PPL Corp. 2000 Earnings Increase 40 Percent; Company Forecasts Continued Strong Growth in 2001, 2002

Capping off the most successful year in its history, PPL Corp. (NYSE: PPL) Wednesday (1/24) announced record 2000 earnings that are 40 percent higher than a year ago. The company's adjusted earnings of $3.28 per share are 23 cents higher than analysts' consensus estimate.

(Photo: http://www.newscom.com/cgi-bin/prnh/19981015/PHTH025 )

"The earnings that we are reporting today are 75 percent higher than we reported just two years ago," said William F. Hecht, PPL Corp. chairman, president and chief executive officer. "Our 2000 earnings results are more clear evidence that we not only have identified superior opportunities in the competitive energy marketplace, we also have successfully capitalized on those opportunities."

"The main driver for our dramatic earnings growth in 2000 was an increase in margins and volume in our wholesale energy transactions," said Hecht. The competitive generation market, he said, is even more advantageous than the company anticipated.

"We have made excellent progress in our generation expansion program and this effort is building value in a very direct way for our shareowners," said Hecht. "We have carefully focused our generation development efforts in regions where there is exceptional opportunity and a very high likelihood of success."

Hecht also noted that, unlike some other electric companies that have gone through deregulation, PPL does not have any deferred power costs for which regulatory approval would be required for future recovery.

Hecht said that the company is increasing both its 2001 and 2002 earnings forecasts by about 35 cents per share. The 2001 forecast now is $3.60 to $3.65 per share, and the 2002 forecast, $3.90 to $4.00 per share.

"Our forecast of continued strong earnings growth is bolstered by the fact that we have been able to capture the value associated with high forward electricity prices in both the Eastern and Western U.S. markets," said Hecht. In both the Eastern and Western markets, he said, the company has adequate generation to meet its projected retail load obligations and still sell into the wholesale market.

Hecht said the major drivers for PPL's 2001 and 2002 earnings forecast are: increased margins on wholesale energy transactions; increased supply of electricity to sell in the competitive wholesale markets in the West; new power plants in Arizona, Connecticut and Pennsylvania; higher earnings from the company's international businesses; and continued success in controlling costs.

The improved earnings performance and prospects for future growth resulted in "spectacular" total return for shareowners in 2000, Hecht said. "Our total return to shareowners, paced by the outstanding performance of our common stock in the market, was about 105 percent, a level higher than all but two of the 71 energy companies that are part of the Edison Electric Institute index."

Hecht pointed out that achievement of the company's 2002 earnings projection would mean that PPL would have more than doubled its earnings per share since 1998, when its adjusted earnings were $1.87 per share.

PPL's stock price, which increased from $22.875 per share at the beginning of 2000 to $45.188 per share at the end of the year, more than doubled the growth rate of the Dow Jones Utility Average.

Hecht said PPL's dramatic growth can be traced directly to its strategy to increase its earnings from non-regulated businesses. He said about 80 percent of the company's earnings now comes from its generation, marketing and international operations.

As the result of its integrated corporate strategy, PPL Corp. companies now:

   -- Own or operate about 10,000 megawatts of electricity generating
      capacity in Pennsylvania, Montana and Maine.
   -- Are developing an additional 4,000 megawatts of generating capacity in
      Connecticut, Pennsylvania, New York, Arizona and Washington.
   -- Market electricity in wholesale or retail markets in 42 states and
      Canada, maximizing the value of the company's growing deregulated
      generation portfolio.
   -- Provide high-quality electricity delivery services to more than 6
      million customers in Pennsylvania, the United Kingdom and Latin

Hecht said record-setting performance at the company's generation facilities throughout 2000, optimized by PPL's wholesale trading and marketing activities, highlighted improved performance in all areas of the company. The company's power plants generated nearly 50 million megawatt-hours of electricity during 2000, a company record. And, PPL's trading and marketing organization is conservatively estimated to have added about $60 million in 2000 net income over and above the earnings from PPL's generating assets, Hecht said.

Also contributing to PPL's earnings growth during the year were positive results from the company's regulated energy delivery business in Pennsylvania and a 12 percent increase in the company's electricity sales to retail customers in Pennsylvania and other Mid-Atlantic states.

Actual earnings for 2000 were $3.44 per share, including a non-recurring benefit of 16 cents per share from settlements with various insurers for environmental and other liabilities and the 1-cent dilutive effect of unexercised stock options. Actual earnings for 1999 were $2.84 per share, including several non-recurring items related to securitization of PPL's transition costs, the sale of assets and the write-down of carrying values of certain investments.

The company's adjusted earnings of $3.28 per share for 2000 do not include $17.7 million, or about 7 cents per share, that is owed to the company by the California Independent System Operator. To the extent that the company does receive payment for these sales, there would be a benefit for 2001 earnings. The benefit of receiving this payment from the California ISO is not, however, included in the company's 2001 earnings forecast, Hecht said.

Because of credit risk, PPL is not making sales to California unless required to do so by the Department of Energy.

Earnings for the fourth quarter of 2000 included no non-recurring items and were $0.87 per diluted share, compared to 1999 fourth quarter adjusted earnings of $0.64 per share. This marks the eighth straight time that PPL earnings have topped analysts' consensus estimates. Actual earnings of $1.02 per share for the 1999 period reflected the net benefits of several non- recurring items, including the sale of assets and write-down of carrying values of certain investments.


                        Consolidated Balance Sheet
                          (Millions of Dollars)

                                           Dec. 31, 2000   Dec. 31, 1999(a)
  Current Assets                               $1,955              $1,293
  Investments                                   1,161                 695
  Property, plant and equipment
    Transmission and distribution - net         2,841               2,462
    Generation - net                            2,177               2,352
    General and intangible - net                  294                 259
    Construction work in progress                 261                 181
    Nuclear fuel and other leased property        123                 139
      Electric utility plant - net              5,696               5,393
    Gas and oil utility plant - net               177                 171
    Other property - net                           75                  60
                                                5,948               5,624
  Recoverable transition costs                  2,425               2,647
  Regulatory and other assets                     881                 915
      Total assets                            $12,370             $11,174

  Current liabilities                          $2,511              $2,280
  Long-term debt (less current portion)         4,467               3,689
  Deferred income taxes and ITC                 1,412               1,548
  Liability for above market NUG purchases        581                 674
  Other noncurrent liabilities                    986                 959
  Minority interest                                54                  64
  Company-obligated mandatorily redeemable
   securities                                     250                 250
  Preferred stock                                  97                  97
  Earnings reinvested                             999                 654
  Other common equity                           1,849               1,795
  Treasury stock                                 (836)               (836)
  Total liabilities                           $12,370             $11,174

(a) Certain amounts have been reclassified to conform to the current year presentation.

                      Consolidated Income Statement
                          (Millions of Dollars)

                          3 Months Ended Dec. 31  12 Months Ended Dec. 31
                            2000        1999(a)        2000         1999(a)

  Operating Revenues
    Electric                $797          $696       $2,984        $2,758
    Natural gas and propane   63            30          183           115
    Wholesale energy
     marketing and trading   507           313        2,080         1,440
     businesses              138            94          436           277
                           1,505         1,133        5,683         4,590
  Operating Expenses
    Fuel and purchased
     power                   570           464        2,461         2,031
    Other operation and
     maintenance             314           235          951           858
    Amortization of
     transition costs         68            59          227           194
    Depreciation and
     amortization             65            64          261           257
    Other                    160           104          581           378
                           1,177           926        4,481         3,718
  Operating income           328           207        1,202           872
  Other income               (23)           90          (15)           97
  Income before interest,
   income taxes and
   minority interest         305           297        1,187           969
  Interest expense           102            74          376           277
  Income taxes                79            82          294           174
  Minority interest            0             1            4            14
  Income before
   extraordinary items       124           140          513           504
  Extraordinary items
   (net of taxes)             11            13           11          (46)
  Income before dividends
   on preferred stock        135           153          524           458
  Preferred stock
   dividend requirements       7             7           26            26
  Net income                $128          $146         $498          $432

  Earnings per share of
   common stock - basic
    Income before
     nonrecurring items    $0.88         $0.64        $3.29         $2.35
    Nonrecurring items
     (net of tax)           0.00          0.38         0.16          0.49
  Net income               $0.88         $1.02        $3.45         $2.84

  Earnings per share of
   common stock - diluted
    Income before
     nonrecurring items    $0.87         $0.64        $3.28         $2.35
    Nonrecurring items
     (net of tax)           0.00          0.38         0.16          0.49
  Net income               $0.87         $1.02        $3.44         $2.84

  Average number of
   shares outstanding
   (thousands)           144,906       143,695      144,350       152,287

(a) Certain amounts have been reclassified to conform to the current year presentation.

                              Key Indicators

                                           12 Months Ended  12 Months Ended
                                            Dec. 31, 2000     Dec. 31, 1999

  Dividends declared per share                   $1.06              $1.00
  Book value per share (a)                      $13.87             $11.23
  Market price per share (a)                   $45.188            $22.875
  Dividend yield                                  2.4%               4.4%
  Dividend payout ratio - basic and diluted (b)    32%                43%
  Price/earnings ratio - basic (b)                13.7                9.7
  Price/earnings ratio - diluted (b)              13.8                9.7
  Return on average common equity (b)           27.14%             16.89%

  (a) End of period
  (b) Based on adjusted earnings

  Operating - Domestic Energy

                      3 Months Ended Dec. 31     12 Months Ended Dec. 31
                                        Percent                     Percent
  PPL Corp.           2000      1999    Change    2000      1999    Change

  (millions of kwh)
    Delivered (a)    8,281      7,959     4.0   33,907    33,045      2.6
    Supplied         9,370      8,463    10.7   37,758    33,695     12.1

    East             6,228      7,745   -19.6   31,544    32,045     -1.6
       Power (b)     1,253          0     n/a    5,096         0      n/a
      Other          1,069          0     n/a    4,244         0      n/a

(a) Electricity delivered to retail customers represents the kwh delivered to customers within PPL Electric Utilities Corp.'s service territory.

(b) Energy sold to Montana Power for retail customers under a power sale agreement that expires June 30, 2002.

PPL invites interested parties to listen to the live Internet Webcast of management's fourth quarter earnings teleconference with financial analysts at 9 a.m. today. The teleconference is available online live, in audio format, on PPL's Internet Web site: http://www.pplweb.com/. The webcast will be available for replay on the PPL Website for 30 days. Interested individuals also can access the live conference call via telephone at 913-981-4900.

Certain statements contained in this news release, including statements with respect to future earnings, energy prices, supply, sales, margins and deliveries, operating costs, subsidiary performance, growth, project development, and generating capacity and performance, are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corp. 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 variations affecting customer energy usage; competition in retail and wholesale power markets; the effect of any business or industry restructuring; the profitability and liquidity of PPL Corp. 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; system conditions and operating costs; development of new projects, markets and technologies; performance of new ventures; political, regulatory or economic conditions in countries where PPL Corp. or its subsidiaries conduct business; receipt of necessary governmental approvals; capital market conditions; stock price performance; foreign exchange rates; and the commitments and liabilities of PPL Corp. and its subsidiaries. Any such forward-looking statements should be considered in light of such factors and in conjunction with PPL Corp.'s Form 10-K and other reports on file with the Securities and Exchange Commission.

NewsCom: http://www.newscom.com/cgi-bin/prnh/19981015/PHTH025

PRN Photo Desk, 888-776-6555 or 201-369-3467


Contact: Media, Dan McCarthy, 610-774-5758, or Investors, Tim Paukovits,
610-774-4124, or fax, 610-774-5281, both of PPL

Website: http://www.pplweb.com/

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