PPL Corporation (NYSE: PPL) today announced 2022 reported earnings (GAAP) of $756 million, or $1.02 per share, compared with a net loss of $1.48 billion, or $1.93 per share in 2021.
Adjusting for special items, 2022 earnings from ongoing operations (non-GAAP) were $1.04 billion, or $1.41 per share, compared with $806 million, or $1.05 per share, a year ago.
PPL's fourth-quarter 2022 reported earnings were $190 million, or $0.26 per share, compared with fourth-quarter 2021 reported earnings of $134 million, or $0.18 per share.
Adjusting for special items, fourth-quarter 2022 earnings from ongoing operations were $209 million, or $0.28 per share, compared with fourth-quarter 2021 earnings from ongoing operations of $163 million, or $0.22 per share.
Over the past two years, we've taken bold steps to transform PPL for long-term growth and success and to improve shareowner return while building on our core strengths,' said PPL President and Chief Executive Officer Vincent Sorgi. 'In June 2022, this included introducing a new PPL positioned to create the utilities of the future, generate top-tier earnings and dividend growth, and lead the clean energy transition while delivering exceptional value for our customers and shareowners.
Since then, we have continued to deliver on the goals we set, exceeding the midpoint of our 2022 earnings forecast, advancing industry-leading grid modernization, providing highly reliable electricity and gas service, and economically advancing our clean energy strategy with a proposal that would provide safe, reliable and affordable energy for our Kentucky customers while significantly reducing our carbon footprint,' said Sorgi.
In conjunction with today's earnings announcement, PPL today reaffirmed its 2023 earnings forecast range of $1.50 to $1.65 per share. The midpoint, $1.58 per share, represents a 7% increase over the $1.48 per share midpoint of PPL's 2022 pro forma earnings per share range (reflecting a full year of earnings contributions from Rhode Island Energy).
In addition, PPL announced a 7% increase in its quarterly common stock dividend, raising the dividend from $0.225 per share to $0.24 per share. The increased dividend will be payable April 3, 2023, to shareowners of record as of March 10, 2023, and reflects PPL's commitment to dividend growth in line with earnings per share growth.
The company reaffirmed its 6% to 8% annual EPS and dividend growth targets through at least 2026 off the midpoint of the 2023 earnings forecast range, or $1.58 per share.
PPL also reaffirmed its planned infrastructure investments, targeting $12 billion in improvements from 2023 to 2026 to strengthen grid reliability and resiliency and economically replace aging coal generation with reliable, least-cost and clean energy sources. These investments are expected to result in 5.6% average annual rate base growth through 2026, with greater than 7% rate base growth in the back half of the plan.
Also as outlined on Jan. 11, PPL has raised its target for annual operation and maintenance savings to at least $175 million by 2026. The expected savings will be driven largely by transmission and distribution operations as PPL continues to deploy scalable technologies and data science across its utility portfolio.
The company's plan also continues to support a balance sheet that is among the best in the U.S. utility sector, supporting the company's capital investment plan without the need to issue equity through at least 2026. PPL's credit profile also reflects a projected Funds from Operations (FFO)/Cash Flow from Operations (CFO) to debt ratio of 16% to 18% throughout the planning period.
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.
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 2022 increased by $0.07 per share compared with a year ago. Earnings from ongoing operations in 2022 increased by $0.09 per share compared with a year ago. Factors driving earnings results primarily included higher retail rates effective July 1, 2021, higher sales volumes and share accretion, partially offset by higher operation and maintenance expense and higher depreciation expense.
Reported earnings and earnings from ongoing operations in the fourth quarter of 2022 decreased by $0.01 per share. Factors driving earnings results primarily included higher operation and maintenance expense and higher interest expense, partially offset by higher sales volumes.
Pennsylvania Regulated Segment
PPL's Pennsylvania Regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.
Reported earnings in 2022 increased by $0.13 per share compared with a year ago. Earnings from ongoing operations increased by $0.09 per share compared to a year ago. Factors driving earnings results primarily included returns on additional capital investments in transmission, higher peak transmission demand, higher sales volumes and share accretion, partially offset by higher operation and maintenance expense.
Reported earnings and earnings from ongoing operations in the fourth quarter of 2022 increased by $0.01 per share compared with a year ago. Factors driving earnings results primarily included returns on additional capital investments in transmission and higher sales volumes, partially offset by higher operation and maintenance expense.
Rhode Island Regulated Segment
PPL's Rhode Island Regulated segment consists of the regulated electricity and natural gas operations of Rhode Island Energy, which was acquired on May 25, 2022.
The Rhode Island Regulated Segment reported a net loss of $0.06 per share since the acquisition in May and reported earnings of $0.01 per share in the fourth quarter of 2022. The net loss since May, as well as fourth-quarter results, reflected integration expenses and related costs associated with the acquisition, which were treated as special items. Adjusting for the special items, PPL's earnings from ongoing operations increased $0.08 per share since acquisition and $0.03 per share in the fourth quarter due to the addition of Rhode Island Energy to PPL's ongoing earnings results.
Corporate and Other
PPL's Corporate and Other category primarily includes financing costs incurred at the corporate level that have not been allocated or assigned to the segments, certain non-recoverable costs resulting from commitments made to the Rhode Island Division of Public Utilities and Carriers and the Rhode Island Attorney General's Office in conjunction with the acquisition of Rhode Island Energy, and certain other unallocated costs.
Reported earnings in 2022 increased by $0.79 per share compared with a year ago, primarily attributable to certain special items discussed above. Adjusting for special items, earnings from ongoing operations in 2022 increased by $0.10 per share compared with a year ago. Factors driving earnings results primarily included lower interest expense from less outstanding holding company debt.
Reported earnings in the fourth quarter of 2022 were even compared with a year ago. Earnings from ongoing operations in the fourth quarter of 2022 increased by $0.03 per share. Factors driving earnings results primarily included lower operation and maintenance expense, lower income taxes and other factors that were not individually significant, partially offset by higher interest expense.
2023 Earnings Forecast
PPL today reaffirmed its 2023 earnings forecast range of $1.50 to $1.65 per share, with a midpoint of $1.58 per share.
Earnings from ongoing operations is a non-GAAP measure that could differ from reported earnings due to special items that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations. PPL management is not able to forecast if any of these factors will occur or whether any amounts will be reported for future periods. Therefore, PPL is not able to provide an equivalent GAAP measure for earnings guidance.
About PPL
PPL Corporation (NYSE: PPL), based in Allentown, Pennsylvania, is a leading U.S. energy company focused on providing electricity and natural gas safely, reliably and affordably to 3.5 million customers in the U.S. PPL's high-performing, award-winning utilities are addressing energy challenges head-on by building smarter, more resilient and more dynamic power grids and advancing sustainable energy solutions.
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 2022 financial results at 11 a.m. Eastern time on Friday, Feb. 17. 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: 0862911. 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.
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.
Significant losses on early extinguishment of debt.
Other charges or credits that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations.
Statements contained in this news release, including statements with respect to future earnings, cash flows, dividends, financing, regulation 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: asset or business acquisitions and dispositions; the novel coronavirus pandemic or other pandemic health events or other catastrophic events and their effect on financial markets, economic conditions and our businesses; market demand for energy in our 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; 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 jurisdictions where PPL Corporation or its subsidiaries conduct business, including any potential effects of threatened or actual cyberattack, terrorism, or war or other hostilities; new state, federal or foreign legislation, including new tax legislation and the commitments and liabilities of PPL Corporation and its subsidiaries. Any such forward-looking statements should be considered in light of such 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.
Contact:
Ryan Hill
Tel: 610-774-4033
PPL CORPORATION 
