PPL Corporation Reports Revised 2011 Earnings Due to Favorable Supreme Court Decision on Montana Streambed Case

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Feb 27, 2012, 07:47 ET

ALLENTOWN, Pa., Feb. 27, 2012 /PRNewswire/ -- PPL Corporation (NYSE: PPL) on Monday (2/27) announced increased fourth-quarter and year-end 2011 earnings compared with the results previously reported on Feb. 10, 2012, due to a favorable U.S. Supreme Court decision affecting the company's hydroelectric generation operations in Montana.

The Supreme Court on Feb. 22 unanimously overturned a previous Montana state Supreme Court decision requiring PPL Montana to pay rent for the use, in its hydroelectric operations, of riverbeds under portions of three rivers in Montana.

Reflecting the court's decision, PPL has reversed a loss accrual of $89 million pre-tax, or $53 million after-tax.

PPL's revised 2011 reported earnings were $1.495 billion, or $2.70 per share, as compared with the previously announced totals of $1.442 billion, or $2.61 per share. Excluding special items, PPL's revised 2011 earnings from ongoing operations were $1.509 billion, or $2.73 per share, as compared with the previously announced totals of $1.504 billion, or $2.72 per share.

For the fourth quarter of 2011, PPL's revised reported earnings were $454 million, or $0.78 per share, as compared with the previously announced totals of $401 million, or $0.69 per share. Excluding special items, PPL's revised 2011 fourth-quarter earnings from ongoing operations were $410 million, or $0.71 per share, as compared with the previously announced totals of $405 million, or $0.70 per share.

PPL is maintaining the existing 2012 earnings forecast range of $2.15 per share to $2.45 per share, with a midpoint of $2.30 per share.

The reversal of the loss accrual affected PPL's competitive supply business segment, which primarily consists of the domestic energy generation and marketing operations of PPL Energy Supply.

This segment's revised 2011 reported earnings were $1.40 per share, as compared with the previously announced $1.31 per share. Excluding special items, this segment's revised 2011 earnings from ongoing operations were $1.15 per share, as compared with the previously announced $1.14 per share.

For the fourth quarter of 2011, this segment's revised reported earnings were $0.46 per share, as compared with the previously announced $0.37 per share. Excluding special items, this segment's revised 2011 fourth-quarter earnings from ongoing operations were $0.27 per share, as compared with the previously announced $0.26 per share.

PPL Corporation, headquartered in Allentown, Pa., owns or controls about 19,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets, and delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom. More information is available at www.pplweb.com.

(See the tables at the end of the news release for details as to the reconciliation of earnings from ongoing operations to reported earnings.)

"Earnings from ongoing operations" should not be considered as an alternative to reported earnings, or net income attributable to PPL, which is an indicator of operating performance determined in accordance with generally accepted accounting principles (GAAP). PPL believes that "earnings from ongoing operations," although a non-GAAP financial measure, is also useful and meaningful to investors because it provides management's view of PPL's fundamental earnings performance as another criterion in making investment decisions. PPL's management also uses "earnings from ongoing operations" in measuring certain corporate performance goals. Other companies may use different measures to present financial performance.

"Earnings from ongoing operations" is adjusted for the impact of special items. Special items include:

Energy-related economic activity.
Foreign currency-related economic hedges.
Gains and losses on sales of assets not in the ordinary course of business.
Impairment charges (including impairments of securities in the company's nuclear decommissioning trust funds).
Workforce reduction and other restructuring impacts.
Acquisition-related costs and charges.
Other charges or credits that are, in management's view, not reflective of the company's ongoing operations.

Statements contained in this news release with respect to future earnings 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. Any such forward-looking statements should be considered in light of such important factors and in conjunction with PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.


PPL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a)

Condensed Consolidated Balance Sheets (Unaudited)
(Millions of Dollars)

			December 31,		December 31,
			2011(b)		2010
Assets
Cash and cash equivalents			$	1,202	$	925
Short-term investments				16		163
Price risk management assets - current				2,548		1,918
Assets held for sale						374
Other current assets				2,660		2,808
Investments				718		693
Property, Plant and Equipment
	Regulated utility plant			22,994		15,994
	Less: Accumulated depreciation - regulated utility plant			3,534		3,037
		Regulated utility plant, net		19,460		12,957
	Non-regulated property, plant and equipment			11,809		11,146
	Less: Accumulated depreciation - non-regulated property, plant and equipment			5,676		5,440
		Non-regulated property, plant and equipment, net		6,133		5,706
	Construction work in progress			1,673		2,160
	Property, Plant and Equipment, net			27,266		20,823
Regulatory assets				1,349		1,180
Goodwill and other intangibles				5,179		2,727
Price risk management assets - noncurrent				920		655
Other noncurrent assets				790		571
Total Assets			$	42,648	$	32,837

Liabilities and Equity
Short-term debt			$	578	$	694
Price risk management liabilities - current				1,570		1,144
Accounts payable				1,214		1,028
Other current liabilities				1,893		2,348
Long-term debt				17,993		12,161
Deferred income taxes and investment tax credits				3,611		2,800
Price risk management liabilities - noncurrent				840		470
Accrued pension obligations				1,299		1,496
Regulatory liabilities				1,010		1,031
Other noncurrent liabilities				1,544		1,187
Common stock and additional paid-in-capital				6,819		4,607
Earnings reinvested				4,797		4,082
Accumulated other comprehensive loss				(788)		(479)
Noncontrolling interests				268		268
Total Liabilities and Equity			$	42,648	$	32,837


(a)	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.
(b)	December 31, 2011 balances include the purchase price allocation associated with the acquisition of WPD Midlands on April 1, 2011.


PPL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)
(Millions of Dollars, Except Share Data)

				Three Months Ended December 31,				Year Ended December 31,
				2011		2010 (a)		2011 (a)		2010 (a)

Operating Revenues
	Utility			$	1,597	$	1,230	$	6,292	$	3,668
	Unregulated retail electric and gas (b)				209		94		726		415
	Wholesale energy marketing
		Realized			1,130		1,050		3,807		4,832
		Unrealized economic activity (b)			1,178		(615)		1,407		(805)
	Net energy trading margins				(16)		6		(2)		2
	Energy-related businesses				120		98		507		409
	Total Operating Revenues				4,218		1,863		12,737		8,521
Operating Expenses
	Operation
		Fuel (b)			454		425		1,946		1,235
		Energy purchases
			Realized		663		641		2,130		2,773
			Unrealized economic activity (b)		1,074		(704)		1,123		(286)
		Other operation and maintenance			626		527		2,667		1,756
	Depreciation				263		180		960		556
	Taxes, other than income				88		57		326		238
	Energy-related businesses				116		95		484		383
	Total Operating Expenses				3,284		1,221		9,636		6,655
Operating Income					934		642		3,101		1,866
Other Income (Expense) - net					6		(13)		4		(31)
Other-Than-Temporary Impairments									6		3
Interest Expense					220		180		898		593
Income from Continuing Operations Before Income Taxes					720		449		2,201		1,239
Income Taxes					262		111		691		263
Income from Continuing Operations After Income Taxes					458		338		1,510		976
Income (Loss) from Discontinued Operations (net of income taxes)							21		2		(17)
Net Income					458		359		1,512		959
Net Income Attributable to Noncontrolling Interests					4		4		17		21
Net Income Attributable to PPL Corporation				$	454	$	355	$	1,495	$	938

Amounts Attributable to PPL Corporation:
	Income from Continuing Operations After Income Taxes			$	454	$	334	$	1,493	$	955
	Income (Loss) from Discontinued Operations (net of income taxes)						21		2		(17)
	Net Income			$	454	$	355	$	1,495	$	938

Earnings Per Share of Common Stock - Basic
	Net Income Available to PPL Corporation Common Shareowners			$	0.78	$	0.73	$	2.71	$	2.17

Earnings Per Share of Common Stock - Diluted (c)
	Earnings from Ongoing Operations			$	0.71	$	0.83	$	2.73	$	3.13
	Special Items				0.07		(0.10)		(0.03)		(0.96)
	Net Income Available to PPL Corporation Common Shareowners			$	0.78	$	0.73	$	2.70	$	2.17

Weighted-Average Shares of Common Stock Outstanding (in thousands)
	Basic				578,153		483,145		550,395		431,345
	Diluted				579,347		483,382		550,952		431,569


(a)	The results of operations of LKE are consolidated for two months in 2010, as the date of acquisition was November 1, 2010. The results of operations of WPD Midlands are consolidated for eight months in 2011, as the date of acquisition was April 1, 2011. Consistent with PPL's policy, the results of operations of WPD Midlands are consolidated on a one-month lag.
(b)	Includes activity from energy-related contracts to hedge future cash flows that are not eligible for hedge accounting, or for which hedge accounting was not elected.
(c)	Earnings in 2011 and 2010 were impacted by several special items, as described in the text and tables of this news release. Earnings from ongoing operations exclude the impact of these special items.


PPL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars)


				2011 (a)		2010 (a)		2009
Cash Flows from Operating Activities
	Net income			$	1,512	$	959	$	426
	Adjustments to reconcile net income to net cash provided by operating activities
		Pre-tax gain from the sale of the Maine hydroelectric generation business					(25)		(38)
		Depreciation			961		567		471
		Amortization			254		213		389
		Defined benefit plans - expense			205		102		70
		Deferred income taxes and investment tax credits			582		241		104
		Impairment of assets			13		120		127
		Unrealized (gains) losses on derivatives, and other hedging activities			(314)		542		329
		Provision for Montana hydroelectric litigation			(74)		66		8
	Change in current assets and current liabilities
		Prepayments			294		(318)		(17)
		Counterparty collateral			(190)		(18)		334
		Other			56		(20)		(211)
	Defined benefit plans - funding				(667)		(396)		(185)
	Other operating activities				(125)				45
			Net cash provided by operating activities		2,507		2,033		1,852
Cash Flows from Investing Activities
	Expenditures for property, plant and equipment				(2,487)		(1,597)		(1,225)
	Proceeds from the sale of certain non-core generation facilities				381
	Proceeds from the sale of the Long Island generation business						124
	Proceeds from the sale of the Maine hydroelectric generation business						38		81
	Acquisition of WPD Midlands				(5,763)
	Acquisition of LKE						(6,812)
	Purchases of nuclear plant decommissioning trust investments				(169)		(128)		(227)
	Proceeds from the sale of nuclear plant decommissioning trust investments				156		114		201
	Proceeds from the sale of other investments				163				154
	Net (increase) decrease in restricted cash and cash equivalents				(143)		85		218
	Other investing activities				(90)		(53)		(82)
			Net cash used in investing activities		(7,952)		(8,229)		(880)
Cash Flows from Financing Activities
	Issuance of long-term debt				5,745		4,642		298
	Retirement of long-term debt				(1,210)		(20)		(1,016)
	Issuance of common stock				2,297		2,441		60
	Payment of common stock dividends				(746)		(566)		(517)
	Redemption of preferred stock of a subsidiary						(54)
	Debt issuance and credit facility costs				(102)		(175)		(21)
	Net increase (decrease) in short-term debt				(125)		70		(52)
	Other financing activities				(92)		(31)		(23)
			Net cash provided by (used in) financing activities		5,767		6,307		(1,271)
Effect of Exchange Rates on Cash and Cash Equivalents					(45)		13
Net Increase (Decrease) in Cash and Cash Equivalents					277		124		(299)
Cash and Cash Equivalents at Beginning of Period					925		801		1,100
Cash and Cash Equivalents at End of Period				$	1,202	$	925	$	801


(a)	LKE's cash flows are consolidated for two months in 2010, as the date of acquisition was November 1, 2010. WPD Midlands' cash flows are consolidated for eight months in 2011, as the date of acquisition was April 1, 2011. Consistent with PPL's policy, the cash flows of WPD Midlands are consolidated on a one-month lag.

Key Indicators (Unaudited)

							12 Months Ended
							December 31,
Financial							2011	2010

Dividends declared per share (d)							$ 1.40	$ 1.40
Book value per share (a)							$ 18.72	$ 16.98
Market price per share (a)							$ 29.42	$ 26.32
Dividend yield (a)							4.8%	5.3%
Dividend payout ratio (b)							52%	65%
Dividend payout ratio - earnings from ongoing operations (b)(c)							51%	45%
Price/earnings ratio (a)(b)							10.9	12.1
Price/earnings ratio - earnings from ongoing operations (a)(b)(c)							10.8	8.4
Return on common equity							14.93%	13.26%
Return on common equity - earnings from ongoing operations (c)							15.08%	19.20%

(a) End of period.
(b) Based on diluted earnings per share.
(c) Calculated using earnings from ongoing operations, which excludes the impact of special items, as described in the text and tables of
this news release.
(d) On February 10, 2012, PPL announced an increase in the quarterly dividend on common stock to $0.36 per share, or $1.44
per share on an annualized basis.


Operating - Domestic & International Electricity Sales (Unaudited)

			3 Months Ended December 31,			12 Months Ended December 31,
					Percent			Percent
(GWh)			2011	2010	Change	2011	2010	Change

Domestic Retail Delivered (a)
	PPL Electric Utilities		8,587	8,569	0.2%	37,165	36,883	0.8%
	LKE (b)		7,119	5,458	30.4%	30,898	5,458	466.1%
		Total	15,706	14,027	12.0%	68,063	42,341	60.7%

Domestic Retail Supplied (c)
	PPL EnergyPlus		2,537	2,246	13.0%	9,249	9,137	1.2%
	LKE (b)		7,119	5,458	30.4%	30,898	5,458	466.1%
		Total	9,656	7,704	25.3%	40,147	14,595	175.1%

International Delivered
	United Kingdom (d)		19,487	6,684	191.5%	58,245	26,820	117.2%

Domestic Wholesale
	PPL EnergyPlus - East (e)		13,427	14,365	(6.5%)	51,804	64,322	(19.5%)
	PPL EnergyPlus - West		2,465	2,598	(5.1%)	10,327	10,723	(3.7%)
	LKE (b)(f)		1,039	444	134.0%	3,550	444	699.5%
		Total	16,931	17,407	(2.7%)	65,681	75,489	(13.0%)

(a) Represents GWh delivered and billed to retail customers.
(b) 2011 includes LKE's volumes for the full year, whereas 2010 includes volumes for the two months following the November 1, 2010
date of acquisition.
(c) Represents GWh supplied by PPL EnergyPlus to PPL Electric Utilities as PLR, and to other retail customers in Pennsylvania, New
Jersey, Montana and Maryland. Also includes GWh supplied by LKE to retail customers in Kentucky, Virginia and Tennessee.
(d) Includes GWh delivered by WPD Midlands since the April 1, 2011 date of acquisition. Sales volumes for WPD operations are reported
on a one-month lag.
(e) Represents GWh generated plus GWh sold under full-requirement sales contracts. The percent change was primarily
due to less full-requirement sales contracts in 2011.
(f) Represents FERC regulated municipal and unregulated off-system sales.


Reconciliation of Segment Earnings from Ongoing Operations to Reported Earnings (Diluted)
(After Tax)
(Unaudited)

4th Quarter 2011		(millions of dollars)
		Kentucky		International		Pennsylvania
		Regulated		Regulated		Regulated		Supply		Total
Earnings from Ongoing Operations		$	36	$	164	$	58	$	152	$	410
Special Items:
Adjusted energy-related economic activity, net									69		69
Foreign currency-related economic hedges					(3)						(3)
WPD Midlands acquisition-related costs:
	Separation benefits				(7)						(7)
	Other acquisition-related costs				(21)						(21)
Other:
	Montana hydroelectric litigation								47		47
	Windfall profits tax litigation				(39)						(39)
	Counterparty bankruptcy								(6)		(6)
	Wholesale supply cost reimbursement								4		4
Total Special Items					(70)				114		44
Reported Earnings		$	36	$	94	$	58	$	266	$	454



		(per share)
		Kentucky		International		Pennsylvania
		Regulated		Regulated		Regulated		Supply		Total
Earnings from Ongoing Operations		$	0.06	$	0.28	$	0.10	$	0.27	$	0.71
Special Items:
Adjusted energy-related economic activity, net									0.11		0.11
WPD Midlands acquisition-related costs:
	Separation benefits				(0.01)						(0.01)
	Other acquisition-related costs				(0.04)						(0.04)
Other:
	Montana hydroelectric litigation								0.08		0.08
	Windfall profits tax litigation				(0.07)						(0.07)
	Counterparty bankruptcy								(0.01)		(0.01)
	Wholesale supply cost reimbursement								0.01		0.01
Total Special Items					(0.12)				0.19		0.07
Reported Earnings		$	0.06	$	0.16	$	0.10	$	0.46	$	0.78


Reconciliation of Segment Earnings from Ongoing Operations to Reported Earnings (Diluted)
(After Tax)
(Unaudited)

Year-to-Date December 31, 2011		(millions of dollars)
		Kentucky		International		Pennsylvania
		Regulated		Regulated		Regulated		Supply		Total
Earnings from Ongoing Operations		$	220	$	482	$	173	$	634	$	1,509
Special Items:
Adjusted energy-related economic activity, net			1						72		73
Foreign currency-related economic hedges					5						5
Impairments:
	Emission allowances								(1)		(1)
	Renewable energy credits								(3)		(3)
WPD Midlands acquisition-related costs:
	2011 Bridge Facility costs				(30)						(30)
	Foreign currency loss on 2011 Bridge Facility				(38)						(38)
	Net hedge gains				38						38
	Hedge ineffectiveness				(9)						(9)
	U.K. stamp duty tax				(21)						(21)
	Separation benefits				(75)						(75)
	Other acquisition-related costs				(57)						(57)
LKE acquisition-related costs:
	Sale of certain non-core generation facilities								(2)		(2)
Other:
	Montana hydroelectric litigation								45		45
	Litigation settlement - spent nuclear fuel storage								33		33
	Change in U.K. tax rate				69						69
	Windfall profits tax litigation				(39)						(39)
	Counterparty bankruptcy								(6)		(6)
	Wholesale supply cost reimbursement								4		4
Total Special Items			1		(157)				142		(14)
Reported Earnings		$	221	$	325	$	173	$	776	$	1,495



		(per share)
		Kentucky		International		Pennsylvania
		Regulated		Regulated		Regulated		Supply		Total
Earnings from Ongoing Operations		$	0.40	$	0.87	$	0.31	$	1.15	$	2.73
Special Items:
Adjusted energy-related economic activity, net									0.12		0.12
Foreign currency-related economic hedges					0.01						0.01
Impairments:
	Renewable energy credits								(0.01)		(0.01)
WPD Midlands acquisition-related costs:
	2011 Bridge Facility costs				(0.05)						(0.05)
	Foreign currency loss on 2011 Bridge Facility				(0.07)						(0.07)
	Net hedge gains				0.07						0.07
	Hedge ineffectiveness				(0.02)						(0.02)
	U.K. stamp duty tax				(0.04)						(0.04)
	Separation benefits				(0.13)						(0.13)
	Other acquisition-related costs				(0.10)						(0.10)
Other:
	Montana hydroelectric litigation								0.08		0.08
	Litigation settlement - spent nuclear fuel storage								0.06		0.06
	Change in U.K. tax rate				0.12						0.12
	Windfall profits tax litigation				(0.07)						(0.07)
	Counterparty bankruptcy								(0.01)		(0.01)
	Wholesale supply cost reimbursement								0.01		0.01
Total Special Items					(0.28)				0.25		(0.03)
Reported Earnings		$	0.40	$	0.59	$	0.31	$	1.40	$	2.70


Reconciliation of Segment Earnings from Ongoing Operations to Reported Earnings (Diluted)
(After Tax)
(Unaudited)

4th Quarter 2010		(millions of dollars)
		Kentucky		International		Pennsylvania
		Regulated		Regulated		Regulated		Supply		Other (a)		Total
Earnings from Ongoing Operations		$	36	$	32	$	26	$	311	$	(1)	$	404
Special Items:
Adjusted energy-related economic activity, net			(1)						(6)				(7)
Foreign currency-related economic hedges					3								3
Sales of assets:
	Maine hydroelectric generation business								15				15
Impairments:
	Emission allowances								(1)				(1)
LKE acquisition-related costs:
	Monetization of certain full-requirement sales contracts								(23)				(23)
	Sale of certain non-core generation facilities								(2)				(2)
	Discontinued cash flow hedges and ineffectiveness								(9)				(9)
	Reduction of credit facility								(6)				(6)
	2010 Bridge Facility costs										(8)		(8)
	Other acquisition-related costs										(14)		(14)
Other:
	LKE discontinued operations		2										2
	Change in U.K. tax rate				(1)								(1)
	Montana basin seepage litigation								2				2
Total Special Items			1		2				(30)		(22)		(49)
Reported Earnings		$	37	$	34	$	26	$	281	$	(23)	$	355



		(per share)
		Kentucky		International		Pennsylvania
		Regulated		Regulated		Regulated		Supply		Other (a)		Total
Earnings from Ongoing Operations		$	0.07	$	0.07	$	0.05	$	0.64			$	0.83
Special Items:
Adjusted energy-related economic activity, net									(0.01)				(0.01)
Sales of assets:
	Maine hydroelectric generation business								0.03				0.03
LKE acquisition-related costs:
	Monetization of certain full-requirement sales contracts								(0.05)				(0.05)
	Discontinued cash flow hedges and ineffectiveness								(0.02)				(0.02)
	Reduction of credit facility								(0.01)				(0.01)
	2010 Bridge Facility costs									$	(0.01)		(0.01)
	Other acquisition-related costs										(0.03)		(0.03)
Total Special Items									(0.06)		(0.04)		(0.10)
Reported Earnings		$	0.07	$	0.07	$	0.05	$	0.58	$	(0.04)	$	0.73




(a) Includes certain costs incurred prior to the November 1, 2010 acquisition of LKE.


Reconciliation of Segment Earnings from Ongoing Operations to Reported Earnings (Diluted)
(After Tax)
(Unaudited)

Year-to-Date December 31, 2010		(millions of dollars)
		Kentucky		International		Pennsylvania
		Regulated (a)		Regulated		Regulated		Supply		Other (b)		Total
Earnings from Ongoing Operations		$	25	$	230	$	115	$	990	$	(2)	$	1,358
Special Items:
Adjusted energy-related economic activity, net			(1)						(121)				(122)
Foreign currency-related economic hedges					1								1
Sales of assets:
	Maine hydroelectric generation business								15				15
	Sundance indemnification								1				1
Impairments:
	Emission allowances								(10)				(10)
LKE acquisition-related costs:
	Monetization of certain full-requirement sales contracts								(125)				(125)
	Sale of certain non-core generation facilities								(64)				(64)
	Discontinued cash flow hedges and ineffectiveness								(28)				(28)
	Reduction of credit facility								(6)				(6)
	2010 Bridge Facility costs										(52)		(52)
	Other acquisition-related costs										(22)		(22)
Other:
	Montana hydroelectric litigation								(34)				(34)
	LKE discontinued operations		2										2
	Change in U.K. tax rate				18								18
	Windfall profits tax litigation				12								12
	Health care reform - tax impact								(8)				(8)
	Montana basin seepage litigation								2				2
Total Special Items			1		31				(378)		(74)		(420)
Reported Earnings		$	26	$	261	$	115	$	612	$	(76)	$	938



		(per share)
		Kentucky		International		Pennsylvania
		Regulated (a)		Regulated		Regulated		Supply		Other (b)		Total
Earnings from Ongoing Operations		$	0.06	$	0.53	$	0.27	$	2.27			$	3.13
Special Items:
Adjusted energy-related economic activity, net									(0.27)				(0.27)
Sales of assets:
	Maine hydroelectric generation business								0.03				0.03
Impairments:
	Emission allowances								(0.02)				(0.02)
LKE acquisition-related costs:
	Monetization of certain full-requirement sales contracts								(0.29)				(0.29)
	Sale of certain non-core generation facilities								(0.14)				(0.14)
	Discontinued cash flow hedges and ineffectiveness								(0.06)				(0.06)
	Reduction of credit facility								(0.01)				(0.01)
	2010 Bridge Facility costs									$	(0.12)		(0.12)
	Other acquisition-related costs										(0.05)		(0.05)
Other:
	Montana hydroelectric litigation								(0.08)				(0.08)
	Change in U.K. tax rate				0.04								0.04
	Windfall profits tax litigation				0.03								0.03
	Health care reform - tax impact								(0.02)				(0.02)
Total Special Items					0.07				(0.86)		(0.17)		(0.96)
Reported Earnings		$	0.06	$	0.60	$	0.27	$	1.41	$	(0.17)	$	2.17


	(a) The Kentucky Regulated segment includes $21 million of interest expense (after tax) on the 2010 equity units, which were issued in June 2010
	to partially fund the LKE acquisition. Of this amount, $11 million (after tax) was included in the Supply segment in the third quarter, which
	was reallocated from the Supply segment to the Kentucky Regulated segment for the year-to-date presentation.
	(b) Includes certain costs incurred prior to the November 1, 2010 acquisition of LKE.