Welcome to our Annual Report and Financial Statements for the year ended 31 March 2019

United Utilities is the UK’s largest listed water and wastewater company. Our purpose is to provide great service to customers and communities in the North West, creating long-term value for all of our stakeholders.

We provide essential services that are relied on by millions of people every day, and our embedded innovation culture and pioneering Systems Thinking approach help us create value for a range of stakeholders.

We continually strive to improve our services, delivering more for less, helping vulnerable customers, and investing to build resilience for the long-term benefit of future generations.

Materiality

Our Annual Report and Financial Statements aim to meet the information needs of our investors to help them make informed decisions regarding their participation – for example, whether to buy, sell or hold our shares or bonds, whether to engage with management on issues, and how to vote their shares. We have included information that we believe is material to these decisions, which is presented in a way that we believe is fair, balanced and understandable.

We engage with – and recognise that this report will be read by – a wide variety of other stakeholders including customers, suppliers, employees, analysts, regulators, community bodies, politicians, non-governmental organisations, and devolved authorities. Where we believe that a topic is material to a large number of them, which is assessed in part through a matrix approach to stakeholder materiality as set out on Managing our material issues, we either include it in this report or refer the reader to other reports and information (such as our regulatory reports, customer communications, or corporate responsibility web pages).

We believe this approach meets the requirements of company law, the UK Corporate Governance Code, IFRS and the International <IR> Framework, and that we go beyond those requirements where we feel it is particularly helpful to do so and where that can be done without making the report unnecessarily lengthy or difficult to read.

Integrated Report

This Annual Report is an Integrated Report and has been prepared and presented in accordance with the International <IR> Framework published by the International Integrated Reporting Council in December 2013. The board, which is responsible for the integrity of this report, has considered the preparation and presentation of this report and concluded that it has been prepared and presented in accordance with the Framework.

Dr John McAdam

Chairman

Steve Mogford

Chief Executive Officer

We have submitted our business plan for the 2020–25 regulatory period

We received the highest grades in the sector against the test areas in Ofwat's initial assessment of plans, and were one of only three companies to be awarded a fast-track rating.

We see this achievement as recognition of the quality of our plan and of the transformation we have made as a business, which has been delivered through a consistent customer-focused approach and a drive for continuous improvement.

We were the only company to retain self-assurance status in Ofwat’s Company Monitoring Framework assessment. We have now held this top rating for three years in a row, recognising the consistently high level of trust and confidence that stakeholders can place in the quality and transparency of our reporting.

What to look for in this Annual Report

Consistent approach

We maintain a consistent and sustainable approach that provides a strong foundation stakeholders can rely on.

Our purpose and strategy

Look out for our strategic themes throughout this report:

The best service to customers

At the lowest sustainable cost

In a responsible manner

Our strategy is broken down into these three themes, which form the framework through which we create value for our stakeholders.

These strategic themes are embedded throughout this report. Our performance measurement, risk assessment and remuneration policy are all aligned to them, often to more than one of the three themes, such is the interconnectivity of what we do.

Continuous improvement

We strive for continuous improvement in our performance and in our reporting.