Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - PPL Corp | form8k.htm |
| EX-99.2 - EXHIBIT 99.2 - PPL Corp | form8k-exhibit99_2.htm |
Exhibit 99.1
|
Contacts:
|
For
news media – George Biechler, 610-774-5997
|
|
For
financial analysts – Joseph P. Bergstein, 610-774-5609
|
PPL Corporation Reports
Third-Quarter Earnings
|
·
|
Company
announces third-quarter reported earnings of $0.05 per share and earnings
from ongoing operations of $0.52 per
share
|
|
·
|
2009
and 2010 earnings forecasts
reaffirmed
|
ALLENTOWN,
Pa. (Oct. 29, 2009)
― PPL Corporation (NYSE: PPL) on Thursday (10/29) announced
declines in both third-quarter and nine-month reported earnings for 2009,
compared with the same periods of 2008. PPL’s earnings from ongoing operations,
which exclude the effect of special items, rose in the third quarter but
remained lower for the nine-month period, compared with a year ago.
PPL’s
reported earnings for the most recent quarter were $0.05 per share, compared
with $0.54 per share a year ago. For the first nine months of 2009, PPL’s
reported earnings were $0.67 per share, compared with $1.73 per share a year
ago.
The
primary drivers of the 2009 reported earnings declines versus 2008 were special
item charges for certain economic hedge activity and the impact of two
non-recurring income tax matters in the current quarter, as well as an
impairment for the pending sale of generation assets on Long Island, N.Y.,
announced last quarter. The special item charges for the third quarter of 2009
totaled $0.47 per share, compared with net special item credits of $0.09 per
share a year ago. PPL’s reported earnings for the first nine months of 2009
included special item charges of $0.76 per share, compared with net special item
credits of $0.17 per share for the same period of 2008.
Earnings
from ongoing operations were $0.52 per share in the third quarter of 2009,
compared with $0.45 per share a year ago. For the first nine months of 2009,
earnings from ongoing operations were $1.43 per share, compared with $1.56 per
share a year ago.
“At this
point in the year, we are pleased with our financial performance and our ability
to track ahead of plan, despite ongoing pressure on wholesale energy prices and
customer demand due to the continuing weak economy and mild weather,” said James
H. Miller, PPL’s chairman, president and chief executive officer. “Our
relatively strong ongoing earnings results for the quarter reflect the continued
benefits of cost-control actions we took early in the year.”
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 $0.84 to
$1.14 per share, reflecting special items recorded through Sept. 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 is expected to result in a special after-tax
gain of approximately $0.06 per share in the fourth quarter of 2009. This figure
excludes an additional special after-tax gain of $0.02 per share in contingent
consideration from ArcLight that would be realized upon completion of PPL’s
previously announced sale of three other hydroelectric facilities to the
Penobscot River Restoration Trust.
PPL also
reaffirmed its 2010 earnings forecast of $3.10 to $3.50 per share. “We expect
the significant increase in earnings that we forecast for 2010 to come almost
entirely from increased margins in the company’s supply business,” Miller
said.
“We
remain convinced that our hedge programs, aggressively executed when forward
power prices for 2010 were much higher than they are today, will provide greater
earnings and cash flow predictability,” he said.
Third-Quarter
2009 Earnings Details
PPL’s
reported earnings in the third quarter of 2009 included special item charges of
$0.47 per share: $0.34 per share related to certain economic hedge activity;
$0.07 per share related to a change in the method of accounting for certain
expenditures for income tax purposes; and $0.06 per share for additional tax
expense related to the 2007 sales of its Latin American businesses. The tax
accounting change, for which IRS consent was received, is expected to provide a
cash flow benefit of approximately $200 million in 2009, as well as smaller cash
flow benefits in future periods.
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, foreign
currency-related economic hedges and impairments of securities in PPL’s nuclear
decommissioning trust funds.
(Dollars
in millions, except for per share amounts)
|
3rd
Quarter
|
||||||||||||
|
2009
|
2008
|
%
Change
|
||||||||||
|
Reported
Earnings
|
$ | 20 | $ | 203 | -90 | % | ||||||
|
Reported
Earnings per Share
|
$ | 0.05 | $ | 0.54 | -91 | % | ||||||
|
Earnings
from Ongoing Operations
|
$ | 195 | $ | 168 | +16 | % | ||||||
|
Per
Share Earnings from Ongoing Operations
|
$ | 0.52 | $ | 0.45 | +16 | % | ||||||
(See
the tables at the end of the news release for details as to the reconciliation
of reported earnings versus earnings from ongoing operations.)
Third-Quarter and Nine-Month
2009 Earnings by Business
Segment
The
following chart shows PPL’s earnings by business segment for the third quarter
and first nine months of 2009, compared with the same periods of
2008.
|
3rd
Quarter
|
Year
to Date
|
|||||||||||||||
|
(per
share)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
Earnings
from ongoing operations
|
||||||||||||||||
|
Supply
|
$
|
0.33
|
$
|
0.16
|
$
|
0.63
|
$
|
0.60
|
||||||||
|
Pennsylvania
Delivery
|
0.07
|
0.09
|
0.26
|
0.34
|
||||||||||||
|
International
Delivery
|
0.12
|
0.20
|
0.54
|
0.62
|
||||||||||||
|
Total
|
$
|
0.52
|
$
|
0.45
|
$
|
1.43
|
$
|
1.56
|
||||||||
|
Special
Items
|
||||||||||||||||
|
Supply
|
$
|
(0.41
|
)
|
$
|
0.10
|
$
|
(0.67
|
)
|
$
|
0.18
|
||||||
|
Pennsylvania
Delivery
|
-
|
(0.01
|
)
|
(0.01
|
)
|
(0.01
|
)
|
|||||||||
|
International
Delivery
|
(0.06
|
)
|
-
|
(0.08
|
)
|
-
|
||||||||||
|
Total
|
$
|
(0.47
|
)
|
$
|
0.09
|
$
|
(0.76
|
)
|
$
|
0.17
|
||||||
|
Reported
earnings
|
||||||||||||||||
|
Supply
|
$
|
(0.08
|
)
|
$
|
0.26
|
$
|
(0.04
|
)
|
$
|
0.78
|
||||||
|
Pennsylvania
Delivery
|
0.07
|
0.08
|
0.25
|
0.33
|
||||||||||||
|
International
Delivery
|
0.06
|
0.20
|
0.46
|
0.62
|
||||||||||||
|
Total
|
$
|
0.05
|
$
|
0.54
|
$
|
0.67
|
$
|
1.73
|
||||||||
(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 increased in the third
quarter of 2009 by $0.17 per share compared with 2008. Directly affecting this
comparison were trading losses in 2008, caused by a dramatic decline in
wholesale energy prices and lack of market liquidity.
Excluding
this impact, energy margins were flat for the quarter. Positive drivers of this
segment’s quarterly results include higher value from baseload generation,
higher Eastern capacity prices and higher wholesale volumes in the West.
Partially offsetting these benefits were lower margins on load-following
agreements, higher operation and maintenance expenses at PPL’s Susquehanna
nuclear plant and higher depreciation.
Earnings
from ongoing operations for PPL’s supply business segment increased during the
first nine months of 2009 by $0.03 per share compared with a year ago. This
comparison also reflects the effect of trading losses in 2008. Positive earnings
drivers for the nine-month period in 2009 were higher wholesale volumes in the
West; higher capacity prices in the East; higher baseload generation; and a gain
recorded on the repurchase of a portion of PPL Energy Supply’s debt in the first
quarter of 2009. Partially offsetting these favorable impacts were lower
marketing margins, due to lower margins on load-following agreements; higher
average fuel expenses; higher income taxes; and higher
depreciation.
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
PPL’s 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 third quarter of 2009 by $0.02 per share compared with a
year ago. This decline was primarily due to lower delivery revenues, resulting
from the impacts of weather and the economy, and higher financing
costs.
Earnings
from ongoing operations for PPL’s Pennsylvania delivery business segment
declined during the first nine months of 2009 by $0.08 per share compared with a
year ago. This decline was primarily due to lower delivery revenues, higher
financing costs, and the divestiture of PPL’s natural gas and propane
businesses. Partially offsetting this decrease were lower operation and
maintenance expenses.
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
declined in the third quarter of 2009 by $0.08 per share compared with a year
ago. This decline was the net result of higher U.K. and U.S. income taxes, less
favorable currency exchange rates and lower financing costs.
Earnings
from ongoing operations for PPL’s international delivery business segment
declined during the first nine months of 2009 by $0.08 per share compared with a
year ago. This decline was the net result of less favorable currency exchange
rates, higher U.S. income taxes, lower operating expenses, lower financing costs
and lower U.K. income taxes.
2009
Earnings Forecast
PPL
projects earnings from ongoing operations of $1.60 to $1.90 per share in 2009,
compared with $2.02 per share in 2008. This projected decline is primarily
driven by less favorable currency exchange rates in the U.K. and higher
operation and maintenance expenses, higher depreciation, and lower delivery
revenues in Pennsylvania. These negative factors are expected to be partially
offset by higher energy margins and lower financing costs.
2010
Earnings Forecast
PPL has
reaffirmed its 2010 earnings forecast in a range of $3.10 to $3.50 per share.
PPL has hedged nearly 100 percent of its expected baseload generation output for
2010 and continues to forecast strong growth in 2010 energy margins based on
hedged power and fuel prices, as well as hedged capacity prices in the PJM
Interconnection.
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 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 third-quarter 2009 financial results at 9 a.m. EDT
Thursday, Oct. 29. The meeting is available online live, in audio format, along
with slides of the presentation, on PPL’s Web site: 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# 36219786).
“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
non-trading economic hedges, foreign currency-related 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). Also included in this special item is the ineffective portion of
qualifying cash flow hedges. The foreign currency-related 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 the U.S. dollar exchange rate. Management believes
that the exclusion of such amounts provides a better matching of earnings from
ongoing operations to the actual amounts settled for PPL’s underlying hedged
assets. 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, cash flow, 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 are subject to 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, rate
relief and regulatory cost recovery; 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.
# # #
Note
to Editors: Visit PPL’s media Web site at www.pplnewsroom.com for additional
news and background about PPL Corporation.
|
PPL
CORPORATION AND SUBSIDIARY COMPANIES
|
||||||||
|
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION (a)
|
||||||||
|
Condensed
Consolidated Balance Sheet (Unaudited)
|
||||||||
|
(Millions
of Dollars)
|
||||||||
|
September
30,
|
December 31,
|
|||||||
|
2009
|
2008
(b)
|
|||||||
|
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 696 | $ | 1,100 | ||||
|
Price
risk management assets - current
|
1,685 | 1,224 | ||||||
|
Assets
held for sale
|
175 | |||||||
|
Other
current assets
|
1,743 | 2,059 | ||||||
|
Investments
|
582 | 522 | ||||||
|
Property,
plant and equipment
|
||||||||
|
Electric
plant
|
20,757 | 20,033 | ||||||
|
Gas
and oil plant
|
68 | 68 | ||||||
|
Other
property
|
163 | 156 | ||||||
| 20,988 | 20,257 | |||||||
|
Less: accumulated
depreciation
|
8,111 | 7,882 | ||||||
| 12,877 | 12,375 | |||||||
|
Regulatory
assets
|
493 | 737 | ||||||
|
Goodwill
and other intangibles
|
1,427 | 1,400 | ||||||
|
Price
risk management assets - noncurrent
|
1,839 | 1,392 | ||||||
|
Other
noncurrent assets
|
427 | 596 | ||||||
|
Total
assets
|
$ | 21,944 | $ | 21,405 | ||||
|
Liabilities
and Equity
|
||||||||
|
Short-term
debt (including current portion of long-term debt)
|
$ | 620 | $ | 1,375 | ||||
|
Price
risk management liabilities - current
|
1,425 | 1,324 | ||||||
|
Other
current liabilities
|
1,748 | 1,603 | ||||||
|
Long-term
debt (less current portion)
|
7,250 | 7,142 | ||||||
|
Deferred
income taxes and investment tax credits
|
2,203 | 1,764 | ||||||
|
Price
risk management liabilities - noncurrent
|
927 | 836 | ||||||
|
Accrued
pension obligations
|
839 | 899 | ||||||
|
Other
noncurrent liabilities
|
995 | 1,066 | ||||||
|
Common
stock and capital in excess of par value
|
2,268 | 2,200 | ||||||
|
Earnings
reinvested
|
3,726 | 3,862 | ||||||
|
Accumulated
other comprehensive loss
|
(376 | ) | (985 | ) | ||||
|
Noncontrolling
interests
|
319 | 319 | ||||||
|
Total
liabilities and equity
|
$ | 21,944 | $ | 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 September 30,
|
9
Months Ended September 30,
|
|||||||||||||||
|
2009
(a)
|
2008
(a)(b)
|
2009
(a)
|
2008
(a)(b)
|
|||||||||||||
|
|
||||||||||||||||
|
Operating
Revenues
|
||||||||||||||||
|
Utility
|
$ | 955 | $ | 1,007 | $ | 2,901 | $ | 3,108 | ||||||||
|
Unregulated
retail electric and gas
|
34 | 43 | 108 | 110 | ||||||||||||
|
Wholesale
energy marketing (c)
|
||||||||||||||||
|
Realized
|
999 | 748 | 2,564 | 1,610 | ||||||||||||
|
Unrealized
economic activity
|
(307 | ) | 1,157 | (67 | ) | 361 | ||||||||||
|
Net
energy trading margins
|
7 | (132 | ) | 2 | (82 | ) | ||||||||||
|
Energy-related
businesses
|
117 | 148 | 321 | 394 | ||||||||||||
|
Total
Operating Revenues
|
1,805 | 2,971 | 5,829 | 5,501 | ||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Operation
|
||||||||||||||||
|
Fuel
|
264 | 305 | 708 | 734 | ||||||||||||
|
Energy
purchases (c)
|
||||||||||||||||
|
Realized
|
750 | 500 | 2,049 | 1,126 | ||||||||||||
|
Unrealized
economic activity
|
(79 | ) | 1,020 | 255 | 157 | |||||||||||
|
Other
operation and maintenance
|
317 | 361 | 1,043 | 1,095 | ||||||||||||
|
Amortization
of recoverable transition costs
|
73 | 73 | 227 | 217 | ||||||||||||
|
Depreciation
|
120 | 117 | 343 | 345 | ||||||||||||
|
Taxes,
other than income
|
70 | 77 | 209 | 224 | ||||||||||||
|
Energy-related
businesses
|
109 | 134 | 298 | 361 | ||||||||||||
|
Total
Operating Expenses
|
1,624 | 2,587 | 5,132 | 4,259 | ||||||||||||
|
Operating
Income
|
181 | 384 | 697 | 1,242 | ||||||||||||
|
Other
Income - net
|
9 | 8 | 38 | 32 | ||||||||||||
|
Other-Than-Temporary
Impairments
|
6 | 18 | 16 | |||||||||||||
|
Interest
Expense
|
106 | 119 | 294 | 335 | ||||||||||||
|
Income
from Continuing Operations Before Income Taxes
|
84 | 267 | 423 | 923 | ||||||||||||
|
Income
Taxes
|
34 | 57 | 101 | 277 | ||||||||||||
|
Income
from Continuing Operations After Income Taxes
|
50 | 210 | 322 | 646 | ||||||||||||
|
Income
(Loss) from Discontinued Operations (net of income taxes)
|
(24 | ) | (2 | ) | (53 | ) | 22 | |||||||||
|
Net
Income
|
26 | 208 | 269 | 668 | ||||||||||||
|
Net
Income Attributable to Noncontrolling Interests
|
6 | 5 | 15 | 15 | ||||||||||||
|
Net
Income Attributable to PPL Corporation
|
$ | 20 | $ | 203 | $ | 254 | $ | 653 | ||||||||
|
Amounts
Attributable to PPL Corporation:
|
||||||||||||||||
|
Income
from Continuing Operations After Income Taxes
|
$ | 44 | $ | 205 | $ | 307 | $ | 631 | ||||||||
|
Income
(Loss) from Discontinued Operations (net of income
taxes)
|
(24 | ) | (2 | ) | (53 | ) | 22 | |||||||||
|
Net
Income
|
$ | 20 | $ | 203 | $ | 254 | $ | 653 | ||||||||
|
Earnings
Per Share of Common Stock - Basic
|
||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 0.52 | $ | 0.45 | $ | 1.43 | $ | 1.56 | ||||||||
|
Special
Items
|
(0.47 | ) | 0.09 | (0.76 | ) | 0.18 | ||||||||||
|
Net
Income Available to PPL Corporation Common Shareowners
|
$ | 0.05 | $ | 0.54 | $ | 0.67 | $ | 1.74 | ||||||||
|
Earnings
Per Share of Common Stock - Diluted
|
||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 0.52 | $ | 0.45 | $ | 1.43 | $ | 1.56 | ||||||||
|
Special
Items
|
(0.47 | ) | 0.09 | (0.76 | ) | 0.17 | ||||||||||
|
Net
Income Available to PPL Corporation Common Shareowners
|
$ | 0.05 | $ | 0.54 | $ | 0.67 | $ | 1.73 | ||||||||
|
Weighted-Average
Shares of Common Stock Outstanding (thousands)
|
||||||||||||||||
|
Basic
|
376,384 | 374,290 | 375,795 | 373,394 | ||||||||||||
|
Diluted
|
376,716 | 375,096 | 376,113 | 374,984 | ||||||||||||
|
(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)
|
||||||||
|
9
Months Ended
|
||||||||
|
September
30,
|
||||||||
|
2009
|
2008
|
|||||||
|
Cash
Flows from Operating Activities
|
||||||||
|
Net
Income
|
$ | 269 | $ | 668 | ||||
|
Adjustments
to reconcile net income to net cash provided
|
||||||||
|
by
operating activities:
|
||||||||
|
Depreciation
|
345 | 347 | ||||||
|
Amortization
of recoverable transition costs and other
|
286 | 286 | ||||||
|
Defined
benefits
|
(29 | ) | (55 | ) | ||||
|
Deferred
income taxes and investment tax credits
|
20 | (56 | ) | |||||
|
Gains
related to the extinguishment of notes
|
(29 | ) | ||||||
|
Impairment
of assets
|
109 | 53 | ||||||
|
Unrealized
(gains) losses on derivatives and other hedging activities
|
256 | (83 | ) | |||||
|
Changes
in working capital
|
(34 | ) | (69 | ) | ||||
|
Other
operating activities
|
54 | 70 | ||||||
|
Net
cash provided by operating activities
|
1,247 | 1,161 | ||||||
|
Cash
Flows from Investing Activities
|
||||||||
|
Expenditures
for property, plant and equipment
|
(821 | ) | (979 | ) | ||||
|
Net
expenditures for intangible assets
|
(58 | ) | (272 | ) | ||||
|
Net
proceeds from (purchases of) other investments
|
150 | (14 | ) | |||||
|
Net
(increase) decrease in restricted cash and cash
equivalents
|
170 | (70 | ) | |||||
|
Other
investing activities
|
(32 | ) | (15 | ) | ||||
|
Net
cash used in investing activities
|
(591 | ) | (1,350 | ) | ||||
|
Cash
Flows from Financing Activities
|
||||||||
|
Net
issuances (retirements) of long-term debt
|
(618 | ) | 400 | |||||
|
Repurchase
of common stock due to the repurchase program
|
(38 | ) | ||||||
|
Payment
of common stock dividends
|
(386 | ) | (365 | ) | ||||
|
Net
increase (decrease) in short-term debt
|
(70 | ) | 109 | |||||
|
Other
financing activities
|
14 | 10 | ||||||
|
Net
cash provided by (used in) financing activities
|
(1,060 | ) | 116 | |||||
|
Effect
of Exchange Rates on Cash and Cash Equivalents
|
(5 | ) | ||||||
|
Net
Decrease in Cash and Cash Equivalents
|
(404 | ) | (78 | ) | ||||
|
Cash
and cash equivalents at beginning of period
|
1,100 | 430 | ||||||
|
Cash
and cash equivalents included in assets held for sale
|
(3 | ) | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 696 | $ | 349 | ||||
|
Key
Indicators
|
||||||||
|
12
Months Ended
|
||||||||
|
September
30,
|
||||||||
|
Financial
|
2009
|
2008
|
||||||
|
Dividends
declared per share
|
$ | 1.37 | $ | 1.31 | ||||
|
Book
value per share (a)
|
$ | 14.92 | $ | 14.91 | ||||
|
Market
price per share (a)
|
$ | 30.34 | $ | 37.02 | ||||
|
Dividend
yield (a)
|
4.5 | % | 3.5 | % | ||||
|
Dividend
payout ratio (b)
|
97 | % | 46 | % | ||||
|
Dividend
payout ratio - earnings from ongoing operations (b)(c)
|
72 | % | 61 | % | ||||
|
Price/earnings
ratio (a)(b)
|
21.5 | 13.0 | ||||||
|
Price/earnings
ratio - earnings from ongoing operations (a)(b)(c)
|
16.1 | 17.1 | ||||||
|
Return
on average common equity
|
9.78 | % | 19.68 | % | ||||
|
Return
on average common equity - earnings from ongoing operations
(c)
|
13.39 | % | 15.62 | % | ||||
|
(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 September 30,
|
9
Months Ended September 30,
|
|||||||||||||||||||||||
|
Percent
|
Percent
|
|||||||||||||||||||||||
|
(millions
of kwh)
|
2009
|
2008
|
Change
|
2009 | 2008 |
Change
|
||||||||||||||||||
|
Domestic
Retail
|
||||||||||||||||||||||||
|
Delivered
(a)
|
9,061 | 9,624 | (5.8 | %) | 28,086 | 29,025 | (3.2 | %) | ||||||||||||||||
|
Supplied
|
9,607 | 10,207 | (5.9 | %) | 29,748 | 30,732 | (3.2 | %) | ||||||||||||||||
|
International
Delivered
|
||||||||||||||||||||||||
|
United
Kingdom
|
5,825 | 6,186 | (5.8 | %) | 19,806 | 20,889 | (5.2 | %) | ||||||||||||||||
|
Domestic
Wholesale
|
||||||||||||||||||||||||
|
East
|
7,914 | 8,783 | (9.9 | %) | 20,446 | 21,246 | (3.8 | %) | ||||||||||||||||
|
West
|
||||||||||||||||||||||||
|
NorthWestern
Energy
|
571 | 633 | (9.8 | %) | 1,698 | 1,869 | (9.1 | %) | ||||||||||||||||
|
Other
West
|
2,273 | 3,010 | (24.5 | %) | 6,782 | 8,759 | (22.6 | %) | ||||||||||||||||
|
(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)
|
||||||||||||||||||||||||||||||||
|
3rd Quarter
2009
|
(millions
of dollars)
|
(per
share)
|
||||||||||||||||||||||||||||||
|
PA
|
Int'l
|
PA
|
Int'l
|
|||||||||||||||||||||||||||||
|
Supply
|
Delivery
|
Delivery
|
Total
|
Supply
|
Delivery
|
Delivery
|
Total
|
|||||||||||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 124 | $ | 27 | $ | 44 | $ | 195 | $ | 0.33 | $ | 0.07 | $ | 0.12 | $ | 0.52 | ||||||||||||||||
|
Special
Items
|
||||||||||||||||||||||||||||||||
|
Unrealized
losses from energy- related, non-trading economic hedges
|
(130 | ) | (130 | ) | (0.34 | ) | (0.34 | ) | ||||||||||||||||||||||||
|
Unrealized
gains from foreign currency economic hedges
|
4 | 4 | ||||||||||||||||||||||||||||||
|
Income
taxes - Latin American businesses
|
(24 | ) | (24 | ) | (0.06 | ) | (0.06 | ) | ||||||||||||||||||||||||
|
Changes
in tax accounting method
|
(25 | ) | (25 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Total
special items
|
(155 | ) | (20 | ) | (175 | ) | (0.41 | ) | (0.06 | ) | (0.47 | ) | ||||||||||||||||||||
|
Reported
Earnings
|
$ | (31 | ) | $ | 27 | $ | 24 | $ | 20 | $ | (0.08 | ) | $ | 0.07 | $ | 0.06 | $ | 0.05 | ||||||||||||||
|
Year-to-Date September
30, 2009
|
(millions
of dollars)
|
(per
share)
|
||||||||||||||||||||||||||||||
|
PA
|
Int'l
|
PA
|
Int'l
|
|||||||||||||||||||||||||||||
|
Supply
|
Delivery
|
Delivery
|
Total
|
Supply
|
Delivery
|
Delivery
|
Total
|
|||||||||||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 239 | $ | 99 | $ | 202 | $ | 540 | $ | 0.63 | $ | 0.26 | $ | 0.54 | $ | 1.43 | ||||||||||||||||
|
Special
Items
|
||||||||||||||||||||||||||||||||
|
Unrealized
losses from energy-related, non-trading economic hedges
|
(168 | ) | (168 | ) | (0.45 | ) | (0.45 | ) | ||||||||||||||||||||||||
|
Unrealized
losses from foreign currency economic hedges
|
(2 | ) | (2 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Adjustments
- nuclear decom. trust investments (Q1, '09; Q2, '09; Q3,
'09)
|
(1 | ) | (1 | ) | ||||||||||||||||||||||||||||
|
Impairments
& other impacts - emission allowances (Q1, '09)
|
(15 | ) | (15 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
|
Impairments
- assets held for sale & other (Q1, '09; Q2, '09)
|
(36 | ) | (1 | ) | (1 | ) | (38 | ) | (0.10 | ) | (0.10 | ) | ||||||||||||||||||||
|
Workforce
reduction (Q1, '09)
|
(6 | ) | (5 | ) | (2 | ) | (13 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.03 | ) | ||||||||||||||||
|
Income
taxes - Latin American businesses (Q3, '09)
|
(24 | ) | (24 | ) | (0.06 | ) | (0.06 | ) | ||||||||||||||||||||||||
|
Changes
in tax accounting method (Q3, '09)
|
(25 | ) | (25 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Total
special items
|
(251 | ) | (6 | ) | (29 | ) | (286 | ) | (0.67 | ) | (0.01 | ) | (0.08 | ) | (0.76 | ) | ||||||||||||||||
|
Reported
Earnings
|
$ | (12 | ) | $ | 93 | $ | 173 | $ | 254 | $ | (0.04 | ) | $ | 0.25 | $ | 0.46 | $ | 0.67 | ||||||||||||||
|
12 Months Ended
September 30, 2009
|
(millions
of dollars)
|
(per
share)
|
||||||||||||||||||||||||||||||
|
PA
|
Int'l
|
PA
|
Int'l
|
|||||||||||||||||||||||||||||
|
Supply
|
Delivery
|
Delivery
|
Total
|
Supply
|
Delivery
|
Delivery
|
Total
|
|||||||||||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 317 | $ | 138 | $ | 260 | $ | 715 | $ | 0.84 | $ | 0.36 | $ | 0.69 | $ | 1.89 | ||||||||||||||||
|
Special
Items
|
||||||||||||||||||||||||||||||||
|
Unrealized
losses from energy-related, non-trading economic hedges
|
(38 | ) | (38 | ) | (0.10 | ) | (0.10 | ) | ||||||||||||||||||||||||
|
Unrealized
losses from foreign currency economic hedges
|
(2 | ) | (2 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Sale
of gas and propane businesses (Q4, '08; Q1, '09)
|
(1 | ) | (1 | ) | ||||||||||||||||||||||||||||
|
Adjustments
- nuclear decom. trust investments (Q4, '08; Q1, '09; Q2, '09; Q3,
'09)
|
(13 | ) | (13 | ) | (0.03 | ) | (0.03 | ) | ||||||||||||||||||||||||
|
Impairments
& other impacts - emission allowances (Q4, '08; Q1,
'09)
|
(13 | ) | (13 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
|
Impairments
- assets held for sale & other (Q4, '08; Q1, '09; Q2,
'09)
|
(52 | ) | (1 | ) | (2 | ) | (55 | ) | (0.14 | ) | (0.14 | ) | ||||||||||||||||||||
|
Workforce
reduction (Q1, '09)
|
(6 | ) | (5 | ) | (2 | ) | (13 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.03 | ) | ||||||||||||||||
|
Income
taxes - Latin American businesses (Q3, '09)
|
(24 | ) | (24 | ) | (0.06 | ) | (0.06 | ) | ||||||||||||||||||||||||
|
Changes
in tax accounting method (Q3, '09)
|
(25 | ) | (25 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Total
special items
|
(147 | ) | (7 | ) | (30 | ) | (184 | ) | (0.39 | ) | (0.01 | ) | (0.08 | ) | (0.48 | ) | ||||||||||||||||
|
Reported
Earnings
|
$ | 170 | $ | 131 | $ | 230 | $ | 531 | $ | 0.45 | $ | 0.35 | $ | 0.61 | $ | 1.41 | ||||||||||||||||
|
Reconciliation
of Business Segment Earnings from Ongoing Operations and Reported Earnings
(Diluted)
|
||||||||||||||||||||||||||||||||
|
3rd Quarter
2008
|
(millions
of dollars)
|
(per
share)
|
||||||||||||||||||||||||||||||
|
PA
|
Int'l
|
PA
|
Int'l
|
|||||||||||||||||||||||||||||
|
Supply
|
Delivery
|
Delivery
|
Total
|
Supply
|
Delivery
|
Delivery
|
Total
|
|||||||||||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 59 | $ | 36 | $ | 73 | $ | 168 | $ | 0.16 | $ | 0.09 | $ | 0.20 | $ | 0.45 | ||||||||||||||||
|
Special
Items
|
||||||||||||||||||||||||||||||||
|
Unrealized
gains from energy-related, non-trading economic hedges
|
67 | 67 | 0.18 | 0.18 | ||||||||||||||||||||||||||||
|
Impairments
& other impacts - emission allowances
|
(27 | ) | (27 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Adjustments
- nuclear decom. trust investments
|
(1 | ) | (1 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Sale
of gas and propane businesses
|
(4 | ) | (4 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Total
special items
|
39 | (4 | ) | 35 | 0.10 | (0.01 | ) | 0.09 | ||||||||||||||||||||||||
|
Reported
Earnings
|
$ | 98 | $ | 32 | $ | 73 | $ | 203 | $ | 0.26 | $ | 0.08 | $ | 0.20 | $ | 0.54 | ||||||||||||||||
|
Year-to-Date September
30, 2008
|
(millions
of dollars)
|
(per
share)
|
||||||||||||||||||||||||||||||
|
PA
|
Int'l
|
PA
|
Int'l
|
|||||||||||||||||||||||||||||
|
Supply
|
Delivery
|
Delivery
|
Total
|
Supply
|
Delivery
|
Delivery
|
Total
|
|||||||||||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 225 | $ | 128 | $ | 233 | $ | 586 | $ | 0.60 | $ | 0.34 | $ | 0.62 | $ | 1.56 | ||||||||||||||||
|
Special
Items
|
||||||||||||||||||||||||||||||||
|
Unrealized
gains from energy-related, non-trading economic hedges
|
121 | 121 | 0.32 | 0.32 | ||||||||||||||||||||||||||||
|
Impairments
& other impacts - emission allowances (Q3, '08)
|
(27 | ) | (27 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Adjustments
- nuclear decom. trust investments (Q2, '08; Q3, '08)
|
(5 | ) | (5 | ) | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
|
Sale
of gas and propane businesses (Q2, '08; Q3, '08)
|
(5 | ) | (5 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Off-site
remediation of ash basin leak (Q2, '08)
|
1 | 1 | ||||||||||||||||||||||||||||||
|
Montana
basin seepage litigation (Q1, '08; Q2, '08)
|
(5 | ) | (5 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Synfuel
tax adjustment (Q1, '08)
|
(13 | ) | (13 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
|
Total
special items
|
72 | (5 | ) | 67 | 0.18 | (0.01 | ) | 0.17 | ||||||||||||||||||||||||
|
Reported
Earnings
|
$ | 297 | $ | 123 | $ | 233 | $ | 653 | $ | 0.78 | $ | 0.33 | $ | 0.62 | $ | 1.73 | ||||||||||||||||
|
12 Months Ended
September 30, 2008
|
(millions
of dollars)
|
(per
share)
|
||||||||||||||||||||||||||||||
|
PA
|
Int'l
|
PA
|
Int'l
|
|||||||||||||||||||||||||||||
|
Supply
|
Delivery
|
Delivery
|
Total
|
Supply
|
Delivery
|
Delivery
|
Total
|
|||||||||||||||||||||||||
|
Earnings
from Ongoing Operations
|
$ | 333 | $ | 163 | $ | 315 | $ | 811 | $ | 0.90 | $ | 0.43 | $ | 0.83 | $ | 2.16 | ||||||||||||||||
|
Special
Items
|
||||||||||||||||||||||||||||||||
|
Unrealized
gains from energy-related, non-trading economic hedges
|
133 | 133 | 0.35 | 0.35 | ||||||||||||||||||||||||||||
|
Impairments
& other impacts - emission allowances (Q3, '08)
|
(27 | ) | (27 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Adjustments
- nuclear decom. trust investments (Q2, '08; Q3, '08)
|
(5 | ) | (5 | ) | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
|
Sale
of gas and propane businesses (Q4, '07; Q2, '08; Q3, '08)
|
(26 | ) | (26 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
|
Off-site
remediation of ash basin leak (Q2, '08)
|
1 | 1 | ||||||||||||||||||||||||||||||
|
Montana
basin seepage litigation (Q1, '08; Q2, '08)
|
(5 | ) | (5 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
|
Synfuel
tax adjustment (Q1, '08)
|
(13 | ) | (13 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
|
Workforce
reduction (Q4, '07)
|
(4 | ) | (1 | ) | (4 | ) | (9 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) | ||||||||||||||||||
|
Sale
of Latin American businesses (Q4, '07)
|
213 | 213 | 0.57 | 0.57 | ||||||||||||||||||||||||||||
|
Impairment
of transmission rights (Q4, '07)
|
(1 | ) | (1 | ) | ||||||||||||||||||||||||||||
|
Total
special items
|
79 | (27 | ) | 209 | 261 | 0.20 | (0.07 | ) | 0.56 | 0.69 | ||||||||||||||||||||||
|
Reported
Earnings
|
$ | 412 | $ | 136 | $ | 524 | $ | 1,072 | $ | 1.10 | $ | 0.36 | $ | 1.39 | $ | 2.85 |