PPL Corporation Reports Second-Quarter 2022 Earnings

News provided by

Aug 03, 2022, 08:00 ET

Announces 2022 second-quarter reported earnings (GAAP) of $0.16 per share.
Achieves 2022 second-quarter ongoing earnings per share of $0.30 vs. $0.19 in 2021.
Reaffirms 2022 ongoing earnings forecast range of $1.30 to $1.45 per share.

ALLENTOWN, Pa., Aug. 3, 2022 /PRNewswire/ -- PPL Corporation (NYSE: PPL) today announced second-quarter 2022 reported earnings (GAAP) of $119 million, or $0.16 per share, compared with second-quarter 2021 reported earnings of $19 million, or $0.03 per share.

PPL reported earnings of $392 million, or $0.53 per share, for the first six months of 2022, compared with the reported net loss of $1.82 billion, or $2.37 per share, for the first six months of 2021.

Adjusting for special items, second-quarter 2022 earnings from ongoing operations (non-GAAP) were $222 million, or $0.30 per share, compared with $147 million, or $0.19 per share, a year ago.

Earnings from ongoing operations for the first six months of 2022 were $527 million, or $0.71 per share, compared with $366 million, or $0.47 per share, for the first six months of 2021.

Special items in the second quarter of 2022 primarily included integration expenses associated with the acquisition of Rhode Island Energy. Special items in 2021 included a non-cash net loss from discontinued operations associated with PPL's former U.K. utility business.

"PPL's strong second-quarter financial performance put us squarely on track to achieve our 2022 earnings guidance, and with our acquisition of Rhode Island Energy now complete, we are excited to deliver on the business plan we shared during our recent Investor Day," said PPL President and Chief Executive Officer Vincent Sorgi.

"Our plan is focused on providing superior reliability and affordability for our customers, driving operational excellence, delivering top-tier annual earnings per share and dividend growth of 6% to 8% annually, and leading the clean energy transition in the regions we serve," added Sorgi. "Looking ahead, we're well positioned to deliver on this plan, with $27 billion in regulated investment opportunity through 2030."

PPL's 2022 ongoing earnings forecast range, reaffirmed today, is $1.30 to $1.45 per share, with a midpoint of $1.37 per share. The 2022 ongoing earnings forecast range reflects a partial year estimate of contributions from Rhode Island Energy, with the acquisition completed by PPL on May 25, 2022.

PPL also reaffirmed its projected compound annual earnings per share and dividend growth of 6% to 8% through at least 2025. The company's earnings per share growth target is based off its 2022 pro forma forecast range of $1.40 to $1.55 per share, with a midpoint of $1.48 per share. The pro forma forecast range reflects a full year of earnings contributions from Rhode Island Energy.

Second-Quarter 2022 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 (net income) to earnings from ongoing operations, including an itemization of special items.

(Dollars in millions, except for per share amounts)	2nd Quarter			Year to Date
	2022	2021	Change	2022	2021	Change
Reported earnings	$ 119	$ 19	NM*	$ 392	$ (1,821)	NM*
Reported earnings per share	$ 0.16	$ 0.03	NM*	$ 0.53	$ (2.37)	NM*

	2nd Quarter			Year to Date
	2022	2021	Change	2022	2021	Change
Earnings from ongoing operations	$ 222	$ 147	51 %	$ 527	$ 366	44 %
Earnings from ongoing operations per share	$ 0.30	$ 0.19	58 %	$ 0.71	$ 0.47	51 %
*NM: Not meaningful

Second-Quarter 2022 Earnings by Segment

	2nd Quarter		Year to Date
Per share	2022	2021	2022	2021
Reported earnings
Kentucky Regulated	$ 0.14	$ 0.11	$ 0.38	$ 0.30
Pennsylvania Regulated	0.17	0.12	0.36	0.27
Rhode Island Regulated	(0.04)	—	(0.04)	—
Corporate and Other	(0.11)	(0.92)	(0.17)	(1.01)
Discontinued Operations	—	0.72	—	(1.93)
Total	$ 0.16	$ 0.03	$ 0.53	$ (2.37)

	2nd Quarter		Year to Date
	2022	2021	2022	2021
Special items (expense) benefit
Kentucky Regulated	$ —	$ —	$ (0.01)	$ 0.01
Pennsylvania Regulated	—	(0.01)	—	(0.03)
Rhode Island Regulated	(0.05)	—	(0.05)	—
Corporate and Other	(0.09)	(0.87)	(0.12)	(0.89)
Discontinued Operations	—	0.72	—	(1.93)
Total	$ (0.14)	$ (0.16)	$ (0.18)	$ (2.84)

	2nd Quarter		Year to Date
	2022	2021	2022	2021
Earnings from ongoing operations
Kentucky Regulated	$ 0.14	$ 0.11	$ 0.39	$ 0.29
Pennsylvania Regulated	0.17	0.13	0.36	0.30
Rhode Island Regulated	0.01	—	0.01	—
Corporate and Other	(0.02)	(0.05)	(0.05)	(0.12)
Total	$ 0.30	$ 0.19	$ 0.71	$ 0.47

Key Factors Impacting Earnings

In addition to the segment drivers outlined below, PPL's reported earnings in the second quarter of 2022 included net special-item after-tax charges of $103 million, or $0.14 per share, primarily attributable to integration expenses associated with the acquisition of Rhode Island Energy. Reported earnings in the second quarter of 2021 included net special-item after-tax charges of $128 million, or $0.16 per share, primarily attributable to discontinued operations associated with the U.K. utility business, a U.K. tax rate change and the early extinguishment of debt.

Reported earnings in the first six months of 2022 included net special-item after-tax charges of $135 million, or $0.18 per share, primarily attributable to integration expenses associated with the acquisition of Rhode Island Energy. Reported earnings in the first six months of 2021 included net special-item after-tax charges of $2.19 billion, or $2.84 per share, primarily attributable to discontinued operations associated with the U.K. utility business, a U.K. tax rate change and a loss on the early extinguishment of debt.

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 and earnings from ongoing operations in the second quarter of 2022 increased by $0.03 per share compared with a year ago. Factors driving earnings results primarily included higher retail rates effective July 1, 2021, and higher sales volumes, partially offset by higher depreciation expense and higher operation and maintenance expense.

Reported earnings in the first six months of 2022 increased by $0.08 per share compared with a year ago. Earnings from ongoing operations in the first six months of 2022 increased by $0.10 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 depreciation expense and higher operation and maintenance expense.

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

Reported earnings in the second quarter of 2022 increased by $0.05 per share compared with a year ago. Earnings from ongoing operations in the second quarter of 2022 increased by $0.04 per share compared with a year ago. Factors driving earnings results primarily included higher peak transmission demand, returns on additional capital investments in transmission and share accretion.

Reported earnings for the first six months of 2022 increased by $0.09 per share compared with a year ago. Earnings from ongoing operations in the first quarter of 2022 increased by $0.06 per share compared with a year ago. Factors driving earnings results primarily included higher peak transmission demand, returns on additional capital investments in transmission, higher sales volumes and share accretion, partially offset by higher operation and maintenance expense.

Rhode Island Energy
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 $0.04 per share in the second quarter of 2022, primarily due to integration expenses associated with the acquisition. Earnings from ongoing operations increased by $0.01 per share 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 the second quarter of 2022 increased by $0.81 compared with a year ago. Earnings from ongoing operations in the second quarter of 2022 increased by $0.03 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 first six months of 2022 increased by $0.84 from a year ago. Earnings from ongoing operations in the first six months of 2022 increased $0.07 per share from a year ago. Factors driving earnings results primarily included lower interest expense from less outstanding holding company debt.

2022 Earnings Forecast

PPL reaffirmed its 2022 earnings from ongoing operations forecast range of $1.30 to $1.45 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 whether 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.

See the table at the end of this news release for a complete reconciliation of the earnings forecast.

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. For more information, 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 second-quarter 2022 financial results at 11 a.m. Eastern time on Wednesday, Aug. 3. The call will be webcast live, in audio format, together with slides of the presentation. 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. Interested individuals can 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 to join the conference: 0662630. Callers can access the webcast link at www.pplweb.com/investors under "Events."

# # #

Management utilizes "Earnings from Ongoing Operations" or "Ongoing Earnings" 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:

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; volatility in or the impact of other changes in financial markets, commodity prices and economic conditions, including inflation; 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.

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)

	June 30,	December 31,
	2022	2021
Assets
Cash and cash equivalents	$ 336	$ 3,571
Accounts receivable	867	641
Unbilled revenues	344	307
Fuel, materials and supplies	332	322
Regulatory assets	198	64
Other current assets	224	102
Property, Plant and Equipment
Regulated utility plant	36,017	30,477
Less: Accumulated depreciation - regulated utility plant	7,981	6,488
Regulated utility plant, net	28,036	23,989
Non-regulated property, plant and equipment	317	266
Less: Accumulated depreciation - non-regulated property, plant and equipment	60	41
Non-regulated property, plant and equipment, net	257	225
Construction work in progress	1,617	1,256
Property, Plant and Equipment, net	29,910	25,470
Noncurrent regulatory assets	1,681	1,236
Goodwill and other intangibles	2,634	1,059
Other noncurrent assets	536	451
Total Assets	$ 37,062	$ 33,223

Liabilities and Equity
Short-term debt	$ 988	$ 69
Long-term debt due within one year	501	474
Accounts payable	985	679
Other current liabilities	1,252	1,101
Long-term debt	12,153	10,666
Deferred income taxes and investment tax credits	3,352	3,270
Accrued pension obligations	183	183
Asset retirement obligations	153	157
Noncurrent regulatory liabilities	3,056	2,422
Other deferred credits and noncurrent liabilities	566	479
Common stock and additional paid-in capital	12,321	12,311
Treasury stock	(976)	(1,003)
Earnings reinvested	2,649	2,572
Accumulated other comprehensive loss	(124)	(157)
Noncontrolling interests	3	—
Total Liabilities and Equity	$ 37,062	$ 33,223


(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 June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Operating Revenues	$ 1,696	$ 1,288	$ 3,478	$ 2,786

Operating Expenses
Operation
Fuel	229	159	441	336
Energy purchases	305	137	657	357
Other operation and maintenance	560	404	993	771
Depreciation	289	269	560	536
Taxes, other than income	70	49	130	101
Total Operating Expenses	1,453	1,018	2,781	2,101

Operating Income	243	270	697	685

Other Income (Expense) - net	26	13	26	13

Interest Expense	118	474	225	627

Income (Loss) from Continuing Operations Before Income Taxes	151	(191)	498	71

Income Taxes	32	345	106	404

Income (Loss) from Continuing Operations After Income Taxes	119	(536)	392	(333)

Income (Loss) from Discontinued Operations (net of income taxes)	—	555	—	(1,488)

Net Income (Loss)	$ 119	$ 19	$ 392	$ (1,821)

Earnings Per Share of Common Stock:
Basic and Diluted
Income (Loss) from Continuing Operations After Income Taxes	$ 0.16	$ (0.69)	$ 0.53	$ (0.44)
Income (Loss) from Discontinued Operations (net of income taxes)	—	0.72	—	(1.93)
Net Income (Loss) Available to PPL Common Shareowners	$ 0.16	$ 0.03	$ 0.53	$ (2.37)

Weighted-Average Shares of Common Stock Outstanding (in thousands)
Basic	735,977	769,466	735,741	769,313
Diluted	736,769	769,466	736,478	769,313

PPL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars)

	Six Months Ended June 30,
	2022	2021
Cash Flows from Operating Activities
Net income (loss)	$ 392	$ (1,821)
Loss from discontinued operations (net of income taxes)	—	1,488
Income (Loss) from continuing operations (net of income taxes)	392	(333)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	560	536
Amortization	15	40
Deferred income taxes and investment tax credits	56	29
Loss on extinguishment of debt	—	322
Stock-based compensation expense	18	17
Other	19	11
Change in current assets and current liabilities
Accounts receivable	(47)	(10)
Accounts payable	166	(26)
Unbilled revenues	22	53
Fuel, materials and supplies	23	43
Prepayments	(69)	(62)
Counterparty collateral	62	—
Taxes payable	(41)	192
Regulatory assets and liabilities, net	(211)	39
Other	36	26
Other operating activities
Defined benefit plans - funding	(7)	(36)
Other	(15)	(46)
Net cash provided by operating activities - continuing operations	979	795
Net cash provided by operating activities - discontinued operations	—	726
Net cash provided by operating activities	979	1,521
Cash Flows from Investing Activities
Expenditures for property, plant and equipment	(1,009)	(969)
Acquisition of Narragansett Electric, net of cash acquired	(3,674)	—
Proceeds from sale of discontinued operations, net of cash divested	—	10,560
Other investing activities	—	(8)
Net cash provided by (used in) investing activities - continuing operations	(4,683)	9,583
Net cash provided by (used in) investing activities - discontinued operations	—	(607)
Net cash provided by (used in) investing activities	(4,683)	8,976
Cash Flows from Financing Activities
Issuance of long-term debt	—	650
Retirement of long-term debt	—	(2,379)
Payment of common stock dividends	(453)	(640)
Retirement of term loan	—	(300)
Retirement of commercial paper	—	(73)
Net increase (decrease) in short-term debt	919	(795)
Other financing activities	3	(19)
Net cash provided by (used in) financing activities - continuing operations	469	(3,556)
Net cash provided by (used in) financing activities - discontinued operations	—	(411)
Contributions from discontinued operations	—	365
Net cash provided by (used in) financing activities	469	(3,602)
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash included in Discontinued Operations	—	8
Net Decrease in Cash, Cash Equivalents and Restricted Cash included in Discontinued Operations	—	284
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	(3,235)	7,187
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	3,572	443
Cash, Cash Equivalents and Restricted Cash at End of Period	$ 337	$ 7,630

Supplemental Disclosures of Cash Flow Information
Significant non-cash transactions:
Accrued expenditures for property, plant and equipment at June 30,	$ 195	$ 222

Operating - Electricity Sales (Unaudited)⁽¹⁾

	Three Months Ended June 30,			Six Months Ended June 30,
			Percent			Percent
(GWh)	2022	2021	Change	2022	2021	Change

PA Regulated Segment
Retail Delivered	8,592	8,543	0.6 %	18,749	18,404	1.9 %

KY Regulated Segment
Retail Delivered	7,150	6,921	3.3 %	14,779	14,493	2.0 %
Wholesale⁽²⁾	304	191	59.2 %	500	467	7.1 %
Total	7,454	7,112	4.8 %	15,279	14,960	2.1 %

Total	16,046	15,655	2.5 %	34,028	33,364	2.0 %


(1)	Excludes Rhode Island Energy's sales volumes as its revenue is decoupled.
(2)	Represents FERC-regulated municipal and unregulated off-system sales.

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

2nd Quarter 2022	(millions of dollars)
	KY	PA	RI	Corp.
	Reg.	Reg.	Reg.	& Other	Total
Reported Earnings⁽¹⁾	$ 102	$ 124	$ (29)	$ (78)	$ 119
Less: Special Items (expense) benefit:
Talen litigation costs, net of tax of ($2)	—	—	—	9	9
Strategic corporate initiatives, net of tax of $1, $3⁽²⁾	(2)	—	—	(11)	(13)
Acquisition integration, net of tax of $10, $16⁽³⁾	—	—	(38)	(61)	(99)
Total Special Items	(2)	—	(38)	(63)	(103)
Earnings from Ongoing Operations	$ 104	$ 124	$ 9	$ (15)	$ 222


	(per share - diluted)
	KY	PA	RI	Corp.
	Reg.	Reg.	Reg.	& Other	Total
Reported Earnings⁽¹⁾	$ 0.14	$ 0.17	$ (0.04)	$ (0.11)	$ 0.16
Less: Special Items (expense) benefit:
Talen litigation costs	—	—	—	0.01	0.01
Strategic corporate initiatives⁽²⁾	—	—	—	(0.02)	(0.02)
Acquisition integration⁽³⁾	—	—	(0.05)	(0.08)	(0.13)
Total Special Items	—	—	(0.05)	(0.09)	(0.14)
Earnings from Ongoing Operations	$ 0.14	$ 0.17	$ 0.01	$ (0.02)	$ 0.30


(1)	Reported Earnings represents Net Income.
(2)	Represents costs primarily related to the acquisition of Rhode Island Energy and PPL's corporate centralization efforts.
(3)	Represents costs related to the integration of Rhode Island Energy and certain costs associated with its acquisition and commitments made during the acquisition process, including costs related to arrearages forgiveness for low-income and protected residential customers and a write-down of regulatory assets as of the Acquisition date for National Grid's Gas Business Enablement (GBE) program.

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

Year-to-Date June 30, 2022	(millions of dollars)
	KY	PA	RI	Corp.
	Reg.	Reg.	Reg.	& Other	Total
Reported Earnings⁽¹⁾	$ 281	$ 267	$ (29)	$ (127)	$ 392
Less: Special Items (expense) benefit:
Talen litigation costs, net of tax of ($1)	—	—	—	5	5
Strategic corporate initiatives, net of tax of $2, $4⁽²⁾	(6)	—	—	(15)	(21)
Acquisition integration, net of tax of $10, $22⁽³⁾	—	—	(38)	(82)	(120)
Solar panel impairment, net of tax of $0	—	—	—	1	1
Total Special Items	(6)	—	(38)	(91)	(135)
Earnings from Ongoing Operations	$ 287	$ 267	$ 9	$ (36)	$ 527


	(per share - diluted)
	KY	PA	RI	Corp.
	Reg.	Reg.	Reg.	& Other	Total
Reported Earnings⁽¹⁾	$ 0.38	$ 0.36	$ (0.04)	$ (0.17)	$ 0.53
Less: Special Items (expense) benefit:
Talen litigation costs	—	—	—	0.01	0.01
Strategic corporate initiatives⁽²⁾	(0.01)	—	—	(0.02)	(0.03)
Acquisition integration⁽³⁾	—	—	(0.05)	(0.11)	(0.16)
Total Special Items	(0.01)	—	(0.05)	(0.12)	(0.18)
Earnings from Ongoing Operations	$ 0.39	$ 0.36	$ 0.01	$ (0.05)	$ 0.71


(1)	Reported Earnings represents Net Income.
(2)	Represents costs primarily related to the acquisition of Rhode Island Energy and PPL's corporate centralization efforts.
(3)	Represents costs related to the integration of Rhode Island Energy and certain costs associated with its acquisition and commitments made during the acquisition process, including costs related to arrearages forgiveness for low-income and protected residential customers and a write-down of regulatory assets as of the Acquisition date for National Grid's Gas Business Enablement (GBE) program.

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

2nd Quarter 2021	(millions of dollars)
	KY	PA	Corp.	Disc.
	Reg.	Reg.	& Other	Ops.⁽²⁾	Total
Reported Earnings⁽¹⁾	$ 84	$ 96	$ (716)	$ 555	$ 19
Less: Special Items (expense) benefit:
Income (Loss) from Discontinued Operations	—	—	—	555	555
Talen litigation costs, net of tax of $1	—	—	(6)	—	(6)
Strategic corporate initiatives, net of tax of $1	—	—	(2)	—	(2)
Transmission formula rate return on equity reduction, net of tax of $2	—	(7)	—	—	(7)
Acquisition integration, net of tax of $1	—	—	(2)	—	(2)
U.K. tax rate change	—	—	(383)	—	(383)
Solar panel impairment, net of tax of $9	—	—	(28)	—	(28)
Loss on early extinguishment of debt, net of tax of $67	—	—	(255)	—	(255)
Total Special Items	—	(7)	(676)	555	(128)
Earnings from Ongoing Operations	$ 84	$ 103	$ (40)	$ —	$ 147


	(per share - diluted)
	KY	PA	Corp.	Disc.
	Reg.	Reg.	& Other	Ops.⁽²⁾	Total
Reported Earnings⁽¹⁾	$ 0.11	$ 0.12	$ (0.92)	$ 0.72	$ 0.03
Less: Special Items (expense) benefit:
Income (Loss) from Discontinued Operations	—	—	—	0.72	0.72
Transmission formula rate return on equity reduction	—	(0.01)	—	—	(0.01)
U.K. tax rate change	—	—	(0.50)	—	(0.50)
Solar panel impairment	—	—	(0.04)	—	(0.04)
Loss on early extinguishment of debt	—	—	(0.33)	—	(0.33)
Total Special Items	—	(0.01)	(0.87)	0.72	(0.16)
Earnings from Ongoing Operations	$ 0.11	$ 0.13	$ (0.05)	$ —	$ 0.19


(1)	Reported Earnings represents Net Income.
(2)	PPL sold its U.K. utility business on June 14, 2021, and its earnings were treated as a special item.

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

Year-to-Date June 30, 2021	(millions of dollars)
	KY	PA	Corp.	Disc.
	Reg.	Reg.	& Other	Ops.⁽²⁾	Total
Reported Earnings⁽¹⁾	$ 230	$ 209	$ (772)	$ (1,488)	$ (1,821)
Less: Special Items (expense) benefit:
Income (Loss) from Discontinued Operations	—	—	—	(1,492)	(1,492)
Talen litigation costs, net of tax of $2	—	—	(9)	—	(9)
Strategic corporate initiatives, net of tax of $1	—	—	(2)	—	(2)
Valuation allowance adjustment	4	—	(4)	4	4
Transmission formula rate return on equity reduction, net of tax of $8	—	(20)	—	—	(20)
Acquisition integration, net of tax of $1	—	—	(2)	—	(2)
U.K. tax rate change	—	—	(383)	—	(383)
Solar panel impairment, net of tax of $9	—	—	(28)	—	(28)
Loss on early extinguishment of debt, net of tax of $67	—	—	(255)	—	(255)
Total Special Items	4	(20)	(683)	(1,488)	(2,187)
Earnings from Ongoing Operations	$ 226	$ 229	$ (89)	$ —	$ 366


	(per share - diluted)
	KY	PA	Corp.	Disc.
	Reg.	Reg.	& Other	Ops.⁽²⁾	Total
Reported Earnings⁽¹⁾	$ 0.30	$ 0.27	$ (1.01)	$ (1.93)	$ (2.37)
Less: Special Items (expense) benefit:
Income (Loss) from Discontinued Operations	—	—	—	(1.94)	(1.94)
Talen litigation costs	—	—	(0.01)	—	(0.01)
Valuation allowance adjustment	0.01	—	(0.01)	0.01	0.01
Transmission formula rate return on equity reduction	—	(0.03)	—	—	(0.03)
U.K. tax rate change	—	—	(0.50)	—	(0.50)
Solar panel impairment	—	—	(0.04)	—	(0.04)
Loss on early extinguishment of debt	—	—	(0.33)	—	(0.33)
Total Special Items	0.01	(0.03)	(0.89)	(1.93)	(2.84)
Earnings from Ongoing Operations	$ 0.29	$ 0.30	$ (0.12)	$ —	$ 0.47


(1)	Reported Earnings represents Net Income.
(2)	PPL sold its U.K. utility business on June 14, 2021, and its earnings were treated as a special item.

Reconciliation of PPL's Earnings Forecast
After-Tax (Unaudited)
(per share - diluted)

	2022 Forecast Range
	Midpoint	High	Low
Estimate of Reported Earnings	$ 1.19	$ 1.27	$ 1.12
Less: Special Items (expense) benefit:⁽¹⁾
Talen litigation costs	0.01	0.01	0.01
Strategic corporate initiatives⁽²⁾	(0.03)	(0.03)	(0.03)
Acquisition integration⁽³⁾	(0.16)	(0.16)	(0.16)
Total Special Items	(0.18)	(0.18)	(0.18)
Forecast of Earnings from Ongoing Operations	$ 1.37	$ 1.45	$ 1.30


(1)	Reflects only special items recorded through June 30, 2022. PPL is not able to forecast special items for future periods.
(2)	Represents costs primarily related to the acquisition of Rhode Island Energy and PPL's corporate centralization efforts.
(3)	Represents costs related to the integration of Rhode Island Energy and certain costs associated with its acquisition and commitments made during the acquisition process, including costs related to arrearages forgiveness for low-income and protected residential customers and a write-down of regulatory assets as of the Acquisition date for National Grid's Gas Business Enablement (GBE) program.