RE: RE: RE: RE: RE: RE: PPL hits $30!
Working capital change is due to expansion. Non cash working capital changes that squeeze cash flow in the short term to fund inventories and expansion translates into earnings and long term sustainable cash flow down the road. DRIP is normal for pipeline utility type situations. eg Transalta and TRP years ago had these in place>>> Of coarse they need capital to fund expansion but wish to avoid equity issues if possible. Drip is a fair way for existing shareholders. Financials are getting stronger day by day. The hurdle was the last 2 years as they transformed from a trust. That is why they made that statement but not to suggest the divy would be cut in 2013. This BOD is not going to give you a DRIP and then cut the divy in 2013. Trust me when I say they have earnings and cash flow models extending out 3 years. This is not a crap shoot like some cyclical companies. Consider it like a quasi utility with a rate base and a certain rate of return over many years upon which you add more of a rate base (like $500 mln) to earn an additional return. Once you have the projects the rest is execution and mathematical. Not so volume sensitive nor price sensitive like other businesses. When NTL sold DMS switches the next year they had to start from zero and sell the same amount plus more to grow. Not this company. The existing operations generate stable cash flow. Projects in progress and new projects they have received assure future growth and their internal numbers looking ahead a couple years are likely to prove reasonable and attainable. Don't underestimate the beauty of this beast. They are rare!
Cheers