Jul 24, 2001
PPL Corporation Reports 12 Percent Growth in Core Businesses For Record Second-Quarter Earnings
PRNewswire
ALLENTOWN, Pa.
PPL Corporation (NYSE: PPL) today (7/24) reported a 12 percent increase in per share earnings in its core businesses for the second quarter of 2001. PPL earned a record $0.72 per share during the second quarter from its core business operations of energy generation, marketing, and distribution and transmission as compared to $0.64 per share a year ago.
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Additionally, PPL recorded $0.08 per share in the second quarter related to benefits of tax credits from synfuel operations, for total reported earnings of $0.80 per share. The contributions from synfuels were not previously included in the company's published forecasts. PPL recorded the benefits in the second quarter following an evaluation of the recent Internal Revenue Service revenue procedures as they apply to the company's synfuel projects.
"We experienced solid results in the second quarter," said William F. Hecht, PPL's chairman, president and chief executive officer. "The major drivers of our second-quarter earnings were increased margins on unregulated wholesale energy transactions conducted by our energy marketing and trading units, positive results from our regulated energy delivery business in Pennsylvania and favorable results from our portfolio of international investments."
Hecht said PPL's second-quarter earnings rose solidly above a year ago, even when compared to last year's second quarter, which included a $0.17 per share benefit from the sale of emission allowances in last year's second quarter, a sale that was not repeated in this year's second quarter.
Hecht reiterated PPL's prior forecast of earnings in excess of $4.00 per share for 2001. The 2001 forecast reflects a strategic initiative the company terms "securitization" of PPL Electric Utilities, the regulated electricity delivery subsidiary. All necessary approvals for this initiative have been received, including those of PPL Electric Utilities' shareowners, the Pennsylvania Public Utility Commission and the Federal Energy Regulatory Commission.
Later this summer, PPL anticipates completing this strategic initiative, which will enable PPL to lock in a market for a significant portion of its eastern generation through 2009 at very favorable prices.
PPL's earnings per diluted share for the first half of 2001 were $2.31, a 42 percent increase over the earnings of $1.63 per diluted share for the same period of 2000. This strong growth in earnings resulted primarily from improved margins in wholesale energy operations and increased contributions from international activities. In addition, the company's sales of energy delivered to residential and small business customers reflected above-average growth for both the quarter and for the year to date.
PPL Corp., headquartered in Allentown, Pa., generates electricity at power plants in Pennsylvania, Maine and Montana; markets wholesale or retail energy in 42 U.S. states and Canada; and delivers energy to nearly 6 million customers in Pennsylvania, the United Kingdom and Latin America.
PPL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
Consolidated Balance Sheet
(Millions of Dollars)
June 30, 2001 Dec. 31, 2000
Assets
Current Assets $1,680 $1,945
Investments 1,191 1,161
Property, plant and equipment -- net
Transmission and distribution 2,811 2,841
Generation 2,341 2,177
General and intangible 295 294
Construction work in progress 258 261
Nuclear fuel 114 123
Electric utility plant 5,819 5,696
Gas and oil utility plant 190 177
Other property 72 75
6,081 5,948
Recoverable transition costs 2,299 2,425
Regulatory and other assets 911 881
Total assets $12,162 $12,360
Liabilities and Equity
Current liabilities $1,940 $2,511
Long-term debt (less current portion) 4,081 4,467
Deferred income taxes and ITC 1,409 1,412
Liability for above market NUG purchases 537 581
Other noncurrent liabilities 964 976
Minority interest 58 54
Company-obligated mandatorily
redeemable securities 825 250
Preferred stock 96 97
Earnings reinvested 1,260 999
Other common equity 1,828 1,849
Treasury stock (836) (836)
Total liabilities and equity $12,162 $12,360
Consolidated Income Statement
(Millions of Dollars)
3 Months Ended 6 Months Ended 12 Months Ended
June 30 June 30 June 30
2001 2000(a) 2001 2000(a) 2001 2000(a)
Operating Revenues
Retail electric
and gas $792 $711 $1,748 $1,556 $3,359 $3,108
Wholesale energy
marketing and
trading 437 491 906 953 2,033 1,761
Energy-related
businesses 180 95 321 201 556 360
1,409 1,297 2,975 2,710 5,948 5,229
Operating Expenses
Fuel and
purchased power 554 593 1,137 1,201 2,397 2,366
Other operation
and maintenance 286 221 524 439 1,051 914
Amortization of
recoverable
transition costs 55 46 126 109 244 217
Depreciation 64 70 127 138 250 274
Other 201 126 356 262 660 451
1,160 1,056 2,270 2,149 4,602 4,222
Operating income 249 241 705 561 1,346 1,007
Other income
and (deductions) 5 8 9 7 (13) 97
Income before
interest, income
taxes and
minority interest 254 249 714 568 1,333 1,104
Interest expense 88 92 192 180 388 334
Income taxes 35 58 161 140 315 200
Minority interest 1 0 3 1 6 15
Income before
extraordinary
items 130 99 358 247 624 555
Extraordinary items
(net of tax) 0 0 0 0 11 (46)
Income before
dividends on
preferred
securities 130 99 358 247 635 509
Dividends -
preferred
securities 13 7 19 13 32 26
Net Income $117 $92 $339 $234 $603 $483
Earnings per share
of common stock
- basic
Income before
nonrecurring
items $0.80 $0.60 $2.33 $1.59 $4.02 $2.76
Nonrecurring items
(net of tax) 0.00 0.04 0.00 0.04 0.13 0.55
Net Income $0.80 $0.64 $2.33 $1.63 $4.15 $3.31
Earnings per share
of common stock
- diluted
Income before
nonrecurring
items $0.80 $0.60 $2.31 $1.59 $4.00 $2.76
Nonrecurring items
(net of tax) 0.00 0.04 0.00 0.04 0.13 0.55
Net Income $0.80 $0.64 $2.31 $1.63 $4.13 $3.31
Average number
of shares
outstanding
(thousands) 145,901 144,137 145,608 143,948 145,187 145,985
(a) Certain amounts have been reclassified to conform to the current year
presentation.
Key Indicators
Financial
12 Months Ended 12 Months Ended
June 30, 2001 June 30, 2000
Dividends declared per share $1.06 $1.03
Book value per share (a) $15.42 $12.31
Market price per share (a) $55.00 $21.9375
Dividend yield 1.9% 4.7%
Dividend payout ratio - diluted (b) 27% 37%
Price/earnings ratio - diluted (b) 13.8 7.9
Return on average common equity (b) 30.25% 24.87%
(a) End of period
(b) Excluding nonrecurring items
Operating - Domestic Energy
3 Months Ended June 30 6 Months Ended June 30
PPL Corp.
(millions of
kwh) Percent Percent
2001 2000 Change 2001 2000 Change
Retail
Delivered (a) 8,082 7,821 3.3% 17,963 17,303 3.8%
Supplied 8,928 9,181 -2.8% 19,481 19,046 2.3%
Wholesale
East 4,259 8,015 -46.9% 9,503 17,784 -46.6%
West
Montana Power
Company (b) 1,048 1,245 -15.8% 2,247 2,586 -13.1%
Other 743 1,346 -44.8% 1,769 2,253 -21.5%
12 Months Ended June 30
Percent
2001 2000 Change
Retail
Delivered (a) 34,567 33,483 3.2%
Supplied 38,192 35,988 6.1%
Wholesale
East 23,305 33,483 -30.4%
West
Montana Power Company (b) 4,757 2,586 (c)
Other 3,760 2,253 (c)
(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 resale to retail customers under
power sale agreements that expire on or before June 30, 2002.
(c) Assets pertaining to the wholesale sales in the West were acquired in
December 1999. As a result, only six months of sales are reflected in
the 12 months ended June 30, 2000.
[PPL invites interested parties to listen to the live Internet Webcast of management's second- quarter earnings teleconference with financial analysts at 4:15 p.m. Tuesday, July 24. 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 Web site for 30 days. Interested individuals also can access the live conference call via telephone at 913-981-5522.]
Certain statements contained in this news release, including statements with respect to future earnings, energy prices, supply, sales, margins and deliveries, financing costs, taxes, strategic initiatives, subsidiary performance, growth, project development, 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, 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.
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SOURCE: PPL Corporation
Contact: Media: Dan McCarthy, +1-610-774-5758, or Financial Analysts:
Tim Paukovits, +1-610-774-4124, both of PPL Corporation, or fax,
+1-610-774-5281
Website: http://www.pplweb.com/
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