0000950120-01-500217.txt : 20011029
0000950120-01-500217.hdr.sgml : 20011029
ACCESSION NUMBER: 0000950120-01-500217
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20011024
ITEM INFORMATION: Other events
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011024
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PPL CORP
CENTRAL INDEX KEY: 0000922224
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911]
IRS NUMBER: 232758192
STATE OF INCORPORATION: PA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-11459
FILM NUMBER: 1765562
BUSINESS ADDRESS:
STREET 1: TWO N NINTH ST
CITY: ALLENTOWN
STATE: PA
ZIP: 181011179
BUSINESS PHONE: 6107745151
MAIL ADDRESS:
STREET 1: TWO N NINTH ST
CITY: ALLENTOWN
STATE: PA
ZIP: 18101-1179
FORMER COMPANY:
FORMER CONFORMED NAME: PP&L RESOURCES INC
DATE OF NAME CHANGE: 19941123
8-K
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pplcorp8k1024.txt
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 24, 2001
PPL Corporation
---------------
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania 1-11459 23-2758192
State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Two North Ninth Street, Allentown, Pennsylvania 18101-1179
----------------------------------------------------------
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code: (610) 774-5151
--------------
Item 5. Other Events
On October 24, 2001, PPL Corporation (PPL) issued a press release
announcing third-quarter 2001 earnings of $1.04 per share. PPL also confirmed
that it still forecasts earnings in excess of $4.00 per share for 2001. In
addition, PPL revised its prior earnings forecast for 2002. For 2002, PPL now
forecasts little, if any, change from the level of earnings per share currently
forecast for 2001. The change from the previous 2002 forecast of $4.55 to $4.65
per share is essentially due to the significant decline in wholesale energy
margins, offset by reductions in operating and financing costs. A copy of the
press release is attached as Exhibit 99.1 and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 - Press Release, dated October 24, 2001, regarding
PPL Corporation's earnings for the third quarter
2001, and earnings forecasts for 2001, 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PPL CORPORATION
By: /s/ John R. Biggar
------------------------------------
John R. Biggar
Executive Vice President and
Chief Financial Officer
Dated: October 24, 2001
EX-99
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pplcorp991.txt
EXHIBIT 99.1
EXHIBIT 99.1
PPL CORPORATION REPORTS 28 PERCENT INCREASE IN THIRD-QUARTER EARNINGS;
COMPANY CONFIRMS EARNINGS FORECAST FOR 2001, REVISES 2002 FORECAST
------------------------------------------------------------------
ALLENTOWN, Pa. (October 24, 2001) -- PPL Corporation (NYSE: PPL) today
(10/24) reported the strongest third-quarter earnings in company history, a 28
percent increase in earnings per share over the same period in 2000. PPL earned
$1.04 per share during the third quarter of 2001 as compared to $0.81 per share
a year ago, when adjusted to exclude the benefit of nonrecurring items.
PPL's record third-quarter earnings were driven primarily by:
o increased margins on wholesale energy activities in markets in
the Eastern United States, compared to a year ago.
o success in continuing to reduce operating costs.
o higher volumes of electricity delivered in PPL Electric
Utilities' franchised service territory.
o improved earnings contributions from energy-related businesses
including the company's mechanical contracting subsidiaries
and the company's synfuels operations.
These factors offset lower margins from PPL's wholesale energy
activities in the Western United States and lower returns from the company's
international operations.
"Excellent operating performance during the third quarter allowed us to
offset the lower margins from our Western wholesale energy sales," said William
F. Hecht, PPL's chairman, president and chief executive officer. "The strength
of our integrated growth strategy and our strong business fundamentals are
leading to record PPL earnings for 2001 despite the precipitous decline in
energy prices."
For the first nine months of 2001, PPL reported a significant 39
percent increase in earnings per share over a year ago. PPL reported earnings of
$3.35 per share for that period of 2001, compared to $2.41 per share reported a
year ago, when adjusted to exclude the benefit of nonrecurring items. Actual
earnings for the third quarter of 2000 benefited from the nonrecurring impact of
13 cents per share from a settlement with various insurers for environmental and
other liabilities.
The strong growth in PPL's earnings for the first nine months of 2001
resulted primarily from the following factors: increased margins on energy
activities in markets in both the Eastern and Western United States; improved
earnings contributions from energy-related businesses including the company's
mechanical contracting subsidiaries and the company's synfuel operations;
success in continuing to control operating costs; and higher returns from the
company's international operations.
COMPANY CONFIRMS 2001 EARNINGS FORECAST, REVISES 2002 FORECAST
Based on the excellent results in the third quarter, the company
confirmed that it still forecasts earnings in excess of $4.00 per share for
2001, which would be the highest annual earnings in the company's history.
2
For 2002, PPL now forecasts little, if any, change from the level of
earnings per share currently forecast for 2001. The change from the previous
2002 forecast of $4.55 to $4.65 is essentially due to the significant decline in
wholesale energy margins, offset by reductions in operating and financing costs.
The 2002 earnings forecast represents a compound annual growth rate of
19 percent based on adjusted earnings per share for 1999, the first full year of
deregulation in Pennsylvania. About 80 percent of PPL's 2002 earnings are
expected to come from its energy supply business and the balance from its
domestic and international delivery businesses.
"Our 2001 performance through the first three quarters of 2001 provides
a firm base from which we expect continued long-term growth," said Hecht. "This
base has been solidified through a concerted effort by our wholesale energy
marketing operation to maximize the value of our generation capacity through
long-term contracts in key U.S. markets."
PPL's most recent major long-term contract is an agreement to provide
450 megawatts of electricity supply to The Montana Power Company over a
five-year period beginning July 1, 2002. "This contract, at prices comparable to
the current market in the Northwestern United States, ends the uncertainty about
our power supply arrangements in Montana," Hecht said. As a result of this
agreement and other wholesale and retail agreements, Hecht said, PPL will have
the majority of the output of its Montana power plants under long-term contracts
beginning in July 2002.
During the third quarter of 2001, PPL also completed the strategic
initiative the company terms "securitization" of PPL Electric Utilities, the
regulated electricity delivery subsidiary. In connection with this initiative,
PPL EnergyPlus, PPL's energy marketing and trading affiliate, won the
competitive bid to provide the energy sufficient for PPL Electric Utilities to
meet its needs through 2009. This contract permits PPL to sell a substantial
portion of its Eastern U.S. generation over the next eight years at attractive
margins when compared to current market prices.
Hecht also pointed out that the company's electricity and natural gas
distribution businesses - in the United States and overseas - provide a stable,
reliable source of earnings for PPL as it continues to pursue a targeted
generation-building strategy.
PPL Corporation, headquartered in Allentown, Pa., generates electricity
at power plants in Pennsylvania, Maine and Montana; markets wholesale or retail
energy in 42 U.S. states and Canada; and delivers energy to nearly 6 million
customers in Pennsylvania, the United Kingdom and Latin America.
3
PPL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
CONSOLIDATED BALANCE SHEET
(MILLIONS OF DOLLARS)
SEPT. 30, 2001 DEC. 31, 2000
-------------- ------------
ASSETS
Current Assets $2,276 $1,945
Investments 1,195 1,161
Property, plant and equipment -- net
Transmission and distribution 2,797 2,841
Generation 2,329 2,177
General and intangible 302 294
Construction work in progress 330 261
Nuclear fuel and other leased property 104 123
------- -------
Electric utility plant 5,862 5,696
Gas and oil utility plant 193 177
Other property 68 75
------- -------
6,123 5,948
Recoverable transition costs 2,234 2,425
Regulatory and other assets 965 881
------- -----
Total assets $12,793 $12,360
======= =======
LIABILITIES AND EQUITY
Current liabilities $1,938 $2,511
Long-term debt (less current portion) 4,675 4,467
Deferred income taxes and ITC 1,433 1,412
Liability for above market NUG purchases 516 581
Other noncurrent liabilities 918 976
Minority interest 52 54
Company-obligated mandatorily redeemable securities 825 250
Preferred stock 96 97
Earnings reinvested 1,374 999
Other common equity 1,802 1,849
Treasury stock (836) (836)
-------- --------
Total liabilities and equity $12,793 $12,360
======= =======
4
CONSOLIDATED INCOME STATEMENT
(MILLIONS OF DOLLARS)
3 MONTHS ENDED SEPT. 30 9 MONTHS ENDED SEPT. 30 12 MONTHS ENDED SEPT. 30
----------------------- ----------------------- ------------------------
2001 2000(a) 2001 2000(a) 2001 2000(a)
---- ------- ---- ------- ---- -------
OPERATING REVENUES
Retail electric and gas .................... $ 818 $ 751 $ 2,566 $ 2,307 $ 3,426 $ 3,033
Wholesale energy marketing and trading ..... 454 620 1,360 1,573 1,867 1,886
Energy-related businesses .................. 166 97 487 298 625 392
--------- --------- --------- --------- --------- ---------
1,438 1,468 4,413 4,178 5,918 5,311
--------- --------- --------- --------- --------- ---------
OPERATING EXPENSES
Fuel and purchased power ................... 530 690 1,667 1,891 2,237 2,355
Other operation and maintenance ............ 261 212 785 651 1,100 890
Amortization of recoverable transition costs 65 50 191 159 259
218
Depreciation ............................... 63 58 190 196 255 260
Other ...................................... 180 145 536 407 695 507
--------- --------- --------- --------- --------- ---------
1,099 1,155 3,369 3,304 4,546 4,230
--------- --------- --------- --------- --------- ---------
OPERATING INCOME .............................. 339 313 1,044 874 1,372 1,081
--------- --------- --------- --------- --------- ---------
Other income and (deductions) ................. 7 1 16 8 (7) 98
--------- --------- --------- --------- --------- ---------
INCOME BEFORE INTEREST, INCOME TAXES AND
MINORITY INTEREST .......................... 346 314 1,060 882 1,365 1,179
Interest expense .............................. 91 94 283 274 385 348
Income taxes .................................. 86 75 247 215 326 297
Minority interest ............................. 1 3 4 4 4 5
--------- --------- --------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEMS ............. 168 142 526 389 650 529
Extraordinary items (net of tax) .............. 0 0 0 0 11 13
--------- --------- --------- --------- --------- ---------
INCOME BEFORE DIVIDENDS ON PREFERRED SECURITIES 168 142 526 389 661
542
Dividends - preferred securities .............. 16 6 35 19 42 26
--------- --------- --------- --------- --------- ---------
NET INCOME .................................... $ 152 $ 136 $ 491 $ 370 $ 619 $ 516
========= ========= ========= ========= ========= =========
EARNINGS PER SHARE OF COMMON STOCK - BASIC
Income before nonrecurring items ........... $ 1.04 $ 0.81 $ 3.37 $ 2.41 $ 4.25 $ 3.04
Nonrecurring items (net of tax) ............ 0.00 0.13 0.00 0.16 0.00 0.55
--------- --------- --------- --------- --------- ---------
Net Income ................................. $ 1.04 $ 0.94 $ 3.37 $ 2.57 $ 4.25 $ 3.59
========= ========= ========= ========= ========= =========
EARNINGS PER SHARE OF COMMON STOCK - DILUTED
Income before nonrecurring items ........... $ 1.04 $ 0.81 $ 3.35 $ 2.41 $ 4.22 $ 3.04
Nonrecurring items (net of tax) ............ 0.00 0.13 0.00 0.16 0.00 0.55
--------- --------- --------- --------- --------- ---------
Net Income ................................. $ 1.04 $ 0.94 $ 3.35 $ 2.57 $ 4.22 $ 3.59
========= ========= ========= ========= ========= =========
AVERAGE NUMBER OF SHARES OUTSTANDING
(THOUSANDS) ................................ 146,241 144,578 145,818 144,165 145,597 144,056
(a) Certain amounts have been reclassified to conform to the current year
presentation.
5
KEY INDICATORS
FINANCIAL
12 MONTHS ENDED 12 MONTHS ENDED
SEPT. 30, 2001 SEPT. 30, 2000
-------------- --------------
Dividends declared per share $1.06 $1.045
Book value per share (a) $15.97 $13.12
Market price per share (a) $32.6000 $41.7500
Dividend yield 3.3% 2.5%
Dividend payout ratio - diluted (b) 25% 34%
Price/earnings ratio - diluted (b) 7.7 13.7
Return on average common equity (b) 30.17% 26.67%
(a) End of period
(b) Based on adjusted earnings
OPERATING - DOMESTIC ENERGY
3 MONTHS ENDED SEPT. 30 9 MONTHS ENDED SEPT. 30 12 MONTHS ENDED SEPT. 30
----------------------- ----------------------- ------------------------
PPL CORP.
(millions of kwh) PERCENT PERCENT PERCENT
2001 2000 CHANGE 2001 2000 CHANGE 2001 2000 CHANGE
---- ---- ------ ---- ---- ------ ---- ---- ------
Retail
Delivered (a) 8,712 8,323 4.7% 26,677 25,626 4.1% 34,957 33,584 4.1%
Supplied 9,416 9,343 0.8% 28,898 28,388 1.8% 38,268 36,851 3.8%
Wholesale
East 4,853 7,555 -35.8% 14,356 25,339 -43.3% 20,603 33,084 -37.7%
West
Montana Power
Company (b) 1,268 1,257 0.9% 3,516 3,843 -8.5% 4,769 3,843 (c)
Other 960 922 4.1% 2,729 3,175 -14.0% 3,798 3,175 (c)
(a) Electricity delivered to retail customers represents the kwh delivered to
customers within PPL Electric Utilities Corp.'s service territory.
(b) Energy sold to Montana Power for retail customers under power sale
agreements that expire on or before June 30, 2002.
(c) Assets pertaining to the wholesale sales in the West were acquired in
December 1999. As a result, only nine months of sales are reflected in the
12 months ended September 30, 2000.
[PPL invites interested parties to listen to the live Internet Webcast of
management's third- quarter earnings teleconference with financial analysts
at 9 a.m. on Wednesday, Oct. 24. The teleconference is available online
live, in audio format, on PPL's Internet Web site: www.pplweb.com. The
--------------
Webcast will be available for replay on the PPL Web site for 30 days.
Interested individuals also can access the live conference call via
telephone at 913-981-5509.]
# # #
Certain statements contained in this news release, including statements with
respect to future earnings, energy prices, supply, sales, margins and
deliveries, operating and financing costs, strategic initiatives, subsidiary
performance, growth, project development, and generating capacity, are
"forward-looking statements" within the meaning of the federal securities laws.
Although PPL Corp. believes that the expectations and assumptions reflected in
these forward-looking statements are reasonable, these statements involve a
number of risks and uncertainties, and actual results may differ materially from
the results discussed in the statements. The following are among the important
factors that could cause actual results to differ materially from the
6
forward-looking statements: market demand and prices for energy, capacity and
fuel; weather variations affecting customer energy usage; competition in retail
and wholesale power markets; the effect of any business or industry
restructuring; the profitability and liquidity of PPL Corp. and its
subsidiaries; new accounting requirements or new interpretations or applications
of existing requirements; operating performance of plants and other facilities;
environmental conditions and requirements; system conditions and operating
costs; development of new projects, markets and technologies; performance of new
ventures; political, regulatory or economic conditions in countries where PPL
Corp. or its subsidiaries conduct business; receipt of necessary governmental
approvals; capital market conditions; stock price performance; foreign exchange
rates; and the commitments and liabilities of PPL Corp. and its subsidiaries.
Any such forward-looking statements should be considered in light of such
factors and in conjunction with PPL Corp.'s Form 10-K and other reports on file
with the Securities and Exchange Commission.