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PPL Corporation Reports 28 Percent Increase in Third-Quarter Earnings;

Company Confirms Earnings Forecast for 2001, Revises 2002 Forecast

ALLENTOWN, Pa. (October 24, 2001) -- PPL Corporation (NYSE: PPL) today (10/24) reported the strongest third-quarter earnings in company history, a 28 percent increase in earnings per share over the same period in 2000. PPL earned $1.04 per share during the third quarter of 2001 as compared to $0.81 per share a year ago, when adjusted to exclude the benefit of nonrecurring items.

PPL's record third-quarter earnings were driven primarily by:

-increased margins on wholesale energy activities in markets in the Eastern United States, compared to a year ago.
-success in continuing to reduce operating costs.
-higher volumes of electricity delivered in PPL Electric Utilities' franchised service territory.
-improved earnings contributions from energy-related businesses including the company's mechanical contracting subsidiaries and the company's synfuels operations.

These factors offset lower margins from PPL's wholesale energy activities in the Western United States and lower returns from the company's international operations.

"Excellent operating performance during the third quarter allowed us to offset the lower margins from our Western wholesale energy sales," said William F. Hecht, PPL's chairman, president and chief executive officer. "The strength of our integrated growth strategy and our strong business fundamentals are leading to record PPL earnings for 2001 despite the precipitous decline in energy prices."

For the first nine months of 2001, PPL reported a significant 39 percent increase in earnings per share over a year ago. PPL reported earnings of $3.35 per share for that period of 2001, compared to $2.41 per share reported a year ago, when adjusted to exclude the benefit of nonrecurring items. Actual earnings for the third quarter of 2000 benefited from the nonrecurring impact of 13 cents per share from a settlement with various insurers for environmental and other liabilities.
The strong growth in PPL's earnings for the first nine months of 2001 resulted primarily from the following factors: increased margins on energy activities in markets in both the Eastern and Western United States; improved earnings contributions from energy-related businesses including the company's mechanical contracting subsidiaries and the company's synfuel operations; success in continuing to control operating costs; and higher returns from the company's international operations.

Company Confirms 2001 Earnings Forecast, Revises 2002 Forecast

Based on the excellent results in the third quarter, the company confirmed that it still forecasts earnings in excess of $4.00 per share for 2001, which would be the highest annual earnings in the company's history.

For 2002, PPL now forecasts little, if any, change from the level of earnings per share currently forecast for 2001. The change from the previous 2002 forecast of $4.55 to $4.65 is essentially due to the significant decline in wholesale energy margins, offset by reductions in operating and financing costs.

The 2002 earnings forecast represents a compound annual growth rate of 19 percent based on adjusted earnings per share for 1999, the first full year of deregulation in Pennsylvania. About 80 percent of PPL's 2002 earnings are expected to come from its energy supply business and the balance from its domestic and international delivery businesses.

"Our 2001 performance through the first three quarters of 2001 provides a firm base from which we expect continued long-term growth," said Hecht. "This base has been solidified through a concerted effort by our wholesale energy marketing operation to maximize the value of our generation capacity through long-term contracts in key U.S. markets."

PPL's most recent major long-term contract is an agreement to provide 450 megawatts of electricity supply to The Montana Power Company over a five-year period beginning July 1, 2002. "This contract, at prices comparable to the current market in the Northwestern United States, ends the uncertainty about our power supply arrangements in Montana," Hecht said. As a result of this agreement and other wholesale and retail agreements, Hecht said, PPL will have the majority of the output of its Montana power plants under long-term contracts beginning in July 2002.

During the third quarter of 2001, PPL also completed the strategic initiative the company terms "securitization" of PPL Electric Utilities, the regulated electricity delivery subsidiary. In connection with this initiative, PPL EnergyPlus, PPL's energy marketing and trading affiliate, won the competitive bid to provide the energy sufficient for PPL Electric Utilities to meet its needs through 2009. This contract permits PPL to sell a substantial portion of its Eastern U.S. generation over the next eight years at attractive margins when compared to current market prices.

Hecht also pointed out that the company's electricity and natural gas distribution businesses - in the United States and overseas - provide a stable, reliable source of earnings for PPL as it continues to pursue a targeted generation-building strategy.

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