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March 31, 2008 Exhibit 99.2
PPL Facts PPL Corporation (NYSE: PPL) is a Fortune 500 company with headquarters in Allentown, Pa. The Company’s diversified corporate strategy is to achieve growth in energy supply margins while limiting volatility in both cash flows and earnings and to achieve stable, long-term growth in regulated delivery businesses through efficient operations and strong customer and regulatory relations. The strategy is carried out through four principal subsidiaries: PPL EnergyPlus, which markets energy in key U. S. markets. PPL Generation, which operates more than 11,000 megawatts of electricity generating capacity in Pennsylvania, Montana, Maine, Illinois, New York and Connecticut, with an additional 331 megawatts of planned upgrade projects. PPL Electric Utilities, which delivers electricity to 1.4 million customers in Pennsylvania. PPL Global, which delivers electricity to 2.6 million customers in the United Kingdom. Security Ratings Moody’s S&P Fitch PPL Corp. Contacts Corporate Credit Rating Baa2 BBB BBB PPL Capital Funding, Inc. Timothy J. Paukovits Medium Term Notes Baa2 BBB-BBB Director-Investor Relations PPL Electric Utilities Corp. Phone: (610) 774-4124 First Mortgage Bonds A3 A-A-Fax: (610) 774-5106 Senior Secured Bonds A3 A-A-tjpaukovits@pplweb.com PPL Energy Supply Senior Unsecured Notes Baa2 BBB BBB+ Joseph P. Bergstein, Jr. WPD Holdings Limited Financial Specialist Senior Unsecured Debt Baa3 BBB-BBB Phone: (610) 774-5609 WPD Operating Cos. Fax: (610) 774-5106 Senior Unsecured Debt Baa1 BBB+ A-jpbergstein@pplweb.com See a complete list of all PPL rated companies in the appendix www.pplweb.com
PPL Facts (cont.) Financial and Operating Information (Unaudited) ($ in millions, except per share amounts) Year Ended December 2007 December 2006 Common Equity $5,556 $5,122 Preferred Equity 301 301 Short-Term Debt 92 42 Long-Term Debt 7,568 7,835 Total Capitalization $13,517 $13,300 Total Assets $19,972 $19,747 Operating Revenues $6,498 $6,131 Reported Earnings Per Share -Diluted $3.35 $2.24 Earnings Per Share From Ongoing Operations – Diluted $2.60 $2.25 Market Price Per Share $52.09 $35.84 Book Value Per Share $14.88 $13.30 ROE – Reported 24.47% 17.81% ROE – Earnings From Ongoing Operations 19.21% 17.69% Common Shares Outstanding (thousands) End of Period 373,271 385,039 Average – Diluted 385,111 386,769 Annualized Dividend Rate $1.22 $1.10 Dividend Payout -Diluted, using annualized dividends Reported Earnings Per Share 36% 49% Earnings Per Share From Ongoing Operations 47% 49% Electric Energy Sales – Domestic (millions of kWh) Retail Deliveries 37,950 36,683 Retail Supply 40,074 38,810 Wholesale Supply East 20,816 19,399 West 14,859 13,203 Net System Capacity (thousands of KW) 11,418 11,556 Note: See Appendix for the reconciliation of reported earnings per share and earnings from ongoing operations. ii
Cautionary Statements And Factors That May Affect Future Results Any statements made in this presentationabout future operating results or other futureevents are forward-looking statements underthe Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from suchforward-looking statements. A discussion of factors that could cause actual results or events to vary is contained in the Appendix tothis presentation and in the Company’s SEC filings. 1
Growing Shareowner Value • Continued focus on execution of our current growth plan • Extract additional value from our energy marketing operations • Multi-faceted expansion of the generation portfolio • Complete previously announced divestiture plans 2
$2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 2007A* 2008 2010 Strong Long-Term Earnings Growth Forecast *Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. $2.60 $2.35 $2.45 $4.00 $4.60 Per Share 3
Expected 2008 Earnings Contributions $2.00 $2.25 $2.50 $2.75 $2.60 Energy Margins $0.06 Net Impact of Asset Divestiture ($0.08) O&M $0.06 International Tax Benefit ($0.08) $2.40** Depreciation ($0.05) PA Delivery Margins $0.02 Synfuels ($0.14) Other $0.01 Per Share 2007A* 2008E **Midpoint of forecast * Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations.
Expected 2010 Earnings Contributions Per Share Increased Energy Increased $5.00 $4.00 $3.00 $2.00 2008E 2010E $2.40* Margins O&M Increased $2.28 $(0.15) Interest Increased $(0.07) $(0.06) $4.30* $(0.10) Depreciation Other 5 *Midpoint of forecast
Cash Flow Forecast Millions 2006A 2007A 2008E 2009E 2010E Free cash flow before dividends Note: See Appendix for the reconciliation of cash flow measures. ($200) $0 $200 $400 $600 $800 $1,000 6
Continued Dividend Growth $/share Annualized $1.50 $1.34 $1.22 $1.25 $1.10 $1.00 $1.00 $0.92 $0.82 $0.75 $0.50 $0.25 $0.00 2004 April October 2006 2007 2008 2005 2005 7
PPL EU Completed Third RFP for 2010 • Solicitation for 850 MWs of residential and small commercial and industrial load • 50% of 2010 expected load now under contract • PUC approval of winning bids received March 27, 2008 • Based on completed solicitations, residential bills could increase by approximately 34.4% • Fourth solicitation bids due September 29, PUC approval expected October 2 8
$/MMBtu 8.00 7.50 2008 PJM Power & Natural Gas Prices 74.00 76.00 9.50 10.00 62.00 68.00 70.00 72.00 7.00 8.50 9.00 West Hub ATC Power NYMEX Natural Gas 3/24 – Bids due for PPL EU 3rd RFP 66.00 64.00 25-Mar 22-Mar19-Mar16-Mar13-Mar10-Mar7-Mar4-Mar1-Mar27-Feb24-Feb21-Feb18-Feb15-Feb12-Feb9-Feb6-Feb3-Feb31-Jan28-Jan25-Jan22-Jan19-Jan16-Jan13-Jan10-Jan7-Jan4-Jan1-Jan $/mwh 9
PPL Electric Utilities Phase-in Plan Proposal 54-Month Phase-In Plan Average Residential Customer - 1,000 kWh per month $1,000.00 $1,100.00 $1,200.00 $1,300.00 $1,400.00 $1,500.00 $1,600.00 $1,700.00 $1,800.00 1/1/2008 7/1/2008 2009 2010 2011 2012 Annualized Electric Cost~6% ~7% ~7% ~6% ~6% 10ALJ recommended that a settlement agreement on rate phase-in plan be approved by the PaPUC.
Scrubbers Expected to be Completed on Budget and on Schedule Q2-09Brunner Island 1 & 2 Q4-08Brunner Island 3 Q2-08Montour 1 In Service 3/8/2008 Montour 2 Scheduled In-Service Dates December, 2006 March, 2008 Montour Scrubber Construction 11
Expansion of Generation Portfolio • Generation uprates continue to progress • Selected UniStar Nuclear Energy to prepare COLA application based on AREVA reactor design • Asset expansion plan 12
Nuclear Development Timeline Submit COLA Submit DOE Loan Application Early Site Work Order Long Lead-Time Materials NRC Approval of COLA Begin Construction Commercial Operation Sept. 2008 Sept. 2008 2009 Late 2008 (Estimate) 2011 (Estimate) 2011 (Estimate) 2016 to 2018 (Estimate) 13 PPL has not yet decided to move forward with construction.
Expected 2008 to 2010 Margin Walk 1700 2100 2500 2900 3300 3700 2008E 2010E *Includes power prices and spark spread changes as well as value from portfolio management. 14 $/Million Higher Higher Higher Nuclear Fuel Increased Capacity Generation Costs Environmental Value $61 ($80) Costs $540 ($49) $3,307 Improved Power Value* $969 $1,866
Key Driver of Fleet Value: Open EBITDA 2010E Generation Output - -millions of MWh 56.2 Unhedged Gross Margin -millions * 3,712 $ O&M -millions (814) $ Open EBITDA -millions 2,898$ Below-Market value of Hedges -millions * (254) $ * Based on forward market prices as of December 31, 2007 15
2010 Margin Sensitivities • PJM electricity price change of $1/MWh = ±$19M (Based on average ATC price of $64/MWh) • PJM capacity price change of $1/MWD = ±$1.7M (Based on PJM capacity price of $191/MWD) • Baseload generation availability change of 1% = ±$20M (Based on an EQA of 91%) 16
ppl
Market Prices EAST PJM On-Peak Off-Peak ATC (3) WEST Mid-Columbia On-Peak Off-Peak ATC (3) GAS (4) NYMEX TZ6NNY PJM MARKET HEAT RATE (5) Actual Forward (1) At 10/2007(2) 2007 2008 2009 2010 2010 9.4 $7.78 $6.86 $51 $45 $57 $57 $43 $73 8.8 $9.04 $8.08 $60 $53 $67 $64 $51 $79 8.98.88.9 $9.56$9.52$8.82 $8.59$8.52$7.81 $64$62$56 $56$54$48 $71$69$61 $69$68$63 $54$53$50 $85$84$78 A-1 (1) Market prices based on the average of broker quotes as of 12/31/2007. (2) Prices at 10/2007 when 2010 earnings forecast of $4.00-$4.60 was developed. (3) 24-hour average. (4) NYMEX and TZ6NNY forward gas prices on 12/31/2007. (5) Market Heat Rate = PJM on-peak power price divided by TZ6NNY gas price.
Hedge Positions* -Electricity and Fuel 2008 2009 2010 Electricity Sales East 96% 94% 61% West 100% 80% 64% Total 96% 92% 62% Coal East 94% 76% 70% West 100% 100% 100% Total 95% 82% 78% A-2*At 12/31/2007
PPL Supply Business Overview 2008E Production GWh Gas/Oil 33% Coal 37% Nuclear 19% Hydro8% QFs 3% 2008E Installed Capacity MW Gas/ Oil 8% Coal 54% Nuclear 31% Hydro 7% A-3
Proactive Coal Supply Management Supports Growth in Margins Projected 2008 Coal Supply • Supply region diversity • Fleet trains (1600 cars) • Average delivered costs – 4% to 5% annual increase from 2007 to 2010 Central PA 20% PRB 6% Montana Mine-mouth 20% Central Appalachia 13% Southwest PA 41% A-4
Key Drivers/Challenges Through 2010 and Beyond • Increased prices for POLR sales • Expiration of supply contracts remarketed at currentforward prices • Power plant uprates and planned levels of equivalent availability of generation • Net economic benefits from the installation of scrubbers at the Montour and Brunner Island coal-fired powerplants • Continued growth of marketing and trading activities • Increased fuel and O&M costs • Cost of compliance with evolving environmentalregulation • Stable electricity regulatory environment at Federal andState levels A-5
Expected Changes in Margins -2007 to 2008 *Includes power price and spark spread changes as well as value from portfolio management. 1700 1800 1900 2000 2007A 2008E $/Million $1,824 $1,866 Improved Power Value* $95 Higher Nuclear Generation $26 Higher Coal Generation $18 Higher Hydro Generation $9 Higher Fuel Costs ($74) Loss of MC 1&2 Energy Value ($32) A-6
0 20 40 60 80 100 120 2009 2009 2010 $/MWh Shaped Energy & Capacity Including Congestion Other Adders Line Losses GRT Load-following Components Example Total $105 $82.00* $45.47 Total $51.23 * Shaped price based on $63/MWh ATC energy price, $150/MW-Day capacity price, and congestion. $48.29 Total $54.41 Residential and Small C&I Residential and Small C&I All Customers 50.20 $10 Volumetric Risk Credit Ancillary Green $8 $5 A-7
Shrinking Reserve Margins Create Potential Value for PPL 5% 10% 15% 20% 2007 2008 2009 2010 PJM Mid-Atlantic Expected Reserve Margin PJM Required 15% Reserve Margin A-8
PPL’s Generation Portfolio Total Domestic Generation: 11,418 MW Planned Uprate Projects: 331 MW * Reflects reduction of 60 MW expected loss due to increased plant usage during scrubber operation. Coal 3,483* Nuclear 2,117 Oil 1,716 Gas 1,582 Hydro 343 CTs 474 QFs 356 East 10,071 MW* Coal 683 Hydro 604 West 1,287 MW Coal Uprate (2008) 6 Hydro Uprate (2011) 28 Nuclear Uprate (2008-2010) 143 Hydro Uprate (2009, 2011) 128 Coal Uprate (2008-2009) 25 * A-9
Summary of Completed RFPs Small Commercial and Residential Customers Industrial Customers $106.54 23.8% to 42.8% $105.22 34.4% Average Retail Price Per MwH Increase in 2010 $108.76$108.80 Round 3 (March 2008) Retail Price Per MwH $105.75$105.08 Round 2 (October 2007) Retail Price Per MwH $105.11$101.77 Round 1 (July 2007) Retail Price Per MwH A-10
Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions of Dollars) $994$154($100)$513$167Free Cash Flow before Dividends (15)101493785Other Investing Activities-net (1,490)(1,456)(1,609)(1,685)(1,394)Capital Expenditures --(310)(310)(282)Transition Bond Repayment Increase/(Decrease) in cash due to: $2,499$1,509$1,815$1,571$1,758Cash from Operations 2010E2009E2008E2007A2006A Note: 2007 free cash flow before dividends includes the net proceeds from the disposition of Latin American and domestic telecommunication operations. 2008 forecast excludes expected net proceeds from the disposition of gas and propane businesses. A-11
Millions $1,043 $1,030 $824 $750 $692 $514 $302 $281 $305 $404 $521 $511 $340 $298 $327 $336 $343 $351 $0 $400 $800 $1,200 $1,600 $2,000 2007A 2008E 2009E 2010E 2011E 2012E Supply PA Delivery International Delivery $1,685 $1,556 $1,376 $1,490$1,456 $1,609 Capital Expenditures by Segment A-12
Reconciliation of Fourth Quarter Reported Earnings and Earnings from Ongoing Operations (Millions of Dollars) Pennsylvania International Supply Delivery Delivery Total Qtr. Ending December 31, 2007 Reported earnings $114 $13 $291 $418 Special Items: MTM adj's from energy-related, nontrading economic hedges 12 12 Divestiture of Latin American businesses 213 213 Sale of gas and propane businesses (21) (21) Impairment of certain transmission rights (1) (1) Workforce reductions (4) (1) (4) (9) 7 (22) 209 194 Earnings from ongoing operations $107 $35 $82 $224 Qtr. Ending December 31, 2006 Reported earnings $79 $50 $49 $178 Special Items: MTM adj's from energy-related, nontrading economic hedges 3 3 PJM billing dispute (18) 21 3 Sale of interest in Griffith 1 1 Susquehanna workforce reduction (3) (3) Impairment of nuclear decom. trust investments (3) (3) (20) 21 0 1 Earnings from ongoing operations $99 $29 $49 $177 Change excluding special items $8 $6 $33 $47 A-13
Reconciliation of Fourth Quarter Reported Earnings and Earnings from Ongoing Operations Pennsylvania International Supply Delivery Delivery Total Qtr. Ending December 31, 2007 Reported earnings $0.31 $0.03 $0.77 $1.11 Special Items: MTM adj's from energy-related, nontrading economic hedges 0.03 0.03 Divestiture of Latin American businesses 0.56 0.56 Sale of gas and propane businesses (0.06) (0.06) Workforce reductions (0.01) (0.01) (0.02) 0.02 (0.06) 0.55 0.51 Earnings from ongoing operations $0.29 $0.09 $0.22 $0.60 Qtr. Ending December 31, 2006 Reported earnings $0.20 $0.13 $0.13 $0.46 Special Items: MTM adj's from energy-related, nontrading economic hedges 0.01 0.01 PJM billing dispute (0.05) 0.06 0.01 Susquehanna workforce reduction (0.01) (0.01) Impairment of nuclear decom. trust investments (0.01) (0.01) (0.06) 0.06 0.00 0.00 Earnings from ongoing operations $0.26 $0.07 $0.13 $0.46 Change excluding special items $0.03 $0.02 $0.09 $0.14 (Dollars Per Share) A-14
Reconciliation of Year-to-Date Reported Earnings and Earnings from Ongoing Operations (Millions of Dollars) Pennsylvania International Supply Delivery Delivery Total Year-to-Date December 31, 2007 Reported earnings $568 $110 $610 $1,288 Special Items: MTM adj's from energy-related, nontrading economic hedges 32 32 PJM billing dispute (1) (1) Divestiture of Latin American businesses 259 259 Sale of telecommunication operations (23) (23) Sale of gas and propane businesses (44) (44) Settlement of Wallingford cost-based rates 33 33 Impairment of certain transmission rights (13) (13) Change in U.K. tax rate 54 54 Workforce reductions (4) (1) (4) (9) 24 (45) 309 288 Earnings from ongoing operations $544 $155 $301 $1,000 Year-to-Date December 31, 2006 Reported earnings $416 $181 $268 $865 Special Items: MTM adj's from energy-related, nontrading economic hedges (11) (11) PJM billing dispute (18) 21 3 Off-site remediation of ash basin leak 6 6 Enron reserve adjustment 11 1 12 Sale of interest in Griffith (16) (16) Synfuels impairment (6) (6) Write-off of Hurricane Isabel regulatory assets (7) (7) Realization of benefits related to Black Lung Trust assets 21 21 Susquehanna workforce reduction (3) (3) Impairment of nuclear decom. trust investments (3) (3) (40) 35 1 (4) Earnings from ongoing operations $456 $146 $267 $869 Change excluding special items $88 $9 $34 $131 A-15
Reconciliation of Year-to-Date Reported Earnings and Earnings from Ongoing Operations Pennsylvania International Supply Delivery Delivery Total Year-to-Date December 31, 2007 Reported earnings $1.48 $0.29 $1.58 $3.35 Special Items: MTM adj's from energy-related, nontrading economic hedges 0.08 0.08 Divestiture of Latin American businesses 0.67 0.67 Sale of telecommunication operations (0.06) (0.06) Sale of gas and propane businesses (0.11) (0.11) Settlement of Wallingford cost-based rates 0.09 0.09 Impairment of certain transmission rights (0.04) (0.04) Change in U.K. tax rate 0.14 0.14 Workforce reductions (0.01) (0.01) (0.02) 0.06 (0.11) 0.80 0.75 Earnings from ongoing operations $1.42 $0.40 $0.78 $2.60 Year-to-Date December 31, 2006 Reported earnings $1.08 $0.47 $0.69 $2.24 Special Items: MTM adj's from energy-related, nontrading economic hedges (0.03) (0.03) PJM billing dispute (0.05) 0.06 0.01 Off-site remediation of ash basin leak 0.02 0.02 Enron reserve adjustment 0.03 0.03 Sale of interest in Griffith (0.04) (0.04) Synfuels impairment (0.01) (0.01) Write-off of Hurricane Isabel regulatory assets (0.02) (0.02) Realization of benefits related to Black Lung Trust assets 0.05 0.05 Susquehanna workforce reduction (0.01) (0.01) Impairment of nuclear decom. trust investments (0.01) (0.01) (0.10) 0.09 0.00 (0.01) Earnings from ongoing operations $1.18 $0.38 $0.69 $2.25 Change excluding special items $0.24 $0.02 $0.09 $0.35 (Dollars Per Share) A-16
Reconciliation of PPL’s Reported Earnings and Earnings from Ongoing Operations Actual High Low 2008 2008 2007 2006 2005 Per Share Earnings from Ongoing Operations $2.45 $2.35 $2.60 $2.25 $2.08 Special items (net of taxes): economic hedges 0.08 (0.03) Write-off of Hurricane Isabel regulatory assets (0.02) Synfuels impairment (0.01) Sale of interest in Griffith (0.04) Enron reserve adjustment 0.03 Stock-based compensation adjustment (0.01) Conditional asset retirement obligation (0.02) Off-site remediation of ash basin leak 0.02 (0.07) Sale of Sundance (0.12) PJM billing dispute 0.01 (0.07) NorthWestern litigation (0.02) Realization of benefits related to Black Lung Trust assets 0.05 Susquehanna w orkforce reduction (0.01) Impairment of nuclear decom. trust investments (0.01) Divestiture of Latin American businesses 0.67 Sale of telecommunication operations (0.06) Sale of gas and propane businesses (0.11) Settlement of Wallingford cost-based rates 0.09 Impairment of certain transmission rights (0.04) Change in U.K. tax rate 0.14 Workforce reductions (0.02) 0.00 0.00 0.75 (0.01) (0.31) Reported Earnings Per Share $2.45 $2.35 $3.35 $2.24 $1.77 Note: Per share amounts are based on diluted shares outstanding. Forecast MTM adj's from energy-related, non-trading A-17
Credit Ratings BBBIssuer Rating AAAAaaTax-Exempt Bonds* STABLE STABLE STABLE Outlook AAA3Senior Secured Debt F-2A-2P-2Commercial Paper BBBBBBBaa3Preferred Stock BBBABaa1Issuer Rating AAA3First Mortgage Bonds AAAAaaTax-Exempt Bonds** BBBBBBBaa3Preference Stock PPL Electric Utilities BBBBBBBaa2Senior Unsecured Debt BBBBB+ Baa3Subordinated Debt STABLE STABLE STABLE Outlook PPL Capital Funding BBBBBBIssuer Rating BBB+ BBBBaa2Senior Notes F-2A-2P-2Commercial paper STABLE STABLE STABLE Outlook PPL Energy Supply STABLE STABLE STABLE Outlook BBBBBBBaa2Issuer Rating PPL Corporation FitchStandard & Poor’s Moody’s *Letter of Credit-Backed Security **Insured Security A-18
Credit Ratings (cont.) A-3Commercial Paper ABBB+ Baa1Senior Unsecured Debt F2A-2P-2Commercial Paper STABLE STABLE STABLE Outlook BBB+ BBB+ Baa1Issuer Rating ABBB+ Baa1Senior Unsecured Debt F2A-2Commercial Paper STABLE STABLE STABLE Outlook Western Power Distribution (South West) PLC BBB+ BBB+ Issuer Rating Western Power Distribution (South Wales) PLC STABLE STABLE STABLE Outlook STABLE STABLE STABLE Outlook BBBBBB-Issuer Rating WPD Holdings LLP BBBBBBBaa3Issuer Rating BBBBBBBaa3Senior Unsecured Debt A-3Commercial Paper WPD Holdings Limited BBBBBBBaa3Pass- Through Certificates STABLE STABLE Outlook PPL Montana AAAAAAAaaTransition Bonds PPL Transition Bond Co. FitchStandard & Poor’s Moody’s A-19
Forward-Looking Information Statement Statements contained in this news release, including statements with respect to future earnings, energy prices, margins, sales and supply, marketing performance, growth, revenues, expenses, rates, regulation, cash flows, credit profile, financing, dividends, business disposition, corporate strategy, capital additions and expenditures, and generating capacity and performance, 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 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 forward-looking statements: market demand and prices for energy, capacity and fuel; market prices for crude oil and the potential impact on the phaseout of synthetic fuel tax credits and synthetic fuel operations; weather conditions affecting generation production, customer energy usage and operating costs; competition in retail and wholesale power markets; liquidity of wholesale power markets; the effect of any business or industry restructuring; the profitability and liquidity, including access to capital markets and credit facilities of PPL Corporation and its subsidiaries; new accounting requirements or new interpretations or applications of existing requirements; operation and availability of existing generation facilities and operating costs; transmission and distribution system conditions and operating costs; current and future environmental conditions and requirements and the related costs of compliance, including environmental capital expenditures and emission allowance and other expenses; significant delays in the planned installation of pollution control equipment at certain coal-fired generating units in Pennsylvania due to weather conditions, contractor performance or other reasons; development of new projects, markets and technologies; performance of new ventures; asset acquisitions and dispositions; political, regulatory or economic conditions in states, regions or countries where PPL Corporation or its subsidiaries conduct business; any impact of hurricanes or other severe weather on PPL and its subsidiaries, including any impact on fuel prices; receipt of necessary governmental permits, approvals and rate relief; new state, federal or foreign legislation, including new tax legislation; state, federal and foreign regulatory developments; any impact of state, federal or foreign investigations applicable to PPL Corporation and its subsidiaries and the energy industry; capital markets conditions, including changes in interest rates, and decisions regarding capital structure; stock price performance of PPL Corporation; the market prices of equity securities and the impact on pension costs and resultant cash funding requirements for defined benefit pension plans; securities and credit ratings; disposition proceeds; foreign currency exchange rates; the outcome of litigation against PPL Corporation and its subsidiaries; potential effects of threatened or actual terrorism or war or other hostilities; 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. A-20
Definitions of Financial Measures “Earnings from ongoing operations” excludes the impact of special items. Special items include charges, credits or gains that are unusual or non-recurring and the mark-to-market impact of energy-related, non-trading economic hedges. The mark-to-market impact of these hedges is economically neutral to the company in that offsetting gains or losses on underlying accrual positions will be recognized as energy is delivered over the terms of the contracts. 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 generally accepted accounting principles (GAAP). PPL believes that earnings from ongoing operations, although a non-GAAP measure, is also useful and meaningful to investors because it provides them with PPL’s underlying earnings performance as another criterion in making their 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. “Free cash flow before dividends” is derived by deducting capital expenditures and other investing activities-net, as well as the repayment of transition bonds, from cash flow from operations. Free cash flow before dividends should not be considered as an alternative to cash flow from operations, which is determined in accordance with GAAP. PPL believes that free cash flow before dividends, although a non-GAAP measure, is an important measure to both management and investors since it is an indicator of the company’s ability to sustain operations and growth without additional outside financing beyond the requirement to fund maturing debt obligations. Other companies may calculate free cash flow before dividends in a different manner. A-21
