EX-99 6 ex99_4.txt EX. 99.4 - PPL ENERGY SUPPLY FIN. INFO. EXHIBIT 99.4 ------------ PPL ENERGY SUPPLY AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED INFORMATION -------------------------------------------- The pro forma information that follows is presented to give effect to the acquisition of Mirant Corporation's 49% indirect equity interest in Western Power Distribution Holdings Limited and WPD Investment Holdings Limited (together, "WPD") on the income statements of PPL Energy Supply. The pro forma results are based on assumptions set forth below, as well as in the Notes to Unaudited Pro Forma Consolidated Financial Information, and are not necessarily indicative of the results of operations which would actually have occurred if the transactions had occurred in such periods, or which may exist or occur in the future. The WPD acquisition is described in Item 2 of this Current Report on Form 8-K/A, of which this Exhibit 99.4 is a part. The acquisition was completed on September 6, 2002. Pro forma adjustments are provided to the consolidated income statements of PPL Energy Supply for the nine months ended September 30, 2002, and for the twelve months ended December 31, 2001. The adjustments are to the income statements filed in PPL Energy Supply's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, and in its Annual Report on Form 10-K for the year ended December 31, 2001. The pro forma adjustments assume that the acquisition was consummated at the beginning of the income statement periods. The PPL Energy Supply pro forma income statement for the nine months ended September 30, 2002 includes the operating results of WPD for the nine months ended August 31, 2002. The PPL Energy Supply pro forma income statement for the twelve months ended December 31, 2001 includes the operating results of WPD for the twelve months ended November 30, 2001. This treatment is consistent with PPL Energy Supply's policy of recording results of its international operations on a lag basis. The September 30, 2002 Balance Sheet filed in PPL Energy Supply's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 included the consolidation of the accounts of WPD. Because the accounts have already been consolidated, there is no presentation of a pro forma balance sheet in this Current Report on Form 8-K/A. The Notes to Unaudited Pro Forma Consolidated Financial Information provide additional descriptions of the adjustments to the income statements. The pro forma financial information should be read in conjunction with the reports of PPL Energy Supply as noted above, as well as the audited financial statements of Western Power Distribution Holdings Limited and WPD Investment Holdings Limited for the year ended March 31, 2002. These financial statements are included as Exhibit 99.1 and Exhibit 99.2 in this Current Report on Form 8-K/A. 1 PPL ENERGY SUPPLY, LLC AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 (Millions of Dollars)
PRO FORMA NOTE AS REPORTED ADJUSTMENTS REF AS ADJUSTED ----------- ----------- ---- ----------- OPERATING REVENUES Wholesale energy marketing................................ $ 693 $ 693 Wholesale energy marketing to affiliates.................. 1,081 1,081 Utility................................................... 755 755 Unregulated retail electric and gas....................... 137 137 Net energy trading margins................................ 21 21 Energy related businesses................................. 423 423 -------- -------- -------- Total..................................................... 3,110 3,110 -------- -------- -------- OPERATING EXPENSES Operation Fuel.................................................... 376 376 Energy purchases........................................ 443 443 Energy purchases from affiliates........................ 129 129 Other operation and maintenance......................... 600 600 Transmission............................................ 18 18 Depreciation.............................................. 194 194 Taxes, other than income.................................. 60 60 Energy related businesses................................. 402 402 Other charges Write-down of international energy projects............. 100 100 Workforce reduction..................................... 41 41 -------- -------- -------- Total..................................................... 2,363 2,363 -------- -------- -------- OPERATING INCOME............................................ 747 747 Other Income - net.......................................... 28 28 Interest Expense............................................ 160 $ 4 1) 164 Interest Expense with Affiliate............................. 2 2 -------- -------- -------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST............ 613 (4) 609 Income Taxes................................................ 236 2) 236 Minority Interest........................................... 76 (72) 3) 4 -------- -------- -------- INCOME BEFORE DISTRIBUTIONS ON PREFERRED SECURITIES......... 301 68 369 Distributions - Preferred Securities........................ 6 6 -------- -------- -------- INCOME FROM CONTINUING OPERATIONS........................... $ 295 $ 68 $ 363 ======== ======== ========
See Notes to Unaudited Pro Forma Consolidated Financial Information 2 PPL ENERGY SUPPLY, LLC AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2001 (Millions of Dollars)
PRO FORMA NOTE AS REPORTED ADJUSTMENTS REF AS ADJUSTED ----------- ----------- ---- ----------- OPERATING REVENUES Wholesale energy marketing and trading.................... $ 3,010 $ 550 4) $ 3,560 Retail electric and gas................................... 764 764 Energy related businesses................................. 501 40 4) 541 Equity in earnings of unconsolidated affiliates........... 127 (91) 5) 36 -------- -------- -------- Total..................................................... 4,402 499 4,901 -------- -------- -------- OPERATING EXPENSES Operation Fuel.................................................... 500 500 Energy purchases........................................ 1,491 1,491 Other operation and maintenance......................... 758 90 4) 848 Transmission............................................ 52 52 Depreciation.............................................. 157 105 4) 262 Taxes, other than income.................................. 38 39 4) 77 Project development....................................... 30 30 Energy related businesses................................. 468 6 4) 474 Other charges Write-down of international energy projects............. 336 336 Cancellation of generation projects..................... 150 150 -------- -------- -------- Total..................................................... 3,980 240 4,220 -------- -------- -------- OPERATING INCOME............................................ 422 259 681 Other Income - net.......................................... 68 26 4) 94 -------- -------- -------- INCOME BEFORE INTEREST EXPENSE.............................. 490 285 775 Interest Expense............................................ 47 139 1) 186 -------- -------- -------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST............ 443 146 589 Income Taxes................................................ 274 79 2) 353 Minority Interest........................................... (2) (2) -------- -------- -------- INCOME BEFORE DISTRIBUTIONS ON PREFERRED SECURITIES......... 171 67 238 Distributions - Preferred Securities........................ 7 4) 7 -------- -------- -------- INCOME FROM CONTINUING OPERATIONS........................... $ 171 $ 60 $ 231 ======== ======== ========
See Notes to Unaudited Pro Forma Consolidated Financial Information 3 PPL ENERGY SUPPLY, LLC AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION INCOME STATEMENT ADJUSTMENTS: ----------------------------- 1) The cost of the WPD acquisition, $236 million, was financed through commercial paper issued by an affiliate of PPL Energy Supply. For purposes of calculating the pro forma information, an interest rate of 2.0% and 4.3% were assumed for the nine months ended September 30, 2002 and for the twelve months ended December 31, 2001, respectively. The twelve-month period also includes $129 million of the interest expense included in WPD's results. 2) Giving effect to the acquisition of Mirant's interest in WPD as of the beginning of the periods, U.S. income taxes were not provided on undistributed earnings of WPD as such earnings are deemed permanently reinvested. The pro forma results reflect the incremental U.S. income taxes that would have been payable with respect to WPD had a tax return for those periods been prepared, offset by the U.S. federal income tax benefit of the interest expense incurred on commercial paper borrowings. The incremental U.S. income taxes associated with the additional earnings from WPD were $1 million for the nine months ended September 30, 2002 and $20 million for the year ended December 31, 2001. 3) The September 30, 2002 Income Statement filed in PPL Energy Supply's Form 10-Q provided for the consolidation of WPD's results of operations as of January 1, 2002. The minority interest account represented Mirant's 49% interest in WPD. This proforma adjustment is made to reverse Mirant's share of WPD earnings, thereby, reflecting PPL Energy Supply's 100% ownership of WPD. 4) Represents WPD's U.S. GAAP results for the twelve months ended November 30, 2001. An average interbank exchange rate of 1.4799 was assumed for the period. 5) PPL Energy Supply's equity earnings in WPD of $91 million prior to the acquisition. 4