Exhibit 99.1
July 24, 2001
Contacts: For media - Dan McCarthy, 610-774-5758
For financial analysts - Tim Paukovits, 610-774-4124
PPL Corporation
Two North Ninth St.
Allentown, PA 18101
Fax 610-774-5281
PPL CORPORATION REPORTS 12 PERCENT GROWTH
IN CORE BUSINESSES FOR RECORD SECOND-QUARTER EARNINGS
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ALLENTOWN, Pa. (July 24, 2001) -- PPL Corporation (NYSE: PPL) today (7/24)
reported a 12 percent increase in per share earnings in its core businesses for
the second quarter of 2001. PPL earned a record $0.72 per share during the
second quarter from its core business operations of energy generation,
marketing, and distribution and transmission as compared to $0.64 per share a
year ago.
Additionally, PPL recorded $0.08 per share in the second quarter related to
benefits of tax credits from synfuel operations, for total reported earnings of
$0.80 per share. The contributions from synfuels were not previously included in
the company's published forecasts. PPL recorded the benefits in the second
quarter following an evaluation of the recent Internal Revenue Service revenue
procedures as they apply to the company's synfuel projects.
"We experienced solid results in the second quarter," said William F.
Hecht, PPL's chairman, president and chief executive officer. "The major drivers
of our second-quarter earnings were increased margins on unregulated wholesale
energy transactions conducted by our energy marketing and trading units,
positive results from our regulated energy delivery business in Pennsylvania and
favorable results from our portfolio of international investments."
Hecht said PPL's second-quarter earnings rose solidly above a year ago,
even when compared to last year's second quarter, which included a $0.17 per
share benefit from the sale of emission allowances in last year's second
quarter, a sale that was not repeated in this year's second quarter.
Hecht reiterated PPL's prior forecast of earnings in excess of $4.00 per
share for 2001. The 2001 forecast reflects a strategic initiative the company
terms "securitization" of PPL Electric Utilities, the regulated electricity
delivery subsidiary. All necessary approvals for this initiative have been
received, including those of PPL Electric Utilities' shareowners, the
Pennsylvania Public Utility Commission and the Federal Energy Regulatory
Commission.
Later this summer, PPL anticipates completing this strategic initiative,
which will enable PPL to lock in a market for a significant portion of its
eastern generation through 2009 at very favorable prices.
PPL's earnings per diluted share for the first half of 2001 were $2.31, a
42 percent increase over the earnings of $1.63 per diluted share for the same
period of 2000. This strong growth in earnings resulted primarily from improved
margins in wholesale energy operations and increased contributions from
international activities. In addition, the company's sales of energy delivered
to residential and small business customers reflected above-average growth for
both the quarter and for the year to date.
PPL Corp., 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.
PPL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
CONSOLIDATED BALANCE SHEET
(MILLIONS OF DOLLARS)
JUNE 30, 2001 DEC. 31, 2000
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ASSETS
Current Assets $ 1,680 $ 1,945
Investments 1,191 1,161
Property, plant and equipment -- net
Transmission and distribution 2,811 2,841
Generation 2,341 2,177
General and intangible 295 294
Construction work in progress 258 261
Nuclear fuel 114 123
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Electric utility plant 5,819 5,696
Gas and oil utility plant 190 177
Other property 72 75
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6,081 5,948
Recoverable transition costs 2,299 2,425
Regulatory and other assets 911 881
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Total assets $12,162 $12,360
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LIABILITIES AND EQUITY
Current liabilities $ 1,940 $ 2,511
Long-term debt (less current portion) 4,081 4,467
Deferred income taxes and ITC 1,409 1,412
Liability for above market NUG purchases 537 581
Other noncurrent liabilities 964 976
Minority interest 58 54
Company-obligated mandatorily redeemable securities 825 250
Preferred stock 96 97
Earnings reinvested 1,260 999
Other common equity 1,828 1,849
Treasury stock (836) (836)
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Total liabilities and equity $12,162 $12,360
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CONSOLIDATED INCOME STATEMENT
(MILLIONS OF DOLLARS)
3 MONTHS ENDED 6 MONTHS ENDED 12 MONTHS ENDED
JUNE 30 JUNE 30 JUNE 30
---------------- ---------------- ----------------
2001 2000(a) 2001 2000(a) 2001 2000(a)
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OPERATING REVENUES
Retail electric and gas $792 $711 $1,748 $1,556 $3,359 $3,108
Wholesale energy marketing and trading 437 491 906 953 2,033 1,761
Energy-related businesses 180 95 321 201 556 360
------- ------- ------- ------- ------- -------
1,409 1,297 2,975 2,710 5,948 5,229
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OPERATING EXPENSES
Fuel and purchased power 554 593 1,137 1,201 2,397 2,366
Other operation and maintenance 286 221 524 439 1,051 914
Amortization of recoverable transition costs 55 46 126 109 244 217
Depreciation 64 70 127 138 250 274
Other 201 126 356 262 660 451
------- ------- ------- ------- ------- -------
1,160 1,056 2,270 2,149 4,602 4,222
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OPERATING INCOME 249 241 705 561 1,346 1,007
------- ------- ------- ------- ------- -------
Other income and (deductions) 5 8 9 7 (13) 97
------- ------- ------- ------- ------- -------
INCOME BEFORE INTEREST, INCOME TAXES AND
MINORITY INTEREST 254 249 714 568 1,333 1,104
Interest expense 88 92 192 180 388 334
Income taxes 35 58 161 140 315 200
Minority interest 1 0 3 1 6 15
------- ------- ------- ------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEMS 130 99 358 247 624 555
Extraordinary items (net of tax) 0 0 0 0 11 (46)
------- ------- ------- ------- ------- -------
INCOME BEFORE DIVIDENDS ON PREFERRED SECURITIES 130 99 358 247 635 509
Dividends - preferred securities 13 7 19 13 32 26
------- ------- ------- ------- ------- -------
NET INCOME $117 $92 $339 $234 $603 $483
======= ======= ======= ======= ======= =======
EARNINGS PER SHARE OF COMMON STOCK - BASIC
Income before nonrecurring items $0.80 $0.60 $2.33 $1.59 $4.02 $2.76
Nonrecurring items (net of tax) 0.00 0.04 0.00 0.04 0.13 0.55
----- ----- ----- ----- ----- ----
Net Income $0.80 $0.64 $2.33 $1.63 $4.15 $3.31
===== ===== ===== ===== ===== =====
EARNINGS PER SHARE OF COMMON STOCK - DILUTED
Income before nonrecurring items $0.80 $0.60 $2.31 $1.59 $4.00 $2.76
Nonrecurring items (net of tax) 0.00 0.04 0.00 0.04 0.13 0.55
----- ----- ----- ----- ----- -----
Net Income $0.80 $0.64 $2.31 $1.63 $4.13 $3.31
===== ===== ===== ===== ===== =====
AVERAGE NUMBER OF SHARES OUTSTANDING
(THOUSANDS) 145,901 144,137 145,608 143,948 145,187 145,985
(a) Certain amounts have been reclassified to conform to the
current year presentation.
KEY INDICATORS
FINANCIAL
12 MONTHS ENDED 12 MONTHS ENDED
JUNE 30, 2001 JUNE 30, 2000
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Dividends declared per share $1.06 $1.03
Book value per share (a) $15.42 $12.31
Market price per share (a) $55.00 $21.9375
Dividend yield 1.9% 4.7%
Dividend payout ratio - diluted (b) 27% 37%
Price/earnings ratio - diluted (b) 13.8 7.9
Return on average common equity (b) 30.25% 24.87%
(a) End of period
(b) Excluding nonrecurring items
OPERATING - DOMESTIC ENERGY
3 MONTHS ENDED JUNE 30 6 MONTHS ENDED JUNE 30 12 MONTHS ENDED JUNE 30
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PPL CORP.
(millions of kwh) PERCENT PERCENT PERCENT
2001 2000 CHANGE 2001 2000 CHANGE 2001 2000 CHANGE
---- ---- ------- ---- ---- ------- ---- ---- -------
Retail
Delivered (a) 8,082 7,821 3.3% 17,963 17,303 3.8% 34,567 33,483 3.2%
Supplied 8,928 9,181 -2.8% 19,481 19,046 2.3% 38,192 35,988 6.1%
Wholesale
East 4,259 8,015 -46.9% 9,503 17,784 -46.6% 23,305 33,483 -30.4%
West
Montana Power Company(b) 1,048 1,245 -15.8% 2,247 2,586 -13.1% 4,757 2,586 (c)
Other 743 1,346 -44.8% 1,769 2,253 -21.5% 3,760 2,253 (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 resale to 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 six months of sales are reflected in the
12 months ended June 30, 2000.
[PPL invites interested parties to listen to the live Internet Webcast of
management's second- quarter earnings teleconference with financial
analysts at 4:15 p.m. Tuesday, July 24. The teleconference is available
online live, in audio format, on PPL's Internet Web site: www.pplweb.com.
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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 913-981-5522.]
# # #
Certain statements contained in this news release, including statements
with respect to future earnings, energy prices, supply, sales, margins and
deliveries, financing costs, taxes, 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 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.