National Grid plc said it expects a noncash tax credit of approximately $2 billion after the revaluation of some deferred tax balances related to the recently approved US tax reform changes.
The company said the credit will be returned to customers over a period of 20 to 30 years. The tax credit will be treated as an exceptional item and will not have any other impact on the results of the fiscal year concluding on March 31, 2018, according to a form 6-K filed Feb. 2.
National Grid is also still reviewing the full impact of the new legislation on earnings and cash flow, and the eventual outcome will be based on the results of talks with regulators for each of its 14 regulated entities in the U.S.
The company expects a reduction of $130 million in annualized revenue increase for these entities once the new rates are adopted in fiscal year 2019, which will be offset by the reduction in tax charge.
