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 |
[ ] | 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)) |
(d) | Exhibits | ||||
99.1 - | Press Release, dated May 2, 2019, announcing PPL's financial results for the quarter ended March 31, 2019 and other business matters. | ||||
PPL CORPORATION | |||
By: | /s/ Marlene C. Beers | ||
Marlene C. Beers Vice President and Controller |
news release | ![]() | |
www.pplnewsroom.com |
Contacts: | For news media – Ryan Hill, 610-774-5997 |
For financial analysts – Andy Ludwig, 610-774-3389 |
• | Announces first-quarter reported earnings of $0.64 per share and earnings from ongoing operations of $0.70 per share. |
• | Reaffirms 2019 earnings from ongoing operations forecast range of $2.30 to $2.50 per share. |
(Dollars in millions, except for per-share amounts) | 1st Quarter | |||||||||
2019 | 2018 | Change | ||||||||
Reported earnings | $ | 466 | $ | 452 | 3 | % | ||||
Reported earnings per share | $ | 0.64 | $ | 0.65 | (2 | )% | ||||
1st Quarter | ||||||||||
2019 | 2018 | Change | ||||||||
Earnings from ongoing operations | $ | 508 | $ | 517 | (2 | )% | ||||
Earnings from ongoing operations per share | $ | 0.70 | $ | 0.74 | (5 | )% |
1st Quarter | |||||||
Per share | 2019 | 2018 | |||||
Reported earnings | |||||||
U.K. Regulated | $ | 0.36 | $ | 0.28 | |||
Kentucky Regulated | 0.16 | 0.19 | |||||
Pennsylvania Regulated | 0.17 | 0.21 | |||||
Corporate and Other | (0.05 | ) | (0.03 | ) | |||
Total | $ | 0.64 | $ | 0.65 | |||
1st Quarter | |||||||
2019 | 2018 | ||||||
Special items (expense) benefit | |||||||
U.K. Regulated | $ | (0.06 | ) | $ | (0.09 | ) | |
Kentucky Regulated | — | — | |||||
Pennsylvania Regulated | — | — | |||||
Corporate and Other | — | — | |||||
Total | $ | (0.06 | ) | $ | (0.09 | ) | |
1st Quarter | |||||||
2019 | 2018 | ||||||
Earnings from ongoing operations | |||||||
U.K. Regulated | $ | 0.42 | $ | 0.37 | |||
Kentucky Regulated | 0.16 | 0.19 | |||||
Pennsylvania Regulated | 0.17 | 0.21 | |||||
Corporate and Other | (0.05 | ) | (0.03 | ) | |||
Total | $ | 0.70 | $ | 0.74 |
2019 forecast midpoint | 2018 actual | |||||||
Per share | ||||||||
U.K. Regulated | $ | 1.40 | $ | 1.36 | ||||
Kentucky Regulated | 0.55 | 0.59 | ||||||
Pennsylvania Regulated | 0.59 | 0.62 | ||||||
Corporate and Other | (0.14 | ) | (0.17 | ) | ||||
Total | $ | 2.40 | $ | 2.40 |
• | Unrealized gains or losses on foreign currency economic hedges (as discussed below). |
• | Gains and losses on sales of assets not in the ordinary course of business. |
• | Impairment charges. |
• | Significant workforce reduction and other restructuring effects. |
• | Acquisition and divestiture-related adjustments. |
• | Other charges or credits that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations. |
PPL CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (1) | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(Millions of Dollars) | |||||||
March 31, | December 31, | ||||||
2019 | 2018 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 518 | $ | 621 | |||
Accounts receivable | 853 | 770 | |||||
Unbilled revenues | 456 | 496 | |||||
Fuel, materials and supplies | 274 | 303 | |||||
Current price risk management assets | 109 | 109 | |||||
Other current assets | 219 | 133 | |||||
Property, Plant and Equipment | |||||||
Regulated utility plant | 40,752 | 39,734 | |||||
Less: Accumulated depreciation - regulated utility plant | 7,532 | 7,310 | |||||
Regulated utility plant, net | 33,220 | 32,424 | |||||
Non-regulated property, plant and equipment | 357 | 355 | |||||
Less: Accumulated depreciation - non-regulated property, plant and equipment | 104 | 101 | |||||
Non-regulated property, plant and equipment, net | 253 | 254 | |||||
Construction work in progress | 1,834 | 1,780 | |||||
Property, Plant and Equipment, net | 35,307 | 34,458 | |||||
Noncurrent regulatory assets | 1,666 | 1,673 | |||||
Goodwill and other intangibles | 3,988 | 3,878 | |||||
Pension benefit asset | 715 | 535 | |||||
Noncurrent price risk management assets | 172 | 228 | |||||
Other noncurrent assets | 290 | 192 | |||||
Total Assets | $ | 44,567 | $ | 43,396 | |||
Liabilities and Equity | |||||||
Short-term debt | $ | 1,428 | $ | 1,430 | |||
Long-term debt due within one year | 202 | 530 | |||||
Accounts payable | 823 | 989 | |||||
Other current liabilities | 1,608 | 1,614 | |||||
Long-term debt | 21,114 | 20,069 | |||||
Deferred income taxes and investment tax credits | 3,066 | 2,922 | |||||
Accrued pension obligations | 718 | 771 | |||||
Asset retirement obligations | 267 | 264 | |||||
Noncurrent regulatory liabilities | 2,700 | 2,714 | |||||
Other noncurrent liabilities | 469 | 436 | |||||
Common stock and additional paid-in capital | 11,058 | 11,028 | |||||
Earnings reinvested | 4,761 | 4,593 | |||||
Accumulated other comprehensive loss | (3,647 | ) | (3,964 | ) | |||
Total Liabilities and Equity | $ | 44,567 | $ | 43,396 |
(1) | 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, | |||||||
2019 | 2018 | ||||||
Operating Revenues | $ | 2,079 | $ | 2,126 | |||
Operating Expenses | |||||||
Operation | |||||||
Fuel | 194 | 214 | |||||
Energy purchases | 250 | 241 | |||||
Other operation and maintenance | 490 | 468 | |||||
Depreciation | 284 | 269 | |||||
Taxes, other than income | 80 | 83 | |||||
Total Operating Expenses | 1,298 | 1,275 | |||||
Operating Income | 781 | 851 | |||||
Other Income (Expense) - net | 52 | (43 | ) | ||||
Interest Expense | 241 | 239 | |||||
Income Before Income Taxes | 592 | 569 | |||||
Income Taxes | 126 | 117 | |||||
Net Income | $ | 466 | $ | 452 | |||
Earnings Per Share of Common Stock: | |||||||
Net Income Available to PPL Common Shareowners: | |||||||
Basic | $ | 0.65 | $ | 0.65 | |||
Diluted | $ | 0.64 | $ | 0.65 | |||
Weighted-Average Shares of Common Stock Outstanding (in thousands) | |||||||
Basic | 721,023 | 694,514 | |||||
Diluted | 729,953 | 695,322 |
PPL CORPORATION AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
(Millions of Dollars) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 466 | $ | 452 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 284 | 269 | |||||
Amortization | 22 | 21 | |||||
Defined benefit plans - (income) | (66 | ) | (50 | ) | |||
Deferred income taxes and investment tax credits | 89 | 59 | |||||
Unrealized losses on derivatives, and other hedging activities | 53 | 85 | |||||
Other | 11 | 12 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (57 | ) | (71 | ) | |||
Accounts payable | (94 | ) | (36 | ) | |||
Prepayments | (86 | ) | (73 | ) | |||
Accrued interest | 48 | 39 | |||||
Unbilled revenues | 48 | 58 | |||||
Other | (87 | ) | (7 | ) | |||
Other operating activities | |||||||
Defined benefit plans - funding | (127 | ) | (150 | ) | |||
Other | (30 | ) | (42 | ) | |||
Net cash provided by operating activities | 474 | 566 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (729 | ) | (750 | ) | |||
Purchase of investments | (55 | ) | — | ||||
Proceeds from the sale of investments | 57 | — | |||||
Other investing activities | 5 | (3 | ) | ||||
Net cash used in investing activities | (722 | ) | (753 | ) | |||
Cash Flows from Financing Activities | |||||||
Issuance of long-term debt | — | 144 | |||||
Issuance of common stock | 22 | 100 | |||||
Payment of common stock dividends | (296 | ) | (273 | ) | |||
Net increase in short-term debt | 424 | 369 | |||||
Other financing activities | (8 | ) | (9 | ) | |||
Net cash provided by financing activities | 142 | 331 | |||||
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash | 3 | (2 | ) | ||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (103 | ) | 142 | ||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 643 | 511 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 540 | $ | 653 | |||
Supplemental Disclosures of Cash Flow Information | |||||||
Significant non-cash transactions: | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ | 322 | $ | 313 | |||
Accrued expenditures for intangible assets at March 31, | $ | 64 | $ | 65 |
Key Indicators (Unaudited) | ||||||||
12 Months Ended | ||||||||
March 31 | ||||||||
Financial | 2019 | 2018 | ||||||
Dividends declared per share of common stock | $ | 1.6425 | $ | 1.595 | ||||
Book value per share (1)(2) | $ | 16.87 | $ | 16.03 | ||||
Market price per share (1) | $ | 31.74 | $ | 28.29 | ||||
Dividend yield | 5.2 | % | 5.6 | % | ||||
Dividend payout ratio (3) | 64.2 | % | 93.8 | % | ||||
Dividend payout ratio - earnings from ongoing operations (3)(4) | 69.6 | % | 67.0 | % | ||||
Return on common equity | 15.9 | % | 11.0 | % | ||||
Return on common equity - earnings from ongoing operations (4) | 14.6 | % | 15.4 | % | ||||
Spot rate of U.S. dollar per British pound sterling for Balance Sheet translation (5) | $ | 1.33 | $ | 1.28 | ||||
Average rate of U.S. dollar per British pound sterling for Statement of Income translation (6) | $ | 1.34 | $ | 1.26 |
(1) | End of period. |
(2) | Based on 721,371 and 697,383 shares of common stock outstanding (in thousands) at March 31, 2019 and March 31, 2018. |
(3) | Based on diluted earnings per share. |
(4) | 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. |
(5) | As of February 28, 2019 and November 30, 2018 as WPD is consolidated on a one-month lag. |
(6) | Represents a year-to-date average and includes the impact of foreign exchange hedges. |
Operating - Domestic & International Electricity Sales (Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
Percent | ||||||||
(GWh) | 2019 | 2018 | Change | |||||
PA Regulated Segment | ||||||||
Retail Delivered | 10,118 | 10,040 | 0.8 | % | ||||
KY Regulated Segment | ||||||||
Retail Delivered | 7,611 | 7,808 | (2.5 | )% | ||||
Wholesale (1) | 542 | 706 | (23.2 | )% | ||||
Total | 8,153 | 8,514 | (4.2 | )% | ||||
Total U.S. | 18,271 | 18,554 | (1.5 | )% | ||||
U.K. Regulated Segment | ||||||||
Delivered | 19,982 | 20,310 | (1.6 | )% |
Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations | |||||||||||||||||||
(After-Tax) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Year-to-Date March 31, 2019 | (millions of dollars) | ||||||||||||||||||
U.K. | KY | PA | Corp. | ||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | |||||||||||||||
Reported Earnings | $ | 264 | $ | 117 | $ | 121 | $ | (36 | ) | $ | 466 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges, net of tax of $11 | (40 | ) | — | — | — | (40 | ) | ||||||||||||
Talen litigation costs, net of tax of $0 | — | — | — | (2 | ) | (2 | ) | ||||||||||||
Total Special Items | (40 | ) | — | — | (2 | ) | (42 | ) | |||||||||||
Earnings from Ongoing Operations | $ | 304 | $ | 117 | $ | 121 | $ | (34 | ) | $ | 508 | ||||||||
(per share - diluted) | |||||||||||||||||||
U.K. | KY | PA | Corp. | ||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | |||||||||||||||
Reported Earnings | $ | 0.36 | $ | 0.16 | $ | 0.17 | $ | (0.05 | ) | $ | 0.64 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges | (0.06 | ) | — | — | — | (0.06 | ) | ||||||||||||
Total Special Items | (0.06 | ) | — | — | — | (0.06 | ) | ||||||||||||
Earnings from Ongoing Operations | $ | 0.42 | $ | 0.16 | $ | 0.17 | $ | (0.05 | ) | $ | 0.70 |
Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations | |||||||||||||||||||
(After-Tax) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Year-to-Date March 31, 2018 | (millions of dollars) | ||||||||||||||||||
U.K. | KY | PA | Corp. | ||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | |||||||||||||||
Reported Earnings | $ | 197 | $ | 133 | $ | 148 | $ | (26 | ) | $ | 452 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges, net of tax of $17 | (65 | ) | — | — | — | (65 | ) | ||||||||||||
Total Special Items | (65 | ) | — | — | — | (65 | ) | ||||||||||||
Earnings from Ongoing Operations | $ | 262 | $ | 133 | $ | 148 | $ | (26 | ) | $ | 517 | ||||||||
(per share - diluted) | |||||||||||||||||||
U.K. | KY | PA | Corp. | ||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | |||||||||||||||
Reported Earnings | $ | 0.28 | $ | 0.19 | $ | 0.21 | $ | (0.03 | ) | $ | 0.65 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges | (0.09 | ) | — | — | — | (0.09 | ) | ||||||||||||
Total Special Items | (0.09 | ) | — | — | — | (0.09 | ) | ||||||||||||
Earnings from Ongoing Operations | $ | 0.37 | $ | 0.19 | $ | 0.21 | $ | (0.03 | ) | $ | 0.74 |
Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations | |||||||||||||||||||
(After-Tax) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Year-to-Date December 31, 2018 | (millions of dollars) | ||||||||||||||||||
U.K. | KY | PA | Corp. | ||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | |||||||||||||||
Reported Earnings | $ | 1,114 | $ | 411 | $ | 431 | $ | (129 | ) | $ | 1,827 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges, net of tax of ($39) | 148 | — | — | — | 148 | ||||||||||||||
U.S. tax reform | 3 | 2 | — | (5 | ) | — | |||||||||||||
Kentucky state tax reform | — | (9 | ) | — | — | (9 | ) | ||||||||||||
IT transformation, net of tax of $2 | — | — | (5 | ) | — | (5 | ) | ||||||||||||
Talen litigation costs, net of tax of $2 | — | — | — | (7 | ) | (7 | ) | ||||||||||||
Death benefit, net of tax of $1 | (5 | ) | — | — | — | (5 | ) | ||||||||||||
Total Special Items | 146 | (7 | ) | (5 | ) | (12 | ) | 122 | |||||||||||
Earnings from Ongoing Operations | $ | 968 | $ | 418 | $ | 436 | $ | (117 | ) | $ | 1,705 | ||||||||
(per share - diluted) | |||||||||||||||||||
U.K. | KY | PA | Corp. | ||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | |||||||||||||||
Reported Earnings | $ | 1.57 | $ | 0.58 | $ | 0.61 | $ | (0.18 | ) | $ | 2.58 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges | 0.21 | — | — | — | 0.21 | ||||||||||||||
U.S. tax reform | 0.01 | — | — | — | 0.01 | ||||||||||||||
Kentucky state tax reform | — | (0.01 | ) | — | — | (0.01 | ) | ||||||||||||
IT transformation | — | — | (0.01 | ) | — | (0.01 | ) | ||||||||||||
Talen litigation costs | — | — | — | (0.01 | ) | (0.01 | ) | ||||||||||||
Death benefit | (0.01 | ) | — | — | — | (0.01 | ) | ||||||||||||
Total Special Items | 0.21 | (0.01 | ) | (0.01 | ) | (0.01 | ) | 0.18 | |||||||||||
Earnings from Ongoing Operations | $ | 1.36 | $ | 0.59 | $ | 0.62 | $ | (0.17 | ) | $ | 2.40 |
Reconciliation of PPL's Forecast of Reported Earnings to Earnings from Ongoing Operations | |||||||||||||||||||||||||||
(After-Tax) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Forecast (per-share - diluted) | |||||||||||||||||||||||||||
2019 Midpoint | |||||||||||||||||||||||||||
U.K. | KY | PA | Corp. | High | Low | ||||||||||||||||||||||
Reg. | Reg. | Reg. | & Other | Total | 2019 | 2019 | |||||||||||||||||||||
Reported Earnings | $ | 1.34 | $ | 0.55 | $ | 0.59 | $ | (0.14 | ) | $ | 2.34 | $ | 2.44 | $ | 2.24 | ||||||||||||
Less: Special Items (expense) benefit:(1) | |||||||||||||||||||||||||||
Foreign currency economic hedges | (0.06 | ) | — | — | — | (0.06 | ) | (0.06 | ) | (0.06 | ) | ||||||||||||||||
Total Special Items | (0.06 | ) | — | — | — | (0.06 | ) | (0.06 | ) | (0.06 | ) | ||||||||||||||||
Earnings from Ongoing Operations | $ | 1.40 | $ | 0.55 | $ | 0.59 | $ | (0.14 | ) | $ | 2.40 | $ | 2.50 | $ | 2.30 |
]M-TNER?:X1_RR