the group
anticipates that pension expense and cash
contributions into the pension schemes will
increase in the near future the investment
risk is being addressed as part of the
pensions review being undertaken by both
the group and its pension scheme trustees
by focusing on the asset allocation of the
schemes
regulatory risk
in the us the group is subject to the
jurisdiction of federal and state regulatory
authorities the ferc establishes tariffs
under which paciﬁcorp provides wheeling
services to the wholesale market and the
retail market for states allowing retail
competition establishes both costbased
and marketbased tariffs under which
paciﬁcorp sells power at wholesale and has
licensing authority over most of
paciﬁcorp’s hydroelectric generation
facilities the utility regulatory commissions
in each state independently determine the
rates paciﬁcorp may charge its retail
customers in that state each state’s rate
setting process is based upon that
commission’s acceptance of an allocated
share of total paciﬁcorp costs as its
“responsibility” when different states
adopt different methods to address this
“interjurisdictional cost allocation” issue
some costs may not be incorporated into
any rates in any state rate making is done
on the basis of “normalised” costs so if in
a speciﬁc year realised costs are higher
than normal rates will not be high enough
to cover those costs likewise if in a given
year costs are lower than normal or
revenues are higher paciﬁcorp retains the
resulting higherthannormal proﬁt each
commission sets rates based on a “test
year” of its choosing in states that use a
historical test year rate adjustments can
follow cost increases or decreases by up to
two years regulatory lag results in a delay
in recovery of costs currently incurred but
not in rates and also imposes a timevalue
ofmoney burden on paciﬁcorp further
each commission decides what levels of
expense and investment are “necessary
reasonable and prudent” in providing
service in the event that a commission
decides that part of paciﬁcorp’s costs do
not meet this standard such costs will be
“disallowed” and not recovered in rates for
these reasons the rates authorised by the
regulators may be less than the costs to
paciﬁcorp to provide electricity service to
its customers in a given period
nearly all of paciﬁcorps hydroelectric
projects are in some stage of the ferc
relicensing under the fpa the relicensing
process is a political and public regulatory
process that involves sensitive resource
issues paciﬁcorp is unable to predict the
requirements that may be imposed during
the relicensing process the economic
impact of those requirements whether new
licences will ultimately be issued or
whether paciﬁcorp will be willing to meet
the relicensing requirements to continue
operating its hydroelectric projects
federal state and local authorities regulate
many of paciﬁcorps activities pursuant to
laws designed to restore protect and
enhance the quality of the environment
paciﬁcorp is unable to predict what
material impact if any future changes in
environmental laws and regulations may
have on the groups consolidated results or
ﬁnancial position
in the uk the electricity and gas industries
are regulated primarily through powers
assigned under the utilities act 2000 to
the authority which licenses industry
participants enforces licence conditions
regulates quality of service and sets pricing
formulae for electricity transmission and
distribution activities in principle it has
wide discretion in the exercise of its
obligation to act to protect the interests of
customers wherever appropriate by
promoting effective competition whilst the
need to ensure that licence holders are
able to ﬁnance their functions is only one of
a number of other factors to which the
authority must have regard however the
authority operates through a process of
extensive consultation and on pre
determined timetables making its activities
relatively predictable regulations designed
to restore protect and enhance the quality
of the environment are similarly introduced
through a process of intensive – and
generally euwide – consultation with the
industry and other parties nonetheless
there is a general tightening of
environmental regulation and it must be
recognised that the future impact of the
costs of such requirements cannot be
forecast with precision
political risk
in the us paciﬁcorp and ppm conduct
business in conformance with a multitude
of federal and state laws the us congress
at present is considering signiﬁcant
changes in energy air quality and tax
policy energy legislation recently passed
by the us house of representatives would
make some changes in federal law affecting
paciﬁcorp and ppm the proposed
changes affect the hydroelectric licensing
process under the fpa and extension of the
renewable energy production tax credit
which would be likely to beneﬁt paciﬁcorps
efforts to develop acquire and maintain a
lowcost generation portfolio and ppm’s
efforts to continue developing its renewable
energy portfolio changes to the clean air
act contemplated by the proposed clear
skies act are being monitored closely in
that they may impact requirements for
several emissions from fossilfuelled
generation plants
the laws of the states in which paciﬁcorp
operates affect paciﬁcorps generation
transmission and distribution business all
but two of the legislatures monitored by
paciﬁcorp have concluded or are close to
concluding their business for their
legislative year paciﬁcorp is not aware of
any new laws positively or negatively
affecting paciﬁcorp in any signiﬁcant
manner based on a review of bills passed
by the washington and idaho legislatures
during their just completed legislative
sessions wyoming enacted an exemption
to the state sales tax for renewable energy
equipment which may make development
of wind energy resources in the state more
economically viable wyoming also passed
legislation revamping the consumer
advocate staff role in commission
proceedings utah enacted legislation
authorising the upsc to use a forward
looking test year of up to 20 months in
setting rates this mechanism if properly
scottishpower annual report  accounts 200203

28
business review – description of legislative and regulatory background
continued implemented should enable the upsc to
set consistent rates that more accurately
reﬂect costs during the actual rate period
california is expected to consider
legislation repealing or reforming many
elements of its 1996 restructuring law
in the uk energy policy has been set out in
a government white paper published in
february 2003 which emphasises a
continuing intention to make maximum use
of marketbased mechanisms whilst
seeking to reduce the use of carbon boost
energysaving and maintain efforts to
mitigate the impact of fuel costs on lower
income households there is particular
emphasis on the use of renewable energy
sources and developing discussion of the
network enhancements likely to be
required for the increased use of both
renewables and embedded generation this
policy framework offers opportunities for
the group and has shaped a number of
current business plans the white paper
has received broad endorsement across the
uk political spectrum and appears to be
largely consistent with eu policy generally
however as the policy outlined extends well
into the future it could be subject to
change and amendment by future
governments
litigation
scottishpower is not aware of any material
pending legal proceedings other than
ordinary routine litigation incidental to the
business of the group to which
scottishpower or any of its subsidiaries is a
party or any such proceedings known to be
contemplated by any governmental
authority
scottishpower annual report  accounts 200203

29 table 1 – summary of p a c i ﬁcorp generating f a c i l i t i e s
n a m e p l a t e plant net
i n s t a l l a t i o n r a t i n g c a p a b i l i t y
l o c a t i o n energy sour c e d a t e s  m w   m w 
h y d roelectric plants
s w i f t c o u g a r wa lewis river 1 9 5 8 2 4 0  0 2 6 3  6
m e r w i n ariel wa lewis river 1 9 3 2  1 9 5 8 1 3 5  0 1 4 4  0
y a l e a m b o y wa lewis river 1 9 5 3 1 3 4  0 1 3 4  0
five north umpqua plants t o ketee falls or n umpqua river 1 9 4 9  1 9 5 6 1 3 3  5 1 36 5
john c boyle keno or klamath river 1 9 5 8 8 0  0 8 4 0
copco nos 1 and 2 plants h o r n b rook ca klamath river 1 9 1 8  1 9 2 5 4 7  0 5 4  5
c l e a r water nos 1 and 2 plants t o ketee falls or c l e a r water river 1 9 5 3 4 1  0 4 1  0
g ra c e g race id bear river 1 9 1 4  1 9 2 3 3 3  0 3 3  0
p rospect no 2 p rospect or rogue river 1 9 2 8 3 2  0 34  0
c u t l e r collingston ut bear river 1 9 2 7 3 0  0 2 9  1
o n e i d a p reston id bear river 1 9 1 5  1 9 2 0 3 0  0 2 8  0
i ron gate h o r n b rook ca klamath river 1 9 6 2 1 8  0 1 9  5
s o d a soda springs id bear river 1 9 2 4 1 4  0 1 4  0
fish cr e e k t o ketee falls or fish cr e e k 1 9 5 2 1 1  0 1 2  0
33 minor hydroelectric plants v a r i o u s v a r i o u s 1 8 9 6  1 9 9 0 8 8  8 8 8  6
subtotal 53 hydroelectric plants 1  0 6 7 3 1  1 15  8
t h e r m a l electric plants
jim bridger rock springs wy c o a l  f i re d 1 9 7 4  1 9 7 9 1  5 4 1  1  1  4 1 3  4 
h u n t i n g t o n huntington ut c o a l  f i re d 1 9 7 4  1 9 7 7 9 9 6  0 8 9 5  0
dave johnston g l e n rock wy c o a l  f i re d 1 9 5 9  1 9 7 2 8 1 6  8 7 6 2  0
n a u g h t o n ke m m e re r wy c o a l  f i re d 1 9 6 3  1 9 7 1 7 0 7  2 7 0 0  0
hunter 1 and 2 castle dale ut c o a l  f i re d 1 9 7 8  1 9 8 0 7 2 7  9  6 6 2  5 
hunter 3 castle dale ut c o a l  f i re d 1 9 8 3 4 9 5  6 4 6 0  0
cholla unit 4 joseph city az c o a l  f i re d 1 9 8 1 4 1 4  0  3 8 0  0 
w y o d a k gillette wy c o a l  f i re d 1 9 7 8 2 8 9  7  2 6 8  0 
c a r b o n castle gate ut c o a l  f i re d 1 9 5 4  1 9 5 7 1 8 8  6 1 7 5  0
c raig 1 and 2 c raig co c o a l  f i re d 1 9 7 9  1 9 8 0 1 7 2  1  1 6 5  0 
colstrip 3 and 4 colstrip mt c o a l  f i re d 1 9 8 4  1 9 8 6 1 5 5  6  1 4 4  0 
hayden 1 and 2 hayden co c o a l  f i re d 1 9 6 5  1 9 7 6 8 1  3  7 8  0 
b l u n d e l l m i l f o rd ut g e o t h e r m a l 1 9 8 4 2 6  1 2 3  0
g a d s b y salt lake city ut g a s  f i re d 1 9 5 1 2 0 0 2 3 9 2  6 3 4 9  0
little mountain ogden ut g a s  f i re d 1 9 7 1 1 6  0 1 4  0
h e r m i s t o n hermiston or g a s  f i re d 1 9 9 6 2 3 7  0  2 3 6  0 
james river camas wa black liquor 1 9 9 6 5 2  2 5 2  0
subtotal 17 thermal electric plants 7  3 0 9  8 6  7 7 6  9
other plants
foote cr e e k arlington wy wind t u r b i n e s 1 9 9 8 3 2  6  3 2  6 
subtotal 1 other plant 3 2  6 3 2  6
total hydro thermal and other generating facilities 71 8  40 9  7 7  9 25  3
n o t e s 
 jointly owned plants amount shown r e p resents p a c i ﬁcorp’s share only
h y d roelectric project locations are stated by locality and river w a t e r s h e d 
table 2 – p a c i ﬁcorp r e c o v e rable coal reserves as at 31 march 2003
r e c o v e rable tons
l o c a t i o n plant served in millions n o t e s
c raig color a d o c ra i g 4 9  1 
emery county utah huntington and hunter 5 4  2 
rock springs wyoming jim bridger 9 3  3 
n o t e s 
1 these coal reserves are leased and mined by trapper mining inc a delaw a re nonstock corporation operated on a cooperative basis in which p a c i ﬁcorp has an
ownership interest of approximately 20
2 these coal reserves are mined by p a c i ﬁcorp subsidiaries
3 these coal reserves are leased and mined by bridger coal company a joint venture between p a c i ﬁc minerals inc a subsidiary of p a c i ﬁcorp and a subsidiary of
idaho power company pa c i ﬁc minerals inc has a twothirds interest in the joint ventur e 
coal reserve estimates are subject to adjustment as a result of the development of additional data new mining technology and changes in regulation and economic
factors affecting the use of such r e s e r v e s 
scottishpower annual report  accounts 200203

30
summary of key operating statistics table 3 – p a c i ﬁcorp electricity gwh energy sales by customer class
electricity sales by class of customer for the years ended 31 march 2003 2002 2001 and 2000 were as follows
2 0 0 3  2 0 0 2  2 0 0 1  2 0 0 0 
g i g a watt hours sold
– re s i d e n t i a l 1 3  2 8 7 1 7 1 3  3 9 5 1 9 1 3  4 5 5 1 8 1 3  0 2 8 1 6
– commerc i a l 1 4  0 0 6 1 8 1 3  8 1 0 1 9 1 3  6 3 4 1 8 1 2  8 2 7 1 6
– industrial 1 9  0 4 8 2 5 1 9  6 1 1 2 7 2 0  6 5 9 2 7 2 0  4 8 8 2 5
– government municipal and other 6 3 1 1 7 1 1 1 7 0 5 1 6 6 3 1
– total retail sales 4 6  9 7 2 6 1 4 7  5 2 7 6 6 4 8  4 5 3 6 4 4 7  0 0 6 5 8
– wholesale sales and market tr a d i n g 3 0 4 8 5 3 9 2 4 2 6 4 3 4 2 7  5 0 2 3 6 3 4  3 2 7 4 2
total gwh sold 7 7 4 5 7 1 0 0 7 1 7 9 1 1 0 0 7 5  9 5 5 1 0 0 8 1  3 3 3 1 0 0
table 4 – p a c i ﬁcorp t ra n s m i s s i o na n d d i s t r i b u t i o n systems key information 200203
p a c i ﬁc powe r utah power t o t a l
f ranchise are a 7 3  6 4 7 sq miles 6 1  5 4 5 sq miles 1 3 5  1 9 2 sq miles
system maximum demand 3  9 6 8m w 4  5 8 1m w 8549 mw
transmission network miles
– overhead 1 4  9 4 9
distribution network miles
– undergr o u n d 5  2 9 9 8  0 0 2 1 3  3 0 1
– overhead 2 6  2 6 0 1 7  5 0 5 4 3  7 6 5
table 5 – total electricity units distributed in p a c i ﬁc power service area g w h 
y e a r r e s i d e n t i a l  c o m m e rc i a l  i n d u s t r i a l  o t h e r  t o t a l
1 9 9 8  9 9 7  9 9 4 3 2 6  9 0 8 2 7 1 0  1 6 6 4 0 1 2 8 1 2 5  1 9 6
1 9 9 9  0 0 7  6 1 2 3 1 6  7 6 6 2 7 1 0  1 6 7 42 1 2 2 – 2 4  6 6 7
2 0 0 0  0 1 7  7 6 8 3 1 7  0 4 1 2 8 1 0  1 6 4 4 0 1 3 0 1 2 5  1 0 3
2 0 0 1  0 2 7  5 3 7 3 1 6  9 3 2 2 9 9  7 4 3 4 0 1 2 9 – 2 4  3 4 1
2 0 0 2  0 3 7  4 5 4 3 1 7  0 8 1 2 9 9  4 78 4 0 9 0 – 2 4  1 03
table 6 – total electricity units distributed in utah power service area g w h 
y e a r r e s i d e n t i a l  c o m m e rc i a l  i n d u s t r i a l  o t h e r  t o t a l
1 9 9 8  9 9 4  9 9 8 2 4 5  3 9 2 2 6 1 0  0 5 6 4 8 5 1 7 2 2 0  9 6 3
1 9 9 9  0 0 5  4 1 6 2 4 6  0 6 1 2 7 1 0 3 2 1 4 6 5 4 1 3 2 2 3 3 9
2 0 0 0  0 1 5  6 8 7 2 4 6  5 9 3 2 8 1 0  4 9 5 4 5 5 7 5 3 2 3  3 5 0
2 0 0 1  0 2 5  8 5 8 2 5 6  8 7 8 30 9  8 6 8 4 3 5 8 2 2 2 3  1 8 6
2 0 0 2  0 3 5  8 3 3 2 6 6  9 25 3 0 9 5 7 0 4 2 5 4 1 2 2 2  8 6 9
table 7 – ppm ge n e rating f a c i l i t i e s
plant net
i n s t a l l a t i o n c a p a b i l i t y
l o c a t i o n energy sour c e d a t e m w
thermal electric plants
klamath cogeneration plant klamath falls or c o m b i n e dc y c l e 2 0 0 1 5 0 6
west valley generating plant west valley city ut n a t u ral gasﬁred – single cycle 2 0 0 2 2 0 0
klamath expansion pro j e c t klamath falls or n a t u ral gasﬁred – simple cycle 2 0 0 2 1 0 0
subtotal 3 thermal electric plants 8 0 6
r e n e wable electric plants
stateline wind energy center o regon w a s h i n g t o n wind gener a t i o n 2 0 0 2 3 0 0
k l o n d i ke wind power plant w a s c o o r wind gener a t i o n 2 0 0 1 2 4
subtotal 2 re n e wable electric plants 3 2 4
total all plants owned or controlled plants 1  1 3 0
scottishpower annual report  accounts 200203

31 summary of key operating statistics
c o n t i n u e d
table 8 – sources of scottishpower owned generating capacity and output in the uk and the republic of ireland as at 31 march 2003
number of maximum 
g e n e rating sets andor net output capacity 
installed capacity c a p a c i t y a va i l a b l e
n o t e s m w m w m w
c o a l
l o n g a n n e t 4 x 600 2  3 0 4
c o c ke n z i e 4 x 300 1  1 5 2
1 3  4 5 6 2  8 8 0
gas t u r b i n e
rye house 1 x 715 7 1 5 7 1 5
b r i g h t o n 2 1 x 414 4 0 0 2 0 0
k n a p t o n 1 x 42 4 2 4 2
pumped stor a g e
c r u a c h a n 4 x 100 4 0 0 4 0 0
conventional hydro
g a l l o way scheme 1 0 9 1 0 6 1 0 6
lanark scheme 1 7 1 7 1 7
w i n d fa r m s
b e i n n an t u i rc 46 x 066 3 0 3 0
b a r n e s m o re 25 x 06 1 5 1 5
hagshaw hill 26 x 06 1 6 1 6
p  l windf a r m 3 103 x 03 3 1 1 5
rigged hill 10 x 05 5 5
c o r ke y 10 x 05 5 5
elliots hill 10 x 05 5 5
coal clough 4 24 x 04 1 0 4
carland cr o s s 4 15 x 04 6 3
dun law 26 x 066 1 7 1 7
h a re hill 20 x 066 1 3 1 3
c h p 1 0 3 1 0 3 1 0 3
t o t a l 5 3 9 2 4  5 9 1
n o t e s 
1 scottish  southern e n e r g y is entitled to a supply of electricity from part of the capacity of scottishpower’s coalﬁred generating stations at longannet and cock e n z i e 
2 brighton power station is owned by south coast power l i m i t e d with scottishpower generation limited and american electric power inc each having a 50 ownership
i n t e re s t 
3 the p  l windfarm is owned by celtpower limited with scottishpower generation limited and tomen power eur o p e bv each having a 50 ownership inter e s t 
4 the windfarms at coal clough and carland cross are owned by a joint venture between scottishpower generation limited western power distribution and
r e n e wable energy systems with scottishpower generation limited having a 45 ownership inter e s t 
table 9 – uk t ra n s m i s s i o na n d d i s t r i b u t i o n systems key information 200203
s c o t t i s h p o w e r m a n w e b t o t a l
s e r v i c ea re a 22950 km
2
12200 km
2
35150 km
2
system maximum demand 4  3 2 4m w 3  1 7 4m w 7  4 9 8m w
transmission network km
u n d e r g ro u n d 2 4 9 – 2 4 9
o v e r h e a d 3  9 1 5 – 3  9 1 5
distribution network km
u n d e r g ro u n d 4 1  1 3 7 2 5  4 4 9 6 6  5 8 6
o v e r h e a d 2 4  4 6 0 2 1  5 3 7 4 5  9 9 7
table 1 0 – total electricity units distributed in the scottishpower service area g w h 
y e a r r e s i d e n t i a l  b u s i n e s s  t o t a l
1 9 9 8  9 9 8  3 4 5 3 7 1 4  0 2 3 6 3 2 2  3 6 8
1 9 9 9  0 0 8  3 8 5 3 8 1 3  9 9 6 6 2 2 2  3 8 1
2 0 0 0  0 1 8505 3 8 14189 6 2 2 2  6 9 4
2 0 0 1  0 2 8  6 9 8 3 9 1 3  8 6 4 6 1 2 2  5 6 2
2 0 0 2  0 3 8  6 4 3 3 9 1 3  6 8 9 6 1 2 2  3 3 2
table 1 1 – total electricity units distributed in the manweb service area g w h 
y e a r r e s i d e n t i a l  b u s i n e s s  t o t a l
1 9 9 8  9 9 5  0 3 7 2 9 1 2  2 8 7 7 1 1 7  3 2 4
1 9 9 9  0 0 5  2 0 4 3 0 1 1  9 7 7 7 0 1 7  1 8 1
2 0 0 0  0 1 5460 3 2 1 1  8 2 6 6 8 1 7  2 8 6
2 0 0 1  0 2 5  3 8 7 3 2 1 1  5 4 0 6 8 1 6  9 2 7
2 0 0 2  0 3 5  5 1 2 3 3 1 1  2 3 3 6 7 1 6  7 4 5
scottishpower annual report  accounts 200203

32 overview of the year to march 2003
group turnover for the year to 31 march
2003 was £5274 million a reduction of
£1040 million on the previous year from
continuing operations group turnover was
lower by £276 million at £5247 million
including adverse translation movements of
£205 million from the weaker us dollar
sales were lower in paciﬁcorp as a result of
reduced wholesale power prices in the
western us although this was partially offset
by revenue growth from our other three
businesses 
paciﬁcorp’s turnover for the year was down
by £481 million to £2499 million mainly as
a result of the lower wholesale prices
experienced for most of the year and a £189
million adverse translation impact of the
weaker us dollar these reductions were
offset in part by higher wholesale volumes
and regulatory rate increases turnover for
infrastructure division increased by £66
million for the year to £314 million this was
mainly due to increased regulated income
from higher sales to third party electricity
suppliers the division also delivered non
regulated revenue growth of £28 million for
the year principally due to increased new
connections from its core utility solutions
joint venture for the uk division turnover
increased in the year by £26 million to
£2148 million this was as a result of higher
sales to retail customers increased
generation agency sales in scotland and
exports to northern ireland which have
offset the impact of low wholesale electricity
prices turnover for ppm for the year
increased by £113 million to £286 million
after a £16 million adverse us dollar
translation impact as the business beneﬁted
from the ﬁrst full year of its longterm power
contracts and the growth of its gas storage
business 
discontinued operations’ turnover in the
year reduced from £791 million to £27
million compared to the prior year
cost of sales of £3227 million were £1184
million lower than last year with £479
million of this movement due to
discontinued operations continuing
operations’ cost of sales decreased by £705
million to £3215 million primarily due to
lower net power costs in paciﬁcorp offset in
part by increased business activity at ppm
transmission and distribution costs of £513
million were in line with the previous year
with lower discontinued operations’ costs
offset by increased costs for continuing
operations due to higher insurance rates
and depreciation principally in paciﬁcorp
and the infrastructure division as a result of
the demerger of thus from the group uk
telephony and related expenses are now
incurred externally contributing to the
increased costs administrative expenses
including goodwill amortisation as shown
in table 12 were £81 million lower than the
previous year which included exceptional
restructuring costs for the uk division of
£19 million administrative expenses
excluding goodwill amortisation and
exceptional items were £52 million lower
scottishpower annual report  accounts 200203

33
financial review
david nish finance director
scottishpower management assesses the underlying performance of its businesses by adjusting
uk generally accepted accounting principles “gaap” statutory results to exclude items it
considers to be nonrecurring or nonoperational in nature in the years presented these items
are goodwill amortisation and exceptional items therefore to provide more meaningful
information scottishpower has focused its discussion of business performance on the results
excluding goodwill amortisation and exceptional items in accordance with recent guidance from
the uk auditing practices board the uk listing authority and the us securities and exchange
commission where nongaap ﬁgures are discussed comparable uk gaap ﬁgures have also been
discussed and reconciled to the nongaap ﬁgures the full statutory results are presented in the
“proﬁt and loss account” and in note 1 “segmental information” on pages 74 to 76 and on page
78 respectively
“our improved operational performance
has contributed to a good set of results”  financial review
continued
than last year with discontinued operations
accounting for £139 million of this
movement continuing operations’
administrative expenses excluding goodwill
amortisation and exceptional items were
£474 million an increase of £87 million
compared to last year this increase was
attributable to higher pension and other
employee related costs throughout the
group higher depreciation charges and one
off gains in the previous year in paciﬁcorp
and increased energy efﬁciency and
customer capture costs in the uk division
depreciation for continuing operations
increased by £33 million to £442 million
reﬂecting the level of capital investment
made in the previous year depreciation for
discontinued operations reduced by £140
million to £6 million for the year
as shown in table 13 group operating proﬁt
increased by £169 million to £946 million
for the year to 31 march 2003 group
operating proﬁt from continuing operations
was £932 million £297 million higher than
the previous year excluding goodwill
amortisation and exceptional items group
operating proﬁt from continuing operations
increased by £270 million to £1071 million
our us operations delivered the majority of
the increase paciﬁcorp contributed
operating proﬁt excluding goodwill
amortisation of £597 million for the year an
increase of £225 million on the previous
year this was mainly due to lower net power
costs rate increases regulatory recoveries of
excess power costs and transition plan
beneﬁts the infrastructure division’s
operating proﬁt of £368 million for the year
represented an increase of £13 million
mainly due to higher regulated revenues and
net cost savings the uk division’s operating
proﬁt excluding goodwill amortisation and
exceptional items of £78 million was
consistent with the prior year with the
impact of low wholesale prices mitigated by
our integrated approach to managing the
energy value chain and the beneﬁt from the
settlement of the nuclear energy agreement
“nea” with british energy “be” ppm
reported operating proﬁt of £28 million for
the year compared to a loss of £5 million in
the previous year with the full year beneﬁt of
assets and contracts acquired in the prior
year and the continued progress made
during the year in growing its portfolio of
assets
operating proﬁt from discontinued
operations fell by £127 million to £14 million
for the year compared to the prior year
goodwill amortisation of £139 million for
the year was £10 million lower than for the
previous year this was due to the demerger
of thus in march 2002 and movements in
us dollar exchange rates reducing the
goodwill charge for paciﬁcorp operating
proﬁt for the year to 31 march 2002
included an exceptional reorganisation
charge of £19 million this arose as a result
of restructuring in the uk division and
included severance and related costs there
were no exceptional operating items in the
year to 31 march 2003
the net interest charge of £254 million for
the year was £156 million lower than the
charge for the previous year which included
exceptional interest charges of £31 million
resulting from the restructuring of the debt
portfolio in advance of the disposal of
southern water excluding exceptional
interest the charge was £125 million lower
primarily attributable to substantially lower
net debt following the sale of southern
water and our us dollar hedging strategy 
proﬁt before tax for the year as shown in
table 14 of £697 million increased by
£1636 million on last year’s loss before tax
of £939 million this was primarily due to
the exceptional items charged to the proﬁt
and loss account in the prior ﬁnancial year
relating to the disposal of southern water
and appliance retailing excluding goodwill
amortisation and exceptional items group
proﬁt before tax for the year to 31 march
2003 increased by £269 million 47 to
£836 million whilst continuing operations’
proﬁt before tax increased by £364 million
79 to £825 million as a result of
improved group operating proﬁt and lower
interest charges
the tax charge for the year increased from
£83 million to £209 million on proﬁt before
tax of £697 million compared to a loss
before tax of £939 million in the previous
year the tax charge represented an effective
rate of tax on proﬁts excluding goodwill
amortisation and exceptional items of 25
this represents an increase from the prior
year rate of 215 reﬂecting a higher
proportion of group proﬁts being derived
from our us operations taxed at a rate
higher than in the uk the effective tax rate
is calculated by dividing tax excluding
exceptional tax credits shown in table 23
by proﬁt before tax excluding goodwill and
exceptional items shown in table 14
expressed as a percentage the effective tax
rate calculated on a basis including goodwill
amortisation and exceptional items was 30
compared to 9 in the previous year as a
signiﬁcant proportion of the exceptional
items in the prior year were nontaxable
there were no exceptional items in the year
exceptional items in the previous ﬁnancial
year including interest and tax were £1318
scottishpower annual report  accounts 200203

34
table 12 – administrative expenses £m 200203 200102
administrative expenses 6145 6951
goodwill amortisation 1390 1490
exceptional items – 185
administrative expenses excluding goodwill  exceptionals 4755 5276
table 13 – group operating proﬁt £m continuing operations total operations
200203 200102 200203 200102
operating proﬁt 9319 6354 9459 7766
goodwill amortisation 1390 1466 1390 1490
exceptional items – 185 – 185
operating proﬁt excluding goodwill  exceptionals 10709 8005 10849 9441
table 14 – proﬁtloss before tax £m continuing operations total operations
200203 200102 200203 200102
proﬁtloss before tax 6858 2765 6968 9388
goodwill amortisation 1390 1466 1390 1490
exceptional items before tax – 373 – 13569
proﬁt before tax excluding goodwill  exceptionals 8248 4604 8358 5671 million included within this total were
exceptional charges of £1308 million
related to the disposal of southern water
including the write back of goodwill
previously taken to reserves and the disposal
of and withdrawal from appliance retailing
the other exceptional items in the previous
ﬁnancial year were reorganisation costs of
£19 million interest of £31 million and a tax
credit on exceptional items of £39 million 
net debt reduced in the year by £1887
million to £4321 million operating cash
ﬂow for the year was £1413 million an
increase of £165 million this was mainly as
a result of improved operational
performance in paciﬁcorp group net capital
expenditure in the year was £717 million a
decrease of £512 million of which £180
million related to continuing operations and
£332 million related to discontinued
operations net inﬂows from acquisitions
and disposals of £1899 million including
net debt disposed of mainly represented
proceeds from the sale of southern water
partially offset by ppm’s £101 million
acquisition of the katy gas storage facility
from aquila inc net debt also beneﬁted
from the weaker dollar which reduced the
sterling value of dollar debt by £290 million
gearing net debtshareholders’ funds
decreased to 93 from 131 at 31 march
2002 and net debtebitda excluding
exceptionals earnings before interest tax
depreciation goodwill amortisation deferred
income released to the proﬁt and loss
account and exceptional items improved
from 41 times last year to 28 times ebitda
is a measure of performance often used in
bank facilities ebitda is shown in table 15
group earnings per share as shown in table
16 improved from a loss of 5371 pence for
the year to 31 march 2002 to earnings of
2617 pence for the year to 31 march 2003
an increase of 7988 pence excluding
goodwill amortisation and exceptional items
group earnings per share for the year were
3371 pence an increase of 759 pence
29
the full year dividends of 28708 pence per
share were consistent with our stated aim of
a 5 annual increase in dividends to 31
march 2003 as stated at the time of
announcing the proposed disposal of
southern water with effect from the
ﬁnancial year commencing 1 april 2003
scottishpower intends to target dividend
cover based on full year earnings excluding
goodwill amortisation and exceptional items
in the range 15 – 20 times and ideally
towards the middle of that range
scottishpower will aim to grow dividends
broadly in line with earnings thereafter 
to implement this policy in the absence of
unforeseen circumstances scottishpower
intends to pay an identical dividend for each
of the ﬁrst three quarters of each year with
the dividend for the fourth quarter
representing the balance of the total
dividend for each year in respect of each of
the quarters ending 30 june 2003 30
september 2003 and 31 december 2003
scottishpower aims to declare a dividend of
475 pence per share
pensions
as required by the transitional arrangements
of financial reporting standard “frs” 17
we have disclosed at 31 march 2003 a
deﬁcit of £231 million net of deferred tax for
our uk deﬁned beneﬁt pension schemes
and a deﬁcit of £214 million 338 million
net of deferred tax for our us schemes with
the obligation to fund other postretirement
beneﬁts in the us we have also reported a
deﬁcit under frs 17 at 31 march 2003 of
£122 million 193 million net of deferred
tax as an indication of the volatility of these
valuations the movement in asset market
values in april 2003 would have reduced the
deﬁcit for the uk schemes by 40 and the
us schemes by 5
the charge in the year for these pension
schemes has increased from £7 million to
£16 million in the uk and from £8 million
11 million to £26 million 41 million in
the us contribution payments to the uk
schemes have recommenced achieving
regulatory recovery of these costs is a
priority and we have a focus on ensuring
inclusion of any increased expense in us
rate cases and the regulatory price control
reviews in the uk 
business reviews
paciﬁcorp
the key ﬁnancial information is shown in
table 17
paciﬁcorp turnover was £2499 million in
the year a reduction of £481 million on the
prior year mainly due to lower wholesale
electricity prices experienced for most of the
year excluding the effect of foreign
exchange wholesale revenues were £409
million lower than last year there was a
63 decrease in average shortterm and
spot market wholesale prices in the year
83mwh to 31mwh and lower long
term volumes this was partially offset by
higher shortterm and spot volumes and
longterm prices factors contributing to the
lower market price included new generation
brought online in the western us the
continuing effect of the federal energy
regulatory commission “ferc” market
mitigation and milder weather and
economic conditions affecting demand
growth residential and commercial
revenues increased by £9 million 14
and £10 million 21 respectively mainly
as a result of higher prices and growth in
customer numbers offset by lower average
customer usage due to milder weather
industrial revenues were down by £4 million
08 in the year as the impact of lower
volumes due to a weaker economy more
scottishpower annual report  accounts 200203

35
table 16 – group earningsloss per share pence continuing operations total operations
200203 200102 200203 200102
earningsloss per share eps 2576 1165 2617 5371
eps impact of goodwill amortisation 754 798 754 811
eps impact of exceptional items – 141 – 7172
eps excluding goodwill  exceptionals 3330 2104 3371 2612
table 15 – ebitda excluding exceptionals £m 200203 200102
proﬁtloss before interest  tax 9511 5286
depreciation  goodwill amortisation 5862 7170
deferred income released to the proﬁt and loss account 186 178
earnings before interest tax depreciation amortisation ebitda 15187 1706
exceptional items excluding interest  tax – 13261
ebitda excluding exceptionals 15187 14967 financial review
continued
than offset higher prices and increased
irrigation revenues other revenue growth
primarily as a result of excess power cost
recoveries in utah and oregon were more
than offset by lower wheeling revenues and
unfavourable foreign exchange movements
operating proﬁt for paciﬁcorp increased by
£233 million to £463 million for the year to
31 march 2003 operating proﬁt excluding
goodwill amortisation for paciﬁcorp for the
year grew by £225 million to £597 million
as a result of regulatory rate increases and
recoveries of excess power costs of £80
million signiﬁcantly lower net power costs
of £257 million and continued progress in
the delivery of transition plan beneﬁts of
£64 million in the year these improvements
were partly offset by lower transmission
revenues of £19 million from reduced use
of the transmission system by third parties
higher depreciation charges of £25 million
risk mitigation and project costs of £41
million insurance pensions and healthcare
costs of £46 million and oneoff gains in the
previous year and foreign exchange of £45
million
infrastructure division
the key ﬁnancial information is shown in
table 18
external turnover within the infrastructure
division increased by £66 million for the year
to £314 million infrastructure division’s
sales are mainly internal to our uk division
however the impact of competition on our
home markets has resulted in an increase in
regulated income from third party electricity
suppliers of £38 million other revenue
growth of £28 million has also been delivered
from external non regulated sales principally
due to increased new connections from its
core utility solutions joint venture
infrastructure division reported operating
proﬁt of £368 million for the year an
increase of £13 million on last year higher
regulated income of £9 million and net
cost reductions of £18 million were partly
offset by higher depreciation operational
rates insurance and pension costs of £14
million
uk division
the key ﬁnancial information is shown in
table 19
uk division turnover increased by £26
million to £2148 million for the year
although wholesale market prices were
down in the year agency turnover
increased by £17 million due to volume
growth from 4656 gwh to 6262 gwh
34 and exports to northern ireland
increased by £19 million following the ﬁrst
full year of trading total sales in england
wales including exports decreased by
£13 million due to adverse prices partly
offset by favourable volumes which
increased by 1461 gwh to 11840 gwh
wholesale gas volumes increased in the
year by 14 billion therms however lower
prices resulted in sales revenues dropping
by £10 million on last year retail supply
turnover grew by £11 million with higher
retail gas sales of £52 million and
increased turnover from outofarea
customer gains of £53 million partially
offset by loss of market share and lower
sales prices in our home areas which
reduced turnover by £94 million other
revenues increased by £2 million in the
year customer numbers have increased to
365 million in the year retention of home
area residential customers stands at 61
operating proﬁt for the uk division
increased by £18 million to £73 million for
the year to 31 march 2003 mainly due to
last year’s results including a £19 million
exceptional reorganisation charge operating
proﬁt excluding goodwill amortisation and
exceptional items was £78 million for the
year £1 million lower compared to the
previous year net energy margins have
performed strongly increasing by £15
million before higher depreciation costs to
capture and investment in energy efﬁciency
schemes of £12 million and increased
pension costs of £4 million the impact of
lower wholesale electricity prices has been
mitigated by our integrated approach to
managing the energy value chain whereby
our own electricity production is extensively
matched to our customer demand across
great britain the renegotiation of the nea
with be at a market related price has
delivered a beneﬁt of approximately £25
million in the current year and provides a
hedge against revenues which have been
impacted by lower wholesale prices
ppm
the key ﬁnancial information is shown in
table 20
turnover for ppm for the year increased by
£113 million to £286 million after a £16
million adverse us dollar translation impact
as the business beneﬁted from the ﬁrst full
year of its klamath and stateline longterm
power contracts and growth of its gas
storage business including the katy gas
storage facility acquired in december 2002
ppm reported an operating proﬁt of £28
million for the year compared to a loss of £5
million last year the growth in operating
proﬁt for the year was due to the increased
contribution from longterm sales contracts
and gas storage activities and optimisation
beneﬁts of £53 million partly offset by higher
depreciation charges and other operating
costs of £17 million to support business
growth and the beneﬁt from settlement of a
£3 million contract in the prior year 
scottishpower annual report  accounts 200203

36
table 17 – paciﬁcorp £m 200203 200102
external turnover 24994 29807
operating proﬁt 4628 2299
goodwill amortisation 1339 1417
operating proﬁt excluding goodwill 5967 3716
table 18 – infrastructure division £m 200203 200102
external turnover 3140 2476
operating proﬁt 3678 3549
table 19 – uk division £m 200203 200102
external turnover 21478 21214
operating proﬁt 730 553
goodwill amortisation 49 49
exceptional items – 185
operating proﬁt excluding goodwill  exceptionals 779 787 discontinued operations
discontinued operations consisted of
southern water appliance retailing and
thus for the year to 31 march 2002 and
southern water for the year to 31 march
2003 the disposal of southern water was
completed on 23 april 2002 and turnover
and operating proﬁt generated in the period
prior to disposal were £27 million and £14
million respectively the disposal of and
withdrawal from appliance retailing was
completed by 31 march 2002 and the thus
demerger was completed in march 2002
in the year discontinued operations’
turnover decreased from £791 million to
£27 million compared to the prior year of
this reduction £403 million was due to
southern water £229 million to thus and
£132 million to appliance retailing
discontinued operations’ operating proﬁt for
the year reduced by £127 million to £14
million with southern water proﬁts
decreasing by £202 million partly offset by
reduced losses in thus and appliance
retailing of £66 million and £9 million
respectively
interest tax earnings and dividends
interest
the net interest charge for the year as shown
in table 21 of £254 million was £156 million
lower than the charge for the previous year
which included exceptional interest of £31
million the exceptional interest principally
related to the restructuring of the group debt
portfolio prior to the sale of southern water
excluding exceptional interest the charge was
£125 million lower this was attributable to
substantially lower net debt following the sale
of southern water together with lower us
interest rates a change in the ﬁxedvariable
debt proﬁle and favourable exchange
beneﬁts from the weaker us dollar the
lower interest charge also included a beneﬁt
of £46 million associated with our dollar
hedging strategy underlying uk interest
excluding the beneﬁt of our dollar hedging
strategy was £104 million a reduction of
£110 million on last year the interest charge
for the us increased by £24 million to £196
million principally as a result of higher
underlying debt preexceptional interest 
adjusted for foreign exchange gains and
losses as shown in table 21 is covered by
proﬁt on ordinary activities before interest
excluding goodwill amortisation and
exceptional items shown in table 22 43
times for the year to 31 march 2003
improved from 25 times for the previous
year interest is covered by proﬁt on ordinary
activities 37 times up from 13 times in
the previous year
tax
the tax charge as shown in table 23 of
£209 million is £126 million higher than the
charge for the prior year the main reasons
for the increase are the tax credit on
exceptional items of £39 million included in
the prior year charge higher pretax proﬁts
in the current ﬁnancial year due to improved
operational performance and a higher
effective rate of tax the effective tax rate
increased to 25 from the prior year rate of
215 on proﬁts excluding goodwill
amortisation and exceptional items the
increase was due to a greater proportion of
group proﬁts being derived from our us
operations which are subject to a higher
rate of tax the effective tax rate beneﬁts
from prior period tax planning following
agreement with the tax authorities on
treatment of speciﬁc items and the ﬁnancial
structure of the group the tax charge was
£209 million on proﬁt before tax of £697
million compared to a tax charge of £83
million on a loss before tax of £939 million
in the previous year going forward the
effective tax rate is expected to increase in
the ﬁnancial year to 31 march 2004 due to
an increased proportion of us proﬁts and
lower beneﬁts from prior period tax
planning
earnings and dividends
key group earningsloss per share and
proﬁtloss after tax information is shown in
table 16 and table 24 respectively 
proﬁt after tax increased by £1510 million
to £488 million this increase was due to
exceptional items in the prior year of £1318
million improved operational performance
in our continuing operations in the current
ﬁnancial year and lower interest charges
partly offset by the proﬁt reduction from our
discontinued operations excluding
exceptional items and goodwill amortisation
proﬁt after tax increased by £182 million to
£627 million with proﬁt after tax for
continuing operations improving by £226
million to £619 million with a weighted
average 1844 million shares in issue during
the year earnings per share improved from a
loss of 5371 pence for the year to 31 march
2002 to earnings of 2617 pence in the year
scottishpower annual report  accounts 200203

37
table 20 – ppm £m 200203 200102
external turnover 2859 1731
operating proﬁtloss 283 47
goodwill amortisation 02 –
operating proﬁtloss excluding goodwill 285 47
table 21 – interest £m 200203 200102
interest 2543 4102
exceptional interest – 308
interest excluding exceptional interest 2543 3794
foreign exchange lossgain 05 69
interest excluding exceptional interest  foreign exchange lossgain 2538 3863
table 22 – proﬁtloss before interest £m 200203 200102
proﬁtloss before interest  9511 5286
goodwill amortisation 1390 1490
exceptional items excluding interest  tax – 13261
proﬁt before interest excluding goodwill  exceptionals 10901 9465
table 23 – tax £m 200203 200102
tax 2090 832
exceptional tax credit – 388
tax excluding exceptional tax credit 2090 1220 financial review
continued
to 31 march 2003 due to the reasons
mentioned above excluding goodwill
amortisation and exceptional items group
earnings per share for the year were 3371
pence an increase of 759 pence and 3330
pence for continuing operations an increase
of 1226 pence   
total cash dividends per share for the year of
28708 pence were consistent with our
stated aim of a 5 annual increase in
dividends to 31 march 2003 dividends in
the prior year included a ‘dividend in specie’
of £437 million arising on the demerger of
thus on 19 march 2002 
group net assets reduced by 2 in the year
from £4818 million to £4712 million with
our balance sheet hedging strategy
signiﬁcantly mitigating the adverse impact of
the weaker us dollar the impact on net
assets of the southern water disposal in
april 2002 was offset by lower net debt
following receipt of the sale proceeds 
fixed assets of £11600 million were
£2977 million lower than the previous
year mainly due to the disposal of
southern water  intangible assets which
represent goodwill arising on acquisition
reduced by £378 million comprising £139
million amortised to the profit and loss
account and £252 million of exchange
movements on the translation of paciﬁcorp
goodwill offset by an increase of £12
million arising on the acquisition of the
katy gas storage facility tangible assets
reduced by £2624 million mainly due to
the disposal of southern water’s ﬁxed
assets of £2475 million other movements
were due to gross capital expenditure of
£787 million and the acquisition of the
katy gas storage facility offset by
depreciation charged to the proﬁt and loss
account of £447 million and exchange
movements on the translation of us
balances investments increased by £25
million mainly due to the purchase of our
own shares which are held in trust for
employee related share schemes
current assets excluding shortterm bank
and other deposits increased by £333
million from 31 march 2002 increases to
debtors were principally due to valuations of
forward contracts associated with our
balance sheet hedging strategy and growth
of our ppm business partly offset by a
reduction as a result of the disposal of
southern water and exchange movements
creditors due within one year excluding
loans and other borrowings were £166
million lower than at 31 march 2002 the
disposal of southern water prior period us
tax settlements lower regulatory liabilities as
a consequence of the utah settlement on
excess power costs and exchange
movements were the main reasons for the
reduction  
provisions for liabilities and charges were
£492 million lower in the year with deferred
tax £389 million lower principally due to the
sale of southern water other provisions are
also lower due to utilisation during the year
together with the effect of foreign exchange
deferred income which principally
represents grants and customer
contributions in our us and uk regulated
businesses increased by £8 million    
total recognised gains and losses
the statement of total recognised gains
and losses combines the proﬁt or loss for
the year together with other gains and losses
taken directly to reserves as required under
uk gaap  total recognised gains for the year
to 31 march 2003 were £424 million
compared to losses for the prior year of
£1006 million which included £1318
million of net exceptional charges after
interest and tax excluding the net
exceptional charges total recognised gains
increased by £112 million compared to last
year as a result of £152 million growth in
proﬁt for the ﬁnancial year offset by the net
impact of foreign exchange movements and
hedging of the group’s results and net
assets the weaker dollar exchange rates
during the year resulted in unfavourable
exchange movements of £387 million which
were largely mitigated by the beneﬁts of
£358 million less tax of £29 million arising
from our strategy to hedge foreign currency
net assets
capital expenditure cash flow and
net debt
capital expenditure
in the year to 31 march 2003 the group
invested £818 million in its asset base with
42 invested for growth of this £717
million related to net capital expenditure a
decrease of £512 million of which £180
million related to continuing operations and
£332 million related to discontinued
operations in addition £101 million was
invested on the acquisition of the katy gas
storage facility
paciﬁcorp
capital expenditure in paciﬁcorp decreased
by £1 million to £368 million with £111
million invested in network growth and new
generation assets including the gas ﬁred
peaking plant at gadsby a further £211
million was invested in network and
generation refurbishment and £46 million
on other projects including information
technology net capital expenditure is
expected to increase in 200304 as a result
of upgrades to transmission and distribution
networks to improve system reliability
increased generation overhauls and higher
mining expenditure all expenditure
prudently incurred is expected to earn its
regulatory rate of return and contribute to
an increased rate base for paciﬁcorp 
infrastructure division
the infrastructure division invested net
capital expenditure of £230 million during
the year an increase of £32 million
compared to the year to 31 march 2002 of
this £141 million was invested in network
refurbishment £68 million on network
expansion and £21 million on other capital
projects net capital expenditure in 200304
is expected to increase modestly with
investment concentrated on the regulatory
asset base delivering the regulated rate of
return in particular further investment will
be undertaken in our overhead network
modernisation programme 
uk division
during the year the uk division invested
£68 million in capital projects a £41 million
scottishpower annual report  accounts 200203

38
table 24 – proﬁtloss after tax £m continuing operations total operations
200203 200102 200203 200102
proﬁtloss after tax 4802 2209 4878 10220
goodwill amortisation 1390 1466 1390 1490
exceptional items including interest  tax – 260 – 13181
proﬁt after tax excluding goodwill  exceptionals 6192 3935 6268 4451 reduction on the previous year of this £10
million was invested in windfarms and £19
million expanding our gas storage assets
and completing the daldowie private finance
initiative project which manufactures waste
derived fuel a further £19 million was invested
in generation plant overhaul and
refurbishment and £20 million on other
projects including business transformation and
information technology in 200304 subject to
obtaining planning permission net capital
expenditure for the uk division could rise
substantially as a result of our commitment
to increase our windfarm capacity in addition
we plan to invest in gas storage development
and upgrades to generation assets required
to maintain our generating capacity all
investments are projected to have returns
signiﬁcantly in excess of the cost of capital and
enhance earnings
ppm
ppm’s net capital expenditure for the year
was £36 million a decrease of £170 million
on last year which included investment to
complete the klamath falls and west valley
generation projects in the year to 31 march
2003 the division invested £10 million
completing its thermal generation assets and
£20 million on wind power including the
purchase of the operational klondike
windfarm in eastern oregon and
commencement of construction of the
moraine windfarm in minnesota ppm also
invested £6 million in gas storage assets and
in information technology projects in addition
ppm acquired the katy gas storage facility
for £101 million in december 2002 in
200304 ppm’s net capital spend is
expected to increase primarily as a result of
the construction of new windfarms and
development opportunities including
moraine and flying cloud which are
expected to deliver favourable rates of return
and enhance earnings
discontinued operations
during the year southern water incurred
net capital expenditure of £15 million prior
to its sale in april 2002
cash flow and net debt
net cash inﬂow from operating activities of
£1413 million was £165 million higher than
the prior year with improved operational
performance in paciﬁcorp offsetting the
reduction in operating cash ﬂows from
discontinued operations capital expenditure
and ﬁnancial investment outﬂows reduced
by £443 million reﬂecting the reduction in
capital expenditure due to our discontinued
operations and lower ppm capital spend
interest tax and dividend payments in the
year amounted to £1012 million £52 million
higher than the prior year net receipts from
acquisitions and disposals of £1899 million
including net debt disposed of mainly
represented the proceeds from the sale of
southern water partially offset by ppm’s
£101 million acquisition of the katy gas
storage facility from aquila inc as a result
net debt at 31 march 2003 was £4321
million £1887 million lower than at 31 march
2002 with the beneﬁt of a weaker dollar also
reducing the sterling value of dollar debt 
overview of the year to march 2002
group turnover for the year to 31 march 2002
decreased by £35 million to £6314 million
compared to the year to 31 march 2001
continuing operations’ turnover increased by
£113 million to £5523 million with
paciﬁcorp contributing revenues of £2981
million a fall of £126 million on 200001 due
to signiﬁcant reductions in wholesale market
prices partly offset by rate increases and
foreign exchange beneﬁts infrastructure
division turnover was £248 million an
increase of £24 million on 200001 due to
higher regulatory sales volumes and prices
turnover in the uk division rose by £58
million to £2121 million as a result of higher
gas retail and wholesale revenues and
increased output from new generating plant
partially offset by lower electricity retail sales
due to lower volumes and prices ppm
turnover increased by £157 million to £173
million primarily due to new gas revenues 
turnover for discontinued operations fell by
£148 million to £791 million following our
exit from appliance retailing which resulted
in lower group revenues yearonyear of
£185 million offset in part by yearonyear
revenue growth from southern water of £7
million and from thus of £30 million
cost of sales for 200102 fell by £59
million to £4411 million compared to
200001 which included £62 million of
exceptional reorganisation costs incurred by
paciﬁcorp cost of sales excluding
exceptional items were £3 million higher
than 200001 at £4411 million with
continuing operations’ costs increasing by
£83 million to £3920 million paciﬁcorp’s
cost of sales excluding exceptional items
were less than the year to 31 march 2001
as lower purchase volumes and prices were
partly offset by foreign exchange
movements costs within the uk division
increased mainly due to gas purchase costs
for rye house power station which was
acquired in march 2001 the growth of
ppm also contributed to higher costs cost
of sales for discontinued operations fell by
£80 million to £491 million mainly due to
our exit from appliance retailing
transmission and distribution costs of
£513 million were £54 million lower than
the year to 31 march 2001 which included
£45 million of exceptional reorganisation
costs incurred by paciﬁcorp pre
exceptional transmission and distribution
costs fell by £9 million as a result of lower
net operating costs in the infrastructure
division administrative expenses
including goodwill amortisation increased
by £53 million to £695 million with £26
million of this increase attributable to
higher exceptional items and higher
goodwill amortisation in 200102
administrative expenses excluding goodwill
amortisation and exceptional items
increased by £27 million with increased
depreciation charges in both the uk and us
and foreign exchange movements partly
offset by lower discontinued operations’
costs due to our exit from appliance
retailing depreciation for continuing
operations increased by £46 million to
£409 million reﬂecting investment in new
generation in the us and the acquisition of
rye house in the uk depreciation for
discontinued operations increased from
£118 million to £146 million
scottishpower annual report  accounts 200203

39
table 25 – group operating costs £m cost of sales transmission and administrative 
distribution costs expenses
200102 200001 200102 200001 200102 200001
operating costs 44108 44695 5126 5667 6951 6416
goodwill amortisation – – – – 1490 1276
exceptional items – 621 – 451 185 135
operating costs excluding goodwill  
 exceptionals 44108 44074 5126 5216 5276 5005 financial review
continued
table 25 provides key ﬁnancial information
on group operating costs
group operating proﬁt for the year to 31
march 2002 as shown in table 26
improved by £55 million to £777 million as
a result of exceptional transition plan costs
incurred in the year to 31 march 2001
partly offset by increased goodwill
amortisation charges and lower operational
proﬁts in the year to 31 march 2002
excluding goodwill amortisation and
exceptional items group operating proﬁt
reduced by £26 million to £944 million
with operating proﬁt from continuing
operations falling by £15 million to £801
million the challenging conditions
experienced in the uk energy market and
the price premium borne under the nea
resulted in a fall of £44 million in the uk
division’s proﬁt excluding goodwill
amortisation and exceptional items
however this was substantially offset by
the beneﬁts derived from infrastructure
division’s operating cost saving
programme where operating proﬁt
increased by £14 million and by the
recovery in paciﬁcorp’s operating
performance in the us paciﬁcorp reported
a yearonyear proﬁt improvement of £25
million excluding goodwill amortisation
and exceptional items after incurring some
300 million of additional excess net power
costs early in 200102 as a result of the
unprecedented fall in wholesale price levels
in the western us market operating proﬁt
for ppm reduced by £9 million to a loss of £5
million as a result of new costs associated
with the startup of the business 
operating proﬁt for our discontinued
operations decreased by £11 million to
£141 million as a result of a £5 million fall
in southern water’s proﬁt and a £6 million
increase in thus’ losses for the period to
19 march 2002 the date of the demerger
exceptional items of £1326 million before
interest and tax were recognised in the
year to 31 march 2002 these exceptional
items related to the disposal of southern
water uk reorganisation costs and a
charge of £120 million associated with our
disposal of and withdrawal from appliance
retailing an exceptional charge of £121
million was incurred in 200001 in respect
of the costs of implementing the paciﬁcorp
transition plan
business reviews
paciﬁcorp
the key ﬁnancial information is shown in
table 27
turnover in paciﬁcorp for 200102 fell by
£126 million to £2981 million compared to
200001 excluding the effect of foreign
exchange residential and commercial revenues
increased by £35 million or 6 and £26 million
or 5 respectively mainly as a result of price
increases and customer growth partly offset by
lower volumes due to weather and the impact
of demand side management programmes
industrial revenues were down by £18 million
as a result of a 5 decrease in volumes due to
lower irrigation usage and the impact of us
economic conditions a 22 decrease in
average shortterm ﬁrm and spot market
wholesale prices 107mwh to 83mwh
and lower longterm volumes signiﬁcantly
impacted wholesale revenues in the year
partially offsetting this was an increase in short
term ﬁrm and spot volumes leaving turnover
from wholesale activities down by £275 million
or 19 on the year ended 31 march 2001
other revenue growth mainly came from
increased wheeling revenues and favourable
foreign exchange movements 
for the year to 31 march 2002 paciﬁcorp’s
operating proﬁt increased by £129 million to
£230 million despite the impact of
additional excess power costs of 300
million incurred in the ﬁrst six months
excluding goodwill amortisation and
exceptional items paciﬁcorp’s operating
proﬁt increased by £25 million to £372
million increases in regulatory rates charged
to customers and other revenues of £72
million and continued transition plan
savings of £24 million were offset by higher
depreciation on regulated assets of £25
million costs of strategic and risk initiatives
of £45 million and other movements of £1
million including higher net power costs and
foreign exchange movements 
infrastructure division
the key ﬁnancial information is shown in
table 28
the infrastructure division reported external
turnover of £248 million for 200102 an
increase of £24 million compared to 200001
due to higher regulated income although
the infrastructure division’s sales were still
mainly internal to the uk division customer
retention in our home markets had declined
due to competition and as a result external
sales increased as distribution and
transmission use of system charges were
recovered from third party suppliers 
in the year to 31 march 2002 operating
proﬁt for the infrastructure division
improved by £14 million to £355 million as
it continued to deliver ﬁnancial upsides from
its restructuring programme with operating
cost reductions of £39 million achieved
during the year these savings helped offset
the impact of regulatory price reductions
experienced in the ﬁrst half of 200102 and
a gain on business disposals reported within
the 200001 results of £18 million 
scottishpower annual report  accounts 200203

40
table 27 – paciﬁcorp £m 200102 200001
external turnover 29807 31062
operating proﬁt 2299 1013
goodwill amortisation 1417 1248
exceptional items – 1207
operating proﬁt excluding goodwill  exceptionals 3716 3468
table 28 – infrastructure division £m 200102 200001
external turnover 2476 2237
operating proﬁt 3549 3413
table 26 – group operating proﬁt £m continuing operations total operations
200102 200001 200102 200001
operating proﬁt 6354 5694 7766 7219
goodwill amortisation 1466 1252 1490 1276
exceptional items 185 1207 185 1207
operating proﬁt excluding goodwill  exceptionals 8005 8153 9441 9702 uk division
the key ﬁnancial information is shown in
table 29
turnover for the uk division grew by £58
million to £2121 million for the year to 31
march 2002 turnover was £106 million
higher due to sales from rye house power
station as a result of the decrease in
wholesale market prices agency turnover fell
by £7 million despite volume growth from
3874 gwh to 4656 gwh and export sales in
england  wales reduced by £16 million
with volumes 22 gwh lower at 4539 gwh
sales from exports via the northern ireland
interconnector of 356 gwh improved
turnover by £8 million in the year turnover
also increased due to higher wholesale gas
sales supply turnover was down by £60
million on the year to 31 march 2001 with
higher retail gas sales of £48 million and
increased turnover from outofarea
customer gains of £54 million offset by loss
of market share and lower prices in our home
areas which reduced turnover by £162 million
operating proﬁt in the uk division fell by £67
million to £55 million with £23 million of this
decline attributable to increased goodwill
amortisation of £4 million and exceptional
costs of £19 million incurred during
200102 following restructuring within the
division operating proﬁt excluding goodwill
amortisation and exceptional items
decreased by £44 million to £79 million
primarily due to the impact of falling
wholesale market prices and the burden of the
nea as a result of these market pressures
generation margins were £63 million lower
than in 200001 partially offsetting this was
an improvement in electricity and gas retail
margins of £29 million after the increased cost
of acquiring new customers the results for
the year ended 31 march 2002 also included
the new electricity trading arrangements
“neta” system error of £10 million 
ppm
the key ﬁnancial information is shown in
table 30
ppm’s turnover increased by £157 million to
£173 million for the year to 31 march 2002
due to new revenues from the startup
operations of the klamath and stateline plants
ppm reported an operating loss of £5 million
in year to 31 march 2002 compared with a
proﬁt of £4 million in the year to 31 march
2001 as a result of increased costs
associated with the startup of the business 
discontinued operations
the key ﬁnancial information is shown in
table 31
southern water
for the year to 31 march 2002 turnover from
southern water increased by £7 million to
£430 million as a result of regulatory price
increases and customer growth partly offset
by the move to measured supply and surface
water rebates southern water’s operating
proﬁt of £216 million fell by £5 million
compared to the prior year as a result of
new capital obligation costs and increased
depreciation charges offset in part by cost
savings the sale of southern water was
announced in march 2002 and was
completed in april 2002 
appliance retailing
the decision to withdraw from appliance
retailing was announced in june 2001 and
resulted in an exceptional charge of £120
million being recognised in 200102 the
disposal of part of the business to
powerhouse retail was ﬁnalised in october
2001 and the closure of the remaining
operations was completed by the end of
200102 appliance retailing reported
turnover of £132 million down £185 million
on 200001 and an operating loss of £9
million consistent with the year to 31 march
2001 
thus
the demerger of thus was completed on 19
march 2002 the ﬁnancial results of the
group included the results of thus up to
this date turnover for thus to 19 march
2002 was £30 million higher than the prior
year at £229 million mainly due to
increased data and telecoms revenues
thus incurred an operating loss of £66
million an increase of £6 million on the
year to 31 march 2001 
interest tax earnings and dividends 
interest 
the net interest charge for the year to 31
march 2002 as shown in table 32
increased by £77 million to £410 million
and included an exceptional charge of £31
million principally related to the
restructuring of the group debt portfolio as
a consequence of the decision to sell
southern water excluding exceptional
charges net interest was £379 million an
increase of £46 million on 200001
primarily as a result of higher levels of debt
in both the uk and us the uk interest
charge excluding exceptional interest rose
by £30 million to £214 million and the
charge for the us increased by £32 million
to £172 million also included within
scottishpower annual report  accounts 200203

41
table 29 – uk division £m 200102 200001
external turnover 21214 20638
operating proﬁt 553 1223
goodwill amortisation 49 04
exceptional items 185 –
operating proﬁt excluding goodwill  exceptionals 787 1227
table 30 – ppm £m 200102 200001
external turnover 1731 161
operating lossproﬁt 47 45
table 31 – southern water appliance retailing and thus £m
southern water appliance retailing thus
200102 200001 200102 200001 200102 200001
external turnover 4299 4224 1323 3177 2291 1994
operating proﬁtloss 2163 2216 90 87 661 604
table 32 – interest £m 200102 200001
interest  4102 3329
exceptional interest 308 –
interest excluding exceptional interest 3794 3329 financial review
continued
interest was a £7 million beneﬁt due to
foreign exchange hedging  
tax
the tax charge as shown in table 33 for the
year to 31 march 2002 was £83 million £12
million lower than in 200001 excluding the
exceptional tax credit of £39 million the tax
charge was £122 million £19 million lower
than in 200001 the exceptional tax credit
in 200102 related to the exceptional
charges incurred during the year following
the disposal of and withdrawal from our
appliance retailing business and
restructuring of the debt portfolio following
the decision to sell southern water the
group’s effective tax rate beneﬁted from the
release of provisions made in prior years
following agreement with the tax authorities
on the treatment of speciﬁc items although
corporate tax rates were higher in the us
than in the uk the ﬁnancial structure of the
group resulted in a reduction in the amount
of overseas tax payable the tax charge was
£83 million on a loss before tax of £939
million compared to a tax charge of £95
million on proﬁt before tax of £380 million in
200001
earnings and dividends
key lossproﬁt after tax and group
lossearnings per share information is
shown in table 34 and table 35 respectively
the loss after tax for the year to 31 march
2002 amounted to £1022 million
compared to a proﬁt of £285 million for
200001 with the fall in proﬁts mainly due
to higher exceptional charges associated
with the sale of southern water including a
£738 million write back of goodwill a pre
tax exceptional charge of £121 million was
included in the 200001 year’s results in
respect of paciﬁcorp transition plan
implementation costs excluding the impact
of goodwill amortisation and exceptional
items proﬁt after tax decreased by £42
million to £445 million primarily as a result
of lower uk division operating proﬁt and
increased interest charges with a weighted
average 1838 million shares in issue during
200102 the loss per share was 5371
pence compared to earnings per share of
1680 pence in the year to 31 march 2001
excluding goodwill amortisation and
exceptional items earnings per share were
2612 pence for the year compared to 2786
pence in the year to 31 march 2001 
the total cash dividends per share of 2734
pence were 5 higher than the 200001
dividends of 2604 pence the increase was
consistent with our stated aim of growing
dividends by 5 per annum for each of the
three ﬁnancial years to 31 march 2003
dividends for the year also included a
‘dividend in specie’ of £437 million arising
on the demerger of thus on 19 march 2002 
total recognised gains and losses
the statement of total recognised gains and
losses combines the proﬁt or loss for the
year together with other gains and losses
taken directly to reserves total recognised
losses for 200102 were £1006 million
compared to gains for 200001 of £801
million the fall in recognised gains of
£1807 million was primarily due to the net
exceptional charges after interest and tax
of £1318 million in the year to 31 march
2002 and the strengthening in dollar
exchange rates from 160£ at 31 march
2000 to 142£ at 31 march 2001 which
resulted in exchange movements of £493
million being recognised in the year to 31
march 2001
treasury
the treasury focus during the year continued
to be to minimise interest payments and
manage risk the group continues to ensure
that borrowings are ﬁnanced from a variety
of competitive sources and that committed
facilities are available both to cover
uncommitted borrowings and to meet the
ﬁnancing needs of the group in the future
cash requirements are subject to seasonal
variations a further focus was to maximise
the return on investment of the proceeds
from the sale of southern water while
avoiding excessive credit risk
since the merger with paciﬁcorp the
group’s external borrowings have been
sourced in two separate pools in the uk
scottish power uk plc “spuk” continues
to be the ﬁnance vehicle for the majority of
the uk activities in the us predominantly
all of the debt is issued by paciﬁcorp the
regulated utility and is entirely
denominated in us dollars 
in both cases regulatory constraints apply
to ﬁnancing activities scottish power plc
“sp plc” is not permitted to borrow from
its subsidiaries with the exception of
certain intermediate holding companies in
the us ownership chain and is currently
ﬁnanced by way of dividends and external
debt during the year sp plc’s two £50
million bilateral 364 day committed
facilities were renewed both were un
drawn at the yearend paciﬁcorp’s
principal debt limitations are a 60 debt
to deﬁned capitalisation test and an
interest coverage covenant
ebitdainterest of 2 times contained in
its principal credit agreements paciﬁcorp
has been in compliance with these
covenants throughout the year to 31
march 2003 in addition under the public
utility holding company act of 1935 there
are restrictions on the ability of group
companies to lend or borrow from one
another
scottishpower annual report  accounts 200203

42
table 34 – lossproﬁt after tax £m 200102 200001
lossproﬁt after tax 10220 2845
goodwill amortisation 1490 1276
exceptional items including interest  tax 13181 748
proﬁt after tax excluding goodwill  exceptionals 4451 4869
table 35 – group lossearnings per share pence 200102 200001
lossearnings per share eps 5371 1680
eps impact of goodwill amortisation 811 697
eps impact of exceptional items 7172 409
eps excluding goodwill  exceptionals 2612 2786
table 33 – tax £m 200102 200001
tax  832 952
exceptional tax credit 388 459
tax excluding exceptional tax credit 1220 1411 in the uk ﬁnancing activities have been
heavily inﬂuenced by the disposal of
southern water no new longterm ﬁnancing
was put in place during the year and all
shortterm debt was repaid following receipt
of the sale proceeds
there have been no new issues under
scottishpower’s euromedium term note
programme established in november 1997
cumulative issues outstanding under the
programme now total some 2700 million
against a programme limit of 7000 million
sp plc and spuk are the issuers under the
programme no issues have been made
since sp plc was added as an issuer as part
of the annual update in 2001 
total borrowings from the european
investment bank “eib” amount to £199
million following the repayment of £129
million as a result of the sale of southern
water as agreed under the terms of the sale
and purchase agreement with first aqua
limited 
during the year spuk has not added to its
indexlinked liabilities the current total of
£275 million has been created through a
combination of issues of direct indexlinked
debt and through swapping ﬁxed rate debt
into indexlinked this represents around
12 of the uk debt portfolio in recognition
of the fact that a large percentage of uk
revenues are linked to inﬂation
spuk cancelled its £1000 million revolving
credit facility following receipt of the proceeds
of the sale of southern water in april 2002
no facility has been required through the
rest of the year as liquidity has been
provided by the funds received from the sale
it is possible that sp plc will wish to raise new
bank ﬁnance during the ﬁnancial year to 31
march 2004 borrowings under this facility
would be used for general corporate purposes
the uk distribution transmission and
generation subsidiaries have provided
upstream guarantees to support the
majority of spuk’s debt that existed at 1
october 2001 following their incorporation
to comply with the utilities act 2000 as at
31 march 2003 the total amount of debt
guaranteed by the three companies
amounted to £2210 million new debt
issued by spuk after 1 october 2001 is not
permitted to beneﬁt from the guarantee of
spuk’s subsidiaries sp distribution limited
and sp transmission limited 
during the year to 31 march 2003
paciﬁcorp issued no new longterm debt
scheduled repayments of 1446 million
were made during the year paciﬁcorp has
an effective shelf registration statement for
up to 11 billion of longterm debt of which
800 million has been authorised to be
issued by the applicable regulatory
commissions subject to certain conditions
any such issuance would be subject to
market conditions paciﬁcorp has debt
maturities out as far as 2037
in june 2002 paciﬁcorp extended its
expiring bank facilities and now has two
facilities a 300 million three year facility
maturing in june 2005 and a 500 million
364 day facility maturing in june 2003
negotiations are currently underway to
replace the 500 million facility these two
bank facilities are provided by a group of
core bank relationships that is regarded as
common to both spuk and paciﬁcorp 
the group continues to manage its interest
rate exposure by maintaining a percentage
of its debt at ﬁxed rates of interest this is
done either directly by means of ﬁxed rate
debt issues or by use of interest and cross
currency swaps to convert variable rate debt
into ﬁxed rate debt and ﬁxedvariable non
functional currency denominated debt into
ﬁxed rate functional currency debt the use
of derivative ﬁnancial instruments relates
directly to underlying existing and anticipated
indebtedness the group treasury operates
strictly within policies set out by the board
and is subject to regular examination by
internal audit the group’s policy is to
maintain at least 50 of its anticipated year
end debt at ﬁxed interest rates
in recognition of the long life of the group’s
assets and anticipated indebtedness and to
create ﬁnancial efﬁciencies the group has
entered into borrowing agreements for
periods out to 2039 in addition spuk
entered into derivative contracts to a
notional value of £100 million which may
result in ﬁxed interest rates of 425 for
periods out to 2030 on this notional
amount at 31 march 2003 the interest rate
on some 71 uk 60 us 80 of debt
was ﬁxed
the weighted average period to maturity of
yearend ﬁxed debt and swaps was 12 years
uk 11 years us 13 years
during 200203 the group maintained its
policy of hedging a substantial part of the
foreign currency value of its us business
notional us debt has been created by the
use of crosscurrency interest rate swaps
crosscurrency basis swaps and foreign
currency forward contracts the current
amount of these hedges is 5000 million
representing approximately 84 of the
group’s us net assets
both spuk and paciﬁcorp have credit
ratings published by standard  poor’s
ratings group moody’s investors service
and the fitch group spuk’s longterm
ratings for guaranteed debt pre 1 october
2001 are now a a2 and a from the three
agencies respectively spuk’s longterm
ratings for unguaranteed debt are a a3 and
a from the three agencies respectively
paciﬁcorp’s senior secured debt is rated a
a3 and a and its unsecured debt is rated
bbb baa1 and a shortterm ratings of 
a2 p2 and f1 apply to both companies
pacificorp group holdings a subsidiary of
paciﬁcorp holdings inc has slightly lower
ratings although they remain investment
grade ratings from standard  poor’s and
moody’s are on negative outlook these
security ratings are not recommendations to
buy sell or hold securities the ratings are
subject to change or withdrawal at any time
by the respective credit rating agencies
each credit rating should be evaluated
independently of any other rating
any adverse change to credit ratings of
group companies could negatively impact
on their ability to access capital markets and
on the rates of interest that they would be
charged for such access the eib debt within
sp transmission limited and sp distribution
limited contains credit downgrade
language which does not constitute default
but means that should the ratings of sp
transmission limited or sp distribution
limited fall the eib will be entitled to ask for
additional security in the form of a
guarantee acceptable to the eib paciﬁcorp
has no rating downgrade triggers within its
debt instruments although interest rates on
loans under their bank facilities and
commitment fees on the facilities would
increase with a ratings downgrade the eib
scottishpower annual report  accounts 200203

43 financial review
continued
debt within sp manweb plc contains
ﬁnancial covenants relating to interest cover
and gearing of sp manweb plc following the
cancellation of spuk’s £1000 million
revolving credit facility there are no other
ﬁnancial covenants within the uk
businesses’ debt
the proceeds of the sale of southern water
were partially utilised to repay spuk’s short
term borrowings and to redeem the eib debt
of southern water as agreed under the sale
and purchase agreement with first aqua
limited the remaining cash received has
been utilised on an ongoing basis to fund
the existing business and to repay debt as it
matures the investment of surplus cash is
undertaken to maximise the return within
board approved policies which govern the
ratings criteria maximum investment and
the maturity with any one counterparty
counterparties are required to have a short
term rating of at least a1 p1 or f1 from
the three major rating agencies
quantitative and qualitative
disclosures about market risk
market rate sensitive instruments and
risk management
the following discussion about the group’s
risk management activities includes
“forwardlooking” statements that involve
risk and uncertainties actual results could
differ materially from those projected in the
forwardlooking statements 
the tables in note 20 to the accounts
pages 93 to 98 summarise the ﬁnancial
instruments including derivative instruments
and derivative commodity instruments held
by the group at 31 march 2003 which are
sensitive to changes in interest rates foreign
exchange rates and commodity prices the
group uses interest rate swaps forward
foreign exchange contracts and other
ﬁnancially settled derivative instruments to
manage the primary market exposures
associated with the underlying assets
liabilities and committed transactions
financially settled weather derivatives are
used to manage risk created by adverse
weather circumstances affecting commodity
demand and operations the group also uses
commodity derivatives that can be settled
ﬁnancially or by delivery of the physical
commodity to further manage its
commodity price and volumetric risks these
instruments are employed to reduce risk by
creating offsetting ﬁnancial exposures or by
directly hedging such commodity exposures
such physically or ﬁnancially settled
instruments as above held by the group
match offsetting physical transactions and
are not held for ﬁnancial trading purposes in
the vast majority of instances similarly such
weather derivatives are not held for ﬁnancial
trading purposes subject to risk
management controls businesses may enter
into ﬁnancial transactions that are designed
to reduce earnings volatility and improve the
return on assets and are structured around
the physical assets of the group
scottishpower energy trading agency
limited is authorised by the uk financial
services authority to undertake investment
activity in the energy markets as an energy
market participant
risk management
overview
the main ﬁnancial risks faced by the group
are interest rate risk inﬂation risk insurance
risk foreign exchange risk liquidity risk credit
risk energy price risk and energy volumetric
risk created by varying demand due to
weather and economic circumstances and
varying supply due to forced outages or other
physical supply and logistics limitations
the board has reviewed and agreed policies
for managing each of these risks as
summarised below in order to mitigate the
ﬁnancial risks identiﬁed the board has
endorsed the use of derivative ﬁnancial
instruments including swaps both interest
rate and crosscurrency swaptions options
forwardrate agreements ﬁnancial and
commodity forward contracts commodity
futures commodity options and weather
derivatives
energy risk management
energy risk is governed globally by the group
energy risk committee “gerc” chaired by
the finance director with membership from
the divisions and independent risk
management the gerc deﬁnes and the
scottishpower board approves the group
risk management policies and limits as well
as the uk and the us risk policies and limits
these policies and limits as well as the gerc
approved procedures are designed to create
consistent risk measurement monitoring
and management standards throughout the
group the monitoring and management of
the level of exposure covered is handled by
the businesses with full oversight by a
corporate risk management function
reporting to the finance director
independent of the businesses the
businesses with commodity exposure are
authorised to manage this exposure using
approved products policies and limits
these businesses report monthly to a local
risk committee as well as the gerc
market exposures are quantiﬁed and
controlled using a number of different risk
measures these include valueatrisk
“var” methods for earnings volatility
control var is a statistically based measure
of the potential ﬁnancial loss on a price
exposure position over a deﬁned period to a
given level of conﬁdence var computations
for the group’s energy commodity portfolios
are based on a historical simulation
technique this technique utilises historical
price changes over a speciﬁed period to
simulate potential forward price curves in
the energy markets to estimate the potential
unfavourable impact of price changes in the
portfolio positions scheduled to settle within
the following 24 months the quantiﬁcation
of market risk using var provides a
consistent measure of risk across the
group’s continually changing portfolio var
represents an estimate of reasonably
possible changes in fair value that would be
measured on its portfolio assuming
hypothetical movements in future market
rates and is not necessarily indicative of
actual results that may occur changes in
markets inconsistent with historical trends
or assumptions used could cause actual
results to exceed predicted limits
the group’s var computations for its energy
commodity portfolio utilise several key
assumptions including a 99 conﬁdence
level for the resultant price changes and a
holding period of ﬁve days the calculation
includes shortterm derivative commodity
instruments held for trading and balancing
purposes the expected resource and
demand obligations from the group’s long
term contracts the expected generation
levels from the group’s generation assets
and the expected retail and wholesale load
levels optionality embedded within the
group’s longterm contracts generation
assets and other derivative instruments with
scottishpower annual report  accounts 200203

44 option characteristics within the energy
portfolio are treated in the historical
simulation of var as static expected or delta
positions through the simulation process
expected positions and option deltas are
recalculated on a daily basis to determine
the portfolio position changes due to
changes in market prices
commodity price exposure is deﬁned as the
possibility that a change in the price of the
commodity will alter the proceeds of sales or
the costs of purchases commodity volume
risk is deﬁned as the possibility that a
change in the supply of or demand for the
commodity will create an unexpected
imbalance and change the requirements for
the commodity additional risk measures are
applied to quantify risks beyond the
conﬁdence intervals deﬁned in the var
methodology and determine volumetric
risks in physical positions
credit risk management
the role of the group’s credit function is to
set consistent standards for assessing and
quantifying scoring the credit risk induced
by contractual obligations of wholesale trading
partners and industrial and commercial
clients a group credit committee provides
an umbrella oversight to ensure a consistent
approach to counterparty rating and limit
management is adopted across the group
and oversees the allocation of limits to those
entities that overlap both the us and the uk
markets this group credit committee
ensures that each individual business is
subject to concentration rules that prevent
misallocation of credit risk amongst
counterparties the uk and the us credit
committees provide local expertise to
understanding the credit environment in
each geographic location all decisions are
supported by rigorous measurement and
reporting of credit exposures and the use of
credit rating models credit approvals are
subject to regular andor event driven
reviews despite mitigation efforts defaults
by counterparties occur from time to time 
treasury management
the group treasury function is authorised to
conduct the daytoday treasury activities of
the group within policies set out by the
board the group treasury function reports
regularly to the board through the monthly
group performance and risk report and is
subject to internal audit
interest rate risk management 
the group continues to access funding
opportunities in the major global markets in
a range of currencies at both ﬁxed and
ﬂoating rates of interest using derivatives
where appropriate to convert the obligations
and payments into ﬁxed or ﬂoating rate
functional currency 
the exposure to ﬂuctuating interest rates is
managed by either issuing ﬁxed or ﬂoating
rate debt or using a spectrum of ﬁnancial
instruments to create the desired
ﬁxedﬂoating mix the group’s policy is to
maintain at least 50 of its anticipated
yearend debt at ﬁxed interest rates at 31
march 2003 71 2002 66 of the
group’s debt was either issued as ﬁxed or
converted to ﬁxed rates using interest rates
swaps 
all treasury transactions are undertaken to
manage the risks arising from underlying
activities and no speculative trading is
undertaken the counterparties to these
instruments generally consist of ﬁnancial
institutions and other bodies with good
credit ratings that is “aa” rated by at least
one of standard  poor’s moody’s or fitch
although the group is potentially exposed to
credit risk in the event of nonperformance
by counterparties such credit risk is
controlled through credit rating reviews of
the counterparties and by limiting the total
amount of exposure to any one party to
levels agreed by the board the group does
not believe that it is over exposed to any
material concentration of credit risk 
inﬂation risk management
in recognition of the fact that a large
percentage of uk revenues are linked to
inﬂation spuk maintains part of its debt
portfolio in indexlinked liabilities this is
done either through issues of debt or
through swapping ﬁxed rate debt into index
linked currently indexlinked liabilities total
£275 million which represents around 12
of the uk debt portfolio
insurance risk management
where cost effective the group maintains a
wideranging insurance programme
providing ﬁnancial protection predominately
against catastrophic risks in march 2002
the group experienced increases in the cost
of insurance and a loss of limited aspects of
coverage as a result of changes in the global
insurance market there continues to be
upward pressure on insurance costs and a
comprehensive review of our insurance
strategy during the last twelve months has
helped to mitigate this pressure but some
classes of insurance continue to increase
signiﬁcantly in cost these increases do not
however have a material impact on the
overall business performance
foreign exchange risk management
translation risk 
the group has currently hedged 5000
million representing approximately 84 of
its us net assets as a strategic hedge of the
investment liabilities have been created for
periods out to 2011 by means of cross
currency interest rate and basis swaps and
by means of forward foreign exchange
contracts the resulting interest ﬂow in us
dollars acts as a natural partial hedge to the
translation of us proﬁts but these proﬁts are
further hedged up to four years into the
future by means of forward sales of us
dollars all foreign currency derivative
contracts are subject to the same controls as
interest rate derivatives referred to above 
transaction risk 
transactions denominated in a foreign
currency are not numerous in the group
where they arise as a result of imports of
capital or other goods denominated in
foreign currencies the exposure is hedged as
soon as it arises
liquidity risk management
the group’s policy is to arrange that debt
maturities are spread over a wide range of
dates thereby ensuring that the group is not
subject to excessive reﬁnancing risk in any
one year the group had undrawn
committed revolving credit facilities totalling
£606 million as at 31 march 2003 which
provide backstop liquidity should the need
arise the majority of these facilities are at
paciﬁcorp liquidity in the uk is currently
supported by the remaining cash held from
the proceeds of the southern water sale
energy price risk management
uk division
neta was introduced in england  wales on
27 march 2001 replacing the previous
‘pool’ mechanism for the sale and purchase
of wholesale power in england  wales
neta provides for a bilateral wholesale
market with suppliers traders and
scottishpower annual report  accounts 200203

45 financial review
continued
generators trading ﬁrm physical forward
contracts for bulk electricity supply in
addition to trading to directly manage our
market price exposure in the england 
wales market the uk division also manages
its price exposure arising from sales within the
scottish market by trading forward contracts
the balancing mechanism operated from 1
hour ahead of realtime gate closure up to
realtime by the national grid company is
used to manage the grid system on a
secondbysecond basis market
participants can participate actively in this
market through the submission of bids and
offers to vary their output as a generator or
demand as a customer the mechanism
also provides for calculation and settlement
of imbalance charges arising from the
differences between parties’ contract
positions and their actual physical energy
ﬂows
the uk division has procedures in place to
minimise exposure to uncertain balancing
mechanism prices that is the possibility
that the uk division will face high charges
for shortfalls in physical energy or receive
low revenues for surplus physical energy
these procedures involve the uk division
entering into bilateral contracts for the sale
and purchase of energy across a range of
time periods to minimise exposure to the
balancing mechanism in addition our
portfolio of ﬂexible generating assets in
england and scotland can be used up to
gate closure to minimise further this
exposure and also to attract premium
income from providing ﬂexible power to the
balancing mechanism 
the uk division has also entered into longer
term in excess of one year arrangements to
protect against longerterm volatility of
power prices the time periods covered by
these longerterm arrangements are
reviewed on a continuous basis to provide
the desired level of price stability
the uk division also has procedures in
place to minimise exposure to gas price
variations in a similar manner to our
power price exposure management
strategy gas price risk is managed through
a combination of longerterm contracts
and shorterterm trading contracts with
ﬂexible delivery proﬁles certain derivative
ﬁnancial instruments and through the use
of ﬂexibility within our portfolio of power
generating and gas storage assets
the uk division mitigates its exposure to
coal price risk through the use of a
combination of ﬁnancial and physical
contracts
cover against volatile spot prices is built up
on a rolling basis through the year and at
31 march 2003 a signiﬁcant proportion of
the uk division’s exposure to power gas and
coal price variations for the following
ﬁnancial year have been mitigated
the uk division measures the market risk in
its energy portfolio daily utilising
scottishpower’s var approach described
above as well as other measurements of
net position and monitors its portfolio
exposure to market risk in comparison to
established thresholds the uk division also
measures its open positions at price risk in
terms of volumes at each delivery location
for each forward time period
as at 31 march 2003 the uk division’s
estimated potential ﬁveday unfavourable
impact on fair value of the energy commodity
portfolio over the next 24 months was £118
million as measured by the var computations
described above compared to £162 million
as at 31 march 2002 the average daily var
ﬁveday holding for the year ended 31 march
2003 was £113 million the maximum and
minimum var measured during the year
ended 31 march 2003 were £167 million
and £77 million respectively changes in
markets inconsistent with historical trends
or assumptions used could cause actual
results to exceed predicted limits market
risks associated with derivative commodity
instruments held for purposes other than
hedging and balancing the uk division’s
energy commodity portfolio were not
material as of 31 march 2003
paciﬁcorp
paciﬁcorp’s market risk to commodity price
change is primarily related to its fuel and
electricity purchases and sales arising
principally from its electricity supply
obligation in the us as in the uk this risk to
price change is subject to ﬂuctuations in
weather economic growth and generation
resource availability which impacts supply and
demand risk limits are established to govern
energy purchases and sales price risk is
managed principally through the operation
of its generation and transmission system in
the western us and through its wholesale
energy purchase and sales activities
physically settled contracts are used to
hedge paciﬁcorp’s excess or shortage of net
electricity for future months 
while paciﬁcorp plans for resources to
meet its current and expected retail and
wholesale load obligations resource
availability price volatility and volumetric
volatility around both load and resources
may materially impact the power costs to
paciﬁcorp and proﬁts from surplus power
sales in the future prices paid by paciﬁcorp
to provide certain load balancing resources
to supply its load may exceed the amounts
it receives through retail rates and
wholesale prices prices received by
paciﬁcorp to dispose of resources made
excess by changes in retail and wholesale
load obligations may fall short of the
amounts paciﬁcorp has paid for such
resources in the 200001 power crisis
regulatory approval of deferred accounting
treatment under us gaap for these excess
costs mitigated a portion of this price risk to
the extent that recovery mechanisms were
implemented recovery of amounts allowed
by the commissions are scheduled to
continue through 200304 and for some
years beyond however such deferred
accounting treatment was granted in the
extraordinary circumstance of the power
crisis and subsequent use of this
mechanism is not automatic and is not
guaranteed for future use
paciﬁcorp continues to actively manage
commodity price volatility and reduce
exposure these steps included adding to its
generation portfolio and entering into
transactions that help to shape paciﬁcorps
system resource portfolio including physical
hedging products and ﬁnancially settled
weather temperaturerelated derivative
instruments that reduce volume and price
risk on days with weather extremes in
addition hydrogeneration hedges have been
put in place for the next three years to limit
volume and price risks associated with paciﬁc
northwest hydrogeneration availability
paciﬁcorp measures the market risk in its
natural gas and electricity portfolio daily 
utilising scottishpower’s var approach
described above as well as other
scottishpower annual report  accounts 200203

46 measurements of net position and monitors
its portfolio exposure to market risk in
comparison to established thresholds
paciﬁcorp also measures its open positions
at price risk in terms of volumes at each
delivery location for each forward time period
at 31 march 2003 paciﬁcorp’s estimated
potential ﬁveday unfavourable impact on fair
value of the natural gas and electricity
commodity portfolio over the next 24 months
was £110 million as measured by the var
computations described above compared to
£114 million at 31 march 2002 the average
daily var ﬁveday holding for the year
ended 31 march 2003 was £124 million the
maximum and minimum var measured
during the year ended 31 march 2003 were
£223 million and £61 million respectively
changes in markets inconsistent with
historical trends or assumptions used could
cause actual results to exceed predicted
limits market risks associated with derivative
commodity instruments held for purposes
other than hedging and balancing
paciﬁcorp’s energy commodity portfolio were
not material at 31 march 2003
ppm 
ppm energy inc “ppm” is scottishpower’s
competitive us energy company which is
primarily focused on providing
environmentally responsible energy
products to wholesale customers the
strategic priorities of ppm are to grow its
renewablethermal energy portfolio and gas
storagehub services business and optimise
returns through the integration of assets
trading and commercial activities ppm’s
strategy is to match the output of ppm
assets and longterm sales obligations
imbalances between asset positions and
longterm sales are managed via wholesale
energy purchases and sales activities
ppm owns the output from several wind
generation facilities located throughout the
us associated with the wind energy
production are renewable energy
certiﬁcates “recs” that represent the
environmental attributes of the renewable
energy consistent with its overall portfolio
strategy ppm balances its wind asset
position with longterm forward sales and
some spot sales of both energy and
renewable attributes wind generation
resource availability and variability is subject
to price changes for that portion of the
output that is not committed to longterm
ﬁxed price bilateral contracts imbalances in
the rec portfolio are subject to price
changes in the rec market
ppm owns or manages over 800 mw of
thermal capacity on its own behalf and on
the behalf of third parties substantially all of
this capacity is committed to longterm
contracts with the imbalance being subject
to generation resource availability and the
relationship of fuel costs to electricity prices
or “spark spread” ppm manages short
term and daily imbalance through realtime
markets ppm’s risk in this business is
principally if counterparties fail to perform in
accordance with contracts and if ppm’s
generation assets fail to perform at
reasonable levels
finally ppm also owns natural gas storage
facilities in canada and texas ppm’s
strategy is to develop a natural gas
storagehub services business that will own
and operate facilities across north america
the business model employed by ppm is
designed to minimise commodity risk and
provide a service for a fee for both longterm
and shortterm hub services hub services is
a generic term used to describe various fee
based transactions carried out by the
storage operator such as parking and
loaning of gas as a result the hub services
business is subject to the risks associated
with the operations and marketing of the
storage facilities and services
subject to market risk limitations delegated
by scottishpower and oversight by the
corporate risk management group ppm will
occasionally maintain or create open
positions in response to or in anticipation
of longterm origination or development
transactions creating exposure to market
price movements therefore ppm actively
participates in the wholesale power and gas
markets to manage its open positions in
addition ppm engages in pointofview
energy management activities in accordance
with strict limits approved by the business
unit risk committee chaired by the group
risk management function control and
performance metrics for such activities are
tracked daily 
ppm measures the market risk in its natural
gas and electricity portfolio daily utilising
scottishpower’s var approach described
above as well as other measurements of
net position and monitors its portfolio
exposure to market risk in comparison to
established thresholds ppm also measures
its open positions at price risk in terms of
volumes at each delivery location for each
forward time period
at 31 march 2003 ppm’s estimated
potential ﬁveday unfavourable impact on fair
value of the energy commodity portfolio over
the next 24 months was £24 million as
measured by the var computations
described above compared to £53 million
at 31 march 2002 the average daily var
ﬁveday holding for the year ended 31
march 2003 was £24 million the
maximum and minimum var measured
during the year ended 31 march 2003 were
£62 million and £09 million respectively
changes in markets inconsistent with
historical trends or assumptions used could
cause actual results to exceed predicted
limits market risks associated with derivative
commodity instruments held for purposes
other than hedging and balancing ppm’s
energy commodity portfolio were not
material at 31 march 2003
contractual obligations and
commercial commitments
the group enters into various ﬁnancial
obligations and commitments in the normal
course of business contractual ﬁnancial
obligations are considered to comprise
known future cash payments that the group
is required to make under contractual
arrangements in place at 31 march 2003
commercial commitments are deﬁned as
those obligations of the group which only
become payable if certain predeﬁned
events occur
table 36 details the group’s contractual
obligations at 31 march 2003
the ‘loans and other borrowings’ ﬁgures in
table 36 are stated at book value at 31
march 2003 
the group has commercial commitments in
respect of surety bonds in the us at 31
march 2003 the total amount that may be
payable by the group in respect of these
commitments is estimated to be £327
million of which £188 million would be
payable within one year £133 million
scottishpower annual report  accounts 200203

47 financial review
continued
between one and three years £04 million
between three and ﬁve years and £02
million after ﬁve years 
the actual net capital expenditure incurred
by the group for the year ended 31 march
2003 was £717 million the group’s
estimated net capital expenditure which is
subject to continuing review and revision for
the year ended 31 march 2004 is within the
range of £800 million – £900 million 
fair value of derivative contracts
table 37 details the changes in the fair value
of the group’s energy related and treasury
derivative contracts which are subject to the
requirements of statement of financial
accounting standard “fas” no 133
‘accounting for derivative instruments and
hedging activities’ fas 133 requires for the
purposes of us gaap  all derivatives as
deﬁned by the standard to be marked to
market value except for those which qualify
for speciﬁc exemption under the standard or
associated guidance for example those
deﬁned as normal purchases and normal
sales the derivatives which are marked to
market value in accordance with fas 133
include only certain of the group’s
commercial contractual arrangements as
many of these arrangements fall outside the
scope of fas 133 in addition the effect of
changes in the fair value of certain longterm
contracts entered into to hedge paciﬁcorp’s
future retail energy resource requirements
which are being marked to market value in
accordance with fas 133 are subject to
regulation in the us and are therefore
deferred as regulatory assets or liabilities
pursuant to fas 71 ‘accounting for the
effects of certain types of regulation’ the
fas 133 liability relating to paciﬁcorp of
£3199 million as set out in table 37 is
offset under us gaap by a us regulatory net
asset of £3206 million
the forward market price curve is derived
using daily market quotes from independent
energy brokers and reporting services as well
as direct information received from third party
offers and actual transactions entered into
by the group for certain contracts extending
past 2006 the forward prices are derived
using a fundamentals model costtobuild
approach that is updated as warranted at
least quarterly to reﬂect changes in the
market shortterm energy contracts without
explicit or embedded optionality are valued
based upon the relevant portion of the
forward market price curve or quoted market
prices energy contracts with explicit or
embedded optionality and longterm energy
contracts are valued by separating each
contract into its component physical and
ﬁnancial forward swap and option legs
forward and swap legs are valued against the
appropriate market curve the optionality is
valued using a modiﬁed blackscholes model
or a stochastic simulation monte carlo
approach each option component is
modelled and valued separately using the
appropriate forward market price curve
interest rate swaps and forwardrate
agreements are valued by calculating the
present value of future cash ﬂows estimated
using forward market curves interest rate
swaptions are valued using the market yield
curve and implied volatilities at the period end
crosscurrency swaps are valued by adding
the present values of the two legs of each
swap present values are calculated by
discounting the future cash ﬂows estimated
using the appropriate forward market curve
for that currency at the appropriate market
discount rates forward foreign exchange
contracts are valued using market forward
exchange rates at the periodend
in table 37 the cumulative effect of
accounting change represents the cumulative
effect on us gaap earnings of adopting
revised fas 133 guidance effective from 1
april 2002 issued by the derivatives
implementation group “dig” under
revised issue c15 ‘normal purchases and
normal sales exception for certain option
type contracts in electricity’ and issue c16
‘applying the normal purchases and normal
sales exception to contracts that combine a
forward contract and purchased option
contract’ this new guidance had the effect of
including an increased number of the group’s
contracts within the scope of fas 133
changes in fair values attributable to changes
in valuation techniques and assumptions
reﬂect changes in the fair value of markto
scottishpower annual report  accounts 200203

48
table 36 – contractual obligations at 31 march 2003 £m
within between 1 between 3 after  
1 year and 3 years and 5 years 5 years total
loans and other borrowings 
including overdrafts 2084 5250 3472 38875 49681
finance leases 01 02 06 166 175
operating leases 109 160 58 178 505
power purchase commitments 12928 17014 11542 33305 74789
capital commitments 993 52 28 201 1274
other ﬁrm commitments 531 959 887 294 2671
total contractual obligations 
at 31 march 2003 16646 23437 15993 73019 129095
within between 1 between 3 after  
1 year and 3 years and 5 years 5 years t otal
prices actively quoted 143 570 355 132 1200
prices based on models and 
other valuation methods 934 766 590 809 1481
total 10771336945677 2681
table 37 – fair value of energy related and treasury derivative contracts £m
paciﬁcorp ppm uk division t reasury t otal
fair value of contracts outstanding at 1 april 2002 3553 527 625 313 3142
cumulative effect of accounting change 21 2307   2286
contracts realised or otherwise settled during the year 701 193 43 854 303
changes in fair values attributable to changes in 
valuation techniques and assumptions 1248  72  1176
other changes in fair value 1928 273 190 4279 2434
foreign exchange movement 354 124   230
fair value of contracts outstanding at 31 march 2003 3199 1736 406 3738 2681 market values as a result of applying
reﬁnements in valuation modelling
techniques
other changes in fair value reﬂect changes in
underlying economic fundamentals which
impact on the value of the derivative including
commodity price risk which is inﬂuenced by
contract size term location and unique or
speciﬁc contract terms movements in
foreign exchange rates which impact the
value of crosscurrency swaps and
movements in interest rates which impact
on the value of interest rate swaps forward
rate agreements and crosscurrency swaps
pension arrangements
as required by the transitional arrangements
for frs 17 we have disclosed at 31 march
2003 a deﬁcit of £231 million net of
deferred tax for our uk deﬁned beneﬁt
pension schemes and a deﬁcit of £214
million 338 million net of deferred tax for
our us schemes with the obligation to fund
other postretirement beneﬁts in the us we
have also reported a deﬁcit under frs 17 at
31 march 2003 of £122 million 193 million
net of deferred tax as an indication of the
volatility of these valuations the movement
in asset market values in april 2003 would
have reduced the deﬁcit for the uk schemes
by 40 and the us schemes by 5
frs 17 prescribes detailed rules for the
calculation of scheme assets and liabilities
and indicates the net accounting surplus or
deﬁcit that would exist on an ongoing basis
using market conditions at the balance sheet
date as noted above ﬂuctuations in
investment conditions can result in
signiﬁcant volatility in funding levels
pension schemes are however managed over
the longterm investment and liability
decisions are based on underlying actuarial
and economic circumstance with the intention
of making sure that the schemes have
sufﬁcient assets to meet liabilities as they fall
due rather than meeting accounting
requirementsthe company and the trustees
of the group’s schemes are currently reviewing
the investment strategy on the assetliability
matching of the group’s schemes 
the charge in the year for these pension
schemes has increased from £7 million to
£16 million in the uk and from £8 million
11 million to £26 million 41 million in
the us contribution payments to the uk
schemes have recommenced achieving
regulatory recovery of these costs is a
priority and we have a focus on ensuring
inclusion of any increased expense in us
rate cases and the regulatory price control
reviews in the uk
creditor payment policy and
practice 
in the uk the group’s current policy and
practice concerning the payment of its trade
creditors is to follow the better payment
practice code to which it is a signatory
copies of the code may be obtained from
the department of trade and industry or
from the website wwwpayontimecouk
the group’s policy and practice is to settle
terms of payment when agreeing the terms
of the transaction to include the terms in
contracts and to pay in accordance with its
contractual and legal obligations the
group’s creditor days at 31 march 2003 for
its uk businesses and us business were 22
days and 40 days respectively
going concern
the directors conﬁrm that the company
remains a going concern on the basis of its
future cash ﬂow forecasts and has
sufﬁcient working capital for present
requirements
dividend policy
as stated at the time of announcing the
proposed disposal of southern water with
effect from the ﬁnancial year commencing
1 april 2003 scottishpower intends to
target dividend cover based on full year
earnings excluding goodwill amortisation
and exceptional items in the range 15 –
20 times and ideally towards the middle of
that range scottishpower will aim to grow
dividends broadly in line with earnings
thereafter 
to implement this policy in the absence of
unforeseen circumstances scottishpower
intends to pay an identical dividend for
each of the ﬁrst three quarters of each year
with the dividend for the fourth quarter
representing the balance of the total
dividend for each year in respect of each of
the quarters ending 30 june 2003 30
september 2003 and 31 december 2003
scottishpower aims to declare a dividend of
475 pence per share
accounting developments
the uk accounting standards board “asb”
did not issue any new standards during the
year ended 31 march 2003 frs 17
‘retirement beneﬁts’ issued in november
2000 requires certain disclosures relating to
pensions and other postretirement beneﬁts
which have been included in this year’s
accounts in november 2002 the asb
issued an amendment standard to defer the
mandatory application of the measurement
rules within frs 17 until 200506 had the
measurement rules within frs 17 been
applied during the ﬁnancial year 200203
the group’s operating proﬁt would have
increased by £5 million ﬁnance costs would
have reduced by £31 million and proﬁt
before tax would have increased by £36
million net assets and reserves at 31 march
2003 would have been reduced by £479
million
in january 2003 the asb issued a non
mandatory statement on the operating and
financial review the group has complied
with the principles set out in this statement
as a matter of best practice
the asb issued a number of exposure drafts
during the past year most of those exposure
drafts have been issued simultaneously with
exposure drafts issued by the international
accounting standards board “iasb” on the
same topics this is in line with the asb’s
objective to highlight new international
proposals for uk companies and to facilitate
a smooth convergence of uk and
international standards in june 2002 the
european union “eu” adopted its
regulation which requires that the group
accounts of listed companies in the eu
should from 200506 be drawn up on the
basis of adopted international accounting
standards “ias” ias continue to evolve
and at present it is not possible to
determine precisely what impact the new
accounting regime will have on the group’s
reported results however it is likely that the
proposals would if implemented have a
material effect on how uk companies report
their ﬁnancial results in particular a greater
degree of volatility in reported proﬁts is likely
scottishpower annual report  accounts 200203

49 scottishpower annual report  accounts 200203

50
financial review
continued
to be one consequence of the proposed
rules especially in relation to accounting for
ﬁnancial instruments many of which are
likely to be marked to market value at each
balance sheet date irrespective of the fact
that they may be held for commercial risk
mitigation purposes or to achieve a
balanced energy position the iasb’s project
on reporting ﬁnancial performance is in its
early stages of development but has the
potential to alter radically the way in which
uk listed companies present their ﬁnancial
results the group continues to monitor the
output of the relevant accounting regulatory
bodies in the uk the us and internationally
the urgent issues task force committee of
the asb issued a number of accounting
pronouncements during the year these
pronouncements had no material impact on
the group’s results and ﬁnancial position
the group’s results are also presented in
accordance with us gaap  the group’s
results under us gaap have been impacted
materially by the implementation of revised
guidance relating to fas 133 this guidance
issued by the dig comprised revised issue
c15 ‘normal purchase and normal sales
exception for certain optiontype contracts
and forward contracts in electricity’ and
issue c16 ‘applying the normal purchases
and normal sales exception to contracts
that combine a forward contract and
purchased option contract’ the cumulative
adjustment to proﬁt under us gaap on
adoption of this guidance was an increase to
proﬁt of £1411 million net of tax on 1 april
2002 the group also implemented fas 142
‘goodwill and other intangible assets’ this
standard prohibits the amortisation of
goodwill and requires that goodwill be tested
annually for impairment and in interim
periods if certain events occur which
indicate that the carrying value of the
goodwill may be impaired the group
performed its annual goodwill impairment
review as of 1 october 2002 and
determined that goodwill recognised under
us gaap is not impaired during the year
the group implemented the financial
accounting standards board “fasb”
interpretation 45 “fin 45” ‘guarantor’s
accounting and disclosure requirements for
guarantees including indirect guarantees of
indebtedness of others an interpretation of
fasb statements no 5 57 and 107 and
rescission of fasb interpretation no 34’
the adoption of fin 45 did not have a
material effect on the group’s results or
ﬁnancial position under us gaap  the
group’s guarantees as deﬁned in fin 45 are
disclosed in note 35 to the accounts fas
146 ‘accounting for costs associated with
exit or disposal activities’ applies to exit or
disposal activities initiated after 31
december 2002 and did not have a material
effect on the group’s results or ﬁnancial
position under us gaap  the fasb issued
fas 148 ‘accounting for stockbased
compensation – transition and disclosure’
which provides alternative methods of
transition for a change to the fair value
based method of accounting for stockbased
employee compensation the group has
adopted the disclosure requirements of this
standard and these are set out in note 35 to
the accounts in june 2002 the emerging
issues task force “eitf” of the fasb
reached a partial consensus on issue no
023 ‘accounting for contracts involved in
energy trading and risk management
activities’ the partial consensus requires all
marktomarket gains and losses arising
from energy trading activities whether
realised or unrealised accounted for under
eitf issue no 9810 ‘accounting for
contracts involved in energy trading and
risk management activities’ be presented
on a net basis in the income statement and
that the gross transaction volume be
disclosed for those energy trading contracts
that are physically settled eitf issue no 02
3did not have a material effect on the
group’s results or ﬁnancial position under
us gaap  the group adopted fas 143
‘accounting for asset retirement
obligations’ on 1 april 2003 the group
estimates that the cumulative posttax effect
of adopting fas 143 will increase net
income under us gaap by £17 million 
which will be recorded primarily as a us net
regulatory liability if paciﬁcorp receives
regulatory approval the group adopted fas
145 ‘rescission of fasb statements no 4
44 and 64 amendment of fasb statement
no 13 and technical corrections’ on 1 april
2003 the adoption of this standard had no
impact on the group’s results and ﬁnancial
position under us gaap  fas 149
‘amendment of statement 133 on derivative
instruments and hedging activities’ amends
and clariﬁes ﬁnancial reporting for derivative
instruments including certain derivative
instruments embedded in other contracts
and for hedging activities and is effective for
contracts entered into or modiﬁed after 30
june 2003 the group is currently evaluating
the effect that fas 149 will have on its
results and ﬁnancial position under us
gaap  in january 2003 the fasb issued fin
46 ‘consolidation of variable interest
entities’ which requires existing
unconsolidated variable interest entities to
be consolidated by their primary
beneﬁciaries in certain circumstances fin
46 applies immediately to variable interest
entities created after 31 january 2003 and
applies to accounting periods beginning
after 15 june 2003 in respect of variable
interest entities created before 1 february
2003 the adoption of this interpretation is
not expected to have a material impact on
the group’s results and ﬁnancial position
under us gaap 
critical accounting policies – uk
gaap
the group accounts are prepared in
accordance with uk gaap  this requires the
directors to adopt those accounting policies
which are most appropriate for the purpose
of the accounts giving a true and fair view
the group’s material accounting policies are
set out in full on pages 70 to 73 in preparing
the accounts in conformity with uk gaap  the
directors are required to make estimates and
assumptions that impact on the reported
amounts of revenues expenses assets and
liabilities actual results may differ from
these estimates certain of the group’s
accounting policies have been identiﬁed as
critical accounting policies by considering
which policies involve particularly complex
or subjective decisions or assessments and
these are discussed below the discussion
below should be read in conjunction with
the full statement of accounting policies
the critical accounting policies have been
discussed with the group’s senior
management and the audit committee
uk gaap – turnover
income from the sale of energy includes an
estimate of the number and value of units
supplied to customers between the most
recent measurement and the yearend this
is estimated based on the energy delivered
each month compared to the amounts billed
to customers estimates of unbilled units
and debt are reviewed regularly to ensure
that income is recognised only where there
is sufﬁcient reliability of the estimates scottishpower annual report  accounts 200203

51
uk gaap – provision for doubtful debts
the group estimates its provision for
doubtful debts relating to trade debtors by a
combination of two methods firstly speciﬁc
amounts are evaluated where information is
available that a customer may be unable to
meet its ﬁnancial obligations in these
circumstances assessment is made based
on available information to record a speciﬁc
provision against the amount receivable
from that customer to adjust the carrying
value of the debtor to the amount expected
to be collected in addition a provision for
doubtful debts within the portfolio of other
debtors is made using historical experience
and ageing analysis to estimate the provision
required to reduce the carrying value of
trade debtors to their estimated recoverable
amounts this process involves the use of
assumptions and estimates which may differ
from actual experience management of debt
recovery is a key priority for the group and
the estimates of provisions for doubtful
debts are reviewed regularly 
uk gaap – depreciation amortisation and
impairment
tangible ﬁxed assets other than land are
generally depreciated on the straight line
method over their estimated operational
lives operational lives are estimated based
on a number of factors including the
expected usage of the asset expected
physical deterioration and technological
obsolescence goodwill on acquisitions prior
to 31 march 1998 was written off to reserves
goodwill on subsequent acquisitions is
amortised on a straight line basis over its
estimated useful economic life the
estimated useful economic life of the goodwill
on acquisition of paciﬁcorp is 20 years this
is based on an assessment of the longterm
nature of paciﬁcorp’s electricity business
and the potential impact of change to the
regulatory regime for utility companies in
the us in certain circumstances accounting
standards require tangible ﬁxed assets and
goodwill to be reviewed for impairment
when a review for impairment is conducted
the recoverable amount is assessed by
reference to the net present value of the
expected future cash ﬂows of the relevant
income generating unit “igu” or disposal
value if higher the discount rate applied is
based on the group’s weighted average cost
of capital with appropriate adjustments for
the risks associated with the igu estimates of
cash ﬂows are consistent with management’s
plans and forecasts estimation of future
cash ﬂows involves a signiﬁcant degree of
judgement
uk gaap – us regulatory assets
us regulatory assets are only recognised
where they comprise rights or other beneﬁts
which have arisen as a result of past
transactions or events which have created
an obligation to transfer economic beneﬁts
to a third party the interpretation of these
principles requires assessment of regulatory
events to determine when an asset should
be recognised the application of this policy
has generally led to us regulatory assets
only being recognised when reﬂected in
customers’ bills 
uk gaap – environmental provisions
provision is made for liabilities relating to
environmental obligations when the related
environmental disturbance occurs based on
the net present value of estimated future
costs estimates of environmental liabilities
are principally based on reports prepared by
external consultants the ultimate cost of
environmental disturbance is uncertain and
there may be variances from these cost
estimates which could affect future results
at 31 march 2003 the group had provided
£852 million for environmental obligations
uk gaap – decommissioning and mine
reclamation provisions
provision is made for the decommissioning
of major capital assets where the costs are
incurred at the end of the lives of the assets
similarly closure and reclamation costs are
a normal consequence of mining with the
majority of the expenditure incurred at the end
of the life of the mine although the ultimate
cost to be incurred is uncertain estimates
have been made of the respective costs based
on local conditions and requirements at 31
march 2003 the group had provided £833
million for decommissioning costs and
£723 million for mine reclamation costs
uk gaap – tax
the group’s tax charge is based on the
proﬁts for the year and tax rates in force
estimation of the tax charge requires an
assessment to be made of the potential tax
treatment of certain items which will only be
resolved once ﬁnally agreed with the relevant
tax authorities in particular the tax returns
of the group’s us businesses are examined
by the internal revenue service and state
agencies on a several year lag assessment
of the likely outcome of the examinations is
based upon historical experience and the
current status of examination issues
uk gaap – pensions and other post
retirement beneﬁts
the group operates a number of deﬁned
beneﬁt schemes for its employees in
addition other postretirement beneﬁts are
provided to employees within the group’s
us businesses the group accounts for these
arrangements under uk gaap in
accordance with statement of standard
accounting practice “ssap” no 24
‘accounting for pension costs’ the impact
on the groups accounts had the
measurement rules of frs 17 ‘retirement
beneﬁts been implemented is summarised
in ‘accounting developments’ on page 49
the expense and balance sheet items relating
to the group’s accounting for pension
schemes under ssap 24 are based on
actuarial valuations inherent in these
valuations are key assumptions including
discount rates earnings increases and
pension increases in payment these actuarial
assumptions are reviewed periodically and
modiﬁed as appropriate the effect of
modiﬁcations is generally amortised over
future periods the assumptions adopted
are based on prior experience market
conditions and the advice of plan actuaries 
where as in 200203 there are signiﬁcant
market changes in the interim period
between formal actuarial valuations the effect
of such changes is recognised in calculating
pension costs where as in 200102 the
impact of amortisation of pension surpluses
would imply a negative pension charge in
respect of a scheme the costs relating to
that scheme is set to a minimum of £nil
the group chooses a discount rate for each
scheme which reﬂects yields on highquality
ﬁxedincome investments which may be
increased for ssap 24 purposes to allow for
higher returns expected over the longerterm
from the schemes’ equity holdings the
pension liability and future pension expense
both increase as the discount rate is reduced 
if the ssap 24 expense for the year ended
31 march 2003 had been based on a
discount rate 05 pa higher or lower than
those actually used the expense would have scottishpower annual report  accounts 200203

52
financial review
continued
table 38 – discount rates
discount rate discount rate
pension fund uk gaap us gaap
scottishpower 60 54
manweb 68 54
paciﬁcorp 75 675
 48 postretiral
reduced or increased respectively by £106
million in respect of the group’s uk pension
schemes and £44 million in respect of the
group’s us pension schemes
the discount rates used for the purposes of
uk gaap for the group’s principal pension
schemes are set out in table 38
uk gaap – derivative financial
instruments
the group uses derivative instruments in the
normal course of business to offset
ﬂuctuations in earnings cash ﬂows and
equity associated with movements in
exchange rates interest rates and
commodity prices derivative ﬁnancial
instruments entered into for hedging
purposes are recognised in the group’s
accounts when the hedged item is
recognised certain derivatives may therefore
be included at cost in the group’s balance
sheet this amount may be signiﬁcantly
different from the market value of the
derivative in limited circumstances the
group holds derivative ﬁnancial instruments
for trading purposes these derivatives are
marked to market and unrealised gains and
losses are recognised in the group’s proﬁt
and loss account the net unrealised gains
on ﬁnancial assets and liabilities held for
trading at 31 march 2003 was £04 million
critical accounting policies – us
gaap
in addition to preparing the group accounts
in accordance with uk gaap  the directors
are also required to prepare a reconciliation
of the group’s proﬁt or loss and
shareholders’ funds between uk gaap and
us gaap  the adjustments required to
reconcile the group’s proﬁt or loss and
shareholders’ funds from uk gaap to us
gaap are explained in note 35 to the
accounts certain of the group’s us gaap
accounting policies have been identiﬁed as
critical us gaap accounting policies and
these are discussed below the discussion
below should be read in conjunction with
the full discussion of the differences
between the group’s uk and us gaap
accounting policies set out in note 35
us gaap – us regulatory assets
the group prepares its us gaap ﬁnancial
information in accordance with fas 71
‘accounting for the effects of certain types
of regulation’ in respect of its regulated us
business paciﬁcorp 
in order to apply fas 71 certain conditions
must be satisﬁed including the following an
independent regulator must set rates the
regulator must set the rates to cover the
speciﬁc costs of delivering service and the
service territory must lack competitive
pressures to reduce rates below the rates set
by the regulator fas 71 requires the group to
reﬂect the impact of regulatory decisions and
requires that certain costs be deferred on the
balance sheet under us gaap until matching
revenue can be recognised fas 71 provides
that regulatory assets may be capitalised
under us gaap  if it is probable that future
revenues in an amount at least equal to the
capitalised costs will result from the inclusion
of that cost in allowable costs for ratemaking
purposes in addition the rate actions should
permit recovery of the speciﬁc previously
incurred costs rate rather than to provide for
expected levels of similar future costs an
entity applying fas 71 does not need
absolute assurance prior to capitalising a cost
only reasonable assurance based on the
group’s us regulatory net asset balance
under us gaap at 31 march 2003 if the
group stopped applying fas 71 to its
remaining regulated us operations it would
have recorded an extraordinary loss after tax
of £5808 million under us gaap  paciﬁcorp
intends to seek recovery of all of its prudent
costs including stranded costs in the event of
deregulation however due to the current lack
of deﬁnitive legislation it is not possible to
predict whether paciﬁcorp will be successful
because of potential regulatory andor
legislative actions in the various states in
which paciﬁcorp operates the group may
have regulatory asset write offs and charges
for impairment of regulatory assets under us
gaap  in future periods such impairment
reviews would involve estimates of future cash
flows including estimated future prices cash
costs of operations sales and load growth
forecasts and the nature of any legislative or
regulatory cost recovery mechanism
us gaap – derivative financial instruments
the group accounts for its derivative
ﬁnancial instruments under us gaap in
compliance with fas 133 certain of the
group’s derivatives are treated as normal
purchases and normal sales and are
therefore excluded from the requirements of
fas 133 derivatives falling within the scope
of fas 133 are required to be recorded in
the balance sheet under us gaap at fair
value changes in the fair values of
derivatives that are not designated as hedges
are adjusted through earnings under us
gaap with the exception of longterm energy
contracts that were in existence on 1 april
2001 and are included in paciﬁcorp’s rate
making base for these longterm energy
contracts paciﬁcorp received regulatory
accounting orders to adjust the fair value
through regulatory assets or liabilities
reversing recorded amounts as the contracts
settle for derivatives designated as effective
cash ﬂow hedges the changes in fair values
are recognised under us gaap in
accumulated other comprehensive income
until the hedged items are recognised in
earnings for derivatives designated as
effective fair value hedges the changes in
fair values are recognised under us gaap in
the income statement offset to the extent
that they are effective by fair value
movements on the designated risk of the
item being hedged the group’s future
results under us gaap could be impacted
by changes in market conditions to the
extent that changes in contract values are
not offset by regulatory or hedge accounting
us gaap – pensions and other post
retirement beneﬁts
the group accounts for its pension schemes
under us gaap in accordance with fas 87
‘employers’ accounting for pensions’ under
fas 87 the group’s pension schemes
generally had assets with a fair value at 31
march 2003 that was less than the
accumulated beneﬁt obligation under the
schemes at the same date primarily due to
declines in equity markets as a result at 31
march 2003 the group recognised a scottishpower annual report  accounts

53
requires recognition and disclosure of
certain guarantees to the extent they are not
required to be recognised guarantees are
regarded as off balance sheet arrangements
under us gaap  full details of the
guarantees required to be disclosed under
fin 45 principally relating to disposal of
certain of the group’s former operations are
set out in note 35 to the accounts the
directors believe that it is extremely unlikely
that these guarantees will give rise to a
material ﬁnancial exposure for the group
uk gaap to us gaap reconciliation
the consolidated accounts of the group are
prepared in accordance with uk gaap
which differ in signiﬁcant respects from us
gaap  reconciliations of proﬁtloss and
equity shareholders’ funds between uk
gaap and us gaap are set out in note 35 to
the accounts under us gaap  the proﬁt for
the year ended 31 march 2003 was £648
million before crediting a cumulative
adjustment for the effect of implementing
dig guidance revised c15 and c16 net of
tax of £141 million compared to a loss of
£825 million in the previous year after
charging an extraordinary item net of tax of
£8 million and before charging a cumulative
adjustment for the effect of implementing
fas 133 net of tax of £62 million earnings
per share under us gaap  before the
cumulative adjustment for revised c15 and
c16 were 3516 pence per share compared
to a loss before the cumulative adjustment
for fas 133 of 4491 pence per share in
200102 earnings per share under us
gaap were 4281 pence per share
compared to a loss per share for the year
ended 31 march 2002 of 4826 pence in
accordance with us gaap  earningsloss
per share are stated based on us gaap
minimum pension liability under us gaap
of £7174 million of which £5690 million
was charged to accumulated other
comprehensive income and £1484 million
was recognised as a us regulatory asset if a
discount rate had been used for
accumulated beneﬁt obligation purposes
which was 05 pa higher than that
actually used the impact would have been
to reduce the minimum pension liability by
£3757 million for the uk schemes and
£241 million for the us schemes the
discount rates used for the purposes of us
gaap for the group’s principal pension
schemes are set out in table 38
off balance sheet arrangements
the group has not entered into any
transactions or arrangements which have
given rise to off balance sheet obligations
other than in respect of the following the
group has entered into various operating
leases in accordance with uk gaap  future
payments under these leases amounting to
£505 million at 31 march 2003 are not
recognised as liabilities in the group’s
balance sheet the group has entered into
various energyrelated and treasury
derivative contracts primarily for hedging
purposes in accordance with uk gaap  the
value of derivatives held for hedging
purposes are only recognised when the
hedged item is recognised this contrasts
with us gaap which requires that
derivatives as deﬁned in the relevant us
accounting standards are reﬂected as assets
or liabilities at their market values at the
balance sheet date an analysis of the
group’s derivatives as deﬁned under us
gaap  is set out in ‘fair value of derivative
contracts’ above as discussed in
‘accounting developments’ above fin 45
earnings without adjustments for the impact
of the uk gaap exceptional items and
goodwill amortisation as such additional
measures of underlying performance are not
permitted under us gaap  the inclusion of
uk gaap exceptional items in the
determination of earnings per share in
accordance with us gaap decreased
earnings by £1039 million or 5653 pence
per share in 200102 the inclusion of
goodwill amortisation decreased earnings by
£173 million or 938 pence per share in
200102 this additional information has
been provided to aid investors’ comparison
between the results reported under us and
uk gaap  equity shareholders’ funds under
us gaap amounted to £5480 million at 31
march 2003 compared to £5850 million at
31 march 2002 
table 39 details the impact of uk gaap
exceptional items and goodwill amortisation
on the reported results under us gaap for
200203 and 200102
summary
we have delivered a good set of ﬁnancial
results with earnings per share increased
from a loss of 5371 pence last year to
earnings of 2617 pence excluding goodwill
amortisation and exceptional items earnings
per share were up 29 on last year to 3371
pence our increased proﬁt before tax
reﬂects improved business operational
performance and lower interest charges due
to our lower net debt position which has
also contributed to a stronger balance sheet
table 39 – impact of uk gaap exceptional items and goodwill amortisation on us gaap eps
200203 200102
effect on us effect on us
gaap eps gaap eps
£m pence £m pence
uk gaap exceptional items 
uk gaap – continuing operations –– 260 141
uk gaap – discontinued operations –– 12921 7031
ukus gaap adjustment for uk gaap exceptional items –– 2791 1519
effect on us gaap of uk gaap exceptional items –– 10390 5653
goodwill amortisation
uk gaap 1390 754 1490 810
ukus gaap adjustment for goodwill amortisation 1390 754 235 128
effect on us gaap of goodwill amortisation –– 1725 938
david nish finance director
7 may 2003 executive directors
ian russell 50 is chief executive having
been appointed to this position in april
2001 he joined scottishpower as finance
director in april 1994 and became deputy
chief executive in november 1998 he is a
member of the institute of chartered
accountants of scotland having trained with
thomson mclintock and has held senior
ﬁnance positions with tomkins plc and
hsbc
charles berry 51 is executive director uk
responsible in this capacity for the uk
energy businesses of generation energy
management and supply he joined
scottishpower in november 1991 and was
appointed to the board in april 1999 he is
a member of the board of the energy
saving trust prior to joining scottishpower
he was group development director of
norwest holst a subsidiary of compagnie
générale des eaux and prior to that held
management positions within subsidiaries
of pilkington plc he holds a bsc first class
hons in electrical engineering from the
university of glasgow and a masters degree
in management from the massachusetts
institute of technology
david nish 43 is finance director having
joined scottishpower in september 1997 as
deputy finance director and then being
appointed to the board as finance director
in december 1999 in this capacity he also
has responsibility at board level for
performance management and information
technology he is a member of the institute
of chartered accountants of scotland and
its qualiﬁcations board a member of the
scottish council of the cbi and a non
executive director of the royal scottish
national orchestra prior to joining
scottishpower he was a partner with price
waterhouse he has a bacc from the
university of glasgow
chairman
charles miller smith 63 joined the board
as deputy chairman in august 1999 and
was appointed chairman in april 2000
following a career with unilever for some 30
years during the last ﬁve of which he was
director of finance and latterly of the food
executive he was appointed chief executive
of ici in 1995 and then served as chairman
from 1999 to 2001 he is an international
adviser to goldman sachs a member of the
board of the indian company icici one
source plc and a member of the ministry of
defence management board he is
currently serving on the committee chaired
by professor laura tyson of london
business school which is considering in the
light of the recommendations of the higgs
review ways of broadening the pool of non
executive directors he is also a governor of
the henley management college
nonexecutive directors
euan baird 65 joined the board in january
2001 he served as chairman and chief
executive ofﬁcer of schlumberger limited
from 1986 to february 2003 he is now
nonexecutive chairman of rollsroyce plc
and a nonexecutive director of société
générale and areva he is a trustee of
tocqueville alexis trust and carnegie
institution of washington and a member of
the comité national de ia science in france
and the prime minister’s council of science
and technology in the uk his current term
of ofﬁce will expire at the agm in 2004
mair barnes 58 joined the board in april
1998 she is a nonexecutive director of
gwr group plc patientline plc and the
south african company woolworths
holdings limited she is a member of the
department of trade and industry’s strategy
board and services group board she was
previously managing director of woolworths
plc in the uk until 1994 and subsequently
became chairman of vantios plc until 1998
she was also formerly a nonexecutive
director of abbey national plc littlewoods
plc and george wimpey plc her current
term of ofﬁce will expire at the agm in 2004
philip carroll 65 joined the board in
january 2002 he was formerly chairman
and chief executive ofﬁcer of fluor
corporation a californiabased international
engineering construction and services
company until his retirement in february
2002 previously he was with shell oil for
over 35 years serving as president and
chief executive ofﬁcer from 1993 to 1998
he is an honorary life member of the board
of the american petroleum institute and
holds various posts with the james a baker
iii institute for public policy of rice
university and the university of houston his
current term of ofﬁce will expire at the agm
in 2005
sir peter gregson gcb 66 joined the
board in december 1996 and is the
company’s senior independent non
executive director and chairman of the
remuneration committee he was formerly
a career civil servant having served latterly
as permanent secretary of the department
of energy from 1985 to 1989 and
permanent secretary of the department of
trade and industry until his retirement in
june 1996 he was previously deputy
chairman of the board of companions of
the chartered institute of management and
a nonexecutive director of woolwich plc his
current term of ofﬁce has been extended by
up to one year such that it will expire not
later than the agm in 2004
nolan karras 58 joined the board in
november 1999 he continues as a non
executive director of paciﬁcorp having
previously until the merger in november
1999 served as chairman of the paciﬁcorp
personnel committee he is president of
the karras company inc and a registered
principal for raymond james financial
services he is chief executive ofﬁcer of
western hay company inc and a non
executive director of beneﬁcial life
insurance company he is chairman of the
utah state higher education board of
regents and a member of the board of
ogdenweber applied technology college
he also served as a member of the utah
house of representatives from 1981 to
1990 and as speaker of the utah house of
representatives from 1989 to 1990 his
current term of ofﬁce will expire at the agm
in 2006
ewen macpherson 61 joined the board in
september 1996 and is chairman of the
audit committee he had a long career with
3i group plc leading to his appointment as
chief executive from 1992 until his
retirement in 1997 he is chairman of
merrill lynch new energy technology plc
scottishpower annual report  accounts 200203

54
board of directors  executive team and a nonexecutive director of foreign 
colonial investment trust plc and pantheon
international participations plc he is also
chairman of the trustees of
glaxosmithkline pension fund previous
appointments include nonexecutive
directorships of mg group plc booker plc
and the law debenture corporation plc he
will retire from the board after the agm in
2003
nick rose 45 joined the board in february
2003 he is the audit committee’s “ﬁnancial
expert” and will succeed ewen macpherson
as chairman of the committee later in the
year he is finance director of diageo plc
having been appointed to this position in
july 1999 previously he held senior ﬁnance
positions with grandmet and was latterly
finance director of international distillers 
vintners in 1996 and then of united
distillers  vintners in 1997 he is also a
director of moët hennessy his current term
of ofﬁce subject to his election in 2003 will
expire at the agm in 2006
executive team
the executive team is constituted as a
committee of the board and includes not
only the executive directors of the board
but also the following key executives and
ofﬁcers from the group
julian brown 53 was appointed group
director strategy in april 1997 having
joined scottishpower in 1993 he began his
commercial career with exxon chemical in
australia and subsequently spent seven
years with management consultants
mckinsey and company he holds a bsc
from the australian national university and
a phd in chemistry from university college
london with effect from 1 april 2003 he
left the executive team to assume a new
position within the group
dominic fry 43 joined scottishpower in
september 2000 as group director
corporate communications he is
responsible for investor and media relations
communications with employees corporate
social responsibility and management of the
group’s overall reputation he has held
appointments as communications director
with j sainsbury plc and eurotunnel plc he
chairs the trading board of the glasgow
science centre and is a communications
adviser to the royal shakespeare company
and business in the community he was
educated at the université paul valéry iii in
montpellier and the university of north
carolina
terry hudgens 48 was appointed chief
executive ofﬁcer of scottishpower’s
competitive us energy business ppm in
may 2001 and joined the executive team in
december 2001 he joined paciﬁcorp as
senior vice president of power supply in
april 2000 having previously spent 25 years
with texaco inc he was formerly president
of texaco natural gas and served as
texaco’s senior representative and elected
ofﬁcer in the natural gas supply
association he has a bachelor’s degree in
civil engineering from the university of
houston
judi johansen 44 was appointed
president and chief executive ofﬁcer of
paciﬁcorp in june 2001 and joined the
executive team in december 2001 she is
responsible for all of paciﬁcorp’s operations
she joined paciﬁcorp as executive vice
president of regulation and external affairs
in december 2000 having held senior
positions with the bonneville power
administration and washington water
power she is involved in several civic and
professional activities she has a bachelor’s
degree in political science from colorado
state university and a law degree from
northwestern school of law at lewis 
clark college in portland oregon
ronnie mercer 59 was appointed group
director infrastructure in april 2001 and is
responsible in this role for the uk wires
business he is a member of the board of
the electricity association he joined the
scottishpower generation business in 1994
and was appointed generation director in
1996 and then managing director of
southern water in 1998 previous career
positions include scottish director and
managing director roles in british steel he
was educated at paisley college of
technology
andrew mitchell 51 was appointed group
company secretary in july 1993 and is
responsible in this role for corporate
governance and reporting shareholder
services compliance and group security he
also serves as chairman of the trustees of
the group’s uk pension schemes and as the
company’s e7 representative prior to
joining scottishpower he held a number of
company secretarial appointments latterly
as company secretary of the laird group
plc and then stakis plc now part of the
hilton group he is a graduate in law from
the university of edinburgh llb hons and
the london school of economics llm and
is a member of the institute of chartered
secretaries and administrators
michael pittman 50 was appointed group
director human resources in november
2001 he has groupwide responsibility for
human resources leading the focus on
talent management one of the group’s
main strategic thrusts he joined paciﬁcorp
in december 1979 and was appointed to
the paciﬁcorp board in may 2000 he
chairs the paciﬁcorp foundation for
learning board and is involved in numerous
civic activities he has held several positions
within paciﬁcorp including safety and
health risk management and operations he
holds an advanced degree in environmental
health from the university of washington 
james stanley 48 was appointed group
director commercial and legal in march
1996 he is responsible in this role for the
provision of all legal commercial and
associated services throughout the group
and particularly the negotiation structuring
and delivery of ma projects such as the
sale of southern water plc in his early
career he specialised in commercial
litigation in private practice in 1986 he
moved to the trafalgar house group and
subsequently became both commercial
director of john brown plc and general
counsel to the global engineering division
of the group he is a graduate in law from
nottingham university and the college of
law in chester where he qualiﬁed as a
solicitor in 1980
scottishpower annual report  accounts 200203

55 members of the audit committee
ewen macpherson chairman
philip carroll
sir peter gregson
nolan karras
nick rose
members of the nomination committee
charles miller smith chairman
mair barnes
sir peter gregson
nolan karras
lan russell
members of the remuneration committee
sir peter gregson chairman
euan baird
mair barnes
nolan karras
ewen macpherson
board  executive team changes
allan leighton resigned from the board on
12 june 2002 nick rose was appointed to
the board on 19 february 2003 in
accordance with the articles of association
he will retire from ofﬁce at the annual
general meeting and being eligible offers
himself for election in addition charles
miller smith david nish and ewen
macpherson retire by rotation at the annual
general meeting charles miller smith and
david nish being eligible offer themselves
for reelection ewen macpherson will retire
from the board and accordingly does not
seek reelection david nish has a service
contract terminable by either party upon
one year’s notice
julian brown served as a member of the
executive team throughout the year but
assumed a new position within the group
with effect from 1 april 2003
forusreporting purposes the members of
the executive team are regarded as ofﬁcers
of the company
scottishpower annual report  accounts 200203

56
board of directors  executive team
continued corporate governance statement
the company is committed to the highest
standards of corporate governance this
statement together with the remuneration
report of the directors set out on pages 61
to 68 describes the extent to which in
respect of the ﬁnancial year ended 31
march 2003 the company has been in
compliance with the principles of good
governance set out in section 1 of the
combined code as appended to the listing
rules of the uk listing authority in the uk
and with the sarbanesoxley act 2002 and
associated rules to the extent they apply to
the company in the us
the company acknowledges the
consideration of the role and effectiveness of
nonexecutive directors contained in the
higgs report and the guidance for audit
committees contained in the smith report
arising from the higgs report the company
will review its corporate governance policies
and practices in due course in the light of
any revisions made to the combined code
board of directors
there is a wellestablished division of
authority and responsibility at the most
senior level within the company through the
separation of the roles of chairman and
chief executive 
in addition to the chairman there are
currently three executive and seven non
executive directors on the board all the
nonexecutive directors are considered by
the board to be independent and sir peter
gregson is the senior independent director
the company has made provision for the
nonexecutive directors to meet annually
without the presence of the chairman and
the chief executive this practice has been
established for a number of years
the nonexecutive directors are from a wide
range of backgrounds and all directors have
the beneﬁt of induction and training tailored
to individual requirements following their
appointment to the board their experience
allows them to exercise independent
judgement on the board and their views
carry signiﬁcant weight in board decisions
they contribute to the company’s strategy
and policy formulation in addition to
monitoring its performance and its
executive management 
the nonexecutive directors are appointed for
a speciﬁed term of three years
reappointment is not automatic and each
nonexecutive director’s position is subject to
review prior to his or her expiry from ofﬁce it
is company policy that nonexecutive directors
serve no more than two threeyear terms
unless there are exceptional circumstances in
the case of sir peter gregson it was felt
appropriate in the interests of orderly
succession planning to extend his term of
ofﬁce by up to one year directors are
elected at the ﬁrst annual general meeting
following their appointment and thereafter
are reelected at least every three years 
board meetings are held on a regular basis
twelve times a year and otherwise as
required of the normal twelve meetings six
are held at company locations in the uk
and us and the remaining six are
conducted by telephone conference the
board has a schedule of matters concerning
key aspects of the company’s activities
which are reserved to it for decision the
board exercises full control over strategy
investment and capital expenditure in
addition individual executive directors have
speciﬁc responsibilities for such matters as
health safety environment and regulation
the decisions reserved to the board include
any changes to the company’s constitution
or share capital or to the group structure
the adoption of business plans and budgets
the approval of capital expenditure over
certain limits and the adoption or variation
of major policies
all directors have access to the company
secretary who is responsible for ensuring
that all board procedures are observed and
through the chairman is responsible for all
corporate governance matters any director
wishing to do so in furtherance of his or her
duties may take independent professional
advice at the company’s expense
during the year the institute of chartered
secretaries and administrators conducted
an independent evaluation of the
performance of the board the evaluation
looked at the operation of the board
including its corporate governance and
decisionmaking framework and the
operation and content of its meetings the
evaluation process on the basis of private
interviews with each of the directors was
considered to have been a thorough
process and its outcome including speciﬁc
recommendations was regarded as very
positive
table 40 shows the number of and
individual attendance at meetings of the
board as well as of the nomination
remuneration and audit committees
during the year
board committees
the board has three principal standing
committees namely the nomination
remuneration and audit committees
together with certain other committees 
the current membership of each of the
principal committees is shown on page 56
in addition authority as described below is
delegated to the executive team details are
as follows
nomination committee
the nomination committee is chaired by
the chairman of the board with as
members of the committee the chief
executive and three independent non
executive directors it has a remit to
consider and make recommendations to the
board on all new appointments of directors
having regard to the overall balance and
composition of the board to consider and
approve the remit and responsibilities of the
executive directors and to review and advise
upon issues of succession planning and
organisational development 
remuneration committee
the remuneration committee is chaired by
sir peter gregson and all members of the
committee are independent nonexecutive
directors it has a remit to consider and
make recommendations on board
remuneration policy and on behalf of the
board to determine speciﬁc remuneration
packages for each of the executive directors
in discharging its remit the committee has
regard to the provisions of the combined
code and has as an objective the aim of
providing packages to attract retain and
motivate executive directors of the quality
required to judge the company’s position in
matters of remuneration policy and practice
relative to other companies and to take into
account wider issues of paysetting it also
has responsibility for the company’s bonus
and incentive schemes the remuneration
report of the directors for 200203 is set
out on pages 61 to 68
scottishpower annual report  accounts 200203

57
corporate governance audit committee
the audit committee is chaired by ewen
macpherson and all members of the
committee are independent nonexecutive
directors nick rose has been identiﬁed as
the committee’s “ﬁnancial expert” and
following ewen macpherson’s retirement
will become chairman of the committee
the committee has written terms of
reference its principal role is to review
• the effectiveness of the system of internal
control and consider reports from both
internal and external auditors on key risks
facing the group and controls over these risks
• the company’s quarterly ﬁnancial
statements including accounting policies
compliance with legal and regulatory
requirements judgmental issues and the
ﬁndings of the external auditors
• the activities and effectiveness of the
internal audit function
• the relationship with the external auditors
including the engagement of auditors the
audit scope and approach fees and
performance and provision of nonaudit
services by the external auditors
• compliance with legal and regulatory
requirements
• litigation and claims affecting the group
meetings of the committee are normally
attended by the chief executive finance
director director of internal audit company
secretary and representatives of the external
auditors however the committee also
meets in private session at least once
annually and otherwise as required with the
external auditors external counsel the
director of internal audit and senior
management
other committees
during the year the company established a
group finance committee and a treasury
committee the group finance committee
comprising both executive and non
executive directors was created to review
the structure financing tax and treasury
affairs of the group and make
recommendations on these matters to the
board the treasury committee was
established to implement finance and
treasury operations within limits set by the
board including such matters as authorities
for the operation of bank accounts and the
approval of bond and note issues loan
facilities and guarantees
executive team
the executive team comprises the chief
executive and other executive directors
together with the chief executive ofﬁcer
paciﬁcorp chief executive ofﬁcer ppm
group director infrastructure group
director commercial and legal group
director corporate communications group
director human resources group director
strategy and the group company
secretary operational control and
implementation of group strategy and policy
are responsibilities delegated by the board
to the chief executive who is supported by
the executive team and by divisional and
business boards in the discharge of these
functions major issues and decisions are
reported to the board 
relations with shareholders
the companys investor relations
department communicates with its
institutional investors through analysts
brieﬁngs and extensive investor roadshows
in the uk us and europe transparency is
further promoted by timely stock exchange
announcements formal meetings with
management and site visits broader
communication with shareholders takes
place via the annual general meeting the
annual report  accounts and the
company website to which all material stock
exchange announcements are posted all
board members attend the agm and they
are available to answer shareholder
questions
the company website
wwwscottishpowercom provides current
information on share prices ﬁnancial results
and analysts’ presentations information
regarding the agm results and other events
are typically made available to shareholders
by webcast
internal control
the directors of scottishpower have overall
responsibility for the system of internal
controls and for reviewing the effectiveness
of the system the system of internal
control is designed to manage rather than
eliminate the risk of failure to achieve
scottishpower annual report  accounts 200203

58
corporate governance
continued
table 40 – board and committee attendance during the year ended 31 march 2003
charles euan mair philip sir peter nolan ewen nick ian charles david
miller smith baird barnes carroll gregson karras macpherson rose
3
russell berry nish
n a
1
 r n r a n r a n r a
2
 r a a n
board 
12 meetings 12 8 11 11 11 12 12 1 12 12 10
nomination committee
5 meetings 5 4 5 5 5
remuneration committee
4 meetings 4 3 4 4 4
audit committee
7 meetings 7 77271
n – nomination committee
r – remuneration committee
a – audit committee
 committee chairman
1
resigned from the audit committee in april 2003
2
appointed to the audit committee in january 2003
3
appointed february 2003  business objectives in pursuing these
objectives internal control can only provide
reasonable and not absolute assurance
against material misstatement or loss
the executive team is responsible for
implementing the risk management
strategy ensuring that an appropriate risk
management framework is operating
effectively across the company
embedding a risk culture throughout the
group and providing the board and the
audit committee with a consolidated view
of the risk proﬁle of the company
identifying any major exposures and
mitigating actions
the risk management framework and
internal control system across the group
which is subject to continuous development
provides the basis on which the company
has complied with the combined code
provisions on internal control
control environment
the company is committed to ensuring that
a proper control environment is
maintained there is a commitment to
competence and integrity and to the
communication of ethical values and
control consciousness to managers and
employees employees are required to
adhere to the company’s code of conduct
and disciplinary rules furthermore in
compliance with the sarbanesoxley act
2002 the company has adopted a code of
ethics for the chief executive finance
director and principal accounting ofﬁcers
human resources policies underpin that
commitment by a focus on enhancing job
skills and promoting high standards of
probity among staff in addition the
appropriate organisational structure has
been developed within which to control the
businesses and to delegate authority and
accountability having regard to acceptable
levels of risk
the company has developed a fraud policy
and implemented procedures to ensure that
all incidences of fraud are appropriately
investigated and reported
a disclosure committee has been
established to ensure effective disclosure
controls are operating around the
production of key published ﬁnancial
statements and to provide assurance to the
chief executive and finance director that
they may sign their formal certiﬁcation to
the securities and exchange commission
“sec” in accordance with section 302 of
the sarbanesoxley act 2002 
identiﬁcation and evaluation of risks and
control objectives
the company’s strategy is to follow an
appropriate risk policy which effectively
manages exposures related to the
achievement of business objectives
each business identiﬁes and assesses the
key business risks associated with the
achievement of its strategic objectives any
key actions needed to further enhance the
control environment are identiﬁed along
with the person responsible for the
management of the speciﬁc risk each
month a detailed review of the key risks
controls and action plans within each of the
businesses takes place and a risk report is
produced for review and challenge by the
board of each business this monthly risk
report is a standing item on the agenda of
the business boards which operate
throughout the group this is a key tool in
ensuring the active management of risk
across the organisation
business controls managers have been
appointed within each of the businesses to
help ensure that the risk management and
internal control system is consistently
adopted updated and embedded into the
business processes
the corporate centre also considers those
risks to the group’s strategic objectives that
may not be identiﬁed and managed at a
business level 
the board and executive team on a
monthly basis receive the groupwide risk
report together with supporting
documentation for review this report
highlights the most signiﬁcant risks across
the group and the actions being taken to
mitigate them and also identiﬁes the
individuals responsible for the
management of these risks the
information being supplied to the board
and executive team is continually being
developed to include quantitative measures
such as sensitivity analyses and valueat
risk calculations for issues reported on in
the group energy risk report
the use of a welldeﬁned risk management
methodology across all businesses allows a
consistent and coordinated approach to risk
reporting for review by the board which
also receives regular reports on these
matters from the audit committee to
enable the directors to review the
effectiveness of the system of internal
control on a regular basis
a key element and requirement of the risk
evaluation process is that a written
certiﬁcate is provided quarterly by all
members of the executive team conﬁrming
that they have reviewed the effectiveness
during the year of the system of internal
control under their responsibility
energy management
a group energy risk committee “gerc”
has been established to assist the executive
team in ensuring that there is an appropriate
risk and control governance framework in
place over energy activities the gerc meets
monthly and the key responsibility of this
group is to make suitable recommendations
to the executive team on energyrelated risk
management issues in addition the group
energy risk director with other members of
the gerc continues to enhance business
processes and systems to ensure that all
risks pertaining to operating the trading and
energy businesses are understood
quantiﬁed managed and reported on a
consistent basis across the group
the gerc also provides advice and
guidance to the businesses on interpretation
and execution of the group energy risk policy
monitoring and corrective action
the executive team reviews monthly the key
risks facing the group and the controls and
monitoring procedures for these operation
of the group’s control and monitoring
procedures is reviewed and tested by the
group’s internal audit function under the
supervision of the director of internal audit
reporting to the finance director and with
access to the chairman of the audit
committee internal audit reports and
recommendations on the group’s
procedures are reviewed regularly by the
audit committee as part of their external
audit responsibilities the external auditors
also provide reports to the audit committee
on the operation of the group’s internal
ﬁnancial control procedures the audit
scottishpower annual report  accounts 200203

59 scottishpower annual report  accounts 200203

60
corporate governance
continued
committee also receives regular reports on
the continued development implementation
and evaluation of the risk management and
internal control system
auditor independence
the audit committee and the ﬁrm of
external auditors have safeguards to avoid
the possibility that the auditors’ objectivity
and independence could be compromised
these safeguards include the
implementation of a policy on the use of the
external auditor for nonauditrelated
services this policy has been revised
during the year to reﬂect the provisions of
the sarbanesoxley act 2002 and
subsequent sec rules
where it is deemed that the work to be
undertaken is of a nature that is generally
considered reasonable to be completed by
the external auditors for sound commercial
and practical reasons including
conﬁdentiality the conduct of such work will
be permissible provided that it has been
preapproved by the audit committee
examples of preapproved services include
the completion of regulatory audits
provision of taxation and regulatory advice
reporting to the sec and the uk listing
authority and the completion of certain
ﬁnancial due diligence work all these
services are also subject to a predeﬁned fee
limit any work performed in excess of this
limit must be approved by the finance
director and the chairman of the audit
committee details of audit and nonaudit
fees paid to the external auditors are
contained in note 2 to the group proﬁt and
loss account on page 79
evaluation of disclosure controls and
procedures sarbanesoxley act 2002
the chief executive and the finance
director have evaluated the effectiveness of
the group’s disclosure controls and
procedures within 90 days of the date of
this document based on this evaluation
the chief executive and finance director
concluded that the disclosure controls and
procedures are effective in all material
respects to ensure that material
information relating to the group would be
made known to them by others within the
group 
there have been no signiﬁcant changes to
the group’s internal controls or in other
factors that could materially affect these
controls after the date of their evaluation
social environmental and ethical risks and
opportunities
information regarding the social
environmental and ethical policies and
practices of the company can be found in
the separate environmental and social
impact report
political donations and expenditure
scottishpower is a politically neutral
organisation but is required to comply with
the political parties elections and
referendums act 2000 this legislation
deﬁnes political “donations” and
“expenditure” in wider terms than would be
commonly understood by these phrases
the deﬁnitions include expenditure which
the board believes it is in the interests of
the company to incur the act also requires
companies to obtain prior shareholder
approval of this expenditure at the annual
general meeting in 2002 the company
obtained authorisation up to a maximum
amount of £100000
during the ﬁnancial year ended 31 march
2003 the company paid a total of £9500
for activities which may be regarded as
falling within the terms of the act these
activities comprised the sponsorship of
briefings receptions and fringe meetings at
party conferences these occasions present
an important opportunity for the company
to represent its views on a nonpartisan
basis to politicians from across the political
spectrum the payments do not indicate
support and are not intended to inﬂuence
support for any particular political party 
it should be noted that these activities do
not contravene the restrictions on political
contributions under the us public utility
holding company act of 1935 to which the
company is subject introduction
the following statement sets out how for
the ﬁnancial year ending 31 march 2003
the company has adopted the remuneration
principles set out in part b of the combined
code and has taken account of the directors’
remuneration report regulations 2002
which came into effect on 1 august 2002 
consideration of remuneration
matters by the directors
the scottishpower board is responsible for
determining the remuneration policy for the
scottishpower group the remuneration
committee with delegated authority from
the board determines the detail of
remuneration arrangements for the
executive team including the executive
directors and reviews proposals in respect
of other senior executives the relationship
between the board and the committee is
based on formal terms of reference which
are regularly reviewed to ensure that they
reﬂect best practice
the remuneration committee consists
solely of independent nonexecutive
directors its members are sir peter gregson
chairman euan baird mair barnes nolan
karras and ewen macpherson these
members have no personal ﬁnancial
interest other than as shareholders in the
matters considered by the committee
details of the payments made to all non
executive directors are set out in table 41
page 65 
the chairman of the company charles
miller smith and the chief executive ian
russell are invited to attend meetings and
may provide guidance on the impact of
remuneration policy and advise as
appropriate on the performance of senior
executives they are not present during any
discussion of their own remuneration the
terms of reference contain conﬂict of
interest provisions to ensure that no
directors are involved in any decision
relating to their own remuneration
the committee is able to draw on advice
from independent remuneration consultants
and internal expertise during the year the
committee appointed towers perrin forster
 crosby inc “towers perrin” as
remuneration consultant and independent
adviser following a competitive tendering
process towers perrin also provides
remuneration and other human resources
consultancy services directly to some
scottishpower companies within parameters
established by the committee company
executives whom the committee may consult
include the group company secretary
andrew mitchell who acts as secretary to
the committee the group director human
resources michael pittman the director
group talent management and reward
sandy begbie and the head of group
reward nigel johnson the terms of
reference empower the committee to avail
itself of external legal and professional
advice at the expense of the company
during the year the board accepted all of
the recommendations from the committee
without signiﬁcant amendment
statement of remuneration policy
philosophy and policy
scottishpower seeks to ensure that
remuneration and incentive schemes are in
line with best practice provide a strong link
to individual and company performance
and promote a community of interest
between employees and shareholders 
rewards for executives and directors are
designed to attract and retain individuals of
high quality who have the requisite skills
and are incentivised to achieve levels of
performance which exceed that of
competitor companies as such
remuneration packages must be market
competitive and capable of rewarding
exceptional performance all senior
management remuneration packages are
set according to a midmarket position with
packages above the midmarket level
provided only where supported by
demonstrably superior personal
performance remuneration packages will
be developed to reﬂect the prevailing market
practice in each business environment
annual bonus arrangements have been
structured so that stretching targets are
based on corporate business unit and
individual performance
the company operates a personal
shareholding policy requiring executives
and senior managers to buildup and retain
a shareholding in the company in
proportion to their annual salaries these
proportions are three times base salary for
the chief executive and two times base
salary for other executive directors the
committee considers this policy to be in line
with evolving best practice and in the
interests of shareholders
in setting remuneration levels the
committee commissions an independent
evaluation of the roles of the executive
team and also of the next levels of
management within the company the
committee takes independent advice from
towers perrin on marketlevel remuneration
based on comparisons with utility and other
companies of similar size and complexity
with which the company competes for
executive talent 
the committee recognises the importance
of linking rewards to business and
personal performance and believes that
the arrangements detailed below provide
an appropriate focus on performance and
balance between short and longterm
incentives at target level base salary is
expected to deliver around 45 of total
reward excluding beneﬁts and pension
the annual bonus plan and longterm
incentive arrangements are expected to
provide 55 of total reward for the
achievement of stretching target level
business and personal performance
objectives higher proportions of
performance based reward are available
for the delivery of exceptional personal
and business performance resulting in
enhanced shareholder value 
the committee constantly monitors
market practice in order to remain
competitive and to reﬂect good corporate
governance practice at this time no
substantial changes to the company’s
policies with regard to directors’
remuneration are envisaged over the next
year however the committee may develop
policy and should it determine any
changes to be appropriate will report such
changes to shareholders through
established channels of consultation and
reporting for example the committee and
the board will consider carefully the
recommendations of the higgs report and
may amend policy accordingly
scottishpower annual report  accounts 200203

61
remuneration report of the directors elements of the remuneration
package
base salaries
the committee sets base salaries for the
executive team by reference to individual
performance through a formal appraisal
system applied to all management
employees and to external market data
reﬂecting similar roles in comparable
companies account is also taken of salary
increases and employment conditions
across the company
annual performancerelated bonus
executive directors and senior management
participate in the company’s performance
related annual bonus plans any payments
to uk executives under the schemes are
nonpensionable and are determined by the
committee following assessment against
predetermined targets
the 200203 plan for executive directors
provided a maximum bonus opportunity of
75 of salary for the chief executive half is
determined by the company’s ﬁnancial
performance with the balance linked to the
achievement of key strategic objectives both
shortterm and longterm for the finance
director and the executive director uk one
third is determined by the company’s
ﬁnancial performance onethird is based on
the performance of the relevant function
division and onethird on the achievement
of key strategic objectives both shortterm
and longterm objectives are set annually
by the board and performance against
these is reviewed on a sixmonthly basis
the committee has approved the bonus
plan for 200304 and no signiﬁcant
changes have been made
exceptionally in 200203 an interim
payment of up to 20 of salary was made
to executive directors at the half year in
recognition of the substantial improvement
in the company’s performance during the
ﬁrst two quarters this interim payment was
outside of normal policy and it is not
anticipated that this practice will be
repeated the aggregate of the interim and
ﬁnal payments was kept within the normal
maximum of 75 of salary 
executive share plans
the company operates a performance share
plan known as the long term incentive
plan “ltip” and an executive share option
plan 2001 “exsop” for executive directors
and other senior managers 
under the ltip awards to acquire shares in
scottishpower at nil or nominal cost are
made to the participants up to a maximum
value equal to 75 of base salary the
award will vest only if the committee is
satisﬁed that there has been an underlying
improvement in the performance of the
company and to this end certain gateway
performance targets are measured and the
committee reviews performance against
these measures when determining if awards
vest the measures relate to the key
ﬁnancial performance indicators of the
company and customer service standards
including those published by ofgem
energywatch and the us public utility
commissions  these measures provide a
mechanism to safeguard stakeholder interests
and provide an overview of the ﬁnancial and
operational success of the business 
the number of shares which actually vest is
dependent upon the company’s comparative
total shareholder return “tsr”
performance over a threeyear performance
period tsr measures scottishpower’s
comparative performance against key
competitors and only provides rewards if
scottishpower exceeds the median
performance of appropriate comparators
the committee chose tsr as the
performance measure for the ltip as it
believes that it provides a clear link to the
creation of shareholder value
ltip awards were granted to 48 directors and
senior executives during the year award 7
tsr performance is measured against an
international comparator group of 39 major
energy companies as identiﬁed below 
aes corp american electric power inc
calpine corp centrica chubu electric
power co inc clp holdings limited
constellation energy group inc dominion
resources inc duke energy corp dynegy
inc edison spa edison international el
paso corp electricidade de portugal sa
electrabel sa endesa sa ente nazionale
per l’energia elettrica spa enel entergy
corp exelon firstenergy corp fpl group
inc gas natural sdg sa iberdrola sa
kansai electric power co inc lattice group
plc national grid group plc ppl corp
progress energy inc public service
enterprise group inc reliant energy inc
rwe ag scottish  southern energy plc
southern company inc tenaga nasional
bhd the tokyo electric power co inc txu
union fenosa williams companies inc xcel
energy inc
no shares vest unless the company’s tsr
performance is at least equal to the median
performance of the comparator group at
which point 40 of the initial award vests
100 of the shares vest if the company’s
performance is equal to or exceeds the top
quartile the number of shares that vest for
performance between these two points is
determined on a straightline basis
for ltip awards which had the potential to
vest during the year performance was
measured against that of the ftse 100
index and an index of the electricity and
water sectors of the ftse all share index
as the performance criteria were not
achieved award 4 of the ltip may 1999 –
may 2002 lapsed with no vesting of shares
the committee has approved the operation
of the ltip for 200304 and no signiﬁcant
changes have been implemented
options were granted at market value to
285 directors and other executives across
the company during the year options
granted to uk executives under the exsop
are subject to the performance criterion that
the average annual percentage increase in
the company’s earnings per share “eps”
be at least 3 adjusted for any increase in
the retail price index the committee
believes that eps is an appropriate
measure for the purposes of testing the
exsop because it is based on the
underlying ﬁnancial performance of the
company this criterion is assessed at the
end of the third ﬁnancial year the ﬁrst year
being the ﬁnancial year starting immediately
before the date of grant if not satisﬁed on
the third anniversary the criterion may be
retested from the same base on the fourth
and ﬁfth anniversaries of grant unvested
options lapse at the ﬁfth anniversary
the committee has approved the operation
of the exsop for 200304 and no changes
have been implemented
scottishpower annual report  accounts 200203

62
remuneration report of the directors
continued
excluding goodwill amortisation and exceptional items performance graph
the new directors’ remuneration report
regulations require that a graph be
presented showing the company’s tsr
performance against the tsr performance
of a broad equity market index over a ﬁve
year period the ftse 100 has been chosen
because it is the principal index in which the
company’s shares are quoted the graph
below presents the comparative tsr
performance of the company during the
period 1 april 1998 – 31 march 2003 the
graph shows that scottishpower has
outperformed the index over this period
this graph looks at the value by 31 march
2003 of £100 invested in scottishpower on
31 march 1998 compared with that of £100
invested in the ftse 100 index the other
points plotted are the values at intervening
ﬁnancial yearends
allemployee share plans 
to facilitate high levels of share ownership
by employees the company operates a
savingsrelated share option plan which is
open to executive directors and all uk
employees under this plan options are
granted over scottishpower shares at a
discount of 20 from the prevailing market
price at the time of grant to eligible
employees who commit to save up to £250
per month over a period of three or ﬁve
years
the company also operates an employee
share ownership plan “esop” and was
amongst the ﬁrst to introduce these
arrangements for executive directors and all
uk employees the esop enables
employees to purchase shares in the
company from pretax income up to the
limits speciﬁed in the legislation the value
of these shares is at risk as they are not
normally released until the legislation
allows the company matches these shares
at no cost to the employee on a oneforone
ratio the legislation also enables the
company to award free shares to
employees 
the savingsrelated share option plan and
the esop are all employee inland revenue
approved plans and as such are not subject
to performance conditions
pension
the executive directors and other ukbased
senior managers of the company are
provided with pension beneﬁts through the
company’s main pension scheme and
through an executive topup pension plan
which provides a maximum pension of two
thirds of ﬁnal salary on retirement at age 63
reduced where service to age 63 is less than
20 years pensionable salary is normally
base salary in the 12 months prior to
leaving the company although there are
prescribed mechanisms for calculating
pensionable salary by averaging base salary
over a period of up to three out of the last
10 years’ service the employee contributes
5 of salary to the scheme life assurance
provision of four times pensionable salary
and a widow’s pension of half the
executive’s pension on death are provided 
individuals who joined the company in the
uk on or after 1 june 1989 are subject to
the inland revenue ‘earnings cap’
introduced by the finance act 1989
entitlement to pension beneﬁts above the
cap cannot be provided through the
company’s approved pension scheme and
therefore arrangements on an unapproved
basis have been made to provide total
beneﬁts for executives affected by the
legislation as though there was no cap the
total liability in respect of executives and
senior employees arising in relation to
unapproved beneﬁts accrued for service for
the year to 31 march 2003 was £208700
the trustee body of the executive top up
plan is chaired by the company secretary 
the committee has reported the pension
expense in accordance with the
requirements of the uk listing authority
and directors’ remuneration report
regulations pension costs detailed in the
accounts are calculated as the cost of
providing beneﬁts accrued in the 200203
year in accordance with appropriate
accounting standards
beneﬁts
executive directors are eligible for a range of
beneﬁts on which they are assessed for tax
these include the provision of a company
car fuel private medical provision and
permanent health insurance the provision
and level of beneﬁts is reviewed regularly to
ensure that practice is in line with the market
service contracts
scottishpower has reviewed its policy on
service contracts and in accordance with
the best practice recommendation of the
combined code has resolved that new
appointees to the board be offered rolling
contracts with notice periods of one year
the committee recognises however that
exceptional circumstances may arise and
that it may be necessary in the case of
appointments from outside the company to
offer a longer initial notice period in such
cases the intent would be subsequently to 
reduce this period to one year following an
agreed initial period 
the committee’s policy on early termination
is to emphasise the duty to mitigate to the
fullest extent practicable senior managers
within the company have notice periods
ranging from six months to one year
executive directors charles berry and david
nish were appointed to the board on or
scottishpower annual report  accounts 200203

63
total shareholder return
source datastream
120
100
80
60
40
20
0
31 march 31 march 31 march 31 march 31 march 31 march
98 99 00 01 02 03
scottish power plc ftse 100 index after 1 april 1999 these appointments have
rolling service contracts terminable on one
year’s notice from both parties charles
berry has a service contract dated 30 july
1999 and subsequently varied and david
nish has a service contract dated 13
december 1999 and subsequently varied
both contracts include a clause enabling the
company at its sole discretion to make a
payment in lieu of notice equal to the value
of the salary and contractual beneﬁts the
executive director would have received
during the notice period 
the chief executive ian russell has a
service contract dated 30 july 1999
terminable by the executive on one year’s
notice and by the company on two years’
notice the chief executive has chosen to
reduce the notice period from the company
to one year the contract includes a clause
enabling the company at its sole discretion
to make a payment in lieu of notice equal to
the value of the salary and contractual
beneﬁts the chief executive would have
received during the notice period the
company would however pursue mitigation
to minimise as far as possible costs to the
company on termination
the chairman charles miller smith is a
nonexecutive director and he does not have
a service contract with the company 
external nonexecutive appointments
the company encourages its directors to
become nonexecutive directors of other
companies provided that these
appointments are not with competing
companies are not likely to lead to any
conﬂicts of interest and do not require
extensive commitments of time which would
prejudice their roles within the company
this serves to add to their personal and
professional experience and knowledge to
the beneﬁt of the company any fees derived
from such appointments may be retained
by the executives
remuneration policy for nonexecutive
directors
the remuneration of nonexecutive directors
is determined by the board and during the
year consisted of a base fee of £24000 pa
a committee membership fee of £3500 pa
a fee of  £7500 pa for chairing the audit
committee and the remuneration
committee and an international travel fee of
£1000 for attending a tranche of meetings
that involve a transatlantic journey in line
with best practice the independent non
executive directors do not have service
contracts are not members of the companys
pension schemes and do not participate in
any bonus share option or other proﬁt or
long term incentive plan full details of the
remuneration of the nonexecutive directors
are contained in table 41
compensation of directors and ofﬁcers
for us reporting purposes it is necessary to
provide information on compensation and
interests for directors and ofﬁcers the
aggregate amount of compensation paid by
the group to all directors and ofﬁcers of the
company as a group was £5407075
during 200203 the aggregate amount set
aside or accrued by the group to provide
pension retirement or similar beneﬁts for
directors and ofﬁcers of the company
pursuant to any existing plan provided or
contributed to by the group was
£1016900
interest of management in certain
transactions
there have been no material transactions
during the group’s three most recent ﬁnancial
years nor are there presently proposed to
be any material transactions to which the
company or any of its subsidiaries was or is
a party and in which any director or ofﬁcer
or 10 shareholder or any relative or
spouse thereof or any relative of such a
spouse who had the same home as such
person or who is a director or ofﬁcer of any
subsidiary of the company has or is to have
a direct or indirect material interest 
during the group’s three most recent
ﬁnancial years there has been no and at
present there is no outstanding indebtedness
to the company or any of its subsidiaries
owed or owing by any director or ofﬁcer of
the group or any associate thereof 
directors’ interests
other than as disclosed none of the
directors had a material interest in any
contract of signiﬁcance with the company
and its subsidiaries during or at the end of
the ﬁnancial year the directors’ interests all
beneﬁcial in the ordinary shares of the
company including interests in options
under the company’s exsop and sharesave
scheme and awards under the ltip are
shown on pages 67 to 68
directors’ and ofﬁcers’ liability insurance
the company maintains liability insurance
for the directors and ofﬁcers of the
company and its subsidiaries
directors’ emoluments and interests
total emoluments
table 41 provides a breakdown of the total
emoluments of the chairman and all the
directors in ofﬁce during the year ended 31
march 2003
directors’ pension beneﬁts
details of pension beneﬁts earned by the
executive directors during the year are
shown in table 42
scottishpower annual report  accounts 200203

64
remuneration report of the directors
continued the following tables provide details of the remuneration pensions and share interests of the directors and the information is audited
table 41 – directors’ emoluments 200203
basic salary bonuses beneﬁts in kind total
£000’s £000’s £000’s £000’s
total emoluments 2003 2002 2003 2002 2003 2002 2003 2002
chairman and executive directors
charles miller smith nonexecutive chairman 2350 2350 – – 140 138 2490 2488
sir ian robinson retired 4 may 2001 – 933 – – – 29 – 962
ian russell appointed chief executive 17 april 2001 5500 5429 4125 – 328 276 9953 5705
charles berry 3000 2800 2250 – 258 192 5508 2992
david nish 3500 3250 2625 – 312 239 6437 3489
alan richardson retired 31 december 2001  – 2250 – – – 08 – 2258
ken vowles retired 31 march 2002 – 3000 – – – 160 – 3160
total 14350 20012 9000 – 1038 1042 24388 21054
fees bonuses beneﬁts in kind total
£000’s £000’s £000’s £000’s
2003 2002 2003 2002 2003 2002 2003 2002
nonexecutive directors fees and expenses
euan baird 295 285 – – 03 07 298 292
mair barnes 330 320 – – 03 10 333 330
philip carroll appointed 15 january 2002 315 44 – – 50 06 365 50
sir peter gregson 440 405 – – 12 28 452 433
nolan karras 359 328 – – 148 197 507 525
allan leighton resigned 12 june 2002 55 275 – – – 01 55 276
ewen macpherson 405 395 – – – 40 405 435
keith mckennon retired 27 july 2001 – 213 – – – 174 – 387
robert miller resigned 8 june 2001 – 61 – – – 22 – 83
john parnaby retired 27 july 2001 – 128 – – – 39 – 167
nick rose appointed 19 february 2003 37 – – – – – 37 –
total 2236 2454 – – 216 524 2452 2978
other emoluments
 alan richardson received an additional £381220 during the ﬁnancial year ended 31 march 2002 in respect of housing foreign service allowance and other essential
costs associated with his assignment as executive director us based in portland oregon these costs include relocation and repatriation to the uk 
 nolan karras received emoluments in the us of £16807 2002 £22613 in respect of services to the paciﬁcorp and utah advisory boards in the form of cash and
shares
i the emoluments of the highest paid director ian russell excluding pension contributions were £995280 2002 £570531 in addition gains on exercise of share
options during the year by ian russell amounted to £nil 2002 £138628 details of other share related incentives are contained in table 44 
ii ian russell has an entitlement under the unapproved pension beneﬁts described further in table 42
iii sir ian robinson retired from the board on 4 may 2001 and as an employee on 31 may 2001 alan richardson retired from the board and as an employee on 
31 december 2001 ken vowles retired from the board and as an employee on 31 march 2002
iv in addition to the above payments were made during the ﬁnancial year ended 31 march 2002 to sir ian robinson £385000 alan richardson £372099 and ken
vowles £405649 in accordance with the terms of their respective contracts
scottishpower annual report  accounts 200203

65 table 42 – deﬁned beneﬁts pension scheme 200203
a b
transfer total 
additional value of change in 
pension increases value of value of value during
earned accrued after inﬂation accrued accrued the year
in year pension net of pension pension net of
transferred net of at end director’s at start at end director’s
in beneﬁts inﬂation of year contribution of year of year contributions
£ pa £ pa £ pa £ £ £ £
ian russell 15094 11947 160286 142710 1493751 1915459 416818
charles berry – 12031 97175 144625 880682 1197029 311487
david nish 37333 10851 79932 100339 536162 804254 263232
i the accrued entitlement of the highest paid director ian russell was £160286 2002 £144159 during the year retirement beneﬁts were accrued under the
deﬁned beneﬁts pension scheme in respect of three directors 2002 ﬁve directors
ii the transfer value of the increases after inﬂation a represents the current capital sum which would be required using demographic and ﬁnancial assumptions to
produce an equivalent increase in accrued pension and ancillary beneﬁts excluding the statutory inﬂationary increase and after deduction of members’ contributions
although the transfer value represents a liability to the pension scheme in respect of approved beneﬁts and to the company in respect of unapproved beneﬁts it is not
a single sum paid or due to be paid to the individual director and cannot therefore meaningfully be added to the annual remuneration instead this value would not be
payable until the director’s retirement date and thereafter would be spread over the remainder of his lifetime and also covering the cost of dependants’ beneﬁts after
his death
iii the total change in value b in the last column of the table above reﬂects the following elements
1 changes to the economic and demographic assumptions underlying the transfer value basis over the year
2 increases in pensionable salary received by directors during the year
3 the directors have completed another year of pensionable service during the year
4 the directors are a year closer to drawing their pensions at the end of the year
during the year the transfer value basis for approved beneﬁts altered the transfer value for approved beneﬁts at the start of the year was calculated broadly in line with
the statutory minimum funding requirement “mfr” basis however by the end of the year the mfr transfer value basis for approved beneﬁts no longer met the
actuarial profession’s guidance for certifying transfer values based on current market conditions the end of year transfer value basis provides for higher transfer values
than the basis at the start of the year all other things being equal
the change in the amount of the transfer values over the year includes the effect of ﬂuctuations in factors that are beyond the control of the company and its directors
such as stock market movements and longterm interest rates 
iv the accrued pension shown is that which would be paid annually on retirement based upon service to the end of the year members of the company’s schemes
have the option of paying additional voluntary contributions neither the contributions nor the resulting beneﬁts are included in the above table
v directors who joined the pension scheme on or after 1 june 1989 are subject to the earnings cap introduced in the finance act 1989 pension entitlements which
cannot be provided through the company’s approved schemes due to the earnings cap are provided through unapproved pension arrangements details of which are
included in the remuneration report the pension beneﬁts disclosed above include approved and unapproved pension arrangements
vi the increase in accrued pension during the year excludes the increase due to rpi inﬂation as measured at december 2002 29
vii the value of directors’ entitlements has been calculated on the basis of actuarial advice in accordance with actuarial guidance note gn11 in two parts the
approved element being based upon the normal cash equivalent transfer value assumptions less directors’ contributions the unapproved element being calculated in
line with frs 17 assumptions
viii transferredin beneﬁts represent pension rights accrued in respect of previous employments
ix the total liabilities calculated on a frs 17 basis for the 9 executives and senior employees arising in relation to unapproved beneﬁts for service for the year to 31
march 2003 was £208700 2002 £690000 all beneﬁts for the above are provided on a deﬁned beneﬁt basis
scottishpower annual report  accounts 200203

66
remuneration report of the directors
continued table 43 – directors’ interests in scottishpower shares
ordinary shares share options executive share options sharesave long term incentive plan
1402 1402 1402 1402
or date of or date of or date of or date of
appointment appointment appointment appointment
31303 if later 31303 if later 31303 if later 31303 if later
vested potential vested potential
charles miller smith 11000 11000––––––––
euan baird 110770 100000––––––––
mair barnes 1400 1400––––––––
philip carroll 4000–––––––––
sir peter gregson 1186 1093––––––––
nolan karras 36346 31286––––––––
ewen macpherson 5000 5000––––––––
nick rose appointed 19 february 2003 ––––––––––
ian russell •87741 86817 498678 227743 4371 4371 12682 238675 12682 175063
charles berry •22553 18958 255443 107660 2941 903 – 124328 4433 87904
david nish •12742 7294 296636 124223 2509 2509 – 137954 4191 85030
none of the directors has an interest in ordinary shares which is greater than 1 of the issued share capital of the company
 these shares represent in each case the maximum number of shares which the directors may receive dependent on the satisfaction of performance criteria as
approved by shareholders in connection with the long term incentive plan
 these shares represent the number of shares the directors are entitled to receive when the ltip award is exercisable after the fourth anniversary of grant calculated
according to the performance criteria measured over the threeyear performance period
• these shares include the number of shares which the directors hold in the employee share ownership plan shown below
free partnership matching dividend
shares shares shares shares total
ian russell 50 799 799 135 1783
charles berry 50 799 799 135 1783
david nish 50 799 799 135 1783
between 31 march 2003 and 7 may 2003 ian russell charles berry and david nish each acquired 32 partnership shares and 32 matching shares as part of the regular
monthly transactions of the employee share ownership plan and nolan karras acquired 20 scottishpower adss 80 ordinary shares as part of the paciﬁcorp
compensation reduction plan otherwise there have been no changes to the directors’ interests between 31 march 2003 and 7 may 2003
table 44 – directors’ interests in performance and other share plans at 31 march 2003
market
option price at
exercise date of date from
1 april 31 march price date exercise which expiry
2002 granted exercised lapsed 2003 pence exercised pence exercisable date
long term incentive plan
ian russell 12682––– 12682 nil 7 may 02 6 may 05
37988 – – 37988 – nil 10 may 03 9 may 06
45000––– 45000 nil 5 may 04 4 may 07
92075––– 92075 nil 4 may 04 3 may 08
– 101600 – – 101600 nil 2 may 05 1 may 09
187745 101600 – 37988 251357
charles berry 4433 – 4433 – – nil 17 may 02 389375 7 may 02 6 may 05
18994 – – 18994 – nil 10 may 03 9 may 06
25384––– 25384 nil 5 may 04 4 may 07
43526––– 43526 nil 4 may 04 3 may 08
– 55418 – – 55418 nil 2 may 05 1 may 09
92337 55418 4433 18994 124328
david nish 4191 – 4191 – – nil 17 may 02 389375 7 may 02 6 may 05
11731 – – 11731 – nil 10 may 03 9 may 06
23076––– 23076 nil 5 may 04 4 may 07
50223––– 50223 nil 4 may 04 3 may 08
– 64655 – – 64655 nil 2 may 05 1 may 09
89221 64655 4191 11731 137954
 during the year the performance period for the awards granted under the long term incentive plan in 1999 ended and on the basis of the company’s total
shareholder return none of the awards vested
awards granted during the year were granted for no consideration the market value of a scottishpower share at the date of grant was 40600 pence
footnote
awards granted to directors under the long term incentive plan on 10 may 2003 were as follows ian russell 129568 charles berry 62790 and david nish 82724
scottishpower annual report  accounts 200203

67 table 44 – directors’ interests in performance and other share plans at 31 march 2003 continued
market
option price at
exercise date of date from
1 april 31 march price date exercise which expiry
2002 granted exercised lapsed 2003 pence exercised pence exercisable date
executive share option plan 2001
ian russell 227743––– 227743 4830 21 aug 04 21 aug 11
– 270935 – – 270935 4060 2 may 05 2 may 12
227743 270935 – – 498678
charles berry 107660––– 107660 4830 21 aug 04 21 aug 11
– 147783 – – 147783 4060 2 may 05 2 may 12
107660 147783 – – 255443
david nish 124223––– 124223 4830 21 aug 04 21 aug 11
– 172413 – – 172413 4060 2 may 05 2 may 12
124223 172413 – – 296636
sharesave scheme
ian russell 4371––– 4371 3860 1 sep 06 28 feb 07
4371––– 4371
charles berry 903 – – 903 – 4290 1 sep 02 28 feb 03
– 2941 – – 2941 3230 1 sep 05 28 feb 06
903 2941 – 903 2941
david nish 2509––– 2509 3860 1 sep 04 28 feb 05
2509––– 2509
denotes options granted under a threeyear scheme
i the market price of the shares at 31 march 2003 was 37600 pence and the range during 200203 was 29875 pence to 41600 pence
ii the long term incentive plan makes annual awards to acquire shares in scottishpower at nil or nominal cost to the plan participants up to a maximum value equal
to 75 of base salary the award will vest only if the remuneration committee is satisﬁed that certain performance measures related to the sustained underlying
ﬁnancial performance of the company and improvements in certain customer service standards published by ofgem energywatch and the us public utility
commissions are achieved over a period of three ﬁnancial years commencing with the ﬁnancial year preceding the date an award is made assuming that such targets
have been achieved the number of shares that can be acquired will be dependent upon how the company ranks in terms of its total shareholder return performance
over a threeyear period in comparison to the constituent companies of the ftse 100 index and the electricity and water sectors and a group of international energy
companies a percentage of each half of the award will vest depending upon the company’s ranking within each of the comparator groups the plan participant may
acquire the shares in respect of the percentage of the award which has vested at any time after the third or fourth year as appropriate up to the seventh year after the
grant of the award no dividends accrue to participants prior to vesting
iii the company grants options annually under the executive share option plan 2001 to relevant executives and senior managers these options are subject to the
performance criterion that the percentage increase in the company’s annualised earnings per share be at least 3 adjusted for any increase in the retail price index
this criterion is assessed at the end of the third ﬁnancial year the ﬁrst year being the ﬁnancial year starting immediately before the date of grant if the criterion is not
satisﬁed over this period it is tested again at the end of the fourth ﬁnancial year if the criterion is not satisﬁed over this period it is tested again at the end of the ﬁfth
ﬁnancial year if the criterion is not satisﬁed over this period then the options lapse 
iv the option price for sharesave options is calculated by reference to the middlemarket quotation on the day immediately preceding the date of invitation and
discounted by 20 in accordance with the inland revenue rules for such schemes 
v the number of options granted to a director under the sharesave scheme is calculated by reference to the total amount which the director agrees to save for a
period of three or ﬁve years under an inland revenue approved savings contract subject to a current maximum
vi total gains made on exercise of directors’ share options and awards during the year were £33580 2002 £295205
vii awards and options granted during the year under the long term incentive plan and executive share option plan 2001 were granted for no consideration
footnote
options granted to directors under the executive share option plan 2001 on 10 may 2003 were as follows ian russell 345514 charles berry 167441 and david
nish 220598
approved by the board and signed on its behalf by
sir peter gregson
chairman of the remuneration committee
7 may 2003
scottishpower annual report  accounts 200203

68
remuneration report of the directors
continued directors’ responsibility for the accounts
the directors are required by law to prepare
accounts for each ﬁnancial year and to
present them annually to the company’s
members at the annual general meeting
the accounts of which the form and
content are prescribed by the companies
act 1985 and applicable accounting
standards must give a true and fair view of
the state of affairs of the company and of
the group as at the end of the ﬁnancial year
and of the group’s proﬁt or loss for the
period
the directors conﬁrm that suitable
accounting policies have been used and
applied consistently and that reasonable
and prudent judgements and estimates
have been made in the preparation of the
accounts for the year ended 31 march
2003 the directors also conﬁrm that
applicable accounting standards have been
followed and that the accounts have been
prepared on the going concern basis
the directors are responsible for
maintaining proper accounting records and
sufﬁcient internal controls to safeguard the
assets of the company and of the group and
to prevent and detect fraud or any other
irregularities
auditors 
following the conversion of the company’s
auditors pricewaterhousecoopers to a
limited liability partnership llp from 1
january 2003 pricewaterhousecoopers
resigned on 21 march 2003 and the
directors appointed its successors
pricewaterhousecoopers llp as auditors a
resolution to reappoint
pricewaterhousecoopers llp as auditors to
the company will be proposed at the annual
general meeting
report of the directors 
the report of the directors comprising the
statements and reports has been approved
by the board and signed on its behalf by
andrew mitchell
secretary
7 may 2003
cautionary statement for purposes of the
“safe harbor” provisions of the private
securities litigation reform act of 1995 
some statements made in this annual report
accounts are forwardlooking statements
within the meaning of the “safe harbor”
provisions of the private securities litigation
reform act of 1995 all statements with
respect to us our corporate plans future
ﬁnancial condition future results of
operations future business plans strategies
objectives and beliefs and other statements
that are not historical facts are forward
looking statements containing the words
“may” “will” “expect” “anticipate” “intend”
“estimate” “continue” “plan” “project”
“target” “on track to” “strategy” “aim”
“seek” “will meet” or other similar words are
also forward looking these statements are
based on our management’s assumptions
and beliefs in light of the information available
to us these assumptions involve risks and
uncertainties which may cause the actual
results performance or achievements to be
materially different from any future results
performance or achievements expressed or
implied by such forwardlooking statements
scottishpower wishes to caution readers and
others to whom forwardlooking statements
are addressed that any such forwardlooking
statements are not guarantees of future
performance and that actual results may
differ materially from estimates in the
forwardlooking statements scottishpower
undertakes no obligation to revise these
forwardlooking statements to reﬂect events
or circumstances after the date hereof
important factors that may cause results to
differ from expectations include for example
– any regulatory changes including changes
in environmental regulations that may
increase the operating costs of the group
may require the group to make unforeseen
capital expenditures or may prevent the
regulated business of the group from
achieving acceptable returns
– future levels of industry generation and
supply demand and pricing political
stability competition and economic growth
in the relevant areas in which the group
has operations
– the availability of acceptable fuel at
favorable prices
– the availability of operational capacity of
plants
– the success of reorganizational and cost
saving efforts and
– development and use of technology the
actions of competitors natural disasters
and other changes to business conditions
scottishpower annual report  accounts 200203

69 accounting policies 
and definitions
definitions 
business segment definitions
scottishpower defines business segments
for management reporting purposes
based on a combination of factors
principally differences in products and
services and the regulatory environment
in which the businesses operate 
business segments have been included
under either ‘continuing operations’ or
‘discontinued operations’ as appropriate
the business segments of the group are
defined as follows
continuing operations 
united kingdom
uk division – integrated generation and
supply
the generation of electricity from the
group’s own power stations the purchase
of external supplies of coal and gas for the
generation of electricity the purchase of
external supplies of electricity and gas for
sale to customers together with related
billing and collection activities gas storage
sale of gas to industrial and domestic
customers and the sale of electricity to
electricity suppliers in scotland and
england  wales and full participation in
the new electricity trading arrangements
“neta” in england  wales 
infrastructure division – power systems
the transmission and distribution
businesses in scotland and the
distribution business of manweb 
operating in merseyside and north wales
and specifically the transportation of
units of electricity from the power
stations through the transmission and
distribution networks to customers in
scotland and to customers in northern
ireland and england  wales through the
interconnectors 
united states
us division – pacificorp 
a vertically integrated electric utility that
includes the generation transmission and
distribution and sale of electricity to retail
industrial and commercial customers in
portions of six western states utah
oregon wyoming washington idaho and
california the operations also include
wholesale sales and power purchase
transactions with various entities the
state regulatory commissions and federal
energy regulatory commission “ferc”
regulate the retail and wholesale
operations the subsidiaries of pacificorp
support its electric utility operations by
providing coal mining facilities and
services environmental remediation and
financing
us division – ppm 
the competitive energy development
origination and marketing business
serving wholesale customers in north
american markets electricity products
and services are provided from gas
generation and renewable wind
generation resources located in the
western and midwestern us natural gas
storage and hub services are provided
from gas storage facilities located in
alberta canada and in texas
discontinued operations 
united kingdom
southern water
the provision of water and wastewater
services in the southeast of england
together with related billing and collection
activities the disposal of the southern
water business was completed on 23
april 2002
thus
the provision of telecommunications
services internet access and information
services to national corporates small and
mediumsized enterprises and residential
customers thus group plc “thus” was
demerged from scottishpower on 19
march 2002 
appliance retailing
the retailing and servicing of domestic
electrical goods and home entertainment
appliances the business was disposed of
and withdrawn from during the year
ended 31 march 2002 
revenue cost definitions
cost of sales
the cost of sales for the group excluding
southern water reflect the direct costs of
the generation and purchase of electricity
the purchase and transportation of
natural gas appliance retailing and
telecommunications services for
southern water cost of sales represented
the cost of extracting water from
underground and raw water surface
reservoirs and of its treatment and supply
to customers and the collection of
wastewater and its treatment and disposal 
transmission and distribution costs
the cost of transmitting units of electricity
from the power stations through the
transmission and distribution networks 
to customers it includes the costs of
metering billing and debt collection 
this heading is considered more
appropriate to the electricity industry 
than the standard companies act 
heading of distribution costs 
administrative expenses
the indirect costs of businesses the 
costs of corporate services property rates
and goodwill amortisation
other definitions
company or scottishpower
scottish power plc
group
scottish power plc and its consolidated
subsidiaries
associated undertakings
entities in which the group holds a long
term participating interest and exercises
significant influence 
joint ventures
entities in which the group holds a long
term interest and shares control with
another company external to the group
subsidiary undertakings
entities in which the group holds a long
term controlling interest
accounts 200203
scottishpower annual report  accounts 200203

70 accounting policies
basis of accounting
the accounts have been prepared under
the historical cost convention modified 
to include the revaluation of certain
tangible fixed assets and in accordance
with applicable accounting standards in
the uk and subject to the treatment
prior to the disposal of southern water
of water infrastructure grants and
contributions described under “grants
and contributions” below comply with the
requirements of the companies act 1985
basis of consolidation
the group accounts include the accounts
of the company and its subsidiary under
takings together with the group’s share 
of results and net assets of associated
undertakings and joint ventures 
for commercial reasons certain
subsidiaries have a different year end 
the consolidation includes the accounts
of these subsidiaries as adjusted for
material transactions in the period
between the year ends and 31 march
use of estimates
the preparation of accounts in conformity
with generally accepted accounting
principles requires management to make
estimates and assumptions that affect the
reported amounts of assets and liabilities
and disclosure of contingent assets and
liabilities at the date of the accounts and
the reported amounts of revenues and
expenses during the reporting period actual
results can differ from those estimates 
turnover
turnover comprises the sales value of
energy goods and other services supplied
to customers during the year and excludes
value added tax and intragroup sales
turnover from the sale of energy is the
value of units supplied during the year
and includes an estimate of the value of
units supplied to customers between the
date of their last meter reading and the
year end based on external data supplied
by the electricity and gas market
settlement processes prior to the disposal
of southern water in april 2002 turnover
also included the sales value of water and
wastewater services
interest
interest on the funding attributable to
major capital projects is capitalised gross
of tax relief during the period of
construction and written off as part of the
total cost over the operational life of the
asset all other interest payable and
receivable is reflected in the profit and
loss account as it arises 
financial instruments
debt instruments
all borrowings are stated at the fair value
of consideration received after deduction
of issue costs the issue costs and interest
payable on bonds are charged to the
profit and loss account at a constant rate
over the life of the bond premiums and
discounts arising on the early repayment
of borrowings are recognised in the profit
and loss account as incurred and received
interest rate swapsforward rate
agreements
these are used to manage debt interest 
rate exposures amounts payable or
receivable in respect of these agreements
are recognised as adjustments to interest
expense over the period of the contracts
the cash flows from and gains and losses
arising on terminations of these contracts
are recognised as returns on investments
and servicing of finance where associated
debt is not retired in conjunction with the
termination of an interest swap gains and
losses are deferred and are amortised to
interest expense over the remaining life of
the associated debt to the extent that
such debt remains outstanding 
interest rate capsswaptionsoptions
premiums received and payable on these
contracts are amortised over the period of
the contracts and are disclosed as interest
income and expense the accounting for
interest rate caps and swaptions is
otherwise in accordance with interest rate
swaps detailed above
cross currency interest rate swaps
these are used both to hedge foreign
exchange and interest rate exposures
arising on foreign currency debt and to
hedge overseas net investment where
used to hedge debt issues the debt is
recorded at the hedge contracted rate and
accounting is otherwise in accordance
with interest rate swaps detailed above
where used to hedge overseas net
investment spot gains or losses are
recorded in the statement of total
recognised gains and losses with interest
recorded in the profit and loss account
forward contracts
the group enters into forward contracts
for the purchase andor sale of foreign
currencies in order to manage its
exposure to fluctuations in currency rates
and to hedge overseas net investment
the cash flows from forward purchase
contracts are classified in a manner
consistent with the underlying nature of
the hedged transaction hence unrealised
gains and losses on contracts hedging
forecast transactions are not accounted
for until the maturity of the contract
foreign currency debtors and creditors
that are hedged with forward contracts
are translated at the contracted rate at the
balance sheet date spot gains or losses
on hedges of the overseas net investment
are recorded in the statement of total
recognised gains and losses with the
interest rate differential reflected in the
profit and loss account where a currency
forward contract no longer represents a
hedge because either the underlying asset
or liability has been derecognised or the
effectiveness of the hedge has been
undermined it is restated at fair value and
any change in value is taken directly to
the profit and loss account and reported
within exchange losses
hydroelectric and temperature hedges
these instruments are used to hedge
fluctuations in weather and temperature
in the us on a periodic basis the group
estimates and records a gain or loss in
the profit and loss account corresponding
to the total expected future cash flows
from these contracts  
commodity contracts
where there is no physical delivery
associated with commodity contracts
they are recorded at fair value on the
balance sheet and movements reflected
through the profit and loss account gas
future contracts are undertaken for
hedging and proprietary trading purposes
where the instrument is a hedge the daily
margin calls are initially reflected on the
balance sheet and subsequently reflected
through the profit and loss account to
match the recognition of the hedged item
where the instrument is for proprietary
trading the margin calls are reflected
through the profit and loss account
scottishpower annual report  accounts 200203

71 taxation
in accordance with financial reporting
standard 19 ‘deferred tax’ full provision
is made for deferred tax on a non
discounted basis 
goodwill
purchased goodwill represents the 
excess of the fair value of the purchase
consideration over the fair value of the net
assets acquired goodwill arising from
acquisitions prior to 31 march 1998 was
written off against reserves 
on disposal of trading entities the
goodwill previously included in reserves is
charged to the profit and loss account
matched by an equal credit to reserves
goodwill arising on acquisitions since
1 april 1998 has been capitalised and
amortised through the profit and loss
account over its estimated useful
economic life goodwill arising on
overseas acquisitions is regarded as a
currency asset and is retranslated at the
end of each period at the closing rate of
exchange
tangible fixed assets
accounting for nonwater 
infrastructure assets
tangible fixed assets are stated at cost or
valuation and are generally depreciated
on the straight line method over their
estimated operational lives tangible fixed
assets include capitalised employee
interest and other costs which are directly
attributable to construction of fixed assets 
land is not depreciated except in the case
of mines see below the main
depreciation periods used by the group
are as set out below
years 
coal oilfired gas and other 
generating stations 2245
hydro plant and machinery 20100
other buildings 40
transmission and distribution plant 2075
towers lines and underground cables 4060
vehicles computer software costs 
miscellaneous equipment and fittings 340
the carrying values of tangible fixed assets
are reviewed for impairment in periods if
events or changes in circumstances
indicate the carrying value may not be
recoverable for those assets with
estimated remaining useful economic lives
of more than 50 years impairment
reviews are undertaken annually
impairment losses are recognised in the
period in which they are identified
mine reclamation and closure costs
provision is made for mine reclamation
and closure costs when an obligation
arises out of events prior to the year 
end the amount recognised is the
present value of the estimated future
expenditure determined in accordance
with local conditions and requirements 
a corresponding tangible fixed asset is 
also created of an amount equal to the
provision this asset together with 
the cost of the mine is subsequently
depreciated on a unit of production basis
the unwinding of the discount is included
within net interest and similar charges
decommissioning costs
provision is made for the estimated
decommissioning costs at the end of the
producing lives of the group’s power
stations on a discounted basis capitalised
decommissioning costs are depreciated
over the useful lives of the related assets
the unwinding of the discount is included
within net interest and similar charges
infrastructure accounting
water infrastructure assets being mains
and sewers reservoirs dams sludge
pipelines and sea outfalls comprised a
network of systems expenditure on water
infrastructure assets relating to increases
in capacity or enhancement of the network
and on maintaining the operating
capability of the network in accordance
with defined standards of service was
treated as an addition to fixed assets
the depreciation charge for water
infrastructure assets was the estimated 
level of annualised expenditure required
to maintain the operating capability of 
the network and was based on the asset
management plan agreed with the water
industry regulator as part of the price
regulation process 
the asset management plan was
developed from historical experience
combined with a rolling programme of
reviews of the condition of the
infrastructure assets
leased assets
as lessee
assets leased under finance leases are
capitalised and depreciated over the
shorter of the lease periods and the
estimated operational lives of the assets
the interest element of the finance lease
repayments is charged to the profit and
loss account in proportion to the balance
of the capital repayments outstanding
rentals payable under operating leases
are charged to the profit and loss account
on a straight line basis 
as lessor
rentals receivable under finance leases
are allocated to accounting periods to give
a constant periodic rate of return on the
net cash investment in the lease in each
period the amounts due from lessees
under finance leases are recorded in the
balance sheet as a debtor at the amount
of the net investment in the lease after
making provisions for bad and doubtful
rentals receivable 
investments
investments in subsidiary and associated
undertakings and joint ventures are 
stated in the balance sheet of the parent
company at cost or nominal value of
shares issued as consideration where
applicable less provision for any
impairment in value the group profit 
and loss account includes the group’s
share of the operating profits less 
losses net interest charge and taxation 
of associated undertakings and joint
ventures the group balance sheet
includes the investment in associated
undertakings and joint ventures at the
group’s share of their net assets other
fixed asset investments are carried at cost
less provision for impairment in value 
own shares held under trust
the amount recorded in the balance sheet
for shares in the company purchased for
employee sharesave schemes represents
the amounts receivable from option
holders on exercise of the options
the group has taken advantage of the
exemption within urgent issues task 
force “uitf” abstract 17 not to apply the
requirements therein to inland revenue
approved savingsrelated share option
schemes and equivalent overseas schemes
long term incentive plan “ltip”
shares in the company purchased for the
ltip are held under trust and are recorded
within investments in the balance sheet at
cost the cost of awards made by the trust
under the ltip  being the difference
between the fair value of the shares and
the option price at the date of grant is
taken to the profit and loss account on a
straight line basis over the period in which
performance is measured
accounting policies and definitions
scottishpower annual report  accounts 200203

72 stocks
stocks are valued at the lower of average
cost and net realisable value
us regulatory assets
statement of financial accounting
standard “fas” 71 ‘accounting for the
effects of certain types of regulation’
establishes us gaap for utilities in the us
whose regulators have the power to
approve andor regulate rates that may be
charged to customers fas 71 provides
that regulatory assets may be capitalised
if it is probable that future revenue in an
amount at least equal to the capitalised
costs will result from the inclusion of that
cost in allowable costs for ratemaking
purposes due to the different regulatory
environment no equivalent gaap applies
in the uk
under uk gaap the group’s policy is to
recognise regulatory assets established in
accordance with fas 71 only where they
comprise rights or other access to future
economic benefits which have arisen as a
result of past transactions or events which
have created an obligation to transfer
economic benefits to a third party
measurement of the past transaction or
event and hence the regulatory asset is
determined in accordance with uk gaap
grants and contributions 
capital grants and customer contributions
in respect of additions to nonwater
infrastructure fixed assets are treated as
deferred income and released to the profit
and loss account over the estimated
operational lives of the related assets prior
to the disposal of southern water in april
2002 grants and contributions receivable
relating to water infrastructure assets were
deducted from the cost or valuation of
those assets while this treatment was in
accordance with ssap 4 it was not in
accordance with the companies act 1985
the act requires capital grants and
contributions to be shown as deferred
income rather than offset against the cost
or valuation of tangible fixed assets
this departure from the requirements of
the act was in the opinion of the
directors necessary for the accounts to
give a true and fair view as while provision
was made for depreciation of water
infrastructure assets these assets did not
have determinable finite lives and
therefore no basis existed on which to
recognise grants and contributions as
deferred income the effect of this
treatment on the value of tangible fixed
assets is disclosed in note 16 
pensions
the group provides pension benefits
through both defined benefit and defined
contribution arrangements the regular
cost of providing pensions and related
benefits and any variations from regular
cost arising from the actuarial valuations
for defined benefit schemes are charged
to the profit and loss account over the
expected remaining service lives of
current employees following consultations
with the actuary any difference between
the charge to the profit and loss account
and the actual contributions paid to the
pension schemes is included as an asset
or liability in the balance sheet payments
to defined contribution schemes are
charged against profits as incurred
postretirement benefits other 
than pensions
certain additional postretirement
benefits principally healthcare benefits
are provided to eligible retirees within the
group’s us businesses the estimated
cost of providing such benefits is charged
against profits on a systematic basis 
over the employees’ working lives within
the group
environmental liabilities
provision for environmental liabilities is
made when expenditure on remedial work
is probable and the group is obliged
either legally or constructively through its
environmental policies to undertake such
work where the amount is expected to be
incurred over the longterm the amount
recognised is the present value of the
estimated future expenditure and the
unwinding of the discount is included
within net interest and similar charges
foreign currencies
group
the results and cash flows of overseas
subsidiaries are translated to sterling 
at the average rate of exchange for each
quarter of the financial year the net
assets of such subsidiaries and the
goodwill arising on their acquisition are
translated to sterling at the closing rates
of exchange ruling at the balance sheet 
date exchange differences which relate 
to the translation of overseas subsidiaries
and of matching foreign currency
borrowings and derivatives are taken
directly to group reserves and are shown
in the statement of total recognised gains
and losses
company
transactions in foreign currencies are
recorded at the rate ruling at the date of
the transaction at the year end monetary
assets and liabilities denominated in
foreign currencies are translated at the
rate of exchange ruling at the balance
sheet date or where applicable at the
hedged contracted rate any gain or loss
arising on the restatement of such
balances is taken to the profit and loss
account
overseas net investments that are partially
hedged with foreign currency borrowings
and derivatives are viewed as a foreign
currency asset to the extent that they are
matched with these instruments
exchange differences arising on re
translation of the investment and the
borrowings and derivatives are taken
directly to reserves the remaining
unhedged element of the investment is
recorded at historical cost at the exchange
rate ruling at the date of acquisition
without further retranslation
exchange rates
the exchange rates applied in the
preparation of the accounts were 
as follows
year ended 31 march
2003 2002 2001
average rate for  
quarters ending
30 june 146£ 142£ 153£
30 september 155£ 144£ 148£
31 december 157£ 144£ 145£
31 march 160£ 143£ 146£
closing rate as 
at 31 march 158£ 142£ 142£
a glossary of terms used in the accounts
and their us equivalents is set out on
page 133
scottishpower annual report  accounts 200203

73 group profit and loss account
for the year ended 31 march 2003
year ended 31 march 2003
continuing discontinued
operations operations total
2003 2003 2003
notes £m £m £m
turnover group and share of joint ventures and associates 52731 267 52998
less share of turnover in joint ventures 252 – 252
less share of turnover in associates 08 – 08
group turnover 1 52471 267 52738
cost of sales 32154 114 32268
gross profit 20317 153 20470
transmission and distribution costs 5126 – 5126
administrative expenses including goodwill amortisation 6132 13 6145
other operating income 260 – 260
operating profit before goodwill amortisation 10709 140 10849
goodwill amortisation 1390 – 1390
operating profit 1 2 9319 140 9459
share of operating profit in joint ventures 48 – 48
share of operating profit in associates 04 – 04
profit on ordinary activities before interest 9371 140 9511
net interest and similar charges
– group 2459 30 2489
– joint ventures 54 – 54
5 2513 30 2543
profit on ordinary activities before goodwill amortisation and taxation 8248 110 8358
goodwill amortisation 1390 – 1390
profit on ordinary activities before taxation 6858 110 6968
taxation
– group 2058 34 2092
– joint ventures 03 – 03
– associates 01 – 01
6 2056 34 2090
profit after taxation 4802 76 4878
minority interests 27 52 – 52
profit for the financial year 4750 76 4826
dividends 8 5295 – 5295
loss retained 26 545 76 469
earnings per ordinary share 7 2576p 041p 2617p
adjusting item – goodwill amortisation 754p – 754p
earnings per ordinary share before goodwill amortisation 7 3330p 041p 3371p
diluted earnings per ordinary share 7 2611p
adjusting item – goodwill amortisation 752p
diluted earnings per ordinary share before goodwill amortisation 7 3363p
dividends per ordinary share 8 28708p
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form part of these accounts 
scottishpower annual report  accounts 200203

74 group profit and loss account
for the year ended 31 march 2002
year ended 31 march 2002
exceptional exceptional
items items
continuing total discontinued total
continuing operations continuing discontinued operations discontinued
operations note 4 operations operations note 4 operations total
2002 2002 2002 2002 2002 2002 2002
notes £m £m £m £m £m £m £m
turnover group and share of joint ventures and associates 55459 – 55459 7913 – 7913 63372
less share of turnover in joint ventures 226 – 226 – – – 226
less share of turnover in associates 05 – 05 – – – 05
group turnover 1 55228 – 55228 7913 – 7913 63141
cost of sales 39200 – 39200 4908 – 4908 44108
gross profit 16028 – 16028 3005 – 3005 19033
transmission and distribution costs 4793 – 4793 333 – 333 5126
administrative expenses including goodwill amortisation 5338 185 5523 1428 – 1428 6951
other operating income 642 – 642 36 – 36 678
utilisation of appliance retailing disposal provision – – – 132 – 132 132
operating profit before goodwill amortisation 8005 185 7820 1436 – 1436 9256
goodwill amortisation 1466 – 1466 24 – 24 1490
operating profit 1 2 6539 185 6354 1412 – 1412 7766
share of operating profit in joint ventures 22 – 22 – – – 22
share of operating profit in associates 02 – 02 – – – 02
6563 185 6378 1412 – 1412 7790
loss on disposal of and withdrawal from appliance retailing  
before goodwill write back 4 – – – – 1050 1050 1050
goodwill write back 4 – – – – 151 151 151
loss on disposal of and withdrawal from appliance retailing 4 – – – – 1201 1201 1201
provision for loss on disposal of southern water  
before goodwill write back 4 – – – – 4493 4493 4493
goodwill write back 4 – – – – 7382 7382 7382
provision for loss on disposal of southern water 4 – – – – 11875 11875 11875
profitloss on ordinary activities before interest 6563 185 6378 1412 13076 11664 5286
net interest and similar charges
– group before exceptional interest and similar charges 3363 – 3363 369 – 369 3732
– exceptional interest and similar charges 4 – 188 188 – 120 120 308
– joint ventures 62 – 62 – – – 62
5 3425 188 3613 369 120 489 4102
profitloss on ordinary activities before goodwill 
amortisation and taxation 4604 373 4231 1067 13196 12129 7898
goodwill amortisation 1466 – 1466 24 – 24 1490
profitloss on ordinary activities before taxation 3138 373 2765 1043 13196 12153 9388
taxation
– group before tax on exceptional items 680 – 680 551 – 551 1231
– tax on exceptional items 4 – 113 113 – 275 275 388
– joint ventures 11 – 11 – – – 11
6 669 113 556 551 275 276 832
profitloss after taxation 2469 260 2209 492 12921 12429 10220
minority interests 27 69 – 69 418 – 418 349
profitloss for the financial year 2400 260 2140 910 12921 12011 9871
dividends
– cash 8 5035 – 5035 – – – 5035
– dividend in specie on demerger of thus 8 – – – 4366 – 4366 4366
5035 – 5035 4366 – 4366 9401
loss retained 26 2635 260 2895 3456 12921 16377 19272
earningsloss per ordinary share 7 1306p 141p 1165p 495p 7031p 6536p 5371p
adjusting items – exceptional items – 141p 141p – 7031p 7031p 7172p
– goodwill amortisation 798p – 798p 013p – 013p 811p
earnings per ordinary share before exceptional items
and goodwill amortisation 7 2104p – 2104p 508p – 508p 2612p
diluted loss per ordinary share 7 5364p
adjusting items – exceptional items 7163p
– goodwill amortisation 810p
diluted earnings per ordinary share before exceptional items
and goodwill amortisation 7 2609p
cash dividends per ordinary share 8 2734p
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form part of these accounts
scottishpower annual report  accounts 200203

75 group profit and loss account
for the year ended 31 march 2001
year ended 31 march 2001
exceptional
item
continuing total total
continuing operations continuing discontinued
operations note 4 operations operations total
2001 2001 2001 2001 2001
notes £m £m £m £m £m
turnover group and share of joint ventures and associates 54219 – 54219 9395 63614
less share of turnover in joint ventures 117 – 117 – 117
less share of turnover in associates 04 – 04 – 04
group turnover 1 54098 – 54098 9395 63493
cost of sales 38370 621 38991 5704 44695
gross profit 15728 621 15107 3691 18798
transmission and distribution costs 4832 451 5283 384 5667
administrative expenses including goodwill amortisation 4461 135 4596 1820 6416
other operating income 466 – 466 38 504
operating profit before goodwill amortisation 8153 1207 6946 1549 8495
goodwill amortisation 1252 – 1252 24 1276
operating profit 1 2 6901 1207 5694 1525 7219
share of operating loss in joint ventures 94 – 94 – 94
share of operating profit in associates 01 – 01 – 01
profit on ordinary activities before interest 6808 1207 5601 1525 7126
net interest and similar charges
– group 2937 – 2937 363 3300
– joint ventures 29 – 29 – 29
5 2966 – 2966 363 3329
profit on ordinary activities before goodwill amortisation and taxation 5094 1207 3887 1186 5073
goodwill amortisation 1252 – 1252 24 1276
profit on ordinary activities before taxation 3842 1207 2635 1162 3797
taxation
– group before tax on exceptional item 1459 – 1459 67 1392
– tax on exceptional item 4 – 459 459 – 459
– joint ventures 19 – 19 – 19
6 1478 459 1019 67 952
profit after taxation 2364 748 1616 1229 2845
minority interests 104 – 104 334 230
profit for the financial year 2260 748 1512 1563 3075
dividends 8 4773 – 4773 – 4773
loss retained 26 2513 748 3261 1563 1698
earnings per ordinary share 7 1235p 409p 826p 854p 1680p
adjusting items – exceptional item – 409p 409p – 409p
– goodwill amortisation 684p – 684p 013p 697p
earnings per ordinary share before exceptional item
and goodwill amortisation 7 1919p – 1919p 867p 2786p
diluted earnings per ordinary share 7 1674p
adjusting items – exceptional item 407p
– goodwill amortisation 694p
diluted earnings per ordinary share before exceptional item
and goodwill amortisation 7 2775p
dividends per ordinary share 8 2604p
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form part of these accounts
scottishpower annual report  accounts 200203

76 2003 2002 2001
note £m £m £m
profitloss for the financial year 4826 9871 3075
exchange movement on translation of overseas results and net assets 26 3870 42 4931
translation differences on foreign currency hedging 26 3576 195 –
tax on translation differences on foreign currency hedging 26 288 ––
unrealised gains on fixed asset disposals 26 – 49 –
total recognised gains and losses for the financial year 4244 10059 8006
note of historical cost profits and losses
for the year ended 31 march 2003
2003 2002 2001
note £m £m £m
profitloss on ordinary activities before taxation 6968 9388 3797
differences between historical cost depreciation charge and actual depreciation 
charge for the year calculated on the revalued amount of fixed assets 26 20 34 34
fixed asset revaluation gains realised on disposal 26 – 1682 –
historical cost profitloss on ordinary activities before taxation 6988 7672 3831
historical cost loss retained for the financial year after
taxation minority interest and dividends 449 17556 1664
reconciliation of movements in shareholders’ funds
for the year ended 31 march 2003
2003 2002 2001
£m £m £m
profitloss for the financial year 4826 9871 3075
dividends
– cash 5295 5035 4773
– dividend in specie on demerger of thus – 4366 –
loss retained 469 19272 1698
exchange movement on translation of overseas results and net assets 3870 42 4931
translation differences on foreign currency hedging 3576 195 –
tax on translation differences on foreign currency hedging 288 ––
unrealised gains on fixed asset disposals – 49 –
share capital issued 120 162 66
goodwill realised on disposals – 7533 –
goodwill realised on demerger of thus – 147 –
net movement in shareholders’ funds 931 11618 3299
opening shareholders’ funds 47314 58932 55633
closing shareholders’ funds 46383 47314 58932
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form part of these accounts
statement of total recognised gains and losses
for the year ended 31 march 2003
scottishpower annual report  accounts 200203

77 notes to the group profit and loss account
for the year ended 31 march 2003
1 segmental information
a turnover by segment total turnover intersegment turnover external turnover
2003 2002 2001 2003 2002 2001 2003 2002 2001
notes £m £m £m £m £m £m £m £m £m
united kingdom – continuing operations
uk division – integrated generation and supply 21808 21607 20991 330 393 353 21478 21214 20638
infrastructure division – power systems 6673 6466 6663 3533 3990 4426 3140 2476 2237
united kingdom total – continuing operations 24618 23690 22875
united states – continuing operations
us division 
pacificorp i 25022 29807 31062 28 –– 24994 29807 31062
ppm iii 2936 1731 161 77 –– 2859 1731 161
united states total – continuing operations 27853 31538 31223
total continuing operations 52471 55228 54098
united kingdom – discontinued operations
southern water 267 4306 4229 – 07 05 267 4299 4224
thus – 2578 2338 – 287 344 – 2291 1994
appliance retailing – 1339 3254 – 16 77 – 1323 3177
united kingdom total – discontinued operations 267 7913 9395
total iii 52738 63141 63493
b operating profitloss by segment before before
goodwill goodwill
amortisation amortisation
before and and
goodwill goodwill exceptional goodwill exceptional exceptional goodwill exceptional
amortisation amortisation item amortisation item item amortisation item
2003 2003 2003 2002 2002 2002 2002 2001 2001 2001 2001
notes £m £m £m £m £m £m £m £m £m £m £m
united kingdom – continuing operations
uk division – integrated generation and supply 779 49 730 787 49 185 553 1227 04 – 1223
infrastructure division – power systems 3678 – 3678 3549 – – 3549 3413 – – 3413
united kingdom total – 
continuing operations 4457 49 4408 4336 49 185 4102 4640 04 – 4636
united states – continuing operations
us division 
pacificorp i 5967 1339 4628 3716 1417 – 2299 3468 1248 1207 1013
ppm iii 285 02 283 47 – – 47 45 – – 45
united states total – continuing operations 6252 1341 4911 3669 1417 – 2252 3513 1248 1207 1058
total continuing operations 10709 1390 9319 8005 1466 185 6354 8153 1252 1207 5694
united kingdom – discontinued operations
southern water 140 – 140 2163 – – 2163 2216 – – 2216
thus ––– 637 24 – 661 580 24 – 604
appliance retailing ––– 90 – – 90 87 – – 87
united kingdom total –
discontinued operations 140 – 140 1436 24 – 1412 1549 24 – 1525
total 10849 1390 9459 9441 1490 185 7766 9702 1276 1207 7219
c depreciation and impairment by segment depreciation depreciation impairment total depreciation
2003 2002 2002 2002 2001
note £m £m £m £m £m
united kingdom – continuing operations
uk division – integrated generation and supply 873 729 130 859 516
infrastructure division – power systems 1124 1083 – 1083 1076
united kingdom total – continuing operations 1997 1812 130 1942 1592
united states – continuing operations
us division 
pacificorp i 2339 2254 – 2254 2035
ppm i 80 24 – 24 01
united states total – continuing operations 2419 2278 – 2278 2036
total continuing operations 4416 4090 130 4220 3628
united kingdom – discontinued operations
southern water 56 776 – 776 712
thus – 652 – 652 365
appliance retailing – 32 – 32 98
united kingdom total – discontinued operations 56 1460 – 1460 1175
total depreciation and impairment charged to operating profit 4472 5550 130 5680 4803
impairment within loss on disposal of and withdrawal from appliance retailing – – 322 322 –
impairment within provision for loss on disposal of southern water – – 4493 4493 –
total depreciation and impairment 4472 5550 4945 10495 4803
scottishpower annual report  accounts 200203

78 1 segmental information continued
i the former ‘pacificorp’ segment has been separated into two reporting segments pacificorp the us regulated business and ppm the competitive us energy
business which commenced substantive operations during 2001
ii ppm completed the acquisition of the katy gas storage facility and certain other trade and assets from aquila inc in december 2002 the post acquisition
results of the acquired business are included within the ppm segment and amounted to turnover of £32 million operating profit before goodwill amortisation
of £10 million and operating profit after goodwill amortisation of £08 million
iii in the segmental analysis turnover is shown by geographical origin turnover analysed by geographical destination is not materially different
2 operating profit
2003 2002 2001
operating profit is stated after chargingcrediting note £m £m £m 
depreciation and impairment of tangible fixed assets 4472 5680 4803
amortisation of goodwill 1390 1490 1276
release of customer contributionsgrants 186 178 151
research and development 07 31 42
hire of plant and equipment – operating leases 01 01 03
hire of other assets – operating leases 146 556 546
auditors’ remuneration for audit of
– group 15 15 15
– company – ––
nonaudit fees paid to auditors
regulatory advice – 03 13
taxation compliance and advice 48 52 31
due diligence uk listing authority and sec reporting 03 34 08
other audit and assurance services 10 08 08
advice on systems and consultancy services i 03 69 54
total uk and us nonaudit fees paid to auditors 64 166 114
i fees for the year ended 31 march 2003 include an amount of £03 million which was paid to pricewaterhousecoopers consulting in the period prior to its
disposal by pricewaterhousecoopers on 2 october 2002
ii the audit committee and the firm of external auditors have safeguards to avoid the possibility that the auditors’ objectivity and independence could be
compromised these safeguards include the implementation of a policy on the use of the external auditor for nonauditrelated services this policy has been
revised during the year to incorporate the provisions of the sarbanesoxley act 2002 and subsequent securities and exchange commission “sec” rules
where it is deemed that the work to be undertaken is of a nature that is generally considered reasonable to be completed by the auditor of the group for sound
commercial and practical reasons including confidentiality the conduct of such work will be permissible provided that it has been preapproved by the audit
committee examples of preapproved services include the completion of regulatory audits provision of taxation and regulatory advice reporting to the sec and
the uk listing authority and the completion of certain financial due diligence work all these services are also subject to a predefined fee limit any work
performed in excess of this limit must be approved by the finance director and the chairman of the audit committee
fees and expenses invoiced by the auditors for nonaudit services include £23 million 2002 £104 million 2001 £75 million payable in the uk
for the year ended 31 march 2003 all of the above nonaudit fees were charged to operating profit
for the year ended 31 march 2002 £151 million of the above nonaudit fees were charged to operating profit £06 million were charged to exceptional loss on
disposal of and withdrawal from appliance retailing and £09 million were charged to exceptional provision for loss on disposal of southern water
for the year ended 31 march 2001 £107 million of the above nonaudit fees were charged to operating profit and £07 million were included within the costs of
sale of the businesses held for disposal
operating profit for the years ended 31 march 2003 31 march 2002 and 31 march 2001 is also stated after chargingcrediting £278 million £42 million
and £43 million respectively in relation to finance leases in the us which are financed by nonrecourse borrowings and qualify for linked presentation under
frs 5 net earnings comprise gross lossearnings after provision against the carrying value of the group’s residual interests of £32 million £323 million
and £338 million less finance costs of £246 million £281 million and £295 million respectively
scottishpower annual report  accounts 200203

79 notes to the group profit and loss account
for the year ended 31 march 2003 – continued
3 employee information
2003 2002 2001
a employee costs note £m £m £m 
wages and salaries 5531 6956 6768
social security costs 367 469 503
pension costs i 680 439 284
total employee costs 6578 7864 7555
less charged as capital expenditure 1552 1913 1512
charged to the profit and loss account 5026 5951 6043
i pension costs above comprise pension costs company contributions to the pacificorp 401k plan and costs of other postretirement and other postemployment
benefits the cost of the group’s pension arrangements for the year ended 31 march 2003 was £418 million 2002 £214 million 2001 £230 million
b employee numbers
the year end and average numbers of employees fulltime and parttime employed by the group including executive directors were 
at 31 march annual average
note 2003 2002 2001 2003 2002 2001
united kingdom – continuing operations
uk division – integrated generation and supply 4319 4582 4278 4362 4589 4178
infrastructure division – power systems 3215 3084 3265 3238 3174 3332
united kingdom total – continuing operations 7534 7666 7543 7600 7763 7510
united states – continuing operations
us division
pacificorp 6130 6289 6626 6175 6436 7027
ppm 161 98 42 128 76 26
united states total – continuing operations 6291 6387 6668 6303 6512 7053
total continuing operations 13825 14053 14211 13903 14275 14563
united kingdom – discontinued operations
southern water – 2109 2138 2024 2125 2160
thus – – 2686 – 2392 2696
appliance retailing – – 2946 – 2391 2988
united kingdom total – discontinued operations i – 2109 7770 2024 6908 7844
total 13825 16162 21981 15927 21183 22407
the year end and average numbers of fulltime equivalent staff employed by the group including executive directors were 
at 31 march annual average
note 2003 2002 2001 2003 2002 2001
united kingdom
– continuing operations 7163 7353 7184 7240 7391 7125
– discontinued operations i – 2056 7025 1982 6314 7049
united states 6265 6349 6612 6268 6474 6993
total 13428 15758 20821 15490 20179 21167
i the annual average for 2003 for southern water is calculated for the period prior to disposal on 23 april 2002 the annual average for 2002 for discontinued
operations is calculated for the period prior to disposal or demerger this represents the period to 8 october 2001 for appliance retailing and the period to 19
march 2002 for thus
c directors’ remuneration
details for each director of remuneration pension entitlements and interests in share options are set out on pages 65 to 68 this information forms part of the
accounts
scottishpower annual report  accounts 200203

80 4 exceptional items
2003 2001
continuing continuing
operations 2002 2002 operations
and continuing discontinued 2002 and 
total operations operations total total
notes £m £m £m £m £m
a recognised in arriving at operating profit
reorganisation costs i v – 185 – 185 1207
total recognised in arriving at operating profit – 185 – 185 1207
b recognised after operating profit
loss on disposal of and withdrawal from appliance retailing ii – – 1201 1201 –
provision for loss on disposal of southern water before goodwill write back iii – – 4493 4493 –
goodwill write back relating to southern water iii – – 7382 7382 –
total recognised after operating profit – – 13076 13076 –
total exceptional items before interest and taxation – 185 13076 13261 1207
restructuring of debt portfolio iv – 188 120 308 –
tax on exceptional items – 113 275 388 459
total exceptional items net of tax – 260 12921 13181 748
year ended 31 march 2003
there were no exceptional items during the year ended 31 march 2003 
year ended 31 march 2002
i an exceptional charge of £185 million was incurred relating to reorganisation costs for the uk division – integrated generation and supply and primarily
represented severance and related costs
ii an exceptional charge of £1201 million related to the loss on disposal of and withdrawal from the group’s appliance retailing operations this charge
included £151 million of goodwill previously written off to reserves the pregoodwill loss of £1050 million comprised asset impairments of £542 million
including a provision for impairment of tangible fixed assets of £322 million and provisions for trading losses and closure costs of £508 million the loss on
disposal of and withdrawal from appliance retailing was stated before a tax credit of £210 million
iii on 23 april 2002 the group completed the sale of aspen 4 limited the holding company of southern water plc to first aqua limited for a total
consideration before expenses of £205 billion including repayment and acquisition of intragroup nontrading indebtedness and assumption by first aqua
limited of southern water’s nontrading debt due to third parties an exceptional charge of £11875 million related to the provision for the loss on disposal of the
group’s southern water business this charge included £7382 million of goodwill previously written off to reserves and was stated before a tax credit of £29 million 
iv exceptional finance costs of £120 million comprising hedging and debt redemption costs associated with the proposed refinancing of southern water  have
been included within the results of discontinued operations exceptional finance costs of £188 million relating to the restructuring of the group’s debt portfolio in
anticipation of the disposal of southern water have been included within the results of continuing operations
year ended 31 march 2001
v the charge of £1207 million related to the cost of the transition plan for pacificorp announced on 4 may 2000 and primarily represented severance and 
related costs for approximately 1600 employees
5 net interest and similar charges
2003 2002 2001
analysis of net interest and similar charges notes £m £m £m 
interest on bank loans and overdrafts 186 328 381
interest on other borrowings 3310 3795 3337
finance leases 21 23 22
total interest payable 3517 4146 3740
interest receivable 1071 150 337
capitalised interest i 173 361 322
net interest charge 2273 3635 3081
unwinding of discount on provisions 265 228 160
foreign exchange lossgain 05 69 88
net interest and similar charges before exceptional items 2543 3794 3329
exceptional interest on bank loans and overdrafts – 120 –
exceptional interest on other borrowings – 188 –
exceptional interest and similar charges 4iv – 308 –
net interest and similar charges after exceptional items 2543 4102 3329
interest cover times ii 43 25 30
i the tax relief on the capitalised interest was £44 million 2002 £105 million 2001 £91 million
ii interest cover is calculated by dividing profit on ordinary activities before interest before exceptional items and goodwill amortisation by the sum of the net
interest charge before exceptional interest and similar charges and the unwinding of discount on provisions 
scottishpower annual report  accounts 200203

81 notes to the group profit and loss account
for the year ended 31 march 2003 – continued
6 tax on profitloss on ordinary activities
before before
exceptional exceptional exceptional exceptional
items items item item
2003 2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m £m
current tax
uk corporation tax 1244 826 325 501 1753 – 1753
foreign tax 789 173 – 173 57 87 30
double taxation relief – ––– 612 – 612
2033 999 325 674 1198 87 1111
adjustments to uk corporation tax in respect of prior years 449 544 – 544 297 – 297
total current tax for year 1584 455 325 130 901 87 814
deferred tax
origination and reversal of timing differences 506 765 63 702 860 372 488
adjustments in respect of prior years – ––– 350 – 350
total deferred tax for year 506 765 63 702 510 372 138
total tax on profitloss on ordinary activities 2090 1220 388 832 1411 459 952
effective rate of tax before goodwill amortisation 250 215 225
the current tax charge on profitloss on ordinary activities for the year varied from the standard rate of uk corporation tax as follows
2003 2002 2001
£m £m £m
corporation tax at 30 2090 2816 1139
losses and other permanent differences 39 281 62
effect of tax rate applied to overseas earnings 07 218 112
permanent differences on exceptional items – 3682 97
goodwill amortisation 417 447 383
adjustments in respect of prior years 449 544 647
tax charge current and deferred 2090 832 952
origination and reversal of timing differences – deferred tax charge 506 702 138
current tax charge for year 1584 130 814
7 earningsloss per ordinary share
a earningsloss per ordinary share have been calculated for all years by dividing the profitloss for the financial year by the weighted average number of
ordinary shares in issue during the financial year based on the following information 
2003 2002 2001
profitloss for the financial year £ million 4826 9871 3075
basic weighted average share capital number of shares million 18439 18378 18303
diluted weighted average share capital number of shares million 18484 18401 18374
the difference between the basic and the diluted weighted average share capital is wholly attributable to outstanding share options and shares held in trust for
the group’s employee share ownership plan these share options are dilutive by reference to continuing operations and accordingly a diluted earningsloss
per share has been calculated which has the impact of reducing the net earningsloss per ordinary share
b the calculation of earningsloss per ordinary share on a basis which excludes exceptional items and goodwill amortisation is based on the following adjusted
earnings
continuing discontinued continuing discontinued continuing discontinued
operations operations total operations operations total operations operations total
2003 2003 2003 2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m £m £m £m
profitloss for the financial year 4750 76 4826 2140 12011 9871 1512 1563 3075
adjusting items – exceptional items
net of attributable taxation ––– 260 12921 13181 748 – 748
– goodwill amortisation 1390 – 1390 1466 24 1490 1252 24 1276
adjusted earnings 6140 76 6216 3866 934 4800 3512 1587 5099
the group’s net interest and similar charges have been allocated between continuing and discontinued operations on the basis of external and internal borrowings
of the respective operations the group’s tax charge has been allocated between continuing and discontinued operations based on the profitloss before tax of
the respective operations
scottishpower management assess the performance of the group by adjusting earnings per share calculated in accordance with frs 14 to exclude items they
consider to be nonrecurring or nonoperational in nature management believes that the exclusion of such items provides a better comparison of business
performance consequently an adjusted earnings per share figure is presented for all years
scottishpower annual report  accounts 200203

82 8 dividends
a cash dividends 2003 2002 2001
pence per pence per pence per
ordinary ordinary ordinary 2003 2002 2001
share share share £m £m £m 
first interim dividend paid 7177 6835 6510 1325 1254 1191
second interim dividend paid 7177 6835 6510 1327 1259 1193
third interim dividend paid 7177 6835 6510 1321 1261 1195
final dividend 7177 6835 6510 1322 1261 1194
total cash dividends 28708 27340 26040 5295 5035 4773
b dividend in specie on demerger of thus
2003 2002 2001
note £m £m £m 
demerger dividend 34 – 4366 –
the demerger of thus was recorded in the group accounts at the book value of the net assets which were deconsolidated of £4219 million together with £147
million of related goodwill which had previously been written off to reserves giving a dividend in specie of £4366 million
the demerger of thus was recorded in the individual company accounts of scottish power plc at the book value of the cost of investment in the ordinary and
preference shares of thus giving a dividend in specie of £3963 million
scottishpower annual report  accounts 200203

83 2003 2002 2001
notes £m £m £m
cash inflow from operating activities 10 14129 12484 14116
dividends received from joint ventures 09 03 21
returns on investments and servicing of finance 9 2970 3778 3735
taxation 1913 850 1526
free cash flow 9255 7859 8876
capital expenditure and financial investment 9 7049 11483 10814
cash flow before acquisitions and disposals 2206 3624 1938
acquisitions and disposals 9 17990 1500 4829
equity dividends paid 5234 4968 4713
cash inflowoutflow before use of liquid resources and financing 14962 7092 1822
management of liquid resources 913 1611 387 119
financing
– issue of ordinary share capital 9 120 162 66
– redemption of preferred stock of pacificorp 9 51 695 –
– decreaseincrease in debt 913 11914 9824 1895
11845 9291 1961
increase in cash in year 13 1506 1812 20
free cash flow represents cash flow from operating activities after adjusting for dividends received from joint ventures returns on investments
and servicing of finance and taxation 
reconciliation of net cash flow to movement in net debt
for the year ended 31 march 2003
2003 2002 2001
note £m £m £m
increase in cash in year 1506 1812 20
cash outflowinflow from decreaseincrease in debt 11914 9824 1895
cash outflow from movement in liquid resources 1611 387 119
change in net debt resulting from cash flows 15031 7625 1756
net debtfunds disposed 1000 469 –
foreign exchange movement 2899 63 2647
other noncash movements 56 1076 33
movement in net debt in year 18874 9233 4436
net debt at end of previous year 62084 52851 48415
net debt at end of year 13 43210 62084 52851
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form part of these accounts
group cash flow statement
for the year ended 31 march 2003
scottishpower annual report  accounts 200203

84 9 analysis of cash flows
2003 2002 2001
note £m £m £m
a returns on investments and servicing of finance
interest received 1120 331 327
interest paid 4042 4028 3958
dividends paid to minority interests 48 81 104
net cash outflow for returns on investments and servicing of finance 2970 3778 3735
b capital expenditure and financial investment
purchase of tangible fixed assets 7359 12447 11436
deferred income received 695 769 973
sale of tangible fixed assets 104 177 264
purchasesale of fixed asset investments 489 18 615
net cash outflow for capital expenditure and financial investment 7049 11483 10814
c acquisitions and disposals
purchase of businesses and subsidiary undertakings 12 1013 – 2302
sale of businesses and subsidiary undertakings 12 19003 1500 7131
net cash inflow from acquisitions and disposals 17990 1500 4829
d management of liquid resources
cash outflow in relation to shortterm deposits and other shortterm investments 1611 387 119
net cash outflow for management of liquid resources 1611 387 119
e financing
issue of ordinary share capital 120 162 66
redemption of preferred stock of pacificorp 51 695 –
69 533 66
debt due within one year
– net repaymentdrawdown of uncommitted facilities 2036 1208 66
– repaymentdrawdown of committed bank loan 1000 1000 –
– net commercial paper redeemedissued 2889 528 61
– mediumterm notesprivate placements 864 799 589
– redemptionissue of loan notes 22 01 04
– european investment bank loans 1292 1148 46
– mortgages 59 726 964
– nonrecourse notes – – 1472
– 5875 eurous dollar bond 2003 1835 1835 –
– other 183 13 05
debt due after one year
– net repayment of uncommitted facilities – 38 –
– mediumterm notesprivate placements 1273 75 5942
– european investment bank loans – 1292 428
– 5875 eurous dollar bond 2003 – 1833 –
– variable coupon australian dollar bond issue – 2338 –
– mortgages 830 4495 258
– secured pollution control revenue bonds – 28 02
– unsecured pollution control revenue bonds 21 29 19
– junior debentures – – 1170
– nonrecourse notes – – 212
– preferred securities 03 ––
– other 21 97 80
finance leases
– finance leases – 03 01
decreaseincrease in debt 11914 9824 1895
net cash outflowinflow from financing 11845 9291 1961
liquid resources include term deposits of less than one year commercial paper and other shortterm investments 
notes to the group cash flow statement
for the year ended 31 march 2003
scottishpower annual report  accounts 200203

85 10 reconciliation of operating profit to net cash inflow from operating activities 
2003 2002 2001
£m £m £m
operating profit 9459 7766 7219
depreciation and amortisation 5862 7170 6079
lossprofit on sale of tangible fixed assets and disposal of businesses 27 77 199
release of deferred income 186 178 151
movements in provisions for liabilities and charges 731 936 575
increasedecrease in stocks 19 104 133
increasedecrease in debtors 1694 584 1372
increasedecrease in creditors 1411 1949 2098
net cash inflow from operating activities 14129 12484 14116
11 effect of acquisitions and disposals on cash flows
acquisition disposal disposals
2003 2003 2002
£m £m £m
cash inflowoutflow from operating activities 10 160 395
returns on investments and servicing of finance – 66 07
capital expenditure and financial investment 14 92 932
acquisitions and disposals –– 33
management of liquid resources –– 40
financing – 45 –
decreaseincrease in cash 04 47 1247
the analysis of cash flows of the acquisition in 2003 relates to the postacquisition cash flows of the katy gas storage facility the effect of the disposal on cash
flows in 2003 relates to the disposal of southern water 
the effect of disposals on cash flows in 2002 principally related to the group’s demerger of thus and the disposal of and withdrawal from appliance retailing
the cash flows relating to acquisitions during 2002 were not material
the effect of acquisitions and disposals on cash flows during 2001 was not material   
12 analysis of cash flows in respect of acquisitions and disposals  
acquisition disposals disposals acquisitions disposals
2003 2003 2002 2001 2001
£m £m £m £m £m
cash consideration including expenses 1013 11394 139 2277 7165
cash settlement of intercompany loan – 7564 –––
bank overdraft disposedcash at bank disposed – 62 92 – –
deferred consideration in respect of prior year disposalsacquisitions – 105 1521 25 –
expenses paid in respect of prior year disposals – 122 68 – 34
1013 19003 1500 2302 7131
in 2003 the cash flows in respect of the acquisition represent the purchase of the katy gas storage facility the cash flows in respect of disposals principally
represent the proceeds from the sale of southern water
in 2002 the cash flows in respect of disposals principally represent the collection of a note receivable on the discontinued operations of pacificorp’s mining and
resource development business nerco which was sold in 1993 and the disposal of pacificorp’s synthetic fuel operations
in 2001 cash flows in respect of acquisitions principally represent the purchase of rye house power station the cash flows in respect of disposals mainly
comprise proceeds from the sale of centralia and powercor
notes to the group cash flow statement
for the year ended 31 march 2003 – continued
scottishpower annual report  accounts 200203

86 13 analysis of net debt
at disposal other at
1 april excl cash  noncash 31 march
2001 cash flow overdrafts exchange changes 2002
200102 £m £m £m £m £m £m
cash at bank 1397 1634 – 03 – 3028
overdrafts 525 178 – 01 – 346
1812
debt due after 1 year 48683 3647 – 37 1063 53430
debt due within 1 year 5754 6174 44 25 13 11922
finance leases 191 03 – – – 194
9824
other deposits 905 387 513 01 – 780
total 52851 7625 469 63 1076 62084
‘other noncash changes’ to net debt represents amortisation of finance costs of £15 million finance costs of £56 million representing the effects of the retail
price index “rpi” on bonds carrying an rpi coupon and the recognition of the share of debt in joint arrangements of £1005 million
at disposal other at
1 april excl cash  noncash 31 march
2002 cash flow overdrafts exchange changes 2003
200203 £m £m £m £m £m £m
cash at bank 3028 1395 – 122 – 4301
overdrafts 346 111 – 24 – 211
1506
debt due after 1 year 53430 2100 1000 2789 55 47596
debt due within 1 year 11922 9814 – 235 01 1874
finance leases 194 – – 19 – 175
11914
other deposits 780 1611 – 46 – 2345
total 62084 15031 1000 2899 56 43210
‘other noncash changes’ to net debt represents amortisation of finance costs of £16 million and finance costs of £40 million representing the effects of the rpi
on bonds carrying an rpi coupon 
scottishpower annual report  accounts 200203

87 2003 2002
notes £m £m
fixed assets
intangible assets 15 22806 26589
tangible assets 16 90287 116523
investments
– investments in joint ventures
share of gross assets 1119 1193
share of gross liabilities 1118 1192
01 01
– loans to joint ventures 402 368
403 369
– investments in associates 28 52
– other investments 2473 2235
17 2904 2656
115997 145768
current assets
stocks 18 1546 1670
debtors
– gross debtors 16845 14482
– less nonrecourse financing 1482 2574
19 15363 11908
shortterm bank and other deposits 6646 3808
23555 17386
creditors amounts falling due within one year
loans and other borrowings 20 2085 12268
other creditors 21 17857 19519
19942 31787
net current assetsliabilities 3613 14401
total assets less current liabilities 119610 131367
creditors amounts falling due after more than one year
loans and other borrowings 20 47771 53624
provisions for liabilities and charges
– deferred tax 23 13019 16912
– other provisions 22 6109 7138
19128 24050
deferred income 24 5589 5512
net assets 14 47122 48181
called up share capital 25 26 9280 9263
share premium 26 22644 22541
revaluation reserve 26 435 455
capital redemption reserve 26 183 183
merger reserve 26 4064 4064
profit and loss account 26 9777 10808
equity shareholders’ funds 26 46383 47314
minority interests including nonequity 27 739 867
capital employed 47122 48181
net asset value per ordinary share 14 2492p 2548p
approved by the board on 7 may 2003 and signed on its behalf by
charles miller smith david nish
chairman finance director
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form part of these accounts
group balance sheet
as at 31 march 2003
scottishpower annual report  accounts 200203

88 14 segmental information
2003 2002
a net assets by segment notes £m £m
united kingdom – continuing operations
uk division – integrated generation and supply 9084 8734
infrastructure division – power systems 21754 20707
united kingdom total – continuing operations 30838 29441
united states – continuing operations
us division 
pacificorp i 67872 75219
ppm i 3758 2541
united states total – continuing operations 71630 77760
total continuing operations 102468 107201
united kingdom – discontinued operations
southern water – 23476
united kingdom total – discontinued operations – 23476
unallocated net liabilities
net debt 43210 62084
deferred tax 13019 16912
corporate tax 2511 2933
proposed dividend 1322 1261
fixed asset investments 2904 2656
other ii 1812 1962
total unallocated net liabilities 55346 82496
total 47122 48181
net asset value per ordinary share has been calculated based on the following net assets and the number of shares in issue at the end of the respective financial
years after adjusting for the effect of shares held in trust for the group’s sharesave schemes and employee share ownership plan
31 march 31 march
2003 2002
net assets as adjusted £ million 46001 46925
number of ordinary shares in issue at year end as adjusted number of shares million 18456 18419
2003 2002
b capital expenditure by segment notes £m £m
united kingdom – continuing operations
uk division – integrated generation and supply iii 732 1092
infrastructure division – power systems iii 2731 2401
united kingdom total – continuing operations 3463 3493
united states – continuing operations
us division 
pacificorp iiii 3884 3932
ppm i 361 2062
united states total – continuing operations 4245 5994
total continuing operations 7708 9487
united kingdom – discontinued operations
southern water iii 158 2795
thus – 780
appliance retailing – 01
total discontinued operations 158 3576
total 7866 13063
2003 2002
c total assets by segment notes £m £m
united kingdom – continuing operations
uk division – integrated generation and supply 16014 15636
infrastructure division – power systems 28087 26576
united kingdom total – continuing operations 44101 42212
united states – continuing operations
us division 
pacificorp i 77092 86003
ppm i 5428 2786
united states total – continuing operations 82520 88789
total continuing operations 126621 131001
united kingdom – discontinued operations
southern water – 25689
total discontinued operations – 25689
unallocated total assets iv 12931 6464
total 139552 163154
notes to the group balance sheet
as at 31 march 2003
scottishpower annual report  accounts 200203

89 14 segmental information continued
i the former ‘pacificorp’ segment has been separated into two reporting segments pacificorp the us regulated business and ppm the competitive us energy
business which commenced substantive operations during 2001
ii other unallocated net liabilities principally includes interest and amounts relating to gains arising on retranslation of forward contracts and cross currency
interest rate swaps used to hedge net overseas investments
iii capital expenditure by business segment is stated gross of capital grants and customer contributions capital expenditure net of contributions amounted to
£7171 million 2002 £12294 million capital grants and customer contributions receivable during the year of £695 million 2002 £769 million comprised
uk division – integrated generation and supply £54 million 2002 £02 million infrastructure division – power systems £432 million 2002 £425 million
pacificorp £200 million 2002 £221 million and southern water £09 million 2002 £121 million
iv unallocated total assets includes investments interest receivable bank deposits and amounts relating to gains arising on retranslation of forward contracts
and cross currency interest rate swaps used to hedge net overseas investments
15 intangible fixed assets
goodwill
year ended 31 march 2002 note £m
cost
at 1 april 2001 30179
thus open offer 34 344
demerger of thus 34 704
exchange 41
at 31 march 2002 29778
amortisation
at 1 april 2001 1771
amortisation for the year 1490 
demerger of thus 34 78 
exchange 06
at 31 march 2002 3189 
net book value
at 31 march 2002 26589
at 31 march 2001 28408
goodwill
year ended 31 march 2003 note £m
cost
at 1 april 2002 29778
acquisition 32 124
exchange 2860
at 31 march 2003 27042
amortisation
at 1 april 2002 3189
amortisation for the year 1390 
exchange 343
at 31 march 2003 4236
net book value
at 31 march 2003 22806
at 31 march 2002 26589
goodwill capitalised is being amortised over its estimated useful economic life of 20 years goodwill capitalised relating to thus was being amortised over its
estimated useful economic life of 15 years
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

90 16 tangible fixed assets
water
land and infrastructure plant and vehicles and
buildings assets machinery equipment total
year ended 31 march 2002 notes £m £m £m £m £m
cost or valuation 
at 1 april 2001 13852 11749 100535 14803 140939
additions 885 767 9865 1546 13063
impairment i ix 69 3063 1361 – 4493
valuation adjustment ii – 1091 2073 – 3164
grants and contributions – 92 – – 92
disposals 137 06 573 949 1665
demerger of thus 34 119 – 4662 1368 6149
exchange 03 – 37 05 45
at 31 march 2002 14409 8264 101694 14027 138394
depreciation 
at 1 april 2001 2656 884 14019 4172 21731
reclassification 426 – 426 – –
charge for the year 328 212 3231 1779 5550
impairment ix 16 – 122 314 452
valuation adjustment ii – 1091 2073 – 3164
disposals 133 05 299 809 1246
demerger of thus 34 31 – 789 641 1461
exchange –– 06 03 09
at 31 march 2002 2410 – 14643 4818 21871
net book value
at 31 march 2002 11999 8264 87051 9209 116523
at 31 march 2001 11196 10865 86516 10631 119208
year ended 31 march 2003
cost or valuation 
at 1 april 2002 14409 8264 101694 14027 138394
additions 241 01 6518 1106 7866
acquisition 32 71 – 812 – 883
grants and contributions – 08 – – 08
disposals 73 03 458 529 1063
valuation adjustment ii – – 1498 – 1498
disposal of southern water 33 8111 8254 7143 2351 25859
exchange 210 – 5413 588 6211
at 31 march 2003 6327 – 97508 11665 115500
depreciation 
at 1 april 2002 2410 – 14643 4818 21871
reclassification –– 32 32 –
charge for the year 139 15 2879 1439 4472
disposals 08 03 408 511 930
valuation adjustment ii – – 1498 – 1498
disposal of southern water 33 750 12 20 330 1112
exchange 18 – 430 138 586
at 31 march 2003 1773 – 18194 5246 25213
net book value
at 31 march 2003 4554 – 79314 6419 90287
at 31 march 2002 11999 8264 87051 9209 116523
2003 2002
historical cost analysis £m £m
cost 114960 137854
depreciation based on cost 25108 21786
net book value based on cost 89852 116068
2003 2002
included in the cost or valuation of tangible fixed assets above are notes £m £m
assets in the course of construction 5561 11811
other assets not subject to depreciation v 1143 1581
grants and contributions in respect of water infrastructure assets – 422
capitalised interest iv 404 1306
i the impairment of assets of £4493 million in 200102 represented the provision for loss on disposal of southern water the total impairment of group assets
is detailed in note 1c
ii the valuation adjustment in 200203 represents an adjustment to the cost and accumulated depreciation of the tangible fixed assets of southern water on disposal
the valuation adjustment in 200102 represented elimination of the accumulated depreciation on the tangible fixed assets of southern water which were impaired
iii the manweb distribution and southern water operational assets were revalued by the directors on 30 september 1997 on a market value basis the valuation
of the manweb distribution assets has not been and will not be updated as permitted under the transitional provisions of frs 15 ‘tangible fixed assets’ the net
book value of tangible fixed assets included at valuation at 31 march 2003 relates to manweb distribution assets and was £5808 million 2002 £5996 million 
iv interest on the funding attributable to major capital projects was capitalised during the year at a rate of 5 2002 7 in the uk and 7 2002 4 in the us 
v other assets not subject to depreciation are land land and buildings held by the group are predominantly freehold 
vi the historical cost of fully depreciated tangible fixed assets still in use was £2980 million 2002 £2726 million 
vii capitalised computer software costs developed for internal use include employee interest and other external direct costs of materials and services which are
directly attributable to the development of computer software cumulative computer software costs capitalised are £5258 million 2002 £4907 million 2001
£4555 million the depreciation charge was £796 million 2002 £734 million 2001 £525 million 
viii the net book value of land and buildings under finance leases at 31 march 2003 was £175 million 2002 £223 million the charge for depreciation against
these assets during the year was £01 million 2002 £21 million
ix assets which were impaired in 200102 were valued on the basis of their estimated recoverable amounts the impairment charge for the year ended 31 march
2002 of £4945 million was charged to the profit and loss account as follows cost of sales £130 million loss on disposal of and withdrawal from appliance
retailing £322 million and provision for loss on disposal of southern water £4493 million 
scottishpower annual report  accounts 200203

91 17 fixed asset investments
associated own
joint ventures undertakings shares held other
shares loans shares under trust investments total 
notes £m £m £m £m £m £m 
cost or valuation 
at 1 april 2001 188 250 50 654 1821 2963
additions – 161 – 256 23 440
share of retained lossprofit 24 05 02 – – 27
disposals and other 163 38 – 198 77 476
demerger of thus 34–––– 242 242
exchange –––– 02 02
at 31 march 2002 01 368 52 712 1523 2656
additions – 68 – 362 194 624
share of retained lossprofit – 03 03–––
disposals and other – 31 08 103 53 195
disposal of southern water 33 – – 19 – – 19
exchange –––– 162 162
at 31 march 2003 01 402 28 971 1502 2904
the principal subsidiary undertakings joint ventures and associated undertakings are listed on page 130 
details of listed investments including own shares held under trust are given below
£m
balance sheet value at 31 march 2003 1546
market value at 31 march 2003 1332
a shares in the company held under trust during the year are as follows
shares shares nominal market 
held at shares shares held at value at value at
1 april acquired transferred 31 march 31 march 31 march
dividends 2001 during year during year 2002 2002 2002 
200102 notes waived 000s 000s 000s 000s £m £m 
long term incentive plan i no 2712 1355 379 3688 18 133
scottishpower sharesave schemes ii yes 15240 – 6917 8323 42 299
executive share option plan 2001 iii yes – 2360 – 2360 12 85
pacificorp stock incentive plan iv no 114 122 76 160 01 06
employee share ownership plan v no 747 1659 224 2182 11 78
18813 5496 7596 16713 84 601
shares shares nominal market 
held at shares shares held at value at value at
1 april acquired transferred 31 march 31 march 31 march
dividends 2002 during year during year 2003 2003 2003 
200203 notes waived 000s 000s 000s 000s £m £m 
long term incentive plan i no 3688 – 218 3470 17 130
scottishpower sharesave schemes ii yes 8323 – 2064 6259 31 235
executive share option plan 2001 iii yes 2360 7387 – 9747 49 366
pacificorp stock incentive plan iv no 160 – 54 106 01 04
employee share ownership plan v no 2182 1574 755 3001 15 113
16713 8961 3091 22583 113 848
i shares of the company are held under trust as part of the long term incentive plan for executive directors and other senior managers see remuneration
report of the directors on pages 61 to 68 for details of the plan 
ii shares of the company are held in two qualifying employee share ownership trusts as part of the scottish power uk plc sharesave scheme and the scottish
power plc sharesave scheme holders of options granted under the schemes will be awarded shares by the trusts upon the exercise of the options details of
options granted under these schemes are disclosed in note 25
iii shares of the company are held under trust as part of the executive share option plan 2001 for executive directors and other senior managers see
remuneration report of the directors on pages 61 to 68 for details of the plan
iv options granted under the pacificorp stock incentive plan are for scottishpower adss for the purposes of the table above adss have been converted 
to scottishpower ordinary shares as follows one scottishpower ads equals four scottishpower ordinary shares 
v shares of the company are held in the employee share ownership plan trust on behalf of employees of the scottishpower group shares appropriated under
the free element and the matching element are subject to forfeiture for a period of three years from the date of appropriation shares appropriated under the
partnership element of the employee share ownership plan are not subject to forfeiture 
18 stocks
2003 2002 
£m £m
raw materials and consumables 917 957
fuel stocks 503 484
work in progress 126 217
finished goods and goods for resale – 12
1546 1670
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

92 19 debtors
2003 2002
notes £m £m
a amounts falling due within one year 
trade debtors i 4248 4709
amounts receivable under finance leases – us ii iii 294 1241
less nonrecourse financing 209 929
85 312
amounts receivable under finance leases – uk iii 01 01
prepayments and accrued income 3933 3952
other debtors iv 5301 1147
13568 10121
b amounts falling due after more than one year 
amounts receivable under finance leases – us ii iii 2330 3180
less nonrecourse financing 1273 1645
1057 1535
amounts receivable under finance leases – uk iii 41 42
other debtors 697 210
15363 11908
i trade debtors are stated net of provisions for doubtful debts of £767 million 2002 £1011 million
ii the group’s finance lease assets in the us which are financed by nonrecourse borrowing qualify for linked presentation under frs 5 the provider of the
finance has agreed in writing in the finance documentation that it will seek repayment of the finance as to both principal and interest only to the extent 
that sufficient funds are generated by the specific assets it has financed and that it will not seek recourse in any other form the directors confirm that the group
has no obligation to support any losses arising under these leases nor is there any intention to do so 
iii amounts receivable under finance leases falling due after more than one year at 31 march 2003 of £2371 million 2002 £3222 million are due as follows
within 12 years £323 million 2002 £287 million within 23 years £258 million 2002 £368 million within 34 years £332 million 2002 £286 million
within  45 years £277 million 2002 £383 million and after 5 years £1181 million 2002 £1898 million amounts received under finance leases during the
year were £516 million 2002 £588 million 
iv included within other debtors falling due within one year is an amount of £2971 million 2002 £nil relating to the value of net investment swaps as disclosed
in note 20b
20 loans and other borrowings
details of the group’s objectives policies and strategy with regard to financial instruments and risk management are contained within the financial review 
on pages 33 to 53 the analyses of financial instruments in this note other than currency disclosures do not include shortterm debtors and creditors as
permitted by frs 13
weighted weighted
average average
interest rate interest rate 2003 2002
a analysis by instrument notes 2003 2002 £m £m
unsecured debt of uk businesses
bank overdraft – – 27 110
committed bank loans 42 50 – 1000
uncommitted bank loans 44 50 93 2129
commercial paper i 43 50 – 1950
mediumterm notesprivate placements ii 50 56 10357 12451
loan notes iii 41 49 36 59
european investment bank loans iv 59 68 1992 3284
5875 eurous dollar bond 2003 70 70 – 1835
variable coupon bond 2008 69 69 – 998
variable rate australian dollar bond 2011 47 57 2342 2338
5250 deutschmark bond 2008 68 68 2458 2457
6625 eurosterling bond 2010 67 67 1984 1982
8375 eurosterling bond 2017 85 84 1977 1975
6750 eurosterling bond 2023 68 68 2472 2471
unsecured debt of us businesses
bank overdraft – – 184 236
commercial paper i 14 22 158 1240
preferred securities v 86 86 2089 2319
pollution control revenue bonds vi 20 21 2849 3164
finance leases vii 119 119 175 194
other borrowings 10 – 181 –
unsecured debt 29374 42192
secured debt of us businesses
first mortgage and collateral bonds viii 75 75 17260 20111
pollution control revenue bonds vi 24 26 1792 1989
other secured borrowings ix 65 66 1430 1600
secured debt 20482 23700
49856 65892
scottishpower annual report  accounts 200203

93 20 loans and other borrowings continued
i commercial paper
scottish power uk plc has an established us20 billion 2002 us20 billion eurocommercial paper programme paper is issued in a range of currencies 
and swapped back into sterling pacificorp has a us15 billion 2002 us15 billion domestic commercial paper programme amounts borrowed under the
commercial paper programmes are repayable in less than one year 
ii mediumterm notesprivate placements
scottish power plc and scottish power uk plc have an established joint us70 billion 2002 us70 billion euromediumterm note programme scottish
power plc has as yet not issued under the programme paper is issued in a range of currencies and swapped back into sterling as at 31 march 2003 maturities
range from 1 to 37 years
iii loan notes
all loan notes are redeemable at the holders’ discretion the ultimate maturity date for currently outstanding loan notes is 2006 
iv european investment bank “eib” loans
these loans incorporate agreements with various interest rates and maturity dates the maturity dates of these arrangements range from 2009 to 2011
following the sale of aspen 4 limited the holding company of southern water plc in april 2002 the eib loans relating to southern water were repaid
v preferred securities
whollyowned subsidiary trusts of pacificorp “the trusts” have issued redeemable preferred securities representing preferred undivided beneficial interests in
the assets of the trusts the sole assets of the trusts are junior subordinated deferrable interest debentures of pacificorp that bear interest at the same rates as
the preferred securities to which they relate and certain rights under related guarantees by pacificorp
vi pollution control revenue bonds
bonds issued by qualified tax exempt entities to finance or refinance the cost of certain pollution control solid waste disposal and sewage facilities pacificorp
has entered into agreements with the issuers pursuant to which pacificorp received the proceeds of the issuance and agreed to make payments sufficient to pay
principal of interest on and certain additional expenses the interest on the bonds is not subject to federal income taxation for most bondholders in some
cases pacificorp has issued first mortgage and collateral bonds as collateral for repayment
vii finance leases
these are facility leases that are accounted for as capital leases maturity dates range from 2014 to 2022 
viii first mortgage and collateral bonds
first mortgage and collateral bonds of pacificorp may be issued in amounts limited by its electric operation’s property earnings and other provisions of the
mortgage indenture approximately us120 billion of the eligible assets based on original costs of pacificorp is subject to the lien of the mortgage
ix other secured borrowings
included within other secured borrowings is scottishpower’s share of debt in a joint arrangement for the klamath cogeneration plant the borrowings are the
subject of a guarantee for us600 million provided by na general partnership in respect of second lien revenue bonds
at 31 march 2003 at 31 march 2002
book fair book fair 
amount value amount value
b fair value of financial instruments £m £m £m £m
shortterm debt and current portion of longterm debt 2092 2092 12631 12631
longterm debt 48072 53843 53560 55552
cross currency interest rate swaps 308 500 299 260
total debt 49856 55435 65892 67923
interest rate swaps – 226 – 226
interest rate swaptions 40 26 40 14
forward rate agreements – 84 ––
forward contracts – 467 168 108
net investment forward contracts 95 99 ––
net investment swaps 2971 2558 ––
energy hedge contracts – 350 03 603
energy trading contracts 04 04 10 10
total financial instruments 46826 52541 66087 68864
the assumptions used to estimate fair values of financial instruments are summarised below
i for shortterm borrowings uncommitted borrowing commercial paper and shortterm borrowings under the committed facilities the book value
approximates to fair value because of their short maturities 
ii the fair values of all quoted euro bonds are based on their closing clean market price converted at the spot rate of exchange as appropriate
iii the fair values of the eib loans have been calculated by discounting their future cash flows at market rates adjusted to reflect the redemption adjustments
allowed under each agreement
iv the fair values of unquoted debt have been calculated by discounting the estimated cash flows for each instrument at the appropriate market discount rate
in the currency of issue in effect at the balance sheet date
v the fair values of the sterling interest rate swaps sterling forward rate agreements and sterling interest rate caps have been estimated by calculating the
present value of estimated cash flows
vi the fair values of the sterling interest rate swaptions are estimated using the sterling yield curve and implied volatilities as at 31 march
vii the fair values of the cross currency interest rate swaps have been estimated by adding the present values of the two sides of each swap the present value
of each side of the swap is calculated by discounting the estimated future cash flows for that side using the appropriate market discount rates for that currency
in effect at the balance sheet date
viii the fair values of the forward contracts and tax equalisation swaps are estimated using market forward exchange rates on 31 march
ix the fair values of gas futures are the margin calls under those contracts
x the fair values of weather derivatives have been estimated assuming for water related derivatives a normal water year in several water basins and for
temperature related derivatives a normal daily high temperature of certain cities in the us
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

94 20 loans and other borrowings continued
2003 2002
c maturity analysis £m £m 
repayments fall due as follows 
within one year or on demand 2085 12268
after more than one year 47771 53624
49856 65892
repayments due after more than one year are analysed as follows 
between one and two years 2230 1989
between two and three years 3022 2386
between three and four years 2462 3404
between four and five years 1016 2595
more than five years 39041 43250
47771 53624
included in the within one year or on demand figure above is £01 million in the between two and five years figures is £08 million and in the more than five years
figure is £166 million relating to finance leases 2002 £nil £06 million and £188 million respectively
2004 2005 2006 2007 2008 thereafter total fair value
liabilities £m £m £m £m £m £m £m £m
fixed rate gbp 250 500 – 1000 250 11099 13099 14869
average interest rate gbp 61 66 – 65 67 66 66
fixed rate usd – uk group ––––– 514 514 736
average interest rate usd – uk group ––––– 46 46
fixed rate usd – us group 886 1534 1699 1320 766 14757 20962 24495
average interest rate usd – us group 73 73 74 76 77 77 76
fixed rate chf 41––––– 41 41
average interest rate chf 25––––– 25
fixed rate czk – – 342––– 342 475
average interest rate czk – – 69––– 69
fixed rate eur 70 146––– 2826 3042 3322
average interest rate eur 49 48––– 52 52
indexlinked gbp ––––– 1841 1841 1946
average interest rate gbp – – –––349x rpi 349 x rpi
variable rate gbp 316 50––– 870 1236 1270
average interest rate gbp 3m libor 3m libor–––4m libor 4m libor
variable rate usd – uk group – – 663 – – 212 875 849
average interest rate usd – uk group – – 3m libor – – 3m libor 3m libor
variable rate usd – us group 522 – 99 142 – 3898 4661 4466
average interest rate usd – us group 1m libor – bma bma – bma bma
variable rate usd – us group ––––– 495 495 495
average interest rate usd – us group ––––– mcby mcby
variable rate aud ––––– 2342 2342 2571
average interest rate aud –––––3mbbsw3mbbsw
variable rate eur ––––– 187 187 210
average interest rate eur –––––5m libor 5m libor
variable rate jpy – – 219––– 219 190
average interest rate jpy – – 6m libor–––6m libor
49856 55935
the disclosures represent the interest profile and currency profile of financial liabilities before the impact of derivative hedging instruments
the average variable rates above libor exclude margins libor is the london inter bank offer rate
gbp – pounds sterling usd – american dollars chf – swiss francs czk – czech koruna eur – euros jpy – japanese yen aud – australian dollars bma is a
weekly high grade market index comprised of 7day tax exempt variable rate demand notes produced by municipal market data mcby is the moody’s corporate
bond yield it is derived from the pricing data of 100 corporate bonds in the us market each with current outstandings of over 100 million and maturities of
30 years bbsw is the australian bank bill rate
reference to ‘m’ in ‘m libor’ and ‘m bbsw’ represents months
 fair value represents the fair value of the total debt excluding the fair value of related cross currency interest rate swaps details of which are set out in note 20g
scottishpower annual report  accounts 200203

95 20 loans and other borrowings continued
at 31 march 2003 at 31 march 2002
uk us total uk us total
d interest rate analysis £m £m £m £m £m £m 
fixed rate borrowings 14270 20962 35232 19202 24462 43664
floating rate borrowings 9468 5156 14624 15837 6391 22228
23738 26118 49856 35039 30853 65892
weighted average interest weighted average 
rate at which borrowings period for which interest
are fixed rate is fixed
at 31 march 2003 at 31 march 2002 at 31 march 2003 at 31 march 2002
uk us uk us uk us uk us
  years years years years
fixed rate borrowings 67 76 69 76 11 13 10 13
all amounts in the analysis above take into account the effect of interest rate swaps and currency swaps floating rate borrowings bear interest at rates based on
libor certificate of deposit rates interbank borrowing rates prime rates or other shortterm market rates the average interest rates on shortterm borrowings
as at 31 march 2003 were as follows uk operations 36 us operations 14 2002 43 and 22 respectively
based on the floating rate net debt of £14624 million at 31 march 2003 2002 £22228 million a 100 basis point change in interest rates would result in a 
£146 million change in profitloss before tax for the year 2002 £222 million change 
at 31 march 2003 at 31 march 2002
uk us total uk us total
e financial assets £m £m £m £m £m £m 
fixed rate financial assets 83 1142 1225 74 1847 1921
floating rate financial assets 5427 1579 7006 2190 1968 4158
5510 2721 8231 2264 3815 6079
included within us fixed rate financial assets at 31 march 2003 are amounts receivable under finance leases of £2624 million 2002 £4421 million less 
nonrecourse finance of £1482 million 2002 £2574 million the floating rate financial assets of the group’s uk and us operations are principally cash
deposits of which £22 million in the uk and £nil in the us 2002 £21 million and £245 million respectively are subject to either a legal assignment or a
charge in favour of a third party
weighted average interest rate weighted average period for
at which financial assets are fixed which interest is fixed
at 31 march 2003 at 31 march 2002 at 31 march 2003 at 31 march 2002
uk us uk us uk us uk us
  years years years years
fixed rate financial assets 82 100 84 94 59 79
all amounts in the analysis above take into account the effect of interest rate swaps and currency swaps floating rate investments pay interest at rates based 
on libor certificate of deposit rates prime rates or other shortterm market rates the average interest rates on shortterm financial assets as at 31 march 2003
were as follows uk operations 36 us operations 12 2002 37 and 20 respectively
the fair values of the financial assets are not materially different from their book values
the group also has certain equity investments which have been excluded from the disclosures above because they have no maturity date as at 31 march 2003
the book value of these investments was £689 million 2002 £785 million and the fair value was £598 million 2002 £711 million
f borrowing facilities
the group has the following undrawn committed borrowing facilities at 31 march 2003 in respect of which all conditions precedent have been met of the
facilities shown £1000 million 2002 £10000 million relates to operations in the uk the remaining £5061 million 2002 £6180 million relates to operations
in the us scottish power uk plc’s £10000 million facility was cancelled following completion of the sale of southern water in april 2002 both facilities are
floating rate facilities
at 31 march at 31 march
2003 2002
£m £m 
expiring within one year 4163 6180
expiring between two and five years 1898 10000
commitment fees on the above facilities were as follows scottish power uk group £02 million 2002 £41 million pacificorp £09 million 
2002 £06 million 
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

96 20 loans and other borrowings continued
2004 2005 2006 2007 2008 thereafter total fair value
g maturity analysis of derivatives £m £m £m £m £m £m £m £m
interest rate swaps
variable to fixed gbp 2750 – – 500 – 500 3750 195
average pay rate 55 – – 55 – 63 56
average receive rate 5m libor – – 3m libor – 3m libor 5m libor
fixed to indexlinked gbp ––––– 1000 1000 113
average pay rate ––––– 335 x rpi 335 x rpi
average receive rate ––––– 62 62
fixed to variable gbp 500 1500 500 2200 1699 9921 16320 984
average pay rate 6m libor 6m libor 6m libor 6m libor 6m libor 6m libor 6m libor
average receive rate 50 57 53 59 56 64 61
variable to variable gbp – 50––– 300 350 07
average pay rate – 6m libor–––6m libor 6m libor
average receive rate – 3m libor–––12m libor 11m libor
variable to fixed usd – – 3163 1582 1582 9489 15816 457
average pay rate – – 33 37 40 41 392
average receive rate – – 6m libor 6m libor 6m libor 6m libor 6m libor
swaptions
notional amount gbp ––––– 1000 1000 26
average pay rate ––––– 43 43
average receive rate –––––6m libor 6m libor
forward rate agreements
notional amount gbp 7038––––– 7038 55
average pay rate 6m libor–––––6m libor
average receive rate 54––––– 54
notional amount usd 11071––––– 11071 139
average pay rate 38––––– 38
average receive rate 6m libor–––––6m libor
cross currency swaps
receive fixed usd pay variable gbp ––––– 514 514 220
average pay rate gbp –––––6m libor 6m libor
average receive rate usd ––––– 46 46
receive variable usd pay fixed gbp – – 331 – – 212 543 36
average pay rate gbp – – 67 – – 49 60
average receive rate usd – – 3m libor – – 3m libor 3m libor
receive variable usd pay variable gbp – – 333––– 333 19
average pay rate gbp – – 6m libor–––6m libor
average receive rate usd – – 3m libor–––3m libor
receive variable aud pay variable gbp ––––– 2378 2378 117
average pay rate gbp –––––6m libor 6m libor
average receive rate aud –––––3mbbsw3mbbsw
receive fixed chf pay variable gbp 41––––– 41 06
average pay rate gbp 3m libor–––––3m libor
average receive rate chf 27––––– 27
receive fixed czk pay variable gbp – – 343––– 343 131
average pay rate gbp – – 6m libor–––6m libor
average receive rate czk – – 35––– 35
receive fixed eur pay fixed gbp ––––– 2466 2466 26
average pay rate gbp ––––– 67 67
average receive rate eur ––––– 53 53
receive fixed eur pay variable gbp 70 146––– 368 584 63
average pay rate gbp 6m libor 6m libor–––6m libor 6m libor
average receive rate eur 49 48––– 50 50
receive variable eur pay variable gbp ––––– 187 187 22
average pay rate gbp –––––6m libor 6m libor
average receive rate eur –––––5m libor 5m libor
receive fixed jpy pay variable gbp – – 219––– 219 30
average pay rate gbp – – 6m libor–––6m libor
average receive rate jpy – – 6m libor–––6m libor
receive fixed gbp pay fixed usd – 5038–––– 5038 306
average pay rate usd – 36–––– 36
average receive rate gbp – 51–––– 51
receive fixed gbp pay variable usd – – – 350 – – 350 50
average pay rate usd – – – 53 – – 53
average receive rate gbp – – – 6m libor – – 6m libor
receive variable gbp pay fixed usd 3522 4134 3437––– 11093 11
average pay rate usd 37 35 37––– 36
average receive rate gbp 6m libor 6m libor 6m libor–––6m libor
receive variable gbp pay variable usd – 1053 3170 1057 3511 19132 27923 2213
average pay rate usd – 6m libor 6m libor 6m libor 6m libor 6m libor 6m libor
average receive rate gbp – 6m libor 6m libor 6m libor 6m libor 6m libor 6m libor
forward contracts
buy gbp sell usd 18565 2041 1135 1287 – – 23028 499
buy usd sell gbp 11730––––– 11730 67
143115 3740
the abbreviations contained in the table are defined in note 20c the above table includes derivatives relating to the partial hedging of the net assets of the us
business and the implementation of the change in policy regarding the interest rate mix of the group’s debt
 derivatives which have a positive fair value are shown in the table above as bracketed while derivatives with a negative fair value are shown without brackets to
follow the convention in note 20b that financial liabilities are shown without brackets
scottishpower annual report  accounts 200203

97 20 loans and other borrowings continued
h hedges
gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged is itself recognised unrecognised gains and losses
on instruments used for hedging and the movements therein are as follows 
total net 
gains losses gainslosses
note £m £m £m 
unrecognised gains and losses on hedges at 1 april 2001 1087 1786 699
transfer from gains to losses i 02 02 –
transfer from losses to gains i 01 01 –
gains and losses arising in previous years that were recognised in 200102 33 82 115
gains and losses arising before 1 april 2001 that were not recognised in 200102 1117 1701 584
gains and losses arising in 200102 that were not recognised in 200102 476 275 201
unrecognised gains and losses on hedges at 31 march 2002 641 1426 785
gains and losses expected to be recognised in 200203 144 177 33
gains and losses expected to be recognised in 200304 or later 497 1249 752
i figures in the table above are calculated by reference to the 31 march 2002 fair value of the derivative concerned
total net 
gains losses gainslosses
note £m £m £m 
unrecognised gains and losses on hedges at 1 april 2002 641 1426 785
transfer from gains to losses ii 67 67 –
transfer from losses to gains ii 494 494 –
gains and losses arising in previous years that were recognised in 200203 232 41 191
gains and losses arising before 1 april 2002 that were not recognised in 200203 152 824 976
gains and losses arising in 200203 that were not recognised in 200203 1966 528 1438
unrecognised gains and losses on hedges at 31 march 2003 1814 1352 462
gains and losses expected to be recognised in 200304 331 481 150
gains and losses expected to be recognised in 200405 or later 1483 871 612
ii figures in the table above are calculated by reference to the 31 march 2003 fair value of the derivative concerned
the analysis above excludes any gains and losses in respect of the net investment swaps and net investment forward contracts as gains and losses arising on
these contracts are recorded in the statement of total recognised gains and losses
2003 2002
i fair value of financial assets and liabilities held for trading £m £m 
net realised and unrealised gains included in profit and loss account 29 45
fair value of financial assets held for trading at 31 march 110 37
fair value of financial liabilities held for trading at 31 march 106 27
in the uk and us a limited amount of proprietary trading within the limits and guidelines of the risk management framework is undertaken
the transactions included in the table above consist of forward purchase and sale contracts of electricity and forward purchase and sale contracts of gas and gas
futures contracts
j currency exposures
as explained in the financial review on pages 33 to 53 the group uses forward contracts and cross currency interest rate swaps to mitigate the currency
exposures arising from its net investment overseas gains and losses arising on net investment overseas and the forward contracts and cross currency interest
rate swaps used to hedge the currency exposures are recognised in the statement of total recognised gains and losses 
the group did not hold material net monetary assets or liabilities in currencies other than functional currency at 31 march 2003 and 31 march 2002
21 other creditors
2003 2002
£m £m 
amounts falling due within one year 
trade creditors 1359 1720
corporate tax 2511 2933
other taxes and social security 626 569
payments received on account 432 293
capital creditors and accruals 730 1354
other creditors 3965 3956
accrued expenses 6912 7433
proposed dividend 1322 1261
17857 19519
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

98 22 provisions for liabilities and charges – other provisions
acquisition
at revision to unwinding utilised at
1 april provisional new of during 31 march 
2000 fair values disposal provisions discount year exchange 2001
200001 £m £m £m £m £m £m £m £m 
reorganisation and restructuring 440 – – 547 – 178 42 851
environmental and health 840 – – 37 23 24 92 968
decommissioning costs 915 152 67 – 39 08 94 821
onerous contracts 790 1715 – – 63 127 – 2441
pensions postretirement and postemployment benefits 976 – – 986 – 476 163 1649
mine reclamation costs 1048 – 173 – 35 118 111 903
other 205 – – 69 – 133 13 154
5214 1563 240 1639 160 1064 515 7787
atdemerger unwindingutilised at
1 april of thus new of during 31 march 
2001 note 34 provisions discount year exchange 2002 
200102 £m £m £m £m £m £m £m 
reorganisation and restructuring 851 – 185 – 408 02 626
environmental and health 968 – 01 57 44 – 982
decommissioning costs 821 – – 48 03 – 866
onerous contracts 2441 – – 85 673 – 1853
pensions postretirement and postemployment benefits 1649 – 173 – 193 02 1627
mine reclamation costs 903 – – 38 91 01 849
disposal of and withdrawal from appliance retailing – – 508 – 435 – 73
other 154 09 226 – 109 – 262
7787 09 1093 228 1956 05 7138
disposal
at of southern unwinding utilised at
1 april water new of during 31 march
2002 note 33 provisions discount year exchange 2003 
200203 notes £m £m £m £m £m £m £m
reorganisation and restructuring a 626 25 47 – 323 30 295
environmental and health b 982 31 – 95 109 85 852
decommissioning costs c 866 – 05 48 06 80 833
onerous contracts d 1853 – – 84 324 – 1613
pensions postretirement and postemployment benefits e 1627 – 520 – 474 170 1503
mine reclamation costs f 849 – – 38 81 83 723
disposal of and withdrawal from appliance retailing g 73––– 21 – 52
other h 262 – 119 – 134 09 238
7138 56 691 265 1472 457 6109
a the provisions for reorganisation and restructuring principally comprise certain costs relating to the pacificorp transition plan announced in may 2000 and
reorganisation provisions established in 200102 for the uk division – integrated generation and supply the provisions are principally in respect of severance
costs most of which are expected to be incurred in the period up to march 2004 the pacificorp transition plan upon completion will result in a reduction in
employee numbers of approximately 1600 from the 1998 levels at 31 march 2003 pacificorp had reduced its employees by approximately 1050 under this
plan the reorganisation provisions established in 200102 for the uk division – integrated generation and supply will result in a reduction in employee numbers
of approximately 500 from 200203 onwards at 31 march 2003 the uk division – integrated generation and supply had reduced its employees by 359
b the environmental and health provisions principally comprise the costs of notified environmental remediation work and constructive obligations in respect of
potential environmental remediation costs identified by an external due diligence review in the us these costs are expected to be incurred in the period up to
march 2010 included within the ‘unwinding of discount’ of £95 million for 200203 is £39 million relating to a change in the discount rate
c the provision for decommissioning costs is the discounted future estimated costs of decommissioning the group’s power plants principally in the us but
also in the uk the decommissioning of these plants is expected to occur over the period between 2004 and 2047
d the provision for onerous contracts comprises the costs of contracted energy purchases the costs provided are expected to be incurred in the period up
to 31 march 2009 as follows less than 1 year £414 million between 1 and 2 years £373 million between 2 and 5 years £757 million and the remainder after
5 years £69 million
e details of the group’s pensions postretirement and postemployment benefits are disclosed in notes 28 and 35
f the provision for mine reclamation costs comprises the discounted future estimated costs of reclaiming the group’s mines in the us the costs are expected
to be incurred in the period up to 2031
g the appliance retailing provision comprises closure costs principally property lease termination premia expected to be incurred in the period up to 2004
h the other category comprises various provisions which are not individually sufficiently material to warrant separate disclosure
scottishpower annual report  accounts 200203

99 23 provisions for liabilities and charges – deferred tax
deferred tax provided in the accounts is as follows 
provided
2003 2002
£m £m
accelerated capital allowances 15399 19785
other timing differences 2380 2873
13019 16912
note £m
deferred tax provided at 1 april 2000 16121
charge to profit and loss account 138
movements arising from revisions to fair values 985
exchange 979
deferred tax provided at 1 april 2001 16253
charge to profit and loss account 702
other movements 43
deferred tax provided at 1 april 2002 16912
charge to profit and loss account 506
disposal of southern water 33 3610
exchange 805
other movements 16
deferred tax provided at 31 march 2003 13019
24 deferred income
released to
at receivable profit at
1 april during and loss 31 march
2001 year account disposal exchange 2002 
£m £m £m £m £m £m
grants and customer contributions 5015 677 178 01 01 5512
released to disposal of
at receivable profit southern at
1 april during and loss water 31 march
2002 year account note 33 exchange 2003 
£m £m £m £m £m £m
grants and customer contributions 5512 687 186 374 50 5589
deferred income excludes grants and contributions received prior to the disposal of southern water in april 2002 in respect of water infrastructure assets 
25 share capital
2003 2002
note £m £m 
authorised 
3000000000 2002 3000000000 ordinary shares of 50p each 15000 15000
one special share of £1 a – –
15000 15000
allotted called up and fully paid 
1855932802 2002 1852646984 ordinary shares of 50p each 9280 9263
one special share of £1 a – –
9280 9263
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

100 25 share capital continued
a special share
the ‘special share’ which can be held only by one of the secretaries of state or any other person acting on behalf of hm government does not carry rights to
vote at the general or separate meetings but entitles the holder to attend and speak at such meetings written consent of the special shareholder is required
before certain provisions of the company’s articles of association or certain rights attaching to the special share are varied this share shall confer no rights to
participate in the capital or profits of the company except that in a winding up the special shareholder shall be entitled to repayment in priority to the other
shareholders the special share is redeemable at par at any time by the special shareholder after consultation with the company
b employee share schemes
the group has six types of share based plans for employees options have been granted and awards made to eligible employees to subscribe for ordinary shares
or adss in scottish power plc in accordance with the rules of each plan 
the scottishpower sharesave schemes are savings related and under normal circumstances share options are exercisable on completion of a three or five year
saveasyouearn contract as appropriate 
the pacificorp stock incentive plan relates to options over scottishpower adss which vest over two or three years as appropriate 
the executive share option scheme applied to executive directors and certain senior managers however this scheme was replaced with the long term
incentive plan and although it will not affect options already granted this plan supersedes the executive share option scheme 
awards granted under the long term incentive plan will vest only if the remuneration committee is satisfied that certain performance measures related to the
sustained underlying financial performance of the group and improvements in customer service standards are achieved over a period of three financial years
commencing with the financial year preceding the date an award is made 
options granted under the executive share option plan 2001 “exsop” to executive directors and certain senior managers are subject to the performance
criterion that the percentage increase in the company’s annualised earnings per share excluding goodwill amortisation and exceptional items be at least 3
adjusted for any increase in the rpi
the employee share ownership plan “esop” allows eligible employees to make contributions from pretax salary to buy shares in scottishpower which are
held in trust partnership shares these shares are matched by the company matching shares and are also held in trust at the launch of the esop free
shares were offered to employees 
the k plus plan consists of the k plus employee savings plan and the k plus employee stock ownership plan the k plan employee savings plan is a 401k
based qualified retirement plan designed to provide income during employees’ retirement the k plus employee stock ownership plan provides for matching
contributions by pacificorp based on employees’ contributions plus additional discretionary employer contributions made to all eligible employees 
i summary of movements in share options in scottishpower shares
southern executive pacificorp 
scottishpower weighted water weighted share weighted stock weighted
sharesave average sharesave average option average incentive average
schemes exercise scheme exercise schemes

exercise plan

exercise total 
number of price number of price number of price number of price number of 
shares 000s pence shares 000s pence shares 000s pence shares 000s pence shares 000s 
outstanding at 1 april 2000 19945 3392 1078 1471 263 2970 19073 5285 40359
granted 2459 4530–––– 457 4406 2916
exercised 3615 2990 786 1457 122 2746 304 5282 4827
lapsed 2577 4007 13 1599 1 – 4318 5960 6909
outstanding at 1 april 2001 16212 3556 279 1493 140 3161 14908 5888 31539
granted 4378 3860 – – 2354 4830 3299 4521 10031
exercised 6718 2833 189 1447 78 2784 99 4743 7084
lapsed 2115 4206 7 1549 19 4830 2240 5764 4381
outstanding at 1 april 2002 11757 3967 83 1591 2397 4799 15868 5636 30105
granted 3316 3230 – – 7327 3880 – – 10643
exercised 1992 3093 68 1594 16 2988 – – 2076
lapsed 5640 4093 15 1574 252 4111 2255 5390 8162
outstanding at 31 march 2003 7441 3777 – – 9456 4115 13613 5008 30510
 the executive share option figures shown for 200203 and 200102 are a combination of the options outstanding under the executive share option scheme
and the executive share option plan 2001
 pacificorp stock incentive plan “psip” are options over scottishpower adss for the purpose of the table above adss have been converted to
scottishpower shares as follows one scottishpower ads equals four scottishpower shares eligibility for participation in the exsop wasextended during the year
to certain senior managers in the us consequently no new options were granted in the year under the psip nor is it intended to grant any new psip optionsin
the future
scottishpower annual report  accounts 200203

101 25 share capital continued
ii analysis of share options outstanding at 31 march 2003
number of option 
date of number of shares price
grant participants 000s pence normal exercisable date
scottishpower sharesave schemes 20 june 1997 3 3 3070 6 months to march 2003
12 june 1998 1005 919 4400 6 months to march 2004
11 june 1999 878 825 4290 6 months to march 2003 or 2005
9 june 2000 1172 677 4530 6 months to march 2004 or 2006
8 june 2001 1787 1966 3860 6 months to march 2005 or 2007
7 june 2002 2000 3051 3230 6 months to march 2006 or 2008
executive share option scheme 17 december 1993 13 20 4548 19962003
27 may 1994 1 1 3540 19972004
12 may 1995 3 26 3350 19982005
executive share option plan 2001 21 august 2001 158 2318 4830 21 august 2004 to 21 august 2011
2 may 2002 265 7091 4060 2 may 2005 to 2 may 2012
pacificorp stock incentive plan 3 june 1997 56 897 5386 29 november 1999 to 3 june 2007
12 august 1997 18 177 5794 29 november 1999 to 12 august 2007
10 february 1998 82 1579 6543 29 november 1999 to 10 february 2008
13 may 1998 4692 1083 6324 29 november 1999 to 13 may 2008
9 february 1999 95 2383 5180 9 february 2000 to 9 february 2009

11 may 1999 4962 1144 4687 11 may 2000 to 11 may 2009
16 february 2000 93 1956 4260 16 february 2001 to 16 february 2010

24 march 2000 4 1343 5021 24 march 2001 to 24 march 2010
25 january 2001 2 457 3963 25 january 2002 to 25 january 2011

24 april 2001 104 2594 4064 24 april 2002 to 24 april 2011
 includes 935054 options granted over scottishpower adss expressed in the above as 3740216 options over scottishpower ordinary shares the exercise
price for which is us2355 per ads equal to us5887 per ordinary share
 options granted under the pacificorp stock incentive plan are over scottishpower adss for the purpose of the table above options have been converted to
scottishpower ordinary shares as follows one scottishpower ads equals four scottishpower ordinary shares the us ads option price was converted so 
that it may be represented in terms of scottishpower ordinary shares the price was further converted at the closing exchange rate on 31 march 2003 to be
quoted in pence in the table above
 options became exercisable in the proportions of onethird on 9 february 2000 onethird on 9 february 2001 and the remaining onethird on 
9 february 2002
 options became exercisable in the proportions 50 on 11 may 2000 and the remaining 50 on 11 may 2001
 options became exercisable in the proportions of onethird on 16 february 2001 onethird on 16 february 2002 and the remaining onethird on 16
february 2003
 options became exercisable in the proportions of onethird on 25 january 2002 onethird on 25 january 2003 and the remaining onethird becomes
exercisable on 25 january 2004
where reference is made to pacificorp stock incentive plan this is to identify the scheme under which the options over scottishpower adss have been granted
for the pacificorp stock incentive plan the date of grant refers to the date the original pacificorp common stock options were granted these 
options were exchanged for options over scottishpower adss following the acquisition on 29 november 1999
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

102 26 analysis of movements in shareholders’ funds
capital profit
number of share share revaluation redemption merger other and loss
shares capital premium reserve reserve reserve reserve account total
notes 000s £m £m £m £m £m £m £m £m
at 1 april 2000 1847586 9238 37338 2205 183 4064 – 2605 55633
retained loss for the year ––––––– 1698 1698
share capital issued 
– employee sharesave scheme 304 01 14––––– 15
– executive share option scheme 122 01 01––––– 02
– esop 1014 05 44––––– 49
revaluation surplus realised – – – 34 – – – 34 –
exchange movement on translation of overseas
results and net assets b––––––– 4931 4931
at 1 april 2001 1849026 9245 37397 2171 183 4064 – 5872 58932
retained loss for the year ––––––– 19272 19272
share capital issued 
– employee sharesave scheme 99 01 05––––– 06
– executive share option scheme 78 – 02––––– 02
– esop 3444 17 137––––– 154
goodwill realised on disposals c––––––– 7533 7533
goodwill realised on demerger of thus 34––––––– 147 147
reduction of share premium d – – 15000 –––– 15000 –
unrealised gains on fixed asset disposals –––––– 49 – 49
gains realised on thus demerger –––––– 49 49 –
revaluation surplus realised – – – 34 – – – 34 –
fixed asset revaluation gains realised on disposal – – – 1682 – – – 1682 –
exchange movement on translation of overseas
results and net assets b––––––– 42 42
translation differences on foreign currency hedging b––––––– 195 195
at 1 april 2002 1852647 9263 22541 455 183 4064 – 10808 47314
retained loss for the year ––––––– 469 469
share capital issued 
– executive share option scheme 15 – 01––––– 01
– esop 3271 17 102––––– 119
revaluation surplus realised – – – 20 – – – 20 –
exchange movement on translation of overseas
results and net assets b––––––– 3870 3870
translation differences on foreign currency hedging b––––––– 3576 3576
tax on translation differences on foreign 
currency hedging ––––––– 288 288
balance at 31 march 2003 1855933 9280 22644 435 183 4064 – 9777 46383
a cumulative goodwill written off to the profit and loss account reserve as at 31 march 2003 was £5723 million 2002 £5723 million 2001 £13499 million
b the pretax cumulative foreign currency translation adjustments at 31 march 2003 amount to £4649 million 2002 £4943 million 2001 £5180 million
c the goodwill realised on disposals related to appliance retailing £151 million and the impairment of goodwill in connection with the provision for loss on
disposal of southern water £7382 million
d the company applied to the court of session ‘the court’ to approve a reduction in the share premium account which had previously been approved by the
company’s shareholders at an extraordinary general meeting on 21 january 2002 on 5 march 2002 the court approved the reduction of the company’s share
premium account by £1500 million this amount was transferred to the company’s profit and loss account reserve the reduction in the share premium
account created sufficient distributable reserves to facilitate payment of a dividend in specie to demerge thus
scottishpower annual report  accounts 200203

103 27 minority interests
equity nonequity total equity nonequity total
2003 2003 2003 2002 2002 2002
note £m £m £m £m £m £m
at 1 april 15 852 867 1282 1576 2858
additions ––– 10 – 10
disposals ––– 22 – 22
thus open offer ––– 344 – 344
demerger of thus 34 ––– 1274 – 1274
redemption of preferred stock of pacificorp – 51 51 – 695 695
profit and loss account 05 47 52 418 69 349
unrealised gains on fixed asset disposals ––– 49 – 49
dividends paid to minority interests – 48 48 – 81 81
exchange – 81 81 – 17 17
at 31 march 20 719 739 15 852 867
nonequity minority interests include 100 of the preferred stock and preferred stock subject to mandatory redemption of pacificorp of the total preferred
stock subject to mandatory redemption at 31 march 2003 £23 million 2002 £26 million is due to be redeemed within 1 year £23 million 2002 £26
million is due to be redeemed in each of the next 4 years with the remaining £305 million 2002 £392 million being redeemable after 5 years
the fair value of preferred stock subject to mandatory redemption is £494 million 2002 £574 million the fair value of other preferred stock is not materially
different from book value
the weighted average rate of return on preferred stock subject to mandatory redemption is 76 2002 76 and on other preferred stock is 51 2002 51
preferred stockholders have first preference in the event of a liquidation of pacificorp and first rights to dividends the holders of these shares only have rights
against the pacificorp group of companies
28 pensions and other postretirement benefits
at 31 march 2003 scottishpower had six statutorily approved defined benefit pension schemes one statutorily approved defined contribution scheme and one
unapproved scheme details of the principal schemes are set out below
provision
pension charge prepayment
for the year as at 31 march 
scheme funded or 2003 2002 2001 2003 2002
pension fund type unfunded £m £m £m £m £m 
scottishpower defined benefit funded 70 –– 20 50
manweb defined benefit funded 52 36 43 – –
southern water
i
defined benefit funded 02 41 37 – –
final salary lifeplan defined benefit funded 31 34 30 – –
pacificorp
iiiii
defined benefit funded 256 75 637 836 884
i the southern water figures for 2003 relate only to the period until its sale on 23 april 2002 refer to note 28d for further details
ii the pacificorp figures include the unfunded supplementary executive retirement plan “serp” the serp accounts for less than 5 of the pacificorp
liabilities
iii the pacificorp figures for 2003 include a credit adjustment of £25 million 2002 £06 million charge 2001 £548 million charge to special termination
benefits also included in the figure for 2003 is a £31 million contribution to the pacificorpinternational brotherhood of electrical workers “ibew” local
union 57 retirement trust fund
the components of the pension charge are as follows
2003 2002
interest interest
credit credit
cost on variation net cost on net
regular prepayment credit pension regular prepayment variation pension
cost provision cost charge cost provision credit charge
pension fund £m £m £m £m £m £m £m £m
scottishpower 179 03 106 70 218 03 325
i
–
manweb 60 – 08 52 51 – 15 36
southern water
ii
02 – – 02 48 – 07 41
final salary lifeplan 31 – – 31 34 – – 34
pacificorp 135 58 63
iii
256 104 67 96
iv
75
i in the year to 31 march 2002 the net pension charge was set to a minimum of £nil where the variation credit exceeded regular cost less interest
ii the southern water figures for 2003 relate only to the period until its sale on 23 april 2002 refer to note 28d for further details
iii being a normal variation cost of £88 million decreased by the credit adjustment relating to the special termination benefits of £25 million
iv being a normal variation credit of £102 million decreased by the cost of special termination benefits of £06 million
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

104 28 pensions continued
the prepaymentprovision as at the year end can be reconciled as follows
prepayment prepayment prepayment
provision provision provision provision
at 1 april employer pension at 31 march at 1 april employer pension at 31 march
2002 contribution charge exchange 2003 2001 contribution charge exchange 2002
pension fund £m £m £m £m £m £m £m £m £m £m
scottishpower 50 – 70 – 20 50––– 50
manweb – 52 52 – – – 36 36 – –
southern water 
i
– 02 02 – – – 41 41 – –
final salary lifeplan – 31 31 – – – 34 34 – –
pacificorp
ii
884 215 256 89 836 859 51 75 01 884
i the southern water figures for 2003 relate only to the period until its sale on 23 april 2002 refer to note 28d for further details
ii the employer contribution rate to the pacificorp scheme increased from 18 of pensionable salaries in 200102 to 103 of pensionable salaries in 200203
the individual scheme funding details based on the latest full actuarial valuations are as follows
principal actuarial assumptions
value value
latest of assets market average of fund
full valuation based on value of valuation investment average average assets
actuarial carried valuation assets method rate of salary pension accrued
pension fund valuation out by £m £m adopted return increases increases benefits
scottishpower 31 march 2000 mercer hr consulting 19304 20904 projected unit 60 45 25 129
manweb 31 march 2001 bacon  woodrow 6408 6236 projected unit 68
i
43 25 111
southern water 31 march 2001 watson wyatt 2960 2960 projected unit 62 45 25 107
final salary lifeplan 31 march 2002 mercer hr consulting 48 48 projected unit 60 43 28 94
pacificorp 1 january 2002 hewitt associates 5195 5195 projected unit 750
ii
40 – 83
i 48 postretiral
ii 750 represents the liability discount rate
a group pension arrangements
following a review of the group’s uk pension arrangements the scottishpower pension scheme manweb pension scheme and southern water pension scheme
were closed to new members from 31 december 1998
the group introduced two new group pension plans for new uk employees effective from 1 january 1999 the new plans are a defined benefit plan final salary
lifeplan and a defined contribution plan money purchase lifeplan which are open to continuous contract employees aged between 16 and 60
following the acquisition of pacificorp on 29 november 1999 the associated us pension arrangements are now included in the group’s accounts further
details of these us arrangements are given in subnote f below
each of the pension schemes are invested in an appropriately diversified range of equities bonds property and private markets the broad proportions of each
asset class in which the schemes aim to be invested are as follows however it is important to note that this may vary from time to time as markets change and
as cash may be held for strategic reasons
private 
equities bonds property markets total

scottishpower 75 19 6 – 100
manweb 70 30 – – 100
final salary lifeplan 100––– 100
pacificorp 52 35 – 13 100
b scottishpower
scottish power uk plc operates a funded pension scheme of the company providing defined retirement and death benefits based on final pensionable salary
this scheme was open prior to 1 january 1999 to employees of scottishpower members are required to contribute to the scheme at a rate of 5 of
pensionable salary scottish power uk plc meets the balance of cost of providing benefits and company contributions paid are based on the results of the
actuarial valuation of the scheme and are agreed by scottish power uk plc and the scheme trustees
the assets of the scheme are held separately from those of the company in a trustee administered fund included in the scheme assets are 140400
scottishpower shares £527904 based on market value as at 31 march 2003 purchased only as part of a pooled strategy to match the relative weightings 
in the uk stock exchange index
the pension charge for the year is based on the advice of the scheme’s independent qualified actuary and is calculated using the same assumptions as those
used at the last formal actuarial valuation of the scheme the scheme assets were taken at an adjusted market value at that time
the amount included in the balance sheet represents the difference between the accumulated excess of the actual contributions paid to the scheme and the
pension accounting charge the net pension charge is derived from a regular cost of 198 of salaries offset by a variation credit the variation credit is calculated
as the assessed surplus updated to allow for significant market changes in the interim period as adjusted for the balance sheet amount spread as a fixed
percentage of pensionable salaries over nine years in the year to 31 march 2002 the net pension charge was set to a minimum of £nil where the variation credit
exceeded the regular cost less interest
the actual contributions payable by participating employers during the year were £nil except where required by a business transfer agreement employer
contributions have recommenced at the rate of 48 of pensionable salaries with effect from april 2003 the rate is expected to rise on the completion of the
2003 triannual actuarial valuation the results will be known in the autumn of 2003 and are likely to lead to an increase in the employer contribution rate
scottishpower annual report  accounts 200203

105 28 pensions continued
c manweb
prior to 1 january 1999 most of the manweb employees were entitled to join the manweb group of the electricity supply pension scheme which provides
pension and other related benefits based on final pensionable salary to employees throughout the electricity supply industry in england  wales the ongoing
contributions to the scheme are based on the results of the actuarial valuation of the scheme and the advice of the scheme actuary 
the assets are held in a separate trustee administered fund the scheme assets no longer include any scottishpower shares for funding and expensing
purposes the scheme assets are taken at market value plus a smoothing adjustment appropriate at the valuation date
the regular cost for the year of 146 of pensionable salaries is based on the advice of the scheme’s independent qualified actuary and is calculated using the
basis of the 2001 valuation the variation credit is calculated as a spreading of the assessed surplus over 14 years
the actual contributions payable by participating employers during the year ranged between 81 and 141 for different sections of membership but tending
towards the higher rates or other rates for particular groups or as required by a business transfer agreement there are no immediate plans to alter the
contributions payable
d southern water
the sale of southern water to first aqua limited “first aqua” was concluded on 23 april 2002 the figures in this note relate purely to the charge arising prior
to this date there is no impact in respect of pensions on the group’s balance sheet as a result of the sale of southern water as the southern water scheme had
not given rise to any prepayment or provision at the time of the sale
southern water operated a funded pension scheme the scheme details above relate to the principal defined benefit scheme which covered the majority 
of the southern water employees members were required to contribute to the scheme at varying rates of pensionable salary depending upon category of
membership the company met the balance of the cost of the accruing benefits contributions paid were based on the results of the actuarial valuation of the
scheme and were agreed by the company and the scheme trustees
the assets are held in a separate trustee administered fund for funding and expensing purposes the scheme assets were taken at market value
the pension charge for the period of 10 of pensionable salaries plus employer augmentation costs is based on the advice of the scheme’s independent
qualified actuary and is calculated using the same assumptions as at the last actuarial valuation of the scheme the variation credit for 200102 was calculated
as the assessed surplus spread over 17 years
the actual contributions payable by participating employers during the year were 10 of pensionable salaries except where required by a business transfer
agreement 
following the sale of southern water on 23 april 2002 the sponsorship of the southern water scheme passed to first aqua with no further payments due by
scottishpower after that date therefore there are no consequent liabilities in respect of this scheme
e final salary lifeplan
the group operates a funded pension scheme providing defined retirement and death benefits based on final pensionable salary for eligible uk employees of
the group the assets of the lifeplan are held in a separate trustee administered fund the pension charge for the year of 114 of pensionable salaries is
based on the advice of the lifeplan’s independent qualified actuary representing the assessed balance of cost of the accruing benefits after allowing for
members’ contributions of 5 of pensionable salaries the same actuarial assumptions have been adopted for both funding and expensing purposes
the actual contributions payable by participating employers during the year were 114 of pensionable salaries except where required by a business transfer
agreement there are no planned changes to employer contribution requirements
f pacificorp
pacificorp operates pension plans covering substantially all its employees benefits are based on the employee’s years of service and final pensionable salary
adjusted to reflect estimated social security benefits pension costs are funded annually by no more than the maximum amount of pension expense which can
be deducted for federal income tax purposes the pacificorp pensions figures in these accounts include the unfunded serp the serp accounts for less than
5 of the pacificorp liabilities pacificorp meets the entire cost of accruing benefits under pacificorp plans the assets for the funded plan are held in a
separate fund for funding and expensing purposes the plan assets are valued at market levels and liabilities costed on financial assumptions in line with
market return expectations the pension charge for the year is based on the advice of the plan’s independent qualified actuary the actual contributions payable
by participating employers during the year were 103 of pensionable earnings the planned contributions for 200304 are expected to increase to 105 of
pensionable earnings
pacificorp also provides other postretirement benefits to certain employees the group has provided £550 million as at 31 march 2003 2002 £626 million
for these benefits the related charge for the year was £143 million 2002 £88 million further details of these benefits are disclosed in note 35 
g additional pension arrangements
the group operates an approved defined contribution pension scheme money purchase lifeplan for eligible employees contributions are paid by the member
and employer at fixed rates the benefits secured at retirement or death reflect each employee’s accumulated fund and the cost of purchasing benefits at that
time the assets of the scheme are held in a separate trustee administered fund the pension charge for the year represents the defined employer contribution
and amounted to £01 million the group also operates pension arrangements for senior executives namely the scottishpower executive topup plan for
benefits which are held within uk inland revenue limits and the unfunded unapproved retirement benefit scheme “uurbs” for benefits beyond these limits
the uurbs has no invested assets and the group has provided £95 million as at 31 march 2003 2002 £93 million for the benefit promises which will
ultimately be paid by the group
further details of the group’s pensions arrangements are disclosed in note 35
notes to the group balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

106 28 pensions continued
h financial reporting standard “frs” 17 ‘retirement benefits’
the pension figures shown above comply with the current pension accounting standard statement of standard accounting practice “ssap” 24 
however under the transitional arrangements of the new accounting standard frs 17 the group is required to disclose the following information about its
pension and other postretirement benefit schemes and the figures that would have been shown under frs 17 in the balance sheet as at 31 march 2003 and
2002 
the major assumptions used by the actuary for both the pensions and other postretirement benefits arrangements were
uk uk us us
arrangements arrangements arrangements arrangements
at 31 march at 31 march at 31 march at 31 march
2003 2002 2003 2002
rate of increase in salaries 39 pa 43 pa 40 pa 40 pa
rate of increase in deferred pensions 24 pa 28 pa na na
rate of increase in pensions in payment 24 pa 28 pa na na
discount rate 54 pa 60 pa 65 pa 75 pa
inflation assumption 24 pa 28 pa 30 pa 40 pa
pensions
the group operates defined benefit and defined contribution pension schemes as described earlier in this note full actuarial valuations were carried out as
described earlier and updated to 31 march 2003 by a qualified independent actuary figures are shown separately for the uk and us arrangements
the assets in the schemes and the expected longterm rates of return were as follows
uk pension uk pension us pension us pension
arrangements arrangements arrangements arrangements
value at value at value at value at
31 march 2003 31 march 2002 31 march 2003 31 march 2002
£m £m £m £m
equities 12414 18820 2042 2932
bonds 3634 5511 1393 2068
property 1472 1643 – –
cash 213 260 – –
private markets – – 500 819
total market value of assets 17733 26234 3935 5819
present value of schemes’ past service liabilities 21026 23623 7382 7601
deficitsurplus of schemes’ assets over past service liabilities 3293 2611 3447 1782
resulting balance sheet liabilityasset 3293 1769 3447 1782
related deferred tax assetliability 988 531 1310 677
net pension liabilityasset 2305 1238 2137 1105
 the balance sheet asset which would have arisen under frs 17 at 31 march 2002 is lower than the total calculated excess of schemes’ assets over past service
liabilities due to part of the scottishpower pension scheme’s past service ‘surplus’ being designated as “nonrecoverable” in frs 17 terms and therefore excluded
from the balance sheet
the uk pension arrangements net pension liabilityasset comprises assets net of deferred tax of £nil 2002 £1591 million and liabilities net of deferred tax of
£2305 million 2002 £353 million
uk pension uk pension us pension us pension
arrangements arrangements arrangements arrangements
longterm rates longterm rates longterm rates longterm rates
of return expected of return expected of return expected of return expected
at 31 march 2003 at 31 march 2002 at 31 march 2003 at 31 march 2002
equities 72 pa 80 pa 925 pa 975 pa
bonds 45 pa 53 pa 65 pa 65 pa
property 62 pa 70 pa na na
cash 345 pa 38 pa na na
private markets na na 140 pa 145 pa
scottishpower annual report  accounts 200203

107 notes to the group balance sheet
as at 31 march 2003 – continued
28 pensions continued
uk pension us pension
arrangements arrangements
year to year to
31 march 2003 31 march 2003
analysis of the amount charged to operating profit £m £m
current service cost 312 139
special termination benefits – 25
total operating profit charge 312 114
uk pension us pension
arrangements arrangements
year to year to
31 march 2003 31 march 2003
analysis of amount creditedcharged to other finance income £m £m
expected return on pension scheme assets 1684 465
interest on pension liabilities 1206 496
net return on assetsinterest cost 478 31
uk pension us pension
arrangements arrangements
year to year to
31 march 2003 31 march 2003
analysis of amount recognised in statement of total recognised gains and losses “strgl” £m £m
actual return less expected return on assets 6472 965
experience gains and losses on liabilities 684 60
changes in assumptions 764 1061
actuarial loss recognised in strgl 6552 1966
adjustment due to surplus cap 842 –
net loss recognised 5710 1966
uk pension us pension
arrangements arrangements
year to year to
31 march 2003 31 march 2003
movement in surplusdeficit in pension schemes during the year £m £m
surplusdeficit in pension schemes at beginning of year 2611 1782
movement in year
current service cost 312 139
gain on settlementcurtailmentspecial termination 394 25
contributions 88 215
net return on assetsinterest cost 478 31
actuarial loss 6552 1966
exchange – 231
deficit in pension schemes at end of year 3293 3447
other postretirement benefits
pacificorp provides postretirement healthcare and life insurance benefits as described in note 35e actuarial valuations were carried out as at 31 march 2003 by
a qualified independent actuary the major assumptions used by the actuary are described in note 35e
the assets in the schemes and the expected longterm rates of return were as follows
value at value at
31 march 2003 31 march 2002
£m £m
equities 886 1130
bonds 524 673
private markets 37 46
total market value of assets 1447 1849
present value of schemes’ liabilities 3414 3313
deficit in the schemes 1967 1464
related deferred tax asset 747 556
net other postretirement benefits liability 1220 908
longterm rates longterm rates
of return expected of return expected
at 31 march 2003 at 31 march 2002
equities 925 pa 975 pa
bonds 65 pa 65 pa
private markets 140 pa 145 pa
scottishpower annual report  accounts 200203

108 28 pensions continued
other post
retirement
benefits
year to
31 march 2003
analysis of the amount charged to operating profit £m
current service cost 36
adjustment to special termination benefits 06
total operating profit charge 30
other post
retirement
benefits
year to
31 march 2003
analysis of amount charged to other finance income £m
expected return on other postretirement benefits scheme’s assets 149
interest on other postretirement benefits scheme’s liabilities 221
net interest cost 72
other post
retirement
benefits
year to
31 march 2003
analysis of amount recognised in statement of total recognised gains and losses “strgl” £m
actual return less expected return on assets 310
experience gains and losses on liabilities 29
changes in assumptions 391
actuarial loss recognised in strgl 730
other post
retirement
benefits
year to
31 march 2003
movement in deficit during the year £m
deficit in schemes at beginning of year 1464
movement in year
current service cost 36
adjustment to special termination benefits 06
contributions 160
net interest cost 72
actuarial loss 730
exchange 169
deficit in schemes at end of year 1967
year to 31 march 2003
uk us other
pension pension postretirement
schemes schemes benefits
history of experience gains and losses £m £m £m
difference between expected and actual return on scheme assets
amount 6472 965 310
percentage of scheme’s assets 36 24 21
experience gains and losses on scheme liabilities
amount 684 60 29
percentage of scheme’s liabilities 3 1 1
total amount recognised in statement of total recognised gains and losses
amount 5710 1966 730
percentage of scheme’s liabilities 27 27 21
summary
if the above frs 17 pensions and other postretirement benefits assets and liabilities net of deferred tax were recognised in the balance sheet as at 31 march
2002 and 31 march 2003 the group’s net assets and profit and loss reserve would be as follows
at 31 march at 31 march
2003 2002
£m £m
net assets 47122 48181
reversal of ssap 24 net pensionsother postretirement benefits liability net of deferred tax 940 963
reversal of capitalisation of ssap 24 costs of pensionsother postretirement benefits net of deferred tax 80 –
net assets excluding effect of frs 17 47982 49144
capitalisation of frs 17 costs of pensionsother postretirement benefits net of deferred tax 15 –
net assets excluding frs 17 pensionsother postretirement benefits assets and liabilities net of deferred tax 47997 49144
frs 17 pensions assets net of deferred tax – 1591
frs 17 pensionsother postretirement benefits liabilities net of deferred tax 5662 2366
net assets including frs 17 pensionsother postretirement benefits liabilities net of deferred tax 42335 48369
profit and loss reserve 9777 10808
reversal of ssap 24 net pensionsother postretirement benefits liability net of deferred tax 940 963
reversal of capitalisation of ssap 24 costs of pensionsother postretirement benefits net of deferred tax 80 –
profit and loss reserve excluding effect of frs 17 10637 11771
capitalisation of frs 17 costs of pensionsother postretirement benefits net of deferred tax 15 –
profit and loss reserve excluding frs 17 pensionsother postretirement benefits assets and liabilities net of deferred tax 10652 11771
frs 17 pensionsother postretirement benefits assets and liabilities net of deferred tax 5662 775
profit and loss reserve including frs 17 pensionsother postretirement benefits assets and liabilities net of deferred tax 4990 10996
scottishpower annual report  accounts 200203

109 notes to the group balance sheet
as at 31 march 2003 – continued
29 contingent liabilities
thus flotation
in november 1999 the group floated a minority stake in its internet and telecommunications business thus plc this gave rise to a contingent liability to
corporation tax on chargeable gains estimated at amounts up to £570 million
on 19 march 2002 the group demerged its residual holding in thus group plc the new holding company of thus plc the charge referred to above could still
arise in certain circumstances before 19 march 2007 members of the scottishpower group have agreed to indemnify thus group plc for any such liability
except in circumstances arising without the consent of the scottishpower group
legal proceedings
the group’s businesses are parties to various legal claims actions and complaints certain of which involve material amounts although the group is unable to
predict with certainty whether or not it will ultimately be successful in these legal proceedings or if not what the impact might be the directors currently believe
that disposition of these matters will not have a materially adverse effect on the group’s consolidated accounts
30 financial commitments
2003 2002
a analysis of annual commitments under operating leases £m £m 
leases of land and buildings expiring
within one year 04 02
between one and two years 03 13
between two and three years 14 01
between three and four years 08 –
between four and five years 01 18
more than five years 25 10
55 44
other operating leases expiring
within one year 11 39
between one and two years 19 36
between two and three years 24 25
between three and four years – 07
between four and five years – 09
more than five years – 02
54 118
2003 2002
b capital commitments £m £m 
contracted but not provided 1274 2389
c other contractual commitments
i uk contractual commitments 
under contractual arrangements in the uk the group has the following power and other purchase commitments at 31 march 2003 
2004 2005 2006 2007 2008 thereafter total
£m £m £m £m £m £m £m 
commitments to purchase in year 6967 6127 2985 2955 3039 12672 34745
uk contractual commitments as at 31 march 2003 principally comprise the purchase of electricity gas and coal to manage both generation and supply activities
ii pacificorp contractual commitments
longterm wholesale sales and purchased power contracts
in the us pacificorp manages its energy resource requirements by integrating longterm firm shortterm and spot market purchases with its own generating
resources to economically operate the system within the boundaries of federal energy regulatory commission requirements and meet commitments for
wholesale sales and retail load growth the longterm wholesale sales commitments include contracts with minimum sales requirements of £1982 million 
£1668 million £1412 million £1158 million and £896 million for the years 2004 to 2008 respectively and £07 billion thereafter as part of its energy
resource portfolio pacificorp acquires a portion of its power through longterm purchases andor exchange agreements which require minimum fixed payments of
£2441 million £2302 million £2133 million £2317 million and £1565 million for the years 2004 to 2008 respectively and £14 billion thereafter 
excluded from the minimum fixed annual payments above are commitments to purchase power from several hydroelectric projects under longterm
arrangements with public utility districts these purchases are made on a ‘costofservice’ basis for a stated percentage of project output and for a like
percentage of project annual costs operating expenses and debt service pacificorp is required to pay its portion of operating expenses and its portion of the
debt service whether or not any power is produced the arrangements provide for nonwithdrawable power and the majority also provide for additional power
withdrawable by the public utility districts upon one to five years’ notice for 2003 these purchases represented approximately 24 of pacificorp’s energy
requirements at 31 march 2003 pacificorp’s share of longterm arrangements with public utility districts were as follows
annual
year contract percentage costs
generating facility expires of output capacity kw £m 
wanapum 2009 187 155444 44
priest rapids 2005 139 109602 25
rocky reach 2011 53 64297 22
wells 2018 69 59617 14
total 388960 105
the annual costs include debt service costs of £41 million pacificorp’s minimum debt service obligation at 31 march 2003 was £54 million and for the years
2004 to 2008 are £51 million £44 million £58 million £77 million and £78 million respectively
shortterm wholesale sales and purchased power contracts
at 31 march 2003 pacificorp had shortterm wholesale forward sales commitments that included contracts with minimum sales requirements of £1381 million
£776 million and £104 million for the years 2004 to 2006 respectively at 31 march 2003 shortterm forward purchase agreements require minimum fixed
payments of £1130 million £2964 million and £193 million for the years 2004 to 2006 respectively
fuel contracts
pacificorp has ‘take or pay’ coal and natural gas contracts that require minimum fixed payments of £1636 million £1467 million £1178 million £975 million
and £1004 million for the years 2004 to 2008 respectively and £5895 million thereafter
iii ppm contractual commitments
at 31 march 2003 ppm had purchase commitments of £3500 million of which £2844 million relates to the years 2004 to 2008 ppm’s contractual
commitments primarily consist of electricity and gas purchases made to optimise returns from generation resources and commercial activities
scottishpower annual report  accounts 200203

110 31 related party transactions
a trading transactions and balances arising in the normal course of business
salespurchases amounts due 
tofrom other fromto other 
group companies group companies 
during the year as at 31 march 
2003 2002 2001 2003 2002
related party related party relationship to group £m £m £m £m £m
sales by related parties 
scottish electricity settlements limited 50 owned joint venture 50 53 62 11 11
scotash limited 50 owned joint venture 06 06 04 02 02
south coast power limited 50 owned joint venture 742 465 251 93 30
celtpower limited 50 owned joint venture 20 17 17 03 03
calanais limited 50 owned joint venture – – 690 – –
thus subsidiary – 09 – – 120
purchases by related parties 
scottish electricity settlements limited 50 owned joint venture 02 02 02 – –
scotash limited 50 owned joint venture 02 02 02 – –
south coast power limited 50 owned joint venture 353 78 32 41 05
klamath cogeneration plant joint arrangement 248 241 – 50 22
celtpower limited 50 owned joint venture – 03 03 – –
calanais limited 50 owned joint venture – – 130 – –
thus subsidiary – 01 – – 52
nest makers limited 50 owned joint venture 16 03 – – –
southern water subsidiary 27 –– 02 –
in addition to the above during the year ended 31 march 2003 pacificorp made management and similar charges to powercor of £nil as a result of the disposal of
powercor by pacificorp in september 2000 31 march 2002 £nil 31 march 2001 £14 million at 31 march 2003 powercor owed the group £nil 2002 £nil
2001 £nil
during the year ended 31 march 2003 scottishpower made management and similar charges to scotash limited of £01 million 2002 £04 million 2001 £02
million
on 23 march 2001 the group disposed of its 50 holding in calanais limited as a result it ceased to be a joint venture from this date
on 19 march 2002 the group demerged thus the related party sales and purchases in 2002 represent those transactions between scottishpower and thus
for the period from 20 march to 31 march 2002
on 23 april 2002 the group disposed of southern water as a result it ceased to be a subsidiary from this date the sales and purchases for 2003 represent
those transactions between scottishpower and southern water for the period from 24 april 2002 to 31 march 2003
b funding transactions and balances arising in the normal course of business
interest payable amounts due 
to other group to other group
companies during companies as 
the year at 31 march
2003 2002 2003 2002 
related party related party relationship to group note £m £m £m £m 
scottish electricity settlements limited 50 owned joint venture 08 11 122 147
scotash limited 50 owned joint venture – – 37 24
south coast power limited 50 owned joint venture 12 11 182 135
roboscot 38 limited 50 owned joint venture – – 54 54
thus subsidiary i – – – 54
nest makers limited 50 owned joint venture – – 07 08
i this balance represents £nil 2002 £11 million of loans and £nil 2002 £43 million payable in respect of finance leases
scottishpower annual report  accounts 200203

111 notes to the group balance sheet
as at 31 march 2003 – continued
32 acquisition
on 9 december 2002 ppm completed the acquisition of the katy gas storage facility and certain other trade and assets from aquila inc for a cash consideration
including expenses of £1013 million the acquisition method of accounting has been adopted and the goodwill on the purchase has been capitalised and is
being amortised over 20 years the directors have estimated the useful economic life of the goodwill acquired having regard to the economic life of the facility
and the duration of the contracts acquired the details of the transaction results and provisional fair value adjustments arising from the change in ownership are
shown below
book provisional
values at fair values at
9 december 9 december
2002 revaluation 2002
fair value of katy consideration £m £m £m
tangible fixed assets 806 77 883
stocks 15 – 15
creditors amounts falling due within one year 09 – 09
net assets 812 77 889
goodwill arising on acquisition of katy 124
purchase consideration 1013
a a valuation adjustment of £77 million has been made to the book value of katy’s tangible fixed assets to record them at their depreciated replacement cost
b due to the proximity of the acquisition to the balance sheet date the fair values attributed to the katy business are provisional and may be revised
the results of katy based on katy’s accounting policies under us gaap prior to acquisition and excluding fair value adjustments arising from the acquisition for
the year to 31 december 2001 and for the preacquisition period from 1 january 2002 to 8 december 2002 are shown below expressed in us dollars
period from year to
1 jan 2002 to 31 dec
8 dec 2002 2001
results m m
turnover 130 97
operating profit 62 16
profit on ordinary activities before taxation 62 14
taxation ––
profit for the financial periodyear 62 14
dividends ––
profit attributable to shareholders 62 14
scottishpower annual report  accounts 200203

112 33 southern water disposal 
on 23 april 2002 the group completed the sale of aspen 4 limited the holding company of southern water plc to first aqua limited for a total consideration
before expenses of £205 billion including repayment and acquisition of intragroup nontrading indebtedness and assumption by first aqua limited of
southern water’s nontrading debt due to third parties the net assets disposed of were as follows
notes £m 
tangible fixed assets 16 i 24747
fixed asset investments 17 19
current assets 1931
creditors amounts falling due within one year
– loans and other borrowings
– intercompany loan 7564 
– bank overdraft 62
– other creditors 2912
creditors amounts falling due after more than one year
– loans and other borrowings 1000
provisions for liabilities and charges
– other provisions 22 56
– deferred tax 23 3610
deferred income 24 374
book value of southern water net assets disposed 11119
gain on disposal i –
net disposal proceeds 11119
satisfied by
cash received for net assets ii 11873
cash expenses 479
net disposal cash proceeds 11394
accrued expenses 275
net disposal proceeds 11119
i in the year ended 31 march 2002 an exceptional impairment provision of £4493 million was made to reduce the carrying value of southern water’s net
assets to their recoverable amount in addition a further exceptional charge of £7382 million was recognised representing the impairment of goodwill on the
acquisition of southern water previously written off to reserves as a consequence of these charges to profits in the year ended 31 march 2002 there is no
further gain or loss required to be recognised for the year ended 31 march 2003 on completion of the sale
ii analysis of total consideration before expenses £m
cash received for net assets 11873
cash received on repayment to scottishpower of intercompany loan 7564
cash consideration before expenses 19437
debt due to third parties assumed by first aqua limited including premium of £63 million 1063
total consideration before expenses 20500
34 thus group plc demerger
on 19 march 2002 the group demerged thus group plc “thus” the demerger of thus was preceded by an open offer of approximately £275 million of new
equity shares in thus which resulted in scottishpower’s equity interest in thus temporarily increasing from 501 to 724 and an increase in goodwill of
£344 million thus’ results for the period to 19 march 2002 were reported under discontinued operations in the scottishpower accounts for the year ended 31
march 2002 and the prior year the demerger of thus was accounted for as a dividend in specie
notes £m 
intangible fixed assets – goodwill 15 626
tangible fixed assets 16 4688
fixed assets investments 17 242
current assets 1045
creditors amounts falling due within one year 1099
provisions for liabilities and charges
– other provisions 22 09
book value of thus net assets disposed 5493
minority interest share of net assets 27 1274
scottishpower’s share of thus net assets disposed 4219
goodwill previously charged to reserves written back 26 147
dividend in specie 4366
scottishpower annual report  accounts 200203

113 notes to the group balance sheet
as at 31 march 2003 – continued
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ 
the consolidated accounts of the group are prepared in accordance with uk gaap which differs in certain significant respects from us gaap the effect of the
us gaap adjustments to profitloss for the financial year and equity shareholders’ funds are set out in the tables below 
year ended 31 march
2003 2002 2001
a reconciliation of profitloss for the financial year to us gaap notes £m £m £m
profitloss for the financial year under uk gaap 4826 9871 3075
us gaap adjustments
amortisation of goodwill i 1390 235 359
disposal of businesses ii – 2791 –
us regulatory net assets iii 1216 953 738
pensions iv 201 400 955
impairment on demerger of thus v – 2437 –
depreciation on revaluation uplift vi 20 34 34
decommissioning and mine reclamation liabilities vii 383 218 323
pacificorp transition plan costs viii 191 299 1082
business combinations i 316 ––
fas 133 ix 2055 1445 –
other xv 108 177 04
reclassification as extraordinary item x – 120 –
6278 7494 5198
deferred tax effect of us gaap adjustments xi 204 676 1330
6482 8170 3868
extraordinary item net of tax x – 84 –
profitloss for the financial year under us gaap before cumulative adjustment for c15 and c16 2002 fas 133 6482 8254 3868
cumulative adjustment for c15 and c16 2002 fas 133 ix 1411 616 –
profitloss for the financial year under us gaap 7893 8870 3868
earningsloss per share under us gaap xiv 4281p 4826p 2113p
diluted earningsloss per share under us gaap xiv 4270p 4826p 2105p
31 march 31 march
2003 2002
b effect on equity shareholders’ funds of differences between uk gaap and us gaap notes £m £m
equity shareholders’ funds under uk gaap 46383 47314
us gaap adjustments
goodwill i 5723 5723
business combinations i 2263 1742
amortisation of goodwill i 510 842
esop shares held in trust xii 382 389
us regulatory net assets iii 10079 10428
pensions iv 4128 2229
cash dividends xiii 1322 1261
revaluation of fixed assets vi 540 540
depreciation on revaluation uplift vi 105 85
decommissioning and mine reclamation liabilities vii 04 607
pacificorp transition plan costs viii 561 869
fas 133 ix 668 3082
other xv 121 34
deferred tax
effect of us gaap adjustments xi 1574 3169
effect of differences in methodology xi 214 213
equity shareholders’ funds under us gaap 54797 58505
i goodwill and business combinations
goodwill
under uk gaap goodwill arising from the purchase of operating entities before 31 march 1998 has been written off directly to reserves additionally uk gaap
requires that on subsequent disposal of these entities any goodwill previously taken directly to reserves is then charged in the profit and loss account against the
profit or loss on disposal goodwill arising on acquisitions after 31 march 1998 is capitalised and amortised through the profit and loss account over its useful
economic life 
the goodwill adjustment is made to recognise goodwill previously written off to reserves under uk gaap as an intangible asset under us gaap 
under us gaap following the introduction of statement of financial accounting standard “fas” 142 ‘goodwill and other intangible assets’ which was effective
for the group from 1 april 2002 goodwill arising from the purchase of operating entities should be held as an indefinite lived intangible asset in the balance
sheet and is no longer amortised instead goodwill is subject to an impairment test performed at least annually the adjustment ‘amortisation of goodwill’ for the
year ended 31 march 2003 represents the reversal of amortisation of goodwill charged under uk gaap 
the group has completed its transitional and annual goodwill impairment analysis under fas 142 and has concluded that goodwill is not impaired the
following table provides an analysis of goodwill included in the balance sheet under us gaap for the year ended 31 march 2003 and for the year ended 31
march 2002
scottishpower annual report  accounts 200203

114 35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
2003 2002
notes £m £m
net book value of goodwill capitalised under us gaap
at 1 april 29377 37941
acquisition 124 –
disposal of businesses – 6801
business combinations a 367 –
amortisation for the year – 1725
exchange 2358 38
as at 31 march b 26776 29377
a the business combinations adjustment of £367 million relates to deferred tax provisions recognised on the acquisition of pacificorp
b the net book value of goodwill capitalised under us gaap is analysed by business segment in the table below
31 march 31 march
2003 2002
£m £m
uk division – integrated generation and supply 5629 5629
us division
pacificorp 21023 23748
ppm 124 –
united states total 21147 23748
total 26776 29377
c the impact of reporting under fas 142 for the year ended 31 march 2002 would have been to reduce the loss under us gaap by £1725 million to £7145
million 2001 increase earnings by £1635 million to £5503 million and to reduce the loss per share under us gaap by 938 pence per share to 3888 pence
per share 2001 increase earnings per share by 893 pence per share to 3006 pence per share
business combinations
in addition to reinstating the goodwill calculated under uk gaap as described above goodwill must also be recalculated in accordance with us gaap this is
required due to differences between uk gaap and us gaap in the determination of acquisition price and valuation of assets and liabilities at the acquisition date
the adjustment referred to as business combinations reflects principally the impact of recalculating the goodwill arising on the acquisitions of manweb and
pacificorp under us gaap the business combinations adjustment of £316 million £221 million net of tax reflected in the reconciliation of profitloss to us
gaap for the year ended 31 march 2003 represents the difference between uk gaap and us gaap in accounting for accruals recognised under uk gaap when
pacificorp was acquired
in cases where traded equity securities are exchanged as consideration uk gaap requires the fair value of consideration to be determined at the date the
transaction is completed while us gaap requires the fair value of such consideration to be determined at the date the acquisition is announced
ii disposal of businesses
under uk gaap the loss on disposal of and withdrawal from appliance retailing and the provision for loss on disposal of southern water were calculated based
on net asset value together with the goodwill previously written off to reserves
under us gaap the same methodology was applied however the net asset value under us gaap differed from that under uk gaap the principal differences
relate to the amortisation of goodwill which had been recognised as an intangible asset under us gaap but had been written off to reserves under uk gaap and
the revaluation of certain tangible fixed assets which is not permitted under us gaap but is permitted under uk gaap
iii us regulatory net assets
fas 71 ‘accounting for the effects of certain types of regulation’ establishes us gaap for utilities in the us whose regulators have the power to approve andor
regulate rates that may be charged to customers fas 71 provides that regulatory assets may be capitalised if it is probable that future revenue in an amount at
least equal to the capitalised costs will result from the inclusion of that cost in allowable costs for ratemaking purposes due to the different regulatory
environment no equivalent gaap applies in the uk
under uk gaap the group’s policy is to recognise regulatory assets established in accordance with fas 71 only where they comprise rights or other access to future
economic benefits which have arisen as a result of past transactions or events which have created an obligation to transfer economic benefits to a third party
the impact of the application of different accounting policies is that us regulatory assets amounting to £10079 million 2002 £10428 million are not
recognised under uk gaap including deferred excess power costs certain fas 133 regulatory balances and certain pension regulatory balances
profits under us gaap are consequently decreased by £1216 million in 2003 2002 profit increased by £953 million
us regulatory net assets relating to the pacificorp transition plan costs are discussed in note viii below
iv pension costs
the fundamental differences between uk gaap and us gaap are as follows 
a under uk gaap the annual pension charge is determined so that it is a substantially level percentage of the current and expected future payroll under us
gaap the aim is to accrue the cost of providing pension benefits in the year in which the employee provides the related service in accordance with fas 87 which
requires readjustment of the significant actuarial assumptions annually to reflect current market and economic conditions
b under uk gaap pension liabilities are usually discounted using an interest rate that represents the expected longterm return on plan assets under us gaap
pension liabilities are discounted using the current rates at which the pension liability could be settled 
c under uk gaap variations from plan can be aggregated and amortised over the remaining employee service lives under us gaap variations from plan must
be amortised separately over remaining service lives 
d under uk gaap alternative bases can be used to value plan assets under us gaap plan assets should be valued at market or at market related values and
where the fairmarket value of the plan assets is less than the accumulated benefit obligation a minimum pension liability is then recognised as a charge to other
comprehensive income under the provisions of fas 87 unless and to the extent that fas 71 can be applied in which case a pension regulatory asset is recognised
scottishpower annual report  accounts 200203

115 notes to the group balance sheet
as at 31 march 2003 – continued
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
v impairment on demerger of thus
under uk gaap the demerger dividend was calculated based on the book value of the net assets disposed of as a result of demerger
under us gaap the demerger dividend was calculated based on the market value of the shares at the demerger date and the difference between this and the
book value of net assets disposed of was disclosed as an impairment charge under us gaap
vi revaluation of fixed assets
the revaluation of assets is not permitted under us gaap the reconciliation therefore adjusts fixed assets to historical cost and the depreciation charge has been
adjusted accordingly 
vii decommissioning and mine reclamation liabilities
under uk gaap future decommissioning costs are provided for on a discounted basis generally at the inception of the asset life with a corresponding increase
to the cost of the asset this increased cost is depreciated over the useful life of the asset under us gaap for regulated industries decommissioning costs are
accounted for by depreciating the related tangible fixed asset to a negative amount which equates to the estimated decommissioning costs in respect of mine
reclamation costs uk gaap requires the discounted future costs of reclamation to be provided for with a corresponding increase to the cost of the mine assets
under us gaap anticipated mine reclamation costs are accrued over the life of the mine asset
viii pacificorp transition plan costs
under uk gaap pacificorp transition plan costs were recognised as an expense in the profit and loss account at the date of the announcement of the plan
costs were provided for in accordance with frs 12 ‘provisions contingent liabilities and contingent assets’
under us gaap pacificorp transition plan costs are accounted for as regulatory assets and are being amortised through the income statement costs have been
accounted for in accordance with emerging issues task force no 943 ‘liability recognition for certain employee termination benefits and other costs to exit
an activity including certain costs incurred in a restructuring’ and fas 88 ‘employers’ accounting for settlements and curtailments of defined benefit
pension plans and for termination benefits’ 
ix fas 133 – derivative instruments and hedging activities 
under uk gaap derivatives designated as used for nontrading purposes are accounted for on a consistent basis with the asset liability or position being
hedged under us gaap the group applies fas 133 ‘accounting for derivative instruments and hedging activities’ as amended by fas 137 ‘accounting for
derivative instruments and hedging activities – deferral of the effective date of fasb statement no 133’ and fas 138 ‘accounting for certain derivative
instruments and certain hedging activities’ effective from 1 april 2002 the group adopted revised fas 133 guidance issued by the derivatives implementation
group under revised issue c15 ‘normal purchases and normal sales exception for certain optiontype contracts in electricity’ and issue c16 ‘applying the
normal purchases and normal sales exception to contracts that combine a forward contract and purchased option contract’ this new guidance had the effect
of including an increased number of the group’s contracts within the scope of fas 133 the cumulative adjustment to profit under us gaap for the year ended
31 march 2003 as a result of adopting revised issue c15 and issue c16 was an increase to profit of £2286 million £1411 million net of tax fas 133
requires recognition of all derivatives as defined in the standard on the balance sheet at fair value derivatives or any portion thereof that are not an effective
hedge are adjusted to fair value through income if a derivative qualifies as an effective hedge changes in the fair value of the derivative are either offset against
the change in fair value of the hedged asset liability or firm commitment recognised in income or are recognised in accumulated other comprehensive income
until the hedged items are recognised in earnings the effects of changes in fair value of certain derivative instruments entered into to hedge future retail
resource requirements in the group’s us regulated business are subject to regulation and therefore are deferred pursuant to fas 71 the fas 133 adjustment
included within equity shareholders’ funds of £668 million at 31 march 2003 is offset by a us regulatory net asset of £3206 million relating to pacificorp’s
regulated activities which have been deferred as a regulatory asset under fas 71
contracts that qualify as normal purchases and normal sales are excluded from the requirements of fas 133 the realised gains and losses on these contracts
are reflected in the income statement at the contract settlement date 
x extraordinary item
under uk gaap certain costs of early debt repayment have been treated as exceptional interest costs under us gaap costs of early debt repayment are
classified as extraordinary items the tax credit on the extraordinary item was £36 million for the year ended 31 march 2002
xi deferred tax
under uk gaap frs 19 ‘deferred tax’ requires full provision for deferred tax at future enacted rates provision is only made in respect of assets revalued for
accounting purposes where a commitment exists to sell the asset at the balance sheet date  
under us gaap full provision for deferred tax is required to the extent that accounting profit differs from taxable profit due to temporary timing differences
provision is made based on enacted tax law 
the item ‘effect of us gaap adjustments’ reflects the additional impact of making full provision for deferred tax in respect of adjustments made in restating 
the balance sheet to us gaap 
the item ‘effect of differences in methodology’ reflects the impact of making full provision for deferred tax under us gaap compared to uk gaap 
xii esop shares held in trust
under uk gaap shares held by employee share ownership trusts are recorded as fixed asset investments at cost less amounts written off under us gaap
shares held in trust are recorded at cost in the balance sheet as a deduction from shareholders’ funds details of the group’s employee share ownership trusts
are set out in note 17 
xiii cash dividends
under uk gaap final ordinary cash dividends are recognised in the financial year in respect of which they are proposed by the board of directors under us
gaap such dividends are not recognised until they are formally declared by the board of directors 
scottishpower annual report  accounts 200203

116 35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
xiv earningsloss per share
earningsloss per ordinary share have been calculated by dividing the profitloss for the financial year under us gaap by the weighted average number of
ordinary shares in issue during the financial year based on the following information 
2003 2002 2001 
profitloss for the financial year under us gaap £ million 7893 8870 3868
basic weighted average share capital number of shares millions 18439 18378 18303
diluted weighted average share capital number of shares millions 18484 18401 18374
earningsloss per share
earnings per share under us gaap – continuing operations 3576p 1915p 1348p
lossearnings per share under us gaap – discontinued operations 060p 6360p 765p
loss per share under us gaap – extraordinary item net of tax – 046p –
earningsloss per share under us gaap before cumulative adjustment for c15 and c16 2002 fas 133 3516p 4491p 2113p
earningsloss per share under us gaap – cumulative adjustment for c15 and c16 2002 fas 133 765p 335p –
earningsloss per share under us gaap 4281p 4826p 2113p
diluted earningsloss per share
diluted earnings per share under us gaap – continuing operations 3567p 1915p 1343p
diluted lossearnings per share under us gaap – discontinued operations 060p 6360p 762p
diluted loss per share under us gaap – extraordinary item net of tax – 046p –
diluted earningsloss per share under us gaap before cumulative adjustment for c15 and c16 2002 fas 133 3507p 4491p 2105p
diluted earningsloss per share under us gaap – cumulative adjustment for c15 and c16 2002 fas 133 763p 335p –
diluted earningsloss per share under us gaap 4270p 4826p 2105p
the difference between the basic and the diluted weighted average share capital is wholly attributable to outstanding share options and shares held in trust for
the group’s employee share ownership plan in accordance with fas 128 ‘earnings per share’ the diluted loss per share for the year ended 31 march 2002
does not assume the exercise of securities that have an antidilutive effect on the loss per share the lossearnings per share detailed above for discontinued
operations have been calculated based on us gaap earnings which are net of £30 million 2002 £370 million 2001 £363 million of interest and similar
charges and a tax credit of £46 million 2002 £188 million tax charge 2001 £58 million tax credit the group’s charge for interest and similar charges has
been allocated between continuing and discontinued operations on the basis of external and internal borrowings of the respective operations
as permitted under uk gaap earningsloss per share have been presented including and excluding the impact of exceptional items and goodwill amortisation 
to provide an additional measure of underlying performance uk gaap permits the presentation of more than one measure of earningsloss per share provided
that all such measures are clearly explained and given equal prominence on the face of the profit and loss account in accordance with us gaap earningsloss
per share have been presented above based on us gaap earningsloss without adjustments for the impact of uk gaap exceptional items and goodwill
amortisation such additional measures of underlying performance are not permitted under us gaap 
xv other
other differences between uk and us gaap are not individually material and relate to postretirement benefits other than pensions capitalisation of finance
costs availableforsale securities energy exchange contracts and stock option compensation expense
uk gaap permits the use of longterm discount rates in determining the provision for postretirement benefits other than pensions us gaap requires the use 
of current market rates
under uk gaap only interest on debt funding may be capitalised during the period of construction under us gaap as applied by regulated electricity utilities
both the cost of debt and the cost of equity applicable to domestic utility properties are capitalised during the period of construction
under uk gaap obligations under energy exchange contracts are valued based on the forecast cost at the balance sheet date of delivering energy under the
contract under us gaap for regulated utilities obligations under energy exchange contracts are valued based on the cost avoided in receiving delivery of energy
under the contract 
availableforsale securities
uk gaap permits current asset investments to be valued at the lower of cost and net realisable value us gaap requires that such investments insofar as they
are availableforsale securities are marked to market with movements in market value being included in other comprehensive income
the book value and estimated fair value of availableforsale securities were as follows
at 31 march 2003
gross gross
unrealised unrealised estimated
book value gains losses fair value
£m £m £m £m
money market account 25 – – 25
mutual fund account 194 – 02 192
debt securities 108 04 17 95
equity securities 350 05 63 292
total 677 09 82 604
at 31 march 2002
gross gross
unrealised unrealised estimated
book value gains losses fair value
£m £m £m £m
money market account 19 – – 19
debt securities 144 03 18 129
equity securities 277 27 53 251
total 440 30 71 399
the quoted market price of securities at 31 march is used to estimate the securities’ fair value
scottishpower annual report  accounts 200203

117 notes to the group balance sheet
as at 31 march 2003 – continued
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
the book value and estimated fair value of debt securities by contractual maturities at 31 march 2003 and 2002 are shown below actual maturities may differ
from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties
at 31 march 2003 at 31 march 2002
estimated estimated
book value fair value book value fair value
£m £m £m £m
debt securities
due within one year 05 05 ––
due between one and five years 16 14 32 29
due between five and ten years 45 40 46 44
due after ten years 42 36 66 56
money market account 25 25 19 19
mutual fund accounts 194 192 ––
equity securities 350 292 277 251
total 677 604 440 399
proceeds gross gains and gross losses from realised sales of availableforsale securities using the specific identification method were as follows
year ended 31 march
2003 2002 2001
£m £m £m
proceeds 563 564 540
gross gains 11 21 53
gross losses 37 56 36
net lossesgains 26 35 17
stockbased compensation
under us gaap the group applies accounting principles board opinion no 25 “apb 25” ‘accounting for stock issued to employees’ and related
interpretations in accounting for its plans and a compensation expense has been recognised accordingly for its share option schemes as the group applies apb
25 in accounting for its plans under fas 123 ‘accounting for stockbased compensation’ it has adopted the disclosure only option in relation to its share
option schemes had the group determined compensation cost based on the fair value at the grant date for its share options under fas 123 the group’s
profitloss for financial year under us gaap and earningsloss per share under us gaap would have been reduced to the pro forma amounts below 
2003 2002 2001
profitloss for the financial year under us gaap £ million 7893 8870 3868
reversal of apb 25 stock compensation expense included within the ‘other’ adjustment £ million 36 44 50
stock compensation expense calculated under fas 123 £ million 61 74 112
pro forma profitloss for the financial year under us gaap £ million 7868 8900 3806
basic earningsloss per share under us gaap 4281p 4826p 2113p
pro forma basic earningsloss per share under us gaap 4267p 4843p 2079p
diluted earningsloss per share under us gaap 4270p 4826p 2105p
pro forma diluted earningsloss per share under us gaap 4257p 4843p 2071p
the weighted average fair value of options granted during the year was £63 million 2002 £86 million 2001 £16 million the fair value of each option grant
was estimated on the date of grant using the blackscholes optionpricing model with the following assumptions used
2003 2002 2001
dividend yield 83 67 64
riskfree interest rate 46 48 49
volatility 300 300 240
expected life of the options years 64 4
the weighted average life of the share options outstanding as at 31 march 2003 march 2002 and march 2001 was as follows
2003 2002 2001
years years years
scottishpower sharesave schemes 3 32
southern water sharesave scheme – 22
executive share option scheme 2 22
executive share option plan 2001 9 9–
pacificorp stock incentive plan 6 66
scottishpower annual report  accounts 200203

118 35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
xvi reclassifications
the reconciliations of profitloss for the financial year and equity shareholders’ funds at the year end from uk gaap to us gaap only include those items
which have a net effect on profitloss or equity shareholders’ funds there are other gaap differences not included in the reconciliations which would affect
the classification of assets and liabilities or of income and expenditure the principal items which would have such an effect are as follows
– under uk gaap debt issue costs are deducted from the carrying value of the related debt instrument us gaap requires such costs to be included as 
an asset
– under uk gaap customer contributions in respect of fixed assets are generally credited to a separate deferred income account under us gaap such
contributions are netted off against the cost of the related fixed assets
– items included as exceptional items under uk gaap are either classified as extraordinary items or operating items under us gaap
– under us gaap transmission and distribution costs would be included in cost of sales and gross profit from continuing operations would be calculated
after deducting these expenses
– under uk gaap the investor’s interest in the turnover and results of a joint venture or associate are disclosed gross the investor’s share of the interest 
and taxation are disclosed separately as a component of the group interest and taxation lines under us gaap the investor’s interest in the net results of joint
ventures and associates is disclosed as a single line in the income statement net of interest and taxation 
consolidated statement of comprehensive incomeloss
under us gaap certain items shown as components of common equity must be more prominently reported in a separate statement as components of
comprehensive incomeloss
the consolidated statement of comprehensive incomeloss is set out below
2003 2002 2001 
£m £m £m
profitloss for the financial year under us gaap after cumulative income adjustment 7893 8870 3868
other comprehensive incomeloss
– foreign currency translation adjustment 1141 297 6712
– unrealised loss on availableforsale securities net of tax credit of £14 million 2002 £01 million 2001 £40 million 23 01 65
– pensions net of tax credit of £1541 million 2002 £236 million 3588 385 –
– cumulative effect of accounting change 2002 fas 133 net of tax charge of £2614 million – 4213 –
– fas 133 – loss on derivative financial instruments recognised in net income net of tax credit of £07 million 
2002 £476 million 16 766 –
– f as 133 – unrealised gainloss on derivative financial instruments net of tax charge of £95 million 2002 tax credit of £2199 million 154 3547 –
total comprehensive incomeloss under us gaap 3279 9653 10515
the accumulated balances related to each component of other comprehensive incomeloss are as follows
2003 2002 2001 
£m £m £m
foreign currency translation adjustment 5525 6666 6963
unrealised loss on availableforsale securities net of tax credit of £34 million 2002 £20 million 55 32 31
pensions net of tax credit of £1777 million 2002 £236 million 3973 385 –
unrealised gainloss on derivative financial instruments net of tax charge of £27 million 2002 tax credit of £61 million 38 100 –
consolidated statement of cash flows
the consolidated statement of cash flows prepared in accordance with frs 1 revised presents substantially the same information as that required under us
gaap under us gaap however there are certain differences from uk gaap with regard to the classification of items within the cash flow statement and with
regard to the definition of cash and cash equivalents 
under uk gaap cash flows are presented separately for operating activities dividends received from joint ventures returns on investments and servicing of
finance taxation capital expenditure and financial investment acquisitions and disposals equity dividends paid management of liquid resources and financing
under us gaap only three categories of cash flow activity are reported operating activities investing activities and financing activities cash flows from
dividends received from joint ventures returns on investments and servicing of finance and taxation would be included as operating activities under us gaap
equity dividends paid would be included under financing activities under us gaap 
under us gaap cash and cash equivalents are not offset by bank overdrafts repayable within 24 hours from the date of the advance as is the case under uk
gaap and instead such bank overdrafts are classified within financing activities 
the consolidated cash flow statement prepared in conformity with uk gaap is set out on page 84 in this statement an additional measure free cash flow is
included which is not an accepted measure under us gaap this measure represents cash flow from operations after adjusting for dividends received from joint
ventures returns on investments and servicing of finance and taxation uk investors regard free cash flow as the money available to management annually to be
allocated among a number of options including capital expenditure payments of dividends and the financing of acquisitions 
scottishpower annual report  accounts 200203

119 notes to the group balance sheet
as at 31 march 2003 – continued
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
the consolidated statement of cash flows under us gaap is set out below
2003 2002 2001
£m £m £m 
cash inflow from operating activities 14129 12484 14116
dividends received from joint ventures 09 03 21
returns on investments and servicing of finance 2970 3778 3735
taxation 1913 850 1526
net cash provided by operating activities 9255 7859 8876
capital expenditure and financial investment 7049 11483 10814
acquisitions and disposals 17928 987 4829
net cash providedused in investing activities 10879 10496 5985
financing 11845 9291 1961
movement in bank overdrafts 49 178 111
equity dividends paid 5234 4968 4713
net cash requiredprovided by financing activities 17128 4145 2641
net increase in cash and cash equivalents 3006 1508 250
exchange movement on cash and cash equivalents 168 02 199
cash and cash equivalents at beginning of financial year 3808 2302 1853
cash and cash equivalents at end of financial year 6646 3808 2302
all liquid investments with maturities of three months or less at the time of acquisition are considered to be cash equivalents
2003 2002 2001 
significant noncash investing or financing activities £m £m £m 
movement of share of debt in joint arrangement – 1005 –
additional information required under us gaap
a infrastructure accounting
the group’s accounting policy in respect of southern water’s infrastructure assets and related maintenance and renewals expenditure as set out and explained
in the accounting policies was not generally accepted under us gaap which required historical cost depreciation accounting for these assets the difference
between the infrastructure renewals depreciation charge and depreciation accounting under us gaap was not material to profit and equity shareholders’ funds
this difference no longer exists following the disposal of southern water in april 2002
b doubtful debts
the group provided £368 million £575 million and £297 million for doubtful debts in 2003 2002 and 2001 respectively writeoffs against the provision for
doubtful debts for uncollectable amounts were £612 million £366 million and £261 million in 2003 2002 and 2001 respectively 
c deferred tax
the additional components of the estimated net deferred tax liability that would be recognised under us gaap are as follows 
2003 2002 
£m £m 
deferred tax liabilities 
excess of book value over taxation value of fixed assets 836 1426
other temporary differences 993 2007
1829 3433
deferred tax assets 
other temporary differences 41 51
net deferred tax liability 1788 3382
analysed as follows 
current 41 51
noncurrent 1829 3433
1788 3382
the deferred tax balance in respect of leveraged leases at the year end is £1011 million 2002 £1451 million
investment tax credits for pacificorp are deferred and amortised to income over periods prescribed by the group’s various regulatory jurisdictions under us gaap
d pensions
at 31 march 2003 scottishpower had six statutorily approved defined benefit pension schemes one statutorily approved defined contribution scheme and one
unapproved scheme 
benefits under the uk defined benefit plans reflect each employee’s basic earnings years of service and age at retirement funding of the defined benefit plans 
is based upon actuarially determined contributions with members paying contributions at fixed rates and the employers meeting the balance of cost as
determined by the scheme actuaries 
under the uk defined contribution plan contributions are paid by the member and employer at a fixed rate benefits under the uk defined contribution plan
reflect each employee’s fund at retirement and the cost of purchasing benefits at that time 
scottishpower annual report  accounts 200203

120 35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
reconciliations of the beginning and ending balances of the projected pension benefit obligation and the funded status of these plans for the years ending 31
march 2003 31 march 2002 and 31 march 2001 are as follows 
2003 2002 2001
change in projected benefit obligation £m £m £m 
projected benefit obligation at beginning of year 31122 30510 28276
service cost excluding plan participants’ contributions 526 622 666
interest cost 1686 1825 1798
plan amendments – 126
ii
157
special termination benefits 25
i
06
iii
548
plan participants’ contributions 81 119 129
actuarial loss 697 290 274
benefits paid 1915 2095 1870
settlements
iv
3179 290 –
exchange 683 09 846
projected benefit obligation at end of year 28310 31122 30510
i the period to commence the enhanced early retirement benefits under the workforce transition retirement program “wtrp” ended on 31 december 2002
acredit adjustment of £25 million for prior special termination benefits was necessary to reflect the impact of those participants who did not commence their
wtrp benefits by 31 december 2002 because they revoked their earlier election
ii ad hoc cost of living benefit increase for certain retired employees that was approved on 13 march 2002
iii the acquisition of pacificorp by scottishpower triggered special termination benefits from the serp during 2002
iv assets and liabilities were transferred in 2002 to the pacificorpibew local union 57 retirement trust fund and in 2003 in relation to the sale of southern water
2003 2002 2001
change in plans’ assets £m £m £m 
fair value of plans’ assets at beginning of year 32046 35866 38868
actual return on plans’ assets 5098 1630 2482
employer contributions 272 185 327
plan participants’ contributions 81 119 129
benefits paid 1915 2095 1870
settlements 2785 394 –
exchange 559 05 894
fair value of plans’ assets at end of year 22042 32046 35866
 assets and liabilities were transferred in 2002 to the pacificorpibew local union 57 retirement trust fund and in 2003 in relation to the sale of southern water
2003 2002 2001
reconciliation of funded status of the plans to prepaid benefit cost £m £m £m
funded status of the plans 6268 924 5356
unrecognised net actuarial lossgain 8524 1219 3489
unrecognised prior service cost 13 15 152
unrecognised transition obligation asset 09 16 25
prepaid benefit cost 2234 2112 1690
amounts recognised in balance sheet 2003 2002 2001
uk arrangements £m £m £m
prepaid benefit cost – 2704 2374
accrued benefit liability 2521 ––
accumulated other comprehensive loss 5079 ––
total recognised 2558 2704 2374
 £nil where scheme has accrued benefit liability or where asset value is below accumulated benefit obligation
amounts recognised in balance sheet 2003 2002 2001
us arrangements £m £m £m
accrued benefit liability 2419 1213 684
accumulated other comprehensive loss 671 621 –
us regulatory assets 1484 ––
exchange 60 ––
total recognised 324 592 684
 for the us pension arrangements the fair value of the plan assets was less than the accumulated benefit obligation under fas 87 a minimum pension liability
is then recognised this liability was recorded as a noncash increase of £1484 million to regulatory assets and £671 million to accumulated other
comprehensive loss accounting orders were received from the regulatory commissions in utah oregon and wyoming to classify this charge as a regulatory asset
instead of a charge to other comprehensive income this increase to regulatory assets will be adjusted in future periods as the difference between the fair value
of the plan assets and the accumulated benefit obligation changes
the value of plan assets exceed the accumulated benefit obligation at the end of the year except in the following cases
value of value of accumulated accumulated
plan assets plan assets benefit obligation benefit obligation
at 31 march 2003 at 31 march 2002 at 31 march 2003 at 31 march 2002
£m £m £m £m
scottishpower 13105 – 14384 –
manweb 4492 – 5630 –
pacificorp 4309 5818 6722 7008
the value of plan assets exceed the projected benefit obligation at the end of the year except in the following cases
value of value of projected projected
plan assets plan assets benefit obligation benefit obligation
at 31 march 2003 at 31 march 2002 at 31 march 2003 at 31 march 2002
£m £m £m £m
scottishpower 13105 – 14873 –
manweb 4492 – 5910 –
final salary lifeplan 128 102 135 116
pacificorp 4309 5818 5284 7601
scottishpower annual report  accounts 200203

121 notes to the group balance sheet
as at 31 march 2003 – continued
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
the components of pension benefit costs for the years ended 31 march 2003 2002 and 2001 were as follows
31 march 31 march 31 march 
2003 2002 2001 
£m £m £m 
service cost 557 622 666
curtailmentsettlement cost 263 ––
interest cost 1686 1825 1798
expected return on plans’ assets 2322 2612 2872
amortisation of experience lossesgains 01 58 360
amortisation of prior service cost – 11 11
amortisation of transition obligation asset 07 09 08
net periodic benefit costcredit 178 243 787
 includes the contribution of £31 million to the pacificorpibew local union 57 retirement trust fund
 sale of southern water and consequent removal of prepaid benefit cost in relation to this scheme
the actuarial assumptions adopted in arriving at the above figures are as follows 
31 march 31 march 31 march 
uk arrangements – assumptions at 2003 2002 2001
expected return on plans’ assets 68 pa 75 pa 70 pa
discount rate 54 pa 60 pa 575 pa
rate of earnings increase 39 pa 43 pa 45 pa
pension increases 24 pa 28 pa 25 pa
31 march 31 march 31 march 
us arrangements – assumptions at 2003 2002 2001 
expected return on plans’ assets 875 pa 925 pa 925 pa
discount rate 675 pa 75 pa 775 pa
rate of earnings increase 40 pa 40 pa 40 pa
inflation rates 30 pa 40 pa 40 pa
e other postretirement benefits
pacificorp provides healthcare and life insurance benefits through various plans for eligible retirees on a basis substantially similar to those who are active
employees the cost of postretirement benefits is accrued over the active service period of employees except for a few groups of former employees pacificorp
funds postretirement benefit expense through a combination of funding vehicles over the period from 1 april 2002 to 31 march 2003 pacificorp made
contributions totalling £163 million in respect of these arrangements these funds are invested in common stocks bonds and us government obligations
the net periodic postretirement benefit cost and significant assumptions are summarised as follows 
2003 2002 2001
£m £m £m
service cost 36 36 35
interest cost 221 200 188
expected return on plan assets 185 204 191
amortisation of experience losses 13 ––
net periodic postretirement benefit cost 85 32 32
the change in the accumulated postretirement benefit obligation change in plan assets and funded status are as follows
2003 2002 2001
change in accumulated postretirement benefit obligation £m £m £m
accumulated postretirement benefit obligation at beginning of year 3313 2680 2203
service cost 36 36 35
interest cost 221 200 188
plan participants’ contributions 39 38 32
special termination benefit gainloss 06 – 114
actuarial lossgain 264 538 31
benefits paid 218 188 136
exchange 345 09 275
accumulated postretirement obligation at end of year 3304 3313 2680
 the period to commence the enhanced early retirement benefits under the wtrp ended on 31 december 2002 a credit adjustment of £06 million for special
termination benefits was necessary to reflect the impact of those participants who did not commence their wtrp benefits by 31 december 2002 because they
revoked their earlier election
2003 2002 2001
change in plan assets £m £m £m
plan assets at fair value at beginning of year 1849 2019 2002
actual return on plan assets 138 126 182
company contributions 30 104 68
plan participants’ contributions 39 38 32
benefits paid 218 188 136
exchange 183 02 235
plan assets at fair value at end of year 1379 1849 2019
2003 2002 2001
reconciliation of accrued postretirement costs and total amount recognised £m £m £m
funded status of plan 1925 1464 661
pacificorp unrecognised net loss 1402 935 60
final contribution made after measurement date but before 31 march 2003 133 ––
accrued postretirement benefit cost 390 529 601
scottishpower annual report  accounts 200203

122 35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
the actuarial assumptions adopted in arriving at the above figures are as follows
31 march 31 march 31 march
us arrangements – assumptions at 2003 2002 2001
expected return on plans’ assets 875 pa 925 pa 925 pa
discount rate 675 pa 750 pa 775 pa
initial healthcare cost trend – under 65 95 pa 105 pa 60 pa
initial healthcare cost trend – over 65 115 pa 125 pa 65 pa
initial healthcare cost trend rate 50 pa 50 pa 45 pa
the assumed healthcare cost trend rate gradually decreases over four to seven years the healthcare cost trend rate assumption has a significant effect on the
amounts reported increasing the assumed healthcare cost trend rate by one percentage point would have increased the accumulated postretirement benefit
obligation the “apbo” as of 31 march 2003 by £164 million 2002 £185 million 2001 £131 million and the annual net periodic postretirement benefit
costs by £14 million 2002 £13 million 2001 £11 million decreasing the assumed healthcare cost trend rate by one percentage point would have reduced
the apbo as of 31 march 2003 by £143 million 2002 £171 million 2001 £160 million and the annual net periodic postretirement benefit costs by £12
million 2002 £12 million 2001 £14 million
postemployment benefits
pacificorp provides certain postemployment benefits to former employees and their dependants during the period following employment but before retirement
the costs of these benefits are accrued as they are incurred benefits include salary continuation severance benefits disability benefits and continuation of
healthcare benefits for terminated and disabled employees and workers’ compensation benefits the provision for postemployment benefits was £95 million 
at 31 march 2003 2002 £135 million
employee savings and stock ownership plan
pacificorp has an employee savings and stock ownership plan that qualifies as a taxdeferred arrangement under section 401a 401k 409 501 and
4975e7 of the internal revenue code participating us employees may defer up to 20 of their compensation subject to certain regulatory limitations
pacificorp matches a portion of employee contributions with scottishpower adss vesting that portion over five years pacificorp makes an additional
contribution of scottishpower adss to qualifying employees equal to a percentage of the employee’s eligible earnings these contributions are immediately
vested employer contributions to the savings plan were £100 million for the year ended 31 march 2003 2002 £147 million 2001 £122 million
f southern water disposal 
on 23 april 2002 the group completed the sale of aspen 4 limited the holding company of southern water plc to first aqua limited a summary of the net
assets disposed of calculated under us gaap are detailed in the table below 
£m 
tangible fixed assets 24747
fixed asset investments 19
current assets 1931
creditors amounts falling due within one year 10538
creditors amounts falling due after more than one year
loans and other borrowings 1000
provisions for liabilities and charges 3666
deferred income 374
net assets 11119
g environmental decommissioning and mine reclamation costs
the group’s mining operations in the us are subject to reclamation and closure requirements reclamation and closure costs are estimated based on
engineering studies the group monitors these requirements and periodically revises its cost estimates to meet existing legal and regulatory requirements of the
various jurisdictions in which it operates
the group believes that it has adequately provided for its reclamation obligations assuming ongoing operations of its mines total estimated final reclamation
costs including joint owners’ portions for all mines with which the group is involved was £1360 million at 31 march 2003 these amounts are expected to be
paid over the next 30 years
the liabilities for environmental decommissioning and mine reclamation costs are generally recorded on an undiscounted basis these liabilities are recorded in
the uk gaap balance sheet within ‘provisions for liabilities and charges’ and balances under us gaap are detailed below 
balance sheet liability 
31 march 31 march 
2003 2002 
notes £m £m 
environmental costs i 357 395
decommissioning costs ii 123 132
mine reclamation costs iii 929 1024
total costs 1409 1551
i expected to be paid over 19 years
ii expected to be paid over 22 years
iii amounts include the group’s and joint owners’ portion of mine reclamation costs
the group had trust fund assets of £433 million and £570 million at 31 march 2003 and 2002 respectively relating to mine reclamation including joint
owners’ portions
h leveraged leases
the pretax lossincome from leveraged leases during the year was £278 million 2002 £42 million the tax creditcharge on the pretax lossincome was
£107 million 2002 £14 million and the investment tax credit recognised in the income statement was £09 million 2002 £10 million
i commitments and contingencies
i environmental issues
uk businesses
the group’s uk businesses are subject to numerous regulatory requirements with respect to the protection of the environment including environmental laws
which regulate the construction operation and decommissioning of power stations pursuant to legislation implementing environmental directives adopted by
the eu and protocols agreed under the auspices of international bodies such as the united nations economic commission for europe the group believes that it
has taken and continues to take measures to comply with applicable laws and regulations for the protection of the environment applicable regulations and
requirements pertaining to the environment change frequently however with the result that continued compliance may require material investments or that the
group’s costs and results of operation are less favourable than anticipated
scottishpower annual report  accounts 200203

123 notes to the group balance sheet
as at 31 march 2003 – continued
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
us division – pacificorp
pacificorp is subject to numerous environmental laws including the federal clean air act as enforced by the environmental protection agency and various
state agencies the 1990 clean air act amendments the endangered species act of 1973 particularly as it relates to certain potentially endangered species of
fish the comprehensive environmental response compensation and liability act of 1980 relating to environmental cleanups along with the federal resource
conservation and recovery act of 1976 and clean water act relating to water quality these laws could potentially impact future operations for those
contingencies identified at 31 march 2003 principally clean air matters which are the subject of discussions with the united states environmental protection
agency and state regulatory authorities future costs relating to these matters may be significant and consist primarily of capital expenditures however
pacificorp expects these costs will be included within rates and therefore are not expected to have a material impact on the group’s results and financial position
ii mine reclamation
us division – pacificorp
all of pacificorp’s mining operations are subject to reclamation and closure requirements compliance with these requirements could result in higher
expenditures for both capital improvements and operating costs
iii deferred net power costs
us division – pacificorp
at 31 march 2003 pacificorp had deferred net power costs for the states of utah oregon and idaho while pacificorp is pursuing full recovery of these costs
there can be no assurance that this will be achieved denial of recovery would result in the writeoff of £872 million of deferred net power costs net of
amortisation under us gaap reported under us regulatory assets in the ukus gaap reconciliation of equity shareholders’ funds
iv regulation
us division – pacificorp
the emerging issues task force “eitf” of the fasb concluded in 1997 that fas 71 should be discontinued when detailed legislation or regulatory orders
regarding competition are issued additionally the eitf concluded that regulatory assets and liabilities applicable to businesses being deregulated should be
writtenoff unless their recovery is provided through future regulated cash flows pacificorp continuously evaluates the appropriateness of applying fas 71 to
each of its jurisdictions at 31 march 2003 the group concluded that fas 71 was appropriate however if efforts to deregulate progress the group may in the
future be required to discontinue its application of fas 71 to all or a portion of its business based on the group’s us regulatory net asset balance under us
gaap at 31 march 2003 if the group stopped applying fas 71 to its remaining regulated us operations it would have recorded an extraordinary loss after tax
of £5808 million under us gaap
v hydroelectric relicensing
us division – pacificorp
approximately 97 of the installed capacity of pacificorp’s hydroelectric portfolio is regulated by the federal energy regulatory commission through 20
individual licences nearly all of pacificorp’s hydroelectric projects are at some stage of relicensing under the federal power act hydroelectric relicensing and
the related environmental compliance requirements are subject to uncertainties pacificorp expects future costs relating to these matters may be significant and
consist primarily of additional environmental requirements the group has accumulated approximately £382 million in costs for ongoing hydroelectric
relicensing and it is expected that these and other future costs will be included in rates and as such will not have a material adverse impact on the group’s
results and financial position under us gaap
j guarantees
in accordance with fasb interpretation no 45 “fin 45” ‘guarantor’s accounting and disclosure requirements for guarantees including indirect guarantees of
indebtedness of others an interpretation of fasb statements no 5 57 and 107 and rescission of fasb interpretation no 34’ the group is required to disclose
certain guarantees as defined in fin 45  these guarantees principally relate to the group’s disposal of its former operations and are typical of these types of
transactions  furthermore disclosure is required under fin 45 of guarantees even where the likelihood that a liability will crystallise is remote  fin 45 also
requires recognition of liabilities under us gaap of the fair value of certain guarantees issued or modified after 31 december 2002  no such guarantees have
been identified the disclosures required to be made under fin 45 are detailed below
the group has entered into a number of transactions involving the sale of parts of its business and the purchase of certain businesses and assets in accordance
with overall group strategy  these transactions include the disposal of southern water the demerger of thus plc the sale and disposal of the group’s appliance
retailing business and the disposal of other noncore activities
it is standard practice in such transactions to obtain or grant contractual assurances including in the form of warranties and indemnities  in conducting merger
disposal or acquisition transactions the group takes significant steps to quantify and mitigate risk at the outset of any transaction and as the transaction
progresses steps include carrying out or granting the facility for the conduct of a thorough due diligence exercise to ascertain any likely liabilities and where the
group is the vendor the use of caps and threshold levels for liability inserting time limits on claim periods and detailed disclosure
under certain of the business disposals indemnities under the transfer of undertakings protection of employment regulations 1981 “the regulations” are still
outstanding  these indemnities relate to potential liabilities with respect to former employees of the group in relation to their period of employment in the group
typically there is no maximum limit on claims under these indemnities
recourse via tax warranties and indemnities remains outstanding on the same basis as stated above and in relation to the disposal of scottishpower
telecommunications services limited a former subsidiary of thus plc these expire on 30 october 2005 the maximum financial exposure under these
arrangements is £75 million no claims have been intimated in relation to this arrangement and the directors consider it extremely unlikely that there will be any
material financial exposure to the group under this arrangement
on 23 april 2002 the group sold aspen 4 limited the owner of the southern water group of companies in such transactions it is standard practice for the vendor
to give assurances in the form of warranties and indemnities to the purchaser in relation to this transaction the warranty liability period commenced on 23 april
2002 and ends on 23 april 2007 for environmental warranties 23 april 2009 for tax warranties and 23 april 2004 for all other warranties the sale and purchase
agreement contains a number of limitations to and exclusions of liability and maximum financial exposure for breach of the warranties apart from tax warranties
is capped at £9000 million for the tax warranties the maximum exposure is approximately £19500 million there are also minimum threshold claim levels to be
reached before a potential claim arises at all and thereafter as to whether it can be made the directors consider it extremely unlikely that there will be any
material financial exposure to the group under these arrangements as a detailed due diligence exercise was carried out predisposal and detailed disclosures were
made to the purchaser so as to make them aware of all relevant information concerning the business and consequentially to reduce the likelihood of claims being
made against the group
on 8 october 2001 certain business and assets of the group’s former appliance retailing business were sold and the remainder of the business was closed in
such transactions it is standard practice for the vendor to give assurances in the form of certain warranties and indemnities to the purchaser in relation to this
transaction the warranty liability period commenced on 8 october 2001 and ends on the earlier of 8 october 2003 or with respect to the sale of the shares the
date of receipt by the purchaser of audited accounts for the group’s former subsidiary domestic appliance insurance limited “dail” for the year ended 31
march 2002 maximum financial exposure for breach of the other warranties is £100 million protection relating to dail was given in relation to any shortfall in the
provisions for claims for which dail was liable under the “cashback” warranty scheme for the tax warranties and cashback indemnity the limit is £750 million
certain threshold levels must be exceeded before claims can be made against the group although a potential claim has been received with respect to the
adequacy of the cashback provisions in the dail accounts and discussions have taken place with respect to such a claim the directors consider it extremely
unlikely that there will be any material financial exposure to the group under these arrangements indemnities were also given in respect of any liability arising in
relation to the regulations for employment claims prior to 8 october 2001 longterm sick employees and employees who are deemed to transfer pursuant to the
regulations but were not disclosed as transferring employees under the transaction a number of properties were assigned to the purchaser by operation of law
and through the putting in place of standard agreements in the event that the purchaser becomes insolvent the liability for rent and certain other items due under
certain lease arrangements could revert to the group the annual liability to the group for rental payments in the event of insolvency of the purchaser is
approximately £90 million it is extremely unlikely that the group would become liable to this extent as steps would be taken to mitigate any such liability which
could include surrendering leases to landlords and putting in place new tenants to take over the liability
scottishpower annual report  accounts 200203

124 scottishpower annual report  accounts 200203

125
35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
on 3 august 2000 the group agreed to sell powercor australia ltd in such transactions it is standard practice for the vendor to give certain warranties and
indemnities to the purchaser  the group agreed to indemnify the purchaser for any breaches of representations relating to tax warranties or tax claims as defined
therein until august 2005 the indemnity is limited by a aud150 million £57 million basket with the group liable for the excess over this amount only and an
overall cap of aud3000 million £1145 million no claims have been intimated in relation to the above noted arrangements and the directors consider it
extremely unlikely that there will be any material financial exposure to the group under these arrangements
in november 2000 the group sold its interests in hazelwood holdings inc and pacificorp global inc in such transactions it is standard practice for the vendor to
give certain warranties and indemnities to the purchaser in relation to this transaction the tax warranty period commenced in november 2000 and ends in
november 2005  the maximum financial exposure for breach of these warranties is aud880 million £336 million the directors consider it extremely unlikely
that there will be any material financial exposure under these arrangements as a detailed due diligence exercise was carried out predisposal and detailed
disclosures were made to the purchaser to reduce the likelihood of claims being made against the group
to the extent that claims based upon the arrangements below are limited by applicable statutes the limitation periods generally vary from three to six years
depending on the jurisdiction and the nature of the claim
on 22 july 2000 a subsidiary company pacificorp trans inc “pacificorp trans” sold two cessna citation excel aircraft for us166 million £105 million and
agreed to indemnify the purchaser for any claims asserted against the purchaser in connection with the inaccuracy of any representation or warranty made by
pacificorp trans 
on 4 may 2000 the group and other joint owners completed the sale to transalta of a power plant and coal mine located in centralia washington under the
agreement relating to the plant the joint owners agreed to indemnify transalta if it were to incur certain losses after the closing date and arising as a result of
certain breaches of covenants under the agreement relating to the mine the group provided similar indemnity the maximum indemnification obligation under
these agreements with respect to the group is limited to 5560 million £3517 million less a deductible of 1 of the purchase price approximately 10 million
£06 million no indemnity claims have been made to date
in connection with the sale of pacificorps montana service territory pacificorp entered into a purchase and sale agreement with flathead electric cooperative
flathead dated 9 october 1998 under the agreement pacificorp indemnified flathead for losses if any occurring after the closing date and arising as a result
of certain breaches of warranty or covenants the indemnification has a cap of 60 million £40 million one indemnity claim relating to environmental issues
has been tendered but remediation costs for this claim if any are not expected to create a material financial exposure for the group
on 15 october 2001 the group sold its synthetic fuels operation in such transactions it is standard practice for the vendor to give certain warranties and
indemnities to the purchaser the group agreed to indemnify the purchaser from losses suffered as a result of fraud or breach of representation or warranty within
30 days of the expiration of the applicable statutory period of limitations the established basket and cap do not apply to the surviving representations and
warranties the group also agreed to indemnify the purchaser for tax liabilities up to the closing date this indemnity also expires within 30 days of the expiration of
the statutory period of limitations no claims have been intimated in relation to the above noted arrangements and the directors consider it extremely unlikely that
there will be any material financial exposure to the group under these arrangements 
on 11 june 1997 pacificorp group holdings company “pghc” a subsidiary of the company sold pacific telecom inc pti in such transactions it is standard
practice for the vendor to give certain warranties and indemnities to the purchaser pghc agreed to indemnify and hold harmless the purchaser from losses or
claims arising from breach of representation or warranty of pghc resulting from any liability of pti with respect to tax years ending prior to the closing date and
resulting from material breaches of agreements and covenants under the agreement the indemnity includes a 50 million £32 million basket with the group
being liable for the excess over this amount only and an overall cap of 3000 million £1897 million most of the indemnities survive for six months beyond the
applicable statute of limitations pghc is currently defending one environmental indemnity claim under this provision and apart from this no claims have been
intimated in relation to the above noted arrangements 
on 10 october 1997 pghc agreed to sell pacific generation company in such transactions it is standard practice for the vendor to give certain warranties and
indemnities to the purchaser the group agreed to indemnify the purchaser for breaches of representations and warranties relating to tax matters which continue
until the expiration of the applicable statute of limitations the indemnity includes an aggregate cap of 660 million £417 million and a basket of 30 million
£17 million no claims have been intimated in relation to the above noted arrangements and the directors consider it extremely unlikely that there will be any 
material financial exposure to the group under these arrangements 
on 9 february 1999 pghc agreed to sell tpc corporation  in such transactions it is standard practice for the vendor to give certain warranties and indemnities to
the purchaser the group provided indemnification to the purchaser for breaches of representations and warranties relating to environmental matters tax matters
and employee benefits for the period ending 9 february 2004 with regard to the environmental matters and through the applicable statute of limitations on tax
and employee benefit matters the indemnification is limited to a 10 million £06 million basket with the group liable for the excess over this amount only and
an overall 100 million £63 million cap in addition certain special indemnities were provided with respect to certain specified matters no claims have been
intimated in relation to the above noted arrangements and the directors consider it extremely unlikely that there will be any material financial exposure to the
group under these arrangements 
scottishpower energy retail limited “sperl” has entered into an agreement with lloyds tsb in relation to energy marketing and services  this agreement
contains indemnities in relation to transfer of staff by operation of the regulations from sperl to lloyds tsb  the maximum liability is limited to £50 million  no
claims have been intimated
under certain cash collateral agreements automated power exchange uk limited uk power exchange and elexon can draw down and use cash collateral in
event of default situations including upon a change in credit rating  the maximum financial exposure under these arrangements is £103 million
under the group’s arrangements carried out in accordance with the standard terms and conditions of the international swap dealers association inc “isda”
master agreement there is a provision that the group will indemnify the counterparty for certain withholding taxes incurred under relevant tax laws a liability
under this indemnification will only arise on the occurrence of certain changes to tax laws in the jurisdiction of a relevant counterparty the directors are not aware
of any such contemplated changes
k derivative instruments and hedging activities
the group uses derivative instruments in the normal course of business to offset fluctuations in earnings cash flows and equity associated with movements in
exchange rates interest rates and commodity prices
fas 133 ‘accounting for derivative instruments and hedging activities’ as amended by fas 137 and fas 138 was adopted by the group with effect from 1 april
2001 effective from 1 april 2002 the group adopted revised fas 133 guidance issued by the derivatives implementation group under revised issue c15
‘normal purchases and normal sales exception for certain optiontype contracts in electricity’ and issue c16 ‘applying the normal purchases and normal
sales exception to contracts that combine a forward contract and purchased option contract’ this new guidance had the effect of including an increased
number of the group’s contracts within the scope of fas 133 the cumulative adjustment to profit under us gaap for the year ended 31 march 2003 as a result
of adopting revised issue c15 and issue c16 was an increase to profit of £2286 million £1411 million net of tax
fas 133 establishes accounting and reporting standards for derivative instruments including certain derivative instruments embedded in other contracts
collectively referred to as derivatives and for hedging activities fas 133 requires that an entity recognise all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value fas 133 prescribes requirements for designation and documentation of hedging
relationships and ongoing assessments of effectiveness in order to qualify for hedge accounting
hedge effectiveness is assessed consistently with the method and risk management strategy documented for each hedging relationship on at least a quarterly
basis the group assesses the effectiveness of each hedging relationship retrospectively and prospectively to ensure that hedge accounting was appropriate for
the prior period and continues to be appropriate for future periods the group applies the short cut method of assessing effectiveness when possible the group
considers hedge accounting to be appropriate if the assessment of hedge effectiveness indicates that the change in fair value of the designated hedging
instrument is 80 to 125 effective at offsetting the change in fair value arising on the hedged risk of the hedged item or transaction
the effect of changes in fair value of certain derivative instruments entered into to hedge pacificorp’s future retail resource requirements are subject to
regulation in the us and therefore are deferred pursuant to fas 71 pacificorp requested and received deferred accounting orders for the effects of fas 133 as it
relates to the change in value of certain longterm wholesale electricity contracts not meeting the definition of normal purchases and normal sales contracts 35 summary of differences between uk and us generally accepted accounting principles ‘gaap’ continued
categories of derivatives
derivatives are classified into four categories fair value hedges cash flow hedges overseas net investment hedges and trading
if a derivative instrument qualifies as a fair value hedge the change in the fair value of the derivative and the change in the fair value of hedged risk arising on the
hedged item is recorded in earnings the corresponding change is recorded against the book values of the derivative and hedged item on the balance sheet
if a derivative instrument qualifies as a cash flow hedge the effective portion of the hedging instrument’s gain or loss is reported in shareholders’ funds under
us gaap as a component of accumulated other comprehensive income and is recognised in earnings in the period during which the transaction being hedged
affects earnings the ineffective portion of the derivative’s fair value change is recorded in earnings
for derivative instruments designated as a hedge of the foreign currency risk in an overseas net investment gains or losses due to fluctuations in foreign exchange rates
are recorded in the cumulative translation adjustment within shareholders’ funds under us gaap as a component of accumulated other comprehensive income
if a derivative instrument does not qualify as either a net investment hedge or a cash flow hedge under the applicable guidance the change in the fair value of
the derivative is immediately recognised in earnings or as an adjustment to the fas 71 regulatory asset as appropriate
derivative instruments are not generally held by the company for speculative trading purposes to the extent such instruments are held they are measured at
fair value with gains or losses recorded in earnings the fair value of trading derivatives at 31 march 2003 was £04 million
certain contracts that meet the definition of a derivative under fas 133 may qualify as a normal purchase or a normal sale and be excluded from the scope of
fas 133 specific criteria must be met in order for a contract that would otherwise be regarded as a derivative to qualify as a normal purchase or a normal sale
the group has evaluated all commodity contracts to determine if they meet the definition of a derivative and qualify as a normal purchase or a normal sale
the group also evaluates contracts for “embedded” derivatives and considers whether any embedded derivatives have to be separated from the underlying host
contract and accounted for separately in accordance with fas 133 requirements where embedded derivatives have terms that are not clearly and closely
related to the terms of the host contract in which they are included they are accounted for separately from the host contract as derivatives with changes in the
fair value recorded in earnings to the extent that the hybrid instrument is not already accounted for at fair value
discontinued hedge accounting
when hedge accounting is discontinued due to the group’s determination that the derivative no longer qualifies as an effective fair value hedge the group will
continue to carry the derivative on the balance sheet at its fair value the related hedged asset or liability will cease to be adjusted for changes in fair value
relating to the previously hedged risk
when the group discontinues hedge accounting in a cash flow hedge because it is no longer probable that the forecasted transaction will occur in the expected
period the gain or loss on the derivative remains in accumulated other comprehensive income and is reclassified into earnings when the forecasted transaction
affects earnings however if it is probable that a forecasted transaction will not occur by the end of the originally specified time period or within an additional
twomonth period of time thereafter the gains and losses that were accumulated in other comprehensive income will be recognised in earnings
where a derivative instrument ceases to meet the criteria for hedge accounting any subsequent gains and losses are recognised in earnings
fair value hedges
the group seeks to maintain a desired level of floating rate debt and uses interest rate and cross currency interest rate swaps to manage interest rate and foreign
currency risk arising from longterm debt obligations denominated in sterling and foreign currencies the group does not exclude any component of derivative
gains and losses from the assessment of hedge effectiveness the ineffective portion of fair value hedges as at 31 march 2003 resulted in a loss of £02 million
cash flow hedges 
a desired level of fixed rate debt is maintained through the use of interest rate and cross currency interest rate swaps foreign currency forward contracts are used
to fix the exchange rate on future contracted purchases of assets these transactions are accounted for as cash flow hedges the group does not exclude any
component of derivative gains and losses from the assessment of ineffectiveness the amount of ineffectiveness for cash flow hedges recorded for the year ended
31 march 2003 was £nil net realised losses on cash flow hedges totalling £139 million were transferred from accumulated other comprehensive income into
income during the year to match the underlying hedged items recognised in the income statement the group estimates that losses of £57 million on cash flow
hedges in place at the year end will be transferred from accumulated other comprehensive income into income during 200304
net investment hedges
the group uses foreign currency forwards and cross currency swaps to protect the value of its investments in operations denominated in foreign currencies the
group excludes the spotforward difference from the assessment of hedge effectiveness in the year ended 31 march 2003 the group recorded a £1588 million
translation adjustment gain related to net investment hedges
recent us accounting pronouncements 
in june 2001 the fasb issued fas 143 accounting for asset retirement obligations which became effective for the group on 1 april 2003 the statement requires the
fair value of an asset retirement obligation to be recorded as a liability in the period in which the obligation was incurred at the same time the liability is recorded the
costs of the asset retirement obligation must be recorded as an addition to the carrying amount of the related asset over time the liability is accreted to its present
value and the addition to the carrying amount is depreciated over the assets useful life upon retirement of the asset the group will settle the retirement obligation
against the recorded balance of the liability any difference in the financial retirement obligation cost and the liability will result in either a gain or loss the group has
considered the application of this standard to its operations and has completed an assessment of the impact of this standard the group estimates that the cumulative
posttax effect of adopting fas 143 will increase net income under us gaap by £17 million which will be recorded primarily as a net us net regulatory liability if
pacificorp receives regulatory approval
in april 2002 the fasb issued fas 145 rescission of fasb statements no 444 and 64 amendment of fasb statement no 13 and technical corrections fas 145
became effective for the group on 1 april 2003 this statement is not expected to have a material impact on the groups results and financial position under us gaap 
in june 2002 the fasb issued fas 146 ‘accounting for costs associated with exit or disposal activities’ which requires that a liability for a cost associated with an exit
or disposal activity be recognised when the liability is incurred instead of at the date of the company’s commitment to the exit plan fas 146 is effective for exit or
disposal activities that are initiated after 31 december 2002 and therefore has had no effect on the group’s results and financial position under us gaap 
in january 2003 the fasb issued fas interpretation no 46 ‘fin 46’ ‘consolidation of variable interest entities’ which requires existing unconsolidated variable
interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved fin 46 applies immediately to
variable interest entities created after 31 january 2003 and applies to accounting periods beginning after 15 june 2003 to variable interest entities acquired before 1
february 2003 this interpretation is not expected to have a material impact on the group’s results and financial position under us gaap 
in april 2003 the fasb issued fas 149 ‘amendment of statement 133 on derivative instruments and hedging activities’ fas 149 amends and clarifies financial
reporting for derivative instruments including certain derivative instruments embedded in other contracts and for hedging activities this statement is effective for
contracts entered into or modified after 30 june 2003 the group is currently evaluating the effect fas 149 will have on its results and financial position under us
gaap 
scottishpower annual report  accounts 200203

126
notes to the group balance sheet
as at 31 march 2003 – continued 2003 2002
notes £m £m
fixed assets
investments 36 40883 47694
current assets
debtors 37 5042 1410
shortterm bank and other deposits 17 –
5059 1410
creditors amounts falling due within one year
loans and other borrowings 38 3134 2663
other creditors 39 2151 1373
5285 4036
net current liabilities 226 2626
net assets 40657 45068
called up share capital 40 9280 9263
share premium 40 22644 22541
capital redemption reserve 40 183 183
profit and loss account 40 8550 13081
equity shareholders’ funds 40 40657 45068
approved by the board on 7 may 2003 and signed on its behalf by
charles miller smith david nish
chairman finance director
the accounting policies and definitions on pages 70 to 73 together with the notes on pages 78 to 83 85 to 87 89 to 126 and 128 to 130 form
part of these accounts 
company balance sheet
as at 31 march 2003
scottishpower annual report  accounts 200203

127 36 fixed asset investments
subsidiary own shares
undertakings held under
shares loans trust total
note £m £m £m £m
cost or valuation
at 1 april 2002 22336 24913 445 47694
additions i 23760 – 361 24121
disposals and other 5957 24913 62 30932
at 31 march 2003 40139 – 744 40883
i the company received a dividend in cash from sp finance of £250 million on 9 december 2002 on the same date the company entered into certain
guarantees and undertakings with sp finance and scottish power uk plc as a consequence of which the dividend was not recognised as income but recorded as 
a liability the company has subsequently fulfilled its obligations under these guarantees and undertakings through the purchase from scottish power uk plc of
preference shares in sp finance for a consideration of £250 million plus interest consequently the purchase of the preference shares has been accounted for 
as settlement of this liability rather than as an addition to fixed asset investments the preference shares were converted to ordinary shares in sp finance on 28
march 2003
37 debtors
2003 2002
£m £m
amounts falling due within one year
loans to subsidiary undertakings 4955 1402
amounts due from subsidiary undertakings 86 –
interest due from subsidiary undertakings 01 08
5042 1410
38 loans and other borrowings due within one year
2003 2002
£m £m
loans from subsidiary undertakings 3134 1663
committed bank loans – 1000
3134 2663
39 other creditors
2003 2002
£m £m
amounts falling due within one year
amounts due to subsidiary undertakings 86 –
interest due to subsidiary undertakings 01 –
corporate tax 651 –
accrued expenses 91 112
proposed dividend 1322 1261
2151 1373
40 analysis of movements in shareholders’ funds
capital profit
number share share redemption and loss
of shares capital premium reserve account total
000s £m £m £m £m £m
at 1 april 2002 1852647 9263 22541 183 13081 45068
retained loss for the year –––– 4531 4531
share capital issued
– executive share option scheme 15 – 01 – – 01
– esop 3271 17 102 – – 119

at 31 march 2003 1855933 9280 22644 183 8550 40657
41 profit and loss account
as permitted by section 230 of the companies act 1985 the company has not presented its own profit and loss account the company’s profit and loss account
was approved by the board on 7 may 2003 the profit for the financial year per the accounts of the company was £764 million 2002 £918 million the
retained loss for the year of £4531 million is stated after dividends of £5295 million
notes to the company balance sheet
as at 31 march 2003
scottishpower annual report  accounts 200203

128 42 contingent liabilities
in consideration of scottish power uk plc agreeing to subscribe for preference shares in sp finance the company has unconditionally and irrevocably agreed to
a indemnify and hold harmless scottish power uk plc against any liability or loss incurred as a direct result of scottish power uk plc being or having been a
member of sp finance and
b procure that for the period from 28 november 2002 until the date being 12 months after scottish power uk plc ceases to be a member of sp finance sp
finance shall not engage in any trading activities nor incur any liabilities other than in respect of its obligations under its articles of association
notes to the company balance sheet
as at 31 march 2003 – continued
scottishpower annual report  accounts 200203

129 proportion 
class of share of shares 
subsidiary undertakings capital held activity 
core utility solutions limited ‘a’ ordinary shares £1 100 multiutility design and construction service
cre energy limited northern ireland ordinary shares £1 100 windpowered electricity generation 
na general partnership

notapplicable100 investment holding
pacificorp usa common stock 100 regional electricity company
pacificorp financial services inc usa common stock 100 finance company
pacificorp group holdings company usa common stock 100 investment holding
pacificorp holdings inc usa common stock 100 us holding company
pacificorp uk limited voting shares 1 100 finance company
ppm energy inc usa common stock 100 wholesale power marketer developer of
windpower projects and provider of
natural gashub services
scottishpower energy retail limited ordinary shares £1 100 supply of electricity and gas to domestic
and business customers
scottishpower energy trading limited ordinary shares £1 100 wholesale trading company engaged in
purchase and sale of electricity gas and coal 
scottishpower energy trading agency limited ordinary shares £1 100 agent for trading activity of scottishpower
energy trading limited and 
scottish power uk plc
scottishpower generation limited ordinary shares £1 100 electricity generation 
scottishpower insurance limited isle of man ordinary shares £1 100 insurance
scottishpower investments limited ordinary shares £1 100 holding company
scottishpower na1 limited

ordinary shares £1 100 holding company
scottishpower na 2 limited

ordinary shares £1 100 holding company
scottish power uk holdings limited

ordinary shares 50p 100 holding company 
scottish power uk plc ordinary shares 50p 100 holding company 
sp dataserve limited ordinary shares £1 100 data collection data aggregation meter
operation and revenue protection
sp distribution limited ordinary shares £1 100 ownership and operation of distribution
network within the scottishpower area
sp finance

ordinary shares £1 100 holding company
sp finance 2 limited

ordinary shares £1 100 holding company
sp manweb plc ordinary shares 50p 100 ownership and operation of distribution
network within the mersey and north wales area
sp power systems limited ordinary shares £1 100 provision of asset management services 
sp transmission limited ordinary shares £1 100 ownership and operation of transmission
network within the scottishpower area 
fixed asset investments
joint ventures
celtpower limited ‘b’ ordinary shares £1 100 windpowered electricity generation
nest makers limited ‘b’ ordinary shares £1 100 energy efficiency agent for the
‘fuel poor’benefit market
scotash limited ‘b’ ordinary shares £1 100 sales of ash and ashrelated cementitious 
products
scottish electricity settlements limited ordinary shares £1 50 scottish electricity settlements
shoreham operations company limited ‘b’ ordinary shares £1 100 management services
south coast power limited ‘b’ ordinary shares £1 100 electricity generation
associated undertaking
wind resources limited ‘b’ ordinary shares £1 100 windpowered electricity generation 
notes
 represents 50 of the total issued share capital
 represents 45 of the total issued share capital
 100 of the following classes of shares in pacificorp uk limited are also indirectly held ‘a’ nonvoting shares of 318926 each ‘b’ nonvoting shares of
344641 each ‘c’ nonvoting shares of 487418 each ‘d’ nonvoting shares of 292490 each ‘e’ nonvoting shares of 487418 each ‘f’ nonvoting
shares of 388354 each

the investment in this company is a direct holding of scottish power plc

na general partnership is a partnership and therefore has no defined class of share capital
the directors consider that to give full particulars of all undertakings would lead to a statement of excessive length the information above includes the
undertakings whose results or financial position in the opinion of the directors principally affect the results or financial position of the group 
all companies are incorporated in great britain unless otherwise stated
principal subsidiary undertakings and other investments
scottishpower annual report  accounts 200203

130 we have audited the accounts which
comprise the accounting policies and
definitions the group profit and loss
accounts the statement of total
recognised gains and losses the note
of historical cost profits and losses the
reconciliation of movements in
shareholders’ funds the group cash
flow statement the reconciliation of net
cash flow to movement in net debt the
group balance sheet the statement of
principal subsidiary undertakings and
other investments the company
balance sheet and the related notes we
have also audited the disclosures
required by part 3 of schedule 7a to the
companies act 1985 contained in the
remuneration report of the directors
‘the auditable part’
respective responsibilities of directors
and auditors
the directors’ responsibilities for
preparing the annual report and
accounts in accordance with applicable
united kingdom law and accounting
standards are set out in the statement of
directors’ responsibilities the directors
are also responsible for preparing the
remuneration report of the directors
our responsibility is to audit the accounts
and the auditable part of the remuneration
report of the directors in accordance with
relevant legal and regulatory requirements
and united kingdom auditing standards
issued by the auditing practices board
this report including the opinion has been
prepared for and only for the company’s
members as a body in accordance with
section 235 of the companies act 1985
and for no other purpose we do not in
giving this opinion accept or assume
responsibility for any other purpose or to
any other person to whom this report is
shown or into whose hands it may come
save where expressly agreed by our prior
consent in writing
we report to you our opinion as to
whether the accounts give a true and fair
view and whether the accounts and the
auditable part of the remuneration
report of the directors have been
properly prepared in accordance with
the companies act 1985 we also report
to you if in our opinion the report of
the directors is not consistent with the
accounts if the company has not kept
proper accounting records if we have
not received all the information and
explanations we require for our audit or 
if information specified by law regarding
directors’ remuneration and transactions
is not disclosed
we read the chairman’s statement the
chief executive’s review the business
review the financial review the
corporate governance statement the
unaudited part of the remuneration
report of the directors and the other
information contained in the annual
report and accounts and consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the accounts
we review whether the corporate
governance statement reflects the
company’s compliance with the seven
provisions of the combined code
specified for our review by the listing
rules of the financial services authority
and we report if it does not we are not
required to consider whether the board’s
statements on internal control cover all
risks and controls or to form an opinion
on the effectiveness of the company’s or
group’s corporate governance procedures
or its risk and control procedures
basis of audit opinion
we conducted our audit in accordance
with auditing standards issued by the
auditing practices board an audit
includes examination on a test basis of
evidence relevant to the amounts and
disclosures in the accounts and the
auditable part of the remuneration
report of the directors it also includes
an assessment of the significant
estimates and judgements made by the
directors in the preparation of the
accounts and of whether the accounting
policies are appropriate to the group’s
circumstances consistently applied and
adequately disclosed
we planned and performed our audit 
so as to obtain all the information and
explanations which we considered
necessary in order to provide us with
sufficient evidence to give reasonable
assurance that the accounts and the
auditable part of the remuneration
report of the directors are free from
material misstatement whether caused
by fraud or other irregularity or error in
forming our opinion we also evaluated
the overall adequacy of the presentation
of information in the accounts
opinion
in our opinion 
– the accounts give a true and fair view
of the state of affairs of the company and
the group at 31 march 2003 and of the
profit and cash flows of the group for the
year then ended 
– the accounts have been properly
prepared in accordance with the
companies act 1985 and
– those parts of the remuneration
report of the directors required by part
3 of schedule 7a to the companies act
1985 have been properly prepared in
accordance with the companies act
1985 
pricewaterhousecoopers llp
chartered accountants and 
registered auditors
glasgow
7 may 2003
independent auditors’ report
to the members of scottish power plc
scottishpower annual report  accounts 200203

131 years ended 31 march
2003 2003 2002 2001 2000 1999
notes m £m £m £m £m £m
uk gaap information
profit and loss account information
turnover
– continuing operations a 8290 5247 5523 5410 3110 2334
– discontinued operations 43 27 791 939 1005 908
total turnover 8333 5274 6314 6349 4115 3242
operating profit
– continuing operations a 1472 932 636 569 395 527
– discontinued operations 22 14 141 153 267 276
total operating profit 1494 946 777 722 662 803
operating profit as adjusted b
– continuing operations a 1692 1071 801 815 676 527
– discontinued operations 22 14 143 155 285 277
total operating profit as adjusted 1714 1085 944 970 961 804
profitloss before taxation
– continuing operations 1084 686 276 264 837 362
– discontinued operations 17 11 1215 116 312 282
total profitloss before taxation 1101 697 939 380 1149 644
profit before taxation as adjusted b
– continuing operations 1304 825 460 509 484 360
– discontinued operations 17 11 107 119 252 285
total profit before taxation as adjusted 1321 836 567 628 736 645
profitloss for financial year
– continuing operations 750 475 214 151 626 210
– discontinued operations 13 8 1201 157 259 259
total profitloss for financial year 763 483 987 308 885 469
cash dividends 837 530 503 477 341 268
dividend in specie on demerger of thus –– 437 – – –
balance sheet information
total assets 22049 13955 16315 16976 15516 6232
capital expenditure net c 1133 717 1229 1095 887 754
longterm liabilities 11453 7249 8318 7793 6895 2852
net debt 6827 4321 6208 5285 4842 2421
equity shareholders’ funds 7328 4638 4731 5893 5563 1203
net assets 7445 4712 4818 6179 5863 1204
basic weighted average share capital number of shares million 1844 1844 1838 1830 1390 1185
diluted weighted average share capital number of shares million 1848 1848 1840 1837 1399 1197
ratios and statistics
earningsloss per ordinary share
– continuing operations 0407 2576p 1165p 826p 4505p 1773p
– discontinued operations 00065 041p 6536p 854p 1864p 2187p
total earningsloss per ordinary share 04135 2617p 5371p 1680p 6369p 3960p
earnings per ordinary share as adjusted e
– continuing operations 05261 3330p 2104p 1919p 2365p 1784p
– discontinued operations 00065 041p 508p 867p 1432p 2186p
total earnings per ordinary share as adjusted 05326 3371p 2612p 2786p 3797p 3970p
diluted earningsloss per ordinary share 04125 2611p 5364p 1674p 6325p 3920p
earningsloss per scottishpower ads d 166 £105 £215 £067 £255 £158
earnings per scottishpower ads as adjusted de 213 £135 £104 £111 £152 £159
diluted earningsloss per scottishpower ads d 164 £104 £215 £067 £253 £157
cash dividends per scottishpower ordinary share 04536 28708p 2734p 2604p 2480p 2250p
cash dividends per scottishpower ads d 183 £115 £109 £104 £099 £090
dividend cover as adjusted e 12x 12x 10x 11x 15x 18x
interest cover as adjusted e 43x 43x 25x 30x 42x 50x
gearing f 93 93 131 90 87 201
us gaap information
total turnover a 8333 5274 6314 6349 4115 3242
profitloss for the financial year 1247 789 887 387 870 451
earningsloss per ordinary share g 06764 4281p 4826p 2113p 6259p 3808p
diluted earningsloss per ordinary share 06747 4270p 4826p 2105p 6216p 3770p
earningsloss per scottishpower ads dg 270 £171 £193 £085 £250 £152
diluted earningsloss per scottishpower ads d 270 £171 £193 £084 £249 £151
total assets 24109 15259 17818 18646 16971 7344
equity shareholders’ funds under us gaap 8658 5480 5850 7463 7001 2457
five year summary
a the results for the financial year ended 31 march 2000 included turnover of
£7117 million operating profit of £1149 million and operating profit before
goodwill amortisation of £1517 million in respect of pacificorp for the period of
the year following its acquisition on 29 november 1999
b operating profit as adjusted and profit before taxation as adjusted 
exclude the effect of exceptional items and goodwill amortisation
c capital expenditure is stated net of capital grants and customer contributions
d earningsloss and cash dividends per scottishpower ads have been calculated
based on a ratio of four scottishpower ordinary shares to one scottishpower
ads cash dividends per scottishpower ads are shown based on the actual
amounts in us dollars
e the adjusted figures for earnings per ordinary share earnings per scottishpower ads
dividend cover and interest cover exclude the effects of exceptional items and
goodwill amortisation as applicable
f gearing is calculated by dividing net debt by equity shareholders’ funds
g as permitted under uk gaap  earningsloss per share have been presented
including and excluding the impact of the exceptional items and goodwill
amortisation to provide an additional measure of underlying performance in
accordance with us gaap  earningsloss per share have been presented based
on us gaap earnings without adjustments for the impact of uk gaap
exceptional items and goodwill amortisation such additional measures of
underlying performance are not permitted under us gaap  
h amounts for the financial year ended 31 march 2003 have been translated solely
for the convenience of the reader at 158 to £100 the closing exchange rate on
31 march 2003
scottishpower annual report  accounts 200203

132 uk financial terms used in annual report  accounts us equivalent or definition
accounts financial statements
associates equity investees
capital allowances tax depreciation
capital redemption reserve other additional capital
creditors accounts payable and accrued liabilities
creditors amounts falling due within one year current liabilities
creditors amounts falling due after more than one year longterm liabilities
employee share schemes employee stock benefit plans
employee costs payroll costs
finance lease capital lease
financial year fiscal year
fixed asset investments noncurrent investments
freehold ownership with absolute rights in perpetuity
gearing leverage
investment in associates and joint ventures securities of equity investees
loans to associates and joint ventures indebtedness of equity investees not current
net asset value book value
operating profit net operating income
other debtors other current assets
own work capitalised costs of group’s employees engaged in the construction 
of plant and equipment for internal use
profit income
profit and loss account statement income statement
profit and loss account in the balance sheet retained earnings
profitloss for financial year net incomeloss
profit on sale of fixed assets gain on disposal of noncurrent assets
provision for doubtful debts allowance for bad and doubtful accounts receivable
provisions longterm liabilities other than debt and specific 
accounts payable
recognised gains and losses statement comprehensive income
reserves shareholders’ equity other than paidup capital
severance costs early release scheme expenses
share premium account additional paidin capital or paidin surplus not distributable
shareholders’ funds shareholders’ equity
stocks inventories
tangible fixed assets property plant and equipment
trade debtors accounts receivable net
turnover revenues
glossary of financial terms and us equivalents
scottishpower annual report  accounts 200203

133 scottishpower annual report  accounts 200203

134
investor information
nature of trading market
the principal trading market for the
ordinary shares of scottishpower is the
london stock exchange in addition
american depositary shares “adss” each
of which represents four ordinary shares
have been issued by jpmorgan chase bank
as depositary the “depositary” for the
company’s adss and are traded on the
new york stock exchange following listing
on 8 september 1997
table 45 sets out for the periods indicated
the highest and lowest middle market
quotations for the ordinary shares as
derived from the daily ofﬁcial list of the
london stock exchange and the range of
high and low closing sale prices for adss as
reported on the new york exchange
composite tape
on 31 march 2003 there were 534
registered holders of 315296 ordinary
shares with addresses in the us and 62359
registered holders of 68859341 adss
equivalent to 275437364 ordinary
shares the combined holdings of these
shareholders represented 1486 of the
total number of ordinary shares outstanding
as at 31 march 2003 uk registered
shareholders held 8490 of the total
number of ordinary shares and all
shareholders other than those registered in
the uk or the us held 024 of the total
number of ordinary shares outstanding as
at 31 march 2003 as certain of the
ordinary shares and adss are held by
brokers and other nominees these numbers
may not be representative of the actual
number of beneﬁcial owners in the us or
elsewhere or the number of ordinary shares
or adss beneﬁcially held by us persons
table 46 – analysis of ordinary shareholdings
at 31 march 2003
range of no of 
holdings shareholdings no of shares
1100 18436 732327
101200 174505 28957720
201600 178703 55273513
6011000 39280 30763853
10015000 48442 90686464
5001100000 4223 62322104
100001 and above 781 1587196821
total 4643701855932802
share capital and options
as a result of the exercise of options under
the executive share option scheme and the
issue of shares to the trustee of the
employee share ownership plan a total of
3285818 ordinary shares of 50p each were
issued during the year accordingly the
number of ordinary shares in issue was
1855932802 as at 31 march 2003 during
the year 3316143 options over ordinary
shares were granted to 2188 employees
under the scottishpower sharesave
scheme a total of 7327043 options were
granted under the executive share option
plan 2001 no options were granted under
the executive share option scheme which
was replaced in 1996 by the introduction of
the long term incentive plan awards in
respect of 1028417 shares were made
under the plan during the year and these
awards are subject to the achievement of
speciﬁed performance criteria details are
contained in the remuneration report 
between 31 march 2003 and 7 may 2003 
a further 225182 ordinary shares have
been issued as a result of the allotments in
respect of the employee share ownership
plan at the annual general meeting of the
company last year shareholders granted
authority to the directors to purchase up to
185298702 ordinary shares the directors
have not exercised this authority
table 45 – historical share prices
ordinary shares
1
american depositary shares
period high p low p high  low 
199899 67500 52100 4463 3413
199900 60150 35950 3911 2297
200001 57600 42200 3388 2615
200102
first quarter 52184 43064 3024 2490
second quarter 51306 35114 2966 2090
third quarter 41259 35578 2451 2105
fourth quarter 42649 35000 2475 2010
200203
first quarter 41600 34200 2480 1990
second quarter 38400 29875 2400 1884
third quarter 37300 33600 2375 2055
fourth quarter 38800 33075 2445 2140
october 2002 37300 34350 2375 2115
november 2002 37300 33800 2365 2055
december 2002 36250 33600 2345 2088
january 2003 37275 33075 2405 2140
february 2003 37350 33200 2400 2180
march 2003 38800 33350 2445 2151
note
1 the past performance of the ordinary shares is not necessarily indicative of future performance scottishpower annual report  accounts 200203

135
substantial shareholdings
as at 7 may 2003 the company had been
notiﬁed that the following companies were
substantial shareholders
capital research and 
management company 738
barclays plc 358
prudential plc 355
legal  general
investmentmanagement 338
the substantial shareholders enjoy the
same voting rights as all other shareholders
control of company
as far as is known to the company it is not
directly or indirectly owned or controlled by
another corporation or by any foreign
government
as at 7 may 2003 no person known to the
company other than as shown above
owned more than 5 of any class of the
group’s voting securities
as at 7 may 2003 the total amount of
voting securities owned by directors and
executive ofﬁcers of scottishpower as a
group is shown in table 47 below
table 47 – voting securities
title of class amount percentage
identity of group owned of class
ordinary shares
directors and ofﬁcers
18 persons 409261 002
full details of the directors’ interests in
scottishpower shares are shown in tables 
43 and 44 in the remuneration report
none of the ofﬁcers had a beneﬁcial interest
in 1 or more of the issued share capital
in addition as at 7 may 2003 the directors
and ofﬁcers of the company as a group held
options to purchase 4466130 ordinary
shares all of which were issued pursuant to
the long t erm incentive plan executive share
option scheme executive share option plan
2001 scottishpower’s sharesave schemes or
the paciﬁcorp stock incentive plan
the company does not know of any
arrangements the operation of which might
result in a change in control of the group
exchange rates
the group publishes its consolidated
accounts in pounds sterling in this
document references to “pounds sterling”
“pounds” “pence” or “p” are to uk currency
and references to “us dollars” “us” or “”
are to us currency solely for the convenience
of the reader this report contains translations
of certain pounds sterling amounts into us
dollars at speciﬁed rates or if not so speciﬁed
at the noon buying rate in new york city
for cable transfers in pounds sterling as
certiﬁed for customs purposes by the
federal reserve bank of new york “noon
buying rate” on 31 march 2003 of £100 
158 on 7 may 2003 the noon buying
rate was 159 to £100 no representation
is made that the pound sterling amounts
have been could have been or could be
converted into us dollars at the rates
indicated or at any other rates
table 48 sets out for the periods indicated
certain information concerning the noon
buying rate for us dollars per £100
dividends
although dividends were historically
declared and paid and ﬁnancial reports
published semiannually following
completion of the merger with paciﬁcorp
the company moved to quarterly reporting
and the quarterly payment of dividends
a dividend of 7177 pence per share on the
ordinary shares will be paid on 16 june
2003 to shareholders on the register on 16
may 2003 this makes total dividends for
the year of 28708 pence per share a
dividend of 04609 per ads will also be
paid on 16 june 2003 to ads holders of
record on 16 may 2003 this makes total
dividends for the year of 18268 per ads
as stated at the time of announcing the
proposed disposal of southern water with
effect from the ﬁnancial year commencing 1
april 2003 scottishpower intends to target
dividend cover based on full year earnings
excluding goodwill amortisation and
exceptional items in the range 15  20
times and ideally towards the middle of that
range scottishpower will aim to grow
dividends broadly in line with earnings
thereafter
to implement this policy in the absence of
unforeseen circumstances scottishpower
intends to pay an identical dividend for each
of the ﬁrst three quarters of each year with
the dividend for the fourth quarter
representing the balance of the total
dividend for each year in respect of each of
the quarters ending 30 june 2003 30
september 2003 and 31 december 2003
scottishpower aims to declare a dividend of
475 pence per share
table 48 – historical exchange rates
period high low average
1
year end
199899 172 160 165 161
199900 168 155 161 159
200001 161 140 152 142
200102 148 137 143 142
200203 165 143 155 158
october 2002 157 154 156
november 2002 159 154 157
december 2002 161 156 159
january 2003 165 160 162
february 2003 165 157 161
march 2003 161 156 158
note
1 the average of the noon buying rates on the last day of each month during the relevant period investor information
continued
scottishpower annual report  accounts 200203

136
table 49 sets out the dividends paid on
ordinary shares and adss in respect of the
past ﬁve ﬁnancial years excluding any
associated uk tax credit in respect of such
dividends a person resident in the uk for
tax purposes who receives a dividend from
the company is generally entitled to a tax
credit currently at a rate of 19th of the
dividend “associated uk tax credit” for
further information see “taxation of
dividends”
memorandum and articles of association
a summary of certain provisions of the
company’s memorandum and articles of
association will be ﬁled with the company’s
report to the us securities and exchange
commission on form 20f
exchange controls and other limitations
affecting security holders
there are currently no uk laws decrees or
regulations that restrict the export or import
of capital including but not limited to
foreign exchange capital restrictions or that
affect the remittance of dividends or other
payments to nonuk resident holders of the
company’s securities except as otherwise
set forth in “taxation”
there are no limitations imposed by uk law
or by the company’s memorandum and
articles of association that restrict the right
of nonuk resident or nonuk citizen
owners to hold or to vote the ordinary
shares
taxation
the following discussion of uk tax and us
federal income tax consequences is set
forth with respect to us tax considerations
in reliance upon the advice of milbank
tweed hadley  mccloy llp special us
counsel to the company and with respect
to uk tax considerations in reliance upon
the advice of freshﬁelds bruckhaus
deringer the company’s uk lawyers the
discussion is intended only as a summary
of the principal us federal income tax and
uk tax consequences to investors who hold
the adss or ordinary shares as capital
assets and does not purport to be a
complete analysis or listing of all potential
tax consequences of the purchase
ownership and disposition of adss or
ordinary shares the summary does not
discuss special tax rules that may be
applicable to certain classes of investors
including banks insurance companies tax
exempt entities dealers traders who elect
to mark to market investors with a
functional currency other than the us
dollar persons who hold adss as part of a
hedge straddle or conversion transaction
or holders of 10 or more of the voting
stock of the company the statements of
uk and us tax laws and practices set out
below are based on the laws in force and as
interpreted by the relevant taxation
authorities as of the date of this report the
statements are subject to any changes
occurring after that date in uk or us law or
practice in the interpretation thereof by the
relevant taxation authorities or in any
double taxation convention between the us
and the uk on 24 july 2001 the us and
the uk signed a new convention between
the two countries for the avoidance of
double taxation with respect to taxes on
income and capital gains “the new income
tax convention” instruments of ratiﬁcation
with respect to the new income tax
convention were exchanged on 31 march
2003 putting the new income tax
convention into force subject to certain
effective date provisions that result in the
delayed implementation of certain
withholding and income tax provisions
as of the time of this report all prior
distributions by the company since
table 49 – historical dividend payments
notes 200203 200102 200001 199900 199899
pence per ordinary share 1
interim – –– 827p 750p
precompletion – –– 810p –
quarter 29 nov 1999 – 31 dec 1999 – –– 223p –
quarter 1 jan 2000 – 31 mar 2000 – –– 620p –
quarter 1 april – 30 june 7177p 6835p 651p – –
quarter 1 july – 30 sept 7177p 6835p 651p – –
quarter 1 oct – 31 dec 7177p 6835p 651p – –
quarter 1 jan – 31 mar  7177p 6835p 651p – –
final – ––– 1500p
total 28708p 2734p 2604p 2480p 2250p
us dollars per ads 12
interim – –– 05324 048
precompletion – –– 05215 –
quarter 29 nov 1999 – 31 dec 1999 – –– 01413 –
quarter 1 jan 2000 – 31 mar 2000 – –– 03856 –
quarter 1 april – 30 june 04472 03907 03928 – –
quarter 1 july – 30 sept 04479 03979 03702 – –
quarter 1 oct – 31 dec 04708 03863 03805 – –
quarter 1 jan – 31 mar 04609 03972 03721 – –
final – ––– 097
total 18268 15721 15156 15808 145
notes 
1 dividends per share and per ads are shown net of any associated uk tax credit available to certain holders of ordinary shares and adss see “taxation of dividends”
dividends paid by the depositary in respect of adss are paid in us dollars based on a market rate of exchange that differs from the noon buying rate 
2 calculated based on a ratio of four ordinary shares for one ads scottishpower annual report  accounts 200203

137
publication of our last annual statement
were governed by the rules of the treaty in
force prior to 1 april 2003 the “expiring
income tax convention” as a result unless
otherwise noted the following discussion is
based on the expiring income tax
convention the company believes and the
discussion therefore assumes that it is not a
passive foreign investment company for us
federal income tax purposes
each investor is urged to consult their own
tax adviser regarding the tax consequences
of the purchase ownership and disposition
of ordinary shares or adss under the laws
of the us the uk and their constituent
jurisdictions and any other jurisdiction
where the investor may be subject to tax
if the obligations contemplated by the
deposit agreement are performed in
accordance with its terms a beneﬁcial
owner of adss will be treated as the owner
of the underlying ordinary shares for the
purposes of the expiring income tax
convention and the us internal revenue
code of 1986 as amended “code”
for the purposes of this summary the term
“us holder” means a beneﬁcial owner of
the adss that is a us citizen or resident a
domestic corporation or partnership a trust
subject to the control of a us person and
the primary supervision of a us court or an
estate the income of which is subject to us
federal income tax regardless of its source
for the purposes of this summary the term
“eligible us holder” means a us holder that
is a resident of the us for the purposes of
the expiring income tax convention and
that satisﬁes the following conditions
• is not also resident in the uk for uk tax
purposes
• is not a corporation which alone or
together with one or more associated
corporations controls directly or indirectly
10 or more of the voting stock of the
company
• whose holding of the adss is not
attributable to a permanent establishment
in the uk through which such holder carries
on a business or with a ﬁxed base in the uk
from which such holder performs
independent personal services and
• under certain circumstances is not a
company 25 or more of the capital of
which is owned directly or indirectly by
persons that are neither individual residents
of nor nationals of the us
taxation of dividends
save as set out below in relation to the uk
withholding tax applied to the uk tax credit
as deﬁned below the company is not
required to withhold any uk taxes from its
dividend payments to us holders therefore
the amount of a dividend paid to a us
holder will not be reduced by any uk
withholding tax under uk tax law and the 
expiring income tax convention an eligible
us holder that makes the appropriate
election with respect to dividends paid prior
to 1 may 2003 and as described below if
elected with respect to dividends paid
before 1 may 2004 is in theory entitled to
an additional payment from the uk “uk tax
credit” equal to 19th of the amount of any
dividend paid by the company to the holder
while as noted above the dividend paid by
the company is not subject to any uk
withholding tax under the expiring income
tax convention and under current uk law
the uk tax credit that otherwise would be
payable by the uk is completely offset by a
uk withholding tax equal to 100 of that
uk tax credit accordingly us holders will
receive the full amount of any dividend
declared by the company without
deduction for uk tax but will not be entitled
to an additional cash payment from the uk
in respect of the uk tax credit an eligible
us holder who elects to claim a credit as
described below against the holder’s us
federal income tax liability with respect to
the uk withholding tax imposed on the uk
tax credit amount is required to include in
addition to the gross amount of the dividend
paid by the company the amount of uk tax
credit in taxable income for us federal
income tax purposes even though none of
the amount of the uk tax credit is paid by
the uk an eligible us holder who so elects
to include the amount of the uk tax credit in
taxable income generally will be entitled to
credit against the holder’s us tax liability
the amount of the uk tax credit that the
holder is deemed to have received which
us tax credit may result in a reduction in
the holder’s effective us tax rate on the
cash dividend received following is a
simpliﬁed numerical example of the us tax
treatment of dividends paid to an eligible
us holder who is subject to tax at a rate of
35 and is eligible for and claims a us tax
credit for the complete amount of the uk
tax credit

dividend received 9000
uk tax credit 1000
us taxable income 10000
us tax  35 3500
us tax credit for uk withholding tax 1000
us tax liability 2500
cash dividend received 9000
us tax liability 2500
aftertax cash amount 6500
approximate effective us tax rate 
on cash received 278
note that the us federal income tax
consequences of dividends paid to an eligible
us holder will depend upon the holder’s
particular circumstances and consequently
the us federal income tax consequences
applicable to a particular holder may differ
from those set out in the above example and
some us holders may not be able to make
full or partial use of the uk tax credit eligible
us holders are urged to consult their own tax
advisers regarding the tax consequences to
them of the payment of a dividend by the
company
the full procedures for determining and
claiming a us tax credit with respect to
dividends received from a uk corporation are
outlined in us internal revenue service
revenue procedure 2000 – 13 2000 – 6
irb 1
a us holder recognises income when the
dividend is actually or constructively received
by the holder in the case of ordinary shares
or by the depositary in the case of adss the
dividend will not be eligible for the dividends
received deduction generally allowed to us
corporations in respect of dividends received
from other us corporations distributions in
excess of current and accumulated earnings
and proﬁts as determined for us federal
income tax purposes will be treated as a
return of capital to the extent of the eligible
us holder’s basis in the ordinary shares or
adss and thereafter as a capital gain in
determining the amount of the distribution
a us holder will use the spot currency
exchange rate on the date the dividend is
included in income any difference between
that amount and the dollars actually received
may constitute a foreign currency gain or loss investor information
continued
scottishpower annual report  accounts 200203

138
however an eligible us holder that is an
individual is not required to recognise a gain
of less than 200 from the exchange of
foreign currency in a “personal transaction”
as deﬁned in section 988e of the code
subject to certain limitations and
requirements an eligible us holder will be
entitled under the expiring income tax
convention to credit the uk withholding tax
imposed with respect to the uk tax credit
against the eligible us holder’s us federal
income tax liability provided the holder
includes the gross amount of the uk tax
credit in the holder’s gross income as
described above claiming a us foreign tax
credit with respect to the uk withholding tax
imposed under the expiring income tax
convention with respect to the uk tax credit
may result in a lower effective us federal
income tax rate on dividends paid by the
company for certain eligible us holders as
demonstrated in the above numerical
example an eligible us holder is not
required to afﬁrmatively make a claim to
the uk inland revenue to be entitled to the
us foreign tax credit although an eligible
us holder electing to claim the credit must
complete an internal revenue service form
8833 treaty based return position
disclosure and ﬁle such form with the
holder’s us federal income tax return for
each year that the tax credit is claimed
eligible us holders that include the amount
of the uk tax credit in gross income but do
not elect to claim foreign tax credits may
instead claim a deduction for uk
withholding tax deemed paid for foreign
tax credit limitation purposes the dividend
grossedup to include the uk tax deemed
paid will be income from sources outside
the us the rules relating to the
computation of foreign tax credits are
complex and eligible us holders should
consult their own tax advisers to determine
whether and to what extent a credit would
be available and whether any ﬁlings or
other actions may be required to
substantiate an eligible us holder’s foreign
tax credit claim
if the us holder is a us partnership trust
or estate the uk tax credit will be available
only to the extent that the income derived
by such partnership trust or estate is
subject to us federal income tax as the
income of a resident either in its hands or
in the hands of its partners or beneﬁciaries
as the case may be whether holders of
adss who reside in countries other than
the us are entitled to a tax credit in respect
of dividends on adss depends in general
upon the provisions of conventions or
agreements if any as may exist between
such countries and the uk
under the new income tax convention us
holders are not entitled to claim the uk tax
credit with respect to dividends paid by the
company on or after 1 may 2003
notwithstanding this effective date an
eligible us holder may continue to claim
the uk tax credit with respect to dividends
paid before 1 may 2004 if the holder elects
to apply all the provisions of the expiring
income tax convention during such period
each investor is urged to consult their own
tax adviser regarding the tax consequences
of electing to apply the expiring income tax
convention in lieu of the new income tax
convention
taxation of capital gains
in general for us tax purposes us holders
of adss will be treated as the owners of the
underlying ordinary shares that are
represented by such adss and deposits
and withdrawals of ordinary shares by us
holders in exchange for adss will not be
treated as a sale or other disposition for us
federal income tax purposes upon a sale
or other disposition of ordinary shares or
adss us holders will recognise a gain or
loss for us federal income tax purposes in
an amount equal to the difference between
the us dollar value of the amount realised
and the us holder’s tax basis determined
in us dollars in such ordinary shares or
adss generally such gain or loss will be a
longterm capital gain or loss if the us
holder’s holding period for such ordinary
shares or adss exceeds one year any such
gain or loss generally will be income from
sources within the us for foreign tax credit
limitation purposes longterm capital gain
for an individual us holder is generally
subject to a maximum tax rate of 20
a us holder who is not resident or
ordinarily resident for uk tax purposes in
the uk will not generally be liable for uk tax
on capital gains recognised on the sale or
other disposition of adss or ordinary
shares unless the ads holder carries on a
trade profession or vocation in the uk
through a branch or agency and the adss
are or have been used held or acquired
for the purposes of such trade profession
or vocation or such branch or agency
us citizens resident or ordinarily resident in
the uk us corporations resident in the uk
by reason of their business being managed
or controlled in the uk and us citizens who
or us corporations which are trading or
carrying on a trade profession or vocation in
the uk through a branch or agency and who
or which have used held or acquired adss
or ordinary shares for the purposes of such
trade profession or vocation or such branch
or agency may be liable for both uk and us
tax in respect of a gain on the disposal of the
adss such holders may not be entitled to a
tax credit against their us federal income tax
liability for the amount of uk capital gains
tax or uk corporation tax on chargeable
gains as the case may be paid in respect of
such gain unless the holder appropriately
can apply the credit against tax due on
income from foreign sources
for companies the uk inland revenue has
proposed that in relation to accounting
periods commencing on or after 1 january
2003 uk statutory references to “branch or
agency” should be replaced with references
to “permanent establishment” and the
references to branch or agency above
should be read accordingly
us information reporting and backup
withholding
in general information reporting
requirements will apply to dividend
payments or other taxable distributions in
respect of ordinary shares or adss made
within the us to a noncorporate us
person accordingly individual us holders
will receive an annual statement showing
the amount of taxable dividends or other
reportable distributions paid to them
during the year “backup withholding” will
apply to such payments i if the holder or
beneﬁcial owner fails to provide an accurate
taxpayer identiﬁcation number in the
manner required by us law and applicable
regulations ii if there has been notiﬁcation
from the internal revenue service of a
failure by the holder or beneﬁcial owner to
report all interest or dividends required to
be shown on its federal income tax returns
or iii in certain circumstances if the
holder or beneﬁcial owner fails to comply
with applicable certiﬁcation requirements scottishpower annual report  accounts 200203

139
in general payment of the proceeds from
the sale of ordinary shares or adss to or
through a us ofﬁce of a broker is subject to
both us backup withholding and
information reporting requirements unless
the holder or beneﬁcial owner establishes
an exemption different rules apply to
payments made outside the us through an
ofﬁce outside the us
uk inheritance tax
an individual who is domiciled in the us for
the purposes of the convention between the
us and the uk for the avoidance of double
taxation with respect to estate and gift taxes
“estate tax convention” and who is not a
national of the uk for the purposes of the
estate tax convention will not generally be
subject to uk inheritance tax in respect of
the adss or ordinary shares on the
individual’s death or on a gift of the adss
or ordinary shares during the individual’s
lifetime unless the adss or ordinary shares
are part of the business property of a
permanent establishment of the individual
in the uk or pertain to a ﬁxed base in the
uk of an individual who performs
independent personal services special
rules apply to adss held in trust in the
exceptional case where the shares are
subject both to uk inheritance tax and to
us federal gift or estate tax the estate tax
convention generally provides for the tax
paid in the uk to be credited against tax
paid in the us
uk stamp duty and stamp duty 
reserve tax
in practice no uk stamp duty need be paid
on the acquisition or transfer of adss
provided that any instrument of transfer is
executed outside the uk and subsequently
remains at all times outside the uk an
agreement to transfer adss will not give
rise to a liability to stamp duty reserve tax
subject to certain exceptions a transfer on
sale of ordinary shares as opposed to adss
will generally be subject to uk stamp duty
at a rate of 05 rounded up if necessary
to the nearest £5 of the consideration given
for the transfer an agreement to transfer
such shares will normally give rise to a
charge to uk stamp duty reserve tax at a
rate of 05 of the consideration payable for
the transfer provided that stamp duty
reserve tax will not be payable if stamp duty
has been paid where such ordinary shares
are later transferred to the depositary’s
nominee further stamp duty or stamp duty
reserve tax will normally be payable at the
rate of 15 rounded up if necessary to
the nearest £5 of the value of the ordinary
shares at the time of the transfer
a transfer of ordinary shares by the
depositary or its nominee to the relative
ads holder when the ads holder is not
transferring beneﬁcial ownership gives rise
to a uk stamp duty liability of £5 per
transfer
taxation of thus demerger dividend in
specie
information pertaining to the tax position
of shareholders following the demerger of
thus can be obtained from the company
secretary at the company’s registered
ofﬁce and from the company’s website
wwwscottishpowercom scottishpower annual report  accounts 200203

140
financial calendar
annual general meeting
the annual general meeting will be held at
the glasgow royal concert hall sauchiehall
street glasgow on friday 25 july 2003 at
1100 am details of the resolutions to be
proposed at the annual general meeting 
are contained in the notice of meeting
quarterly results
copies of the quarterly results may be
obtained free of charge on request from
the company secretary at the company’s
registered ofﬁce quarterly results will also
be published on the company’s website
wwwscottishpowercom
halfyear results
the company as permitted by the london
stock exchange publishes its halfyear
results in one uk national newspaper in
2003 it is expected that the halfyear
results will be published in the telegraph
and on the company’s website copies of
the halfyear results may be obtained free
of charge on request from the company
secretary at the company’s registered ofﬁce
environmental and social impact report
copies of the environmental and social
impact report may be obtained free of
charge on request from the company
secretary at the company’s registered ofﬁce
this report together with fuller information
about environmental marketplacecommunity
and workplace issues is also published on
the company’s website
press releases and uptodate information
on the company can be found on the
company’s website 
the annual review 200203 is also
available on cd free of charge from the
company secretary at the company’s
registered ofﬁce
16 june 2003 dividend payment date – us and uk ﬁnal dividend for the year ended 31 march 2003
july 2003 announcement of results for quarter ending 30 june 2003 – q1
25 july 2003 annual general meeting
september 2003 q1 dividend payable
november 2003 announcement of results for quarter ending 30 september 2003 – q2
december 2003 q2 dividend payable
february 2004 announcement of results for quarter ending 31 december 2003 – q3
march 2004 q3 dividend payable
may 2004 announcement of preliminary results for the year ending 31 march 2004
june 2004 q4 dividend payable ﬁnal dividend for the year ending 31 march 2004 scottishpower annual report  accounts 200203

141
shareholder services
ordinary shares
share registration enquiries
the registrar
lloyds tsb registrars scotland
po box 28448
edinburgh eh4 1wq
tel 44 0870 600 3999
fax 44 0870 900 0030
textphone 44 0870 600 3950
website wwwshareviewcouk
dividend reinvestment plan
the dividend reinvestment plan provides
ordinary shareholders with the facility to
invest cash dividends by purchasing further
scottishpower shares for further details
please contact lloyds tsb on telephone
number 0870 241 3018
share consolidation and isas
share consolidation is a facility which allows
a number of holdings and especially family
holdings to be consolidated into one
holding this service is provided free of
charge
individual savings accounts “isas” are
suitable for uk resident private investors
who wish to shelter their scottishpower
shares from income and capital gains tax
details of the scottishpower isa service are
available from lloyds tsb at the following
address alternatively please call the isa
helpline on 0870 242 4244
lloyds tsb registrars isas
the causeway
worthing bn99 6uy
share dealing
scottishpower ordinary shares may 
be bought or sold at competitive rates 
by post or telephone for further 
details please contact stocktrade on 0845
601 0979 quoting low c0070
american depositary 
shares “adss”
exchange and stock transfer enquiries
jpmorgan chase bank
shareholder relations
po box 43013
providence ri 029403013
tel 1 866 scotadr toll free
1 866 726 8237 toll free
1 781 575 2678 outside us 
not toll free
fax 1 781 575 4082
website wwwadrcomshareholder
dividend reinvestment plan
global invest direct
global invest direct is the direct share
purchase and dividend reinvestment plan
for ads holders which allows existing and
ﬁrst time investors to purchase adss
without a broker global invest direct
encourages investors to make initial and
ongoing investments in the company by
providing investors with the convenience of
investing directly in scottishpower’s adss
with reduced brokerage commissions and
service costs for further details please
contact jpmorgan chase bank as detailed
above
agent for us federal securities laws
the agent for scottishpower for us federal
securities law purposes is
puglisi  associates
850 library avenue suite 204
po box 885
newark
delaware 19715 accounting
developments 49
policies and deﬁnitions 5053 7073
acquisition 86 11 12 90 15 112 32
american depositary shares 141
annual general meeting 140
audit committee 56 58
audit report 131
balance sheets
company 127
group 88
board of directors 54
borrowings 9398 20
business
description of 1218
reviews – 200203 3539
reviews – 200102 4042
strategy 3 10 12
capital commitments 110 30b
capital expenditure 38 89 14b
capital gains tax 138
cash ﬂow
acquisitions and disposals 86 11 12
analysis 85 9
commentary 38
group statement 84
us gaap 119 35
chairman’s statement 2
charitable donations 18
chief executive’s review 311
contingent liabilities 110 29 129 42
corporate governance 57
creditor payment policy and practice 49
creditors 98 21 128 39
currencies accounting policy 73
debt net
analysis 87 13
reconciliation to net cash ﬂow 84
debtors 93 19 128 37
deferred income 100 24
deferred tax 82 6 100 23
depreciation
accounting policy 72
by segment 78 1c
directors
executive 54
nonexecutive 54
pensions 63
remuneration 6168
report 169
responsibilities for accounts 69
service contracts 63
share options 62 67
shareholdings 67
dividends
in specie 38 42 83 8
per ads 135
per ordinary share 2 3 83 8 135
payment dates 140
divisions
infrastructure 5 14
uk 7 14
earnings and dividends
200203 37
200102 42
earnings per ordinary share 1 82 7
employees
numbers and costs 16 80 3
policies uk and us 17 26
environment
accounting policy 73
policy approach 17
regulation 2426
exceptional items 34 81 4
executive team 55 58
financial
commitments 47110 30
guarantees 124125 35
highlights 1
review 3353
financial instruments
accounting policies 71
analysis 9398 20
five year summary 132
fixed assets
intangible 90 15
investments 72 92 17 128 36
tangible 72 91 16
glossary
of ﬁnancial terms 133
of general terms 143
going concern 49
goodwill
accounting policy 72
analysis 90 15
grants and contributions
accounting policy 73
analysis 100 24
health and safety 3 27
inheritance tax 139
interest charge net
accounting policy 71
analysis 81 5
interest and taxation
200203 37
200102 41
internal control 58
investor information 134140
leased assets accounting policy 72
litigation 29
loans and other borrowings 9398 20
long term incentive plan 62 67 72
minority interests 104 27
net asset value per share 89 14a
net assets by segment 89 14a
nomination committee 56 57 58
off balance sheet arrangements 53
operating proﬁt
analysis 79 2
by segment 78 1b
highlights 1
reconciliation to net operating 
cash ﬂows 86 10
own shares held under trust 72
paciﬁcorp 35 1214
ppm energy inc 9 16
pensions 
accounting policy 73
analysis 104109 28 120122 35d
costs 2 28 35 49
postretirement beneﬁts
accounting policy 73
analysis 108 28h 122123 35e
proﬁt and loss account
company 128 41
group 7476
property 18
provisions for liabilities
and charges 99 22 100 23
recognised gains and losses 77
registrar 141
regulation
electricity and gas uk 2224
electricity us 1922
employment 2627
environmental uk 2526
environmental us 2425
related party transactions 111 31
remuneration committee
membership 56 575861
report 6168
research and development 17 79 2
reserves 103 26 128 40
risk management 4447 59
segmental information 78 1 89 14
share capital 100 25 128 40
share options 101 25b 134
share premium 103 26 128 40
shareholder services 141
shareholders’ funds
analysis 103 26 128 40
reconciliation 77
shareholdings analysis 134
southern water 3 16 86 11 12 113 33
stocks
accounting policy 73
analysis 92 18
substantial shareholdings 135
taxation
accounting policy 72
analysis 82 6
commentary 34 37 41
deferred 82 6 100 23
of dividends 137
thus 12 113 34
total assets by segment 89 14c
treasury 4244
turnover
accounting policy 71
by segment 78 1a
highlights 1
us gaap 114126 35
us regulatory assets 73 115 35
figures in brackets refer to notes to the accounts
scottishpower annual report  accounts 200203

142
index term – deﬁnition
ads – american depositary share us
the authority – the gas and electricity
markets authority the body which
determines energy market regulation in
great britain uk
be – british energy plc uk
betta – british electricity trading and
transmission arrangements uk
btu – british thermal unit uk
billion – one thousand million
1000000000
british isles – the united kingdom and the
republic of ireland
churn – the turnover of existing customers
leaving and new customers joining the
company’s customer list
co
2
– carbon dioxide
combined code – guidelines setting out
corporate governance principles regarded as
good practice for uk registered companies
uk
company – scottish power plc
competition commission – the uk
regulatory body concerned with competition
policy and the abuse of market power uk
demand side management – encouraging
customers to reduce their electricity
consumption
distribution – the transfer of electricity
from the transmission system to customers
us equivalent is power distribution
dti – department of trade and industry uk
ea – environment agency uk
ebitda – earnings before interest tax
depreciation goodwill amortisation and
deferred income released to the proﬁt and
loss account
eu – european union
epa – environmental protection agency us
energy supply – sales of electricity and gas
to residential commercial and industrial
customers uk
esop – employee share ownership plan uk
exsop – executive share option scheme
open to the company’s executive directors
and senior managers
ferc – federal energy regulatory
commission us
gaap – generally accepted accounting
principles
gas – natural gas
giga g – one thousand million
1000000000 units
great britain – england scotland and wales
group – scottish power plc and its
consolidated subsidiaries
guaranteed standards – standards of
performance agreed between the company
and ofgem for transmission distribution
and supply uk
home area – the geographical area in which
a company was previously the sole licensed
supplier of residential customers uk
interconnectors – the high voltage links
connecting the transmission system of
scotland with those of england  wales 
and northern ireland uk
isa – individual savings account uk
kilo k – one thousand 1000 units
ltip – long term incentive plan
mega m – one million 1000000 units
msp – the multistate process through
which paciﬁcorp and the six states it serves
are working to clarify roles and
responsibilities concerning the regulation of
paciﬁcorps’ business activities us
nea – nuclear energy agreement between
british energy scottishpower and scottish 
southern uk
neta – new electricity trading
arrangements uk
nox – oxides of nitrogen
ofgem – ofﬁce of gas and electricity
markets the gas and electricity regulator in
great britain uk
ofwat – ofﬁce of water services the water
regulator in england  wales uk
ped – public electricity distributor uk
plc – public limited company uk
power production – the us term for the
generation of electricity
pscs – public services commissions the
individual bodies which regulate utilities in
each of the states us
rates – the us term for tariffs
retail sales – sales of electricity to
residential commercial and industrial
customers us
roe – return on equity us
rospa – royal society for the prevention of
accidents uk
rpi – retail price index the equivalent of
the us consumer price index – cpi uk
sec – securities and exchange commission
us
see – social environmental and ethical
sepa – scottish environment protection
agency uk
so
2
– sulphur dioxide
tera t – indicates a measure of 10
12
 for
example terawatthours
transmission – the transfer of electricity
from power stations to the distribution
system
transportation of gas – transfer of gas
from onshore terminals to consumers
through the national pipeline network uk
uk – united kingdom comprising england
scotland wales and northern ireland 
us – united states of america
volt v – unit of electrical potential
watt w – unit of electrical power the rate
at which electricity is produced or used
watt hour wh – unit of electrical energy
the production or consumption of one watt
for one hour
wecc – western electricity coordinating
council us
wholesale – the dealing of bulk power with
another power supplier
windfarm – a group of winddriven turbines
intended to generate electricity
us or uk in the deﬁnitions above indicates that
the term is applicable to the united states or the
united kingdom respectively
scottishpower annual report  accounts 200203

143
glossary of terms
metres yards
091 1 109
km miles
161 1 062
litres us gallons
378 1 026
conversion
factors designed by cgi brandsense printed by pillans  waddies – a member of the ormolu group
the paper used in this report is core silk produced inachlorinefree process from 100 virgin pulp emas approved
scottish power plc
registered ofﬁce
1 atlantic quay
glasgow g2 8sp
registered in scotland no 193794
for press releases and uptodate information visit our website
wwwscottishpowercom scottishpower annual report  accountsform 20f 200203
the power 
to perform
scottishpower annual review 200203 scottishpower annual review 200203 1
contents
01 chairman’s statement
02 chief executive’s review
16 board of directors 
executive team
18 financial review
21 independent auditors’
statement
22 summary financial 
statements
25 summary report of the 
directors
29 shareholder information
99
397
00
380
01
279
02
261
03
337
earnings per share pence
excluding goodwill amortisation and exceptional items
99
396
00
637
01
168
02
537
03
262
earningsloss per share pence
99
804
00
961
01
970
02
944
03
1085
operating proﬁt £m
excluding goodwill amortisation and exceptional items
99
803
00
662
01
722
02
777
03
946
operating proﬁt £m
99
046
00
079
01
207
02
1763
03
618
total shareholder return pence
capital appreciation plus dividend reinvestment
for £1 invested on 1 april 1998 
source datastream
99
2250
00
2480
01
2604
02
2734
03
2871
dividends per share pence
cash dividends excluding
‘dividend in specie’ on demerger
of thus
99
046
00
033
01
284
02
1588
03
1390
 change in total shareholder return
percentage change in total shareholder return
index in each ﬁnancial year
source datastream
2003 2002
turnover £5274m £6314m
operating proﬁt £946m £777m
operating proﬁt excluding goodwill and exceptionals £1085m £944m
proﬁtloss before tax £697m £939m
proﬁt before tax excluding goodwill and exceptionals £836m £567m
earningsloss per share 2617p 5371p
earnings per share excluding goodwill and exceptionals 3371p 2612p
dividends per share 2871p 2734p
cash dividends excluding ‘dividend in specie’ on demerger of thus
financial highlights shareholder information
annual general meeting
the annual general meeting will be held at the
glasgow royal concert hall sauchiehall street
glasgow on friday 25 july 2003 at 1100 am
details of the resolutions to be proposed at the
annual general meeting are contained in the
notice of meeting
quarterly results
copies of the quarterly results may be
obtained free of charge on request from the
company secretary at the company’s
registered ofﬁce quarterly results will also be
published on the company’s website
wwwscottishpowercom
halfyear results
the company as permitted by the london
stock exchange publishes its halfyear results
in one uk national newspaper in 2003 it is
expected that the halfyear results will be
published in the telegraph and on the
company’s website copies of the halfyear
results may be obtained free of charge on
request from the company secretary at the
company’s registered ofﬁce
environmental and social impact report
copies of the environmental and social
impact report may be obtained free of
charge on request from the company
secretary at the company’s registered ofﬁce
this report together with fuller information
about environmental marketplacecommunity
and workplace issues is also published on the
company’s website
press releases and uptodate information on
the company can be found on the company’s
website 
the annual review 200203 is also available
on cd free of charge from the company
secretary at the company’s registered ofﬁce
ordinary shares
share registration enquiries
the registrar
lloyds tsb registrars scotland
po box 28448
edinburgh eh4 1wq
tel 44 0870 600 3999
fax 44 0870 900 0030
textphone 44 0870 600 3950
website wwwshareviewcouk
dividend reinvestment plan
the dividend reinvestment plan provides
ordinary shareholders with the facility to invest
cash dividends by purchasing further
scottishpower shares for further details
please contact lloyds tsb on telephone
number 0870 241 3018
share consolidation and isas
share consolidation is a facility which allows a
number of holdings and especially family
holdings to be consolidated into one holding
this service is provided free of charge
individual savings accounts isas are suitable
for uk resident private investors who wish to
shelter their scottishpower shares from
income and capital gains tax details of the
scottishpower isa service are available from
lloyds tsb at the following address
alternatively please call the isa helpline on 
0870 242 4244
lloyds tsb registrars isas
the causeway
worthing bn99 6uy
share dealing
scottishpower ordinary shares may 
be bought or sold at competitive rates 
by post or telephone for further 
details please contact stocktrade on 0845
601 0979 quoting low c0070
american depositary 
shares adss
exchange and stock transfer enquiries
jpmorgan chase bank
shareholder relations
po box 43013
providence ri 029403013
tel 1 866 scotadr toll free
1 866 726 8237 toll free
1 781 575 2678 outside us not t oll free
fax 1 781 575 4082
website wwwadrcomshareholder
dividend reinvestment plan
global invest direct
global invest direct is the direct share purchase
and dividend reinvestment plan for ads holders
which allows existing and ﬁrst time investors to
purchase adss without a broker global invest
direct encourages investors to make initial and
ongoing investments in the company by
providing investors with the convenience of
investing directly in scottishpower’s adss with
reduced brokerage commissions and service
costs for further details please contact
jpmorgan chase bank as detailed above
agent for us federal securities laws
the agent for scottishpower for us federal
securities law purposes is
puglisi  associates
850 library avenue suite 204
po box 885
newark
delaware 19715
cautionary statement for purposes of the “safe
harbor” provisions of the private securities
litigation reform act of 1995 
some statements made in this annual review are
forwardlooking statements within the meaning of the
“safe harbor” provisions of the private securities
litigation reform act of 1995 all statements with
respect to us our corporate plans future ﬁnancial
condition future results of operations future business
plans strategies objectives and beliefs and other
statements that are not historical facts are forward
looking statements containing the words “may”
“will” “expect” “anticipate” “intend” “estimate”
“continue” “plan” “project” “target” “on track to”
“strategy” “aim” “seek” “will meet” or other similar
words are also forward looking these statements are
based on our management’s assumptions and beliefs
in light of the information available to us these
assumptions involve risks and uncertainties which
may cause the actual results performance or
achievements to be materially different from any
future results performance or achievements expressed
or implied by such forwardlooking statements
scottishpower wishes to caution readers and others to
whom forwardlooking statements are addressed that
any such forwardlooking statements are not
guarantees of future performance and that actual
results may differ materially from estimates in the
forwardlooking statements scottishpower undertakes
no obligation to revise these forwardlooking
statements to reﬂect events or circumstances after the
date hereof  important factors that may cause results
to differ from expectations include for example
– any regulatory changes including changes in
environmental regulations that may increase the
operating costs of the group may require the group
to make unforeseen capital expenditures or may
prevent the regulated business of the group from
achieving acceptable returns
– future levels of industry generation and supply
demand and pricing political stability competition
and economic growth in the relevant areas in which
the group has operations
– the availability of acceptable fuel at favorable
prices
– the availability of operational capacity of plants
– the success of reorganizational and costsaving
efforts and
– development and use of technology the actions of
competitors natural disasters and other changes to
business conditions
range of no of 
holdings shareholdings no of shares
1100 18436 732327
101200 174505 28957720
201600 178703 55273513
6011000 39280 30763853
10015000 48442 90686464
5001100000 4223 62322104
100001 and above 781 1587196821
total 4643701855932802
scottishpower annual review 200203 2829 designed by cgi brandsense printed by pillans  waddies – a member of the ormolu group
the paper used in this review is core silk produced in a chlorinefree process from 100 virgin pulp emas approved
scottish power plc
registered ofﬁce
1 atlantic quay
glasgow g2 8sp
registered in scotland no 193794
for press releases and uptodate information visit our website
wwwscottishpowercom
financial calendar
16 june 2003 dividend payment date – us and uk ﬁnal dividend for the year ended 31 march 2003
july 2003 announcement of results for quarter ending 30 june 2003 – q1
25 july 2003 annual general meeting
september 2003 q1 dividend payable
november 2003 announcement of results for quarter ending 30 september 2003 – q2
december 2003 q2 dividend payable
february 2004 announcement of results for quarter ending 31 december 2003 – q3
march 2004 q3 dividend payable
may 2004 announcement of preliminary results for the year ending 31 march 2004
june 2004 q4 dividend payable ﬁnal dividend for the year ending 31 march 2004
list of uk ﬁnancial terms used in the annual review
uk ﬁnancial terms us equivalent or deﬁnition
accounts financial statements
associates equity investors
capital redemption reserve other additional capital
creditors accounts payable and accrued liabilities
creditors amounts falling due within one year current liabilities
creditors amounts falling due longterm liabilities
after more than one year
financial year fiscal year
gearing leverage
net asset value book value
operating proﬁt net operating income
proﬁt income
proﬁt and loss account statement income statement
proﬁt and loss account in the balance sheet retained earnings
proﬁtloss for the ﬁnancial year net incomeloss
provisions longterm liabilities other than debt and speciﬁc accounts payable
reserves shareholders’ equity other than paidup capital
share premium account additional paidin capital or paidin surplus not distributable
shareholders’ funds shareholders’ equity
turnover revenues scottishpower annual review 200203 1
contents
01 chairman’s statement
02 chief executive’s review
16 board of directors 
executive team
18 financial review
21 independent auditors’
statement
22 summary financial 
statements
25 summary report of the 
directors
29 shareholder information
99
397
00
380
01
279
02
261
03
337
earnings per share pence
excluding goodwill amortisation and exceptional items
99
396
00
637
01
168
02
537
03
262
earningsloss per share pence
99
804
00
961
01
970
02
944
03
1085
operating proﬁt £m
excluding goodwill amortisation and exceptional items
99
803
00
662
01
722
02
777
03
946
operating proﬁt £m
99
046
00
079
01
207
02
1763
03
618
total shareholder return pence
capital appreciation plus dividend reinvestment
for £1 invested on 1 april 1998 
source datastream
99
2250
00
2480
01
2604
02
2734
03
2871
dividends per share pence
cash dividends excluding
‘dividend in specie’ on demerger
of thus
99
046
00
033
01
284
02
1588
03
1390
 change in total shareholder return
percentage change in total shareholder return
index in each ﬁnancial year
source datastream
2003 2002
turnover £5274m £6314m
operating proﬁt £946m £777m
operating proﬁt excluding goodwill and exceptionals £1085m £944m
proﬁtloss before tax £697m £939m
proﬁt before tax excluding goodwill and exceptionals £836m £567m
earningsloss per share 2617p 5371p
earnings per share excluding goodwill and exceptionals 3371p 2612p
dividends per share 2871p 2734p
cash dividends excluding ‘dividend in specie’ on demerger of thus
financial highlights all four scottishpower businesses produced
good results during 200203 sustaining the
recovery that began in the latter months of last
year this ﬁnancial and commercial progress is
especially pleasing after the challenges the
energy markets have presented in both the us
and the uk earnings per share rose by 29
to 3371 pence
our regulated businesses in the us and uk
both performed well paciﬁcorp’s drive to
increase operational efﬁciency and improve
customer service resulted in a substantial boost
to proﬁtability and remains on track to achieve
its targeted return on equity our uk
infrastructure business delivered another
strong performance increasing sales and
meeting demanding cost savings objectives 
in the competitive sectors the uk division has
continued to face tough conditions but
succeeded in increasing sales maintaining
proﬁts and growing customer numbers our
newest business ppm reported an operating
proﬁt of £28 million and has good
opportunities to grow its successful gas storage
and renewables ventures
with proﬁts and earnings up debt and interest
charges down and satisfactory cash ﬂow
scottishpower ended the year in a sound
ﬁnancial position we have announced our
intention to declare three quarterly dividend
payments of 475 pence from april 2003 and
will set the fourth quarter payment to represent
the balance of the dividend for the year to 31
march 2004 after march 2004 we shall aim to
grow dividends in line with earnings
the last weeks of 200102 saw scottishpower
refocused on energy and these results prove
clearly that this was the correct strategy the
testing period we have endured has had a
positive effect on the group’s culture today
scottishpower has an international leadership
team of growing stature and a programme of
development initiatives designed to raise our
skills and competencies further
we have had to sharpen existing skills and
develop others that will be of lasting value the
california energy crisis that followed so soon
after our merger with paciﬁcorp has given us 
a heightened awareness of risk and better
techniques for managing it we are now
applying this experience in the uk wholesale
market with success our grasp and handling of
detailed regulatory issues has improved boding
well for the next uk price review in 2005 we
are developing a growing portfolio of renewable
energy assets and have successfully
renegotiated the nuclear energy agreement
with british energy
against our peer groups scottishpower remains
at or near the top of the environmental and
social impact rankings and paciﬁcorp is gaining
ground in the equivalent us benchmarks
surveys among our employees who have borne
the brunt of all the change and upheaval within
the businesses show morale improving
pensions have been much in the news during the
year and neither our us nor uk pension funds
have escaped the downturn in equity markets we
have resumed contributions to our uk pension
funds and will make the recovery of increased
pension costs through regulatory processes one
of our priorities in both the us and the uk
now turning to the board there are a number
of changes to report nick rose finance
director of diageo joined the board as a non
executive director in february 2003 ewen
macpherson will retire as a nonexecutive
director after the agm we thank him for his
advice and wish him well i am grateful that sir
peter gregson who had planned to retire this
year has agreed to extend his term of ofﬁce for
another year
this has been an eventful but ultimately
successful year during which all our employees
in both the us and the uk have given strong
support on a daily basis on behalf of the board
i want to thank them for their efforts and goodwill
the outlook for scottishpower remains positive
with additional improvements in performance
expected from our business and good
opportunities for further growth
chairman’s statement
“today scottishpower has an international
leadership team of growing stature”
charles miller smith chairman
7 may 2003
charles miller smith chairman
 excluding goodwill amortisation and exceptional items
scottishpower annual review 200203 01 chief executive’s review
i am pleased to report that in the past year we delivered a good set of
results with proﬁts up substantially and earnings per share for the
year up 29 the recovery at paciﬁcorp was particularly pleasing
with operating proﬁt up by some 60 in the year our dividend for
the year was 2871 pence per share an increase of 5 we also
delivered a total return of 139 for shareholders during the year
the sale of southern water at the beginning of the year enabled us 
to reduce our net debt by £2 billion thus strengthening our balance
sheet and ﬁnancial ratios 
we manage regulated and competitive businesses in the uk and us to serve gas and electricity
customers we invested over £800 million in our businesses during the year of which some
£345 million 42 was in areas of growth such as additions to our electricity networks new
generation especially renewables and gas storage investment of this sort is at the heart of our
strategy to become a leading international energy company we invest only in businesses where
we can deploy proven skills and strong market knowledge
the safety and wellbeing of our workforce and the public is our number one priority sadly the
year saw two of our colleagues killed at work one fatal accident in the uk and one in the us
tragedies such as these reinforce my conviction that we should put nothing ahead of safety and
that we all have a role and responsibility to ensure that the highest standards are maintained at
all times 
during the past year we have made good progress in further enhancing the underlying quality
of our business as business in the community’s company of the year 2002 we have continued
to contribute signiﬁcantly to the corporate social responsibility agenda in both the uk and the
us and are publishing our ﬁrst combined environmental and social impact report in july 2003
our robust risk management policies and procedures were recognised by the international
ﬁnance magazine risk with the prestigious award of corporate risk manager of the year we
have also placed great emphasis on the talent and performance management of our people
our top international cadre of 250 managers now has clear incentive based performance
agreements linked directly to our strategic objectives 
pacificorp 
paciﬁcorp is our regulated us business with a portfolio of over 8000 mw of power from coal
gas renewable and hydro resources 15000 miles of transmission lines and a distribution
system serving 15 million customers in six states paciﬁcorp is a leading regional integrated
utility and is a key player in western energy markets the strategic priorities of paciﬁcorp set at
the beginning of 200203 were
• achieve roe target1 billion ebit by 200405 through
– general rate cases
– transition plan
• manage risk and reward balance
• deliver excellent customer service
operating proﬁt for paciﬁcorp increased by £233 million to £463 million for the year to 
31 march 2003 operating proﬁt excluding goodwill amortisation for paciﬁcorp for the year
grew by £225 million to £597 million as a result of regulatory rate increases and recoveries of
excess power costs of £80 million signiﬁcantly lower net power costs of £257 million and
continued progress in the delivery of transition plan beneﬁts of £64 million in the year these
improvements were partly offset by lower transmission revenues of £19 million from reduced
“this has been a year of delivery based on
our consistent focus on performance” 
ian russell chief executive  excluding goodwill amortisation and exceptional items
 excluding goodwill amortisation 99
00
01
02
03
earnings per share pence
excluding goodwill amortisation
and exceptional items  
scottishpower annual review 200203 0203
use of the transmission system by third parties higher depreciation charges of £25 million risk
mitigation and project costs of £41 million insurance pensions and healthcare costs of £46
million and oneoff gains in the previous year and foreign exchange of £45 million 
net capital expenditure for the year decreased by £1 million to £368 million with £111 million
invested in network growth and new generation assets £211 million on network and generation
refurbishment and £46 million on other capital projects including information technology 
net capital expenditure is expected to increase in 200304 as a result of higher generation and
mining overhauls and refurbishment spend environmental initiatives and continued investment
in expanding the network all expenditure prudently incurred is expected to earn its regulatory
rate of return and contribute to an increased rate base for paciﬁcorp
• achieve roe target1 billion ebit by 200405 through
– general rate cases
– transition plan
paciﬁcorp remains on track towards its target of 1 billion ebit by 200405 through a
combination of general rate cases and beneﬁts derived from the transition plan
general rate increases of approximately 160 million per year have been awarded to paciﬁcorp
from 1 april 2001 to 31 march 2003 with 31 million awarded during the year ended 31
march 2003 paciﬁcorp’s regulatory strategy includes ﬁling regular rate cases to increase
revenues to recover increasing operational costs and capital expenditure while realising our full
allowed return on investment in line with this plan paciﬁcorp ﬁled a general rate case in
oregon in march 2003 for 58 million representing a 7 rate increase primarily as a result of
increased costs related to insurance premiums healthcare pensions and other costs that are
similarly affecting many other us companies in california testimony and hearings in
paciﬁcorp’s 16 million general rate case request have been scheduled to take place through
may and june of 2003 paciﬁcorp also plans to ﬁle in the next few weeks for general rate cases
in wyoming and utah
during march 2003 paciﬁcorp was denied recovery of 91 million in net excess power costs in
wyoming and is currently seeking a rehearing of this decision additionally paciﬁcorp
continues seeking to defer and recover approximately 16 million in net excess power costs in
washington state an order on this case is expected by early summer 2003 
among the legislative measures approved in paciﬁcorp’s service territory senate bill 61 in utah
will go into effect in early summer 2003 this legislation provides an option for the utah public
excerpt from our
preliminary results
presentation 
may 2002
“the outlook for scottishpower remains positive” 
397
380
279
261
337 service commission to use a future testyear period in utility rate cases that more appropriately
reﬂects the cost of providing service which is necessary to reduce the period between capital
investment and recovery in rates – referred to as “regulatory lag” reducing regulatory lag
should encourage needed costeffective investments in utility infrastructure by companies such
as paciﬁcorp
the paciﬁcorp transition plan continues to progress on track as a key driver towards increasing
proﬁtability and supporting paciﬁcorp’s regulatory objectives cumulative transition plan
beneﬁts total approximately 217 million slightly ahead of this year’s target of 204 million
and we are now twothirds of the way towards our goal of 300 million by 200405 these
included new call centre technology and other process changes that helped increase employee
productivity and improve customer service in distribution operational efﬁciency improvements
were delivered such as home start which allows overhead line crews to respond more
effectively to faults additionally continuing procurement cost savings and royalties from the
sale of a synthetic fuel operation last year contributed to paciﬁcorp’s continued delivery of the
transition plan in 200203 
paciﬁcorp’s distribution and transmission
areas cover 135192 sq miles
“cumulative transition plan beneﬁts total
approximately 217 million”  scottishpower annual review 200203 0405
• manage risk and reward balance
paciﬁcorp successfully managed power demand during the challenging summer of 2002 and
winter of 200203 through a robust combination of existing physical resources a weather
related hedge and peaking generation facilities during the winter paciﬁcorp’s base of coalﬁred
generating resources and forward gas purchase strategy minimised the risks of natural gas
price volatility paciﬁcorp remains wellpositioned and is fundamentally balanced for the
summer of 2003 
our longterm integrated resource plan irp which seeks to identify new resource
requirements to implement plans to deliver safe reliable lowcost power to customers over the
next 20 years was ﬁled with state regulatory commissions in january 2003 the irp is
progressing with the development of the request for proposals rfp process under which
paciﬁcorp will seek bids for future generation needs rfps will be issued for both short and
longterm electricity requirements including renewable energy needs the rfp process is
expected to extend until spring 2004 
the irp and the resulting rfp process have been created to identify paciﬁcorp’s future
resource mix in a coordinated process with the six states in which paciﬁcorp operates as
part of these processes paciﬁcorp is expecting to add the equivalent of approximately 4000
mw of capacity through a combination of sources over the next decade these include the
addition of base load construction capacity or purchases approximately 2100 mw
peaking resources approximately 1200 mw and purchased “shaped” power
approximately 700 mw in addition paciﬁcorp also plans to implement demand side
management programmes up to 450 mw on average and acquire renewable energy
approximately 1400 mw among the steps involved in the irp process will be an
evaluation of potential future generation sources such as an additional generating unit at the
hunter station in utah the air quality permitting process has begun to enable paciﬁcorp to
develop this option prudently incurred costs of such investments are expected to be
included in paciﬁcorp’s future rate base
copyright the times business
4 october 2002 chief executive’s review continued
• deliver excellent customer service
during 200203 paciﬁcorp continued to enhance its customer service commitments while
maintaining retail rates that are among the lowest in the western us improvements include
enhancing paciﬁcorp’s outage communications technology to provide customers with the ability
to report outages directly thus helping to speed repairs or pinpoint potential problem areas
paciﬁcorp was recognised by tqs research of atlanta georgia for improvements with large
commercial and industrial customers overall customer satisfaction metrics show positive
results including improved accuracy and timeliness of customer billing in addition paciﬁcorp
successfully tested a handheld meter reading system that will improve system functionality and
accuracy the new system is expected to be implemented by the summer of 2003 with further
productivity improvements to follow over the next 12 months that will enhance paciﬁcorp’s
scheduling technology
“paciﬁcorp’s green pricing programme is one of
the most progressive and successful in the us” 
paciﬁcorp is expecting to add the equivalent of 4000 mw
approximately of capacity through a combination of sources  scottishpower annual review 200203 0607
based on a recent report paciﬁcorp was rated third in the us by the department of energy as a
marketer of green energy under paciﬁcorp’s blue sky programme in excess of 21000
customers have signed up for blue sky or other renewable products paciﬁcorp’s green pricing
programme is one of the most progressive and successful in the us 
to improve customer service and reliability paciﬁcorp continues its infrastructure improvement
projects in targeted areas particularly along utah’s wasatch front where there is rapidly
growing demand for electricity the scope of this 200 million investment through 2005
includes transmission line upgrades new distribution substations upgrades to existing
distribution substations and other system enhancements these projects will provide additional
capacity to meet future load demands throughout paciﬁcorp’s network especially in high
growth areas
infrastructure division
infrastructure division our regulated uk wires business is the uk’s third largest distribution
company and comprises the distribution and transmission networks in our scottish service area
and the distribution network in manweb over 110000 circuit km in total the strategic priorities
of the infrastructure division set at the beginning of 200203 were
• be at or near the regulatory efﬁciency frontier
– outperform operating cost targets
– achieve better than planned output from capex
• achieve high standards of customer service
• invest consistently to add value
for the year to 31 march 2003 the infrastructure division reported operating proﬁt of £368
million an increase of £13 million on last year higher regulated income of £9 million and net
cost reductions of £18 million were partly offset by higher depreciation operational rates
insurance and pension costs of £14 million 
the infrastructure division invested net capital expenditure of £230 million during the year an
increase of £32 million compared to the year to 31 march 2002 of this £141 million was
invested in network refurbishment £68 million on network expansion and £21 million on other
capital projects 
net capital expenditure in 200304 is expected to increase modestly with investment
concentrated on the regulatory asset base delivering the regulated rate of return in particular
further investment will be undertaken in our overhead network modernisation programme 
scottishpower share price outperformed the ftse 100 index of companies by 526 
 calculated for the period 290302 – 310303 chief executive’s review continued
• be at or near the regulatory efﬁciency frontier
– outperform operating cost targets
– achieve better than planned output from capex
in line with our strategic priorities we expect to be at or near the regulatory efﬁciency frontier
for the next price review period beginning in april 2005 as previously stated targeted cash cost
savings of £75 million due by march 2003 were achieved ahead of schedule by september
2002 reﬂecting our increased commercial focus in the division as a result a further target of
£33 million of net cost reductions was identiﬁed for completion by 200304 with net cost
reductions of £18 million being achieved in 200203 through the initiatives set out below
we are achieving better outputs from capital expenditure by ensuring that costs are appropriately
allocated to capital projects through our asset managerservice provider model and have seen
procurement savings of over 10 in a number of key purchase areas such as distribution
transformers overhead lines and cables additionally we have conducted a benchmark review of
call centre services are making more efﬁcient use of contractors achieving improved staff
ﬂexibility using site start arrangements and adopting a ﬂexible day working system
• achieve high standards of customer service
we continue to focus on delivering high standards of customer service our network performance
as measured by customer interruptions and customer minutes lost indicates that we are on
track to be able to participate in ofgem’s information and incentives programme iip when the
reward mechanism for outperforming the regulatory targets is put in place by 200405
our performance against ofgem’s standard for responding to customers’ written
correspondence has improved signiﬁcantly in addition our performance relative to the industry
as measured by ofgem’s customer satisfaction survey has ensured we are placed in the
incentive reward band under the terms of the iip further a recent government report
recognised our good performance during a galeforce storm in the mersey and north wales
area on 27 october 2002 we received speciﬁc praise for our performance in emergency
preparation telephone response and regular and realistic feedback to customers on estimated
times of reconnection
• invest consistently to add value
capital expenditure to date contributes to maintaining the value of our asset base progress in
the berwick and borders investment programme which represents an investment of £11
million continues to be made with 65 of the 33kv circuits included in the programme being
completed additionally 63 of the 11kv circuits included in the programme have been
completed or are under construction this part of the overhead line build programme has been
accelerated and is on target for completion by march 2004 
reinforcement of the transmission network will improve both the performance and resilience of
our network with high proﬁle projects at gretna and chapelcross representing a £13 million
investment beneﬁts of these projects include the strengthening of the network to deal with the
chapelcross power station closure these projects are being delivered on time and to budget
the government target of 10 of supply from renewable sources by 2010 is an opportunity for
infrastructure division to invest in network capacity our transmission business has participated
in a recent network study that explored the existing scottish and northern england networks’
potential to support increased volumes of new renewable generation the study identiﬁed three
progressive steps required to upgrade our transmission network and we believe the associated
investment to be valued at roughly £300 million – £400 million over 10 years dependent on
renewable progress we are currently working to develop detailed plans in relation to this
opportunity in addition we believe our distribution networks in scotland and manweb are well
positioned to develop network investment opportunities in support of renewable generation
should government targets be met 
“regulated uk wires business is the uk’s third
largest distribution company”  scottishpower annual review 200203 0809
the formal price control reviews of sp transmission sp distribution and sp manweb will
continue during the forthcoming year we have been working with ofgem and the rest of the
industry to develop the framework of price controls applying to all network monopoly
companies and lay the foundations for the formal distribution price control reviews
we believe a key issue for the reviews is the provision of a sufﬁcient and stable return to allow
companies to attract and retain funding from capital markets a further issue relates to ﬁnding
ways to facilitate renewable energy in line with government targets both have implications for
the working of the regulatory regime and for the longterm safety and integrity of the uk
electricity infrastructure 
the outcome from the price control review should take account of guidance from the
government on social and environmental objectives and recognise any additional expenditure
arising from such objectives our performance in the recent asset risk management survey
demonstrated our ability to invest efﬁciently and effectively and our cost and storm response
performances provide us with the credibility to inﬂuence this important debate 
we should not lose sight of the fact that the industry is entering a new phase where simple cost
cutting and moderate investment leading to price cuts for customers will no longer sustain future
performance and price increases will be required we are committed to working with ofgem
and the rest of the industry throughout the price control review process to deliver a successful
outcome that balances the interests of shareholders customers and all other stakeholders 
uk division
the uk division is our competitive integrated generation and supply business the division
manages activities across the energy value chain maximising value from a diverse energy
portfolio of some 5000 mw of coal gas hydro and wind powered plants through to our
national customer base of over 36 million customers via an energy management function that
acts to balance and hedge energy needs the strategic priorities of the uk division set at the
beginning of 200203 were
• enhance margins through our integrated operations
• grow customer numbers and improve customer service
• make selective investments using proven knowledge and skills
operating proﬁt for the uk division increased by £18 million to £73 million for the year to 31
march 2003 mainly due to last year’s results including a £19 million exceptional reorganisation
charge operating proﬁt excluding goodwill amortisation and exceptional items was £78 million
for the year £1 million lower compared to the previous year net energy margins have
performed strongly increasing by £15 million before higher depreciation costs to capture and
investment in energy efﬁciency schemes of £12 million and increased pension costs of £4
million the impact of lower wholesale electricity prices has been mitigated by our integrated
approach to managing the energy value chain whereby our own electricity production is
extensively matched to our customer demand across great britain the renegotiation of the
nuclear energy agreement nea with british energy be at a market related price has delivered
a beneﬁt of approximately £25 million in the current year and provides a hedge against
revenues which have been impacted by lower wholesale prices 
during the year the uk division invested £68 million in capital projects a £41 million reduction
on the previous year £29 million was invested in new generation and gas storage assets £19
million in generation plant overhaul and refurbishment and £20 million on other projects
including business transformation and information technology
in 200304 subject to obtaining planning permission net capital expenditure for the uk
division could increase substantially as a result of our commitment to increase our windfarm
capacity in addition we plan to invest in gas storage development and upgrades to generation
assets required to maintain our generating capacity all investments are projected to have
returns signiﬁcantly in excess of the cost of capital and enhance earnings
• enhance margins through our integrated operations
during the year we continued to beneﬁt from the ﬂexibility of our plant portfolio we have
maintained what we believe is a best in class performance in the balancing mechanism in particular from our ﬂexible ccgt plant at rye house and our pumped storage facility at
cruachan which is being upgraded in capacity by 10 we continue to optimise the operating
regime across our plant portfolio aiming to deliver the lowest sustainable costs and to position
it to take maximum advantage of commercial opportunities
the renegotiation of the nea relieved the division of a signiﬁcant cost burden during the year
but the future of the remaining restructuring contracts is still unresolved we continue to press
the government strongly on this issue whilst we expect wholesale electricity prices to remain
depressed for the next two years there could be upward price pressure emerging from
tightening of the capacity margin throughout great britain and as environmental measures
such as carbon trading and the large combustion plants directive start to take effect we may
see some price volatility before a new equilibrium is reached
retail sales revenues increased during the year in part following an increase in prices to
customers outside our service territories in november 2002 prices to the majority of electricity
customers in our scottish and manweb territories were increased effective 1 april 2003
although in both instances we have preserved our competitive dual fuel prices and provided
nearly all customers affected by the april 2003 price increase with the opportunity of mitigating
the increase by changing to a more economical product package
the success of our company lies in the knowledge
capabilities and skills offered by our employees scottishpower annual review 200203 1011
our business transformation programme which is underpinned by 6 sigma methodology
continues to deliver signiﬁcant savings to the business in the year to 31 march 2003 we have
delivered revenue and cost beneﬁts of £14 million across our business processes including
sales and marketing billing and debt the utilisation of 6 sigma methodology is now being
extended throughout the uk division
• grow customer numbers and improve customer service
we continue to be successful in growing our customer base customer numbers now stand at
365 million up by approximately 150000 in the year to 31 march 2003 as well as gaining
new customers we have successfully reduced overall churn by 4 percentage points compared
with the prior year
customer retention and winback continues to be an important part of our marketing activities
and we have deployed tv advertising to good effect emphasising that our dual fuel customers
can beneﬁt from a competitive price by joining scottishpower
in response to customer research we introduced a new bill design to provide clearer and more
concise communication of charges and have improved the level of service provided by our call
centres during the year 
scottishpower was amongst the pioneers of the industry’s energysure accreditation scheme for
sales staff which will be governed by an external code administrator all scottishpower’s
domestic sales teams have now been accredited to this customer service and quality standard
and we are now rolling out the scheme to cover all the relevant sales and marketing channels
in addition we have introduced three new energy products during the year including capped
price and no standing charge offers which have further enhanced the range available to
customers 
• make selective investments using proven knowledge and skills
the renewables obligation has created a market framework that allows developers to capitalise
on the uk’s rich resource of wind energy with eligible developments attracting renewables
training and development is available through scottishpower learning
and paciﬁcorp learning to all employees
“customer numbers now stand at 365 million
up by approximately 150000 in the year”  chief executive’s review continued
obligation certiﬁcates rocs currently worth approximately £45 for every mwh produced with
our strong track record in site identiﬁcation and development we are well placed to deliver
investments with an attractive return and enhanced earnings and to market effectively the
energy produced from renewable sources
in the year ended 31 march 2003 we have made planning applications for 279 mw of
windfarm capacity and we now have in excess of 546 mw awaiting planning consent we have
also begun environmental assessments on around 300 mw of capacity at additional potential
sites progress towards planning consent for our whitelee 240 mw and black law 134 mw
developments has been slowed by issues related to radar at glasgow and edinburgh airports
respectively a technical solution to this problem is being progressed and we are conﬁdent that
the issue will be resolved with 546 mw of windfarm capacity awaiting planning consent and the
300 mw pipeline of projects under assessment we are making excellent progress towards
alignment with the government target of 10 of supply from renewable sources by 2010
we are upgrading ﬁve of our smaller hydro generating stations totalling 45 mw to qualify for
rocs as part of this the upgrade to the 11 mw station at bonnington was completed in
200203 with the other four stations to be upgraded over the next 15 months
our 60 million therm gas storage planning application at byley in cheshire is presently awaiting
the result of a public inquiry expected to be determined in 200304
ppm
ppm is our competitive us energy company focused on providing environmentally responsible
energy products to wholesale customers its principal assets are thermal and renewable
generation resources and gas storage assets primarily serving western us and canadian
markets the strategic priorities of ppm set at the beginning of 200203 were
• grow its renewablethermal energy portfolio and gas storagehub services
• optimise returns through the integration of assets and commercial activities
ppm reported an operating proﬁt of £28 million for the year compared to a loss of £5 million last
year the growth in operating proﬁt for the year was due to the increased contribution from long
term sales contracts and gas storage activities and optimisation beneﬁts of £53 million partly
offset by higher depreciation charges and other operating costs of £17 million to support business
growth and the beneﬁt from settlement of a £3 million contract in the prior year 
ppm’s net capital expenditure for the year was £36 million a decrease of £170 million on last
year which included investment to complete the klamath falls and west valley generation
projects in the current year the business invested £30 million in new generation and £6 million
in other projects in addition we acquired the katy gas storage facility for £101 million
in 200304 ppm’s net capital spend is expected to increase primarily as a result of the
construction of new windfarms and development opportunities including moraine and flying
cloud which are expected to deliver favourable rates of return and enhance earnings
• grow its renewablethermal energy portfolio and gas storagehub services
ppm continues to grow its renewable energy business and has recently announced the
development of the 44 mw flying cloud wind project in iowa which includes a 15 year
agreement to sell power to interstate power  light a subsidiary of alliant energy in addition
construction of the 51 mw moraine wind project in minnesota has commenced the moraine
project is fully contracted with a 15 year agreement to sell power to the northern states power
company this will bring ppm’s total wind power under contract to more than 560 mw and
total thermalrenewable resource under ppm’s ownership or control to approximately 1350 mw
“we are well placed to deliver investments with
an attractive return and enhanced earnings”  scottishpower annual review 200203 1213
in addition to its renewable generation portfolio ppm has a total of 37 billion cubic feet bcf 
of gas storage capacity under ownership up from 14 bcf the prior year this includes the 
21 bcf acquired at the katy gas storage facility in december 2002 and a 2 bcf expansion of
the alberta hub gas storage facility during the year ppm has successfully integrated the katy
assets and is on target to deliver expected results ppm intends to add to its 40 ownership 
in the alberta hub gas storage facility with the purchase of an additional ownership interest 
this spring 
• optimise returns through integration of assets and commercial activities
integration of plant operations contract dispatch and energy management added 7 million in
the year the optimisation beneﬁts come from displacing plant operations with lowpriced
power purchases selling the displaced gas or placing it in storage as well as using transmission
and contract delivery ﬂexibility to manage locational price differences in both gas and power 
ppm has new and expanded terms for energy supply to the sacramento municipal utility
district one of ppm’s largest customers arrangements include revisions to original longterm
contracts executed in 200203 as well as sales of up to half the output of the 150 mw high
winds energy center in northern california and 100 mw of summer peaking power supply from
ppm’s portfolio 
in 200203 ppm placed 319 mw under longterm contract in addition ppm has effectively
managed its commodity exposure having sold its positions forward for 525 years fluctuating
commodity prices have little impact on ppm’s portfolio value except where increased volatility
gives ppm an opportunity to take advantage of plant options delivery ﬂexibility gas storage and
other tactics to maximise value 
regulatory and government policy issues
multistate process msp
paciﬁcorp continues work on the msp which is designed to resolve how prudently incurred
costs are allocated among the six states in which paciﬁcorp operates a collaborative process is
under way to identify possible solutions conduct technical conferences with participants and
meet with key parties to examine speciﬁc issues paciﬁcorp intends to ﬁle a ﬁnal detailed
regulatory proposal with each state utility commission this summer 
rto west
paciﬁcorp and nine other utilities received initial approval of their rto west proposal in
september 2002 from the federal energy regulatory commission ferc under the proposal
which the ferc called best in class among all the rto ﬁlings in terms of the proposed design
structure and thoroughness of approach the ﬁling utilities will retain ownership of their
transmission assets but transfer operational control of their system to rto west as proposed
rto west will help stabilise electricity transmission and guard against market manipulation in
the western part of the united states and canada while providing a reasonable level of return
for future transmission investments the rto west members are currently planning to ﬁle with
the ferc this summer and expect a response from the ferc by the end of 2003
federal energy regulatory commission ferc
the ferc continues its various investigations into western us market manipulation related to
the 200001 energy crisis as a regulated utility that participated in these markets primarily to
meet the company’s own power requirements paciﬁcorp has responded to various data
requests from the ferc and other market participants these cases involve trading practices
connected with the california power crisis as well as spot market refund cases and complaints
brought by paciﬁcorp against wholesale power marketers to seek refunds for highpriced power
purchased in 2001 paciﬁcorp continues to press for economic recovery while fully responding
to requests for information
british electricity trading and transmission arrangements betta 
the recently announced delay by the department of trade and industry to the introduction of
betta will not have a material effect on scottishpower in 200304 the ﬁnancial impact of the
betta bill is broadly neutral for scottishpower but zonal charges for transmission access and
losses would have a negative impact on the generation business in the uk division we were
pleased to see that the trade and industry select committee in its fifth report recommended delay in the implementation of transmission access reform until the costs and beneﬁts are able
to be assessed on a great britainwide basis scottishpower together with a number of other
companies has ﬁled for a judicial review of ofgem’s decision to implement zonal transmission
losses in england and wales
energy white paper
the recently published white paper on energy sets out to achieve a lower carbon energy
system proposing signiﬁcant investment in renewable energy energy efﬁciency and in
networks the uk division is well placed to take early mover advantage on renewable generation
and the infrastructure division should beneﬁt from the government’s commitment to investing
in networks we are pleased that ofgem recognises the need to plan and develop networks to
facilitate the transmission of renewable energy from scotland to centres of demand in the rest
of great britain
looking ahead
during 200203 we reported each quarter our progress in delivering the key strategic priorities
scottishpower the bitc business in the community company of the year and ballet central
pictured both believe in affordable access to the arts for as many people as possible scottishpower annual review 200203 1415
for each of our four businesses some of those priorities have now been achieved and further
new priorities have been identiﬁed accordingly looking ahead our strategic priorities are as
follows
paciﬁcorp
• achieve roe target  1 billion ebit by 200405
• manage energy risk and supply  demand balance
• deliver excellent customer service
• invest to grow the regulatory asset base including delivery of the integrated resource plan
infrastructure division 
• invest consistently to add future value including supporting renewables
• optimise our position through the 2005 price control reviews and the introduction of betta
• deliver costeffective high quality customer service
uk division
• enhance margins through our integrated operations 
• increase the value of our customer base through targeted sales growth and improved 
customer service
• progress towards achieving 10 of electricity supply from renewable sources by 2010 
ppm
• continue to be a leading provider of renewable energy products 
• grow natural gas storage and hub services business 
• create additional value by optimising the returns from our capability across gas and power
conclusion
our consistent focus on performance last year enabled us to deliver a good set of results 
we will continue to place a premium on leading operational performance to secure further
improvements in the results of our businesses there are substantial opportunities to expand
scottishpower through incremental investments in each of our businesses particularly in
networks generation including renewables and gas storage with as much as 40 of our capital
investment in new assets in these areas we believe we are well positioned to continue to grow
the outlook for scottishpower remains positive with further improvements expected from our
businesses we also believe that our continued focus will enable us to take advantage of the
opportunities to create shareholder value that will over time arise from the changing structure
of our industry in the uk the rest of europe and the us
courtesy of the herald glasgow ©
smg newspapers ltd 12 july 2002
ian russell chief executive
7 may 2003
photograph by bill cooper board of directors  executive team
01 ian russell 50 is chief executive
having been appointed to this position
in april 2001 he joined scottishpower
as finance director in april 1994 and
became deputy chief executive in
november 1998 he is a member of
the institute of chartered accountants
of scotland having trained with
thomson mclintock and has held
senior ﬁnance positions with tomkins
plc and hsbc
02 charles berry 51 is executive
director uk responsible in this
capacity for the uk energy businesses
of generation energy management
and supply he joined scottishpower
in november 1991 and was
appointed to the board in april 1999
he is a member of the board of the
energy saving trust prior to joining
scottishpower he was group
development director of norwest
holst a subsidiary of compagnie
générale des eaux and prior to that
held management positions within
subsidiaries of pilkington plc he
holds a bsc first class hons in
electrical engineering from the
university of glasgow and a masters
degree in management from the
massachusetts institute of technology
03 david nish 43 is finance
director having joined scottishpower
in september 1997 as deputy
finance director and then being
appointed to the board as finance
director in december 1999 in this
capacity he also has responsibility at
board level for performance
management and information
technology he is a member of the
institute of chartered accountants of
scotland and its qualiﬁcations board
a member of the scottish council of
the cbi and a nonexecutive director
of the royal scottish national
orchestra prior to joining
scottishpower he was a partner with
price waterhouse he has a bacc from
the university of glasgow
04 ronnie mercer 59 was
appointed group director
infrastructure in april 2001 and is
responsible in this role for the uk
wires business he is a member of the
board of the electricity association
he joined the scottishpower
generation business in 1994 and was
appointed generation director in
1996 and then managing director of
southern water in 1998 previous
career positions include scottish
director and managing director roles
in british steel he was educated at
paisley college of technology
05 judi johansen 44 was appointed
president and chief executive ofﬁcer
of paciﬁcorp in june 2001 and joined
the executive team in december
2001 she is responsible for all
paciﬁcorp’s operations she joined
paciﬁcorp as executive vice president
of regulation and external affairs in
december 2000 having held senior
positions with the bonneville power
administration and washington water
power she is involved in several civic
and professional activities she has a
bachelor’s degree in political science
from colorado state university and a
law degree from northwestern school
of law at lewis  clark college in
portland oregon
06 julian brown 53 was appointed
group director strategy in april 1997
having joined scottishpower in 1993
he began his commercial career with
exxon chemical in australia and
subsequently spent seven years with
management consultants mckinsey
and company he holds a bsc from
the australian national university and
a phd in chemistry from university
college london with effect from 1
april 2003 he left the executive team
to assume a new position within the
group
07 michael pittman 50 was
appointed group director human
resources in november 2001 he has
groupwide responsibility for human
resources leading the focus on talent
management one of the group’s main
strategic thrusts he joined paciﬁcorp
in december 1979 and was appointed
to the paciﬁcorp board in may 2000
he chairs the paciﬁcorp foundation
for learning board and is involved in
numerous civic activities he has held
several positions within paciﬁcorp
including safety and health risk
management and operations he
holds an advanced degree in
environmental health from the
university of washington
08 dominic fry 43 joined
scottishpower in september 2000 as
group director corporate
communications he is responsible
for investor and media relations
communications with employees
corporate social responsibility and
management of the group’s overall
reputation he has held appointments
as communications director with j
sainsbury plc and eurotunnel plc he
chairs the trading board of the
glasgow science centre and is a
communications adviser to the royal
shakespeare company and business
in the community he was educated
at the université paul valéry iii in
montpellier and the university of
north carolina
09 terry hudgens 48 was
appointed chief executive ofﬁcer of
scottishpower’s competitive us
energy business ppm in may 2001
and joined the executive team in
december 2001 he joined paciﬁcorp
as senior vice president of power
supply in april 2000 having
previously spent 25 years with texaco
inc he was formerly president of
texaco natural gas and served as
texaco’s senior representative and
elected ofﬁcer in the natural gas
supply association he has a
bachelor’s degree in civil engineering
from the university of houston
10 james stanley 48 was appointed
group director commercial and legal
in march 1996 he is responsible in
this role for the provision of all legal
commercial and associated services
throughout the group and particularly
the negotiation structuring and
delivery of ma projects such as the
sale of southern water plc in his early
career he specialised in commercial
litigation in private practice in 1986
he moved to the trafalgar house
group and subsequently became both
commercial director of john brown
plc and general counsel to the global
engineering division of the group he
is a graduate in law from nottingham
university and the college of law in
chester where he qualiﬁed as a
solicitor in 1980
11 andrew mitchell 51 was
appointed group company secretary
in july 1993 and is responsible in this
role for corporate governance and
reporting shareholder services
compliance and group security he
also serves as chairman of the
trustees of the group’s uk pension
schemes and as the company’s e7
representative prior to joining
scottishpower he held a number of
company secretarial appointments
latterly as company secretary of the
laird group plc and then stakis plc
now part of the hilton group he is a
graduate in law from the university of
edinburgh llb hons and the
london school of economics llm
and is a member of the institute of
chartered secretaries and
administrators
executive directors executive team
01 02 03 04 05
06 07 08 09 10 scottishpower annual review 200203 1617
12 charles miller smith 63 joined
the board as deputy chairman in
august 1999 and was appointed
chairman in april 2000 following a
career with unilever for some 30 years
during the last ﬁve of which he was
director of finance and latterly of the
food executive he was appointed chief
executive of ici in 1995 and then
served as chairman from 1999 to
2001 he is an international adviser to
goldman sachs a member of the
board of the indian company icici
one source plc and a member of the
ministry of defence management
board he is currently serving on the
committee chaired by professor laura
tyson of london business school
which is considering in the light of the
recommendations of the higgs review
ways of broadening the pool of non
executive directors he is also a
governor of the henley management
college
nonexecutive directors
13 sir peter gregson gcb 66 joined
the board in december 1996 and is
the company’s senior independent
nonexecutive director and chairman
of the remuneration committee he
was formerly a career civil servant
having served latterly as permanent
secretary of the department of
energy from 1985 to 1989 and
permanent secretary of the
department of trade and industry
until his retirement in june 1996 he
was previously deputy chairman of
the board of companions of the
chartered institute of management
and a nonexecutive director of
woolwich plc his current term of
ofﬁce has been extended by up to one
year such that it will expire not later
than the agm in 2004
14 nolan karras 58 joined the board
in november 1999 he continues as a
nonexecutive director of paciﬁcorp
having previously until the merger in
november 1999 served as chairman
of the paciﬁcorp personnel
committee he is president of the
karras company inc and a
registered principal for raymond
james financial services he is chief
executive ofﬁcer of western hay
company inc and a nonexecutive
director of beneﬁcial life insurance
company he is chairman of the utah
state higher education board of
regents and a member of the board
of ogdenweber applied technology
college he also served as a member
of the utah house of representatives
from 1981 to 1990 and as speaker of
the utah house of representatives
from 1989 to 1990 his current term
of ofﬁce will expire at the agm in
2006
15 ewen macpherson 61 joined the
board in september 1996 and is
chairman of the audit committee he
had a long career with 3i group plc
leading to his appointment as chief
executive from 1992 until his retirement
in 1997 he is chairman of merrill
lynch new energy technology plc and a
nonexecutive director of foreign 
colonial investment trust plc and
pantheon international participations
plc he is also chairman of the trustees
of glaxosmithkline pension fund
previous appointments include non
executive directorships of mg group
plc booker plc and the law debenture
corporation plc he will retire from the
board after the agm in 2003
16 euan baird 65 joined the board
in january 2001 he served as
chairman and chief executive ofﬁcer
of schlumberger limited from 1986 to
february 2003 he is now non
executive chairman of rollsroyce plc
and a nonexecutive director of société
générale and areva he is a trustee of
tocqueville alexis trust and carnegie
institution of washington and a
member of the comité national de ia
science in france and the prime
minister’s council of science and
technology in the uk his current term
of ofﬁce will expire at the agm in 2004
17 mair barnes 58 joined the board
in april 1998 she is a nonexecutive
director of gwr group plc patientline
plc and the south african company
woolworths holdings limited she is a
member of the department of trade
and industry’s strategy board and
services group board she was
previously managing director of
woolworths plc in the uk until 1994
and subsequently became chairman
of vantios plc until 1998 she was
also formerly a nonexecutive director
of abbey national plc littlewoods plc
and george wimpey plc her current
term of ofﬁce will expire at the agm in
2004
18 philip carroll 65 joined the
board in january 2002 he was
formerly chairman and chief
executive ofﬁcer of fluor corporation
a californiabased international
engineering construction and services
company until his retirement in
february 2002 previously he was with
shell oil for over 35 years serving as
president and chief executive ofﬁcer
from 1993 to 1998 he is an honorary
life member of the board of the
american petroleum institute and
holds various posts with the james a
baker iii institute for public policy of
rice university and the university of
houston his current term of ofﬁce will
expire at the agm in 2005
19 nick rose 45 joined the board
in february 2003 he is the audit
committee’s “ﬁnancial expert” and
will succeed ewen macpherson as
chairman of the committee later in
the year he is finance director of
diageo plc having been appointed to
this position in july 1999 previously
he held senior ﬁnance positions with
grandmet and was latterly finance
director of international distillers 
vintners in 1996 and then of united
distillers  vintners in 1997 he is
also a director of moët hennessy his
current term of ofﬁce subject to his
election in 2003 will expire at the
agm in 2006
board  executive team changes
allan leighton resigned from the board
on 12 june 2002 nick rose was
appointed to the board on 19 february
2003 in accordance with the articles of
association he will retire from ofﬁce at
the annual general meeting and being
eligible offers himself for election in
addition charles miller smith david
nish and ewen macpherson retire by
rotation at the annual general meeting
charles miller smith and david nish
being eligible offer themselves for re
election ewen macpherson will retire
from the board and accordingly does
not seek reelection david nish has a
service contract terminable by either
party upon one year’s notice
julian brown served as a member of
the executive team throughout the year
but assumed a new position within the
group with effect from 1 april 2003
for us reporting purposes the
members of the executive team are
regarded as ofﬁcers of the company
members of the audit committee
ewen macpherson chairman
philip carroll
sir peter gregson
nolan karras
nick rose
members of the nomination
committee
charles miller smith chairman
mair barnes
sir peter gregson
nolan karras
lan russell
members of the remuneration
committee
sir peter gregson chairman
euan baird
mair barnes
nolan karras
ewen macpherson
chairman
11 12 13 14 15
16 17 18 19 financial review
overview of the year to march 2003
group turnover for the year to 31 march 2003
was £5274 million a reduction of £1040 million
on the previous year from continuing
operations group turnover was lower by £276
million at £5247 million including adverse
translation movements of £205 million from the
weaker us dollar sales were lower in paciﬁcorp
as a result of reduced wholesale power prices in
the western us although this was partially offset
by revenue growth from our other three
businesses paciﬁcorp’s turnover for the year
was down by £481 million to £2499 million
mainly as a result of the lower wholesale prices
experienced for most of the year and a £189
million adverse translation impact of the weaker
us dollar these reductions were offset in part by
higher wholesale volumes and regulatory rate
increases turnover for infrastructure division
increased by £66 million for the year to £314
million this was mainly due to increased
regulated income from higher sales to third party
electricity suppliers the division also delivered
non regulated revenue growth of £28 million
for the year principally due to increased new
connections from its core utility solutions joint
venture for the uk division turnover increased
in the year by £26 million to £2148 million this
was as a result of higher sales to retail customers
increased generation agency sales in scotland
and exports to northern ireland which have
offset the impact of low wholesale electricity
prices turnover for ppm for the year increased
by £113 million to £286 million after a £16
million adverse us dollar translation impact as
the business beneﬁted from the ﬁrst full year of
its longterm power contracts and the growth
of its gas storage business 
discontinued operations’ turnover in the year
reduced from £791 million to £27 million
compared to the prior year
group operating proﬁt increased by £169
million to £946 million for the year to 31 march
2003 group operating proﬁt from continuing
operations was £932 million £296 million higher
than the previous year excluding goodwill
amortisation and exceptional items group
operating proﬁt from continuing operations
increased by £270 million to £1071 million our
us operations delivered the majority of the
increase paciﬁcorp contributed operating proﬁt
excluding goodwill amortisation of £597 million
for the year an increase of £225 million on the
previous year this was mainly due to lower net
power costs rate increases regulatory recoveries
of excess power costs and transition plan
beneﬁts the infrastructure division’s operating
proﬁt of £368 million for the year represented an
increase of £13 million mainly due to higher
regulated revenues and net cost savings the uk
division’s operating proﬁt excluding goodwill
amortisation and exceptional items of £78
million was consistent with the prior year with the
impact of low wholesale prices mitigated by our
integrated approach to managing the energy
value chain and the beneﬁt from the settlement
of the nuclear energy agreement nea with
british energy be ppm reported operating
proﬁt of £28 million for the year compared to a
loss of £5 million in the previous year with the
full year beneﬁt of assets and contracts acquired
in the prior year and the continued progress made
during the year in growing its portfolio of assets
operating proﬁt from discontinued operations
fell by £127 million to £14 million for the year
compared to the prior year 
goodwill amortisation of £139 million for the year
was £10 million lower than for the previous year
this was due to the demerger of thus in march
2002 and movements in us dollar exchange
rates reducing the goodwill charge for paciﬁcorp
operating proﬁt for the year to 31 march 2002
included an exceptional reorganisation charge of
£18 million this arose as a result of restructuring
in the uk division and included severance and
related costs there were no exceptional operating
items in the year to 31 march 2003
the net interest charge of £254 million for the
year was £156 million lower than the charge
for the previous year which included exceptional
interest charges of £30 million resulting from
the restructuring of the debt portfolio in advance
david nish finance director
“our improved operational performance has
contributed to a good set of results” 
scottishpower management assesses the underlying performance of its businesses by adjusting 
uk generally accepted accounting principles gaap statutory results to exclude items it
considers to be nonrecurring or nonoperational in nature in the years presented these items
are goodwill amortisation and exceptional items therefore to provide more meaningful
information scottishpower has focused its discussion of business performance on the results
excluding goodwill amortisation and exceptional items in accordance with recent guidance from
the uk auditing practices board and uk listing authority where nongaap ﬁgures are discussed
comparable uk gaap ﬁgures have also been provided the summarised statutory results are
presented in the “summary group proﬁt and loss accounts” on pages 22 and 23  scottishpower annual review 200203 1819
99
00
01
02
03
operating proﬁt £m
excluding goodwill amortisation
and exceptional items  
99
00
01
02
03
turnover £m
of the disposal of southern water excluding
exceptional interest the charge was £126 million
lower primarily attributable to substantially
lower net debt following the sale of southern
water and our us dollar hedging strategy 
proﬁt before tax for the year of £697 million
increased by £1636 million on last year’s loss
before tax of £939 million this was primarily
due to the exceptional items charged to the
proﬁt and loss account in the prior ﬁnancial
year relating to the disposal of southern water
and appliance retailing excluding goodwill
amortisation and exceptional items group
proﬁt before tax for the year to 31 march 2003
increased by £270 million 48 to £836
million whilst continuing operations’ proﬁt
before tax increased by £365 million 79 to
£825 million as a result of improved group
operating proﬁt and lower interest charges 
the tax charge for the year increased from £83
million to £209 million on proﬁt before tax of
£697 million compared to a loss before tax of
£939 million in the previous year the tax
charge represented an effective rate of tax on
proﬁts excluding goodwill amortisation and
exceptional items of 25 this represents an
increase from the prior year rate of 215
reﬂecting a higher proportion of group proﬁts
being derived from our us operations taxed at
a rate higher than in the uk
there were no exceptional items in the year
exceptional items in the previous ﬁnancial year
including interest and tax were £1318 million
included within this total were exceptional
charges of £1308 million related to the disposal
of southern water including the write back of
goodwill previously taken to reserves and the
disposal of and withdrawal from appliance
retailing the other exceptional items in the
previous ﬁnancial year were reorganisation
costs of £18 million interest of £30 million and
a tax credit on exceptional items of £38 million 
net debt reduced in the year by £1887 million
to £4321 million operating cash ﬂow for the
year was £1413 million an increase of £165
million this was mainly as a result of improved
operational performance in paciﬁcorp group net
capital expenditure in the year was £717 million
a decrease of £512 million of which £180
million related to continuing operations and
£332 million related to discontinued operations
net inﬂows from acquisitions and disposals of
£1899 million including net debt disposed of
mainly represented proceeds from the sale of
southern water partially offset by ppm’s £101
million acquisition of the katy gas storage facility
from aquila inc net debt also beneﬁted from
the weaker dollar which reduced the sterling
value of dollar debt by £290 million gearing
net debtshareholders’ funds decreased to
93 from 131 at 31 march 2002 and net
debtebitda excluding exceptionals earnings
before interest tax depreciation goodwill
amortisation deferred income released to the
proﬁt and loss account and exceptional items
improved from 41 times last year to 28 times
ebitda is a measure of performance often
used in bank facilities
group net assets reduced by 2 in the year
from £4818 million to £4712 million with our
balance sheet hedging strategy signiﬁcantly
mitigating the adverse impact of the weaker us
dollar the impact on net assets of the southern
water disposal in april 2002 was offset by lower
net debt following receipt of the sale proceeds 
group earnings per share improved from a
loss of 5371 pence for the year to 31 march
2002 to earnings of 2617 pence for the year
to 31 march 2003 an increase of 7988 pence
excluding goodwill amortisation and exceptional
items group earnings per share for the year were
3371 pence an increase of 759 pence 29
the full year dividends of 28708 pence per
share were consistent with our stated aim of a
5 annual increase in dividends to 31 march
2003 as stated at the time of announcing the
proposed disposal of southern water with
effect from the ﬁnancial year commencing 1
april 2003 scottishpower intends to target
dividend cover based on full year earnings
excluding goodwill amortisation and
exceptional items in the range 15 – 20 times
and ideally towards the middle of that range
scottishpower will aim to grow dividends
broadly in line with earnings thereafter 
to implement this policy in the absence of
unforeseen circumstances scottishpower
intends to pay an identical dividend for each of
the ﬁrst three quarters of each year with the
dividend for the fourth quarter representing
the balance of the total dividend for each year
in respect of each of the quarters ending 30
june 2003 30 september 2003 and 31
december 2003 scottishpower aims to
declare a dividend of 475 pence per share
pensions
as required by the transitional arrangements of
financial reporting standard frs 17 our year
end report and accounts disclosed at 31 march
2003 a deﬁcit of £231 million net of deferred
tax for our uk deﬁned beneﬁt pension schemes
and a deﬁcit of £214 million 338 million net
of deferred tax for our us schemes as an
indication of the volatility of these valuations
the movement in asset market values in april
2003 would have reduced the deﬁcit for the uk
schemes by 40 and the us schemes by 5
the charge in the year for these pension
schemes has increased from £7 million to £16
million in the uk and from £8 million 11
804
961
970
944
1085
3242
4115
6349
6314
5274 financial review continued
million to £26 million 41 million in the us
contribution payments to the uk schemes
have recommenced achieving regulatory
recovery of these costs is a priority and we
have a focus on ensuring inclusion of any
increased expense in us rate cases and the
regulatory price control reviews in the uk
business reviews
paciﬁcorp
paciﬁcorp turnover was £2499 million in the
year a reduction of £481 million on the prior year
mainly due to lower wholesale electricity prices
experienced for most of the year excluding the
effect of foreign exchange wholesale revenues
were £409 million lower than last year there was
a 63 decrease in average shortterm and spot
market wholesale prices in the year 83mwh to
31mwh and lower longterm volumes this
was partially offset by higher shortterm and spot
volumes and longterm prices factors
contributing to the lower market price included
new generation brought online in the western us
the continuing effect of the federal energy
regulatory commission ferc market
mitigation and milder weather and economic
conditions affecting demand growth residential
and commercial revenues increased by £9 million
14 and £10 million 21 respectively
mainly as a result of higher prices and growth in
customer numbers offset by lower average
customer usage due to milder weather industrial
revenues were down by £4 million 08 in the
year as the impact of lower volumes due to a
weaker economy more than offset higher prices
and increased irrigation revenues other
revenue growth primarily as a result of excess
power cost recoveries in utah and oregon were
more than offset by lower wheeling revenues
and unfavourable foreign exchange movements
operating proﬁt for paciﬁcorp increased by £233
million to £463 million for the year to 31 march
2003 operating proﬁt excluding goodwill
amortisation for paciﬁcorp for the year grew by
£225 million to £597 million as a result of
regulatory rate increases and recoveries of
excess power costs of £80 million signiﬁcantly
lower net power costs of £257 million and
continued progress in the delivery of transition
plan beneﬁts of £64 million in the year these
improvements were partly offset by lower
transmission revenues of £19 million from
reduced use of the transmission system by third
parties higher depreciation charges of £25
million risk mitigation and project costs of £41
million insurance pensions and healthcare costs
of £46 million and oneoff gains in the previous
year and foreign exchange of £45 million
infrastructure division
external turnover within the infrastructure
division increased by £66 million for the year
to £314 million infrastructure division’s sales are
mainly internal to our uk division however the
impact of competition on our home markets has
resulted in an increase in regulated income from
third party electricity suppliers of £38 million
other revenue growth of £28 million has also
been delivered from external non regulated sales
principally due to increased new connections
from its core utility solutions joint venture
infrastructure division reported operating proﬁt
of £368 million for the year an increase of £13
million on last year higher regulated income of
£9 million and net cost reductions of £18 million
were partly offset by higher depreciation
operational rates insurance and pension costs
of £14 million 
uk division
uk division turnover increased by £26 million to
£2148 million for the year although wholesale
market prices were down in the year agency
turnover increased by £17 million due to volume
growth from 4656 gwh to 6262 gwh 34
and exports to northern ireland increased by
£19 million following the ﬁrst full year of trading
t otal sales in england  wales including exports
decreased by £13 million due to adverse prices
partly offset by favourable volumes which
increased by 1461 gwh to 11840 gwh
wholesale gas volumes increased in the year by
14 billion therms however lower prices resulted
in sales revenues dropping by £10 million on last
year retail supply turnover grew by £11 million
with higher retail gas sales of £52 million and
increased turnover from outofarea customer
gains of £53 million partially offset by loss of
market share and lower sales prices in our home
areas which reduced turnover by £94 million
other revenues increased by £2 million in the
year customer numbers have increased to 365
million in the year retention of home area
residential customers stands at 61
operating proﬁt for the uk division increased by
£18 million to £73 million for the year to 31
march 2003 mainly due to last year’s results
including a £18 million exceptional reorganisation
charge operating proﬁt excluding goodwill
amortisation and exceptional items was £78
million for the year £1 million lower compared to
the previous year net energy margins have
performed strongly increasing by £15 million
before higher depreciation costs to capture and
investment in energy efﬁciency schemes of £12
million and increased pension costs of £4 million
the impact of lower wholesale electricity prices
has been mitigated by our integrated approach to
managing the energy value chain whereby our
own electricity production is extensively matched
to our customer demand across great britain
the renegotiation of the nea with be at a market
related price has delivered a beneﬁt of
approximately £25 million in the current year and
provides a hedge against revenues which have
been impacted by lower wholesale prices  scottishpower annual review 200203 2021
p p m
turnover for ppm for the year increased by
£ 1 1 3 million to £286 million after a £16 million
a d ve r s e us dollar translation impact as the
business b e n e ﬁted from the ﬁrst full year of its
k l a m a t ha n d stateline longterm power
c o n t racts and g ro w t h of its gas stor a g e
business including the katy gas storage f a c i l i t y
a c q u i red in december 2002
ppm reported an operating pr o ﬁt of £28 million
for the year compared to a loss of £5 million
last year the growth in operating pr o ﬁt for the
year was due to the increased contribution fr o m
longterm sales contracts and gas stor a g e
activities and optimisation beneﬁts of £53 million
partly offset by higher depreciation charges and
other oper a t i n g costs of £17 million to support
business growth and the beneﬁt from settlement
of a £3 million cont ract in the prior year 
discontinued oper a t i o n s
discontinued oper a t i o n s consisted of southern
w a t er appliance retailing and thus for the year
to 31 march 2002 and southern water for the
year to 31 m a rch 2003 the disposal of southern
water was completed on 23 april 2002 and
turnover and oper a t i n g p ro ﬁt generated in the
period prior to disposal were £27 million and
£14 million r e s p e c t i v e l y the disposal of and
w i t h d ra wal from appliance retailing w a s
completed by 31 march 2002 and the thus
d e merger was completed in march 2002
in the year discontinued operations’ turnover
d e c reased from £791 million to £27 million
c o m p a red to the prior year of this r e d u c t i o n 
£403 million was due to southern w a t e r £229
million to thus and £132 million to appliance
r e t a i l i n g 
discontinued operations’ o p e rating pro ﬁt for
the year reduced by £127 million to £14 million
with southern water pr o ﬁts dec reasing by
£202 million partly offset by reduced losses in
thus and appliance retailing of £66 mil l i o n
and £9 million re s p e c t i v e l y
s u m m a r y
we have delivered a good set of ﬁn a n c i a l
results with earnings per share increased fr o m
a loss of 5371 pence last year to earnings of
2617 pence ex c l u d i n g goodwill amortisation
and exceptional items earnings per share were
up 29 on last year to 3371 pence our
i n c reased pro ﬁt before tax r e ﬂects impro v e d
business operational performance and lower
i n t e rest charges due to our lower net debt
position which has also contributed to a
s t ronger balance s h e e t 
david nish finance dir e c t o r
7 may 2003
independent auditors’ statement to the members of scottish power plc 
this statement including the opinion
has been prepared for and only for the
company’s members as a body in
accordance with section 251 of the
companies act 1985 and for no other
purpose we do not in giving this
opinion accept or assume responsibility
for any other purpose or to any other
person to whom this statement is
shown or into whose hands it may come
save where expressly agreed by our
prior consent in writing
basis of opinion
we conducted our work in accordance
with bulletin 19996 ‘the auditors’
statement on the summary ﬁnancial
statement’ issued by the auditing
practices board for use in the united
kingdom
opinion
in our opinion the summary ﬁnancial
statements are consistent with the
annual report and accounts the
directors’ report and the directors’
remuneration report of scottish power
plc for the year ended 31 march 2003
and comply with the applicable
requirements of section 251 of the
we have examined the summary
ﬁnancial statements of scottish power
plc which comprise the summary gro u p
proﬁt and loss accounts the summary
group cash flow statement the
summary group balance sheet and the
summary information under us gaap
respective responsibilities of directors
and auditors
the directors are responsible for
preparing the annual review in
accordance with applicable law
our responsibility is to report to you our
opinion on the consistency of the
summary ﬁnancial statements within
the annual review with the full annual
report and accounts the directors’
report and the directors’ remuneration
report and their compliance with the
relevant requirements of section 251 of
the companies act 1985 and the
regulations made thereunder we also
read the other information contained in
the annual review and consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the
summary ﬁnancial statements
companies act 1985 and the
regulations made thereunder
pricewaterhousecoopers llp
chartered accountants and registered
auditors
glasgow
7 may 2003
a the maintenance and integrity of the
scottish power plc website is the
responsibility of the directors the work
carried out by the auditors does not
involve consideration of these matters
and accordingly the auditors accept no
responsibility for any changes that may
have occurred to the annual review
since it was initially presented on the
website
b legislation in the united kingdom
governing the preparation and
dissemination of ﬁnancial information
may differ from legislation in other
jurisdictions summary group proﬁt and loss account
for the year ended 31 march 2003
continuing discontinued
operations operations total total
2003 2003 2003 2003
£m £m £m m
group turnover 5247 27 5274 8333
operating proﬁt before goodwill amortisation 1071 14 1085 1714
goodwill amortisation 139 – 139 220
operating proﬁt 932 14 946 1494
share of operating proﬁt in associates and joint ventures 5– 5 8
proﬁt on ordinary activities before interest 937 14 951 1502
net interest and similar charges 251 3 254 401
proﬁt on ordinary activities before goodwill amortisation and taxation 825 11 836 1321
goodwill amortisation 139 – 139 220
proﬁt on ordinary activities before taxation 686 11 697 1101
taxation 206 3 209 330
proﬁt after taxation 480 8 488 771
minority interests 5 – 5 8
proﬁt for the ﬁnancial year 475 8 483 763
dividends 530 – 530 837
loss retained 55 8 47 74
earnings per ordinary shareper ads 2576p 041p 2617p 166
earnings per ordinary shareper ads before goodwill amortisation 3330p 041p 3371p 213
dividends per ordinary shareper ads 28708p 183
details of directors’ remuneration are set out on page 28
exceptional exceptional
items total items total
continuing continuing continuing discontinued discontinued discontinued
operationsoperationsoperationsoperationsoperationsoperations total total
2002 2002 2002 2002 2002 2002 2002 2002
£m £m £m £m £m £m £m m
group turnover 5523 – 5523 791 – 791 6314 8966
operating proﬁt before goodwill amortisation 801 18 783 143 – 143 926 1315
goodwill amortisation 147 – 147 2 – 2 149 212
operating proﬁt 654 18 636 141 – 141 777 1103
share of operating proﬁt in associates and joint ventures 2 – 2––– 2 3
656 18 638 141 – 141 779 1106
loss on disposal of and withdrawal from appliance retailing
before goodwill write back –––– 105 105 105 149
goodwill write back –––– 15 15 15 21
loss on disposal of and withdrawal from appliance retailing –––– 120 120 120 170
provision for loss on disposal of southern water
before goodwill write back –––– 450 450 450 639
goodwill write back –––– 738 738 738 1048
provision for loss on disposal of southern water –––– 1188 1188 1188 1687
proﬁtloss on ordinary activities before interest 656 18 638 141 1308 1167 529 751
net interest and similar charges 343 19 362 37 11 48 410 582
proﬁtloss on ordinary activities before goodwill 
amortisation and taxation 460 37 423 106 1319 1213 790 1121
goodwill amortisation 147 – 147 2 – 2 149 212
proﬁtloss on ordinary activities before taxation 313 37 276 104 1319 1215 939 1333
taxation 66 11 55 55 27 28 83 118
proﬁtloss after taxation 247 26 221 49 1292 1243 1022 1451
minority interests 7 – 7 42 – 42 35 50
proﬁtloss for the ﬁnancial year 240 26 214 91 1292 1201 987 1401
dividends
– cash 503 – 503 – – – 503 714
– dividend in specie on demerger of thus – – – 437 – 437 437 621
503 – 503 437 – 437 940 1335
loss retained 263 26 289 346 1292 1638 1927 2736
earningsloss per ordinary shareper ads 1306p 141p 1165p 495p 7031p 6536p 5371p 305
earnings per ordinary shareper ads before exceptional 
items and goodwill amortisation 2104p – 2104p 508p – 508p 2612p 148
cash dividends per ordinary shareper ads 2734p 157
summary group proﬁt and loss account
for the year ended 31 march 2002 scottishpower annual review 200203 2223
summary group proﬁt and loss account
for the year ended 31 march 2001
exceptional
item total total
continuing continuing continuing discontinued
operationsoperationsoperationsoperations total total
2001 2001 2001 2001 2001 2001
£m £m £m £m £m m
group turnover 5410 – 5410 939 6349 9016
operating proﬁt before goodwill amortisation 815 121 694 155 849 1206
goodwill amortisation 125 – 125 3 128 182
operating proﬁt 690 121 569 152 721 1024
share of operating loss in associates and joint ventures 9 – 9 – 9 13
proﬁt on ordinary activities before interest 681 121 560 152 712 1011
net interest and similar charges 297 – 297 36 333 473
proﬁt on ordinary activities before goodwill amortisation and taxation 509 121 388 119 507 720
goodwill amortisation 125 – 125 3 128 182
proﬁt on ordinary activities before taxation 384 121 263 116 379 538
taxation 148 46 102 7 95 135
proﬁt after taxation 236 75 161 123 284 403
minority interests 10 – 10 33 23 33
proﬁt for the ﬁnancial year 226 75 151 156 307 436
dividends 477 – 477 – 477 677
loss retained 251 75 326 156 170 241
earnings per ordinary shareper ads 1235p 409p 826p 854p 1680p 095
earnings per ordinary shareper ads before exceptional item
and goodwill amortisation 1919p – 1919p 867p 2786p 158
dividends per ordinary shareper ads 2604p 152
summary group cash flow statement
for the years ended 31 march 2003 2002 and 2001
2003 2003 2002 2002 2001 2001
£m m £m m £m m
cash inﬂow from operating activities 1413 2232 1248 1772 1412 2005
dividends received from joint ventures 1 2 – – 2 3
returns on investments and servicing of ﬁnance 297 469 377 535 374 531
taxation 191 302 85 121 153 217
free cash ﬂow 926 1463 786 1116 887 1260
capital expenditure and ﬁnancial investment 705 1114 1148 1630 1081 1535
cash ﬂow before acquisitions and disposals 221 349 362 514 194 275
acquisitions and disposals 1799 2843 150 213 483 686
equity dividends paid 524 828 497 706 471 669
cash inﬂowoutﬂow before use of liquid resources and ﬁnancing 1496 2364 709 1007 182 258
management of liquid resources 161 254 39 55 12 17
financing 1184 1871 929 1319 196 278
increase in cash in year 151 239 181 257 2 3
decreaseincrease in net debt 1887 2981 923 1311 444 630 summary group balance sheet
as at 31 march 2003
2003 2003 2002 2002
£m m £m m
fixed assets 11600 18328 14576 20698
current assets 2355 3721 1739 2469
creditors amounts falling due within one year 1994 3151 3179 4514
net current assetsliabilities 361 570 1440 2045
total assets less current liabilities 11961 18898 13136 18653
creditors amounts falling due after more than one year 4777 7548 5362 7614
provisions for liabilities and charges 1913 3022 2405 3415
deferred income 559 883 551 782
net assets 4712 7445 4818 6842
called up share capital 928 1466 926 1315
share premium 2264 3577 2254 3201
revaluation reserve 44 70 46 65
capital redemption reserve 18 28 18 25
merger reserve 406 642 406 577
proﬁt and loss account 978 1545 1081 1535
equity shareholders’ funds 4638 7328 4731 6718
minority interests including nonequity 74 117 87 124
capital employed 4712 7445 4818 6842
net asset value per ordinary shareper ads 2492p 1575 2548p 1447
summary information under us gaap
2003 2003 2002 2002 2001 2001
£  £  £ 
net earningsloss per ordinary share uk poundsus dollars 043 068 048 068 021 030
net earningsloss per ads uk poundsus dollars 171 270 193 274 085 121
shareholders’ equity uk pounds millionsus dollars millions 5480 8658 5850 8307 7463 10597
increase in cash and cash equivalents uk pounds millionsus dollars millions 301 476 151 214 25 36
as permitted under uk gaap earningsloss per share have been presented including and excluding the impact of exceptional items and
goodwill amortisation to provide an additional measure of underlying performance in accordance with us gaap earningsloss per share
have been presented above based on us gaap earnings without adjustments for the impact of uk gaap exceptional items and goodwill
amortisation such additional measures of underlying performance are not permitted under us gaap 
approved by the board on 7 may 2003 and signed on its behalf by
charles miller smith david nish
chairman finance director
the summary ﬁnancial statements on pages 22 to 24 are only a summary of information in the company’s annual report and accounts
they do not contain sufﬁcient information to allow for a full understanding of the results of the group and state of affairs of the company or
of the group
the auditors’ report on the full annual report and accounts for the year ended 31 march 2003 was unqualiﬁed and did not include a
statement under sections 2372 inadequate accounting records or returns or accounts not agreeing with records and returns or 2373
failure to obtain necessary informations and explanations of the companies act 1985
for further information the full annual accounts and the independent auditors’ report on those accounts should be consulted copies of the
full annual report and accounts may be obtained free of charge on request from the company secretary at the company’s registered ofﬁce
amounts for the ﬁnancial years ended 31 march 2003 31 march 2002 and 31 march 2001 have been translated solely for the convenience
of the reader at the closing exchange rates on 31 march of 158 to £100 142 to £100 and 142 to £100 respectively dividends per
american depositary share “ads” are shown based on the actual amounts in us dollars one ads represents four ordinary shares scottishpower annual review 200203 2425
summary report of the directors
activities and review
the principal activities of the
scottishpower group cover electricity
generation transmission distribution and
supply services both in the uk and us in
great britain scottishpower also stores
and supplies gas whilst the company’s
us activities extend to coal mining and
gas storage
results and dividends
the proﬁt of the group for the year
amounted to £483 million details of
which are set out in the summary group
proﬁt and loss account a ﬁnal dividend
of 7177 pence per share will be paid on
16 june 2003 to those shareholders
whose names appear in the register of
members on 16 may 2003 together with
three quarterly dividends each of 7177
pence per share paid on 16 september
2002 16 december 2002 and 14 march
2003 this makes total dividends for the
year of 28708 pence per share these
dividends amount in aggregate to £530
million the retained loss for the year of
£47 million has been transferred to
reserves
corporate governance statement
the company is committed to the
highest standards of corporate
governance this report describes the
extent to which in respect of the ﬁnancial
year ended 31 march 2003 the
company has been in compliance with
the principles of good governance set out
in section 1 of the combined code as
appended to the listing rules of the uk
listing authority in the uk and with the
sarbanesoxley act 2002 and associated
rules to the extent they apply to the
company in the us
board of directors
there is a wellestablished division of
authority and responsibility at the most
senior level within the company through
the separation of the roles of chairman
and chief executive in addition to the
chairman there are currently three
executive and seven nonexecutive
directors on the board all the non
executive directors are considered by the
board to be independent and sir peter
gregson is the senior independent
director 
board meetings are held on a regular
basis twelve times a year and otherwise
as required the board has a schedule of
matters concerning key aspects of the
company’s activities which are reserved to
it for decision the board exercises full
control over strategy investment and
capital expenditure in addition individual
executive directors have speciﬁc
responsibilities for matters such as health
safety environment and regulation
board committees
the board has three principal standing
committees namely the nomination
remuneration and audit committees in
addition authority as described below
is delegated to the executive team
details are as follows
nomination committee 
the nomination committee is chaired by
the chairman of the board with as
members of the committee the chief
executive and three independent non
executive directors it has a remit to
consider and make recommendations to
the board on all new appointments of
directors having regard to the overall
balance and composition of the board to
consider and approve the remit and
responsibilities of the executive directors
and to review and advise upon issues of
succession planning and organisational
development
remuneration committee 
the remuneration committee is chaired
by sir peter gregson and all members of
the committee are independent non
executive directors it has a remit to
consider and make recommendations on
board remuneration policy and on behalf
of the board to determine speciﬁc
remuneration packages for each of the
executive directors in discharging its
remit the committee has regard to the
provisions of the combined code and has
as an objective the aim of providing
packages to attract retain and motivate
executive directors of the quality required
to judge the company’s position in
matters of remuneration policy and
practice relative to other companies and
to take into account wider issues of pay
setting it also has responsibility for the
company’s bonus and incentive schemes
the remuneration report of the directors
for 200203 is set out in the annual
report  accounts
audit committee 
the audit committee is chaired by ewen
macpherson and all members of the
committee are independent non
executive directors nick rose has been
identiﬁed as the committee’s “ﬁnancial
expert” and following ewen
macpherson’s retirement will become
chairman of the committee 
it has a remit to review the effectiveness
of the company’s system of internal
controls its ﬁnancial statements the
activities and effectiveness of the internal
audit function the relationship with the
external auditors compliance with legal
and regulatory requirements and
litigation and claims affecting the group
executive team 
the executive team comprises the chief
executive and other executive directors
together with the chief executive ofﬁcer
paciﬁcorp chief executive ofﬁcer ppm
group director infrastructure group
director commercial and legal group
director corporate communications
group director human resources
group director strategy and the group
company secretary operational control
and implementation of group strategy
and policy are responsibilities delegated
by the board to the chief executive who
is supported by the executive team and
by divisional and business boards in the
discharge of these functions major issues
and decisions are reported to the board
internal control
the directors of scottishpower have
overall responsibility for the system of
internal controls and for reviewing the
effectiveness of the system the system
of internal control is designed to manage
rather than eliminate the risk of failure to
achieve business objectives in pursuing
these objectives internal control can only
provide reasonable and not absolute
assurance against material misstatement
or loss
the executive team is responsible for
implementing the risk management
strategy ensuring that an appropriate
risk management framework is operating
effectively across the company
embedding a risk culture throughout the
group and providing the board and the
audit committee with a consolidated
view of the risk proﬁle of the company
identifying any major risk exposures and
mitigating actions
the risk management framework and
internal control system across the group
which is subject to continuous
development provides the basis on
which the company has complied with
the combined code provisions on
internal control
social environmental and ethical risks
and opportunities
information regarding the social
environmental and ethical policies and
practices of the company can be found in
the annual report  accounts and in the
separate environmental and social
impact report  summary report of the directors continued
political donations and expenditure
scottishpower is a politically neutral
organisation but is required to comply
with the political parties elections and
referendums act 2000 this legislation
deﬁnes political “donations” and
“expenditure” in wider terms than would
be commonly understood by these
phrases the deﬁnitions include
expenditure which the board believes it is
in the interests of the company to incur
the act also requires companies to
obtain prior shareholder approval of this
expenditure at the annual general
meeting in 2002 the company obtained
authorisation up to a maximum amount
of £100000
during the ﬁnancial year ended 31 march
2003 the company paid a total of £9500
for activities which may be regarded as
falling within the terms of the act these
activities comprised the sponsorship of
brieﬁngs receptions and fringe meetings
at party conferences these occasions
present an important opportunity for the
company to represent its views on a non
partisan basis to politicians from across
the political spectrum the payments do
not indicate support and are not
intended to inﬂuence support for any
particular political party
remuneration of directors
the scottishpower board is responsible
for determining the remuneration policy
for the scottishpower group the
remuneration committee with delegated
authority from the board determines the
detail of remuneration arrangements for
the executive team including the
executive directors and reviews
proposals in respect of other senior
executives the relationship between the
board and the committee is based on
formal terms of reference which are
regularly reviewed to ensure that they
reﬂect best practice
the remuneration committee consists
solely of independent nonexecutive
directors its members are sir peter
gregson chairman euan baird mair
barnes nolan karras and ewen
macpherson these members have no
personal ﬁnancial interest other than as
shareholders in the matters considered
by the committee details of the
payments made to all nonexecutive
directors are set out on page 28 
statement of remuneration policy
philosophy and policy
scottishpower seeks to ensure that
remuneration and incentive schemes are
in line with best practice provide a strong
link to individual and company
performance and promote a community
of interest between employees and
shareholders 
rewards for executives and directors are
designed to attract and retain individuals
of high quality who have the requisite
skills and are incentivised to achieve
levels of performance which exceed that
of competitor companies as such
remuneration packages must be market
competitive and capable of rewarding
exceptional performance all senior
management remuneration packages are
set according to a midmarket position
with packages above the midmarket
level provided only where supported by
demonstrably superior personal
performance remuneration packages
will be developed to reﬂect the prevailing
market practice in each business
environment
annual bonus arrangements have been
structured so that stretching targets are
based on corporate business unit and
individual performance
the company operates a personal
shareholding policy requiring executives
and senior managers to buildup and
retain a shareholding in the company in
proportion to their annual salaries these
proportions are three times base salary
for the chief executive and two times
base salary for other executive directors
the committee considers this policy to
be in line with evolving best practice and
in the interests of shareholders
in setting remuneration levels the
committee commissions an independent
evaluation of the roles of the executive
team and also of the next levels of
management within the company the
committee takes independent advice
from towers perrin forster  crosby inc
on marketlevel remuneration based on
comparisons with utility and other
companies of similar size and complexity
with which the company competes for
executive talent 
the committee recognises the
importance of linking rewards to
business and personal performance and
believes that the arrangements detailed
below provide an appropriate focus on
performance and balance between short
and longterm incentives at target level
base salary is expected to deliver around
45 of total reward excluding beneﬁts
and pension the annual bonus plan and
longterm incentive arrangements are
expected to provide 55 of total reward
for the achievement of stretching target
level business and personal performance
objectives higher proportions of
performance based reward are available
for the delivery of exceptional personal
and business performance resulting in
enhanced shareholder value 
the committee constantly monitors
market practice in order to remain
competitive and to reﬂect good corporate
governance practice at this time no
substantial changes to the company’s
policies with regard to directors’
remuneration are envisaged over the next
year however the committee may
develop policy and should it determine
any changes to be appropriate will report
such changes to shareholders through
established channels of consultation and
reporting for example the committee
and the board will consider carefully the
recommendations of the higgs report
and may amend policy accordingly 
executive share plans
the company operates a performance
share plan known as the long term
incentive plan ltip and an executive
share option plan 2001 exsop for
executive directors and other senior
managers 
under the ltip awards to acquire shares
in scottishpower at nil or nominal cost
are made to the participants up to a
maximum value equal to 75 of base
salary the award will vest only if the
committee is satisﬁed that there has
been an underlying improvement in the
performance of the company and to this
end certain gateway performance targets
are measured and the committee reviews
performance against these measures
when determining if awards vest the
measures relate to the key ﬁnancial
performance indicators of the company
and customer service standards including
those published by ofgem energywatch
and the us public utility commissions
these measures provide a mechanism to
safeguard stakeholder interests and
provide an overview of the ﬁnancial and
operational success of the business
the number of shares which actually vest
is dependent upon the company’s
comparative total shareholder return
tsr performance over a threeyear
performance period tsr measures
scottishpower’s comparative
performance against key competitors
and only provides rewards if
scottishpower exceeds the median
performance of appropriate comparators scottishpower annual review 200203 2627
the committee chose tsr as the
performance measure for the ltip as it
believes that it provides a clear link to
the creation of shareholder value
ltip awards were granted to 48 directors
and senior executives during the year
award 7 tsr performance is measured
against an international comparator
group of 39 major energy companies
no shares vest unless the company’s
tsr performance is at least equal to the
median performance of the comparator
group at which point 40 of the initial
award vests 100 of the shares vest if
the company’s performance is equal to
or exceeds the top quartile the number
of shares that vest for performance
between these two points is determined
on a straightline basis
for ltip awards which had the potential
to vest during the year performance
was measured against that of the ftse
100 index and an index of the electricity
and water sectors of the ftse all share
index as the performance criteria were
not achieved award 4 of the ltip may
1999 – may 2002 lapsed with no
vesting of shares
the committee has approved the
operation of the ltip for 200304 and 
no signiﬁcant changes have been
implemented
options were granted at market value to
285 directors and other executives
across the company during the year
options granted to uk executives under
the exsop are subject to the
performance criterion that the average
annual percentage increase in the
company’s earnings per share eps
be at least 3 adjusted for any
increase in the retail price index the
committee believes that eps is an
appropriate measure for the purposes
of testing the exsop because it is
based on the underlying ﬁnancial
performance of the company this
criterion is assessed at the end of the
third ﬁnancial year the ﬁrst year being
the ﬁnancial year starting immediately
before the date of grant if not satisﬁed
on the third anniversary the criterion
may be retested from the same base
on the fourth and ﬁfth anniversaries of
grant unvested options lapse at the
ﬁfth anniversary
the committee has approved the
operation of the exsop for 200304
and no changes have been
implemented
performance graph
the new directors’ remuneration
report regulations require that a graph
be presented showing the company’s
tsr performance against the tsr
performance of a broad equity market
index over a ﬁveyear period the ftse
100 has been chosen because it is the
principal index in which the company’s
shares are quoted the graph below
presents the comparative tsr
performance of the company during
the period 1 april 1998 – 31 march
2003 the graph shows that
scottishpower has outperformed the
index over this period
this graph looks at the value by 31 march
2003 of £100 invested in scottishpower on
31 march 1998 compared with that of £100
invested in the ftse 100 index the other
points plotted are the values at intervening
ﬁnancial yearends
service contracts
scottishpower has reviewed its policy on
service contracts and in accordance with
the best practice recommendation of the
combined code has resolved that new
appointees to the board be offered
rolling contracts with notice periods of
one year the committee recognises
however that exceptional circumstances
may arise and that it may be necessary
in the case of appointments from outside
the company to offer a longer initial
notice period in such cases the intent
would be to subsequently reduce this
period to one year following an agreed
initial period 
the committee’s policy on early
termination is to emphasise the duty to
mitigate to the fullest extent practicable
senior managers within the company
have notice periods ranging from six
months to one year
executive directors charles berry and
david nish were appointed to the board
on or after 1 april 1999 these
appointments have rolling service
contracts terminable on one year’s
notice from both parties charles berry
has a service contract dated 30 july
1999 and subsequently varied and
david nish has a service contract dated
13 december 1999 and subsequently
varied both contracts include a clause
enabling the company at its sole
discretion to make a payment in lieu of
notice equal to the value of the salary
and contractual beneﬁts the executive
director would have received during the
notice period
the chief executive ian russell has a
service contract dated 30 july 1999
terminable by the executive on one
year’s notice and by the company on
two years’ notice the chief executive
has chosen to reduce the notice period
from the company to one year whilst
the contract includes a clause enabling
the company at its sole discretion to
make a payment in lieu of notice equal
to the value of the salary and
contractual beneﬁts the chief executive
would have received during the notice
period the company would however
pursue mitigation to minimise as far as
possible costs to the company on
termination
charles miller smith is a nonexecutive
director and he does not have a service
contract with the company 
remuneration policy for nonexecutive
directors
the remuneration of nonexecutive
directors is determined by the board
and during the year consisted of a base
fee of £24000 pa a committee
membership fee of £3500 pa a fee of
£7500 pa for chairing the audit
committee and the remuneration
committee and an international travel
fee of £1000 for attending a tranche of
meetings that involve a transatlantic
journey in line with best practice the
independent nonexecutive directors do
not have service contracts are not
members of the company’s pension
schemes and do not participate in any
bonus share option or other proﬁt or
long term incentive plan details of the
remuneration of the nonexecutive
directors are set out on page 28
total shareholder return
source datastream
120
100
80
60
40
20
0
31 march 31 march 31 march 31 march 31 march 31 march
98 99 00 01 02 03
scottish power plc ftse 100 index
excluding goodwill amortisation and exceptional items summary report of the directors continued
directors’ interests in shares as at 31 march 2003
ordinary shares share options executive share options sharesave long term incentive plan
1402
or date of
appointment 31303 1402
31303 if later 31303 1402 31303 1402 vested potential vested potential
charles miller smith 11000 11000 ––––––––
ian russell •87741 •86817 498678 227743 4371 4371 12682 238675 12682 175063
charles berry •22553 •18958 255443 107660 2941 903 – 124328 4433 87904
david nish •12742 •7294 296636 124223 2509 2509 – 137954 4191 85030
euan baird 110770 100000 ––––––––
mair barnes 1400 1400 ––––––––
philip carroll 4000 –––––––––
sir peter gregson 1186 1093 ––––––––
nolan karras 36346 31286 ––––––––
ewen macpherson 5000 5000 ––––––––
nick rose appointed 19 february 2003 ––––––––––
none of the directors has an interest in ordinary shares which is greater than 1 of the issued share capital of the company
 these shares represent in each case the maximum number of shares which the directors may receive dependent on the satisfaction of performance
criteria as approved by shareholders in connection with the long term incentive plan
 these shares represent the number of shares the directors are entitled to receive when the long term incentive plan award is exercisable after the fourth
anniversary of grant calculated according to the performance criteria measured over the threeyear performance period
• these shares include the number of shares which the directors hold in the employee share ownership plan shown below
free partnership matching dividend
shares shares shares shares total
ian russell 50 799 799 135 1738
charles berry 50 799 799 135 1738
david nish 50 799 799 135 1738
between 31 march 2003 and 7 may 2003 ian russell charles berry and david nish each acquired 32 partnership shares and 32 matching shares 
as part of the regular monthly transactions of the employee share ownership plan and nolan karras acquired 20 scottishpower adss 
80 ordinary shares as part of the paciﬁcorp compensation reduction plan otherwise there have been no changes in the directors’ interests 
between 31 march 2003 and 7 may 2003
footnote
awards granted to directors under the long term incentive plan on 10 may 2003 were as follows ian russell 129568 charles berry 62790 and 
david nish 82724
options granted to directors under the executive share option plan 2001 on 10 may 2003 were as follows ian russell 345514 charles berry 167441 
and david nish 220598
summary of total emoluments 200203 – 
chairman and executive directors
basic total
salary £k emoluments £k
charles miller smith nonexecutive chairman 2350 2490
ian russell 5500 9953
charles berry 3000 5508
david nish 3500 6437
total 14350 24388
summary of total emoluments 200203 – 
nonexecutive directors fees and expenses
fees total fees 
£k expenses £k
euan baird 295 298
mair barnes 330 336
philip carroll 315 365
sir peter gregson 440 452
nolan karras 359 507
allan leighton resigned 12 june 2002 55 55
ewen macpherson 405 405
nick rose appointed 19 february 2003 37 37
total 2236 2455
the total emoluments of the directors during the year were £268 million 2002 £240 million 
during the year retirement beneﬁts were accrued under the deﬁned beneﬁts pension scheme in respect of three directors 2002 five directors
during the year the performance period for the awards granted under the long term incentive plan in 1999 ended and on the basis of the company’s
total shareholder return none of the awards vested
total gains made on exercise of directors’ share options and awards during the year were £33580 2002 £295205 shareholder information
annual general meeting
the annual general meeting will be held at the
glasgow royal concert hall sauchiehall street
glasgow on friday 25 july 2003 at 1100 am
details of the resolutions to be proposed at the
annual general meeting are contained in the
notice of meeting
quarterly results
copies of the quarterly results may be
obtained free of charge on request from the
company secretary at the company’s
registered ofﬁce quarterly results will also be
published on the company’s website
wwwscottishpowercom
halfyear results
the company as permitted by the london
stock exchange publishes its halfyear results
in one uk national newspaper in 2003 it is
expected that the halfyear results will be
published in the telegraph and on the
company’s website copies of the halfyear
results may be obtained free of charge on
request from the company secretary at the
company’s registered ofﬁce
environmental and social impact report
copies of the environmental and social
impact report may be obtained free of
charge on request from the company
secretary at the company’s registered ofﬁce
this report together with fuller information
about environmental marketplacecommunity
and workplace issues is also published on the
company’s website
press releases and uptodate information on
the company can be found on the company’s
website 
the annual review 200203 is also available
on cd free of charge from the company
secretary at the company’s registered ofﬁce
ordinary shares
share registration enquiries
the registrar
lloyds tsb registrars scotland
po box 28448
edinburgh eh4 1wq
tel 44 0870 600 3999
fax 44 0870 900 0030
textphone 44 0870 600 3950
website wwwshareviewcouk
dividend reinvestment plan
the dividend reinvestment plan provides
ordinary shareholders with the facility to invest
cash dividends by purchasing further
scottishpower shares for further details
please contact lloyds tsb on telephone
number 0870 241 3018
share consolidation and isas
share consolidation is a facility which allows a
number of holdings and especially family
holdings to be consolidated into one holding
this service is provided free of charge
individual savings accounts isas are suitable
for uk resident private investors who wish to
shelter their scottishpower shares from
income and capital gains tax details of the
scottishpower isa service are available from
lloyds tsb at the following address
alternatively please call the isa helpline on 
0870 242 4244
lloyds tsb registrars isas
the causeway
worthing bn99 6uy
share dealing
scottishpower ordinary shares may 
be bought or sold at competitive rates 
by post or telephone for further 
details please contact stocktrade on 0845
601 0979 quoting low c0070
american depositary 
shares adss
exchange and stock transfer enquiries
jpmorgan chase bank
shareholder relations
po box 43013
providence ri 029403013
tel 1 866 scotadr toll free
1 866 726 8237 toll free
1 781 575 2678 outside us not t oll free
fax 1 781 575 4082
website wwwadrcomshareholder
dividend reinvestment plan
global invest direct
global invest direct is the direct share purchase
and dividend reinvestment plan for ads holders
which allows existing and ﬁrst time investors to
purchase adss without a broker global invest
direct encourages investors to make initial and
ongoing investments in the company by
providing investors with the convenience of
investing directly in scottishpower’s adss with
reduced brokerage commissions and service
costs for further details please contact
jpmorgan chase bank as detailed above
agent for us federal securities laws
the agent for scottishpower for us federal
securities law purposes is
puglisi  associates
850 library avenue suite 204
po box 885
newark
delaware 19715
cautionary statement for purposes of the “safe
harbor” provisions of the private securities
litigation reform act of 1995 
some statements made in this annual review are
forwardlooking statements within the meaning of the
“safe harbor” provisions of the private securities
litigation reform act of 1995 all statements with
respect to us our corporate plans future ﬁnancial
condition future results of operations future business
plans strategies objectives and beliefs and other
statements that are not historical facts are forward
looking statements containing the words “may”
“will” “expect” “anticipate” “intend” “estimate”
“continue” “plan” “project” “target” “on track to”
“strategy” “aim” “seek” “will meet” or other similar
words are also forward looking these statements are
based on our management’s assumptions and beliefs
in light of the information available to us these
assumptions involve risks and uncertainties which
may cause the actual results performance or
achievements to be materially different from any
future results performance or achievements expressed
or implied by such forwardlooking statements
scottishpower wishes to caution readers and others to
whom forwardlooking statements are addressed that
any such forwardlooking statements are not
guarantees of future performance and that actual
results may differ materially from estimates in the
forwardlooking statements scottishpower undertakes
no obligation to revise these forwardlooking
statements to reﬂect events or circumstances after the
date hereof  important factors that may cause results
to differ from expectations include for example
– any regulatory changes including changes in
environmental regulations that may increase the
operating costs of the group may require the group
to make unforeseen capital expenditures or may
prevent the regulated business of the group from
achieving acceptable returns
– future levels of industry generation and supply
demand and pricing political stability competition
and economic growth in the relevant areas in which
the group has operations
– the availability of acceptable fuel at favorable
prices
– the availability of operational capacity of plants
– the success of reorganizational and costsaving
efforts and
– development and use of technology the actions of
competitors natural disasters and other changes to
business conditions
range of no of 
holdings shareholdings no of shares
1100 18436 732327
101200 174505 28957720
201600 178703 55273513
6011000 39280 30763853
10015000 48442 90686464
5001100000 4223 62322104
100001 and above 781 1587196821
total 4643701855932802
scottishpower annual review 200203 2829 designed by cgi brandsense printed by pillans  waddies – a member of the ormolu group
the paper used in this review is core silk produced in a chlorinefree process from 100 virgin pulp emas approved
scottish power plc
registered ofﬁce
1 atlantic quay
glasgow g2 8sp
registered in scotland no 193794
for press releases and uptodate information visit our website
wwwscottishpowercom
financial calendar
16 june 2003 dividend payment date – us and uk ﬁnal dividend for the year ended 31 march 2003
july 2003 announcement of results for quarter ending 30 june 2003 – q1
25 july 2003 annual general meeting
september 2003 q1 dividend payable
november 2003 announcement of results for quarter ending 30 september 2003 – q2
december 2003 q2 dividend payable
february 2004 announcement of results for quarter ending 31 december 2003 – q3
march 2004 q3 dividend payable
may 2004 announcement of preliminary results for the year ending 31 march 2004
june 2004 q4 dividend payable ﬁnal dividend for the year ending 31 march 2004
list of uk ﬁnancial terms used in the annual review
uk ﬁnancial terms us equivalent or deﬁnition
accounts financial statements
associates equity investors
capital redemption reserve other additional capital
creditors accounts payable and accrued liabilities
creditors amounts falling due within one year current liabilities
creditors amounts falling due longterm liabilities
after more than one year
financial year fiscal year
gearing leverage
net asset value book value
operating proﬁt net operating income
proﬁt income
proﬁt and loss account statement income statement
proﬁt and loss account in the balance sheet retained earnings
proﬁtloss for the ﬁnancial year net incomeloss
provisions longterm liabilities other than debt and speciﬁc accounts payable
reserves shareholders’ equity other than paidup capital
share premium account additional paidin capital or paidin surplus not distributable
shareholders’ funds shareholders’ equity
turnover revenues


Summary:
 scottishpower annual report  accounts 200203

1
financial highlights
99
397
00
380
01
279
02
261
03
337
earnings per share pence
excluding goodwill amortisation and exceptional items
99
396
00
637
01
168
02
537
03
262
earningsloss per share pence
99
804
00
961
01
970
02
944
03
1085
operating proﬁt £m
excluding goodwill amortisation and exceptional items
99
803
00
662
01
722
02
777
03
946
operating proﬁt £m
99
2250
00
2480
01
2604
02
2734
03
2871
dividends per share pence
cash dividends excluding
‘dividend in specie’ 
on demerger of thus
99
046
00
033
01
284
02
1588
03
1390
 change in total shareholder return
percentage change in total shareholder return
index in each ﬁnancial year
source datastream
2003 2002
turnover £5274m £6314m
operating proﬁt £946m £777m
operating proﬁt excluding goodwill and exceptionals £1085m £944m
proﬁtloss before tax £697m £939m
proﬁt before tax excluding goodwill and exceptionals £836m £567m
earningsloss per share 2617p 5371p
earnings per share excluding goodwill and exceptionals 3371p 2612p
dividends per share 2871p 2734p
cash dividends excluding ‘dividend in specie’ on demerger of thus
99
046
00
079
01
207
02
1763
03
618
total shareholder return pence
capital appreciation plus dividend reinvestment
for £1 invested on 1 april 1998 
source datastream