EX-99.1 2 form8k-exhibit99_1.htm EXHIBIT 99.1 form8k-exhibit99_1.htm
Exhibit 99.1
 
May 1, 2013, 1:30 p.m.
Contacts:
For news media – George C. Lewis, 610-774-5997
 
For financial analysts – Joseph P. Bergstein, 610-774-5609
 
PPL Corporation reports first-quarter earnings

·  
Announces solid increases in results from regulated businesses

·  
Finalizes remarketing plan for equity units; updates per-share earnings guidance to reflect accelerated recognition of common stock underlying equity units

·  
Announces reduction in future equity needs

·  
Affirms underlying 2013 forecast of net income
 
ALLENTOWN, Pa. (May 2, 2013) ― PPL Corporation (NYSE: PPL) announced first-quarter 2013 reported earnings on Thursday (5/2) of $413 million, or $0.65 per share, a decrease from $541 million, or $0.93 per share, a year ago.

Adjusting for special items, quarterly earnings from ongoing operations were $454 million, or $0.71 per share, an increase from $409 million, or $0.70 per share, in the first quarter of 2012.

First-quarter per-share reported and ongoing earnings reflect accelerated recognition of the common stock underlying the equity units issued to fund the company’s 2010 and 2011 acquisitions in Kentucky and the United Kingdom. Excluding the impact of the accelerated share recognition, per-share earnings from ongoing operations would have been $0.06 higher.

“We delivered strong quarter-over-quarter growth in each of the regulated business segments, keeping us on track to achieve our 2013 net income target,” said William H. Spence, PPL chairman, president and chief executive officer.

“Late in the first quarter we finalized our financing plans to remarket $2.1 billion of debt securities related to the equity units issued in 2010 and 2011,” he said. As a result of those activities, effective Jan. 1, 2013, PPL is reflecting the full expected impact of common stock underlying both series of equity units in its calculation of earnings per share.

Terms of the equity units have not changed and the actual issuance of common stock under the equity units remains scheduled to occur July 1, 2013, and May 1, 2014, for the 2010 and 2011 Equity Units, respectively.

“Additionally, we are announcing today a reduction in future equity needs,” Spence said. PPL has removed approximately $100 million per year in previously planned equity offerings from its financing plans for 2013 and beyond.

As a result of the accelerated recognition of common stock related to the equity units and the change in financing plans, PPL’s 2013 earnings per share forecasts have been adjusted downward by $0.10 per share. The revised forecast of ongoing earnings is a range of $2.15 to $2.40 per share, with a midpoint of $2.27. The forecast of reported earnings is now $2.09 to $2.34 per share, reflecting special items recorded through the first quarter.

First-Quarter 2013 Earnings Details

PPL’s reported earnings for the first quarter of 2013 included net special item charges of $41 million, or $0.06 per share, reflecting a charge of $0.18 per share for adjusted energy-related economic activity (primarily mark-to-market losses on commodity hedges), partially offset by a credit of $0.12 per share for foreign currency-related economic hedges.

Reported earnings are calculated in accordance with U.S. generally accepted accounting principles (GAAP). “Earnings from ongoing operations” is a non-GAAP financial measure that is adjusted for special items including the impact of adjusted energy-related economic activity, foreign currency-related economic hedges, as well as other impacts fully detailed at the end of this news release.
 
(Dollars in millions, except for per share amounts)
 
1st Quarter
1st Quarter
 
 
2013
2012
% Change
Reported Earnings
$413
$541
-24%
Reported Earnings Per Share
$0.65
$0.93
-30%
Earnings from Ongoing Operations
$454
$409
11%
Earnings from Ongoing Operations Per Share
$0.71
$0.70
1%

(See the tables at the end of the news release for details as to the reconciliation of earnings from ongoing operations to reported earnings.)
 
First-Quarter Earnings by Business Segment

The following chart shows PPL’s earnings per share by business segment for the first quarter of 2013 compared with the same period of 2012.
 
   
1st Quarter
Earnings from ongoing operations
 
2013
 
2012
                 
Kentucky Regulated
 
$
0.14
   
$
0.06
 
U.K. Regulated
   
0.37
     
0.31
 
Pennsylvania Regulated
   
0.10
     
0.06
 
Supply
   
0.11
     
0.27
 
Corporate and Other1
   
(0.01
)
   
 
    Total
 
$
0.71
   
$
0.70
 
                 
Special items
               
                 
Kentucky Regulated
 
$
   
$
0.01
 
U.K. Regulated
   
0.12
     
(0.03
)
Pennsylvania Regulated
   
     
 
Supply
   
(0.18
)
   
0.25
 
Corporate and Other1
   
       
 
    Total
 
$
(0.06
)
 
$
0.23
 
                 
Reported earnings
               
                 
Kentucky Regulated
 
$
0.14
   
$
0.07
 
U.K. Regulated
   
0.49
     
0.28
 
Pennsylvania Regulated
   
0.10
     
0.06
 
Supply
   
(0.07
)
   
0.52
 
Corporate and Other1
   
(0.01
)
   
 
    Total
 
$
0.65
   
$
0.93
 
 
1 This category primarily includes unallocated corporate-level financing and other costs. Non-financing costs included in this category are not expected to be significant in 2013.

 (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

Kentucky Regulated Segment
PPL’s Kentucky Regulated segment primarily consists of the regulated electricity and natural gas operations of Louisville Gas and Electric Company and Kentucky Utilities Company.

Segment earnings from ongoing operations in the first quarter of 2013 increased by $0.08 per share compared with a year ago. This increase was primarily due to new electric and gas rates that went into effect Jan. 1, and higher sales volumes due to weather, partially offset by dilution of $0.01 per share.

U.K. Regulated Segment
PPL’s U.K. Regulated segment primarily consists of the regulated electricity delivery operations of Western Power Distribution, serving Southwest and Central England and South Wales.

Segment earnings from ongoing operations in the first quarter of 2013 increased by $0.06 per share compared with a year ago. This increase was primarily due to higher delivery revenue as a result of higher prices, and lower income taxes, partially offset by dilution of $0.04 per share.

Pennsylvania Regulated Segment
PPL’s Pennsylvania Regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.

Segment earnings from ongoing operations in the first quarter of 2013 increased by $0.04 per share compared with a year ago. This increase was primarily due to higher delivery revenues as a result of new distribution rates that went into effect Jan. 1, higher sales volumes due to weather, and lower operation and maintenance expense, partially offset by dilution of $0.01 per share.

Supply Segment
PPL’s Supply segment consists primarily of the competitive domestic electricity generation and energy marketing operations of PPL Energy Supply.
 
 
Segment earnings from ongoing operations in the first quarter of 2013 decreased by $0.16 per share compared with a year ago. This decrease was primarily due to lower Eastern energy margins due to lower baseload energy prices, which were partially offset by higher baseload unit availability, higher capacity prices and higher margins on intermediate and peaking units; lower Western energy margins due to lower prices; higher income taxes; and dilution of $0.01 per share.

 
 

 

 

2013 Earnings from Ongoing Operations Forecast by Business Segment

   
Forecast
       
Earnings per share
 
2013 original
midpoint
   
2013 revised
midpoint
   
2012 Actual
 
                   
Kentucky Regulated
  $ 0.47     $ 0.46     $ 0.33  
U.K. Regulated
    1.25       1.20       1.19  
Pennsylvania Regulated
    0.29       0.27       0.22  
Supply
    0.40       0.37       0.68  
Corporate and Other
    (0.04 )     (0.03 )     -  
Total
  $ 2.37     $ 2.27     $ 2.42  
 
PPL expects lower earnings per share in 2013 compared with 2012, primarily due to lower earnings in the Supply segment, higher earnings in the three regulated segments and dilution of $0.21 per share associated with shares related to the 2010 and 2011 Equity Units and the April 2012 forward stock sale that settles in 2013.
 
Kentucky Regulated Segment
PPL expects higher segment earnings in 2013 compared with 2012, primarily driven by electric and gas base rate increases, returns on additional environmental capital investments, and load growth, partially offset by higher operation and maintenance expense.  Dilution is expected to be $0.03 per share.

U.K. Regulated Segment
PPL expects higher segment earnings in 2013 compared with 2012, primarily driven by higher electricity delivery revenue and lower income taxes, partially offset by higher operation and maintenance expense, higher depreciation and higher interest expense.  Dilution is expected to be $0.10 per share.

Pennsylvania Regulated Segment
PPL expects higher segment earnings in 2013 compared with 2012, primarily driven by higher distribution revenues from a distribution base rate increase and higher transmission margins, partially offset by higher depreciation.  Dilution is expected to be $0.03 per share.

Supply Segment
PPL expects lower segment earnings in 2013 compared with 2012, primarily driven by lower energy prices, higher fuel costs, higher operation and maintenance expense, higher depreciation, and higher financing costs, partially offset by higher capacity prices and higher nuclear generation output despite scheduled outages for both Susquehanna units to implement a long-term solution to turbine blade issues.  Dilution is expected to be $0.05 per share.

Corporate and Other
This category primarily includes unallocated corporate-level financing and other costs.

PPL Corporation (NYSE: PPL), with annual revenue of more than $12 billion, is one of the largest companies in the U.S. utility sector.  The PPL family of companies delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom, owns more than 18,000 megawatts of generating capacity in the United States and sells energy in key U.S. markets.  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 unless otherwise noted.)

Conference Call and Webcast

PPL invites interested parties to listen to a live Internet webcast of management’s teleconference with financial analysts about first-quarter 2013 financial results at 8:30 a.m. Eastern Time on Thursday, May 2.  The meeting is available online live, in audio format, along with slides of the presentation, on PPL’s website: 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 702-696-4769 (ID#57179671).

“Earnings from ongoing operations,” also referred to as “ongoing earnings,” should not be considered as an alternative to reported earnings, or net income attributable to PPL shareowners, which is an indicator of operating performance determined in accordance with U.S. generally accepted accounting principles (GAAP). PPL believes that “earnings from ongoing operations,” although a non-GAAP financial measure, is also useful and meaningful to investors because it provides management’s view of PPL’s fundamental earnings performance as another criterion in making 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.

“Earnings from ongoing operations” is adjusted for the impact of special items. Special items include:
·  
Adjusted energy-related economic activity (as discussed below).
·  
Foreign currency-related economic hedges.
·  
Gains and losses on sales of assets not in the ordinary course of business.
·  
Impairment charges (including impairments of securities in the company’s nuclear decommissioning trust funds).
·  
Workforce reduction and other restructuring effects.
·  
Acquisition-related adjustments.
·  
Other charges or credits that are, in management’s view, not reflective of the company’s ongoing operations.

Adjusted energy-related economic activity includes the changes in fair value of positions used to economically hedge a portion of the economic value of PPL’s competitive generation assets, full-requirement sales contracts 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) prior to the delivery period that was hedged. Also included in adjusted energy-related economic activity is the premium amortization associated with options and the ineffective portion of qualifying cash flow hedges and economic activity realized associated with the monetization of certain full-requirement sales contracts in 2010. This economic activity is deferred, with the exception of the full-requirement sales contracts that were monetized, and included in earnings from ongoing operations over the delivery period of the item that was hedged or upon realization. Management believes that adjusting for such amounts provides a better matching of earnings from ongoing operations to the actual amounts settled for PPL’s underlying hedged assets. Please refer to the Notes to the Consolidated Financial Statements and MD&A in PPL Corporation’s periodic filings with the Securities and Exchange Commission for additional information on adjusted energy-related economic activity.

Statements contained in this news release, including statements with respect to future earnings, cash flows, financing, regulation and corporate strategy, 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; the length of scheduled and unscheduled outages at our plants; 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 or business acquisitions and dispositions, and PPL Corporation’s ability to realize the expected benefits from acquired businesses, including the 2010 acquisition of Louisville Gas and Electric Company and Kentucky Utilities Company and the 2011 acquisition of the Central Networks electricity distribution businesses in the U.K.; 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 and its subsidiaries.


 
 

 

 

PPL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a)
                 
Condensed Consolidated Balance Sheets (Unaudited)
(Millions of Dollars)
                 
       
March 31,
 
December 31,
       
2013
 
2012 
Assets
           
Cash and cash equivalents
 
$
 853 
 
$
 901 
Price risk management assets - current
   
 1,284 
   
 1,525 
Other current assets
   
 2,852 
   
 2,642 
Investments
   
 812 
   
 759 
Property, Plant and Equipment
           
 
Regulated utility plant
   
 25,054 
   
 25,196 
 
Less: Accumulated depreciation - regulated utility plant
   
 4,258 
   
 4,164 
   
Regulated utility plant, net
   
 20,796 
   
 21,032 
 
Non-regulated property, plant and equipment
   
 12,948 
   
 12,545 
 
Less: Accumulated depreciation - non-regulated property, plant and equipment
   
 6,039 
   
 5,942 
   
Non-regulated property, plant and equipment, net
   
 6,909 
   
 6,603 
 
Construction work in progress
   
 2,270 
   
 2,397 
 
Property, Plant and Equipment, net
   
 29,975 
   
 30,032 
Regulatory assets - noncurrent
   
 1,464 
   
 1,483 
Goodwill and other intangibles
   
 4,905 
   
 5,083 
Price risk management assets - noncurrent
   
 598 
   
 572 
Other noncurrent assets
   
 598 
   
 637 
Total Assets
 
$
 43,341 
 
$
 43,634 
                 
Liabilities and Equity
           
Short-term debt
 
$
 1,061 
 
$
 652 
Long-term debt due within one year
   
 751 
   
 751 
Accounts payable
   
 1,071 
   
 1,252 
Price risk management liabilities - current
   
 972 
   
 1,065 
Other current liabilities
   
 1,795 
   
 1,905 
Long-term debt - noncurrent
   
 18,881 
   
 18,725 
Deferred income taxes and investment tax credits
   
 3,917 
   
 3,715 
Price risk management liabilities - noncurrent
   
 533 
   
 629 
Accrued pension obligations
   
 1,596 
   
 2,076 
Regulatory liabilities - noncurrent
   
 1,016 
   
 1,010 
Other noncurrent liabilities
   
 1,206 
   
 1,356 
Common stock and additional paid-in capital
   
 6,994 
   
 6,942 
Earnings reinvested
   
 5,676 
   
 5,478 
Accumulated other comprehensive loss
   
 (2,146)
   
 (1,940)
Noncontrolling interests
   
 18 
   
 18 
Total Liabilities and Equity
 
$
 43,341 
 
$
 43,634 

(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.
   

 
 

 


 PPL CORPORATION AND SUBSIDIARIES
                   
 Condensed Consolidated Statements of Income (Unaudited)
(Millions of Dollars, Except Share Data)
                   
         
Three Months Ended March 31,
         
2013 
 
2012 
 
                 
Operating Revenues
           
 
Utility
 
$
 1,950 
 
$
 1,714 
 
Unregulated retail electric and gas (a)
   
 237 
   
 223 
 
Wholesale energy marketing
           
   
Realized
   
 976 
   
 1,208 
   
Unrealized economic activity (a)
   
 (822)
   
 852 
 
Net energy trading margins
   
 (11)
   
 8 
 
Energy-related businesses
   
 127 
   
 107 
 
Total Operating Revenues
   
 2,457 
   
 4,112 
Operating Expenses
           
 
Operation
           
   
Fuel (a)
   
 529 
   
 424 
   
Energy purchases
           
     
Realized
   
 691 
   
 883 
     
Unrealized economic activity (a)
   
 (634)
   
 591 
   
Other operation and maintenance
   
 676 
   
 706 
 
Depreciation
   
 284 
   
 264 
 
Taxes, other than income
   
 96 
   
 91 
 
Energy-related businesses
   
 122 
   
 102 
 
Total Operating Expenses
   
 1,764 
   
 3,061 
Operating Income
   
 693 
   
 1,051 
Other Income (Expense) - net
   
 122 
   
 (17)
Interest Expense
   
 251 
   
 230 
Income Before Income Taxes
   
 564 
   
 804 
Income Taxes
   
 151 
   
 259 
Net Income
   
 413 
   
 545 
Net Income Attributable to Noncontrolling Interests
   
 
   
 4 
Net Income Attributable to PPL Shareowners
 
$
 413 
 
$
 541 
                   
Earnings Per Share of Common Stock
           
 
Basic
 
$
 0.70 
 
$
 0.93 
 
Diluted
 
$
 0.65 
 
$
 0.93 
                   
Weighted-Average Shares of Common Stock Outstanding
           
  (in thousands)
           
 
Basic
   
582,640 
   
579,041 
 
Diluted
   
657,020 
   
579,527 

(a)
Includes activity from energy-related contracts to hedge future cash flows that are not eligible for hedge accounting, or for which hedge accounting was not elected.

 
 

 


 PPL CORPORATION AND SUBSIDIARIES
                   
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars)
                   
         
Three Months Ended March 31,
         
2013 
 
2012 
Cash Flows from Operating Activities
           
 
Net income
 
$
  413 
 
$
  545 
 
Adjustments to reconcile net income to net cash provided by operating activities
           
   
Depreciation
   
  284 
   
  264 
   
Amortization
   
  64 
   
  55 
   
Defined benefit plans - expense
   
  51 
   
  42 
   
Deferred income taxes and investment tax credits
   
  80 
   
  257 
   
Unrealized (gains) losses on derivatives, and other hedging activities
   
  98 
   
 (235)
   
Other
   
  30 
   
  20 
 
Change in current assets and current liabilities
           
   
Accounts receivable
   
 (187)
   
  32 
   
Counterparty collateral
   
 (64)
   
  65 
   
Other
   
 (70)
   
 (82)
 
Other operating activities
           
   
Defined benefit plans - funding
   
 (429)
   
 (208)
   
Other
   
 (26)
   
 (27)
     
Net cash provided by operating activities
   
  244 
   
  728 
Cash Flows from Investing Activities
           
 
Expenditures for property, plant and equipment
   
 (828)
   
 (682)
 
Purchases of nuclear plant decommissioning trust investments
   
 (28)
   
 (38)
 
Proceeds from the sale of nuclear plant decommissioning trust investments
   
  24 
   
  34 
 
Proceeds from the sale of other investments
   
 
   
  16 
 
Net (increase) decrease in restricted cash and cash equivalents
   
 (52)
   
 (22)
 
Other investing activities
   
 (15)
   
 (19)
     
Net cash used in investing activities
   
 (899)
   
 (711)
Cash Flows from Financing Activities
           
 
Issuance of long-term debt
   
  450 
   
 
 
Retirement of long-term debt
   
 (8)
   
 
 
Issuance of common stock
   
  20 
   
  16 
 
Payment of common stock dividends
   
 (210)
   
 (203)
 
Debt issuance and credit facility costs
   
 (18)
   
 (3)
 
Contract adjustment payments
   
 (24)
   
 (23)
 
Net increase (decrease) in short-term debt
   
  416 
   
  93 
 
Other financing activities
   
 (5)
   
 (4)
     
Net cash provided by (used in) financing activities
   
  621 
   
 (124)
Effect of Exchange Rates on Cash and Cash Equivalents
   
 (14)
   
  8 
Net Increase (Decrease) in Cash and Cash Equivalents
   
 (48)
   
 (99)
Cash and Cash Equivalents at Beginning of Period
   
  901 
   
  1,202 
Cash and Cash Equivalents at End of Period
 
$
  853 
 
$
  1,103 

 
 

 


Key Indicators (Unaudited)
                             
                       
12 Months Ended
                       
March 31,
Financial
         
2013 
 
2012 
                             
Dividends declared per share
         
$ 1.4475
 
$ 1.41
Book value per share (a)(b)
         
$ 18.04
 
$ 19.44
Market price per share (a)
         
$ 31.31
 
$ 28.26
Dividend yield (a)
         
4.6%
 
5.0%
Dividend payout ratio (c)
         
62%
 
50%
Dividend payout ratio - earnings from ongoing operations (c)(d)
         
59%
 
54%
Price/earnings ratio (a)(c)
         
13.4 
 
10.0 
Price/earnings ratio - earnings from ongoing operations (a)(c)(d)
         
12.8 
 
10.8 
Return on average common equity
         
12.84%
 
15.35%
Return on average common equity - earnings from ongoing operations (d)
         
13.44%
 
14.19%
                             
(a) End of period.
   
(b) Based on 583,214 and 579,520 shares of common stock outstanding (in thousands) at March 31, 2011 and March 31, 2012.
(c) Based on diluted earnings per share.
       
(d) Calculated using earnings from ongoing operations, which is a non-GAAP financial measure that excludes the impact of special items, as described in the text and tables of this
      news release.
 
 
  
       
                             
                             
Operating - Domestic & International Electricity Sales (Unaudited)
                             
                   
3 Months Ended March 31,
                           
Percent
(GWh)
             
2013 
 
2012 
 
Change
                             
Domestic Retail Delivered
                       
 
PPL Electric Utilities (a)
             
 9,883 
 
 9,368 
 
5.5%
 
LKE
             
 8,000 
 
 7,505 
 
6.6%
   
Total
             
 17,883 
 
 16,873 
 
6.0%
                             
Domestic Retail Supplied (b)
                       
 
PPL EnergyPlus
             
 3,281 
 
 2,702 
 
21.4%
 
LKE
             
 8,000 
 
 7,505 
 
6.6%
   
Total
             
 11,281 
 
 10,207 
 
10.5%
                             
International Delivered
                       
 
United Kingdom
             
 21,752 
 
 21,423 
 
1.5%
                             
Domestic Wholesale
                       
 
PPL EnergyPlus - East
             
 14,457 
 
 12,418 
 
16.4%
 
PPL EnergyPlus - West
             
 1,910 
 
 1,918 
 
(0.4%)
 
LKE (c)
             
 575 
 
 589 
 
(2.4%)
   
Total
             
 16,942 
 
 14,925 
 
13.5%
                             
(a)    Prior period volumes were restated to include unbilled volumes.
(b)    Represents GWh supplied by PPL EnergyPlus to PPL Electric Utilities as PLR, and to other retail customers in Pennsylvania, New Jersey, Montana, Delaware and Maryland. 
Also includes GWh supplied by LKE to retail customers in Kentucky, Virginia and Tennessee.
 
(c)    Represents FERC-regulated municipal and unregulated off-system sales.

 
 

 


Reconciliation of Segment Earnings from Ongoing Operations to Reported Earnings
(After Tax)
(Unaudited)
                                       
                                       
1st Quarter 2013
 
(millions of dollars)
     
Kentucky
 
U.K.
 
Pennsylvania
       
Corporate
   
     
Regulated
 
Regulated
 
Regulated
 
Supply
   
and Other
 
Total
Earnings from Ongoing Operations
 
$
 84 
 
$
 238 
 
$
 64 
 
$
 71 
 
$
 (3)
 
$
 454 
Special Items:
                                 
 
Adjusted energy-related economic activity, net
   
 
   
 
   
 
   
 (117)
         
 (117)
Foreign currency-related economic hedges
   
 
   
 78 
   
 
   
 
         
 78 
Acquisition-related adjustments:
   
 
   
 
   
 
   
 
         
 
 
WPD Midlands
   
 
   
 
   
 
   
 
         
 
 
Separation benefits
   
 
   
 (1)
   
 
   
 
         
 (1)
 
Other acquisition-related adjustments
   
 
   
 (2)
   
 
   
 
         
 (2)
Other:
   
 
   
 
   
 
   
 
         
 
 
EEI adjustments
   
 1 
   
 
   
 
   
 
         
 1 
Total Special Items
   
 1 
   
 75 
   
 
   
 (117)
   
 
   
 (41)
Reported Earnings
 
$
 85 
 
$
 313 
 
$
 64 
 
$
 (46)
 
$
 (3)
 
$
 413 
                                       
 
     
(per share - diluted) (a)
     
Kentucky
 
U.K.
 
Pennsylvania
       
Corporate
   
     
Regulated
 
Regulated
 
Regulated
 
Supply
   
and Other
 
Total
Earnings from Ongoing Operations
 
$
 0.14 
 
$
 0.37 
 
$
 0.10 
 
$
 0.11 
 
$
 (0.01)
 
$
 0.71 
Special Items:
                                 
 
Adjusted energy-related economic activity, net
   
 
   
 
   
 
   
 (0.18)
         
 (0.18)
Foreign currency-related economic hedges
   
 
   
 0.12 
         
 
         
 0.12 
Total Special Items
   
 
   
 0.12 
   
 
   
 (0.18)
   
 
   
 (0.06)
Reported Earnings
 
$
 0.14 
 
$
 0.49 
 
$
 0.10 
 
$
 (0.07)
 
$
 (0.01)
 
$
 0.65 
                                       
 
(a)
The "If-Converted Method" was applied to PPL's Equity Units beginning in the first quarter of 2013, resulting in $15 million of interest charges (after tax) being added back to net income and approximately 72 million shares of PPL Common Stock being treated as outstanding.  Both adjustments are only done for purposes of calculating earnings per share diluted.

 
 

 


Reconciliation of Segment Earnings from Ongoing Operations to Reported Earnings
(After Tax)
(Unaudited)
                                 
1st Quarter 2012
 
(millions of dollars)
     
Kentucky
 
U.K.
 
Pennsylvania
       
     
Regulated
 
Regulated
 
Regulated
 
Supply
 
Total
Earnings from Ongoing Operations
 
$
 38 
 
$
 183 
 
$
 33 
 
$
 155 
 
$
 409 
Special Items:
         
 
               
 
Adjusted energy-related economic activity, net
   
 
   
 
         
 150 
   
 150 
Foreign currency-related economic hedges
   
 
   
 (14)
         
 
   
 (14)
Impairments:
   
 
   
 
         
 
   
 
 
Adjustments - nuclear decommissioning trust investments
   
 
   
 
         
 1 
   
 1 
Acquisition-related adjustments:
   
 
   
 
         
 
   
 
 
WPD Midlands
   
 
   
 
         
 
   
 
 
Separation benefits
         
 (4)
         
 
   
 (4)
 
LKE
   
 
   
 
         
 
   
 
 
Net operating loss carryforward and other tax-related adjustments
   
 4 
   
 
         
 
   
 4 
Other:
   
 
   
 
         
 
   
 
 
Counterparty bankruptcy
                     
 (6)
   
 (6)
 
Ash basin leak remediation adjustment
                     
 1 
   
 1 
Total Special Items
   
 4 
   
 (18)
   
 
   
 146 
   
 132 
Reported Earnings
 
$
 42 
 
$
 165 
 
$
 33 
 
$
 301 
 
$
 541 
 
     
(per share - diluted)
     
Kentucky
 
U.K.
 
Pennsylvania
       
     
Regulated
 
Regulated
 
Regulated
 
Supply
 
Total
Earnings from Ongoing Operations
 
$
 0.06 
 
$
 0.31 
 
$
 0.06 
 
$
 0.27 
 
$
 0.70 
Special Items:
   
 
   
 
   
 
   
 
   
 
Adjusted energy-related economic activity, net
   
 
   
 
   
 
   
 0.26 
   
 0.26 
Foreign currency-related economic hedges
   
 
   
 (0.02)
   
 
   
 
   
 (0.02)
Acquisition-related adjustments:
   
 
   
 
   
 
   
 
   
 
 
WPD Midlands
   
 
   
 
   
 
   
 
   
 
 
Separation benefits
   
 
   
 (0.01)
   
 
   
 
   
 (0.01)
 
LKE
   
 
   
 
   
 
   
 
   
 
 
Net operating loss carryforward and other tax-related adjustments
   
 0.01 
   
 
   
 
   
 
   
 0.01 
Other:
   
 
   
 
   
 
   
 
   
 
 
Counterparty bankruptcy
                     
 (0.01)
   
 (0.01)
Total Special Items
   
 0.01 
   
 (0.03)
   
 
   
 0.25 
   
 0.23 
Reported Earnings
 
$
 0.07 
 
$
 0.28 
 
$
 0.06 
 
$
 0.52 
 
$
 0.93