ALLENTOWN, Pa., April 30 /PRNewswire-FirstCall/ -- PPL Corporation
(NYSE: PPL) today announced the transfer of its entire ownership interest in
its former electric distribution company in Brazil.
PPL transferred its interest in Companhia Energetica do Maranhao S.A.,
commonly known as CEMAR, to Brazil Development Equity Investments and SVM
Participacoes e Empreendimentos Ltda., companies controlled by a private
equity fund managed by GP Investimentos, a Brazilian private equity firm.
The transaction will result in a non-cash, unusual credit of approximately
$22 million, or 12 cents per share, to PPL's earnings in the second quarter of
2004. This credit results from the reversal of the negative carrying value,
created by previous consolidated operating losses for this investment.
John R. Biggar, PPL's executive vice president and chief financial
officer, reaffirmed PPL's previously announced 2004 forecast of earnings from
ongoing operations of $3.45 to $3.75 per share. Unusual items are not included
in earnings from ongoing operations.
Earlier this year, PPL sold its minority interest in Compania General de
Electricidad, or CGE, in Chile, which resulted in a non-cash, unusual charge
of approximately $7.5 million, or $0.04 per share, to the corporation's
earnings in the first quarter of 2004. Including these two unusual items, plus
an unusual charge of $0.01 for a discontinued telecommunications operation in
El Salvador, PPL's forecast of reported earnings for 2004 is $3.52 to $3.82
per share.
The transfer in ownership of CEMAR was sponsored by the Brazilian
electricity regulator, which assumed full operational and financial control of
CEMAR in August 2002 and since that time has been attempting to transfer CEMAR
to a new owner. PPL acquired CEMAR in June 2000.
In 2001, PPL had concluded that the long-term viability of its investment
in CEMAR was jeopardized and that the probability of positive cash flows was
minimal due to a prolonged drought, electricity rationing, an uncertain
regulatory climate and a malfunctioning wholesale electricity market in
Brazil. Accordingly, PPL wrote down its investment in CEMAR from approximately
$300 million to zero.
PPL suspended recording CEMAR's financial results in August 2002, because
it no longer controlled the entity as a result of the intervention by the
regulator.
PPL Corporation, headquartered in Allentown, Pa., controls about 11,500
megawatts of generating capacity in the United States, sells energy in key
U.S. markets and delivers electricity to nearly 5 million customers in
Pennsylvania, the United Kingdom and Latin America. More information is
available at http://www.pplweb.com.
"Earnings from ongoing operations" excludes the impact of unusual items.
Earnings from ongoing operations should not be considered as an alternative to
net income, 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 measure, is also
useful and meaningful to investors because it provides them with PPL's
underlying earnings performance as another criterion in making their
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.
Certain statements contained in this news release, including statements
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 involve 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 and prices for energy, capacity and fuel; competition;
accounting requirements; operating performance and costs of plants and other
facilities; political, regulatory or economic developments and conditions; the
liquidity of PPL Corporation and its subsidiaries; capital markets; and
foreign exchange rates. Any such forward-looking statements should be
considered in light of such factors and in conjunction with PPL Corporation's
Form 10-K and other reports on file with the Securities and Exchange
Commission.
SOURCE PPL Corporation
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Related links:
http://www.pplweb.com
CONTACT:
Tim Paukovits, for financial community,
+1-610-774-4124, or George Biechler, for news media,
+1-610-774-5997, both of PPL Corporation, or fax, +1-610-774-5281
NOTE TO EDITORS: Visit PPL's media Web site at
http://www.pplnewsroom.com for additional news and background about the
corporation and its subsidiaries.
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