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): February 23, 2015

 

 

 

Commission File

Number

   

Registrant; State of Incorporation;

Address and Telephone Number

   

IRS Employer

Identification No.

1-11459

   

PPL Corporation

(Exact name of Registrant as specified in its charter)

(Pennsylvania)

Two North Ninth Street

Allentown, PA 18101-1179

(610) 774-5151

    23-2758192

 

 

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:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition

The information attached hereto as exhibit 99.1 provides supplemental unaudited financial information for PPL Global, LLC, an indirect wholly owned subsidiary of PPL Corporation (“PPL”). PPL Global, LLC primarily includes PPL’s regulated electricity distribution businesses in the U. K, known as Western Power Distribution (“WPD”), the results of hedging the translation of WPD’s earnings from British pound sterling into U.S. dollars, and certain cost such as U.S. income taxes and administrative costs.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

 

  (d) Exhibits

99.1 -     Supplemental Unaudited Financial Information of PPL Global, LLC

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

PPL CORPORATION
By:  

/s/ Stephen K. Breininger

 

Stephen K. Breininger

Vice President and Controller

Dated: February 23, 2015



Exhibit 99.1

Supplemental Unaudited Financial Information - PPL Global, LLC

The supplemental unaudited financial information provided below should be read in conjunction with the audited financial statements and accompanying notes of PPL Corporation (“PPL”) in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “2014 10-K”) and the disclosure relevant to the UK Regulated Segment under Item 7. Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2014 10-K.

The U.K. Regulated segment consists of PPL Global, LLC which primarily includes PPL’s regulated electricity distribution businesses in the U.K. known as Western Power Distribution (“WPD”), the results of hedging the translation of WPD’s earnings from British pound sterling into U.S. dollars, and certain cost such as U.S. income taxes, administrative costs and allocated financing costs. However, the supplemental unaudited financial information presented here excludes the allocated financing costs of $25 million and $27 million, after-tax for 2014 and 2013, respectively, that are included in the U.K. Regulated segment “Income Statement Data” as reported in Note 2 to the Financial Statements included in the 2014 10-K. In all other respects, the information presented below was prepared on the same basis as the information presented in the 2014 10-K.

PPL Global, LLC

Condensed Consolidated Balance Sheets

At December 31,

(Millions of Dollars)

 

     2014      2013  

Assets

      

Current Assets

    $ 889       $ 1,255   

Property, Plant & Equipment, net

      11,683         11,134   

Goodwill

      3,005         3,143   

Other Noncurrent Assets

      428         363   
  

 

 

     

 

 

  

Total Assets

    $ 16,005       $ 15,895   
  

 

 

     

 

 

  

Liabilities and Equity

      

Current Liabilities (including debt due within one year)

    $ 1,367       $ 1,201   

Long-term Debt

      7,381         7,648   

Deferred Credits and Other Noncurrent Liabilities

      1,582         1,718   

Equity

      5,675         5,328   
  

 

 

     

 

 

  

Total Liabilities and Equity

    $ 16,005       $ 15,895   
  

 

 

     

 

 

  

PPL Global, LLC

Condensed Consolidated Statements of Cash Flows

For the Years Ended December 31,

(Millions of Dollars)

 

     2014     2013  

Cash Flows From Operating Activities

     

Net Income

    $ 1,007      $ 949   

Adjustments to reconcile net income to net cash provided by operating activities

     

Depreciation

      337        300   

Unrealized (gains) losses on derivatives

      (195 )      44   

Adjustment to WPD line loss accrual

      65        45   

Other

      99        (37 ) 

Changes in current assets and current liabilities

      211        1   

Other operating activities

     

Defined benefit plans - funding

      (312 )      (134 ) 

Other

      (28 )      (18 ) 
  

 

 

    

 

 

  

Net cash provided by (used in) operating activities

     1,184        1,150   
  

 

 

    

 

 

  

Cash Flows from Investing Activities

     

Expenditures for long-lived assets

      (1,439 )      (1,280 ) 

Other

      (3 )      1   
  

 

 

    

 

 

  

Net cash provided by (used in) investing activities

      (1,442 )      (1,279 ) 
  

 

 

    

 

 

  

Cash Flows from Financing Activities

     

Distributions to PPL

      (277 )      (261 ) 

Issuance of long-term debt

      —          744   

Net increase (decrease) in short-term debt

      98        (6 ) 

Other

      93        57   
  

 

 

    

 

 

  

Net cash provided by (used in) financing activities

      (86 )      534   
  

 

 

    

 

 

  

Effect of Exchange Rates on Cash and Cash Equivalents

      (8 )      8   
  

 

 

    

 

 

  

Net Increase (Decrease) in Cash and Cash Equivalents

      (352 )      413   

Cash and Cash Equivalents at Beginning of Period

      641        228   
  

 

 

    

 

 

  

Cash and Cash Equivalents at End of Period

    $ 289      $ 641   
  

 

 

    

 

 

  

PPL Global, LLC

Condensed Consolidated Statements of Income

For the Years Ended December 31,

(Millions of Dollars)

 

     2014      2013  

Utility revenue

    $ 2,573       $ 2,359   

Energy-related businesses

      48         44   
  

 

 

     

 

 

  

Total operating revenues

      2,621         2,403   
  

 

 

     

 

 

  

Other operation and maintenance

      451         470   

Depreciation

      337         300   

Taxes, other than income

      157         147   

Energy-related businesses

      31         29   
  

 

 

     

 

 

  

Total operating expenses

      976         946   
  

 

 

     

 

 

  

Other Income (Expense) - net - WPD

      17         13   

Other Income (Expense) - net - Domestic1

      110         (52 ) 

Interest Expense

      418         381   

Income Taxes - Foreign

      248         127   

Income Taxes - Domestic

      99         (39 ) 
  

 

 

     

 

 

  

Net Income

   $ 1,007       $ 949   
  

 

 

     

 

 

  

 

1 

“Other Income (Expense) -net - Domestic” is primarily comprised of the realized and unrealized hedging results from hedging the translation of WPD’s earnings from British pound sterling into U.S. dollars.

The following after-tax gains (losses), which management considers special items, impacted PPL Global, LLC’s results.

 

     2014     2013    

Income Statement Line Item

Foreign currency-related economic hedges, net of tax of ($68) and $151

    $ 127      ($ 29 )    Other Income (Expense) - net - Domestic

WPD Midlands acquisition-related adjustments:

       

Separation benefits, net of tax of $0 and $12

        (4 )    Other operation and maintenance

Other acquisition-related adjustments, net of tax of $0 and ($2)

        8      Other operation and maintenance

Other:

       

Change in U.K. income tax rate3

        84      Income Taxes - Foreign

Windfall Profits Tax litigation4

        43      Income Taxes - Domestic

Change in WPD line loss accrual, net of tax of $13 and $105

      (52 )      (35 )    Utility revenue
  

 

 

    

 

 

    

Total

    $ 75      $ 67     
  

 

 

    

 

 

    

 

1 

Represents unrealized gains (losses) on contracts that economically hedge anticipated British pound sterling denominated earnings.

 

2 

Represents severance compensation and early retirement deficiency costs.

 

3 

The U.K. Finance Act of 2013, enacted in July 2013, reduced the U.K.‘s statutory income tax rate from 23% to 21%, effective April 1, 2014 and from 21% to 20%, effective April 1, 2015. As a result, PPL reduced its net deferred tax liability and recognized a deferred tax benefit in 2013.

 

4 

In May 2013, the U.S. Supreme Court reversed the December 2011 ruling by the U.S. Court of Appeals for the Third Circuit concerning the creditability of the U.K. Windfall Profits Tax for U.S. Federal income tax purposes. As a result, PPL recorded a $43 million income tax benefit in 2013. See Note 5 to the Financial Statements of the 2014 10-K for additional information.

 

5 

In 2013, WPD Midlands increased its line loss accrual by $45 million, pre-tax, based on information provided by Ofgem regarding the calculation. In March 2014, Ofgem issued its final decision on the DPCR4 line loss incentives and penalties mechanism. As a result, WPD increased its existing liability by $65 million, pre-tax, for over-recovery of line losses. See Note 6 to the Financial Statements of the 2014 10-K for additional information.

PPL (NYSE:PPL)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more PPL Charts.
PPL (NYSE:PPL)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more PPL Charts.