#1Investor presentation United Utilities Summer 2023 Manchester Bioresource Centre United Utilities Water for the North West#2Contents Background 3-8 Environmental, Social and 9-15 Governance (ESG) Economic regulation 16-23 Outcome Delivery Incentives (ODIs) 24-32 Financial summary 33-40 Glossary 41 Cautionary statement 42#3Background Manchester Bioresource Centre United Utilities Water for the North West#4Where we operate Regulated UK water and wastewater business Around 3m households and 200,000 business customer premises Regional population of around 7.3m people In the North West of England Serving the North West since privatisation in 1989 Omagh Coleraine Enniskillen Northern Ireland Stornoway Thurso Inverness Scotland Dundee Perth Dunfermline Glasgow Paisley Edinburgh Livingston East Kilbride Hamilton Ayr Kirkwoll Ballymena North Carlisle East England Belfast North West England Aberdeen Newcastle upon Tyne Sunderland Durham Darlington Yorkshire and the Humber -York Blackpool Preston Leeds Bradford Kingston upon Hull Liverpool Birkenhead t Manchester Doncaster Sheffield Chester Wrexham Stoke-on-Trent Derby East Midlands Nottingham Wolverhampton Wales Leicester Birmingham Coventry West Midlands ●Peterborough East of England Cambridge Norwich Gloucester Llanelli Swanse Luton Oxford Ipswich Colchester Cardiff Newport Bristol Bath Greater Swindon South West England London Reading London Southend-on-Sea South East England Portsmouth Brighton and Hove ●Canterbury ●Southampton Exeter Bournemouth Newquay Truro Torquay Plymouth St Ives Investor presentation 4#5Our Board Breadth and depth of experience Sir David Higgins, Chair Nomination Committee Sir David has spent his career overseeing high profile infrastructure projects. Chair of Gatwick Airport Limited and a member of the Council at the London School of Economics. Former chief executive of Network Rail, The Olympic Delivery Authority, and English Partnerships Louise Beardmore, Chief Executive Officer ESG Committee Joined United Utilities on its graduate programme and has comprehensive experience of the company, its customers and its regulators. She was appointed as customer service and people director in 2016, prior to which she held a number of senior positions across the group. She is a non-executive director of Water UK and the UK Engage for Success Foundation Phil Aspin, Chief Financial Officer Treasury committee Over 25 years' experience at United Utilities. Prior to his appointment as CFO, Phil was group controller having previously been group treasurer. He was appointed as a member of the UK Accounting Standards Endorsement Board in March 2021. He is chair of the pensions committee of the 100 Group a member of both the 100 Group main committee and the stakeholder communications and reporting committee Alison Goligher, NED Nomination, remuneration and ESG committees Non-executive director at Technip Energies NV and part- time executive chair Silixa Ltd. Former roles at Royal Dutch Shell, most recently Executive Vice President Upstream International Unconventionals Liam Butterworth, NED Nomination, audit and ESG committees Joined GKN Automotive Limited, owned by Melrose plc, as CEO in 2018. During the year, following a demerger, the Dowlais Group plc was listed on the London Stock Exchange, with Liam appointed as CEO. Over 30 years' experience in the automotive industry and was the former CEO of Delphi Technologies plc. Kath Cates, NED Nomination, audit and remuneration committees Non-executive director at Columbia Threadneedle Investments, TP ICAP Group Plc and Brown Shipley. Former chief operating officer at Standard Chartered plc and a number of roles at UBS, prior to which she qualified as a solicitor. Former non-executive director at Brewin Dolphin Holdings plc and RSA Insurance Group plc Michael Lewis, NED Nomination and ESG committees CEO of Uniper SE, and a Member of Council the Natural Environment Research Council. Started his career at Wessex Water plc, prior to joining PowerGen plc, which was subsequently acquired by E.ON SE. Appointed as CEO of E.ON UK in 2017, where he led the company's transformation into a leading supplier of zero carbon energy solutions. became CEO of Uniper SE in June 2023 Paulette Rowe, NED Nomination and ESG committees During the year, joined private equity firm Greater Sum Ventures and was appointed as a non-executive director of Thredd. She has held senior executive roles in banking and technology at Meta, Barclays, the Royal Bank of Scotland/NatWest and at Paysafe Group. She is a former trustee and chair of children's charity The Mayor's Fund for London Doug Webb, NED Nomination, audit, remuneration and treasury committees NED and audit committee chair at Johnson Matthey plc. Former CFO roles at Meggitt plc, London Stock Exchange, and QinetiQ Group plc, and NED and audit committee chair at SEGRO plc, BMT Group Ltd, and the Manufacturing Technology Group Ltd Investor presentation • 5#6Our regulation Strong performance in early part of AMP7 We operate in 5-year regulatory cycles called Asset Management Periods (AMPS) We recently entered the seventh five-year period since privatisation (AMP7 - running from April 2020 to March 2025) Our economic regulator, Ofwat, sets the price, service and incentive package we must deliver in each of these five-year periods There are four main areas in which companies can outperform by delivering a superior level of performance and/or doing so at a lower cost: Total expenditure (totex) Financing performance Outcome Delivery Incentives (ODIs) Customer satisfaction (measured using Ofwat's C-Mex assessment in AMP7) We have transformed our performance in recent years and we exited AMP6 operating at the upper quartile across a range of metrics We were fast-tracked through the most recent price review (PR19) and given one of the lowest cost challenges in the sector by Ofwat We reinvested £130 million of AMP6 outperformance, targeting key performance areas giving us a flying start to AMP7 Investor presentation 6#7Strategic purpose Water makes the North West Stronger Greener Healthier Investor presentation • 7#8Why invest in United Utilities Regulatory outperformance Sustainable performance improvements and track record of outperformance in AMP5 and AMP6 Use of technology and data Use of technology, data and machine intelligence, which provides us with a competitive advantage Strong management team Extensive commercial, operational and regulatory experience across the business Best in class treasury management Low cost of debt locked in, stable A3 credit rating, robust capital structure with target 55%-65% RCV gearing range Low dependency pension schemes IAS19 pension surplus, and low dependency funding position in line with TPR recommendations Clarity on allowed returns to 2025 Wholesale revenue and asset base linked to CPIH inflation through to at least 2025 ESG credentials Strong record of high ESG standards with external recognition of our approach to ESG Investor presentation 8#9Environmental, Social and Governance (ESG) United Utilities Manchester Bioresource Centre Water for the North West#10Strong track record of leading on ESG Significant achievements against environment, social and governance 2000 Business in the Community 'Company of the year' FTSE4Good MEMBER OF Dow Jones 2009 Business in the Community 'Company of the year' Sustainability Indices In Collaboration with RobecoSAM AMP3 2001 Established director level committee focused on responsible business 2005 Led sector's approach to catchment management through SCAMP 2006 AMP4 Set our first carbon reduction target pwc BPTA winners 2015 Fair Tax AMP5 AMP6 2014 CDP Early adopter of 2016 DISCLOSURE INSIGHT ACTION integrated reporting 2011 Three strategic themes introduced 2019 Achieved Priority self-sufficiency of Services pensions scheme launched Planted over 2 million trees Over £600m outperformance reinvested glassdoor 2020 BEST PLACES TO WORK 2019 23% female apprentices (sector average 5-7%) £43m community investment Investor presentation 10#11Behaving responsibly Delivering for customers and the community 1 Upper quartile for AMP6 achieving SIM outperformance 3 3 accreditations 2 30+ awards across customer service, collections and debt management 4 5 AMP incentive range +/- £66m Strong C-MeX performance to date, record £3.0m reward in 2022/23 Investor presentation 11#12Behaving responsibly Supporting customers Debt affordability schemes building social capital £280m customer support over AMP7 330,000 customers helped so far this AMP Driving innovation to enhance experience and reduce cost Use of Open Banking and other digital technologies Void app secured £28m ODI reward Investor presentation . 12#13Behaving responsibly Investing in colleagues 1 82% engagement, above UK and Utilities Norms 3 5 Technical Training Academy 2 UK Apprentice of the year 4 Only UK Utility to be ranked in top 100 in FT inclusive leaders index 2023 Record graduate and apprentice recruitment INCLUSIVE TOP50 UK EMPLOYERS 2021/22 7th MOST INCLUSIVE EMPLOYER Bloomberg Gender-Equality Index 2022 2021 THE WORKPLACE WELLBEING CHARTER ROSPA Gold Award BRITAIN'S HEALTHIEST WORKPLACE We are a Living Wage Employer PENSION QUALITY MARK PLUS glassdoor 2020 BEST *** PLACES Ofsted Good rating TO WORK FT LEADER IN DIVERSITY FINANCIAL TIMES statista 2020 United U Gender Ray report 2021 Water for the North West Investor presentation 13#14Behaving responsibly Delivering for the environment Top performer on EPA Leading performance in minimising pollution with zero serious incidents in AMP6 Achieved 4* industry leading status on the Environment Agency's environmental performance assessment for 2021 - 5 times in 7 years Sector leading catchment management Led sector's approach to catchment management through SCAMP Catchment Systems Thinking (CAST) delivers an optimised integrated approach SBT 2-scope 2 electricity 2030 Near term sciance- 100% SBT1-scope 1 and 2 emissions Reduce scope 1 and 2 absolute emissions by ↓42% 66% based targets NET ZERO BY 2050 construction services suppliers by emissions have SBTs by 2025 net zoro ambition Long-term 2030 SBT 3-scope 3 supplier engagement renewable electricity Reduce other scope 3 absolute emissions by +25% SBT 4-scope 3 emissions Carbon footprint significantly reduced since 2005/06 baseline 100% electricity usage from renewable sources from October 2021 Investor presentation . 14#15Behaving responsibly Recognised for best practice corporate governance Consistently recognised as going above and beyond the minimum and early adopters of best practice Fair Tax II Bloomberg Gender-Equality Index 2022 We are GOLD AWARD WINNERS K at THE UK COMPLAINT HANDLING AWARDS 19 FTSE4Good ServiceMark⭑* with Distinction Accredited from Oct 21 to Oct 24 The Institute of Customer Service Utility Week AWARDS 2020 WINNER United Utilities Integrated Network Solution (INS) DIGITAL TRANSFORMATION AWARD MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM TAUWI The Telecoms Association of UK Water Industry Project of the Year 2020 WINNER United Utilities DIGITAL INNOVATION AWARD glassdoor 2020 BEST PLACES TO WORK WOW! Awards for outstanding customer service... Credit Excellence Awards 2020 arvato in association with BERTELSMANN TCFD TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES QUALITY CICM Q ACCREDITED THE WORKPLACE WELLBEING CHARTER + +CDP DISCLOSURE INSIGHT ACTION CREDIT BRITAIN'S HEALTHIEST WORKPLACE FT LEADER IN FINANCIAL TIMES DIVERSITY statista 2020 Investor presentation 15#16Economic regulation United Utilities Manchester Bioresource Centre Water for the North West#17Ofwat's legal duties 1 Primary Ensure companies properly carry out their functions Ensure companies can finance their functions Protect interests of consumers, wherever appropriate by promoting effective competition Secure the long-term resilience of water and sewerage systems¹ 2 Secondary Promoting economy and efficiency Contributing to the achievement of sustainable development Ensure Ofwat gives no undue preference¹ 1 Added as part of the Water Act 2014 Investor presentation 17#18Exceeded our targets in AMP6 Executed and delivered our purpose £ Accelerated investment Delivered outperformance Systems Thinking & Innovation Relentless focus on customers Motivated and engaged workforce Fast track business plan Sharing outperformance To provide great water for a stronger, greener, healthier North West Investor presentation 18#19Summary of UUW's AMP7 final determination A balanced settlement overall +1.5% -1.8% Opportunities represented by ODIS £ 13.8% real reduction in average bills Delivering for the environment Increasing resilience through Haweswater Aqueduct Resilience Programme (HARP) 110km long £5.8bn totex allowance Targeting 20% reduction in pollution 15% reduction in leakage UUG dividend maintained with CPIH growth A purpose led company, recognising the needs of all of our stakeholders Investor presentation • 19#20AMP7 totex allowance increased from draft determination £5.8bn AMP7 totex allowance AMP7 net totex allowances (£m) Wholesale Retail £5,564m £508 m £5,056 m Draft Determination £5,798m £475 m £ £5,323 m Final Determination Final determination allowance was £234m higher than draft determination سا 50:50 customer sharing ratio Weighted average PAYG of 59.6% - aligned to the natural rate £57m HARP allowance and £44m for strategic water resource development Exiting AMP6 at the required totex run rate Investor presentation • 20#21Totex run rate on target AMP6 investment delivering efficiencies to be sustained into AMP7 այ 1,600 Totex¹ 1,400 1,200 Capex 1,000 Capex Capex 800 600 400 Opex Opex & IRE & IRE Opex & IRE 200 0 2015/16 2019/20 AMP7 FD average Source: Company PR19 business plan submission, September 2018 and Final Determination 1 2017/18 prices, including £250m AMP6 additional investment but not the further £100m announced in May 2019. Investor presentation . 21#22Delivering efficiencies AMP6 focus on innovation, market testing and cost challenge delivered efficiencies required for AMP7 Innovation Identified as having the most embedded culture of innovation Systems Thinking delivering efficiencies and better service for customers Innovation Lab a source of global ideas to keep us at the frontier of new ideas Market testing Market Engagement Methodology to procure as efficiently as possible Appointed two capital delivery partners as preferred bidders for over £300m of AMP7 capital programme achieving £40m savings versus the traditional delivery route Cost challenge Risk and value assessment across all major projects expected to deliver £100m savings in our plan £110m reduction in scope of wastewater environment programme through working proactively with the Environment Agency Investor presentation . 22#23PR24 Timetable Business plan submission 2 October 2023 Early 2023 development meetings for long-term delivery strategies Nov 2023 Engagement with EA, NRW, CCW and DWI on business plans Feb to June 2023 Proposed open challenge sessions Oct to Nov 2023 Proposed open challenge sessions Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2023 2024 July 2022 PR24 Dec 2022 PR24 final Mar 2023 Cost assessment May 2023 methodology methodology model consultation consultation Early company submissions on Winter 2022-23 Indicative ODI rates PR24 design 2 Oct 2023 Business plan submissions Spring 2024 Dec 2024 Draft determinations and business plan incentives Final determinations cost claims and ODIS Business plan assessment and determinations Source: Ofwat's draft methodology published 7 July 2022 Investor presentation 23#24Outcome Delivery Incentives (ODIs) United Utilities Manchester Bioresource Centre Water for the North West#25ODI reset Lessons learned from AMP6 Reward (Penalty) in 5 years 2015-20 (£m) Private sewers service index Wastewater category 3 pollution incidents Sewer flooding index Thirlmere transfer to West Cumbria 36.9 16.4 Outperformance P90 +£140m £43.9m (9.3) 21.6 Total leakage at or below target 13.1 Most likely outcome (P50) Reliable water service index (31.9) Average minutes supply lost per property 12.5 Water quality service index (14.2) Other 11 wholesale ODIS (1.2) P10 -£470m Total wholesale ODIS 43.9 Investor presentation . 25#26-150 -200 -250 -300 Severn Trent Yorkshire United Utilities Anglian Wessex այ 200 150 50 ཤྩ ྴ ༅ ྴ ༠ 100 0 -50 -100 Northumbrian South West & B'mouth South Staffs & Camb Sutton & E Surrey Hafren Dyfrdwy South East Portsmouth Dwr Cymru Southern Bristol Affinity Thames ODI reset Lessons learned from AMP6 Cumulative ODI incentives over AMP6 performance measurement methodologies ODIS have incentivised company behaviour Cross sector comparison requires harmonised Incentives to be reset with greater consistency required ODIS are not a proxy for operational efficiency#27AMP7: Customer commitments: Outcome Delivery Incentives (ODIs) 7 comparative -£252m to +£128m Measuring against the sector with comparative targets 46 commitments across our full end to end service delivering the outcomes that are important to customers with rewards available in all areas 5 Common -£69m to +£31m 27 Bespoke ODI -£214m to +£249m Measuring against the sector with rewards based on company specific targets Unique to us offering outperformance opportunities where we truly deliver what matters to our customers 7 Reputational No financial incentive Investor presentation 27#28Robust plans across common AMP7 ODIS £100m flying start investment targeted improved performance in key areas £m impact P10 penalties P90 rewards (£55) (£50) (£45) (£40) (£35) (£30) (£25) (£20) (£15) (£10) (£5) £0 £5 £10 £15 £20 £25 £30 £35 Water quality compliance (CRI) Reducing interruptions to water supply Leakage Per capita consumption Mains repairs Unplanned outage Internal flooding Incidents Pollution incidents Sewer collapses Treatment works compliance Projected P10 underperformance payments and P90 outperformance payments for United Utilities' common and comparative performance commitments over 2020-25 excluding C-MeX and D-MeX. Source: Ofwat Final Determination, December 2019 سا Accelerated investment with a flying start Smarter networks, increased visualisation and predictability Systems Thinking & Innovation Central planning and decision making capability Embedded innovative technologies with AMP7 trials already underway Leading Capability in our people and ways of working Integration, optimisation and collaboration across all our asset plans Investor presentation . 28#29Opportunities across bespoke AMP7 ODIS Opportunities to unlock outperformance across bespoke ODI measures £m impact P10 penalties (£45) (£40) (£35) (£30) (£25) (£20) (£15) (£10) (£5) £0 Reducing water quality contacts Number of properties with lead risk reduced Helping customers look after water in their home Vyrnwy Reducing areas of low water pressure Water service resilience Manchester and Pennine resilience Keeping reservoirs resilient Thirlmere transfer into West Cumbria Abstraction incentive mechanism Protecting the environment from the impact of growth and new development Enhancing natural capital value for customers Recycling biosolids Better Air Quality Number of customers lifted out of water poverty Voids Non-household vacancy incentive scheme Gap sites (Wholesale) Gap sites (retail) P90 rewards £5 £10 £15 £20 £25 £30 £35 Sewer blockages External flooding Incidents Raising customer awareness to reduce the risk of flooding Hydraulic internal flood risk resilience Hydraulic external flood risk resilience Projected P10 underperformance payments and P90 outperformance payments for United Utilities' bespoke performance commitments over 2020-25 Source: Ofwat Final Determination, December 2019 OQQ || || || Optimised investment plan for multiple benefit Industry leading technologies backed by industry leading innovation culture Data driven proactive approach Investor presentation . 29#30Ambition and innovation across our performance commitments (PCs) We co-developed with our customers some really innovative PCs that are important to them, they are industry leading and with incentives that provide good opportunities for outperformance First in the industry to commit to tackling the issues of air quality by incentivising a reduction of emissions from our energy generation activities through an ODI. Reducing the number of properties with water quality risk from lead. The most stretching target of any other company, with equally leading outperformance opportunities. Reducing the hydraulic risk of flooding using innovative advanced modelling techniques for risk and investment planning. Exploring more scenarios in minutes than you could do manually in months. O £4.3m reward £2.6m penalty £12.7m reward £3.1m penalty £68.0m reward £61.2m penalty Delivering additional natural capital value. First in the industry to unlock opportunities for outperformance by generating value for communities across the North West from ecosystems services. £5.5m reward £2.0m penalty Engaging with customers to change their behaviour. Using an innovative methodology to raise customer awareness to reduce the risk of flooding. £3.0m reward £3.0m penalty New contingency plans increase the resilience in our water service. The first forward looking measure in the industry to incentivise long term resilience. £9.3m reward £5.5m penalty All figures are reflective of Ofwat's view of our P10 and P90 positions in United Utilities Final Determination: December 2019, with the exception of Water Service Resilience which has been adjusted to reflect the variability in this measure Investor presentation 30#31Customer service performance commitments 12 of United Utilities' performance commitments are focused on customer services, delivering the outcomes that are important to customers with rewards available for outperformance on specific performance commitments. 4 Common Measuring against sector, with rewards based on company specific targets 80 9 Bespoke Unique to us, offering outperformance opportunities where we fully deliver what matters to customers Reward range £132m Financially incentivised Of the 12 performance commitments, rewards are available across 9 of the performance commitments Penalty range -£163m 3 Reputational No financial incentive Investor presentation 31#32Transition from SIM to C-MeX and D-Mex Old SIM measure Satisfaction survey of customers who have contacted us 75% New C-Mex measure Customer Contactor Satisfaction Survey of customers who have contacted us (similar to SIM) 50% Customer Experience Survey, survey of any customer across the North West 50% Quantitative element, scoring based on volumes and severity of complaints 25% Reward/penalty range = +/-£66 New D-Mex measure Qualitative Component, developer services customer satisfaction Survey 50% Quantitative component, company performance against a key set of WaterUK metrics 50% Reward/penalty range = +£36m - £72m Reward/penalty range = +£13m to -£26m Investor presentation 32#33Financial summary United Utilities Manchester Bioresource Centre Water for the North West#34Best in class treasury management Track record of delivering significant financing outperformance Financing outperformance¹ in AMPs 5 and 6 AMP7 AMP5 AMP6 Confident of delivering further outperformance >£500m >£500m AMP5 AMP6 1 Pre-tax on an actual company basis Flexibility to reinvest over £600m across AMPs 5 and 6 Quantum subject to outturn inflation Financial resilience to withstand credit crises Investor presentation 34#35Benefit of our treasury policies and excellence We typically outperform the index for new debt by 50-100 bps UU issuances (incl. fees) vs iBoxx yield less 15bps (1 April 2020 to 31 March 2023) Yield (%) 7.00 6.00 5.00 4.00 3.00 2.00 1.00 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 Investor presentation $35#36Credit rating summary Aim to at least retain UUW credit ratings to support efficient access to debt capital markets Moody's Fitch S&P UUW¹ rated A3 UU PLC rated Baal A3 threshold: net debt to RCV ratio <65% A3 threshold: adjusted interest cover >1.7x UUW¹ rated² A- UU PLC rated² A- A-threshold: net debt to RCV ratio <67% A-threshold: PMICR³ >1.6x UUW¹ rated BBB+ UU PLC rated BBB- BBB+ threshold: adjusted FFO to debt >9% BBB+ threshold: net debt/EBITDA 9x 1 Any notes issued by UUW's financing subsidiary United Utilities Water Finance PLC (UUWF) are expected to be rated in line with UUW's credit rating 2 Rating for senior unsecured debt, issuer default rating is one notch lower 3 Post maintenance interest cover ratio Investor presentation 36#37Weighted average cost of capital (WACC) Aim to at least retain UUW credit ratings to support efficient access to debt capital markets AMP6 Real (RPI) Cost of equity 5.65% Cost of debt 2.59% AMP7 Real (RPI 3%) Cost of debt 1.15%¹ AMP7 Real (CPI 2%) Cost of equity 3.18% Cost of debt 2.14%2 Cost of equity 4.19% Industry average WACC based on notional company with 60% gearing Gearing 62.5% Appointee WACC 3.74% Retail margin adjustment 0.14% Wholesale WACC 3.60% Gearing 60% Gearing 60% Debt indexation to apply for new debt assumed to be 20% of total debt Appointee WACC 1.96% Retail margin adjustment 0.04% Wholesale WACC 1.92% Appointee WACC 2.96% Retail margin adjustment 0.04% Wholesale WACC 2.92% CPIH to be adopted for the indexation of future price controls 1 Cost of debt split: 1.43% embedded debt (assumed to be 80% of total); -0.45% new debt (assumed to be 20% of total) 2 Cost of debt split: 2.42% embedded debt (assumed to be 80% of total); -0.53% new debt (assumed to be 20% of total) Investor presentation 37#38Risk reduction - Interest rate hedging policy Aims to minimise regulatory risk • AMP7 cost of debt set through PR19 process We target around half of our debt to be in index-linked form, and we keep index-linked debt un-swapped as a good match for the RCV, which is 50% RPI-linked and 50% CPIH-linked as at 1 April 2020 with post-2020 new additions linked to CPIH We fix underlying rates on the remaining nominal floating rate debt on a 10-year reducing balance basis This helps to manage uncertainty regarding Ofwat's approach to setting the cost of debt at future price reviews 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 10-year rolling interest rate profile Lock in rolling 10-year average interest rate on nominal debt Illustrative net debt fix/float/IL mix - prior to AMP6 additional hedging 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Floating Index linked Fixed Investor presentation 38#39Pensions United Utilities' pensions are fully funded on a low dependency basis 5000 4500 4000 £79m 3500 3000 2500 2000 1500 1000 500 0 IFRS pension surplus £344m £215m surplus ₤248m surplus £220m £275m surplus surplus surplus £126m surplus surplus £699m surplus £654m surplus £484m £326m surplus surplus £754m surplus £821m £689m surplus surplus £1,017m surplus £824m surplus £601m surplus Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Assets Liabilities IAS19 surplus, no funding deficit No deficit on a low dependency basis Low risk assets, hedged for inflation and interest rate risk Future contributions are ongoing service costs only Investor presentation 39#40Impact of inflation Short term timing differences - for 2023/24 year end Regulated revenue Dividends Regulatory capital value (RCV) Index-linked debt4 Price limits are based on the movement in CPIH³ inflation between November 2021 and November 2022 (i.e. 9.3%) Dividends are linked to the same inflation as regulated revenue in order to mirror the inflationary uplift in price limits Opening RCV is inflated by the movement in inflation between March 2023 and March 2024, 50% linked to RPI¹ inflation and 50% linked to CPIH³ inflation Plus RCV additions (from totex) during the year, gives 31 March 2024 RCV (which is used as part of year-end gearing calculation) RPI 3 month lag: Adjustment to principal is based on the movement in RPI¹ inflation between January 2023 and January 2024 RPI 8 month lag: Adjustment to principal is based on the movement in RPI¹ inflation between July 2022 and July 2023 CPI 3 month lag: Adjustment to principal is based on the movement in CPI² inflation between January 2023 and January 2024 1 Retail Prices Index (RPI) 2 Consumer Price Index (CPI) 3 Consumer Price Index adjusted for Housing (CPIH) 4 Indexation of principal is calculated based on monthly movements in RPI / CPI Investor presentation • 40#41Glossary Pay-as-you-go ratio. The allocation of expenditure between that recovered through revenues in the current regulatory period and that added to the RCV to be recovered in future periods (see RCV run-off), helping to ensure intergenerational equity by sharing the cost of long-term investments. Term Description Term Description AMP6/ AMP7 Asset Management Plan periods. The five-year regulatory price control periods since privatisation. AMP6 runs from 01/04/2015 to 31/03/2020. AMP7 runs from 01/04/2020 to 31/03/2025. PAYG ratio APR Annual Performance Report. Separate from the statutory financial statements, this provides detailed regulatory performance information. PR14/ PR19 C-MEX / D-Mex CPI / CPI- H C-MeX: measure of customer satisfaction for AMP7. Similar to qualitative SIM assessment in AMP6. D-MeX: measure of developer satisfaction for AMP7. Consumer Price Index / Consumer Price Index including Housing. CPI-H is the UK Government's preferred measure of inflation, and will be used by Ofwat to calculate inflation of revenue and RCV in AMP7. CPI is the closest proxy for which debt and derivatives are available in the financial markets. RCV RCV run- off DWI Drinking Water Inspectorate. Independent quality regulator that assesses our comparative performance in the water side of our business. RPI EA Environment Agency. Independent environmental regulator that assesses our comparative performance in the wastewater side of our business. SIM FD Final Determination. The regulatory settlement Ofwat gives each company to deliver for the 5-year regulatory price control period. IAP Initial Assessment of Plans. Ofwat graded water companies' business plan submissions for AMP7 across 9 key test areas and categorised the plans, leading to different timelines and base returns for higher/lower rated plans. TCQi Totex ODIS Outcome Delivery Incentives. The rewards and penalties associated with operational performance against regulatory targets agreed for the period. Ofwat Independent economic regulator for the water sector in England and Wales. Price Review years. PR14: the price review process for AMP6, concluded in 2014. PR19: the price review process for AMP7, will be concluded in 2019. Regulatory Capital Value. This represents the value of accumulated investment in the company's asset base, and is used as a building block upon which companies earn a return in each 5-year regulatory price control period. The rate at which expenditure previously added to the RCV (see PAYG ratio) is recovered through revenues in a regulatory period. Retail Price Index. Until recently (see CPI-H) this was the UK Government's preferred measure of inflation, and RPI is being used by Ofwat to calculate inflation of revenue and RCV in AMP6. Service Incentive Mechanism. This is the metric used to measure customer satisfaction during AMP6, with separate assessments of quantitative SIM and qualitative SIM giving an overall combined SIM score for the period that can be used to compare performance versus peers within the water sector. Time Cost and Quality index. This is the internal measure we use to assess our capital projects, giving equal weighting to cost efficiency, quality, and on-time delivery. Total expenditure. This comprises operating costs, infrastructure renewals expenditure (IRE) and capital expenditure. Any variation from companies' allowed level of totex for the period represents out- or under-performance. Investor presentation 41#42Cautionary statement This presentation contains certain forward-looking statements with respect to the operations, performance and financial condition of the group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this presentation and the company undertakes no obligation to update these forward-looking statements. Nothing in this presentation should be construed as a profit forecast. Certain regulatory performance data contained in this presentation is subject to regulatory audit. Nothing in this presentation shall constitute an offer to buy or sell any securities of any member of the United Utilities group. Investor presentation 42