Current Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 6, 2010
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Commission File
Number
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Registrant; State of Incorporation;
Address and Telephone Number
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IRS Employer
Identification No.
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1-11459
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PPL Corporation
(Exact name of Registrant as specified in its charter)
(Pennsylvania)
Two North Ninth Street
Allentown, PA 18101-1179
(610) 774-5151
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23-2758192
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1-32944
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PPL Energy Supply, LLC
(Exact name of Registrant as specified in its charter)
(Delaware)
Two North Ninth Street
Allentown, PA 18101-1179
(610) 774-5151
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23-3074920
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1-905
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PPL Electric Utilities Corporation
(Exact name of Registrant as specified in its charter)
(Pennsylvania)
Two North Ninth Street
Allentown, PA 18101-1179
(610) 774-5151
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23-0959590
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition
On May 6, 2010, PPL Corporation (“PPL”) issued a press release announcing its financial results for the quarter ended March 31, 2010, and other business matters. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
Section 7 - Regulation FD
Item 7.01 Regulation FD Disclosure
On May 6, 2010, at 9:00 a.m. (Eastern Time), members of PPL's senior management will hold a teleconference and webcast with financial analysts to discuss PPL’s financial results for the quarter ended March 31, 2010, and other business matters. A copy of the slides to be used during the webcast is attached as Exhibit 99.2 and incorporated herein by reference. The event will be available live, in audio format, along with the slides, on PPL’s Internet Web site: www.pplweb.com. The webcast will be available for replay on PPL’s Web site for 30 days.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
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PPL CORPORATION
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By:
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/s/ Vincent Sorgi
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Vincent Sorgi
Vice President and Controller
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PPL ENERGY SUPPLY, LLC
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By:
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/s/ Vincent Sorgi
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Vincent Sorgi
Vice President and Controller
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PPL ELECTRIC UTILITIES CORPORATION
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|||
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By:
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/s/ Vincent Sorgi
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Vincent Sorgi
Vice President and Controller
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Dated: May 6, 2010
Exhibit 99.1
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Contacts:
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For news media – George Biechler, 610-774-5997
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For financial analysts – Joseph P. Bergstein, 610-774-5609
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PPL reports increase in first-quarter earnings versus year ago
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·
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Energy supply business margins and earnings improve
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·
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Company reaffirms 2010 earnings forecast
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ALLENTOWN, Pa. (May 6, 2010
) ― PPL Corporation (NYSE: PPL) on
Thursday (5/6) reported an increase in first-quarter earnings for 2010, compared with the same quarter of 2009.
PPL’s reported earnings in the most recent quarter were $0.66 per share, up from $0.64 per share a year ago. Adjusting for special items, PPL’s earnings from ongoing operations for the quarter were $0.94 per share, compared with $0.60 per share a year ago.
Driving PPL’s significantly higher quarterly earnings from ongoing operations were higher wholesale electricity margins in the company’s energy supply business. Partially offsetting the higher margins were lower earnings in PPL’s regulated electric delivery businesses in Pennsylvania and the United Kingdom.
PPL reaffirmed its 2010 forecast of $3.10 to $3.50 per share in earnings from ongoing operations. PPL’s 2010 forecast of reported earnings is $2.82 to $3.22 per share, reflecting special items recorded through March 31, 2010. The company’s forecast does not reflect any impact of the recently announced agreement to acquire E.ON U.S., LLC, including the required financing related to that acquisition.
“As expected, earnings from our energy supply business increased significantly in the first quarter, following the expiration of a decade-long contract with our Pennsylvania electric delivery company,” said James H. Miller, PPL’s chairman, president and chief executive officer.
“Although declining energy prices, lower electricity demand and lingering economic uncertainty present continuing challenges for our sector, we are reiterating our 2010 forecast of earnings from ongoing operations,” Miller said. “Our supply business will benefit from wholesale energy prices that were contractually hedged in prior years at prices higher than current forward prices.”
First-Quarter 2010 Earnings Details
Special item charges in the quarter, totaling $0.28 per share, were: $0.16 per share for energy-related economic activity; $0.09 per share related to hydroelectric litigation in Montana; $0.02 per share for a tax change related to retiree prescription drug coverage, in connection with the recent federal health care legislation; and $0.01 per share related to the impairment of emission allowances. For the first quarter of 2009, PPL recorded a net special item credit of $0.04 per share.
Reported earnings are calculated in accordance with generally accepted accounting principles (GAAP). Earnings from ongoing operations is a non-GAAP financial measure that is adjusted for special items. Special items include the impact of energy-related economic activity (principally changes in fair value of economic hedges and the ineffective portion of qualifying cash flow hedges), as well as other impacts fully detailed at the end of this news release.
(Dollars in millions, except for per share amounts)
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1
st
Quarter
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1
st
Quarter
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||
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2010
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2009
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% Change
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Reported Earnings
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$250
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$241
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+4%
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Reported Earnings Per Share
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$0.66
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$0.64
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+3%
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Earnings from Ongoing Operations
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$357
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$226
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+58%
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Per Share Earnings from Ongoing Operations
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$0.94
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$0.60
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+57%
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(See the tables at the end of this news release for details as to all special items and the reconciliation of earnings from ongoing operations to reported earnings.)
First-Quarter 2010 Earnings by Business Segment
The following chart shows PPL’s earnings by business segment for the first quarter of 2010, compared with the same period of 2009.
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1
st
Quarter
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||||||||
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2010
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2009
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|||||||
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(per share)
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||||||||
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Earnings from Ongoing Operations
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||||||||
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Supply
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$
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0.64
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$
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0.22
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||||
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Pennsylvania Delivery
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0.10
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0.14
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||||||
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International Delivery
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0.20
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0.24
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||||||
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Total
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$
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0.94
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$
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0.60
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||||
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Special Items
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||||||||
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Supply
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$
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(0.28
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)
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$
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0.06
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|||
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Pennsylvania Delivery
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-
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(0.01
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)
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|||||
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International Delivery
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-
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(0.01
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)
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|||||
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Total
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$
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(0.28
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)
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$
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0.04
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|||
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Reported Earnings
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||||||||
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Supply
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$
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0.36
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$
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0.28
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||||
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Pennsylvania Delivery
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0.10
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0.13
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||||||
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International Delivery
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0.20
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0.23
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||||||
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Total
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$
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0.66
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$
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0.64
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||||
(
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
Supply Segment
PPL’s supply business segment
primarily consists of the domestic energy generation and marketing and trading operations of PPL Energy Supply.
Earnings from ongoing operations for PPL’s supply business segment in the first quarter of 2010 increased by $0.42 per share compared with 2009. This increase was primarily due to significantly higher eastern baseload generation pricing compared to the prices realized under the full-requirements supply contract with PPL’s electricity delivery company that expired at the end of 2009.
Partially offsetting these positive earnings were lower realized net margins from load-following agreements due to continued lower customer demand, higher operation and maintenance expenses at PPL’s Susquehanna nuclear plant as a result of the timing of this year’s refueling outage, and the absence of a gain recorded in 2009 when PPL Energy Supply repurchased a portion of its outstanding debt.
Pennsylvania Delivery Segment
PPL’s Pennsylvania delivery business segment includes the regulated electric delivery operations of PPL Electric Utilities.
Earnings from ongoing operations for PPL’s Pennsylvania delivery business segment in the first quarter of 2010 declined by $0.04 per share compared with 2009. This decrease was due to higher operation and maintenance expenses, and lower distribution margins as a result of continued slow economic growth, milder weather and customers’ reduced consumption of electricity in apparent response to the increased cost of energy supply.
International Delivery Segment
PPL’s international delivery business segment primarily includes the regulated electric delivery operations of Western Power Distribution in the U.K.
Earnings from ongoing operations for PPL’s international delivery business segment in the first quarter of 2010 declined by $0.04 per share compared with a year ago. This decline was primarily due to higher financing costs, higher U.K. income taxes, and higher pension costs, which were partially offset by higher electric delivery revenues and a more favorable currency exchange rate.
2010 Earnings from Ongoing Operations Forecast by Business Segment
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Earnings
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2010
(Forecast)
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2009
(Actual)
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||
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(per share)
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midpoint
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|||
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Supply
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$2.44
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$0.88
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Pennsylvania Delivery
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0.29
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0.35
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International Delivery
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0.57
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0.72
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Total
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$3.30
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$1.95
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PPL is reaffirming its 2010 forecast of $3.10 to $3.50 per share in earnings from ongoing operations. The company’s forecast does not reflect any impact of the recently announced agreement to acquire E.ON U.S., LLC, including the required financing related to that acquisition. This forecast does reflect the following key expectations by business segment.
Supply Segment
PPL projects higher earnings from its supply business segment in 2010 compared with 2009, due to strong growth in energy margins. The forecast for strong growth in energy margins is based on hedged power and fuel prices as well as established capacity prices in the PJM Interconnection. These positive factors are expected to be partially offset by higher depreciation, higher financing costs, and higher operation and maintenance expenses.
Pennsylvania Delivery Segment
PPL projects lower earnings from its Pennsylvania delivery business segment in 2010 compared with 2009, primarily driven by higher operation and maintenance expenses, partially offset by lower financing costs.
International Delivery Segment
PPL projects lower earnings from its international delivery business segment in 2010 compared with 2009 as a result of higher income taxes, higher operation and maintenance expenses, and higher financing costs. These negative factors are expected to be partially offset by higher electric delivery revenues and a more favorable currency exchange rate.
PPL Corporation, headquartered in Allentown, Pa., owns or controls nearly 12,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to about 4 million customers in Pennsylvania and the United Kingdom. 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.
)
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 2010 financial results at 9 a.m. EDT Thursday, May 6. The meeting is available online live, in audio format, along with slides of the presentation, on PPL’s Web site: 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 702-696-4769 (ID# 71016750).
“Earnings from ongoing operations” should not be considered as an alternative to reported earnings, or net income attributable to PPL, which is an indicator of operating performance determined in accordance with 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 them with management’s view of PPL’s fundamental earnings performance as another criterion in making their 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:
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·
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Energy-related economic activity (as discussed below).
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·
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Foreign currency-related economic hedges.
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·
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Sales of assets not in the ordinary course of business.
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·
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Impairment charges (including impairments of securities in the company’s nuclear decommissioning trust funds).
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·
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Workforce reduction and other restructuring impacts.
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·
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Other charges or credits that are, in management’s view, not reflective of the company’s ongoing operations.
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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 generation assets, load-following 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). Also included in this special item is the ineffective portion of qualifying cash flow hedges and the premium amortization associated with options classified as economic activity. These items are included in ongoing earnings 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 energy-related economic activity.
Statements contained in this news release, including statements with respect to future earnings, energy prices, margins and sales, growth, revenues, expenses, marketing performance, hedging, financing, regulation, exchange rates, acquisitions, corporate strategy, and generating capacity and performance, 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; 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 acquisitions and dispositions; 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.
|
(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.
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PPL CORPORATION AND SUBSIDIARIES
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||||||||||||||||
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Condensed Consolidated Income Statement (Unaudited)
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||||||||||||||||
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(Millions of Dollars, Except per Share Data)
|
||||||||||||||||
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3 Months Ended March 31,
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12 Months Ended March 31,
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|||||||||||||||
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2010
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2009 (a)
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2010
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2009 (a)
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|||||||||||||
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|
||||||||||||||||
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Operating Revenues
|
||||||||||||||||
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Utility
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$ | 1,014 | $ | 1,065 | $ | 3,851 | $ | 4,059 | ||||||||
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Unregulated retail electric and gas (b)
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104 | 42 | 214 | 159 | ||||||||||||
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Wholesale energy marketing
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||||||||||||||||
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Realized
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1,386 | 798 | 3,879 | 2,658 | ||||||||||||
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Unrealized economic activity (b)
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424 | 352 | (157 | ) | 1,588 | |||||||||||
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Net energy trading margins
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11 | (12 | ) | 40 | (131 | ) | ||||||||||
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Energy-related businesses
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94 | 99 | 418 | 502 | ||||||||||||
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Total Operating Revenues
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3,033 | 2,344 | 8,245 | 8,835 | ||||||||||||
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Operating Expenses
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||||||||||||||||
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Operation
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||||||||||||||||
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Fuel (b)
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233 | 258 | 906 | 1,102 | ||||||||||||
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Energy purchases
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||||||||||||||||
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Realized
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1,012 | 677 | 2,971 | 1,994 | ||||||||||||
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Unrealized economic activity (b)
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563 | 269 | 449 | 1,081 | ||||||||||||
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Other operation and maintenance
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445 | 372 | 1,497 | 1,419 | ||||||||||||
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Amortization of recoverable transition costs
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84 | 220 | 301 | |||||||||||||
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Depreciation
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128 | 109 | 488 | 456 | ||||||||||||
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Taxes, other than income
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72 | 72 | 280 | 285 | ||||||||||||
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Energy-related businesses
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88 | 91 | 393 | 465 | ||||||||||||
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Total Operating Expenses
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2,541 | 1,932 | 7,204 | 7,103 | ||||||||||||
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Operating Income
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492 | 412 | 1,041 | 1,732 | ||||||||||||
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Other Income - net
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8 | 35 | 22 | 79 | ||||||||||||
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Other-Than-Temporary Impairments
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17 | 1 | 50 | |||||||||||||
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Interest Expense
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114 | 89 | 421 | 436 | ||||||||||||
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Income from Continuing Operations Before Income Taxes
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386 | 341 | 641 | 1,325 | ||||||||||||
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Income Taxes
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131 | 98 | 163 | 402 | ||||||||||||
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Income from Continuing Operations After Income Taxes
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255 | 243 | 478 | 923 | ||||||||||||
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Income (Loss) from Discontinued Operations (net of income taxes)
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3 | (43 | ) | 8 | ||||||||||||
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Net Income
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255 | 246 | 435 | 931 | ||||||||||||
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Net Income Attributable to Noncontrolling Interests
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5 | 5 | 19 | 20 | ||||||||||||
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Net Income Attributable to PPL Corporation
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$ | 250 | $ | 241 | $ | 416 | $ | 911 | ||||||||
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Amounts Attributable to PPL Corporation:
|
||||||||||||||||
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Income from Continuing Operations After Income Taxes
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$ | 250 | $ | 238 | $ | 459 | $ | 903 | ||||||||
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Income (Loss) from Discontinued Operations (net of income taxes)
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3 | (43 | ) | 8 | ||||||||||||
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Net Income
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$ | 250 | $ | 241 | $ | 416 | $ | 911 | ||||||||
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Earnings Per Share of Common Stock - Basic (c)
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||||||||||||||||
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Earnings from Ongoing Operations
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$ | 0.94 | $ | 0.60 | $ | 2.30 | $ | 2.02 | ||||||||
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Special Items
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(0.28 | ) | 0.04 | (1.20 | ) | 0.40 | ||||||||||
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Net Income Available to PPL Corporation Common Shareowners
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$ | 0.66 | $ | 0.64 | $ | 1.10 | $ | 2.42 | ||||||||
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Earnings Per Share of Common Stock - Diluted (c)
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||||||||||||||||
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Earnings from Ongoing Operations
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$ | 0.94 | $ | 0.60 | $ | 2.30 | $ | 2.01 | ||||||||
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Special Items
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(0.28 | ) | 0.04 | (1.20 | ) | 0.41 | ||||||||||
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Net Income Available to PPL Corporation Common Shareowners
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$ | 0.66 | $ | 0.64 | $ | 1.10 | $ | 2.42 | ||||||||
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Weighted-Average Shares of Common Stock Outstanding (thousands)
|
||||||||||||||||
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Basic
|
377,717 | 375,112 | 376,761 | 374,212 | ||||||||||||
|
Diluted
|
377,986 | 375,409 | 376,962 | 375,002 | ||||||||||||
|
(a)
|
Certain amounts from 2009 have been reclassified to conform to the current year presentation.
|
|
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(b)
|
Includes energy-related contracts to hedge future cash flows that are not eligible for hedge accounting, or where hedge accounting is not elected.
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|
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(c)
|
Earnings in 2010 and 2009 were impacted by several special items, as described in the text and tables of this news release. Earnings from ongoing operations excludes the impact of these special items.
|
|
PPL CORPORATION AND SUBSIDIARIES
|
||||||||
|
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
||||||||
|
(Millions of Dollars)
|
||||||||
|
Three Months Ended
|
||||||||
|
March 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Cash Flows from Operating Activities
|
||||||||
|
Net Income
|
$ | 255 | $ | 246 | ||||
|
Adjustments to reconcile net income to net cash provided
|
||||||||
|
by operating activities:
|
||||||||
|
Depreciation
|
128 | 110 | ||||||
|
Amortization of recoverable transition costs and other
|
51 | 93 | ||||||
|
Defined benefits
|
(115 | ) | (6 | ) | ||||
|
Impairment of assets
|
3 | 51 | ||||||
|
Deferred income taxes and investment tax credits
|
(5 | ) | (12 | ) | ||||
|
Unrealized (gains) losses on derivatives, and other hedging activities
|
107 | (103 | ) | |||||
|
Gains related to the extinguishment of notes
|
(29 | ) | ||||||
|
Provision for Montana hydroelectric litigation
|
56 | |||||||
|
Changes in current assets and current liabilities:
|
||||||||
|
Counterparty collateral deposits
|
351 | 137 | ||||||
|
Other changes in current assets and current liabilities
|
(52 | ) | (211 | ) | ||||
|
Other operating activities
|
19 | 34 | ||||||
|
Net cash provided by operating activities
|
798 | 310 | ||||||
|
Cash Flows from Investing Activities
|
||||||||
|
Expenditures for property, plant and equipment
|
(283 | ) | (270 | ) | ||||
|
Proceeds from the sale of the Long Island generation business
|
124 | |||||||
|
Expenditures for intangible assets
|
(22 | ) | (30 | ) | ||||
|
Net (increase) decrease in restricted cash and cash equivalents
|
(130 | ) | 156 | |||||
|
Other investing activities
|
1 | (6 | ) | |||||
|
Net cash used in investing activities
|
(310 | ) | (150 | ) | ||||
|
Cash Flows from Financing Activities
|
||||||||
|
Issuance of long-term debt
|
597 | |||||||
|
Retirement of long-term debt
|
(421 | ) | ||||||
|
Payment of common stock dividends
|
(131 | ) | (126 | ) | ||||
|
Net decrease in short-term debt
|
(36 | ) | (90 | ) | ||||
|
Other financing activities
|
8 | |||||||
|
Net cash provided by (used in) financing activities
|
430 | (629 | ) | |||||
|
Effect of Exchange Rates on Cash and Cash Equivalents
|
5 | |||||||
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
923 | (469 | ) | |||||
|
Cash and cash equivalents at beginning of period
|
801 | 1,100 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 1,724 | $ | 631 | ||||
|
Key Indicators (Unaudited)
|
||||||||
|
12 Months Ended
|
||||||||
|
March 31,
|
||||||||
|
Financial
|
2010
|
2009
|
||||||
|
Dividends declared per share
|
$ | 1.385 | $ | 1.35 | ||||
|
Book value per share (a)
|
$ | 15.58 | $ | 13.94 | ||||
|
Market price per share (a)
|
$ | 27.71 | $ | 28.71 | ||||
|
Dividend yield (a)
|
5.0 | % | 4.7 | % | ||||
|
Dividend payout ratio (b)
|
126 | % | 56 | % | ||||
|
Dividend payout ratio - earnings from ongoing operations (b)(c)
|
60 | % | 67 | % | ||||
|
Price/earnings ratio (a)(b)
|
25.2 | 11.9 | ||||||
|
Price/earnings ratio - earnings from ongoing operations (a)(b)(c)
|
12.0 | 14.3 | ||||||
|
Return on average common equity
|
7.45 | % | 16.79 | % | ||||
|
Return on average common equity - earnings from ongoing operations (c)
|
15.29 | % | 14.54 | % | ||||
|
(a)
|
End of period.
|
|
|
(b)
|
Based on diluted earnings per share.
|
|
|
(c)
|
Calculated using earnings from ongoing operations, which 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,
|
12 Months Ended March 31,
|
|||||||||||||||||||||||
|
Percent
|
Percent
|
|||||||||||||||||||||||
|
(millions of kwh)
|
2010
|
2009
|
Change
|
2010
|
2009
|
Change
|
||||||||||||||||||
|
Domestic Retail
|
||||||||||||||||||||||||
|
Delivered (a)
|
10,285 | 10,677 | (3.7 | %) | 36,325 | 38,153 | (4.8 | %) | ||||||||||||||||
|
Supplied (b)
|
2,466 | 11,250 | (78.1 | %) | 30,128 | 40,486 | (25.6 | %) | ||||||||||||||||
|
International Delivered
|
||||||||||||||||||||||||
|
United Kingdom
|
7,609 | 7,604 | 0.1 | % | 26,363 | 27,574 | (4.4 | %) | ||||||||||||||||
|
Domestic Wholesale
|
||||||||||||||||||||||||
|
East
|
17,193 | 6,763 | 154.2 | % | 37,952 | 29,450 | 28.9 | % | ||||||||||||||||
|
West
|
2,761 | 2,934 | (5.9 | %) | 11,293 | 13,371 | (15.5 | %) | ||||||||||||||||
|
(a)
|
Represents the kwh delivered to retail customers within PPL Electric Utilities Corporation's service territory.
|
|
|
(b)
|
Represents the kwh supplied by PPL EnergyPlus to PPL Electric Utilities as PLR, and to retail customers in Pennsylvania and Montana.
|
First Quarter Earnings Call
May 6, 2010
May 6, 2010
© PPL Corporation 2010
Exhibit 99.2
© PPL Corporation 2010
1
Any statements made in this presentation about future operating
results or other future events are forward-looking statements under
the Safe Harbor Provisions of the Private Securities Litigation Reform
Act of 1995. Actual results may differ materially from such forward-
looking statements. A discussion of factors that could cause actual
results or events to vary is contained in the Appendix to this
presentation and in the Company’s SEC filings.
results or other future events are forward-looking statements under
the Safe Harbor Provisions of the Private Securities Litigation Reform
Act of 1995. Actual results may differ materially from such forward-
looking statements. A discussion of factors that could cause actual
results or events to vary is contained in the Appendix to this
presentation and in the Company’s SEC filings.
Cautionary Statements and Factors
That May Affect Future Results
That May Affect Future Results
© PPL Corporation 2010
2
J. H. Miller
P. A. Farr
W. H. Spence
Agenda
First Quarter 2010 Earnings and 2010
Earnings Forecast and Outlook
Segment Results and Financial Overview
Operational Review
Q&A
© PPL Corporation 2010
3
Reported Earnings
Earnings from Ongoing Operations
Note:
See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
Earnings Results
© PPL Corporation 2010
4
Forecast
$2.02
$3.50
Per Share
$1.95
$3.10
Note:
See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
Strong Expected Earnings Growth
© PPL Corporation 2010
5
$ 0.34
$0.60
$0.94
Total
(0.04)
0.24
0.20
International Delivery
(0.04)
0.14
0.10
Pennsylvania Delivery
$ 0.42
$0.22
$0.64
Supply
Change
Q1
2009
Q1
2010
|
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
|
Ongoing Earnings Overview
© PPL Corporation 2010
6
|
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
|
|
|
1
st
Quarter
|
|
|
2009 EPS - Ongoing Earnings
|
|
$0.22
|
|
Margins - East
|
0.53
|
|
|
O&M
|
(0.06)
|
|
|
Depreciation
|
(0.02)
|
|
|
Income Taxes & Other
|
(0.03)
|
|
|
Total
|
|
0.42
|
|
2010 EPS - Ongoing Earnings
|
|
$0.64
|
Supply Segment
Earnings Drivers
Earnings Drivers
© PPL Corporation 2010
7
|
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
|
|
|
1
st
Quarter
|
|
|
2009 EPS - Ongoing Earnings
|
|
$0.14
|
|
Delivery Margins
|
(0.02)
|
|
|
O&M
|
(0.02)
|
|
|
Total
|
|
(0.04)
|
|
2010 EPS - Ongoing Earnings
|
|
$0.10
|
Pennsylvania Delivery Segment
Earnings Drivers
Earnings Drivers
© PPL Corporation 2010
8
|
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
|
|
|
1
st
Quarter
|
|
|
2009 EPS - Ongoing Earnings
|
|
$0.24
|
|
Utility Revenues
|
0.02
|
|
|
O&M
|
(0.02)
|
|
|
Financing Costs
|
(0.03)
|
|
|
Effect of Exchange Rates
|
0.02
|
|
|
Income Taxes & Other
|
(0.03)
|
|
|
Total
|
|
(0.04)
|
|
2010 EPS - Ongoing Earnings
|
|
$0.20
|
International Delivery Segment
Earnings Drivers
Earnings Drivers
© PPL Corporation 2010
9
Forecast
|
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings.
|
|
|
$2.02
$3.50
Per Share
$1.95
$3.10
Strong Expected Earnings Growth
© PPL Corporation 2010
10
Millions
Note:
See Appendix for reconciliation of cash from operations to free cash flow before dividends
Free Cash Flow before Dividends Forecast
© PPL Corporation 2010
11
PA and International Delivery Segment
Operational Update
Operational Update
PA Delivery
§
PPLEU completed 4
th
solicitation for 2011 to mid-2013 procurement
period
period
§
PPLEU filed for $114.7 million distribution rate increase
International Delivery
§
WPD agreed to outcome of Distribution Price Control 5 (DPCR5)
•
New rates effective April 1
© PPL Corporation 2010
12
PPL Electric Utilities Rate Case Facts
§
Seeking $114.7 million distribution rate increase
•
Future test year is 2010
•
Requested allowed ROE of 11.75%
•
2010 Common Equity of 48.4%
•
2010 Distribution Rate Base of $2.245 billion
§
1% change in ROE = $20 million in revenue
§
Docket # R-2010-2161694
© PPL Corporation 2010
13
Supply Segment Operational Update
§
Completed sale of Long Island generation assets
§
Susquehanna nuclear power plant set operational record
§
Susquehanna Unit #1 completed refueling outage and uprate work
© PPL Corporation 2010
14
As of March 31, 2010
*Represents expected sales based on current business plan assumptions
**Represents energy, capacity, congestion and other revenues
|
|
|
|
2010
|
|
2011
|
|
2012
|
|
Baseload
|
|
|
|
|
|
|
|
|
Expected Generation* (Million MWhs)
|
|
|
52.0
|
|
52.1
|
|
56.1
|
|
East
|
|
|
43.3
|
|
43.8
|
|
47.6
|
|
West
|
|
|
8.7
|
|
8.3
|
|
8.5
|
|
|
|
|
|
|
|
|
|
|
Current Hedges (%)
|
|
|
100%
|
|
96%
|
|
61%
|
|
East
|
|
|
100%
|
|
97%
|
|
58%
|
|
West
|
|
|
100%
|
|
91%
|
|
79%
|
|
|
|
|
|
|
|
|
|
|
Average Hedged Price (Energy Only) ($/MWh)
|
|
|
$58
|
|
$57
|
|
$59
|
|
East
|
|
|
$59
|
|
$58
|
|
$60
|
|
West
|
|
|
$49
|
|
$55
|
|
$56
|
|
|
|
|
|
|
|
|
|
|
Expected Average Price (Fully Loaded) ($/MWh)
|
|
|
$69
|
|
$65
|
|
$66
|
|
East**
|
|
|
$71
|
|
$67
|
|
$69
|
|
West
|
|
|
$49
|
|
$55
|
|
$56
|
|
|
|
|
|
|
|
|
|
|
% Hedged Through Swaps/Options Energy Transactions
|
|
|
97%
|
|
95%
|
|
61%
|
|
% Hedged Through Load-following Transactions
|
|
|
3%
|
|
1%
|
|
0%
|
|
Intermediate/Peaking
|
|
|
|
< |