Exhibit 99.1
------------
January 26, 2000
Contact: John R. Biggar, PP&L Resources (610) 774-5613
Timothy J. Paukovits, PP&L Resources (610) 774-4124
PP&L RESOURCES ACHIEVES RECORD EARNINGS IN 1999;
EXPECTS CONTINUED RECORD GROWTH
-------------------------------
ALLENTOWN, Pa.---PP&L Resources, Inc. (NYSE: PPL) Wednesday (1/26) reported
the highest annual earnings in the company's 80-year history. Adjusted earnings
for 1999, that is earnings excluding one-time items, were $2.35 per share, 26
percent higher than the similarly adjusted earnings per share of $1.87 reported
one year ago.
"The record earnings level for 1999 demonstrates that PP&L's integrated
corporate strategy is successfully building value for our shareowners," said
John R. Biggar, PP&L Resources' senior vice president and chief financial
officer.
"Clearly, our strategy to generate and sell competitively priced energy in
key U.S. markets and to operate high-quality energy delivery businesses around
the world is working," said Biggar. "We look forward to continuing this
unprecedented growth in 2000."
Biggar said the company's adjusted 1999 earnings per share record of $2.35
exceeded the consensus analysts' earnings estimate of $2.31 per share. "We
expect this significant growth in earnings to continue beyond 1999," Biggar
said. He said the company's earnings for the year 2000 are expected to be
between $2.60 and $2.65 per share, which would represent an additional increase
of 11 to 13 percent over the record results for 1999.
The company also reported adjusted earnings of 64 cents per share for the
fourth quarter of 1999, 60 percent higher than the 40 cents reported for the
same period a year ago.
Contributing to earnings growth during the fourth quarter of 1999 were a 14
percent increase in electricity supplied to commercial and industrial customers,
lower taxes, lower depreciation on generation assets in connection with the
transition from a regulated to a competitive energy market, increased
contributions from unregulated operations and fewer shares of common stock
outstanding as a result of stock repurchase programs. These benefits were
partially offset by a one-year 4 percent rate reduction for electric delivery
customers in Pennsylvania and by the loss of customers who shopped for alternate
electricity generation suppliers under Pennsylvania's customer choice program.
The earnings improvement for the year reflects similar factors, as well as
significantly higher margins on wholesale energy and marketing activities in
1999 compared with 1998.
-2-
Reported earnings for 1999, that is earnings including one-time items, were
$2.84 per share, also a record. This compares to a loss of $3.46 in 1998, which
reflected $948 million of net write-offs related to the settlement of the
company's restructuring case before the Pennsylvania Public Utility Commission
and another competition-related case before the Federal Energy Regulatory
Commission. Reported fourth quarter 1999 earnings were $1.02 per share, compared
to 56 cents for the same period of 1998, an increase of 82 percent, when
reflecting the net benefits of one-time adjustments in both periods.
One-time boosts to earnings during the fourth quarter of 1999 included a
gain from the sale of a generation plant in Sunbury, Pa. and a gain from the
sale of the supply portion of the company's electricity business in the United
Kingdom - SWEB, now renamed Western Power Distribution (WPD). Partially
offsetting these benefits during the fourth quarter of 1999 was a one-time
adjustment to write down the carrying value of certain investments made by PP&L
Global, the company's international energy development subsidiary.
In addition to an 8 percent increase in electricity supplied to commercial
and industrial customers in 1999, the company also recognized a 4 percent
increase in electricity supplied to residential customers, even though it did
not compete for customers in the residential market. In total, electricity
supplied to retail customers in 1999 increased by 7 percent over the previous
year. This reflects the success of PP&L EnergyPlus, the company's competitive
retail marketing subsidiary.
"Overall, the company's strategy to own and effectively operate power
plants is one that maximizes the value of our physical assets in order to
minimize the cost of our product. That enables us to be successful in the
competitive marketplace," said Biggar.
-3-
PP&L RESOURCES, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
Consolidated Balance Sheet
(Millions of Dollars)
Dec. 31, 1999 Dec. 31, 1998(a)
------------- ----------------
Assets
Investments and current assets 1,971 1,854
Property, plant and equipment
Transmission and distribution - net $2,462 $2,179
Generation - net 2,352 1,601
General and intangible - net 259 223
Construction work in progress 181 117
Nuclear fuel and other leased property 139 162
-------- --------
Electric utility plant - net 5,393 4,282
Gas and oil utility plant - net 171 175
Other property - net 80 23
--------- ---------
5,644 4,480
Recoverable transition costs 2,647 2,819
Regulatory and other assets 945 454
-------- -----
Total assets $11,207 $9,607
======= ======
Liabilities and Equity
Current liabilities 2,286 1,276
Long-term debt (less current portion) 3,689 2,983
Deferred income taxes and ITC 1,575 1,574
Liability for above market NUG purchases 674 775
Other noncurrent liabilities 959 862
Minority interest 64 0
Company-obligated mandatorily redeemable securities 250 250
Preferred stock 97 97
Earnings reinvested 654 372
Other common equity 1,795 1,837
Treasury stock (836) (419)
----------- ---------
Total liabilities and equity $11,207 $9,607
======= ======
(a) Certain amounts have been reclassified to conform to the current year
presentation.
Consolidated Income Statement
(Millions of Dollars)
3 Months Ended Dec. 31 12 Months Ended Dec. 31
---------------------- -----------------------
1999 1998(a) 1999 1998(a)
------ --------- ------ --------
Operating Revenues
Electric $696 $588 $2,758 $2,410
Gas and propane 28 29 109 35
Wholesale energy marketing and trading 315 236 1,446 1,223
Energy-related businesses 94 49 277 118
--------- ---------- -------- --------
1,133 902 4,590 3,786
-------- --------- ------- -------
Operating Expenses
Fuel and purchased power 460 330 2,010 1,563
Other operation and maintenance 239 229 901 777
Amortization of recoverable
transition costs 59 0 172 0
Depreciation and amortization 64 72 257 338
Other 104 91 378 281
-------- ------- ------ ------
926 722 3,718 2,959
-------- ------ ----- -----
Operating income 207 180 872 827
------- ------ ------ ------
Other income 90 40 97 66
--------- ------- ------- -------
-4-
Income before interest, income taxes and
minority interest 297 220 969 893
Interest expense 74 66 277 230
Income taxes 82 59 174 259
Minority interest 1 0 14 0
-------- -------- ------- --------
Income before extraordinary items 140 95 504 404
Extraordinary items (net of taxes) 13 0 (46) (948)
------- -------- ------ ------
Income (loss) before dividends on
preferred stock 153 95 458 (544)
Preferred stock dividend requirements 7 6 26 25
-------- -------- -------- -------
Net income (loss) $146 $89 $432 ($569)
==== ====== --==== ======
Earnings per share of common stock - basic and diluted
Adjusted earnings $0.64 $0.40 $2.35 $1.87
One-time adjustments 0.38 0.16 0.49 (5.33)
----- ----- ----- --------
Actual earnings $1.02 $0.56 $2.84 ($3.46)
===== ===== ===== =======
Average number of shares outstanding
(thousands) 143,695 157,152 152,287 164,651
(a) Certain amounts have been reclassified to conform to the current year
presentation.
Key Indicators
Financial
12 Months Ended 12 Months Ended
Dec. 31, 1999 Dec. 31, 1998
------------- -------------
Dividends declared per share $1.00 $1.335
Book value per share (a) $11.2 $11.4
Market price per share (a) $22.875 $27.875
Dividend yield 4.4% 4.8%
Dividend payout ratio (b) 43% 71%
Price/earnings ratio (b) 9.7 14.9
Return on average common equity (b) 16.89% 10.98%
(a) End of period
(b) Based on adjusted earnings
Operating
PP&L, Inc. (consolidated) 3 Months Ended Dec. 31 12 Months Ended Dec. 31
---------------------- -----------------------
Percent Percent
1999 1998 Change 1999 1998 Change
-------- -------- ------ ------ -------- ------
(millions of kwh)
Electricity delivered to
retail customers (a) 7,959 7,943 0.2 33,045 32,144 2.8
Electricity supplied to
retail customers (a) 8,463 7,805 8.4 33,695 31,651 6.5
Wholesale energy sales 7,654 7,405 3.4 31,683 36,708 -13.7
(a) Electricity delivered to retail customers represents the kwh delivered to
customers within PP&L, Inc.'s service territory. Electricity supplied
represents the kwh supplied to customers within and outside PP&L, Inc.'s
service territory (including sales of PP&L EnergyPlus). Customers within
PP&L, Inc.'s service territory will have their energy delivered by PP&L,
Inc.; however, they have a choice as to their electricity supplier.
-5-
Based in Allentown, Pa., PP&L Resources, Inc. is a Fortune 500 company
that delivers electricity and natural gas to more than 1.3 million customers in
Pennsylvania; sells wholesale and retail energy in 35 U.S. states and Canada;
generates electricity at power plants in Pennsylvania, Maine and Montana;
delivers electricity to 1.4 million customers in southwest Britain; and delivers
electricity to more than 800,000 customers in Chile, Bolivia and El Salvador.
# # #
Certain statements contained in this news release, including statements
with respect to future earnings, performance and financial results of domestic
and foreign subsidiaries, wholesale and retail marketing results and other
statements which are statements of other than historical facts, are
"forward-looking statements" within the meaning of the federal securities laws.
Although PP&L Resources believes that the expectations and assumptions reflected
in these statements are reasonable, there can be no assurance that these
expectations will prove to have been correct. These forward-looking statements
involve a number of risks and uncertainties, and actual results may differ
materially from the results discussed in the forward-looking statements. The
following are among the important factors that could cause actual results to
differ materially from the forward-looking statements: state and federal
regulatory developments; new state or federal legislation; national or regional
economic conditions; 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;
PP&L Resources' and PP&L, Inc.'s profitability and liquidity; 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; performance of new
ventures; political, regulatory or economic conditions in foreign countries
where PP&L Global makes investments; foreign exchange rates; and PP&L Resources'
and PP&L, Inc.'s commitments and liabilities. Any such forward-looking
statements should be considered in light of such important factors and in
conjunction with PP&L Resources' 1998 Form 10-K and interim reports on file with
the SEC. New factors that could cause actual results to differ materially from
those described in forward-looking statements emerge from time to time, and it
is not possible for PP&L Resources to predict all of such factors, or the extent
to which any such factor or combination of factors may cause actual results to
differ from those contained in any forward-looking statement. Any
forward-looking statement speaks only as of the date on which such statement is
made, and PP&L Resources undertakes no obligation to update the information
contained in such statement to reflect subsequent developments or information.