PPL Corporation Reports 2020 Earnings

ALLENTOWN, Pa., Feb. 18, 2021 /PRNewswire/ -- PPL Corporation (NYSE: PPL) on Thursday (2/18) announced 2020 reported earnings (GAAP) of $1.47 billion, or $1.91 per share, compared with $1.75 billion, or $2.37 per share, in 2019.

Adjusting for special items, 2020 earnings from ongoing operations (non-GAAP) were $1.85 billion, or $2.40 per share, compared with 2019 ongoing earnings of $1.81 billion, or $2.45 per share.

"In the face of a global pandemic, PPL demonstrated its resilience, providing electricity and natural gas safely and reliably to first responders and more than 10 million customers, giving them one less thing to worry about in an uncertain world," said PPL President and Chief Executive Officer Vincent Sorgi.

"As the pandemic necessitated changes to the way we work, we responded quickly and effectively, achieving award-winning customer satisfaction, completing more than $3 billion in infrastructure improvements, advancing our clean energy strategy, and supporting COVID-19 relief for individuals and families struggling in our communities.

"In addition, as COVID-19 forced lockdowns and business closures, we positioned PPL to weather the economic downturn and managed the financial impact, achieving our earnings guidance and delivering on our commitment to return capital to shareowners."

In achieving earnings from ongoing operations at the low end of the company's original 2020 earnings guidance of $2.40 to $2.60 per share, PPL overcame a $0.12-per-share unfavorable impact from COVID-19 due to lower sales volumes in the U.K. and lower commercial and industrial demand in Kentucky, as well as a $0.05 unfavorable impact due to milder than normal weather.

Looking forward, Sorgi said the company's long-term strategy is to achieve industry-leading performance in safety, reliability, customer satisfaction and operational efficiency; to advance a clean energy transition while maintaining affordability and reliability; to maintain a strong financial foundation and create long-term value for our shareowners; to foster a diverse and exceptional workplace; and to build strong communities.

In 2021, that includes completing the process to sell PPL's U.K. utility business and reposition the corporation as a U.S.-focused utility company, a move PPL believes will simplify its business mix, unlock shareowner value, strengthen its balance sheet, enhance long-term earnings growth and provide the company greater financial flexibility.

PPL said the formal process to sell the U.K. utility business remains on track. While there can be no assurance of any specific outcome, including whether it will result in the completion of any transaction, the company continues to expect to announce a transaction in the first half of 2021.

In addition to announcing year-end earnings results, PPL reported fourth-quarter 2020 earnings of $290 million, or $0.38 per share, compared with reported earnings of $364 million, or $0.48 per share, in 2019. Adjusting for special items, fourth-quarter 2020 earnings from ongoing operations were $456 million, or $0.59 per share, compared with $431 million, or $0.57 per share, in 2019.

The company also maintained its commitment to dividends as a key component of total shareowner return, announcing a quarterly common stock dividend of $0.4150 per share, payable April 1, 2021, to shareowners of record as of March 10, 2021. The dividend will mark the company's 301(st) consecutive quarterly dividend paid since 1946.

Fourth-Quarter and Year-to-Date Earnings Details

As discussed in this news release, reported earnings are calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). "Earnings from ongoing operations" is a non-GAAP financial measure that is adjusted for special items. See the tables at the end of this news release for a reconciliation of reported earnings to earnings from ongoing operations, including an itemization of special items.



     
              (Dollars in millions, except for per share amounts)          
          
          4th Quarter                      
     
           Year



                                                                     2020              2019             Change          2020      2019      Change




     Reported earnings                                                    $
        290                            $
      364          (20)              $
       1,469  $
       1,746   (16)
                                                                                                                                  %                                        %



     Reported earnings per share                                         $
        0.38                           $
      0.48          (21)               $
       1.91   $
       2.37   (19)
                                                                                                                                  %                                        %




                                                                              
          
          4th Quarter                      
     
           Year



                                                                     2020              2019             Change          2020      2019      Change




     Earnings from ongoing operations                                     $
        456                            $
      431             6               $
       1,847  $
       1,806      2
                                                                                                                                  %                                        %



     Earnings from ongoing operations per share                          $
        0.59                           $
      0.57             4                $
       2.40   $
       2.45    (2)
                                                                                                                                  %                                        %

Fourth-Quarter and Year-to-Date Earnings by Segment


                                                                4th Quarter              
         
          Year

                                                                                                 ---


     
                Per share                          2020                  2019           2020                    2019

                                                                                                                 ---


     
                Reported Earnings



     U.K. Regulated                                         $
       0.15                             $
        0.26                  $
         0.89     $
          1.33



     Kentucky Regulated                              0.11                          0.10                          0.54                 0.59



     Pennsylvania Regulated                          0.16                          0.16                          0.65                 0.62



     Corporate & Other                             (0.04)                       (0.04)                       (0.17)              (0.17)



         Total                                              $
       0.38                             $
        0.48                  $
         1.91     $
          2.37







                                                                4th Quarter              
         
          Year

                                                                                                                        ---

                                                      2020                  2019           2020                    2019

                                                                                                                 ---


     
                Special items benefit (expense)



     U.K. Regulated                                       $
       (0.19)                          $
        (0.09)                $
        (0.44)    $
        (0.07)



     Kentucky Regulated                                 -                                                    (0.01)



     Pennsylvania Regulated                             -



     Corporate & Other                             (0.02)                                                    (0.04)              (0.01)



     Total Special Items                                  $
       (0.21)                          $
        (0.09)                $
        (0.49)    $
        (0.08)







                                                                4th Quarter              
         
          Year

                                                                                                                        ---

                                                      2020                  2019           2020                    2019

                                                                                                                 ---


     
                Earnings from Ongoing Operations



     U.K. Regulated                                         $
       0.34                             $
        0.35                  $
         1.33     $
          1.40



     Kentucky Regulated                              0.11                          0.10                          0.55                 0.59



     Pennsylvania Regulated                          0.16                          0.16                          0.65                 0.62



     Corporate and Other                           (0.02)                       (0.04)                       (0.13)              (0.16)



         Total                                              $
       0.59                             $
        0.57                  $
         2.40     $
          2.45

Key Factors Impacting Earnings

In addition to the segment drivers outlined below, PPL's reported earnings in 2020 included special-item after-tax expenses of $378 million, or $0.49 per share, primarily from unrealized losses on foreign currency economic hedges and the impact of the U.K. tax rate change on deferred taxes. Reported earnings in 2019 included special-item after-tax expenses of $60 million, or $0.08 per share, primarily from unrealized losses on foreign currency economic hedges.

PPL's reported earnings for the fourth quarter of 2020 included special-item after-tax expenses of $166 million, or $0.21 per share, primarily from unrealized losses on foreign currency economic hedges. Reported earnings for the fourth quarter of 2019 included special-item after-tax expenses of $67 million, or $0.09 per share, primarily from unrealized losses on foreign currency economic hedges.

U.K. Regulated Segment

PPL's U.K. Regulated segment primarily consists of the regulated electricity delivery operations of Western Power Distribution (WPD), which serves Southwest and Central England and South Wales.

Reported earnings in 2020 decreased by $0.44 per share compared with a year ago. Earnings from ongoing operations in 2020 decreased by $0.07 per share. Factors impacting 2020 U.K. Regulated segment earnings results included $0.06 per share from the effect of dilution. Excluding dilution, factors driving earnings results included lower sales volumes primarily due to the impact of COVID-19, lower pension income, higher operation and maintenance expense, and higher depreciation expense, partially offset by higher foreign currency exchange rates and higher prices.

Reported earnings in the fourth quarter of 2020 decreased by $0.11 per share compared with a year ago. Earnings from ongoing operations in the fourth quarter of 2020 decreased by $0.01 per share. Factors impacting fourth-quarter U.K. Regulated segment earnings results included $0.01 per share from the effect of dilution. Excluding dilution, factors driving earnings results included higher foreign currency exchange rates, offset by lower pension income, lower sales volumes primarily due to the impact of COVID-19 and higher income taxes.

Kentucky Regulated Segment

PPL's Kentucky Regulated segment primarily consists of the regulated electricity and natural gas operations of Louisville Gas and Electric Company and the regulated electricity operations of Kentucky Utilities Company.

Reported earnings in 2020 decreased by $0.05 per share compared with a year ago. Earnings from ongoing operations in 2020 decreased by $0.04 per share. Factors impacting 2020 Kentucky Regulated segment earnings results included $0.02 per share from the effect of dilution. Excluding dilution, factors driving earnings results included lower commercial and industrial demand revenue due to the impact of COVID-19, lower sales volumes primarily due to weather, higher depreciation expense and higher income taxes due to a tax credit recognized in the second quarter of 2019, partially offset by higher retail rates effective May 1, 2019, and lower operation and maintenance expense.

Reported earnings and earnings from ongoing operations in the fourth quarter of 2020 increased by $0.01 per share compared with a year ago. Factors driving earnings results primarily included lower operation and maintenance expense partially offset by lower commercial and industrial demand revenue due to the impact of COVID-19.

Pennsylvania Regulated Segment

PPL's Pennsylvania Regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.

Reported earnings and earnings from ongoing operations in 2020 increased by $0.03 per share compared with a year ago. Factors impacting 2020 Pennsylvania Regulated segment earnings results included $0.03 per share from the effect of dilution. Excluding dilution, factors driving earnings results primarily included returns on additional capital investments in transmission and lower operation and maintenance expense, partially offset by higher depreciation expense.

Reported earnings and earnings from ongoing operations in the fourth quarter of 2020 were even compared with a year ago. Factors driving earnings results primarily included returns on additional capital investments in transmission and lower operation and maintenance expense, partially offset by higher income taxes and higher depreciation expense.

Corporate and Other

PPL's Corporate and Other category primarily includes unallocated corporate-level financing and other costs.

Reported earnings in 2020 were even compared with a year ago. Earnings from ongoing operations in 2020 increased by $0.03 compared to a year ago. Excluding special items, factors driving earnings results primarily included lower overall corporate expenses and other factors.

Reported earnings in the fourth quarter of 2020 were even compared with a year ago. Earnings from ongoing operations in the fourth quarter of 2020 increased by $0.02 compared to a year ago. Excluding special items, factors driving earnings results primarily included lower overall corporate expenses and other factors.

2021 Earnings Forecast

PPL is not providing future earnings guidance at this time as a result of the formal process to sell its U.K. utility business. The company expects to announce a transaction in the first half of 2021.

Headquartered in Allentown, Pa., PPL Corporation (NYSE: PPL) is one of the largest companies in the U.S. utility sector. PPL's seven high-performing, award-winning utilities serve more than 10 million customers in the U.S. and United Kingdom. With more than 12,000 employees, the company is dedicated to providing exceptional customer service and reliability and delivering superior value for shareowners. To learn more, visit www.pplweb.com.

# # #

(Note: All references to earnings per share in the text and tables of this news release are stated in terms of diluted earnings per share unless otherwise noted.)

Conference Call and Webcast

PPL invites interested parties to listen to a live Internet webcast of management's teleconference with financial analysts about fourth-quarter and full-year 2020 financial results at 11 a.m. Eastern time on Thursday, Feb. 18. The call will be webcast live, in audio format, together with slides of the presentation. Interested individuals can access the webcast link at www.pplweb.com/investors under Events and Presentations or access the live conference call via telephone at 1-888-346-8683. International participants should call 1-412-902-4270. Participants will need to enter the following "Elite Entry" number in order to join the conference: 4358266. For those who are unable to listen to the live webcast, a replay with slides will be accessible at www.pplweb.com/investors for 90 days after the call.

# # #

Management utilizes "Earnings from Ongoing Operations" as a non-GAAP financial measure that should not be considered as an alternative to reported earnings, or net income, an indicator of operating performance determined in accordance with GAAP. PPL believes that Earnings from Ongoing Operations is useful and meaningful to investors because it provides management's view of PPL's earnings performance as another criterion in making investment decisions. In addition, PPL's management uses Earnings from Ongoing Operations in measuring achievement of certain corporate performance goals, including targets for certain executive incentive compensation. Other companies may use different measures to present financial performance.

Earnings from Ongoing Operations is adjusted for the impact of special items. Special items are presented in the financial tables on an after-tax basis with the related income taxes on special items separately disclosed. Income taxes on special items, when applicable, are calculated based on the statutory tax rate of the entity where the activity is recorded. Special items may include items such as:

    --  Unrealized gains or losses on foreign currency economic hedges (as
        discussed below).
    --  Gains and losses on sales of assets not in the ordinary course of
        business.
    --  Impairment charges.
    --  Significant workforce reduction and other restructuring effects.
    --  Acquisition and divestiture-related adjustments.
    --  Other charges or credits that are, in management's view, non-recurring
        or otherwise not reflective of the company's ongoing operations.

Unrealized gains or losses on foreign currency economic hedges include the changes in fair value of foreign currency contracts used to hedge British-pound-sterling-denominated anticipated earnings and anticipated proceeds from the potential sale of its U.K. utility business. The changes in fair value of these contracts are recognized immediately within GAAP earnings. Management believes that excluding these amounts from Earnings from Ongoing Operations until settlement of the contracts provides a better matching of the financial impacts of those contracts with the economic value of PPL's underlying hedged earnings.

Statements contained in this news release, including statements with respect to future earnings, cash flows, dividends, financing and corporate strategy, 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 are subject to 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 for energy in our U.S. service territories; weather conditions affecting customer energy usage and operating costs; the effect of any business or industry restructuring; the profitability and liquidity of PPL Corporation and its subsidiaries; new accounting requirements or new interpretations or applications of existing requirements; operating performance of our facilities; the length of scheduled and unscheduled outages at our generating plants; environmental conditions and requirements and the related costs of compliance; system conditions and operating costs; development of new projects, markets and technologies; performance of new ventures; asset or business acquisitions and dispositions; any impact of severe weather on our business; receipt of necessary government permits, approvals, rate relief and regulatory cost recovery; capital market conditions and decisions regarding capital structure; the impact of state, federal or foreign investigations applicable to PPL Corporation and its subsidiaries; the outcome of litigation against PPL Corporation and its subsidiaries; stock price performance; the market prices of equity securities and the impact on pension income and resultant cash funding requirements for defined benefit pension plans; the securities and credit ratings of PPL Corporation and its subsidiaries; political, regulatory or economic conditions in states, regions or countries where PPL Corporation or its subsidiaries conduct business, including any potential effects of threatened or actual cyberattack, terrorism, or war or other hostilities; British pound sterling to U.S. dollar exchange rates; new state, federal or foreign legislation, including new tax legislation; and the commitments and liabilities of PPL Corporation and its subsidiaries. Any forward-looking statements should be considered in light of these important factors and in conjunction with factors and other matters discussed in PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.

Note to Editors: Visit our media website at www.pplnewsroom.com for additional news and background about PPL Corporation.


                                                                                     
         
             PPL CORPORATION AND SUBSIDIARIES


                                                                                   
       
         CONDENSED CONSOLIDATED FINANCIAL INFORMATION (1)




                                                                                   
       
         Condensed Consolidated Balance Sheets (Unaudited)


                                                                                         
        
                (Millions of Dollars)




                                                                                                                                               December 31,                       December 31,


                                                                                                                                                       2020                2019

                                                                                                                                                                           ---


     
                Assets



     Cash and cash equivalents                                                                                                                                $
        708                       $
        815



     Accounts receivable                                                                                                                               881                   792



     Unbilled revenues                                                                                                                                 498                   504



     Fuel, materials and supplies                                                                                                                      361                   332



     Current price risk management assets                                                                                                               94                   147



     Other current assets                                                                                                                              226                   177



     Property, Plant and Equipment



     Regulated utility plant                                                                                                                        45,887                42,709



     Less: Accumulated depreciation - regulated utility plant                                                                                        8,894                 8,055




       Regulated utility plant, net                                                                                                                 36,993                34,654




     Non-regulated property, plant and equipment                                                                                                       498                   357



     Less: Accumulated depreciation - non-regulated property, plant and equipment                                                                      102                   109




       Non-regulated property, plant and equipment, net                                                                                                396                   248



     Construction work in progress                                                                                                                   1,503                 1,580




     Property, Plant and Equipment, net                                                                                                             38,892                36,482




     Noncurrent regulatory assets                                                                                                                    1,262                 1,492



     Goodwill and other intangibles                                                                                                                  4,038                 3,940



     Pension benefit asset                                                                                                                             706                   464



     Noncurrent price risk management assets                                                                                                            52                   149



     Other noncurrent assets                                                                                                                           398                   386




     
                Total Assets                                                                                                                             $
        48,116                    $
        45,680






     
                Liabilities and Equity



     Short-term debt                                                                                                                                        $
        1,662                     $
        1,151



     Long-term debt due within one year                                                                                                              1,574                 1,172



     Accounts payable                                                                                                                                  965                   956



     Other current liabilities                                                                                                                       1,776                 1,621



     Long-term debt                                                                                                                                 21,553                20,721



     Deferred income taxes and investment tax credits                                                                                                3,690                 3,212



     Accrued pension obligations                                                                                                                       200                   587



     Asset retirement obligations                                                                                                                      200                   212



     Noncurrent regulatory liabilities                                                                                                               2,530                 2,572



     Other deferred credits and noncurrent liabilities                                                                                                 593                   485



     Common stock and additional paid-in capital                                                                                                    12,278                12,222



     Earnings reinvested                                                                                                                             5,315                 5,127



     Accumulated other comprehensive loss                                                                                                          (4,220)              (4,358)




     
                Total Liabilities and Equity                                                                                                             $
        48,116                    $
        45,680



              (1)              The Financial Statements in this
                                  news release have been condensed
                                  and summarized for purposes of
                                  this presentation.  Please refer
                                  to PPL Corporation's periodic
                                  filings with the Securities and
                                  Exchange Commission for full
                                  financial statements, including
                                  note disclosure.


                                                                                            
       
                 PPL CORPORATION AND SUBSIDIARIES




                                                                                       
       
          Condensed Consolidated Statements of Income (Unaudited)


                                                                                         
        
              (Millions of Dollars, except share data)




                                                                                                                                              Three Months Ended                       Year Ended
                                                                                                                                  December 31,                           December 31,

                                                                                                                                                                              ---

                                                                                                                            2020                           2019          2020                      2019

                                                                                                                                                                                                 ---


     
                Operating Revenues                                                                                              $
              1,929                           $
         1,954             $
       7,607  $
      7,769





     
                Operating Expenses



     Operation



       Fuel                                                                                                                 154                                     153                           632          709



       Energy purchases                                                                                                     164                                     185                           634          723



       Other operation and maintenance                                                                                      498                                     533                         1,944        1,985



     Depreciation                                                                                                           328                                     309                         1,287        1,199



     Taxes, other than income                                                                                                81                                      81                           307          313




     Total Operating Expenses                                                                                             1,225                                   1,261                         4,804        4,929






     
                Operating Income                                                                                          704                                     693                         2,803        2,840





     Other Income (Expense) - net                                                                                          (84)                                                                 169          309





     Interest Expense                                                                                                       251                                     248                         1,001          994






     
                Income Before Income Taxes                                                                                369                                     445                         1,971        2,155





     Income Taxes                                                                                                            79                                      81                           502          409






     
                Net Income                                                                                                        $
              290                             $
         364             $
       1,469  $
      1,746






     
                Earnings Per Share of Common Stock:



     Net Income Available to PPL Common Shareowners:



       Basic                                                                                                                       $
              0.38                            $
         0.49              $
       1.91   $
      2.39



       Diluted                                                                                                                     $
              0.38                            $
         0.48              $
       1.91   $
      2.37





     
                Weighted-Average Shares of Common Stock Outstanding (in thousands):



       Basic                                                                                                            768,852                                 748,745                       768,590      728,512



       Diluted                                                                                                          769,725                                 754,762                       769,384      736,754


                                                                                              
       
                 PPL CORPORATION AND SUBSIDIARIES


                                                                                          
     
         Condensed Consolidated Statements of Cash Flows (Unaudited)


                                                                                                
           
                (Millions of Dollars)




                                                                                                                                                    2020               2019           2018

                                                                                                                                                                                     ---


     
                Cash Flows from Operating Activities



     Net income                                                                                                                                           $
        1,469                     $
        1,746           $
        1,827



     Adjustments to reconcile net income to net cash provided by operating activities



       Depreciation                                                                                                                               1,287                       1,199                       1,094



       Amortization                                                                                                                                  72                          81                          78



       Defined benefit plans - (income)                                                                                                           (201)                      (263)                      (192)



       Deferred income taxes and investment tax credits                                                                                             402                         309                         355



       Unrealized (gains) losses on derivatives, and other hedging activities                                                                       280                          73                       (186)



       Other                                                                                                                                         17                          14                          23



     Change in current assets and current liabilities



       Accounts receivable                                                                                                                         (82)                          4                          28



       Accounts payable                                                                                                                              10                        (77)                         78



       Unbilled revenues                                                                                                                             10                         (5)                         41



       Regulatory assets and liabilities, net                                                                                                      (63)                       (88)                         13



       Other current liabilities                                                                                                                   (23)                       (73)                       (22)



       Other                                                                                                                                       (18)                       (59)                         15



     Other operating activities



       Defined benefit plans - funding                                                                                                            (390)                      (350)                      (361)



       Proceeds from transfer of excess benefit plan funds                                                                                            -                                                    65



       Other                                                                                                                                       (24)                       (84)                       (35)




       Net cash provided by operating activities                                                                                                  2,746                       2,427                       2,821




     
                Cash Flows from Investing Activities



     Expenditures for property, plant and equipment                                                                                             (3,249)                    (3,083)                    (3,238)



     Purchase of investments                                                                                                                          -                       (55)                       (65)



     Proceeds from sale of investments                                                                                                                9                          69                           6



     Other investing activities                                                                                                                    (18)                       (11)                       (64)




       Net cash used in investing activities                                                                                                    (3,258)                    (3,080)                    (3,361)




     
                Cash Flows from Financing Activities



     Issuance of long-term debt                                                                                                                   2,167                       1,465                       1,059



     Retirement of long-term debt                                                                                                               (1,172)                      (300)                      (277)



     Proceeds from project financing                                                                                                                173



     Issuance of common stock                                                                                                                        34                       1,167                         698



     Payment of common stock dividends                                                                                                          (1,275)                    (1,192)                    (1,133)



     Issuance of term loan                                                                                                                          300



     Issuance of commercial paper                                                                                                                    73



     Net increase (decrease) in short-term debt                                                                                                     127                       (278)                        363



     Other financing activities                                                                                                                    (41)                       (26)                       (20)




       Net cash provided by financing activities                                                                                                    386                         836                         690




     
                Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash                                                             17                          10                        (18)




     
                Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash                                                           (109)                        193                         132



     Cash, Cash Equivalents and Restricted Cash at Beginning of Period                                                                              836                         643                         511




     Cash, Cash Equivalents and Restricted Cash at End of Period                                                                                            $
        727                       $
        836             $
        643






     
                Supplemental Disclosures of Cash Flow Information



     Cash paid during the period for:



       Interest - net of amount capitalized                                                                                                                 $
        939                       $
        905             $
        910



       Income taxes - net                                                                                                                                    $
        95                        $
        93             $
        127



     Significant non-cash transactions:



       Accrued expenditures for property, plant and equipment at December 31,                                                                               $
        319                       $
        340             $
        345



       Accrued expenditures for intangible assets at December 31,                                                                                            $
        85                        $
        79              $
        64


                        
        
               Key Indicators (Unaudited)




                                                 12 Months Ended
                                      December 31,



                  Financial:   2020                             2019





     Dividends
      declared per
      share of
      common stock                    $
              1.66                       $
       1.65


     Book value
      per share
      (1)(2)                         $
              17.39                      $
       16.93


     Market price
      per share
      (1)                           $
              28.20                      $
       35.88


     Dividend                   5.9                                    4.6
      yield                       %                                     %


     Dividend
      payout ratio                %                                     %
      (3)                     86.9                                   69.6


     Dividend
      payout ratio                %                                     %
      -earnings
      from ongoing
      operations
      (3)(4)                   69.2                                   67.3


     Return on
      common                      %                                     %
      equity                   11.1                                   14.3


     Return on
      common                      %                                     %
      equity -
      earnings
      from ongoing
      operations
      (4)                     14.0                                   14.8


     Spot rate of
      U.S. Dollar
      per British
      pound
      sterling for
      Balance
      Sheet
      translation
      (5)                            $
              1.33                       $
       1.29


     Average rate
      of U.S.
      Dollar per
      British
      pound
      sterling for
      Statement of
      Income
      translation
      (6)                            $
              1.47                       $
       1.32



              (1)   
              End of period.



              (2)              Based on 768,907 and 767,233 shares
                                  of common stock outstanding (in
                                  thousands) at December 31, 2020,
                                  and December 31, 2019.



              (3)              Based on diluted earnings per
                                  share.



              (4)              Calculated using earnings from
                                  ongoing operations, which is a
                                  non-GAAP financial measure that
                                  includes adjustments described in
                                  the text and tables of this news
                                  release.



              (5)              As of November 30, 2020, and
                                  November 30, 2019, as WPD is
                                  consolidated on a one-month lag.



              (6)              Represents a year-to-date average
                                  and includes the impact of foreign
                                  exchange hedges.






                                                      
         
                Operating - Domestic & International Electricity Sales (Unaudited)




                                                           Three Months Ended                                                                    Twelve Months Ended
                                              December 31,                                                                   December 31,



                                                                                                   Percent                                                           Percent



     (GWh)                                 2020            2019                                       Change                  2020         2019                           Change

                                                                                                                                                                           ---




     
                PA Regulated Segment



     Retail Delivered                     8,870                      9,094                                                   (2.5)              36,008                           37,024  (2.7)

                                                                                                                                %                                                         %






     
                KY Regulated Segment



     Retail Delivered                     6,882                      7,028                                                   (2.1)              28,474                           30,214  (5.8)

                                                                                                                                %                                                         %



     Wholesale (1)                          150                        171                                                  (12.3)                 542                            1,154 (53.0)
                                                                                                                                %                                                         %




      Total                               7,032                      7,199                                                   (2.3)              29,016                           31,368  (7.5)

                                                                                                                                %                                                         %






     
                Total U.S.             15,902                     16,293                                                   (2.4)              65,024                           68,392  (4.9)

                                                                                                                                %                                                         %






     
                U.K. Regulated Segment



     Delivered                           17,555                     18,096                                                   (3.0)              68,133                           72,061  (5.5)

                                                                                                                                %                                                         %



              (1)              Represents FERC-regulated
                                  municipal and unregulated off-
                                  system sales. KU's service to
                                  eight municipalities terminated
                                  effective April 30, 2019. KU
                                  continues to provide service to
                                  two municipalities.



     
                Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations



     
                (After-Tax)



     
                (Unaudited)





     4th Quarter 2020                                                                                                     
        (millions of dollars)



                                                                                                     U.K.          
      KY      
            PA                   Corp.


                                                                                                     Reg.            Reg.             Reg.                 & Other Total

                                                                                                                                                                     ---


     
                Reported Earnings (1)                                                                   $
      112                              $
          88                $
          126          $
       (36)  $
      290



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges, net of tax of $37                                           (140)                                                                              (140)



     Talen litigation costs, net of tax of $1                                                          -                                                                       (7)      (7)



     COVID-19 impact, net of tax of $0, $0, $0, $0 (2)                                                 -                 (1)                                                            (1)



     Strategic corporate initiatives, net of tax of $0, $0, $0, $1                                   (8)                                                                       (4)     (12)



     Executive retirement benefits, net of tax of $2                                                   -                                                                       (6)      (6)



     
                Total Special Items                                                              (148)                 (1)                                                  (17)    (166)




     
                Earnings from Ongoing Operations                                                        $
      260                              $
          89                $
          126          $
       (19)  $
      456







                                                                                                                           
        (per share - diluted)



                                                                                                     U.K.          
      KY      
            PA                   Corp.


                                                                                                     Reg.            Reg.             Reg.                 & Other Total

                                                                                                                                                                     ---


     
                Reported Earnings (1)                                                                  $
      0.15                            $
          0.11               $
          0.16        $
       (0.04) $
      0.38



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges                                                             (0.18)                                                                             (0.18)



     Talen litigation costs                                                                            -                                                                    (0.01)   (0.01)



     Strategic corporate initiatives                                                              (0.01)                                                                             (0.01)



     Executive retirement benefits                                                                     -                                                                    (0.01)   (0.01)



     
                Total Special Items                                                             (0.19)                                                                    (0.02)   (0.21)




     
                Earnings from Ongoing Operations                                                       $
      0.34                            $
          0.11               $
          0.16        $
       (0.02) $
      0.59



              (1)              Reported Earnings represents Net
                                  Income.



              (2)              COVID-19 impact relates to
                                  incremental costs for labor not
                                  chargeable to capital projects due to
                                  U.K. government lockdown
                                  restrictions, outside services,
                                  customer payment processing,
                                  purchases of personal protective
                                  equipment and other safety related
                                  actions associated with the COVID-19
                                  pandemic.



     
                Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations



     
                (After-Tax)



     
                (Unaudited)




                                   
              Year-to-Date December 31, 2020                                                    
        (millions of dollars)



                                                                                                     U.K.            
      KY         
            PA                   Corp.


                                                                                                     Reg.              Reg.                Reg.                 & Other Total

                                                                                                                                                                          ---


     
                Reported Earnings (1)                                                                    $
       686                                $
          418                $
          497         $
      (132) $
      1,469



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges, net of tax of $57                                           (216)                                                                                   (216)



     Talen litigation costs, net of tax of $3                                                          -                                                                           (13)     (13)



     COVID-19 impact, net of tax of $4, $2, $0, $0 (2)                                              (15)                      (5)                                  (1)              (1)     (22)



     U.K. tax rate change                                                                          (102)                                                                                   (102)



     Strategic corporate initiatives, net of tax of $0, $0, $0, $3                                   (8)                                                                           (11)     (19)



     Executive retirement benefits, net of tax of $2                                                   -                                                                            (6)      (6)



     
                Total Special Items                                                              (341)                      (5)                                  (1)             (31)    (378)




     
                Earnings from Ongoing Operations                                                       $
       1,027                                $
          423                $
          498         $
      (101) $
      1,847







                                                                                                                                
        (per share - diluted)



                                                                                                     U.K.            
      KY         
            PA                   Corp.


                                                                                                     Reg.              Reg.                Reg.                 & Other Total

                                                                                                                                                                          ---


     
                Reported Earnings (1)                                                                   $
       0.89                               $
          0.54               $
          0.65        $
      (0.17)  $
      1.91



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges                                                             (0.27)                                                                                  (0.27)



     Talen litigation costs                                                                            -                                                                         (0.02)   (0.02)



     COVID-19 impact (2)                                                                          (0.02)                   (0.01)                                                         (0.03)



     U.K. tax rate change                                                                         (0.14)                                                                                  (0.14)



     Strategic corporate initiatives                                                              (0.01)                                                                         (0.01)   (0.02)



     Executive retirement benefits                                                                     -                                                                         (0.01)   (0.01)



     
                Total Special Items                                                             (0.44)                   (0.01)                                                (0.04)   (0.49)




     
                Earnings from Ongoing Operations                                                        $
       1.33                               $
          0.55               $
          0.65        $
      (0.13)  $
      2.40



              (1)              Reported Earnings represents
                                  Net Income.



              (2)              COVID-19 impact relates to
                                  incremental costs for labor
                                  not chargeable to capital
                                  projects due to U.K.
                                  government lockdown
                                  restrictions, outside
                                  services, customer payment
                                  processing, purchases of
                                  personal protective equipment
                                  and other safety related
                                  actions associated with the
                                  COVID-19 pandemic.



     
                Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations



     
                (After-Tax)



     
                (Unaudited)





     4th Quarter 2019                                                                                                    
     (millions of dollars)



                                                                                                     U.K.          
      KY        
               PA               Corp.


                                                                                                     Reg.            Reg.                  Reg.             & Other Total

                                                                                                                                                                      ---


     
                Reported Earnings (1)                                                                   $
      193                                  $
       72                $
       125          $
       (26)  $
      364



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges, net of tax of $17                                            (66)                                                                             (66)



     Talen litigation costs, net of tax of $0                                                          -                                                                     (1)      (1)



     
                Total Special Items                                                               (66)                                                                     (1)     (67)




     
                Earnings from Ongoing Operations                                                        $
      259                                  $
       72                $
       125          $
       (25)  $
      431







                                                                                                                          
     (per share - diluted)



                                                                                                     U.K.          
      KY        
               PA               Corp.


                                                                                                     Reg.            Reg.                  Reg.             & Other Total

                                                                                                                                                                      ---


     
                Reported Earnings (1)                                                                  $
      0.26                                $
       0.10               $
       0.16        $
       (0.04) $
      0.48



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges                                                             (0.09)                                                                           (0.09)



     
                Total Special Items                                                             (0.09)                                                                           (0.09)




     
                Earnings from Ongoing Operations                                                       $
      0.35                                $
       0.10               $
       0.16        $
       (0.04) $
      0.57



              (1)              Reported Earnings represents
                                  Net Income.



     
                Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations



     
                (After-Tax)



     
                (Unaudited)





     Year-to-Date December 31, 2019                                                                                        
       (millions of dollars)



                                                                                                     U.K.            
      KY    
            PA                   Corp.


                                                                                                     Reg.              Reg.           Reg.                 & Other Total

                                                                                                                                                                     ---


     
                Reported Earnings (1)                                                                    $
       977                           $
          436                $
          458              $
      (125) $
      1,746



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges, net of tax of $13                                            (51)                                                                             (51)



     Talen litigation costs, net of tax of $1                                                          -                                                                       (5)           (5)



     Other, net of tax of $1                                                                         (4)                                                                                     (4)



     
                Total Special Items                                                               (55)                                                                       (5)          (60)




     
                Earnings from Ongoing Operations                                                       $
       1,032                           $
          436                $
          458              $
      (120) $
      1,806







                                                                                                                            
       (per share - diluted)



                                                                                                     U.K.            
      KY    
            PA                   Corp.


                                                                                                     Reg.              Reg.           Reg.                 & Other Total

                                                                                                                                                                     ---


     
                Reported Earnings (1)                                                                   $
       1.33                          $
          0.59               $
          0.62             $
      (0.17)  $
      2.37



     Less: Special Items (expense) benefit:



     Foreign currency economic hedges                                                             (0.06)                                                                                  (0.06)



     Talen litigation costs                                                                            -                                                                    (0.01)        (0.01)



     Other                                                                                        (0.01)                                                                                  (0.01)



     
                Total Special Items                                                             (0.07)                                                                    (0.01)        (0.08)




     
                Earnings from Ongoing Operations                                                        $
       1.40                          $
          0.59               $
          0.62             $
      (0.16)  $
      2.45



              (1)              Reported Earnings represents
                                  Net Income.



              Contacts:                    For news media: Ryan
                                             Hill, 610-774-4033

                                            For financial analysts:
                                             Andy Ludwig,
                                             610-774-3389

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SOURCE PPL Corporation