PPL Corporation Reports Strong 2012 Earnings, Incr
PPL Corporation Reports Strong 2012 Earnings, Increases Common Stock Dividend
-- Reported earnings of $2.60 per share and earnings from ongoing operations of $2.42 per share exceed 2012 forecast ranges
-- Annualized dividend increased to $1.47 per share, 11th increase in the past 12 years
-- Company announces 2013 earnings forecast
02-14-13
ALLENTOWN, Pa., Feb. 14, 2013 /PRNewswire/ -- PPL Corporation (NYSE: PPL) announced on Thursday (2/14) strong 2012 earnings that exceeded forecast ranges, a 2013 earnings forecast range of $2.25 to $2.50 per share, and an increase in its quarterly common stock dividend — the 11th such increase in the past 12 years.
PPL's 2012 reported earnings were $1.526 billion, or $2.60 per share, compared with $1.495 billion, or $2.70 per share in 2011. Per share earnings in 2012 include dilution of $0.14 per share because of common stock issued in April 2011 to fund the acquisition of the Midlands businesses in the United Kingdom.
Adjusting for special items, PPL's earnings from ongoing operations were $1.417 billion, or $2.42 per share, in 2012 compared with $1.509 billion, or $2.73 per share, in 2011.
The increase in the quarterly common stock dividend to $0.3675 per share is payable April 1, 2013, to shareowners of record as of March 8, 2013. On an annualized basis, the dividend is $1.47 per share, up from $1.44 per share. PPL has increased its dividend in 11 of the last 12 years; the new dividend rate reflects a 177 percent increase over that 12-year period.
"Given the significant challenges of 2012, we are very pleased with the earnings we are announcing today, which exceed our forecast ranges," said William H. Spence, PPL's chairman, president and chief executive officer. PPL's forecast ranges for 2012 were $2.37 to $2.47 per share for reported earnings and $2.30 to $2.40 per share for earnings from ongoing operations.
"Our strong earnings — and steadily increasing dividends — deliver significant value to shareowners. Our 2012 performance also demonstrates our ability to meet the commitments we made regarding the major acquisitions in Kentucky and the United Kingdom, and reflects the persistent efforts of PPL people to manage through the challenges of the competitive wholesale power market," Spence said.
PPL's reported earnings for the fourth quarter of 2012 were $359 million, or $0.60 per share, compared with $454 million, or $0.78 per share in the fourth quarter of 2011. Adjusting for special items, fourth quarter earnings from ongoing operations were $292 million, or $0.49 per share, compared with $410 million, or $0.71 per share in the fourth quarter of 2011.
PPL also announced its 2013 earnings forecast range of $2.25 to $2.50 per share, with a midpoint of $2.37 per share. PPL is projecting that its rate-regulated businesses will account for 85 percent of 2013 earnings, compared with 72 percent of ongoing earnings in 2012 and 58 percent of ongoing earnings in 2011.
"The 2013 earnings forecast reflects increased revenue from our three regulated businesses and lower energy margins for our supply business resulting largely from the roll-off of higher-priced hedges," Spence said.
PPL's 2013 earnings forecast also includes an additional scheduled outage at the Susquehanna nuclear power plant in Pennsylvania that accelerates PPL's plan to address turbine blade issues that have affected both Susquehanna units.
"While the additional scheduled Susquehanna outage impacts projected 2013 earnings by about 5 cents per share, implementing a long-term solution sooner than previously planned reduces future risk and minimizes the overall financial effect on PPL," Spence said.
2012 Earnings Details
PPL's 2012 reported earnings include net special item credits of $109 million, or $0.18 per share, compared with net special item charges of $14 million, or $0.03 per share, in 2011.
The special item credits for 2012 include $0.13 per share to adjust a U.K. liability related to line losses, $0.13 per share for a reduction in the U.K. corporate income tax rate, and $0.07 per share for adjusted energy-related economic activity. These special item credits were partially offset by special item charges that include $0.06 per share for foreign currency-related economic hedges, $0.03 per share for coal contract modification payments and $0.03 per share for an impairment of an equity method investment in the Kentucky Regulated segment.
Reported earnings are calculated in accordance with U.S. generally accepted accounting principles (GAAP). Earnings from ongoing operations, a non-GAAP financial measure, are adjusted for special items that include the impact of adjusted energy-related economic activity (principally changes in fair value of economic hedges and the ineffective portion of qualifying cash flow hedges), acquisition-related adjustments, and other impacts fully detailed at the end of this news release.