- Special items, lower wholesale energy margins, unfavorable
currency exchange rates and lower domestic electricity delivery
revenues drive earnings decline versus a year ago - Earnings from
ongoing operations, excluding special items, continue to track
ahead of 2009 plan - Company reaffirms 2009 earnings forecast,
revises 2010 earnings forecast ALLENTOWN, Pa., Aug. 4
/PRNewswire-FirstCall/ -- PPL Corporation (NYSE: PPL) on Tuesday
(8/4) reported declines in both second-quarter and first-half
earnings for 2009, compared with the same periods of 2008. Driven
primarily by special item charges for certain economic hedge
activity and an impairment related to a previously announced
pending asset sale, PPL reported a loss of $0.02 per share in the
second quarter of 2009. This loss compares with reported earnings
of $0.50 per share a year ago. Second-quarter results also were
lower than a year ago due to lower wholesale energy margins,
unfavorable currency exchange rates and lower domestic electricity
sales. For the first six months of 2009, PPL announced reported
earnings of $0.62 per share, compared with $1.19 per share a year
ago. The decline in reported earnings in the first half of 2009 is
a result of the same factors affecting the quarterly results.
Excluding special items, earnings from ongoing operations were
$0.32 per share in the second quarter of 2009, compared with $0.50
per share a year ago. For the first six months of 2009, earnings
from ongoing operations were $0.91 per share, compared with $1.11
per share a year ago. "The combination of a weak economy and mild
weather pressured wholesale energy prices and electricity demand.
We are encouraged, however, by our earnings from ongoing operations
for the quarter, across all of our business segments," said James
H. Miller, PPL chairman, president and chief executive officer.
"The cost containment actions that began early this year are paying
off, and we continue to perform ahead of plan, keeping us on track
to achieve our 2009 forecast of earnings from ongoing operations."
PPL reaffirmed its 2009 forecast of $1.60 to $1.90 per share in
earnings from ongoing operations. PPL's 2009 forecast of reported
earnings is $1.31 to $1.61 per share, reflecting special items
recorded through June 30, 2009. The 2009 forecast of reported
earnings does not reflect the expected gain on the sale of PPL's
Maine hydroelectric business. As previously announced, the sale of
six hydroelectric facilities to an affiliate of ArcLight Capital
Partners, LLC, along with the pending sale of three other
hydroelectric dams to the Penobscot River Restoration Trust, is
expected to result in a special after-tax gain in the range of
$0.07 to $0.09 per share. Driven by expectations of lower margins
in marketing and trading and the continued decline in 2010
wholesale electricity prices, PPL has reduced its 2010 earnings
forecast to a range of $3.10 to $3.50 per share. The company had
previously expected 2010 earnings to be at the low end of the prior
forecasted range of $3.60 to $4.20 per share. "Given the
significant economic uncertainty, challenging market conditions and
lower regional customer demand for electricity, we took aggressive
action to further lower our 2010 earnings risk by increasing our
baseload generation hedge levels to 98 percent and lowering our
expectations for our marketing and trading business," Miller said.
"While our revised 2010 forecast reflects current market
conditions, it's important to note that the generation hedge
strategy we put in place several years ago has provided substantial
value for the company," Miller said. "As a result of this strategy,
our 2010 expected generation is hedged at an average price greater
than current forward prices. The revised 2010 earnings range still
represents a significant increase over 2009 expectations."
Second-Quarter 2009 Earnings Details PPL's reported earnings in the
second quarter of 2009 included a net special item charge of $0.34
per share, including $0.25 per share related to net unrealized
losses from energy-related, non-trading economic hedges and
economic foreign currency hedges, and $0.09 per share related to
the previously announced pending sale of PPL's Long Island
generation assets. The second quarter of 2008 included offsetting
special items. Reported earnings are calculated in accordance with
generally accepted accounting principles (GAAP). Earnings from
ongoing operations is a non-GAAP financial measure that excludes
special items. Special items include charges or credits that are
unusual or nonrecurring. Special items also include unrealized
gains and losses from energy-related, non-trading economic hedges
and economic foreign currency hedges and impairments of securities
in PPL's nuclear decommissioning trust investments. (Dollars in
millions, except for per share amounts) 2nd Quarter -----------
2009 2008 % Change ---- ---- -------- Reported Earnings $(7) $190
NA Reported Earnings per Share $(0.02) $0.50 NA Earnings from
Ongoing Operations $119 $190 -37% Per Share Earnings from Ongoing
Operations $0.32 $0.50 -36% (See the tables at the end of the news
release for details as to the reconciliation of reported earnings
versus earnings from ongoing operations.) First-Half and
Second-Quarter 2009 Earnings by Business Segment The following
chart shows PPL's earnings by business segment for the second
quarter and first half of 2009, compared with the same periods of
2008. 2nd Quarter Year to Date ----------- ------------ (per share)
2009 2008 2009 2008 ---- ---- ---- ---- Earnings from ongoing
operations Supply $0.09 $0.26 $0.30 $0.45 Pennsylvania Delivery
0.05 0.08 0.19 0.24 International Delivery 0.18 0.16 0.42 0.42 ----
---- ---- ---- Total $0.32 $0.50 $0.91 $1.11 ===== ===== =====
===== Special Items Supply $(0.32) $- $(0.25) $0.08 Pennsylvania
Delivery - - (0.01) - International Delivery (0.02) - (0.03) -
----- --- ----- --- Total $(0.34) $- $(0.29) $0.08 ====== == ======
===== Reported earnings Supply $(0.23) $0.26 $0.05 $0.53
Pennsylvania Delivery 0.05 0.08 0.18 0.24 International Delivery
0.16 0.16 0.39 0.42 ---- ---- ---- ---- Total $(0.02) $0.50 $0.62
$1.19 ====== ===== ===== ===== (For more details and a breakout of
special items by segment, see the reconciliation tables at the end
of this news release.) Key Factors Impacting Business Segment
Earnings from Ongoing Operations Supply Segment PPL's supply
business segment primarily consists of the domestic energy
generation and marketing operations of PPL Energy Supply. Earnings
from ongoing operations for PPL's supply business segment decreased
in the second quarter of 2009 by $0.17 per share, or 65 percent,
compared with a year ago. This decline resulted primarily from:
lower marketing and trading margins in the eastern U.S.; higher
average fuel prices and lower baseload generation; higher operation
and maintenance expenses at PPL's Susquehanna nuclear plant as a
result of the timing of this year's refueling outage; and higher
depreciation and financing costs. Partially offsetting these
negative factors were higher wholesale energy margins in the
western U.S. due to higher wholesale volumes driven by increased
hydroelectric generation output. Earnings from ongoing operations
for PPL's supply business segment during the first six months of
2009 decreased by $0.15 per share, or 33 percent, compared with a
year ago. This decline resulted primarily from the same factors
that drove second-quarter 2009 results, except for modestly lower
operation and maintenance expenses and a gain recorded on a
repurchase of a portion of PPL Energy Supply's debt in the first
quarter of 2009. Pennsylvania Delivery Segment PPL's Pennsylvania
delivery business segment includes the regulated electric delivery
operations of PPL Electric Utilities and included the delivery
operations of its natural gas and propane businesses prior to their
divestiture in October 2008. Earnings from ongoing operations for
PPL's Pennsylvania delivery business segment declined in the second
quarter of 2009 by $0.03 per share, or 38 percent, compared with a
year ago. This decline was the net result of lower delivery
revenues, lower operation and maintenance expenses, and higher
financing costs. Earnings from ongoing operations for PPL's
Pennsylvania delivery business segment declined during the first
six months of 2009 by $0.05 per share, or 21 percent, compared with
a year ago. This decline resulted primarily from the same factors
that drove second-quarter 2009 results, along with a $0.03 per
share loss of earnings due to the divestiture of PPL's natural gas
and propane businesses. International Delivery Segment PPL's
international delivery business segment primarily includes the
regulated electricity delivery operations of Western Power
Distribution in the United Kingdom. Earnings from ongoing
operations for PPL's international delivery business segment
increased in the second quarter of 2009 by $0.02 per share, or 13
percent, compared with a year ago. This increase resulted primarily
from lower U.K. and U.S. income taxes, lower operation and
maintenance expenses and lower financing costs. These positive
earnings drivers were partially offset by less favorable currency
exchange rates. Earnings from ongoing operations for PPL's
international delivery business segment were unchanged for the
first six months of 2009, at $0.42 per share, compared with a year
ago. Year-to-date results were impacted by the same factors that
drove second-quarter 2009 results. 2009 Earnings from Ongoing
Operations Forecast by Business Segment Earnings 2009 2008 (per
share) (forecast) (actual) Midpoint Supply $0.85 $0.81 Pennsylvania
Delivery 0.31 0.44 International Delivery 0.59 0.77 ---- ---- Total
$1.75 $2.02 ----- ----- Supply Segment PPL projects higher earnings
from ongoing operations in its supply business segment in 2009
compared with 2008, driven by higher energy margins as a result of
higher expected baseload generation and margins from marketing and
trading activities, despite higher expected coal expense, partially
offset by higher expected operation and maintenance expenses and
depreciation. Pennsylvania Delivery Segment PPL projects lower
earnings from ongoing operations in its Pennsylvania delivery
business segment in 2009 compared with 2008, primarily due to
higher financing costs, lower than expected revenues in the
electricity delivery business, higher operation and maintenance
expenses, and the divestiture of its natural gas distribution and
propane businesses. International Delivery Segment PPL projects
lower earnings from ongoing operations in its international
delivery business segment in 2009 compared with 2008 as a result of
less favorable currency exchange rates. 2010 Earnings Forecast With
the full-requirements contract between PPL EnergyPlus and PPL
Electric Utilities expiring at the end of 2009, PPL has hedged
approximately 98 percent of its expected baseload generation output
for 2010 and plans to place additional hedges to further mitigate
financial risk. However, primarily as a result of lower regional
customer demand, increased shopping, lower natural gas and power
prices, and reduced congestion and volatility in the PJM energy
markets -- margin expectations for PPL EnergyPlus' marketing and
trading operations have been significantly lowered. In addition,
the company expects lower revenues from its international delivery
segment due to inflation adjustments incorporated in the rate
structure. Therefore, PPL has revised its 2010 earnings forecast to
a range of $3.10 to $3.50 per share from its prior forecast at the
low end of the range of $3.60 to $4.20 per share. In addition to
the above key factors, the revised 2010 forecast assumes PPL
Electric Utilities' ability to fully recover its purchased power
costs resulting from the ongoing solicitation process approved by
the Pennsylvania Public Utility Commission. PPL Corporation,
headquartered in Allentown, Pa., controls or owns more than 12,000
megawatts of generating capacity in the United States, sells energy
in key U.S. markets and delivers electricity to more than 4 million
customers in Pennsylvania and the United Kingdom. More information
is available at http://www.pplweb.com/. (Note: All references to
earnings per share in the text and tables of this news release are
stated in terms of diluted earnings per share.) Conference Call and
Webcast PPL invites interested parties to listen to the live
webcast of management's teleconference with financial analysts
about second-quarter 2009 financial results at 9 a.m. EDT Tuesday,
Aug. 4. The meeting is available online live, in audio format,
along with slides of the presentation, on PPL's Web site:
http://www.pplweb.com/. The webcast will be available for replay on
the PPL Web site for 30 days. Interested individuals also can
access the live conference call via telephone at 702-696-4769 (ID#
21486024). "Earnings from ongoing operations" excludes the impact
of special items. Special items include charges or credits that are
unusual or nonrecurring. Special items also include unrealized
gains and losses from energy-related and foreign currency-related,
non-trading economic hedges and impairments of securities in PPL's
nuclear decommissioning trust funds. The energy-related,
non-trading economic hedges are used to hedge a portion of the
economic value of PPL's generation assets and PPL's load-following
and retail activities. This economic value is subject to changes in
fair value due to market price volatility of the input and output
commodities (e.g., fuel and power). The foreign currency-related,
non-trading economic hedges are used to hedge a portion of the net
income of the international delivery business segment. This
economic value in U.S. dollars is subject to changes in the British
Pound Sterling to U.S. dollar exchange rate. The unrealized gains
and losses on these non-trading economic hedges in PPL's supply and
international delivery business segments are economically neutral
to the company because they will reverse as the hedging contracts
settle in the future. Earnings from ongoing operations should not
be considered as an alternative to reported earnings, or net income
attributable to PPL, which is an indicator of operating performance
determined in accordance with generally accepted accounting
principles (GAAP). PPL believes that earnings from ongoing
operations, although a non-GAAP measure, is also useful and
meaningful to investors because it provides them with PPL's
underlying earnings performance as another criterion in making
their investment decisions. PPL's management also uses earnings
from ongoing operations in measuring certain corporate performance
goals. Other companies may use different measures to present
financial performance. Statements contained in this news release,
including statements with respect to future earnings, energy
prices, margins and sales, growth, revenues, expenses, asset
disposition, marketing performance, hedging, regulation, corporate
strategy and generating capacity and performance, are
"forward-looking statements" within the meaning of the federal
securities laws. Although PPL Corporation believes that the
expectations and assumptions reflected in these forward-looking
statements are reasonable, these statements involve a number of
risks and uncertainties, and actual results may differ materially
from the results discussed in the statements. The following are
among the important factors that could cause actual results to
differ materially from the forward-looking statements: market
demand and prices for energy, capacity and fuel; weather conditions
affecting customer energy usage and operating costs; competition in
power markets; the effect of any business or industry
restructuring; the profitability and liquidity of PPL Corporation
and its subsidiaries; new accounting requirements or new
interpretations or applications of existing requirements; operating
performance of plants and other facilities; environmental
conditions and requirements and the related costs of compliance,
including environmental capital expenditures and emission allowance
and other expenses; system conditions and operating costs;
development of new projects, markets and technologies; performance
of new ventures; asset acquisitions and dispositions; any impact of
hurricanes or other severe weather on our business, including any
impact on fuel prices; receipt of necessary government permits,
approvals and rate relief; capital market conditions and decisions
regarding capital structure; the impact of state, federal or
foreign investigations applicable to PPL Corporation and its
subsidiaries; the outcome of litigation against PPL Corporation and
its subsidiaries; stock price performance; the market prices of
equity securities and the impact on pension income and resultant
cash funding requirements for defined benefit pension plans; the
securities and credit ratings of PPL Corporation and its
subsidiaries; political, regulatory or economic conditions in
states, regions or countries where PPL Corporation or its
subsidiaries conduct business, including any potential effects of
threatened or actual terrorism or war or other hostilities; foreign
exchange rates; new state, federal or foreign legislation,
including new tax legislation; and the commitments and liabilities
of PPL Corporation and its subsidiaries. Any such forward-looking
statements should be considered in light of such important factors
and in conjunction with PPL Corporation's Form 10-K and other
reports on file with the Securities and Exchange Commission. PPL
CORPORATION AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (a) Condensed Consolidated Balance Sheet
(Unaudited) (Millions of Dollars) June 30, December 31, 2009 2008
(b) ---- -------- Assets Cash and cash equivalents $973 $1,100
Price risk management assets - current 1,966 1,224 Assets held for
sale 182 Other current assets 1,674 2,059 Investments 522 522
Property, plant and equipment Electric plant 20,444 20,033 Gas and
oil plant 68 68 Other property 161 156 --- --- 20,673 20,257 Less:
accumulated depreciation 7,991 7,882 ----- ----- 12,682 12,375
Regulatory assets 571 737 Goodwill and other intangibles 1,413
1,400 Price risk management assets - noncurrent 1,986 1,392 Other
noncurrent assets 441 596 --- --- Total assets $22,410 $21,405
======= ======= Liabilities and Equity Short-term debt (including
current portion of long-term debt) $1,097 $1,375 Price risk
management liabilities - current 1,768 1,324 Other current
liabilities 1,651 1,603 Long-term debt (less current portion) 7,224
7,142 Deferred income taxes and investment tax credits 1,940 1,764
Price risk management liabilities - noncurrent 1,072 836 Accrued
pension obligations 873 899 Other noncurrent liabilities 947 1,066
Common stock and capital in excess of par value 2,250 2,200
Earnings reinvested 3,837 3,862 Accumulated other comprehensive
loss (568) (985) Noncontrolling interests 319 319 --- --- Total
liabilities and equity $22,410 $21,405 ======= ======= (a) The
Financial Statements in this news release have been condensed and
summarized for purposes of this presentation. Please refer to PPL
Corporation's periodic filings with the Securities and Exchange
Commission for full financial statements, including note
disclosure. (b) Certain amounts from 2008 have been reclassified to
conform to the current year presentation. Condensed Consolidated
Income Statement (Unaudited) (Millions of Dollars, Except per Share
Data) 3 Months Ended 6 Months Ended June 30, June 30,
--------------- --------------- 2009 (a) 2008 (a)(b) 2009 (a) 2008
(a)(b) -------- ----------- -------- ----------- Operating Revenues
Utility $881 $981 $1,946 $2,101 Unregulated retail electric and gas
32 33 74 67 Wholesale energy marketing (c) Realized 760 434 1,565
862 Unrealized economic activity (112) (616) 240 (796) Net energy
trading margins 7 52 (5) 50 Energy-related businesses 105 130 204
246 --- --- --- --- Total Operating Revenues 1,673 1,014 4,024
2,530 ----- ----- ----- ----- Operating Expenses Operation Fuel 186
189 444 429 Energy purchases (c) Realized 615 309 1,299 626
Unrealized economic activity 65 (604) 334 (863) Other operation and
maintenance 354 358 726 734 Amortization of recoverable transition
costs 70 68 154 144 Depreciation 114 117 223 228 Taxes, other than
income 67 72 139 147 Energy-related businesses 98 120 189 227 --
--- --- --- Total Operating Expenses 1,569 629 3,508 1,672 -----
--- ----- ----- Operating Income 104 385 516 858 Other Income
(Expense) - net (6) 13 29 24 Other-Than-Temporary Impairments 1 7
18 10 Interest Expense 99 108 188 216 -- --- --- --- Income (Loss)
from Continuing Operations Before Income Taxes (2) 283 339 656
Income Taxes (31) 94 67 220 --- -- -- --- Income from Continuing
Operations After Income Taxes 29 189 272 436 Income (Loss) from
Discontinued Operations (net of income taxes) (32) 6 (29) 24 --- -
--- -- Net Income (Loss) (3) 195 243 460 Net Income Attributable to
Noncontrolling Interests 4 5 9 10 - - - -- Net Income (Loss)
Attributable to PPL Corporation ($7) $190 $234 $450 === ==== ====
==== Amounts Attributable to PPL Corporation: Income from
Continuing Operations After Income Taxes $25 $184 $263 $426 Income
(Loss) from Discontinued Operations (net of income taxes) (32) 6
(29) 24 --- - --- -- Net Income (Loss) ($7) $190 $234 $450 === ====
==== ==== Earnings Per Share of Common Stock - Basic Earnings from
Ongoing Operations $0.32 $0.50 $0.91 $1.11 Special Items (0.34)
0.00 (0.29) 0.09 ----- ---- ----- ---- Net Income (Loss) ($0.02)
$0.50 $0.62 $1.20 ====== ===== ===== ===== Earnings Per Share of
Common Stock - Diluted Earnings from Ongoing Operations $0.32 $0.50
$0.91 $1.11 Special Items (0.34) 0.00 (0.29) 0.08 ----- ---- -----
---- Net Income (Loss) ($0.02) $0.50 $0.62 $1.19 ====== ===== =====
===== Weighted-Average Shares of Common Stock Outstanding
(thousands) Basic 375,881 373,158 375,493 373,009 Diluted 376,206
374,902 375,805 374,990 (a) Earnings in the 2009 and 2008 periods
were impacted by several special items, as described in the text
and tables of this news release. Earnings from ongoing operations
excludes the impact of these special items. (b) Certain amounts
from 2008 have been reclassified to conform to the current year
presentation. (c) PPL enters into certain non-trading energy or
energy-related contracts to hedge future cash flows that are not
eligible for hedge accounting, or where hedge accounting is not
elected. Consistent with the treatment of the hedged item,
unrealized and realized gains and losses on these transactions are
reflected in "Wholesale energy marketing" or "Energy purchases."
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars) 6 Months Ended June 30, -------- 2009 2008
---- ---- Cash Flows from Operating Activities Net Income $243 $460
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation 225 230 Amortization of
recoverable transition costs and other 182 178 Deferred income
taxes and investment tax credits (86) (38) Gains related to the
extinguishment of notes (29) Impairment of assets 104 11 Unrealized
(gains) losses on derivatives and other hedging activities 40 (84)
Changes in working capital (134) 164 Other operating activities 23
12 -- -- Net cash provided by operating activities 568 933 --- ---
Cash Flows from Investing Activities Expenditures for property,
plant and equipment (524) (661) Net expenditures for intangible
assets (40) (256) Net proceeds from (purchases of) other
investments 150 (14) Net (increase) decrease in restricted cash and
cash equivalents 189 (281) Other investing activities (15) (4) ---
-- Net cash used in investing activities (240) (1,216) ---- ------
Cash Flows from Financing Activities Net issuances (retirements) of
long-term debt (132) 182 Repurchase of common stock due to the
repurchase program (38) Payment of common stock dividends (256)
(239) Net increase (decrease) in short-term debt (77) 400 Other
financing activities 10 18 -- -- Net cash provided by (used in)
financing activities (455) 323 ---- --- Effect of Exchange Rates on
Cash and Cash Equivalents (2) -- Net Increase (Decrease) in Cash
and Cash Equivalents (127) 38 Cash and cash equivalents at
beginning of period 1,100 430 Cash and cash equivalents included in
assets held for sale (2) -- Cash and cash equivalents at end of
period $973 $466 ==== ==== Key Indicators 12 Months Ended June 30,
-------- Financial 2009 2008 ---- ---- Dividends declared per share
$1.36 $1.28 Book value per share (a) $14.67 $13.84 Market price per
share (a) $32.96 $52.27 Dividend yield (a) 4.1% 2.4% Dividend
payout ratio (b) 72% 41% Dividend payout ratio - earnings from
ongoing operations (b)(c) 75% 53% Price/earnings ratio (a)(b) 17.4
16.6 Price/earnings ratio - earnings from ongoing operations
(a)(b)(c) 18.1 21.6 Return on average common equity 13.25% 22.16%
Return on average common equity - earnings from ongoing operations
(c) 13.15% 17.81% (a) End of period. (b) Based on diluted earnings
per share. (c) Calculated using earnings from ongoing operations,
which excludes the impact of special items, as described in the
text and tables of this news release. Operating - Domestic &
International Electricity Sales 3 Months Ended 6 Months Ended June
30, June 30, --------------- --------------- Percent Percent
(millions of kwh) 2009 2008 Change 2009 2008 Change ---- ----
------ ---- ---- ------ Domestic Retail Delivered (a) 8,349 8,832
(5.5%) 19,029 19,401 (1.9%) Supplied 8,893 9,404 (5.4%) 20,145
20,526 (1.9%) International Delivered United Kingdom 6,377 6,949
(8.2%) 13,981 14,703 (4.9%) Domestic Wholesale East 5,769 6,535
(11.7%) 12,532 12,463 0.6% West NorthWestern Energy 567 669 (15.2%)
1,127 1,236 (8.8%) Other West 2,135 2,655 (19.6%) 4,509 5,749
(21.6%) (a) Electricity delivered to retail customers represents
the kwh delivered to customers within PPL Electric Utilities
Corporation's service territory. Reconciliation of Business Segment
Earnings from Ongoing Operations and Reported Earnings (Diluted)
2nd Quarter 2009 (millions of dollars) ----------------
--------------------- PA Int'l Supply Delivery Delivery Total
------ -------- -------- ----- Earnings from Ongoing Operations $34
$17 $68 $119 Special Items Unrealized losses from energy- related,
non-trading economic hedges (88) (88) Unrealized losses from
foreign currency economic hedges (6) (6) Adjustments - nuclear
decom. trust investments 2 2 Impairments - assets held for sale
& other (34) (34) --- -- --- Total special items (120) (6)
(126) ---- --- -- ---- Reported Earnings ($86) $17 $62 ($7) ====
=== === === 2nd Quarter 2009 (per share) ----------------
----------- PA Int'l Supply Delivery Delivery Total ------ --------
-------- ----- Earnings from Ongoing Operations $0.09 $0.05 $0.18
$0.32 Special Items Unrealized losses from energy- related,
non-trading economic hedges (0.23) (0.23) Unrealized losses from
foreign currency economic hedges (0.02) (0.02) Adjustments -
nuclear decom. trust investments Impairments - assets held for sale
& other (0.09) (0.09) ----- ----- ----- Total special items
(0.32) (0.02) (0.34) ----- ----- ----- ----- Reported Earnings
($0.23) $0.05 $0.16 ($0.02) ====== ===== ===== ====== Year-to-Date
June 30, 2009 (millions of dollars) --------------------------
--------------------- PA Int'l Supply Delivery Delivery Total
------ -------- -------- ----- Earnings from Ongoing Operations
$115 $72 $158 $345 Special Items Unrealized losses from energy-
related, non-trading economic hedges (38) (38) Unrealized losses
from foreign currency economic hedges (6) (6) Adjustments - nuclear
decom. trust investments (Q1, '09; Q2, '09) (1) (1) Impairments
& other impacts - emission allowances (Q1, '09) (15) (15)
Impairments - assets held for sale & other (Q1, '09; Q2, '09)
(36) (1) (1) (38) Workforce reduction (Q1, '09) (6) (5) (2) (13) --
-- -- --- Total special items (96) (6) (9) (111) --- -- -- ----
Reported Earnings $19 $66 $149 $234 === === ==== ==== Year-to-Date
June 30, 2009 (per share) -------------------------- ----------- PA
Int'l Supply Delivery Delivery Total ------ -------- -------- -----
Earnings from Ongoing Operations $0.30 $0.19 $0.42 $0.91 Special
Items Unrealized losses from energy- related, non-trading economic
hedges (0.10) (0.10) Unrealized losses from foreign currency
economic hedges (0.02) (0.02) Adjustments - nuclear decom. trust
investments (Q1, '09; Q2, '09) Impairments & other impacts -
emission allowances (Q1, '09) (0.04) (0.04) Impairments - assets
held for sale & other (Q1, '09; Q2, '09) (0.10) (0.10)
Workforce reduction (Q1, '09) (0.01) (0.01) (0.01) (0.03) -----
----- ----- ----- Total special items (0.25) (0.01) (0.03) (0.29)
----- ----- ----- ----- Reported Earnings $0.05 $0.18 $0.39 $0.62
===== ===== ===== ===== 12 Months Ended June 30, 2009 (millions of
dollars) ----------------------------- --------------------- PA
Int'l Supply Delivery Delivery Total ------ -------- -------- -----
Earnings from Ongoing Operations $252 $147 $289 $688 Special Items
Unrealized gains from energy- related, non-trading economic hedges
159 159 Unrealized losses from foreign currency economic hedges (6)
(6) Sale of gas and propane businesses (Q3, '08; Q4, '08; Q1, '09)
(5) (5) Adjustments - nuclear decom. trust investments (Q3, '08;
Q4, '08; Q1, '09; Q2, '09) (14) (14) Impairments & other
impacts - emission allowances (Q3, '08; Q4, '08; Q1, '09) (40) (40)
Impairments - assets held for sale & other (Q4, '08; Q1, '09;
Q2, '09) (52) (1) (2) (55) Workforce reduction (Q1, '09) (6) (5)
(2) (13) -- -- -- --- Total special items 47 (11) (10) 26 -- ---
--- -- Reported Earnings $299 $136 $279 $714 ==== ==== ==== ==== 12
Months Ended June 30, 2009 (per share)
----------------------------- ----------- PA Int'l Supply Delivery
Delivery Total ------ -------- -------- ----- Earnings from Ongoing
Operations $0.66 $0.39 $0.77 $1.82 Special Items Unrealized gains
from energy- related, non-trading economic hedges 0.43 0.43
Unrealized losses from foreign currency economic hedges (0.02)
(0.02) Sale of gas and propane businesses (Q3, '08; Q4, '08; Q1,
'09) (0.01) (0.01) Adjustments - nuclear decom. trust investments
(Q3, '08; Q4, '08; Q1, '09; Q2, '09) (0.04) (0.04) Impairments
& other impacts - emission allowances (Q3, '08; Q4, '08; Q1,
'09) (0.11) (0.11) Impairments - assets held for sale & other
(Q4, '08; Q1, '09; Q2, '09) (0.14) (0.01) (0.15) Workforce
reduction (Q1, '09) (0.01) (0.01) (0.01) (0.03) ----- ----- -----
----- Total special items 0.13 (0.03) (0.03) 0.07 ---- ----- -----
---- Reported Earnings $0.79 $0.36 $0.74 $1.89 ===== ===== =====
===== Reconciliation of Business Segment Earnings from Ongoing
Operations and Reported Earnings (Diluted) 2nd Quarter 2008
(millions of dollars) ---------------- --------------------- PA
Int'l Supply Delivery Delivery Total ------ -------- -------- -----
Earnings from Ongoing Operations $96 $32 $62 $190 Special Items
Unrealized gains from energy- related, non-trading economic hedges
4 4 Adjustments - nuclear decom. trust investments (4) (4) Off-site
remediation of ash basin leak 1 1 Sale of gas and propane
businesses (1) (1) - -- -- Total special items 1 (1) - -- --- ----
Reported Earnings $97 $31 $62 $190 === === === ==== 2nd Quarter
2008 (per share) ---------------- ----------- PA Int'l Supply
Delivery Delivery Total ------ -------- -------- ----- Earnings
from Ongoing Operations $0.26 $0.08 $0.16 $0.50 Special Items
Unrealized gains from energy- related, non-trading economic hedges
0.01 0.01 Adjustments - nuclear decom. trust investments (0.01)
(0.01) Off-site remediation of ash basin leak Sale of gas and
propane businesses Total special items ----- ----- ----- -----
Reported Earnings $0.26 $0.08 $0.16 $0.50 ===== ===== ===== =====
Year-to-Date June 30, 2008 (millions of dollars)
-------------------------- --------------------- PA Int'l Supply
Delivery Delivery Total ------ -------- -------- ----- Earnings
from Ongoing Operations $166 $92 $160 $418 Special Items Unrealized
gains from energy- related, non-trading economic hedges 54 54
Adjustments - nuclear decom. trust investments (Q2, '08) (4) (4)
Off-site remediation of ash basin leak (Q2, '08) 1 1 Sale of gas
and propane businesses (Q2, '08) (1) (1) Montana basin seepage
litigation (Q1, '08; Q2, '08) (5) (5) Synfuel tax adjustment (Q1,
'08) (13) (13) --- -- --- Total special items 33 (1) 32 -- -- ----
-- Reported Earnings $199 $91 $160 $450 ==== === ==== ====
Year-to-Date June 30, 2008 (per share) --------------------------
----------- PA Int'l Supply Delivery Delivery Total ------ --------
-------- ----- Earnings from Ongoing Operations $0.45 $0.24 $0.42
$1.11 Special Items Unrealized gains from energy- related,
non-trading economic hedges 0.14 0.14 Adjustments - nuclear decom.
trust investments (Q2, '08) (0.01) (0.01) Off-site remediation of
ash basin leak (Q2, '08) Sale of gas and propane businesses (Q2,
'08) Montana basin seepage litigation (Q1, '08; Q2, '08) (0.01)
(0.01) Synfuel tax adjustment (Q1, '08) (0.04) (0.04) ----- -----
Total special items 0.08 0.08 ---- ----- ----- ---- Reported
Earnings $0.53 $0.24 $0.42 $1.19 ===== ===== ===== ===== 12 Months
Ended June 30, 2008 (millions of dollars)
----------------------------- --------------------- PA Int'l Supply
Delivery Delivery Total ------ -------- -------- ----- Earnings
from Ongoing Operations $466 $159 $293 $918 Special Items
Unrealized gains from energy- related, non-trading economic hedges
60 60 Adjustments - nuclear decom. trust investments (Q2, '08) (4)
(4) Off-site remediation of ash basin leak (Q2, '08) 1 1 Sale of
gas and propane businesses (Q3, '07; Q4, '07; Q2, '08) (45) (45)
Montana basin seepage litigation (Q1, '08; Q2, '08) (5) (5) Synfuel
tax adjustment (Q1, '08) (13) (13) Workforce reduction (Q4, '07)
(4) (1) (4) (9) Sale of Latin American businesses (Q3, '07; Q4,
'07) 216 216 Sale of domestic telecommunication operations (Q3,
'07; Q4, '07) (3) (3) Settlement of Wallingford cost- based rates
(Q3, '07) 33 33 Impairment of transmission rights (Q3, '07; Q4,
'07) (13) (13) Change in U.K. tax rate (Q3, '07; Q4, '07) 54 54 --
--- -- -- Total special items 52 (46) 266 272 -- --- --- ---
Reported Earnings $518 $113 $559 $1,190 ==== ==== ==== ====== 12
Months Ended June 30, 2008 (per share)
----------------------------- ----------- PA Int'l Supply Delivery
Delivery Total ------ -------- -------- ----- Earnings from Ongoing
Operations $1.23 $0.42 $0.77 $2.42 Special Items Unrealized gains
from energy- related, non-trading economic hedges 0.17 0.17
Adjustments - nuclear decom. trust investments (Q2, '08) (0.01)
(0.01) Off-site remediation of ash basin leak (Q2, '08) Sale of gas
and propane businesses (Q3, '07; Q4, '07; Q2, '08) (0.12) (0.12)
Montana basin seepage litigation (Q1, '08; Q2, '08) (0.01) (0.01)
Synfuel tax adjustment (Q1, '08) (0.04) (0.04) Workforce reduction
(Q4, '07) (0.01) (0.01) (0.02) Sale of Latin American businesses
(Q3, '07; Q4, '07) 0.57 0.57 Sale of domestic telecommunication
operations (Q3, '07; Q4, '07) (0.01) (0.01) Settlement of
Wallingford cost- based rates (Q3, '07) 0.09 0.09 Impairment of
transmission rights (Q3, '07; Q4, '07) (0.04) (0.04) Change in U.K.
tax rate (Q3, '07; Q4, '07) 0.14 0.14 ---- ----- ---- ---- Total
special items 0.14 (0.12) 0.70 0.72 ---- ----- ---- ---- Reported
Earnings $1.37 $0.30 $1.47 $3.14 ===== ===== ===== =====
DATASOURCE: PPL Corporation CONTACT: Media, George Biechler,
+1-610-774-5997; Financial analysts, Joe Bergstein,
+1-610-774-5609, both of PPL Corporation Web Site:
http://www.pplweb.com/
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