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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