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PPL Reports First-Quarter 2008 Earnings; Reaffirms 2008 and 2010 Earnings Forecasts- Reported earnings per share up versus a year ago, driven by special items in both periods, stronger results in international delivery business- Ongoing earnings per share down versus a year ago on loss of synfuel-related benefits, lower supply business margins, offset by stronger results in international delivery business
ALLENTOWN, Pa., May 2 /PRNewswire-FirstCall/ -- Driven by stronger results in its international delivery business segment and special items, PPL Corporation NYSE: PPL reported higher first-quarter 2008 earnings compared with a year ago, the company announced Friday (5/2). PPL's reported earnings in the most recent quarter were $0.69 per share, 33 percent higher than a year ago. The increase was primarily due to a net credit of $0.08 per share in special items recorded in the first quarter of 2008 compared with a net charge of $0.13 per share in special items recorded during the same period a year ago. PPL's first-quarter 2008 earnings from ongoing operations, which exclude special items, were 6 percent lower than a year ago, at $0.61 per share, primarily due to the expiration of the federal synfuel tax credit program at the end of 2007. This decline reflects a loss of $0.08 per share in synfuel benefits, $0.03 per share in lower energy margins from the company's U.S. power plants, and $0.03 per share from the loss in earnings from PPL's Latin American businesses as a result of their sales in 2007. Higher earnings of $0.10 per share from PPL's U.K. electricity delivery businesses, including a $0.04 per share increase in delivery margins, partially offset these declines. "PPL is solidly on target to achieve its 2008 ongoing earnings forecast," said James H. Miller, PPL's chairman, president and chief executive officer. "As we communicated late last year, our 2008 forecast incorporates the loss of several contributors to 2007 ongoing earnings, including synfuel benefits, the operating earnings of assets divested last year and tax benefits related to our international operations. We expect the loss of these items, which contributed 34 cents per share to our 2007 annual ongoing earnings, to be partially offset in 2008 by higher energy margins, stronger delivery margins and lower operating costs. "Consistent with our results in 2007, we expect virtually all of the 2008 margin growth in our supply business segment to occur during the second half of the year," Miller said. "We expect margin growth to be driven primarily by the replacement of expiring supply obligations with higher-margin wholesale energy contracts, by higher base load generation, and by expanded energy marketing and trading activities." Miller said first-quarter 2008 earnings from PPL's regulated Pennsylvania delivery operations were essentially flat compared with a year ago. However, first-quarter earnings at PPL's regulated electricity distribution businesses in the U.K. were higher compared with a year ago. "In the current business environment, all of our business segments are performing as expected, and they are successfully executing their respective business plans," Miller said. PPL reaffirmed its 2008 forecast of earnings from ongoing operations of $2.35 to $2.45 per share. This forecast reflects the loss of earnings due to the expiration of the federal synfuel tax credit program at the end of 2007 and the sale of PPL's Latin American businesses during 2007. In addition, U.S. income tax benefits realized in 2007 are not likely to recur at a similar level in 2008. The company's 2008 forecast of reported earnings is $2.43 to $2.53 per share, reflecting special items recorded through March 31, 2008. The company also reaffirmed its 2010 earnings forecast range of $4.00 to $4.60 per share. "We are executing on the tactical plans to achieve the 2010 forecast," Miller said. "One of our top priorities is to enhance the value of our electricity generation fleet, as well as to increase the value of our energy marketing and trading operations. We are extracting additional value from a wider array of wholesale products and services in more markets, beyond the firm electricity sales that are backed by our power plants." First-Quarter 2008 Earnings Details Reported earnings in the first quarter of 2008 included special items of $0.08 per share in net credits. For the first quarter of 2008, PPL recorded a special credit of $0.13 per share related to the mark-to-market impacts of energy-related, non-trading economic hedges. The mark-to-market gains or losses on the energy hedges will reverse as the hedging contracts settle in the future. PPL also recorded special charges of $0.04 per share as a result of a valuation adjustment to prior-year synfuel tax credits and $0.01 per share for a groundwater litigation settlement offer related to the Colstrip generating plant in Montana. Synfuel operations ceased production at the end of 2007. In the first quarter of 2007, PPL recorded net special charges of $0.13 per share, which included an $0.11 per share special charge related to the sales of its Latin American electricity delivery businesses. (See tables for other special items.) Reported earnings are calculated in accordance with generally accepted accounting principles (GAAP) in the United States. Earnings from ongoing operations is a non-GAAP financial measure that excludes special items. Special items include charges or credits that are unusual or nonrecurring as well as the mark-to-market impact of energy-related, non-trading economic hedges.
(Dollars in millions, except for per share amounts)
1st Quarter
2008 2007 % Change
Reported Earnings $260 $203 +28%
Reported Earnings per Share $0.69 $0.52 +33%
Earnings from Ongoing Operations $228 $252 -10%
Per Share Earnings from Ongoing Operations $0.61 $0.65 -6%
(See the tables at the end of the news release for details as to the reconciliation of reported earnings versus earnings from ongoing operations.) First-Quarter 2008 Earnings by Business Segment The following chart shows PPL's earnings by business segment for the first quarter of 2008, compared with the same period of 2007.
1st Quarter
2008 2007
(per share)
Earnings from Ongoing Operations
Supply $0.19 $0.32
Pennsylvania Delivery 0.16 0.15
International Delivery 0.26 0.18
Total $0.61 $0.65
Special Items
Supply $0.08 $(0.02)
Pennsylvania Delivery - -
International Delivery - (0.11)
Total $0.08 $(0.13)
Reported Earnings
Supply $0.27 $0.30
Pennsylvania Delivery 0.16 0.15
International Delivery 0.26 0.07
Total $0.69 $0.52
(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 operations of PPL Energy Supply. Per share earnings from ongoing operations for PPL's supply business segment declined in the first quarter of 2008 by $0.13 per share, or 41 percent, compared with a year ago. This decline was primarily driven by an $0.08 per share loss of synfuel-related benefits as a result of the expiration of federal synfuel tax credits at the end of 2007 and lower wholesale energy margins in the eastern U.S. The change in energy margins was the net result of higher average fuel prices; lower base load generation following the shutdown of two coal-fired units at PPL's Martins Creek power plant in Pennsylvania; and improved margins from energy marketing and trading activities. In addition, this business segment incurred higher operating expenses in the current quarter compared with a year ago. Pennsylvania Delivery Segment PPL's Pennsylvania delivery business segment includes the regulated electric and gas delivery operations of PPL Electric Utilities and PPL Gas Utilities. Per share earnings from ongoing operations for PPL's Pennsylvania delivery business segment increased in the first quarter of 2008 by $0.01 per share, or 7 percent, compared with a year ago. This increase was primarily driven by higher electricity delivery revenues, which were a result of load growth and PPL Electric Utilities' base rate increase that went into effect on Jan. 1, 2008. These positive factors were partially offset by higher operating expenses. International Delivery Segment PPL's international delivery business segment primarily includes the regulated electricity distribution companies in the U.K. and included the operating results of the Latin American companies prior to their sales in 2007. Per share earnings from ongoing operations for PPL's international delivery business segment increased in the first quarter of 2008 by $0.08 per share, or 44 percent, compared with a year ago. This increase was primarily driven by higher U.K. delivery revenues, due to higher rates incorporating the annual regulatory adjustment for inflation; lower operating expenses; and lower U.K. income taxes. These positive benefits were partially offset by the loss in earnings from PPL's Latin American businesses as a result of their sales in 2007.
2008 Ongoing Earnings Forecast by Business Segment
Earnings 2008 2007
(per share) (forecast) (actual)
Midpoint
Supply $1.31 $1.42
Pennsylvania Delivery 0.42 0.40
International Delivery 0.67 0.78
Total $2.40 $2.60
Supply Segment PPL projects lower earnings from ongoing operations in its supply business segment in 2008 compared with 2007 as a result of the loss of synfuel-related benefits and higher depreciation and operating expenses for scrubbers that have been or will be installed during 2008 at its Montour and Brunner Island coal-fired power plants, both in Pennsylvania. PPL expects these negative effects to be partially offset by higher energy margins as a result of higher- valued wholesale energy contracts and higher expected base load generation compared with 2007. PPL expects most of the increase in energy margins to be realized in the second half of 2008. Pennsylvania Delivery Segment PPL projects higher earnings from ongoing operations for its Pennsylvania delivery business segment, driven by higher revenues as a result of PPL Electric Utilities' new distribution rates, partially offset by higher operating expenses. International Delivery Segment PPL projects the earnings from ongoing operations of its international delivery business segment will decline in 2008 compared with 2007. This decline is a result of the 2007 divestiture of PPL's Latin American businesses and higher U.S. income taxes primarily driven by certain U.S. income tax benefits realized in 2007. Partially offsetting the impact of these negative earnings drivers are higher revenues in PPL's U.K. electricity distribution businesses and lower U.K. pension expense. 2010 Earnings Forecast PPL also reaffirmed its 2010 earnings forecast range of $4.00 to $4.60 per share. This forecast is driven primarily by higher energy margins based on higher wholesale electricity and capacity prices, higher expected generation output, and increased earnings from marketing and trading activities. At the end of 2009, the full-requirements supply contract between PPL EnergyPlus and PPL Electric Utilities will expire. As a result of higher forward energy prices in the competitive marketplace and the 2010 capacity prices set in PJM Interconnection's auctions, PPL expects a significant improvement in energy margins in 2010. This forecast does not include the effect of any new assets being added to the company's portfolio and assumes PPL Electric Utilities' ability to fully recover its market-based energy costs as provided under Pennsylvania law. PPL Corporation, headquartered in Allentown, Pa., controls more than 11,000 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 http://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.) PPL invites interested parties to listen to a live Internet webcast of management's teleconference with financial analysts about first-quarter 2008 financial results at 9 a.m. EDT Friday, May 2. The meeting is available online live, in audio format, along with slides of the presentation, on PPL's 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 702-696-4769 (ID# 44159434).
PPL CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a)
Condensed Consolidated Balance Sheet (Unaudited)
(Millions of Dollars)
March 31, 2008 Dec. 31, 2007
Assets
Cash and cash equivalents $495 $430
Assets held for sale 315 318
Other current assets 3,179 2,420
Investments 612 608
Property, plant and equipment
Electric plant 20,244 20,109
Gas and oil plant 67 66
Other property 197 202
20,508 20,377
Less: accumulated
depreciation 7,850 7,772
12,658 12,605
Recoverable transition
costs 497 574
Goodwill and other intangibles 1,313 1,326
Regulatory and other noncurrent
assets 1,986 1,691
Total assets $21,055 $19,972
Liabilities and
Equity
Short-term debt
(including current portion
of long-term debt) $838 $770
Liabilities held for sale 58 68
Other current liabilities 2,660 2,044
Long-term debt (less current
portion) 7,067 6,890
Deferred income taxes and
investment tax credits 2,113 2,192
Other noncurrent liabilities 2,415 2,132
Minority interest 19 19
Preferred securities of a subsidiary 301 301
Earnings reinvested 3,583 3,448
Common stock and capital in excess
of par value 2,161 2,176
Accumulated other comprehensive
loss (160) (68)
Total liabilities and equity $21,055 $19,972
(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.
Condensed Consolidated Income Statement (Unaudited)
(Millions of Dollars, Except per Share Data)
3 Months Ended March 31, 12 Months Ended March 31,
2008(a) 2007(a)(b) 2008(a) 2007(a)(b)
Operating Revenues
Utility $1,120 $1,081 $4,153 $3,921
Unregulated retail
electric 34 22 114 88
Wholesale energy
marketing 258 249 1,481 1,446
Net energy trading
margins (2) 9 30 34
Energy-related
businesses 116 185 700 635
1,526 1,546 6,478 6,124
Operating Expenses
Fuel and energy
purchases 298 355 1,569 1,700
Other operation and
maintenance 377 325 1,425 1,291
Amortization of
recoverable
transition costs 76 81 305 291
Depreciation 112 116 442 435
Taxes, other than
income 75 78 295 289
Energy-related
businesses 108 202 668 682
1,046 1,157 4,704 4,688
Operating Income 480 389 1,774 1,436
Other Income - net 8 27 76 82
Interest Expense 108 120 462 455
Income from Continuing
Operations Before
Income Taxes, Minority
Interest and Dividends
on Preferred Securities
of a Subsidiary 380 296 1,388 1,063
Income Taxes 129 69 330 246
Minority Interest 0 1 2 4
Dividends on Preferred
Securities of a
Subsidiary 5 5 18 18
Income from Continuing
Operations 246 221 1,038 795
Income (Loss) from
Discontinued
Operations (net of
income taxes) 14 (18) 307 (7)
Net Income $260 $203 $1,345 $788
Earnings per share
of common stock -
basic
Earnings from ongoing
operations $0.61 $0.66 $2.58 $2.25
Special items 0.09 (0.13) 0.99 (0.19)
Net Income $0.70 $0.53 $3.57 $2.06
Earnings per share
of common stock -
diluted
Earnings from ongoing
operations $0.61 $0.65 $2.56 $2.22
Special items 0.08 (0.13) 0.97 (0.19)
Net Income $0.69 $0.52 $3.53 $2.03
Average shares
outstanding
(thousands)
Basic 372,782 384,793 377,795 381,923
Diluted 376,602 389,168 382,204 387,590
(a) Earnings in the 2008 and 2007 periods 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.
(b) Certain amounts from 2007 have been reclassified to conform to the
current year presentation. This includes the reclassification of PPL
Gas Utilities Corporation accounts to Discontinued Operations.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars)
3 Months Ended
March 31,
2008 2007
Cash Flows from Operating Activities
Net income $260 $203
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 112 124
Amortizations - recoverable transition
costs and other 94 108
Unrealized gain on derivatives and other
hedging activities (63) (22)
Deferred income taxes and investment
tax credits (38) (32)
Impairment of assets 0 65
Changes in working capital 39 (175)
Other 20 15
Net cash provided by operating activities 424 286
Cash Flows from Investing Activities
Expenditures for property, plant and equipment (330) (341)
Net (purchases) sales of emission allowances (18) 26
Net (purchases) sales of other investments (25) 5
Other investing activities (89) 11
Net cash used in investing activities (462) (299)
Cash Flows from Financing Activities
Net issuances of long-term debt 308 304
Repurchase of common stock (38) 0
Payment of common stock dividends (113) (105)
Net (decrease) increase in short-term debt (50) 29
Other financing activities 1 (7)
Net cash provided by financing activities 108 221
Effect of Exchange Rates on Cash and Cash
Equivalents (2) (1)
Net Increase in Cash and Cash Equivalents 68 207
Cash and cash equivalents at beginning of period 430 794
Cash and cash equivalents included in assets held
for sale (3) (36)
Cash and cash equivalents at end of period $495 $965
Key Indicators
Financial
12 Months Ended 12 Months Ended
March 31, 2008 March 31, 2007
Dividends declared per share $1.25 $1.13
Book value per share (a) $14.97 $13.68
Market price per share (a) $45.92 $40.90
Dividend yield (a) 2.7% 2.8%
Dividend payout ratio (b) 35% 56%
Dividend payout ratio - earnings
from ongoing operations (b)(c) 49% 51%
Price/earnings ratio (a)(b) 13.0 20.1
Price/earnings ratio - earnings
from ongoing operations (a)(b)(c) 17.9 18.4
Return on average common equity 25.13% 15.72%
Return on average common equity -
earnings from ongoing operations (c) 18.71% 17.03%
(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.
Reconciliation of Business Segment Earnings from Ongoing Operations and
Reported Earnings (Diluted)
1st Quarter 2008 (millions of dollars)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $70 $60 $98 $228
Special Items
MTM adj's from energy-
related, non-trading
economic hedges 50 50
Synfuel tax adjustment (13) (13)
Colstrip groundwater
litigation (5) (5)
Total special items 32 32
Reported earnings $102 $60 $98 $260
1st Quarter 2008 (per share)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $0.19 $0.16 $0.26 $0.61
Special Items
MTM adj's from energy-
related, non-trading
economic hedges 0.13 0.13
Synfuel tax adjustment (0.04) (0.04)
Colstrip groundwater
litigation (0.01) (0.01)
Total special items 0.08 0.08
Reported earnings $0.27 $0.16 $0.26 $0.69
12 Months Ended March 31, 2008 (millions of dollars)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $489 $157 $331 $977
Special Items
MTM adj's from energy-
related, non-trading
economic hedges 71 71
Workforce reduction
(Q4, '07) (4) (1) (4) (9)
Sale of Latin American
businesses (Q2, '07;
Q3, '07; Q4, '07) 299 299
Sale of domestic
telecommunication
operations (Q2, '07;
Q3, '07; Q4, '07) (5) (5)
Colstrip groundwater
litigation (Q1, '08) (5) (5)
Sale of gas and propane
businesses (Q3, '07;
Q4, '07) (44) (44)
Settlement of
Wallingford cost-based
rates (Q3, '07) 33 33
Impairment of certain
transmission rights
(Q3, '07; Q4, '07) (13) (13)
Change in U.K. tax
rate (Q3, '07; Q4, '07) 54 54
Synfuel tax adjustment
(Q1, '08) (13) (13)
Total special items 64 (45) 349 368
Reported earnings $553 $112 $680 $1,345
12 Months Ended March 31, 2008 (per share)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $1.28 $0.41 $0.87 $2.56
Special Items
MTM adj's from energy-
related, non-trading
economic hedges 0.19 0.19
Workforce reduction
(Q4, '07) (0.01) (0.01) (0.02)
Sale of Latin American
businesses (Q2, '07;
Q3, '07; Q4, '07) 0.78 0.78
Sale of domestic
telecommunication
operations (Q2, '07;
Q3, '07; Q4, '07) (0.01) (0.01)
Colstrip groundwater
litigation (Q1, '08) (0.01) (0.01)
Sale of gas and propane
businesses (Q3, '07;
Q4, '07) (0.11) (0.11)
Settlement of
Wallingford cost-based
rates (Q3, '07) 0.09 0.09
Impairment of certain
transmission rights
(Q3, '07; Q4, '07) (0.04) (0.04)
Change in U.K. tax
rate (Q3, '07; Q4, '07) 0.14 0.14
Synfuel tax adjustment
(Q1, '08) (0.04) (0.04)
Total special items 0.17 (0.11) 0.91 0.97
Reported earnings $1.45 $0.30 $1.78 $3.53
Reconciliation of Business Segment Earnings from Ongoing Operations and
Reported Earnings (Diluted)
1st Quarter 2007 (millions of dollars)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $126 $58 $68 $252
Special Items
MTM adj's from energy-
related, non-trading
economic hedges 10 10
PJM billing dispute (1) (1)
Sale of Latin American
businesses (40) (40)
Sale of domestic
telecommunication
operations (18) (18)
Total special items (9) (40) (49)
Reported earnings $117 $58 $28 $203
1st Quarter 2007 (per share)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $0.32 $0.15 $0.18 $0.65
Special Items
MTM adj's from energy-
related, non-trading
economic hedges 0.03 0.03
PJM billing dispute
Sale of Latin American
businesses (0.11) (0.11)
Sale of domestic
telecommunication
operations (0.05) (0.05)
Total special items (0.02) (0.11) (0.13)
Reported earnings $0.30 $0.15 $0.07 $0.52
12 Months Ended March 31, 2007 (millions of dollars)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $455 $149 $255 $859
Special Items
MTM adj's from energy-
related, non-trading
economic hedges (8) (8)
PJM billing dispute
(Q4, '06; Q1, '07) (18) 20 2
Off-site remediation of
ash basin leak (Q2, '06) 5 5
Reduction in Enron reserve
(Q2, '06) 2 2
Sale of interest in Griffith
(Q2, '06; Q4, '06) (17) (17)
Impairment of synfuel-related
assets (Q2, '06) (6) (6)
Reversal of cost recovery -
Hurricane Isabel (Q3, '06) (6) (6)
Realization of benefits
related to Black Lung Trust
assets (Q3, '06) 21 21
Workforce reduction (Q4, '06) (3) (3)
Impairment of nuclear decom.
trust investments (Q4, '06) (3) (3)
Sale of Latin American
businesses (Q1, '07) (40) (40)
Sale of domestic
telecommunication
operations (Q1, '07) (18) (18)
Total special items (66) 35 (40) (71)
Reported earnings $389 $184 $215 $788
12 Months Ended March 31, 2007 (per share)
PA Int'l
Supply Delivery Delivery Total
Earnings from Ongoing
Operations $1.18 $0.38 $0.66 $2.22
Special Items
MTM adj's from energy-
related, non-trading
economic hedges (0.02) (0.02)
PJM billing dispute
(Q4, '06; Q1, '07) (0.05) 0.06 0.01
Off-site remediation of
ash basin leak (Q2, '06) 0.01 0.01
Reduction in Enron reserve
(Q2, '06) 0.01 0.01
Sale of interest in Griffith
(Q2, '06; Q4, '06) (0.04) (0.04)
Impairment of synfuel-related
assets (Q2, '06) (0.01) (0.01)
Reversal of cost recovery -
Hurricane Isabel (Q3, '06) (0.02) (0.02)
Realization of benefits
related to Black Lung Trust
assets (Q3, '06) 0.05 0.05
Workforce reduction (Q4, '06)(0.01) (0.01)
Impairment of nuclear decom.
trust investments (Q4, '06) (0.01) (0.01)
Sale of Latin American
businesses (Q1, '07) (0.11) (0.11)
Sale of domestic
telecommunication
operations (Q1, '07) (0.05) (0.05)
Total special items (0.17) 0.09 (0.11) (0.19)
Reported earnings $1.01 $0.47 $0.55 $2.03
Operating - Domestic and International Electricity Sales
(millions of kwh)
3 Months Ended March 31 12 Months Ended March 31
2008 2007 Percent 2008 2007 Percent
Change Change
Domestic Retail
Delivered (a) 10,569 10,307 2.5% 38,211 37,057 3.1%
Supplied 11,123 10,842 2.6% 40,356 39,175 3.0%
International Delivered
United Kingdom 7,754 7,724 0.4% 27,917 28,423 (1.8%)
Domestic Wholesale
East 5,929 4,248 39.6% 22,497 18,899 19.0%
West
NorthWestern Energy 567 834 (32.0%) 2,542 3,366 (24.5%)
Other West 3,530 2,731 29.3% 14,625 9,541 53.3%
(a) Electricity delivered to retail customers represents the kwh delivered
to customers within PPL Electric Utilities Corporation's service
territory.
"Earnings from ongoing operations" excludes the impact of special items. Special items include charges, credits or gains that are unusual or nonrecurring and the mark-to-market impact of energy-related, non-trading economic hedges. The mark-to-market impact of these hedges is economically neutral to the company because the mark-to-market gains or losses on the energy hedges will reverse as the hedging contracts settle in the future. Earnings from ongoing operations should not be considered as an alternative to reported earnings, or net income, 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 measure, is also useful and meaningful to investors because it provides them with PPL's underlying 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. Statements contained in this news release, including statements with respect to future earnings, energy prices, margins and sales, growth, revenues, expenses and pension costs, marketing performance, regulation, asset dispositions and acquisitions, corporate strategy, capital additions, 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 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 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 and rate relief; 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. Website: http://www.pplweb.com/ |
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