Oct 25, 2000
PPL's Earnings Surge by 47 Percent for Third Quarter; Company Forecasts Double-Digit Growth in 2002
PRNewswire
ALLENTOWN, Pa.
For the third time this year, PPL Corp. (NYSE: PPL) Wednesday (10/25) reported record quarterly earnings. This marks the seventh consecutive quarter in which PPL has met or exceeded the consensus earnings estimate of financial analysts.
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When adjusted to exclude the benefit of nonrecurring items, the company's third quarter 2000 earnings were $0.81 per share, 47 percent higher than similarly adjusted earnings of $0.55 per share reported a year ago.
PPL also announced its 2002 earnings forecast of between $3.55 and $3.65 per share, a range that reflects an approximate 11 percent increase over its 2001 forecast of $3.20 to $3.30 per share. William F. Hecht, PPL's chairman, president and chief executive officer, said these earnings forecasts are based on conservative assumptions about future business conditions. Hecht also confirmed the company's previously announced 2000 forecast of $3.00 per share, which also excludes the benefits of nonrecurring items.
Hecht said the record-setting earnings performance in recent quarters can be directly attributed to the company's success, over the last several years, in capitalizing on opportunities offered by the competitive energy marketplace.
"The most dramatic example of our success is in the electricity generation and marketing businesses," said Hecht. "Our company achieved excellent operating performance at our generation facilities throughout 2000, and we optimized the value of this performance through our wholesale trading and marketing activities in energy and related commodities. Through September 30, our trading and marketing organization is conservatively estimated to have added about $30 million of net income over and above the earnings from PPL's generating assets."
Also contributing to PPL's earnings growth during the third quarter and the first nine months of 2000 were positive results from the company's regulated energy delivery business in Pennsylvania and from the company's international operations.
Actual earnings for the third quarter of 2000 were $0.94 per share, including a nonrecurring benefit of 13 cents per share from a settlement with various insurers for environmental and other liabilities. Actual earnings for the third quarter of 1999 were $0.68 per share, including a nonrecurring benefit of 13 cents per share resulting from a series of transactions related to the securitization of PPL's transition costs.
Actual earnings per share for the first nine months of 2000 were $2.57, compared to actual earnings per share of $1.85 reported for the same period of last year. Excluding nonrecurring items during these periods, earnings per share of $2.41 for the first nine months of 2000 reflect an increase of 40 per cent over adjusted earnings per share of $1.72 for the same period of 1999.
Actual earnings per share for the 12 months ended September 30, 2000, were $3.59, compared to actual earnings per share of $2.41 reported in the same period last year. Excluding nonrecurring items during these periods, earnings per share of $3.04 for the 12 months ended Sept. 30, 2000, reflect an increase of 43 percent over adjusted earnings per share of $2.13 for the same period last year. This growth underscores the company's success from continuing operations.
"Our achievements of the past year and our expectation of sustained earnings improvement over the next two years are the result of a solid set of business fundamentals and a time-proven dedication on the part of our employees to continually improve our operations," said Hecht.
Hecht said PPL's corporate strategy of concentrating on the generation and sale of competitively priced energy in key U.S. markets while operating high-quality energy delivery businesses in selected regions around the world has led to record-breaking, sustainable growth.
The major drivers of PPL's 2002 earnings forecast are:
-- Increased margins on energy transactions;
-- Increased supply of electricity to sell in the competitive wholesale
markets in the West;
-- New natural gas-powered plants in Arizona, Connecticut and
Pennsylvania;
-- Strong growth in the electricity delivery business in Pennsylvania;
-- Higher earnings from the company's international businesses; and
-- Success in continuing to reduce costs.
PPL invites interested parties to listen to the live Internet webcast of management's third quarter earnings teleconference with financial analysts at 9 a.m. today. The teleconference is available online live, in audio format, on PPL's main Internet web site, http://www.pplweb.com/ . Interested individuals also can access the live conference call via telephone at 913-981-4900.
Based in Allentown, Pa., PPL Corp. is a FORTUNE 500® company that delivers electricity and natural gas to more than 1.3 million customers in Pennsylvania; markets wholesale or retail energy in 42 U.S. states and Canada; provides energy services for businesses in the Mid-Atlantic and Northeastern U.S.; generates electricity at power plants in Pennsylvania, Maine and Montana; delivers electricity to 2.4 million customers in southwest Great Britain; and delivers electricity to nearly 1.8 million customers in Chile, Bolivia, El Salvador and Brazil.
PPL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
Consolidated Balance Sheet
(Millions of Dollars)
Sept. 30, Dec. 31,
2000 1999 (a)
Assets
Current Assets $1,742 $1,293
Investments 1,021 695
Property, plant and equipment
Transmission and
distribution - net 2,804 2,462
Generation - net 2,143 2,352
General and intangible - net 265 259
Construction work in progress 225 181
Nuclear fuel and other
leased property 108 139
Electric utility plant - net 5,545 5,393
Gas and oil utility plant - net 171 171
Other property - net 79 60
5,795 5,624
Recoverable transition costs 2,487 2,647
Regulatory and other assets 927 915
Total assets $11,972 $11,174
Liabilities
Current liabilities $2,043 $2,280
Long-term debt
(less current portion) 4,564 3,689
Deferred income taxes and ITC 1,474 1,548
Liability for above market NUG
purchases 604 674
Other noncurrent liabilities 966 959
Minority interest 75 64
Company-obligated mandatorily
redeemable securities 250 250
Preferred stock 97 97
Earnings reinvested 910 654
Other common equity 1,825 1,795
Treasury stock (836) (836)
Total liabilities $11,972 $11,174
(a) Certain amounts have been reclassified to conform to the current year
presentation.
Consolidated Income Statement
(Millions of Dollars)
3 Months 9 Months 12 Months
Ended Sept. 30 Ended Sept. 30 Ended Sept. 30
2000 1999(a) 2000 1999(a) 2000 1999(a)
Operating Revenues
Electric $729 $811 $2,201 $2,062 $2,897 $2,650
Natural gas and
propane 26 15 120 85 151 114
Wholesale energy
marketing and
trading 616 495 1,559 1,127 $1,871 $1,363
Energy-related
businesses 87 65 288 183 382 232
1,458 1,386 4,168 3,457 5,301 4,359
Operating Expenses
Fuel and purchased
power 690 701 1,891 1,567 2,355 1,899
Other operation and
maintenance 213 253 637 645 872 872
Amortization of
recoverable
transition costs 50 27 159 113 218 113
Depreciation and
amortization 58 73 196 193 260 265
Other 134 94 411 274 515 365
1,145 1,148 3,294 2,792 4,220 3,514
Operating income 313 238 874 665 1,081 845
Other income 1 0 8 7 98 47
Income before interest,
income taxes and
minority interest 314 238 882 672 1,179 892
Interest expense 94 80 274 203 348 269
Income taxes 75 (22) 215 92 297 151
Minority interest 3 13 4 13 5 13
Income before
extraordinary
items 142 167 389 364 529 459
Extraordinary items
(net of taxes) 0 (59) 0 (59) 13 (59)
Income before dividends
on preferred stock 142 108 389 305 542 400
Preferred stock
dividend
requirements 6 6 19 19 26 25
Net Income $136 $102 $370 $286 $516 $375
Earnings per share of common stock -
basic and diluted
Adjusted
earnings $0.81 $0.55 $2.41 $1.72 $3.04 $2.13
Nonrecurring
items .13 .13 .16 .13 .55 .24
Other restructuring
impacts .00 .00 .00 .00 .00 .04
Actual Earnings $0.94 $0.68 $2.57 $1.85 $3.59 $2.41
Average number of
shares outstanding
(thousands) 144,578 150,694 144,165 154,865 144,056 155,373
(a) Certain amounts have been reclassified to conform to the current year
presentation.
Key Indicators
Financial
12 Months Ended 12 Months Ended
Sept. 30, 2000 Sept. 30, 1999
Dividends declared per share $1.045 $1.00
Book value per share (a) $13.12 $10.51
Market price per share (a) $41.7500 $27.0625
Dividend yield 2.5% 3.7%
Dividend payout ratio (b) 34% 47%
Price/earnings ratio (b) 13.7 12.7
Return on average common equity (b)26.50% 13.90%
(a) End of period
(b) Based on adjusted earnings
Operating
PPL Electric Utilities Corp./ 3 Months Ended Sept. 30
PPL EnergyPlus
Percent
2000 1999 Change
(millions of kwh)
Electricity delivered
to retail customers (a) 8,321 8,221 1.2%
Electricity supplied to
retail customers (a) 9,340 8,480 10.1%
PPL Electric Utilities Corp./
PPL EnergyPlus
Wholesale energy sales 6,998 7,801 -10.3%
Operating
PPL Electric Utilities Corp./ 9 Months Ended Sept. 30
PPL EnergyPlus
Percent
2000 1999 Change
(millions of kwh)
Electricity delivered
to retail customers (a) 25,624 25,086 2.1%
Electricity supplied to
retail customers (a) 28,386 25,232 12.5%
PPL Electric Utilities Corp./
PPL EnergyPlus
Wholesale energy sales 23,721 24,061 -1.4%
Operating
PPL Electric Utilities Corp./ 12 Months Ended Sept. 30
PPL EnergyPlus
Percent
2000 1999 Change
(millions of kwh)
Electricity delivered
to retail customers (a) 33,582 33,029 1.7%
Electricity supplied to
retail customers (a) 36,848 33,037 11.5%
PPL Electric Utilities Corp./
PPL EnergyPlus
Wholesale energy sales 31,375 31,466 -0.3%
(a) Electricity delivered to retail customers represents the kwh delivered
to customers within PPL Electric Utilities Corp.'s service territory.
Electricity supplied represents the kwh supplied to customers within
and outside PPL Electric Utilities Corp.'s service territory
(including sales of PPL EnergyPlus). Customers within PPL Electric
Utilities Corp.'s service territory will have their energy delivered
by PPL Electric Utilities Corp.
Certain statements contained in this news release, including statements with respect to future earnings, energy supply, sales, margins and deliveries, operating costs, subsidiary performance and generating capacity, 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; performance of new ventures; political, regulatory or economic conditions in countries where PPL Corp. or its subsidiaries conduct business; capital market conditions; 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.
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PRN Photo Desk, 888-776-6555 or 201-369-3467
SOURCE: PPL Corporation
Contact: John R. Biggar, 610-774-5613, or Timothy J. Paukovits,
610-774-4124, both of PPL Corp., or fax, 610-774-5281
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