ALLENTOWN, Pa., April 28, 2016 /PRNewswire/ -- PPL
Corporation (NYSE: PPL) on Thursday (4/28) announced first-quarter
2016 reported earnings of $481
million, or $0.71 per share,
compared with $647 million, or
$0.96 per share, in 2015.
Adjusting for special items, first-quarter 2016 earnings from
ongoing operations were $458 million,
or $0.67 per share, compared with
$519 million, or $0.77 per share, a year ago. As expected, this
was driven primarily by lower earnings in the U.K. as a result of a
revenue reset that occurred at the beginning of the new RIIO-ED1
price control period on April 1,
2015, and a lower average foreign currency exchange rate in
2016 compared to the first quarter of 2015. Higher domestic
margins from rate increases effective July
1, 2015, in Kentucky and
Jan. 1, 2016, in Pennsylvania were partially offset by lower
sales volumes due to mild winter weather.
"Our first-quarter results were in line with our expectations
despite the warmer than normal start to the year, and we remain on
track to deliver on our 2016 earnings forecast," said William H. Spence, PPL's chairman, president and
Chief Executive Officer.
"Moreover, we remain confident in our ability to achieve
long-term, sustainable growth as we continue to make significant
investments to build tomorrow's energy infrastructure and make the
power grid more reliable, resilient and secure."
Spence said a prime example of PPL's investments, and its
ability to execute large capital projects, is its recently
energized Northeast-Pocono
transmission line in Pennsylvania.
The $350 million project to
strengthen reliability and reinforce the grid was energized this
month, a year ahead of schedule. It included about 60 miles of new
transmission lines, three new substations and additional
improvements. In all, PPL plans to invest more than
$16 billion in energy infrastructure
over the next five years.
In announcing its quarterly earnings, PPL reaffirmed its 2016
forecast range for earnings from ongoing operations of $2.25 to $2.45 per share. The 2016 forecast for
reported earnings is $2.29 to $2.49
per share, reflecting special items recorded through the first
quarter.
The company also reaffirmed its expectation that it will achieve
compound annual growth through 2018 of 5 to 6 percent off of 2014
earnings of $2.03 per share from
ongoing operations (adjusted).
Spence said organic growth in the company's U.S. utilities is
among the strongest in the U.S. utility sector. Earnings from PPL's
operations in the U.S., including its corporate services
organization, are expected to grow 11 to 13 percent through 2018,
with 1 to 3 percent earnings growth expected in the U.K.
First-Quarter 2016 Earnings Details
PPL's reported earnings for the first quarter of 2016 included
net special-item after-tax benefits of $23
million, or $0.04 per share,
primarily due to foreign currency-related economic hedges. Reported
earnings for the first quarter of 2015 included net special-item
after-tax benefits of $128 million,
or $0.19 per share, primarily due to
earnings from PPL's former Supply segment and foreign
currency-related economic hedges.
Reported earnings are calculated in accordance with U.S. GAAP
(generally accepted accounting principles). "Earnings from ongoing
operations" is a non-GAAP financial measure that is adjusted for
special items, including the former Supply segment's earnings for
2015. Special items are fully detailed at the end of this news
release.
(Dollars in
millions, except for per share amounts)
|
|
1st
Quarter
|
|
|
|
|
2016
|
|
2015
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Reported
earnings
|
|
$
|
481
|
|
|
$
|
647
|
|
|
(26%)
|
Reported earnings per
share
|
|
$
|
0.71
|
|
|
$
|
0.96
|
|
|
(26%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
|
|
|
2016
|
|
2015
|
|
%
Change
|
|
|
|
|
|
|
|
Earnings from ongoing
operations
|
|
$
|
458
|
|
|
$
|
519
|
|
|
(12%)
|
Earnings from ongoing
operations per share
|
|
$
|
0.67
|
|
|
$
|
0.77
|
|
|
(13%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(See the tables at the end of this news release for a
reconciliation of reported earnings (loss) to earnings from
ongoing operations.)
First-Quarter 2016 Earnings by Segment
|
|
1st
Quarter
|
Per
share
|
|
2016
|
|
2015
|
Earnings from
ongoing operations
|
|
|
|
|
|
|
|
|
U.K.
Regulated
|
|
$
|
0.39
|
|
|
$
|
0.50
|
|
Kentucky
Regulated
|
|
|
0.16
|
|
|
|
0.16
|
|
Pennsylvania
Regulated
|
|
|
0.14
|
|
|
|
0.13
|
|
Corporate and
Other
|
|
|
(0.02)
|
|
|
|
(0.02)
|
|
Total
|
|
$
|
0.67
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Special
items
|
|
|
|
|
|
|
|
|
Special items
(expense) benefit:
|
|
|
|
|
|
|
|
|
U.K.
Regulated
|
|
$
|
0.04
|
|
|
$
|
0.06
|
|
Kentucky
Regulated
|
|
|
–
|
|
|
|
–
|
|
Pennsylvania Regulated
|
|
|
–
|
|
|
|
–
|
|
Corporate and Other
|
|
|
–
|
|
|
|
(0.01)
|
|
Former
Supply/Discontinued Operations
|
|
|
–
|
|
|
|
0.14
|
|
Total Special
items
|
|
$
|
0.04
|
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Reported
earnings
|
|
|
|
|
|
|
|
|
U.K.
Regulated
|
|
$
|
0.43
|
|
|
$
|
0.56
|
|
Kentucky
Regulated
|
|
|
0.16
|
|
|
|
0.16
|
|
Pennsylvania
Regulated
|
|
|
0.14
|
|
|
|
0.13
|
|
Corporate and
Other
|
|
|
(0.02)
|
|
|
|
(0.03)
|
|
Former
Supply/Discontinued Operations
|
|
|
–
|
|
|
|
0.14
|
|
Total
|
|
$
|
0.71
|
|
|
$
|
0.96
|
|
(See the reconciliation tables at the end of this news
release for an itemization of special items.)
Key Factors Impacting Earnings from Ongoing
Operations
U.K. Regulated Segment
PPL's U.K. Regulated segment
primarily consists of the regulated electricity delivery operations
of Western Power Distribution (WPD), serving Southwest and
Central England and South Wales.
Earnings from ongoing operations in the first quarter of 2016
decreased by $0.11 per share compared
with a year ago. This decrease was primarily driven by the
April 1, 2015 price decrease due to
the beginning of the new eight-year price control period
(RIIO-ED1), lower sales volumes due to unfavorable weather, and the
effect of changes in British pound sterling to U.S. dollar exchange
rates.
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 the
regulated electricity operations of Kentucky Utilities Company.
Earnings from ongoing operations in the first quarter of 2016
were the same as a year ago. This was primarily due to higher base
electricity rates effective July 1,
2015, and lower operation and maintenance expense, offset by
lower sales volumes, due to unfavorable weather, and higher
financing
costs.
Pennsylvania Regulated Segment
PPL's Pennsylvania
Regulated segment consists of the regulated electricity delivery
operations of PPL Electric Utilities.
Earnings from ongoing operations in the first quarter of 2016
increased by $0.01 per share compared
with a year ago, driven primarily by higher base electricity rates
for distribution effective Jan.1, 2016, and higher transmission
margins, partially offset by lower sales volumes, due to
unfavorable weather, and higher operation and maintenance
expense.
Corporate and Other
PPL's Corporate and Other category
primarily includes unallocated corporate-level financing and other
costs. Corporate and Other in the first quarter of 2016 was the
same as a year ago.
Forecast of Earnings from Ongoing
Operations
|
2016
forecast
midpoint
|
|
2015
actual
|
Per
share
|
|
|
|
|
|
U.K.
Regulated
|
$ 1.43
|
|
|
$ 1.44
|
|
Kentucky
Regulated
|
0.57
|
|
|
0.51
|
|
Pennsylvania
Regulated
|
0.47
|
|
|
0.37
|
|
Corporate and
Other
|
(0.12)
|
|
|
(0.11)
|
|
Total
|
$ 2.35
|
|
|
$ 2.21
|
|
(See the tables at the end of this news release for a
reconciliation of reported earnings to earnings from ongoing
operations.)
The midpoint of PPL's 2016 earnings from ongoing operations
forecast of $2.35 per share
represents an increase of more than 6 percent compared to 2015
earnings from ongoing operations. This increase is primarily
attributable to increases in the Pennsylvania Regulated and
Kentucky Regulated segments.
U.K. Regulated Segment
PPL projects relatively flat segment earnings in 2016 compared
with 2015, due to higher gross margins and lower operation and
maintenance expense, including pension expense, offset by higher
financing costs, depreciation, taxes and other expenses and lower
British pound sterling to U.S. dollar exchange rates.
The remaining 2016 foreign currency exposure for this segment is
93 percent hedged at an average rate of $1.54 per pound, compared to an average hedged
rate of $1.57 per pound in 2015.
Kentucky Regulated Segment
PPL projects higher
segment earnings in 2016 compared with 2015, primarily driven by
electric and gas base rate increases effective July 1, 2015, and higher returns on additional
environmental capital investments, partially offset by higher
depreciation and higher financing costs.
Pennsylvania Regulated Segment
PPL projects higher
segment earnings in 2016 compared with 2015, primarily driven by
higher base electricity rates for distribution effective
Jan. 1, 2016, and higher transmission
margins, partially offset by higher depreciation, higher financing
costs and a benefit received in 2015 from the release of a gross
receipts tax reserve.
Corporate and Other
PPL projects costs to be
relatively flat in this category in 2016 compared with 2015.
Headquartered in Allentown,
Pa., PPL Corporation (NYSE: PPL) is one of the largest
companies in the U.S. utility sector. PPL's seven high-performing,
award-winning utilities serve 10 million customers in the U.S. and
United Kingdom. The company and
its 13,000 employees are dedicated to providing exceptional
customer service and reliability and delivering superior value for
shareowners. To learn more, visit 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 2016 financial results at 8:30 a.m. Eastern Daylight Time on Thursday, April 28. The call will be
webcast live, in audio format, along with slides of the
presentation. For those who are unable to listen to the live
webcast, a replay with slides will be accessible at
www.pplweb.com/investors for 30 days after the call.
Interested individuals can access the live conference call via
telephone at 1-888-317-6003. International participants should call
1-412-317-6061. Participants in Canada should call 1-866-284-3684.
Participants will need to enter the following "Elite Entry" number
in order to join the conference: 2306854.
Management utilizes "Earnings from ongoing operations" as a
non-GAAP financial measure, and it should not be considered as an
alternative to reported earnings, or net income, which is an
indicator of operating performance determined in accordance with
GAAP. PPL believes that earnings from ongoing operations is useful
and meaningful to investors because it provides management's view
of PPL's 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:
- Unrealized gains or losses on foreign currency-related
economic hedges (as discussed below).
- Supply segment discontinued operations.
- Gains and losses on sales of assets not in the ordinary
course of business.
- Impairment charges.
- Workforce reduction and other restructuring
effects.
- Acquisition and divestiture-related adjustments.
- Other charges or credits that are, in management's view, not
reflective of the company's ongoing operations.
Unrealized gains or losses on foreign currency-related
economic hedges include the changes in fair value of foreign
currency contracts used to economically hedge
British-pound-sterling-denominated anticipated earnings.
The changes in fair value of these contracts each period are
recognized immediately within GAAP earnings. Management
believes that excluding these amounts from earnings from ongoing
operations until settlement of the contracts provides a better
matching of the financial impacts of those contracts with the
economic value of PPL's underlying hedged earnings.
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 for energy in our service
territories; weather conditions affecting customer energy usage and
operating costs; 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 our facilities; the length of scheduled and
unscheduled outages at our generating plants; environmental
conditions and requirements and the related costs of compliance;
system conditions and operating costs; development of new projects,
markets and technologies; performance of new ventures; asset or
business acquisitions and dispositions; any impact of severe
weather on our business; 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; British
pound sterling to U.S. dollar 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 our media website at
www.pplnewsroom.com for additional news
and background about PPL Corporation.
PPL CORPORATION
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED FINANCIAL INFORMATION (a)
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(Millions of
Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December 31,
|
|
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
814
|
|
$
|
836
|
Accounts
receivable
|
|
|
777
|
|
|
732
|
Unbilled
revenues
|
|
|
419
|
|
|
453
|
Fuel, materials and
supplies
|
|
|
332
|
|
|
357
|
Current price risk
management assets
|
|
|
183
|
|
|
139
|
Other current
assets
|
|
|
188
|
|
|
129
|
Property, Plant and
Equipment
|
|
|
|
|
|
|
|
Regulated utility
plant
|
|
|
33,849
|
|
|
34,399
|
|
Less: Accumulated
depreciation - regulated utility plant
|
|
|
5,731
|
|
|
5,683
|
|
|
Regulated utility
plant, net
|
|
|
28,118
|
|
|
28,716
|
|
Non-regulated
property, plant and equipment
|
|
|
476
|
|
|
516
|
|
Less: Accumulated
depreciation - non-regulated property, plant and
equipment
|
|
|
144
|
|
|
165
|
|
|
Non-regulated
property, plant and equipment, net
|
|
|
332
|
|
|
351
|
|
Construction work in
progress
|
|
|
1,382
|
|
|
1,315
|
|
Property, Plant and
Equipment, net
|
|
|
29,832
|
|
|
30,382
|
Noncurrent regulatory
assets
|
|
|
1,747
|
|
|
1,733
|
Goodwill and other
intangibles
|
|
|
4,003
|
|
|
4,229
|
Noncurrent price risk
management assets
|
|
|
254
|
|
|
156
|
Other noncurrent
assets
|
|
|
160
|
|
|
155
|
Total
Assets
|
|
$
|
38,709
|
|
$
|
39,301
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Short-term
debt
|
|
$
|
1,265
|
|
$
|
916
|
Long-term debt due
within one year
|
|
|
485
|
|
|
485
|
Accounts
payable
|
|
|
707
|
|
|
812
|
Other current
liabilities
|
|
|
1,609
|
|
|
1,663
|
Long-term
debt
|
|
|
18,074
|
|
|
18,563
|
Deferred income taxes
and investment tax credits
|
|
|
3,687
|
|
|
3,568
|
Accrued pension
obligations
|
|
|
1,183
|
|
|
1,405
|
Asset retirement
obligations
|
|
|
517
|
|
|
536
|
Noncurrent regulatory
liabilities
|
|
|
942
|
|
|
945
|
Other noncurrent
liabilities
|
|
|
478
|
|
|
489
|
Common stock and
additional paid-in capital
|
|
|
9,736
|
|
|
9,694
|
Earnings
reinvested
|
|
|
3,185
|
|
|
2,953
|
Accumulated other
comprehensive loss
|
|
|
(3,159)
|
|
|
(2,728)
|
Total Liabilities
and Equity
|
|
$
|
38,709
|
|
$
|
39,301
|
|
|
(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,
|
|
|
|
|
2016
|
|
2015
(a)
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
$
|
2,011
|
|
$
|
2,230
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
Operation
|
|
|
|
|
|
Fuel
|
|
197
|
|
|
253
|
Energy
purchases
|
|
233
|
|
|
329
|
Other operation and
maintenance
|
|
450
|
|
|
456
|
Depreciation
|
|
229
|
|
|
216
|
Taxes,
other than income
|
|
79
|
|
|
86
|
Total
Operating Expenses
|
|
1,188
|
|
|
1,340
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
823
|
|
|
890
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense) - net
|
|
61
|
|
|
88
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
224
|
|
|
209
|
|
|
|
|
|
|
|
|
|
Income from
Continuing Operations Before Income Taxes
|
|
660
|
|
|
769
|
|
|
|
|
|
|
|
|
|
Income
Taxes
|
|
179
|
|
|
217
|
|
|
|
|
|
|
|
|
|
Income from
Continuing Operations After Income Taxes
|
|
481
|
|
|
552
|
|
|
|
|
|
|
|
|
|
Income (Loss) from
Discontinued Operations (net of income taxes)
|
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
|
481
|
|
$
|
647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
|
Income
from Continuing Operations After Income Taxes:
|
|
|
Basic
|
$
|
0.71
|
|
$
|
0.83
|
Diluted
|
$
|
0.71
|
|
$
|
0.82
|
Net
Income:
|
|
|
|
|
|
Basic
|
$
|
0.71
|
|
$
|
0.97
|
Diluted
|
$
|
0.71
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares of Common Stock Outstanding (in thousands)
|
|
|
|
|
|
Basic
|
|
675,441
|
|
|
666,974
|
Diluted
|
|
678,817
|
|
|
668,732
|
|
|
(a) Amounts have been reclassified to
reflect the Supply segment as a discontinued operation.
|
PPL CORPORATION
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(Millions of
Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
2016
|
|
2015
(a)
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
481
|
|
$
|
647
|
|
(Income) loss from
discontinued operations (net of income taxes)
|
|
|
|
|
|
(95)
|
|
Income from
continuing operations (net of income taxes)
|
|
|
481
|
|
|
552
|
|
Adjustments to
reconcile Income from continuing operations (net of taxes) to net
cash provided by operating activities - continuing
operations
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
229
|
|
|
216
|
|
|
Amortization
|
|
|
18
|
|
|
11
|
|
|
Defined benefit plans
- expense (income)
|
|
|
(13)
|
|
|
16
|
|
|
Deferred income taxes
and investment tax credits
|
|
|
162
|
|
|
111
|
|
|
Unrealized gains on
derivatives, and other hedging activities
|
|
|
(34)
|
|
|
(52)
|
|
|
Stock-based
compensation expense
|
|
|
13
|
|
|
14
|
|
|
Other
|
|
|
(5)
|
|
|
(3)
|
|
Change in current
assets and current liabilities
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(62)
|
|
|
(128)
|
|
|
Accounts
payable
|
|
|
(43)
|
|
|
(49)
|
|
|
Other current
liabilities
|
|
|
(66)
|
|
|
(124)
|
|
|
Other
|
|
|
(10)
|
|
|
42
|
|
Other operating
activities
|
|
|
|
|
|
|
|
|
Defined benefit plans
- funding
|
|
|
(123)
|
|
|
(197)
|
|
|
Other
|
|
|
10
|
|
|
43
|
|
|
|
Net cash provided by
operating activities - continuing operations
|
|
|
557
|
|
|
452
|
|
Net cash provided by
operating activities - discontinued operations
|
|
|
|
|
|
221
|
|
|
|
Net cash provided by
operating activities
|
|
|
557
|
|
|
673
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
Expenditures for
property, plant and equipment
|
|
|
(656)
|
|
|
(833)
|
|
Expenditures for
intangible assets
|
|
|
(6)
|
|
|
(10)
|
|
Purchase of other
investments
|
|
|
|
|
|
(15)
|
|
Other investing
activities
|
|
|
1
|
|
|
(2)
|
|
|
|
Net cash used in
investing activities - continuing operations
|
|
|
(661)
|
|
|
(860)
|
|
Net cash used in
investing activities - discontinued operations
|
|
|
|
|
|
(130)
|
|
|
|
Net cash used in
investing activities
|
|
|
(661)
|
|
|
(990)
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
Issuance of long-term
debt
|
|
|
224
|
|
|
|
|
Retirement of
long-term debt
|
|
|
(224)
|
|
|
|
|
Issuance of common
stock
|
|
|
42
|
|
|
35
|
|
Payment of common
stock dividends
|
|
|
(255)
|
|
|
(250)
|
|
Net increase in
short-term debt
|
|
|
351
|
|
|
163
|
|
Other financing
activities
|
|
|
(23)
|
|
|
(14)
|
|
|
|
Net cash provided by
(used in) financing activities - continuing operations
|
|
|
115
|
|
|
(66)
|
|
Net cash used in
financing activities - discontinued operations
|
|
|
|
|
|
(222)
|
|
Net cash
distributions to parent from discontinued operations
|
|
|
|
|
|
191
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
|
115
|
|
|
(97)
|
Effect of Exchange
Rates on Cash and Cash Equivalents
|
|
|
(33)
|
|
|
(2)
|
Net Decrease in
Cash and Cash Equivalents included in Discontinued
Operations
|
|
|
|
|
|
131
|
Net Decrease in
Cash and Cash Equivalents
|
|
|
(22)
|
|
|
(285)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
836
|
|
|
1,399
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
814
|
|
$
|
1,114
|
|
(a) Amounts
have been reclassified to reflect the Supply segment as a
discontinued operation.
|
Key Indicators
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
Financial
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share of common stock
|
|
|
|
|
|
$1.5075
|
|
$1.49
|
Book value per share
(a)(b)(c)
|
|
|
|
|
|
$14.43
|
|
$21.02
|
Market price per
share (a)
|
|
|
|
|
|
$38.07
|
|
$33.66
|
Dividend
yield
|
|
|
|
|
|
4.0%
|
|
4.4%
|
Dividend payout ratio
(d)(e)
|
|
|
|
|
|
198.4%
|
|
48.2%
|
Dividend payout ratio
- earnings from ongoing operations (d)(f)
|
|
|
|
|
|
71.4%
|
|
69.3%
|
Price/earnings ratio
(d)(e)
|
|
|
|
|
|
50.1
|
|
10.9
|
Price/earnings ratio
- earnings from ongoing operations (d)(f)
|
|
|
|
|
|
18.0
|
|
15.7
|
Return on common
equity (e)
|
|
|
|
|
|
4.3%
|
|
15.5%
|
Return on common
equity - earnings from ongoing operations (f)(g)
|
|
|
|
|
|
14.3%
|
|
15.3%
|
|
(a) End
of period.
|
(b) Based
on 676,384 and 667,713 shares of common stock outstanding (in
thousands) at March 31, 2016 and March 31, 2015.
|
(c) 2016
reflects the impact of the spinoff of the Supply segment and a $3.2
billion related dividend.
|
(d) Based
on diluted earnings per share.
|
(e) 2016
includes two months of Supply segment earnings, compared to twelve
months in 2015.
|
(f)
Calculated using earnings from ongoing operations, which is a
non-GAAP financial measure that includes adjustments
described in the text
and tables of this news release.
|
(g)
Adjusted to exclude the equity of PPL Energy Supply, LLC as that
business was spun off in 2015.
|
Operating -
Domestic & International Electricity Sales
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended
March 31,
|
|
|
|
|
|
|
|
|
|
Percent
|
(GWh)
|
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
Domestic Retail
Delivered
|
|
|
|
|
|
|
|
|
PPL Electric
Utilities
|
|
|
9,680
|
|
10,661
|
|
(9.2%)
|
|
LKE
|
|
|
7,689
|
|
8,296
|
|
(7.3%)
|
|
|
Total
|
|
|
17,369
|
|
18,957
|
|
(8.4%)
|
|
|
|
|
|
|
|
|
|
|
Domestic Retail
Supplied
|
|
|
|
|
|
|
|
|
LKE (a)
|
|
|
7,689
|
|
8,296
|
|
(7.3%)
|
|
|
|
|
|
|
|
|
|
|
International
Delivered
|
|
|
|
|
|
|
|
|
United
Kingdom
|
|
|
20,292
|
|
20,793
|
|
(2.4%)
|
|
|
|
|
|
|
|
|
|
|
Domestic
Wholesale
|
|
|
|
|
|
|
|
|
LKE (b)
|
|
|
506
|
|
684
|
|
(26.0%)
|
|
(a)
Represents GWh supplied by LKE to retail customers in Kentucky,
Virginia and Tennessee.
|
(b)
Represents FERC-regulated municipal and unregulated off-system
sales.
|
Reconciliation of
Segment Reported Earnings (Loss) to Earnings from Ongoing
Operations
|
(After-Tax)
|
(Unaudited)
|
|
|
|
|
(millions of
dollars)
|
|
Year-to-Date March
31, 2016
|
|
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
|
|
|
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
&
Other
|
|
Total
|
Reported Earnings
(Loss)
|
|
$
|
289
|
|
$
|
112
|
|
$
|
94
|
|
$
|
(14)
|
|
$
|
481
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
24
|
Spinoff of the Supply
segment
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(1)
|
Total Special
Items
|
|
|
24
|
|
|
|
|
|
|
|
|
(1)
|
|
|
23
|
Earnings from
Ongoing Operations
|
|
$
|
265
|
|
$
|
112
|
|
$
|
94
|
|
$
|
(13)
|
|
$
|
458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(per share -
diluted)
|
|
Year-to-Date March
31, 2016
|
|
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
|
|
|
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
&
Other
|
|
Total
|
Reported Earnings
(Loss)
|
|
$
|
0.43
|
|
$
|
0.16
|
|
$
|
0.14
|
|
$
|
(0.02)
|
|
$
|
0.71
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
0.04
|
Total Special
Items
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
0.04
|
Earnings from
Ongoing Operations
|
|
$
|
0.39
|
|
$
|
0.16
|
|
$
|
0.14
|
|
$
|
(0.02)
|
|
$
|
0.67
|
Reconciliation of
Segment Reported Earnings (Loss) to Earnings from Ongoing
Operations
|
(After-Tax)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of
dollars)
|
|
Year-to-Date March
31, 2015
|
|
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
|
|
Disc.
|
|
|
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
&
Other
|
|
Ops.
|
|
Total
|
Reported Earnings
(Loss)
|
|
$
|
375
|
|
$
|
109
|
|
$
|
87
|
|
$
|
(19)
|
|
$
|
95
|
|
$
|
647
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
Spinoff of the Supply
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95
|
|
|
95
|
|
Employee transitional
services
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
(2)
|
|
Transition and
transaction costs
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
|
|
|
|
(3)
|
|
Separation
benefits
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
(1)
|
WPD Midlands
acquisition-related adjustment
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
Total Special
Items
|
|
|
39
|
|
|
|
|
|
|
|
|
(6)
|
|
|
95
|
|
|
128
|
Earnings from
Ongoing Operations
|
|
$
|
336
|
|
$
|
109
|
|
$
|
87
|
|
$
|
(13)
|
|
$
|
|
|
$
|
519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(per share -
diluted)
|
|
Year-to-Date March
31, 2015
|
|
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
|
|
Disc.
|
|
|
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
&
Other
|
|
Ops.
|
|
Total
|
Reported Earnings
(Loss)
|
|
$
|
0.56
|
|
$
|
0.16
|
|
$
|
0.13
|
|
$
|
(0.03)
|
|
$
|
0.14
|
|
$
|
0.96
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.06
|
Spinoff of the Supply
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.14
|
|
|
0.14
|
|
Transition and
transaction costs
|
|
|
|
|
|
|
|
|
|
|
(0.01)
|
|
|
|
|
|
(0.01)
|
Total Special
Items
|
|
|
0.06
|
|
|
|
|
|
|
|
|
(0.01)
|
|
|
0.14
|
|
|
0.19
|
Earnings from
Ongoing Operations
|
|
$
|
0.50
|
|
$
|
0.16
|
|
$
|
0.13
|
|
$
|
(0.02)
|
|
$
|
|
|
$
|
0.77
|
Reconciliation of
Segment Reported Earnings (Loss) to Earnings from Ongoing
Operations
|
(After-Tax)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date December
31, 2015
|
|
(per share -
diluted)
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
&
|
|
Disc.
|
|
|
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
Other
|
|
Ops.(a)
|
|
Total
|
Reported Earnings
(Loss)
|
|
$
|
1.66
|
|
$
|
0.48
|
|
$
|
0.37
|
|
$
|
(0.14)
|
|
$
|
(1.36)
|
|
$
|
1.01
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.08
|
Spinoff of the Supply
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.36)
|
|
|
(1.36)
|
|
Transition and
transaction costs
|
|
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
|
|
|
|
(0.02)
|
|
Employee transitional
services
|
|
|
|
|
|
|
|
|
|
|
|
(0.01)
|
|
|
|
|
|
(0.01)
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in U.K. tax
rate
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.11
|
|
Settlement of certain
income tax positions
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.03
|
|
Certain valuation
allowances
|
|
|
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
LKE
acquisition-related adjustment
|
|
|
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
(0.01)
|
Total Special
Items
|
|
|
0.22
|
|
|
(0.03)
|
|
|
|
|
|
(0.03)
|
|
|
(1.36)
|
|
|
(1.20)
|
Earnings from
Ongoing Operations
|
|
$
|
1.44
|
|
$
|
0.51
|
|
$
|
0.37
|
|
$
|
(0.11)
|
|
$
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date December
31, 2014
|
|
(per share -
diluted)(b)
|
|
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
&
|
|
Disc.
|
|
|
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
Other(c)
|
|
Ops.(c)
|
|
Total
|
Reported Earnings
(Loss)
|
|
$
|
1.48
|
|
$
|
0.47
|
|
$
|
0.39
|
|
$
|
(0.18)
|
|
$
|
0.45
|
|
$
|
2.61
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.19
|
Spinoff of the Supply
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supply segment
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.46
|
|
|
0.46
|
|
Discontinued
operations adjustments
|
|
|
|
|
|
|
|
|
|
|
|
(0.01)
|
|
|
0.01
|
|
|
|
|
Change in tax
valuation allowances
|
|
|
|
|
|
|
|
|
|
|
|
(0.07)
|
|
|
|
|
|
(0.07)
|
|
Transition and
transaction costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
|
(0.02)
|
|
Separation
benefits
|
|
|
|
|
|
|
|
|
|
|
|
(0.02)
|
|
|
|
|
|
(0.02)
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in WPD line
loss accrual
|
|
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.08)
|
|
Separation
benefits
|
|
|
|
|
|
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
(0.01)
|
Total Special
Items
|
|
|
0.11
|
|
|
|
|
|
(0.01)
|
|
|
(0.10)
|
|
|
0.45
|
|
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dissynergies-spinoff
of Supply segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense (benefit):
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect operation
and maintenance
|
|
|
|
|
|
|
|
|
|
|
|
0.07
|
|
|
|
|
|
0.07
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
0.05
|
|
|
|
|
|
0.05
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
0.01
|
Total
dissynergies-spinoff of Supply segment
|
|
|
|
|
|
|
|
|
|
|
|
0.13
|
|
|
|
|
|
0.13
|
Earnings from
Ongoing Operations (Adjusted)
|
|
$
|
1.37
|
|
$
|
0.47
|
|
$
|
0.40
|
|
$
|
(0.21)
|
|
$
|
|
|
$
|
2.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes an $879
million charge reflecting the difference between PPL's recorded
value for the Supply segment and the estimated fair
|
|
value determined in
accordance with applicable accounting rules under GAAP.
|
(b)
|
The "If-Converted
Method" has been applied to PPL's 2011 Equity Units, resulting in
$9 million of interest charges (after-tax) being
|
|
added back to
earnings and approximately 11 million shares of PPL common stock
being treated as outstanding. Both adjustments are
|
|
only for purposes of
calculating diluted earnings per share.
|
(c)
|
Certain amounts have
been reclassified to reflect the Supply segment as a discontinued
operation.
|
(d)
|
Represents 2014 costs
allocated to the Supply segment that remained with PPL after the
spinoff of the Supply segment.
|
Reconciliation of
PPL's Forecast of Reported Earnings (Loss) to Earnings from Ongoing
Operations
|
(After-Tax)
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecast (per share -
diluted)
|
|
|
2016
Midpoint
|
|
|
|
|
U.K.
|
|
KY
|
|
PA
|
|
Corp.
|
|
|
|
High
|
|
Low
|
|
|
Reg.
|
|
Reg.
|
|
Reg.
|
|
&
Other
|
|
Total
|
|
2016
|
|
2016
|
Reported Earnings
(Loss)
|
$
|
1.47
|
|
$
|
0.57
|
|
$
|
0.47
|
|
$
|
(0.12)
|
|
$
|
2.39
|
|
$
|
2.49
|
|
$
|
2.29
|
Less: Special Items
(expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency-related economic hedges
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
0.04
|
|
|
0.04
|
|
|
0.04
|
Total Special
Items
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
0.04
|
|
|
0.04
|
|
|
0.04
|
Earnings from
Ongoing Operations
|
$
|
1.43
|
|
$
|
0.57
|
|
$
|
0.47
|
|
$
|
(0.12)
|
|
$
|
2.35
|
|
$
|
2.45
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
|
For news media
– Ryan Hill, 610-774-5997
|
|
For financial
analysts – Lisa Pammer, 610-774-3316
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ppl-corporation-reports-first-quarter-earnings-300259261.html
SOURCE PPL Corporation