Credit Investor Presentation

Weighted average cost of capital 1 (WACC) AMP6 AMP7 Cost of debt 2.59% Cost of equity 5.65% Cost of debt 1.15%² Gearing 62.5% Appointee WACC 3.74% Retail margin adjustment 0.14% Wholesale WACC 3.60% 1 Vanilla, real 2017/18 FYA RPI-stripped 2 Cost of debt split: 1.43% embedded debt (assumed to be 80% of total); -0.45% new debt (assumed to be 20% of total) Gearing 60% Cost of equity 3.18% Industry average WACC based on notional company with 60% gearing 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% CPIH to be adopted for the indexation of future price controls United Utilities • Credit Investor presentation • 46

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