EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1

Exhibit 99.1 

 

Contacts:   For news media – Ryan Hill, 610-774-5997
    For financial analysts – Joseph P. Bergstein Jr., 610-774-5609

 

 

 

PPL Corporation Reports 2015 Earnings

 

·Increased per-share earnings from ongoing operations by 9 percent in 2015.
·Announces 2016 earnings forecast range of $2.25 to $2.45 per share.
·Updates compound annual per-share earnings growth rate to 5 to 6 percent through 2018.
·Increases annualized common stock dividend to $1.52 per share.

 

ALLENTOWN, Pa. (Feb. 4, 2016) – PPL Corporation (NYSE: PPL) on Thursday (2/4) announced 2015 reported earnings of $682 million, or $1.01 per share, compared with $1.74 billion, or $2.61 per share, in 2014.

The company’s results for 2015 reflect the loss from discontinued operations of $921 million, or $1.36 per share, resulting primarily from the June 1 spinoff of its competitive supply business.

Adjusting for special items, including results from the discontinued operations of the former Supply segment, earnings from ongoing operations were $1.49 billion, or $2.21 per share, compared with earnings from ongoing operations (adjusted) of $1.35 billion, or $2.03 per share in 2014, an increase of 9 percent on a per-share basis.

The company’s results exceeded the midpoint of its 2015 earnings from ongoing operations forecast range of $2.15 to $2.25, marking the sixth consecutive year PPL has exceeded the midpoint of its earnings forecast.

“2015 marked a pivotal year for PPL, one in which we again delivered strong results for our shareowners while laying a firm foundation for PPL’s continued growth and success,” said William H. Spence, PPL’s chairman, president and Chief Executive Officer.

“We completed the successful spinoff of our Supply segment, capping our strategic transformation into a high-performing, purely regulated utility business,” Spence said. “We completed $3.5 billion in infrastructure improvements for our customers, secured approvals for recovery of additional utility investments in Pennsylvania and Kentucky rate cases, successfully transitioned to a new eight-year price-control period in the United Kingdom and reduced corporate support costs.

“Looking forward, we are well-positioned to continue to deliver competitive earnings growth and dividend yields, all supported by a low-risk business plan,” Spence said.

The company announced its 2016 earnings forecast range of $2.25 to $2.45 per share. In addition, Spence said PPL expects compound annual growth through 2018 of 5 to 6 percent above 2014 earnings of $2.03 per share from ongoing operations (adjusted).

Earnings from PPL’s operations in the United States, 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 United Kingdom.

Backed by the continued strong performance and expected growth of its utilities, PPL announced that it is increasing its common stock dividend to $0.38 per share on a quarterly basis. The increased dividend will be payable April 1 to shareowners of record as of March 10. The increase, PPL’s 14th in 15 years, raises the annualized dividend from $1.51 per share to $1.52 per share.

In closing out 2015, PPL reported fourth-quarter earnings of $399 million, or $0.59 per share, compared with reported earnings of $695 million, or $1.04 per share, in 2014. Adjusting for special items, fourth-quarter earnings from ongoing operations were $294 million, or $0.43 per share, compared with $330 million, or $0.49 per share, in 2014.

 

 
 

 

 

2015 Earnings Details

 

PPL’s reported earnings for 2015 included net special-item after-tax charges of $807 million, or $1.20 per share.

Special items for 2015 included a loss from discontinued operations of $921 million, or $1.36 per share, resulting primarily from the June 1 spinoff of its competitive supply business, partially offset by a reduction in the U.K. corporate income tax rate and unrealized gains on foreign currency-related economic hedges.

PPL’s reported earnings for the fourth quarter of 2015 included net special-item after-tax credits of $105 million, or $0.16 per share.

Special items for the fourth quarter of 2015 included reductions to net deferred income tax liabilities resulting from a reduction in the U.K. corporate income tax rate and unrealized gains on 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 Supply segment’s earnings and the loss from discontinued operations associated with the spinoff of the Supply segment. In addition, 2014 has been adjusted to reflect the impact of dissynergies related to the spinoff of the Supply segment. Special items and the dissynergies are fully detailed at the end of this news release.

 

(Dollars in millions, except for per
share amounts)		  

 

Year

    

 

Fourth Quarter

   
2015		  

 
2014

   %
Change		    

 

2015

  

 

2014

  

%

Change

                                         
Reported earnings   $ 682     $ 1,737     (61% )   $ 399     $ 695     (43%)
Reported earnings per share   $ 1.01     $ 2.61     (61% )   $ 0.59     $ 1.04     (43%)
                                           
    Year     Fourth Quarter
   
2015		   2014
 (adjusted)		   %
Change		    
2015		  

2014

(adjusted)

  

%

Change

Earnings from ongoing operations   $ 1,489     $ 1,349     10%     $ 294     $ 330     (11%)
Earnings from ongoing operations
     per share 		  $ 2.21     $ 2.03     9%     $ 0.43     $ 0.49     (12%)
                                                   

 

 

(See the tables at the end of this news release for a reconciliation of reported earnings (loss) to earnings from ongoing operations.)

 

 
 

 

2015 and Fourth-Quarter Earnings by Segment

 

    Year   Fourth Quarter
Per share   2015  

2014

(adjusted)

   2015  

2014

(adjusted)

Earnings from ongoing operations                                
U.K. Regulated   $ 1.44     $ 1.37     $ 0.29     $ 0.36  
Kentucky Regulated     0.51       0.47       0.09       0.10  
Pennsylvania Regulated     0.37       0.40       0.09       0.10  
Corporate and Other1     (0.11 )     (0.21 )     (0.04 )     (0.07 )
    Total   $ 2.21     $ 2.03     $ 0.43     $ 0.49  
                                 
    Year   Fourth Quarter
Special items and dissynergy adjustments     2015      

2014

(adjusted)

       2015      

2014

(adjusted)

  
Special items (expense) benefit                                
   U.K. Regulated   $ 0.22     $ 0.11     $ 0.16     $ 0.08  
   Kentucky Regulated     (0.03 )     –       –       –  
   Pennsylvania Regulated     –       (0.01 )     –       –  
   Corporate and Other1     (0.03 )     (0.10 )     0.01       –  
   Supply/Discontinued Operations     (1.36 )     0.45       (0.01 )     0.43  
      Total special items     (1.20 )     0.45       0.16       0.51  
Dissynergy adjustments expense (benefit)                                
   Corporate and Other1     –       0.13       –       0.04  
      Total special items and dissynergy    
      adjustments		   $ (1.20 )   $ 0.58     $ 0.16     $ 0.55  
                                 
    Year   Fourth Quarter
Reported earnings (loss)     2015       2014       2015       2014  
U.K. Regulated   $ 1.66     $ 1.48     $ 0.45       0.44  
Kentucky Regulated     0.48       0.47       0.09       0.10  
Pennsylvania Regulated     0.37       0.39       0.09       0.10  
Corporate and Other1     (0.14 )     (0.18 )     (0.03 )     (0.03 )
Supply/Discontinued Operations2     (1.36 )     0.45       (0.01 )     0.43  
    Total   $ 1.01     $ 2.61     $ 0.59       1.04  

 

1This category primarily includes unallocated corporate-level financing and other costs. For 2014, earnings from ongoing operations (adjusted) and special items and dissynergy adjustments reflect the impact of dissynergies related to the spinoff of the Supply segment: Indirect O&M ($0.02 in the 4th quarter and $0.07 YTD), Interest ($0.02 in the 4th quarter and $0.05 YTD), and Depreciation ($0.01 YTD).

 

22015 reported earnings include discontinued operations of the former Supply segment.

 

 

(See the reconciliation tables at the end of this news release for an itemization of special items and dissynergy adjustments.)

 
 

 

 

 

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 2015 increased by $0.07 per share compared with a year ago. This increase was primarily due to lower income taxes, lower depreciation expense and higher margins driven by an April 1, 2014 price increase, partially offset by lower prices driven by an April 1, 2015 price decrease due to the beginning of the new eight-year price control period (RIIO-ED1).

Earnings from ongoing operations in the fourth quarter of 2015 decreased by $0.07 per share compared with a year ago. This decrease was primarily due to lower margins primarily driven by an April 1, 2015 price decrease due to the commencement of RIIO-ED1 and higher operation and maintenance expense, partially offset by lower U.K. income taxes due to a change in tax rates and lower depreciation expense.

 

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 2015 increased by $0.04 per share compared with a year ago. This was primarily due to higher base electricity rates effective July 1, 2015, and higher returns on additional environmental capital investments, partially offset by lower sales volumes due to unfavorable weather in the fourth quarter, and higher operation and maintenance expense, including costs associated with the retirement of coal-fired generation at the Cane Run facility, and higher financing costs related to the 2015 debt issuances.

Earnings from ongoing operations in the fourth quarter of 2015 decreased by $0.01 per share compared with a year ago. This was primarily due to lower sales volumes due to unfavorable weather and higher financing costs, partially offset by higher base electricity rates effective July 1, 2015, and higher returns on additional environmental capital investments.

 

Pennsylvania Regulated Segment

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

Earnings from ongoing operations in 2015 decreased by $0.03 per share compared with a year ago, driven primarily by higher operation and maintenance expense and higher depreciation expense, partially offset by higher transmission and distribution margins and the release of a gross receipts tax reserve.

Earnings from ongoing operations in the fourth quarter of 2015 decreased by $0.01 per share compared with a year ago. This was primarily due to higher operation and maintenance expense, higher depreciation expense and lower sales volumes due to unfavorable weather, partially offset by higher transmission margins and the release of a gross receipts tax reserve.

Corporate and Other

PPL’s Corporate and Other category primarily includes unallocated corporate-level financing and other costs. Corporate and Other in 2015 improved by $0.10 per share compared with a year ago (adjusted) and $0.03 per share in the fourth quarter compared with the previous year. This was primarily due to the benefits of the corporate restructuring.

 
 

 

 

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 2015 earnings from ongoing operations.)

 

The midpoint of PPL’s 2016 earnings 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 financing costs, depreciation expense, currency, taxes and other expenses, partially offset by lower operation and maintenance expense, including pension expense, and higher gross margins. 

The 2016 foreign currency exposure for this segment is 95 percent hedged at an average rate of $1.56 per pound.

 

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 expense and higher financing costs.

 

Pennsylvania Regulated Segment

PPL projects higher segment earnings in 2016 compared with 2015, primarily driven by a distribution base rate increase 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 2015 financial results at 8:30 a.m. Eastern Standard Time on Thursday, Feb. 4. 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: 0130109.

 

# # #

 

“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 U.S. generally accepted accounting principles (GAAP). PPL believes that earnings from ongoing operations, although a non-GAAP financial measure, is also useful and meaningful to investors because it provides management’s view of PPL’s earnings excluding the Supply segment, as the spinoff was completed June 1, 2015. Other companies may use different measures to present financial performance. Earnings from ongoing operations is adjusted for the impact of special items as described below, which includes the Supply segment’s earnings now reflected in discontinued operations. Also included in special items is the loss on spinoff resulting from the fair value of the Supply segment being less than PPL’s recorded value as of June 1, 2015, the date of the spinoff. “Earnings from ongoing operations (adjusted)” for 2014 also reflects, within the Corporate and Other category, the impact of spinoff dissynergies that would remain with PPL after the completion of the transaction, if left unmitigated.

 

“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.
•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.

 

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)
                 
        December 31,   December 31,
        2015   2014 (b)
Assets            
Cash and cash equivalents   $ 836   $ 1,399
Short-term investments           120
Accounts receivable     732     808
Unbilled revenues     453     517
Fuel, materials and supplies     357     381
Price risk management assets - current     139     79
Current assets of discontinued operations           2,592
Other current assets     129     130
Property, Plant and Equipment            
  Regulated utility plant     34,399     30,568
  Less: accumulated depreciation - regulated utility plant     5,683     5,361
    Regulated utility plant, net     28,716     25,207
  Non-regulated property, plant and equipment     516     592
  Less: accumulated depreciation - non-regulated property, plant and equipment     165     162
    Non-regulated property, plant and equipment, net     351     430
  Construction work in progress     1,315     2,532
  Property, Plant and Equipment, net     30,382     28,169
Noncurrent regulatory assets     1,733     1,562
Goodwill and other intangibles     4,229     4,335
Noncurrent assets of discontinued operations           8,311
Other noncurrent assets     311     203
Total Assets   $ 39,301   $ 48,606
                 
Liabilities and Equity            
Short-term debt   $ 916   $ 836
Long-term debt due within one year     485     1,000
Accounts payable     812     995
Current liabilities of discontinued operations           2,771
Other current liabilities     1,663     1,837
Long-term debt     18,563     17,054
Deferred income taxes and investment tax credits     3,568     3,234
Accrued pension obligations     1,405     1,457
Assets retirement obligations     536     324
Noncurrent regulatory liabilities     945     992
Noncurrent liabilities of discontinued operations           3,953
Other noncurrent liabilities     489     525
Common stock and additional paid-in capital     9,694     9,440
Earnings reinvested (c)     2,953     6,462
Accumulated other comprehensive loss     (2,728)     (2,274)
Total Liabilities and Equity   $ 39,301   $ 48,606

 

 

(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.
(b) Amounts have been reclassified to reflect the Supply segment as a discontinued operation and the adoption of new accounting guidance in 2015.
(c) 2015 reflects the impact of the spinoff of the Supply segment and a $3.2 billion related dividend.
 
 

 

PPL CORPORATION AND SUBSIDIARIES
                               
 Condensed Consolidated Statements of Income (Unaudited)
(Millions of Dollars, Except Share Data)
          Three Months Ended December 31,   Year Ended December 31,
           
           
          2015   2014 (a)     2015 (a)     2014 (a)
                               
Operating Revenues   $ 1,780   $ 1,946   $ 7,669   $ 7,852
                               
Operating Expenses                        
  Operation                        
    Fuel     168     217     863     965
    Energy purchases     179     241     855     924
    Other operation and maintenance     533     474     1,938     1,856
  Depreciation     225     235     883     923
  Taxes, other than income     58     79     299     317
  Total Operating Expenses     1,163     1,246     4,838     4,985
                               
Operating Income     617     700     2,831     2,867
                               
Other Income (Expense) - net     47     72     108     105
                               
Interest Expense     226     206     871     843
                               
Income from Continuing Operations Before Income Taxes     438     566     2,068     2,129
                               
Income Taxes     33     158     465     692
                               
Income from Continuing Operations After Income Taxes     405     408     1,603     1,437
                               
Income (Loss) from Discontinued Operations (net of income taxes)     (6)     287     (921)     300
Net Income   $ 399   $ 695   $ 682   $ 1,737
                               
Earnings Per Share of Common Stock:                        
  Income from Continuing Operations After Income Taxes                        
  Available to PPL Common Shareowners:                        
   Basic   $ 0.60   $ 0.62   $ 2.38   $ 2.19
   Diluted   $ 0.60   $ 0.62   $ 2.37   $ 2.16
  Net Income Available to PPL Common Shareowners:                        
   Basic   $ 0.59   $ 1.04   $ 1.01   $ 2.64
   Diluted   $ 0.59   $ 1.04   $ 1.01   $ 2.61
                               
Weighted-Average Shares of Common Stock Outstanding                        
  (in thousands)                        
  Basic     673,028     665,205     669,814     653,504
  Diluted     676,548     667,263     672,586     665,973

 

(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)
                         
                     
          2015   2014   2013
Cash Flows from Operating Activities                  
  Net income   $ 682   $ 1,737   $ 1,130
  Loss (income) from discontinued operations (net of income taxes)     921     (300)     238
  Income from continuing operations (net of income taxes)     1,603     1,437     1,368
  Adjustments to reconcile Income from continuing operations (net of taxes) to net cash                  
  provided by operating activities - continuing operations                  
    Depreciation     883     923     843
    Amortization     59     65     66
    Defined benefit plans - expense     56     48     125
    Deferred income taxes and investment tax credits     428     666     387
    Unrealized (gains) losses on derivatives, and other hedging activities     (77)     (187)     56
    Adjustment to WPD line loss accrual           65     45
    Other     17     66      
  Change in current assets and current liabilities                  
    Accounts receivable     47     (123)     (211)
    Accounts payable     (154)     40     127
    Unbilled revenues     54     22     (56)
    Prepayments     (23)     87     39
    Taxes payable     (175)     161     51
    Uncertain tax positions     (17)           (112)
    Other     99     23     (66)
  Other operating activities                  
    Defined benefit plans - funding     (499)     (384)     (450)
    Settlement of interest rate swaps     (101)           104
    Other assets     (19)     9     11
    Other liabilities     53     23     120
      Net cash provided by operating activities - continuing operations     2,234     2,941     2,447
  Net cash provided by operating activities - discontinued operations     343     462     409
      Net cash provided by operating activities   2,577     3,403     2,856
Cash Flows from Investing Activities                  
  Expenditures for property, plant and equipment     (3,495)     (3,674)     (3,629)
  Expenditures for intangible assets     (37)     (49)     (53)
  Purchases of other investments           (120)      
  Proceeds from the sale of other investments     136            
  Net decrease in restricted cash and cash equivalents     8     19     2
  Other investing activities     (13)     (2)     16
      Net cash used in investing activities - continuing operations     (3,401)     (3,826)     (3,664)
  Net cash provided by (used in) investing activities - discontinued operations     (149)     497     (631)
      Net cash used in investing activities     (3,550)     (3,329)     (4,295)
Cash Flows from Financing Activities                  
  Issuance of long-term debt     2,236     296     2,038
  Retirement of long-term debt     (1,000)     (237)      
  Repurchase of common stock                 (74)
  Issuance of common stock     203     1,074     1,411
  Payment of common stock dividends     (1,004)     (967)     (878)
  Contract adjustment payments on Equity Units           (22)     (82)
  Net increase in short-term debt     94     147     405
  Other financing activities     (47)     (29)     (67)
      Net cash provided by financing activities - continuing operations     482     262     2,753
  Net cash provided by (used in) financing activities - discontinued operations     (546)     (846)     47
  Net cash distributions to parent from discontinued operations     132     1,167     (1,169)
      Net cash provided by financing activities     68     583     1,631
Effect of Exchange Rates on Cash and Cash Equivalents     (10)     (8)     8
Net (Increase) Decrease in Cash and Cash Equivalents included in Discontinued Operations     352     (113)     175
Net Increase (Decrease) in Cash and Cash Equivalents     (563)     536     375
Cash and Cash Equivalents at Beginning of Period     1,399     863     488
Cash and Cash Equivalents at End of Period   $ 836   $ 1,399   $ 863
 
 

 

Key Indicators (Unaudited)  
                               
                        12 Months Ended  
                        December 31,  
Financial           2015   2014  
                               
Dividends declared per share of common stock           $1.50   $1.49  
Book value per share (a)(b)(c)           $14.72   $20.47  
Market price per share (a)           $34.13   $36.33  
Dividend yield           4.4%   4.1%  
Dividend payout ratio (d)(e)           148.5%   57.1%  
Dividend payout ratio - earnings from ongoing operations (d)(f)           67.9%   73.4%  
Price/earnings ratio (d)(e)           33.8   13.9  
Price/earnings ratio - earnings from ongoing operations (d)(f)           15.4   17.9  
Return on common equity (e)           5.8%   13.0%  
Return on common equity - earnings from ongoing operations (f)(g)           15.2%   15.5%  
                               
(a)  End of period.  
(b)  Based on 673,857 and 665,849 shares of common stock outstanding (in thousands) at December 31, 2015, and December 31, 2014.  
(c)  2015 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)  2015 includes the impact of the $879 loss on the spinoff of the Supply segment, 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.  
      2015 also includes five months of Supply segment earnings, compared to twelve months for 2014.  
(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. 2014 was adjusted for Supply segment earnings and the impact of dissynergies related  
      to the spinoff of the Supply segment.  
(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 December 31,   12 Months Ended December 31,  
                Percent           Percent  
(GWh)   2015   2014   Change   2015   2014   Change  
                               
Domestic Retail Delivered                          
  PPL Electric Utilities   8,433   9,073   (7.1%)   36,984   37,026   (0.1%)  
  LKE   6,830   7,510   (9.1%)   30,814   31,543   (2.3%)  
    Total   15,263   16,583   (8.0%)   67,798   68,569   (1.1%)  
                               
Domestic Retail Supplied                          
  LKE (a)   6,830   7,510   (9.1%)   30,814   31,543   (2.3%)  
                               
International Delivered                          
  United Kingdom   18,785   18,859   (0.4%)   75,907   75,813   0.1%  
                               
Domestic Wholesale                          
  LKE (b)   452   514   (12.1%)   2,241   2,365   (5.2%)  
                               
(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) 4th Quarter 2015   Year-to-Date December 31, 2015
    U.K.   KY   PA   Corp.   Disc.       U.K.   KY   PA   Corp.   Disc.    
    Reg.   Reg.   Reg.   & Other   Ops.   Total   Reg.   Reg.   Reg.   & Other   Ops.(a)   Total
Reported Earnings (Loss) $ 307   $ 59   $ 61   $ (23)   $ (5)   $ 399   $ 1,121   $ 326   $ 252   $ (96)   $ (921)   $ 682
Less: Special Items (expense) benefit:                                                                      
Foreign currency-related economic hedges   35                             35     55                             55
Spinoff of the Supply segment:                                                                      
   Discontinued operations                           (5)     (5)                             (921)     (921)
   Transition and transaction costs                     4           4                       (12)           (12)
   Employee transitional services                     (1)           (1)                       (5)           (5)
   Separation benefits                     (2)           (2)                       (5)           (5)
Other:                                                                      
   Change in U.K. tax rate   78                             78     78                             78
   Settlement of certain income tax positions                                       18                             18
   WPD Midlands acquisition-related adj.                                       2                             2
   Certain valuation allowances         (4)                       (4)           (12)                       (12)
   LKE acquisition-related adjustment                                             (5)                       (5)
Total Special Items   113     (4)           1     (5)     105     153     (17)           (22)     (921)     (807)
Earnings from Ongoing Operations $ 194   $ 63   $ 61   $ (24)   $     $ 294   $ 968   $ 343   $ 252   $ (74)   $     $ 1,489
                                                                         
                                                                         
(per share - diluted) 4th Quarter 2015   Year-to-Date December 31, 2015
    U.K.   KY   PA   Corp.   Disc.       U.K.   KY   PA   Corp.   Disc.    
    Reg.   Reg.   Reg.   & Other   Ops.   Total   Reg.   Reg.   Reg.   & Other   Ops.(a)   Total
Reported Earnings (Loss) $ 0.45   $ 0.09   $ 0.09   $ (0.03)   $ (0.01)   $ 0.59   $ 1.66   $ 0.48   $ 0.37   $ (0.14)   $ (1.36)   $ 1.01
Less: Special Items (expense) benefit:                                                                      
Foreign currency-related economic hedges   0.05                             0.05     0.08                             0.08
Spinoff of the Supply segment:                                                                      
   Discontinued operations                           (0.01)     (0.01)                             (1.36)     (1.36)
   Transition and transaction costs                     0.01           0.01                       (0.02)           (0.02)
   Employee transitional services                                                         (0.01)           (0.01)
Other:                                                                      
   Change in U.K. tax rate   0.11                             0.11     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   0.16                 0.01     (0.01)     0.16     0.22     (0.03)           (0.03)     (1.36)     (1.20)
Earnings from Ongoing Operations $ 0.29   $ 0.09   $ 0.09   $ (0.04)   $     $ 0.43   $ 1.44   $ 0.51   $ 0.37   $ (0.11)   $     $ 2.21
                                                                         
(a)   Represents the Supply segment, which 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.
 
 

 

Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations                                
(After-Tax)                                      
(Unaudited)                                      
                                                                           
(millions of dollars) 4th Quarter 2014   Year-to-Date December 31, 2014  
    U.K.   KY   PA   Corp. &   Disc   Total   U.K.   KY   PA   Corp. &   Disc   Total  
    Reg.   Reg.   Reg.   Other(a)   Ops.(a)   Corp.   Reg.   Reg.   Reg.   Other(a)   Ops.(a)   Corp.  
Reported Earnings (Loss) $ 294   $ 65   $ 69   $ (20)   $ 287   $ 695   $ 982   $ 312   $ 263   $ (120)   $ 300   $ 1,737  
Less: Special Items (expense) benefit:                                                                        
Foreign currency-related economic hedges   55                             55     127                             127  
Spinoff of the Supply segment                                                                        
  Supply segment earnings                           291     291                             307     307  
  Discontinued operations adjustments                     2     (2)                             (5)     5        
  Change in tax valuation allowances                     3           3                       (46)           (46)  
  Transition and transaction costs                     (2)     (2)     (4)                       (5)     (12)     (17)  
  Separation benefits                     (1)           (1)                       (12)           (12)  
Other:                                                                        
  Change in WPD line loss accrual                                       (52)                             (52)  
  Separation benefits                                                   (2)                 (2)  
Total Special Items   55                 2     287     344     75           (2)     (68)     300     305  
                                                                           
Dissynergies-spinoff of Supply segment                                                                        
expense(benefit): (b)                                                                        
  Indirect operation and maintenance                     12           12                       47           47  
  Interest expense                     7           7                       29           29  
  Depreciation                     2           2                       7           7  
Total dissynergies-spinoff of Supply segment                     21           21                       83           83  
Earnings from Ongoing Operations (Adj.) $ 239   $ 65   $ 69   $ (43)   $     $ 330   $ 907   $ 312   $ 265   $ (135)   $     $ 1,349  
                                                                           
                                                                           
(per share - diluted) 4th Quarter 2014   Year-to-Date December 31, 2014 (c)  
    U.K.   KY   PA   Corp. &   Disc   Total   U.K.   KY   PA   Corp. &   Disc   Total  
    Reg.   Reg.   Reg.   Other(a)   Ops.(a)   Corp.   Reg.   Reg.   Reg.   Other(a)   Ops.(a)   Corp.  
Reported Earnings (Loss) $ 0.44   $ 0.10   $ 0.10   $ (0.03)   $ 0.43   $ 1.04   $ 1.48   $ 0.47   $ 0.39   $ (0.18)   $ 0.45   $ 2.61  
Less: Special Items (expense) benefit:                                                                        
Foreign currency-related economic hedges   0.08                             0.08     0.19                             0.19  
Spinoff of the Supply segment:                                                                        
  Supply segment earnings                           0.43     0.43                             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   0.08                       0.43     0.51     0.11           (0.01)     (0.10)     0.45     0.45  
                                                                           
Dissynergies-spinoff of Supply segment                                                                        
expense(benefit): (b)                                                                        
  Indirect operation and maintenance                     0.02           0.02                       0.07           0.07  
  Interest expense                     0.02           0.02                       0.05           0.05  
  Depreciation                                                         0.01           0.01  
Total dissynergies-spinoff of Supply segment                     0.04           0.04                       0.13           0.13  
Earnings from Ongoing Operations (Adj.) $ 0.36   $ 0.10   $ 0.10   $ (0.07)   $     $ 0.49   $ 1.37   $ 0.47   $ 0.40   $ (0.21)   $     $ 2.03  
                                                                           
                                                                           
(a)  Certain amounts have been reclassified to reflect the Supply segment as a discontinued operation.  
(b)  Represents 2014 costs allocated to the Supply segment that remained with PPL after the spinoff of the Supply segment.  
(c)  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.