PPL Corp 8-K, filed Feb 14, 2020
PPL Corp (PPL)
8-K
2020-02-14
For: 2020-02-14
View Original
Added on
April 11, 2026
About this 8-K
PPL Corp filed this 8-K on February 14, 2020.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 14, 2020
Commission File Number | Registrant; State of Incorporation; Address and Telephone Number | IRS Employer Identification No. | |||
(Exact name of Registrant as specified in its charter) | |||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol: | Name of each exchange on which registered |
Junior Subordinated Notes of PPL Capital Funding, Inc. | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition
The information attached hereto as Exhibit 99.1 provides supplemental unaudited financial information for the U.K. Regulated Segment of PPL Corporation ("PPL"). The U.K. Regulated Segment consists of PPL Global, LLC, which primarily includes PPL's regulated electricity distribution businesses in the U.K., known as Western Power Distribution ("WPD"), the results of hedging the translation of WPD's earnings from British pound sterling into U.S. dollars and certain costs such as U.S. income taxes, administrative costs and acquisition-related financing costs.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) | Exhibits | |||
99.1 - | Supplemental Unaudited Financial Information of PPL Corporation's U.K. Regulated Segment. | |||
104 - | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document). | |||
As provided in General Instruction B.2 of Form 8-K, the information contained in this Form 8-K shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall any such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PPL CORPORATION | |||
By: | /s/ Marlene C. Beers | ||
Marlene C. Beers Vice President and Controller | |||
Dated: February 14, 2020
The supplemental financial information provided below should be read in conjunction with the audited financial statements and accompanying notes of PPL Corporation ("PPL") in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the "2019 10-K") and the disclosures relevant to the U.K. Regulated segment under Item 1. Business, and Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2019 10-K.
The U.K. Regulated segment consists of PPL Global, LLC, which primarily includes WPD's regulated electricity distribution operations, the results of hedging the translation of WPD's earnings from British pound sterling into U.S. dollars, and certain costs, such as U.S. income taxes, administrative costs and acquisition-related financing costs. The information presented below was prepared on the same basis as the information presented in the 2019 10-K.
Select Condensed Consolidated Financial Information - PPL's U.K. Regulated Segment
Unaudited
PPL's U.K. Regulated Segment
Condensed Consolidated Balance Sheets
At December 31,
(Millions of Dollars)
2019 | 2018 | |||||||
Assets | ||||||||
Current Assets | $ | 768 | $ | 534 | ||||
Property, Plant & Equipment, net | 13,232 | 12,437 | ||||||
Goodwill | 2,483 | 2,447 | ||||||
Other Noncurrent Assets | 1,139 | 1,282 | ||||||
Total Assets | $ | 17,622 | $ | 16,700 | ||||
Liabilities and Equity | ||||||||
Current Liabilities (including debt due within one year) | $ | 1,272 | $ | 1,020 | ||||
Long-term Debt | 7,875 | 7,572 | ||||||
Deferred Credits and Other Noncurrent Liabilities | 946 | 882 | ||||||
Equity | 7,529 | 7,226 | ||||||
Total Liabilities and Equity | $ | 17,622 | $ | 16,700 | ||||
The spot rates of U.S. Dollar per British pound sterling used to translate the WPD Balance Sheet from British pound sterling to U.S. dollars were $1.29/£ and $1.28/£ as of December 31, 2019 and 2018, respectively. In 2019, changes in this exchange rate resulted in a foreign currency translation gain of $106 million, which reflected a $181 million increase to PP&E, $34 million increase to goodwill and $12 million decrease to other net liabilities, partially offset by a $121 million increase to long-term debt.
PPL's U.K. Regulated Segment
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 31,
(Millions of Dollars)
2019 | 2018 | |||||||
Cash Flows From Operating Activities | ||||||||
Net Income | $ | 977 | $ | 1,114 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation | 250 | 247 | ||||||
Unrealized (gains) losses on derivatives, and other hedging activities | 62 | (190 | ) | |||||
Other | (151 | ) | (68 | ) | ||||
Changes in current assets and current liabilities | (109 | ) | (64 | ) | ||||
Other operating activities | ||||||||
Defined benefit plans - funding | (277 | ) | (186 | ) | ||||
Other | 71 | 62 | ||||||
Net cash provided by operating activities | 823 | 915 | ||||||
Cash Flows from Investing Activities | ||||||||
Expenditures for long-lived assets | (857 | ) | (954 | ) | ||||
Other | 12 | 19 | ||||||
Net cash used in investing activities | (845 | ) | (935 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Net Distributions to PPL | (264 | ) | (214 | ) | ||||
Issuance of long-term debt | 364 | 541 | ||||||
Net increase (decrease) in short-term debt | 63 | (347 | ) | |||||
Other | 1 | (1 | ) | |||||
Net cash provided by (used in) financing activities | 164 | (21 | ) | |||||
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash | 10 | (18 | ) | |||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 152 | (59 | ) | |||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 24 | 83 | ||||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 176 | $ | 24 | ||||
Supplemental Disclosures of Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Interest - net of amount capitalized | $ | 353 | $ | 347 | ||||
Income taxes - net | $ | 92 | $ | 193 | ||||
Significant non-cash transactions: | ||||||||
Accrued expenditures for property, plant and equipment at December 31, | $ | 47 | $ | 37 | ||||
Accrued expenditures for intangible assets at December 31, | $ | 79 | $ | 64 | ||||
PPL's U.K. Regulated Segment
Condensed Consolidated Statements of Income
For the Years Ended December 31,
(Millions of Dollars)
20191 | 20181 | |||||||
Operating revenues | $ | 2,167 | $ | 2,268 | ||||
Other operation and maintenance | 510 | 538 | ||||||
Depreciation | 250 | 247 | ||||||
Taxes, other than income | 127 | 134 | ||||||
Total operating expenses | 887 | 919 | ||||||
Other Income (Expense) - net | 294 | 403 | ||||||
Interest Expense | 405 | 413 | ||||||
Income Taxes | 192 | 225 | ||||||
Net Income | 977 | 1,114 | ||||||
Less: Special Items | (55 | ) | 146 | |||||
Earnings from Ongoing Operations2 | $ | 1,032 | $ | 968 | ||||
The following after-tax gains (losses), which management considers special items, impacted PPL's U.K. Regulated segment's results and are excluded from Earnings from Ongoing Operations.
2019 | 2018 | Income Statement Line Item | ||||||||
Foreign currency economic hedges, net of tax of $13, ($39)3 | $ | (51 | ) | $ | 148 | Other Income (Expense) - net | ||||
Other, net of tax of $1, $04 | (4 | ) | — | Other operation and maintenance | ||||||
U.S. tax reform5 | — | 3 | Income Taxes | |||||||
Death benefit, net of tax of $0, $16 | — | (5 | ) | Other operation and maintenance | ||||||
Total | $ | (55 | ) | $ | 146 | |||||
1 The average rates of U.S. Dollar per British pound sterling used to translate the WPD Statement of Income from British pound sterling to U.S. dollars were $1.32/£ and $1.31/£, representing a year-to-date average including the impact of foreign exchanges hedges for 2019 and 2018, respectively.
2 A non-GAAP financial measure that should not be considered as an alternative to 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 GBP-denominated anticipated earnings. 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.
3 Unrealized gains (losses) on contracts that economically hedge anticipated GBP-denominated earnings.
4 Settlement of a contractual dispute.
5 Adjustments to certain provisional amounts recognized in the December 31, 2017 Statement of Income related to the enactment of the Tax Cuts and Jobs Act.
6 Primarily a payment related to the death of the WPD Chief Executive.