Interim Management Statement and AGM

United Utilities Group PLC

27 July 2012

            UNITED UTILITIES GROUP PLC 2012 ANNUAL GENERAL MEETING             

                       AND INTERIM MANAGEMENT STATEMENT                        

United Utilities issues an interim management statement, for the period 1 April
2012 to 26 July 2012, ahead of its annual general meeting to be held today at
The Midland Hotel, Peter Street, Manchester. Commenting on the group's
performance for the year ended 31 March 2012, Chairman, Dr John McAdam, will
say:

"During the last 12 months we have made good progress towards achieving our
vision of becoming a leading North West service provider and one of the best UK
water and wastewater companies. We have reported another good set of results in
a tough economic climate and have delivered significant improvements in
customer satisfaction. We are also confident that we can improve further.
Alongside this, we increased capital investment in our assets by 12 per cent to
£680 million for the year, providing benefits for our customers, the regional
economy and the wider environment.

"In line with our policy, the board has proposed a final dividend of 21.34
pence per share. Taken together with the interim dividend of 10.67 pence, paid
in February, the total dividend for the 2011/12 year is 32.01 pence per share,
an increase of 6.7 per cent over the prior year. Looking ahead, we plan to
continue with our policy of targeting real dividend growth of RPI inflation
plus two per cent per annum through to at least 2015."

Trading update

Current trading is in line with the group's expectations of delivering a good
underlying financial performance for 2012/13. The company's business
improvement initiatives continue to progress well and this, coupled with
performance to date, has reinforced management's confidence in delivering its
regulatory outperformance targets over the 2010-15 regulatory period.

Revenue is higher, reflecting the regulated price increase for 2012/13.
However, as expected, this increase is slightly below the allowed regulated
price rise, principally reflecting the ongoing impact of customers switching to
meters and continued lower commercial volumes. The increase in revenue is
largely offset by higher depreciation, as outlined previously, and higher
levels of infrastructure renewals expenditure and other operating costs which
are both impacted by the transfer of private sewers. Infrastructure renewals
expenditure has increased in line with the company's planned investment
profile, as United Utilities invests to maintain and improve the resilience of
its network. The increase in other operating costs also reflects higher
property rates, as expected. Regulatory capital investment has continued at
high levels and is expected to be around £700 million (including infrastructure
renewals expenditure) in 2012/13.

Improving operational performance and customer service are top priorities for
United Utilities. The business met its regulatory leakage target for the sixth
consecutive year in 2011/12, reflecting strong year round operational focus.
Water resources in the region are at healthy levels, with reservoirs currently
over 90% full, which is ahead of typical levels for this time of year.

United Utilities has made significant progress on Ofwat's service incentive
mechanism (SIM) in 2011/12. All water companies have now published their 2011/
12 quantitative SIM scores. Based on these publications, United Utilities has
moved up five places and is ranked 16th out of the 21 water companies. When
taken together with the qualitative SIM measure, published earlier in the year,
United Utilities is also ranked 16th on the 2011/12 combined SIM assessment, or
7th when compared with the ten water and sewerage companies. Whilst we are
pleased that this represents the largest overall SIM score improvement in the
industry, we recognise that we have more to do and can see further
opportunities for improvement.

The company continues to make progress and the number of customer complaints to
the Consumer Council for Water (CCW) has fallen by more than a quarter in the
three months to 30 June 2012, compared with the same period last year. In
addition, there have been no customer complaints requiring investigation by the
CCW in the first three months of the 2012/13 financial year.

Financial position

The group's financial position remains robust and its regulatory capital asset
base continues to grow, reflecting continued high levels of capital investment
and RPI inflation. United Utilities has headroom to cover its projected
financing needs into 2014, consistent with its policy of maintaining a healthy
level of headroom on a rolling basis, and has substantially repaid all term
debt due in the 2010-15 regulatory period.

In light of this robust financing position, the group agreed with the pension
trustee to accelerate approximately £50 million of previously agreed pension
deficit repair payments and this was paid in June 2012. This accelerated
payment, coupled with the £100 million payment made in September 2011,
substantially completes early the schedule of previously agreed pension deficit
repair payments covering the 2010-15 regulatory period. This provides a higher
investment return for the group than could have been achieved through short
term deposits.

As expected, group net debt is currently slightly higher, compared with the
position at 31 March 2012, reflecting continued high levels of capital
investment and the accelerated pension payment. This is before payment of the
proposed 2011/12 final dividend, which is scheduled for 3 August 2012 and
totals approximately £146 million. Gearing remains stable, reflecting growth in
the regulatory capital value, supporting a solid A3 credit rating for United
Utilities Water PLC.

The UK Government on 3 July 2012 substantively enacted the change to reduce the
mainstream rate of corporation taxation from 24% to 23% from 1 April 2013. This
is expected to result in a deferred taxation credit of approximately £50
million, which will be recognised in the financial statements for the first
half of 2012/13.

Political and regulatory developments

As part of the ongoing consultation process, Ofwat published its statement of
principles for the 2014 price review on 15 May 2012 and a consultation on
retail price controls earlier this month. As expected, the UK Government
published a draft Water Bill on 10 July 2012 for pre-legislative scrutiny. The
draft bill is principally intended to give effect to the legislative changes
required to deliver the programme set out in Government's White Paper, "Water
For Life", published last December. United Utilities continues to have active
involvement in these developments.

Board changes

David Jones will stand down at today's annual general meeting, after over seven
years as a non-executive director. Sara Weller, who joined the Board in March
2012, will take over David's position as chair of the Remuneration Committee.
Nick Salmon, who is senior independent director, will be appointed as a member
of the Audit and Risk Committee and replace David on this committee. Both
appointments will become effective at the conclusion of today's annual general
meeting.

Outlook

The group expects to deliver a good underlying financial performance for 2012/
13. United Utilities is encouraged by its recent progress and will continue
with its strong focus on operational performance and customer service.
Management is confident of delivering its 2010-15 regulatory outperformance
targets, with substantial financing outperformance already secured. The board
intends to continue with its dividend policy of targeting an annual growth rate
of 2% above RPI inflation through to at least 2015, supported by a robust
capital structure.

In line with its usual practice, United Utilities intends to issue a pre-close
trading update on 20 September 2012.

United Utilities contacts:

Gaynor Kenyon, Corporate Affairs Director               [phone]  
                                                                             
Darren Jameson, Head of Investor Relations              [phone]  
                                                                             
Peter Hewer / Michelle Clarke, Tulchan Communications   [phone] 

This announcement is also available at: http://corporate.unitedutilities.com/
investors.aspx