PPL earns money by delivering electricity and natural gas, and by generating electricity in Kentucky. Its third-quarter 2026 profit rose 15%, helped by higher approved utility rates. Yet, over the first nine months, cash spent on plants and networks exceeded operating cash flow by $1.47 billion. PPL is earning more from its utilities while taking on a larger financing task to build their next generation of infrastructure.
Period: July–September 2026, with January–September comparisons identified separately. Research cutoff: November 9, 2026, New York date; the latest company results and business-plan update reviewed are dated November 6.
1. New rates improved profit faster than revenue
Approved rate increases are already improving the earnings of PPL’s existing utilities. Kentucky’s new base rates apply from January 1, while Pennsylvania’s new distribution rates took effect July 1. These changes allow the utilities to collect more for providing service and supporting their equipment and networks.
The improvement appears in both the quarter and the first nine months. Operating profit—revenue remaining after running the business, but before interest and income taxes—grew faster than revenue in each period. The operating margin shows how much of each revenue dollar remains as that profit.
| Consolidated results; $ millions except per-share amounts and margins | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Revenue | 2,239 | 2,497 | 6,768 | 7,382 |
| Operating profit | 569 | 665 | 1,653 | 1,885 |
| Operating margin, calculated | 25.4% | 26.6% | 24.4% | 25.5% |
| Net income | 318 | 367 | 915 | 1,049 |
| Net margin, calculated | 14.2% | 14.7% | 13.5% | 14.2% |
| Diluted earnings per share, dollars | 0.43 | 0.49 | 1.23 | 1.38 |
Source: PPL third-quarter 2026 Form 10-Q, consolidated income statement, p. 4, and MD&A, pp. 79–81. Margins divide the corresponding profit by revenue for the same period.
Pennsylvania distribution pricing added $61 million to third-quarter revenue. Kentucky’s new retail rates added another $54 million across Louisville Gas and Electric, or LG&E, and Kentucky Utilities, or KU. Pennsylvania transmission revenue also rose as additional investment entered the system. This is the central business mechanism: PPL builds infrastructure, then approved charges allow it to recover costs and earn a return on qualifying investment.
Revenue growth also includes money collected to pay for purchased energy. Pennsylvania’s supplier-of-last-resort service, which supplies customers who have not selected another electricity supplier, produced $209 million more revenue in the first nine months. Pennsylvania energy-purchase expense rose $196 million over the same period. The scopes are not identical, so their difference is not a profit calculation; the comparison shows why a larger electricity bill does not translate dollar for dollar into more utility profit.
Source: PPL Form 10-Q, revenue bridge and energy purchases, pp. 79–80; Pennsylvania segment analysis, pp. 84–85.
Retail electricity delivered increased 1.5% in Pennsylvania and 0.3% in Kentucky during the first nine months. The earnings explanations above show that higher rates and investment recovery were important even with modest growth in electricity delivered.
Source: PPL’s November 6, 2026 earnings release, “Operating — Electricity Sales,” nine-month retail-delivery rows.
The profit gains were concentrated in Kentucky and Pennsylvania. Rhode Island moved in the opposite direction, while lower corporate losses helped the nine-month total.
| Reported net income by business; $ millions | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Kentucky Regulated | 185 | 224 | 534 | 625 |
| Pennsylvania Regulated | 159 | 191 | 482 | 507 |
| Rhode Island Regulated | 27 | 2 | 80 | 48 |
| Corporate and Other | -53 | -50 | -181 | -131 |
| Consolidated net income | 318 | 367 | 915 | 1,049 |
Source: PPL Form 10-Q, segment earnings, p. 81. These are PPL’s reported segment results, including the corporate reconciliation, rather than a sum of separately filed subsidiary accounts.
Higher financing costs absorbed part of the operating improvement. Nine-month interest expense rose from $599 million to $690 million, primarily because PPL borrowed more long-term money. Of the $232 million increase in operating profit, $91 million was offset by additional interest expense. PPL’s growth is therefore becoming more sensitive to the cost of funding the assets that produce those earnings.
Source: PPL Form 10-Q, consolidated income statement, p. 4, and interest-expense explanation, p. 81.
2. Rhode Island’s new rates arrive with a substantial customer-credit obligation
Rhode Island’s profit improved after management’s exclusions, while reported profit fell. Its third-quarter reported profit fell to $2 million. Management’s measure excluding selected items was $40 million, compared with $38 million a year earlier. The gap matters because the excluded costs still affect PPL’s reported earnings and, where paid, its cash.
Rhode Island recorded $38 million of after-tax special charges in the quarter. These included $17 million for acquisition integration, primarily a transition-services settlement; $10 million for the acquisition-related customer commitment; and $5 million for collection-process problems following customer-system integration. The remaining charges concerned information technology, safety and costs regulators disallowed.
Source: PPL Form 10-Q, Rhode Island segment analysis and reconciliation of ongoing earnings, pp. 85–89. Amounts in this paragraph are after tax.
The next twelve months contain a larger, separately identified obligation. When PPL acquired Rhode Island Energy in 2022, it agreed to protect customers from certain rate increases caused by the acquisition’s tax-accounting effects. The approved solution totals approximately $175 million: $163 million of bill credits from October 2026 through September 2027, plus a $12 million reduction of a gas-cost recovery balance already recorded in the third quarter.
The future bill credits reduce revenue as customers receive them. They also reduce the money customers otherwise would have paid. They are larger than the $138 million annual increase in electric and gas base revenue approved effective September 1. That comparison illustrates the near-term collection burden; it is not a forecast of a $25 million profit decline, because the periods, costs and accounting effects differ.
The rate decision also approved a 9.275% return on the equity used in setting rates, below the requested 10.75%, and rejected the proposed second rate year. As of the November 6 filing, PPL had not received the final written order, after which appeal rights would apply. The practical benefit is higher recurring base revenue, with the first year’s reported results still burdened by acquisition-related customer relief.
Sources: PPL Form 10-Q, Note 6, “Rhode Island Activities,” pp. 41–42; Rhode Island regulator’s docket 25-45-GE, filing list for the August 25 acceptance letter and September 4 bill-credit compliance filing. The written-order status is stated as of PPL’s filing date.
PPL’s group-wide adjusted earnings also need care. Nine-month reported profit increased 14.6%, while management’s “earnings from ongoing operations” increased 9.3%. Smaller net special charges explain $37 million of the $134 million reported increase. Much of the narrower corporate loss came from smaller integration and IT charges: the corporate loss excluding special items actually increased from $112 million to $122 million. The complete after-tax reconciliation appears in the calculation notes.
One adjustment removes a benefit rather than adding back a cost. Kentucky’s nine-month results included a $15 million after-tax IT benefit, primarily from moving costs expensed in 2025 into an asset recoverable through future customer rates. This improved current reported profit without producing an equivalent current cash receipt. Management excludes that benefit from ongoing earnings, appropriately preventing it from being mistaken for new operating savings.
Source: PPL Form 10-Q, Kentucky special items, p. 83; consolidated reconciliations, pp. 88–89; Note 6, “IT System Costs,” p. 40.
3. Higher profit did not produce more operating cash
PPL’s investment funding gap widened because cash spending rose while operating cash flow was nearly flat. Cash spent on property, plants and equipment increased 23.1% in the first nine months. Operating cash flow declined 1.2%.
| Consolidated cash allocation; $ millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Cash provided by operations | 2,081 | 2,056 |
| Cash spending on property, plant and equipment | 2,868 | 3,530 |
| Cash remaining after that spending, calculated | -787 | -1,474 |
| Common dividends paid | 593 | 630 |
| Cash remaining after investment and dividends, calculated | -1,380 | -2,104 |
Source: PPL Form 10-Q, consolidated cash-flow statement, p. 6. Spending and dividends are shown as positive uses of cash. “Cash remaining after that spending” is the free-cash-flow definition used here: operating cash flow less cash expenditures for property, plant and equipment. It excludes other investing transactions.
Several payment and recovery movements explain the weak cash growth. Relative to 2025, tax-payment timing was less favorable, more cash went into fuel and supplies, and balances collected from customers through regulatory mechanisms provided less support. Collections of previously recorded sales partly offset these uses. The filing attributes another cash reduction to more costs awaiting recovery through future rates and lower noncurrent regulatory liabilities.
A regulatory asset generally represents a cost the utility expects to recover from customers later. A regulatory liability generally represents amounts customers are owed or amounts collected for future obligations. Building up the former, or using up the latter, can leave less cash available now even when the income statement shows higher profit.
The company’s year-to-year cash bridge is straightforward: $134 million more profit and $124 million more noncash adjustments were outweighed by $187 million less cash from current operating balances and $96 million less from other operating items. The result was a $25 million decline in operating cash flow.
Source: PPL Form 10-Q, operating-cash-flow bridge and explanation, p. 94.
Construction itself also creates accounting income before cash collection. PPL recorded $82 million of equity financing allowance during construction, up from $58 million. This allowance recognizes an approved financing return while a project is being built; it is added to the project’s cost. PPL removes it when reconciling profit to operating cash because it is not a current cash receipt.
Depreciation, the gradual expense for using existing assets, was the largest noncash add-back at $1.079 billion. The cash reconciliation also adds back $207 million of deferred taxes and investment tax credits, accounting items that differ from current tax payments. Even with these adjustments, operations covered only 58.2% of cash capital spending, down from 72.6% a year earlier.
Source: PPL Form 10-Q, cash-flow statement, p. 6, and Note 12, p. 58. Coverage percentages are calculated using the cash-spending amounts in the table above.
4. More money is tied up in construction and future customer recovery
PPL’s asset growth is concentrated in physical infrastructure, including projects that are still unfinished. Net property, plant and equipment rose by $2.573 billion from December to September. Construction in progress accounted for $1.110 billion of that increase.
| Consolidated financial position; $ millions | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Cash and cash equivalents, excluding restricted cash | 1,071 | 393 |
| Customer receivables plus unbilled revenue, net | 1,666 | 1,523 |
| Fuel, materials and supplies | 551 | 618 |
| Property, plant and equipment, net | 36,132 | 38,705 |
| Construction in progress, included in property above | 3,437 | 4,547 |
| Current and noncurrent regulatory assets | 2,400 | 2,502 |
| Financing debt, calculated | 19,350 | 20,890 |
| Total equity | 14,881 | 15,209 |
Source: PPL Form 10-Q, consolidated balance sheets, pp. 7–8. Financing debt combines short-term borrowings and both portions of long-term debt; it excludes supplier balances and regulatory obligations. Construction in progress is not added again to total property.
The spending has identified purposes. Pennsylvania is expanding transmission and distribution infrastructure. Kentucky’s higher outlays include Mill Creek Unit 5 and the E.W. Brown battery-storage project. These investments support the company’s stated goals of improving reliability, replacing aging equipment and meeting future demand.
Source: PPL Form 10-Q, business strategy, p. 73, and investing-activity explanation, p. 95.
Customers owed less overall for billed and unbilled service, but unpaid bills remained a cost. Billed customer receivables rose $40 million, but unbilled revenue—service already supplied for which bills had not yet been issued—fell $183 million. Pennsylvania and Rhode Island nevertheless recorded higher bad-debt expense—the estimated cost of bills that customers will not pay. A lower combined receivable balance therefore coexists with collection problems in parts of the business.
Regulatory assets increased $102 million. The IT-system component alone rose from $18 million to $78 million as regulators approved ways to recover implementation costs. That changes when expenses reach earnings and when customers reimburse PPL. Goodwill from past acquisitions remained $2.247 billion, and other intangible assets—assets without physical form—rose only $14 million to $341 million; these were not the main drivers of asset growth.
Sources: PPL Form 10-Q, balance sheet, p. 7; Note 6, pp. 39–40; operating-cost explanations, pp. 80 and 87.
Recovery terms will determine how quickly construction supports cash. Kentucky approved a temporary mechanism covering specified projects, including Mill Creek Unit 5, the Brown battery and two solar facilities. It excluded Mill Creek Unit 6 and Brown Unit 12 because their expected service dates fall beyond the pilot’s estimated duration. PPL can seek recovery in future proceedings, but approval for one project does not automatically cover the next.
The filing projects capital spending of $5.200 billion in 2026, $6.350 billion in 2027 and $6.675 billion in 2028. Generation spending rises from $1.000 billion to $1.950 billion between the first two years. These are forecasts; the 2026 estimate excludes amounts already in accounts payable at September 30. The growing construction program makes timely rate recovery more important to PPL’s funding capacity.
Source: PPL Form 10-Q, Kentucky rate proceedings, pp. 43–44 and 75; capital-expenditure forecasts, pp. 97–98.
5. Available credit supports the build, while debt and future share issuance carry costs
PPL has substantial borrowing capacity, but its expansion is consuming cash and increasing financing obligations. In the first nine months, net long-term debt issuance and additional short-term borrowing supplied $1.551 billion. Even with that funding, cash including restricted balances fell by $690 million.
PPL ended September with $393 million of unrestricted cash and $2.847 billion of unused committed credit capacity. The credit figure already allows for short-term notes and bank guarantees backed by these facilities. These sources share the same bank commitments, so they are not independent pools of funding. PPL Capital Funding and Rhode Island Energy share a $1.5 billion facility, with respective borrowing sublimits of $1.25 billion and $250 million.
Supplier payments are a separate obligation. Accounts payable fell from $1.559 billion to $1.464 billion, while current and noncurrent regulatory liabilities fell from $3.694 billion to $3.572 billion. Settling these operating balances can require cash or reduce future collections, alongside the separate payments owed to lenders.
Source: PPL Form 10-Q, pp. 6, 8 and 96–97. Net new borrowing is $2,046 million of long-term issuance less $718 million of retirements plus $223 million of additional short-term debt.
Long-term debt due within one year was $358 million at September 30. For the later repayment profile, the last full annual schedule identifies larger concentrations in 2028 and 2030:
| Contractual principal schedule at December 31, 2025; $ millions | Amount |
|---|---|
| Due in 2027 | 428 |
| Due in 2028 | 1,350 |
| Due in 2029 | 116 |
| Due in 2030 | 2,181 |
Source: PPL 2025 Form 10-K, Note 8, pp. 141–142. This is the December 2025 schedule, based on maturities, sinking-fund requirements or earlier put dates, rather than an updated September 2026 schedule.
The annual filing also reported $109 million of operating-lease commitments, including $20 million for 2026, and no significant finance leases. Bank facilities limited debt to 70% of each borrower’s debt and equity, measured under the loan agreements; compliance was confirmed at December 2025. Each borrower must meet its own contractual test.
Source: PPL 2025 Form 10-K, credit facilities, pp. 53–54, and contractual obligations, pp. 55–56.
New 2026 financing pushed some repayments much further out: Rhode Island issued $400 million of 6.00% notes due in 2056, and Pennsylvania issued $500 million of 5.75% mortgage bonds due in 2056. Long maturities reduce near-term refinancing needs but commit the utilities to interest costs for many years.
PPL’s February corporate-unit financing has a different structure. Its $1.15 billion of notes initially bears 4.02% interest, alongside purchase contracts carrying annual payments of 2.98%. Together, those rates imply approximately $80.5 million of annual payments before any deferral or later rate reset: $46.2 million of note interest and $34.3 million of contract payments. The initial proceeds were used to repay short-term debt and for general corporate purposes.
The purchase contracts normally require 24.7 million to 30.9 million common shares to be issued by February 2029, subject to the contractual terms. The notes mature in 2034 and 2039. PPL expects them to be sold again to investors, with interest rates reset, before the purchase contracts settle in 2029. If that sale fails, holders can demand repayment of their face amount. Thus the arrangement provides funding now while adding both future shares and a later financing event.
Source: PPL Form 10-Q, Note 7, pp. 49–51. Annual payment amounts are calculated from the stated principal and initial contractual rates, not presented as total company interest expense.
Separately, PPL had contracts to sell shares at a later date, called forward sales. September’s outstanding contracts could have provided approximately $978 million in exchange for delivery of 27.4 million shares. Settlement dates run from December 2026 through August 2027. This is potential future cash, not part of September’s cash balance.
Existing dilution already affected earnings per share. The nine-month diluted average share count rose 1.9% to 756.577 million. Consequently, reported earnings per share rose 12.2%, less than the 14.6% increase in net income. A December 2025 forward settlement had delivered about 11.3 million shares; during the first nine months of 2026, PPL issued another 0.537 million new shares and reissued 0.980 million treasury shares. Reissuing treasury shares increases shares outstanding; it is not a buyback. The expense for paying employees with share awards was $39 million, compared with $37 million.
Sources: PPL Form 10-Q, pp. 6 and 9; Notes 4 and 7, pp. 35–36 and 51; PPL 2025 Form 10-K, Note 8, “ATM Program,” p. 144.
Moody’s moved the outlook for PPL, PPL Capital Funding and Rhode Island Energy to negative in May 2026. That is a meaningful counterweight to the available credit facilities: future funding still depends on maintaining lenders’ confidence as investment grows. PPL disclosed no debt-maturity acceleration triggered simply by a rating change, but some commercial contracts can require collateral; derivative-related additional collateral below investment grade was estimated at $19 million.
Source: PPL Form 10-Q, rating actions, pp. 98–99, and Note 14, p. 68.
6. Data centers can expand the business through two different routes
PPL can earn from delivering power even when another company generates it; owning new generation adds a separate execution risk. Pennsylvania’s regulated utility operates the delivery network. Invitium Energy, owned 51% by PPL and 49% by Blackstone Infrastructure, is developing new generation under prospective long-term customer agreements.
Source: PPL Form 10-Q, Note 2, p. 29; Note 8, p. 51; business descriptions, pp. 71–72.
Talen’s June 2025 agreement with Amazon illustrates the distinction. It contemplated up to 1,920 megawatts of nuclear supply through 2042, reaching full volume no later than 2032. Talen would supply the energy, while PPL Electric would handle transmission and delivery. Competing generators can therefore serve the same expanding customer base without eliminating PPL’s network role. Invitium must separately win generation business on contract terms, delivery timing and execution.
Source: Talen Energy’s June 11, 2025 announcement, expanded Amazon agreement and division of supply and delivery responsibilities. The timetable is the plan disclosed in that announcement.
PPL’s November 6 update raised planned regulated investment to $25 billion for 2027–2030, compared with $23 billion for the different 2026–2029 period. It projects 10% annual growth in rate base—the investment regulators allow utilities to earn on—and excludes Invitium. Management forecasts 2026 ongoing earnings of $1.92–$1.96 per share and 2027 earnings of $2.06–$2.14.
Pennsylvania’s reported data-center pipeline includes 35.3 gigawatts in advanced planning, 11.4 gigawatts under signed service agreements and 8.5 gigawatts under construction. These overlapping development measures are not current electricity sales and should not be added together.
Source: PPL’s November 6, 2026 results and business-plan release, “Updated Business Plan,” “Pennsylvania,” and earnings forecasts.
The plan anticipates approximately $3 billion of further equity financing beyond previously arranged funding. The presentation identifies that arranged funding as roughly $0.5 billion of forward shares settling in August 2027 and the $1.15 billion corporate-unit purchase contracts settling in February 2029. Those future settlements should not be counted again as new September cash. Management also targets roughly 0.5% compound annual growth in operation-and-maintenance expense across its utilities, making cost control an important assumption behind the plan.
Source: PPL November 6 investor presentation, slides 6 and 17, including financing footnote 1.
Invitium’s proposed QTS project covers about 2 gigawatts under nonbinding commercial terms with an initial 20-year period. A separate signed agreement reimburses specified development costs if certain conditions fail. Proposed fixed payments would cover capital and fixed operating costs; variable payments would cover fuel and other running costs. These protections address different risks, but the supply terms still require completion.
Source: PPL’s November 6 release, “Invitium Energy.”
PPL estimates its share of the two-gigawatt generation investment at $2.5–$3.5 billion. Fuel cells and batteries could start as early as 2029; the gas units are expected in 2032 and 2033. This is a later business opportunity, with construction commitments preceding the main generating capacity.
Source: PPL November 6 investor presentation, slide 5; cost estimate and nonbinding-term-sheet footnotes.
The industry evidence supports both demand growth and careful staging. PJM, the regional grid operator serving Pennsylvania, projected 3.6% annual summer-peak growth over ten years in its January 2026 forecast. But it reduced near-term demand estimates through 2032 after updating economic assumptions and checking large-load proposals more closely. Its process distinguishes firm commitments from less-certain projects and checks for double counting.
For PPL, the business test is therefore whether customers make enforceable commitments and arrive on the timetable used to build the network and plants. Large pipeline figures establish opportunity; customer payments, completed contracts and approved recovery determine how much of it becomes cash-producing infrastructure.
Source: PJM’s January 14, 2026 load-forecast explanation, “Changes From 2025 Long-Term Load Forecast,” “Summer Peak Load Growth,” and “Improving the Forecast for Large Load Additions.”
7. Existing obligations can still compete with new construction for cash
Regulatory refunds and environmental obligations remain part of the funding task. Rhode Island recorded a $27 million liability following the federal regulator’s reduction of the permitted New England transmission return. The refund deadline was extended to May 20, 2027. Appeals and a separate request for a higher future return remain unresolved. PPL continues to carry the refund liability while the appeal proceeds.
Source: PPL Form 10-Q, Note 6, “ISO-NE ROE Complaints,” pp. 46–47.
Rhode Island also had $96 million of environmental-remediation liabilities, expected to be paid over about 30 years and generally recovered through rates. Kentucky’s coal-ash closure and monitoring requirements can change as engineering work and regulatory proceedings develop. Expected customer recovery reduces the ultimate burden on PPL, but the utility may still have to finance work before collecting reimbursement.
PPL’s estimated obligation to retire facilities and restore affected sites, including the current portion, declined from $140 million to $116 million. That change reflected $18 million of settlements and $12 million of lower estimated cost or revised timing, offset by other increases. The filing says further monitoring and regulatory developments could require material additional spending; not every unresolved exposure can yet be estimated.
Source: PPL Form 10-Q, Note 10, pp. 52–55, and Note 15, pp. 68–69. The balance sheet separately presents $112 million as noncurrent asset-retirement obligations.
A smaller but distinct exposure comes from the former Safari solar business. PPL disclosed $56 million of sale-and-leaseback guarantees through 2028, with a limited indemnity from Safari. PPL also agreed to cover certain increases in project buyout values; that additional amount could not be reasonably estimated. The company considers payments on these arrangements reasonably possible, so the stated guarantee is not a complete cap on the exposure.
Tax-credit eligibility is another project condition, although PPL currently expects no material limitation on its clean-energy projects from the rules discussed in Note 5. Known payments and uncertain cleanup costs both matter when PPL sets the pace of new construction.
Source: PPL Form 10-Q, Note 10, guarantees and Safari terms, p. 56; Note 5, tax legislation and guidance, p. 38.
8. The business is improving, but funding discipline will determine the pace
PPL has a stronger earnings base, while the next stage of growth requires more capital before it produces cash. Approved rates in Kentucky and Pennsylvania are delivering measurable profit gains. Rhode Island’s new rates improve its future revenue base, but customer credits and unresolved integration costs weigh on the near-term benefit.
The key condition for successful expansion is the alignment of three things: construction spending, customer commitments and regulatory recovery. Faster conversion of projects into paid service would strengthen cash generation. Delays, rising project costs or slower recovery would increase borrowing and share-issuance needs. PPL’s established delivery networks give it a credible role in serving growing electricity demand; the company’s challenge is to build at a pace its customers and financing capacity can support.
Reporting basis and calculation notes
Reporting basis: This analysis uses PPL Corporation and subsidiaries’ unaudited consolidated U.S. GAAP accounts in Form 10-Q, accession 0000922224-26-000052, filed November 6, 2026, for the period ended September 30, 2026. The filing also contains separate subsidiary statements; those are not substituted for PPL’s consolidated results. Quarterly comparisons cover July–September in both years, cumulative comparisons cover January–September, and balance-sheet comparisons use December 31, 2025 and September 30, 2026. Dollar amounts are U.S. dollars.
Source: SEC filing-detail record, filing date, accession and reporting period; Form 10-Q, Note 1, p. 28. The embedded financial facts were checked for PPL’s consolidated entity, period and unit; dollar amounts reported in millions and share counts reported in thousands were kept distinct.
Reporting basis: The research cutoff is November 9, 2026, New York date. The assessment incorporates PPL’s November 6 business update and relevant earlier primary documents, including the Rhode Island docket reviewed for the rate case. It does not assert that every development through the cutoff has been independently confirmed. Forecasts are management’s plans, not reported results.
Calculation notes: Management’s adjusted profit removes the following net charges. Every adjustment below is after tax, using the company’s disclosed entity-specific statutory-tax treatment. A positive number is added to reported profit; a negative number removes a benefit. This measure is not a promise that the excluded costs will never recur.
| Reported-to-adjusted reconciliation; $ millions | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Reported net income | 318 | 367 | 915 | 1,049 |
| Remove net Talen litigation benefit | 0 | 0 | -3 | 0 |
| Acquisition integration, net | 15 | 17 | 35 | 17 |
| IT transformation, net | 12 | 6 | 48 | 6 |
| Customer-system integration impacts | 9 | 5 | 9 | 18 |
| Prior-period transmission-return reduction | 0 | 0 | 0 | 20 |
| Meter-system integration impacts | 0 | 0 | 0 | 9 |
| Safety transformation | 0 | 2 | 0 | 3 |
| Acquisition-related customer commitment | 0 | 10 | 0 | 10 |
| Rate-case cost disallowances | 0 | 4 | 0 | 4 |
| Energy-efficiency settlement | 0 | 0 | 6 | 0 |
| Office relocation | 1 | 0 | 5 | 0 |
| Post-transition account adjustments | 0 | 0 | 24 | 0 |
| Total net adjustments added | 37 | 44 | 124 | 87 |
| Earnings from ongoing operations | 355 | 411 | 1,039 | 1,136 |
The 2026 nine-month net IT charge of $6 million combines Kentucky’s $15 million benefit with $21 million of charges elsewhere. Adjusted results continue to include ordinary depreciation, financing costs and other operating expenses; removing special items does not remove the cost of expanding the business.
Source: PPL Form 10-Q, “Reconciliation of Earnings from Ongoing Operations,” pp. 88–89, including each item’s tax footnote.
Calculation notes: Profit growth is current-period profit divided by comparable prior-period profit, less one. Nine-month reported growth is $1,049 million ÷ $915 million − 1 = 14.6%; adjusted growth is $1,136 million ÷ $1,039 million − 1 = 9.3%. The reported increase reconciles as $97 million of adjusted improvement plus $37 million of smaller net special charges = $134 million. Nine-month operating margin rose by 1.11 percentage points, calculated from $1,885 million ÷ $7,382 million less $1,653 million ÷ $6,768 million.
Calculation notes: The cash-flow statement’s opening balance includes $1,071 million of cash and $15 million of restricted cash. Its closing balance includes $393 million and $3 million, respectively. Thus $1,086 million opening cash + $2,056 million operating cash − $3,616 million investing cash + $870 million financing cash = $396 million closing cash, including restricted amounts.
The following check groups the cash-flow statement’s adjustments to show how reported profit becomes cash. Noncash adjustments reverse accounting income or expense that did not produce the corresponding cash receipt or payment.
| Profit-to-cash check; $ millions | First nine months 2025 | First nine months 2026 |
|---|---|---|
| Net income | 915 | 1,049 |
| Noncash adjustments | 1,180 | 1,304 |
| Changes in current operating balances | 44 | -143 |
| Other operating items | -58 | -154 |
| Operating cash flow | 2,081 | 2,056 |
The noncash group includes depreciation, amortization, benefit-plan income, deferred taxes and investment credits, share compensation, the construction financing allowance and the statement’s other adjustments. Current operating balances include customer bills, supplier bills, supplies, taxes and regulatory balances. Other operating items include benefit-plan funding and changes in other operating assets and liabilities.
Cash capital spending excludes $692 million of accrued property expenditures at September 2026 and $486 million at September 2025. Those are unpaid expenditure balances, not extra amounts to subtract from the cash-based free-cash-flow calculation.
Source: PPL Form 10-Q, cash-flow statement and supplemental disclosure, p. 6; Note 13, cash reconciliation, p. 60.
Calculation notes: Equity, the amount left after subtracting liabilities from assets, increased by $328 million. Retained earnings are accumulated profits kept in the business; they rose because profit exceeded declared dividends. The purchase-contract financing reduced paid-in capital, the account for share-related funding. The treasury-share deduction became smaller because shares were reissued.
| Equity reconciliation; $ millions | December 31, 2025 | Net movement | September 30, 2026 |
|---|---|---|---|
| Common stock | 8 | 0 | 8 |
| Additional paid-in capital | 12,443 | -96 | 12,347 |
| Treasury stock deduction | -575 | 28 | -547 |
| Retained earnings | 3,207 | 403 | 3,610 |
| Accumulated other comprehensive loss | -202 | -7 | -209 |
| Total equity | 14,881 | 328 | 15,209 |
Paid-in capital reconciles as $12,443 million + $20 million from common shares issued − $108 million for purchase contracts − $8 million in the statement’s net stock-compensation entry = $12,347 million. The net equity entry is distinct from the $39 million stock-compensation expense added back in operating cash flow.
Retained earnings reconcile as $3,207 million + $1,049 million profit − $646 million of declared dividends and dividend equivalents = $3,610 million. The $646 million equity deduction differs from the $630 million of cash dividends paid because the measures use different timing and include different items. Other comprehensive loss, which records specified changes outside net income, increased by $7 million, principally from benefit-plan effects.
The balance sheets also balance: at September 30, $32,137 million of liabilities + $15,209 million of equity = $47,346 million of assets; at December 31, $30,363 million of liabilities + $14,881 million of equity = $45,244 million of assets. Financing debt increased by $1,540 million, from $19,350 million to $20,890 million. These carrying amounts differ from contractual principal schedules because the financial statements include accounting adjustments such as debt discounts and issuance costs.
Calculation notes: Shares outstanding reconcile as 751.041 million at December 31 + 0.537 million newly issued + 0.980 million treasury shares reissued = 752.558 million at September 30. No common-share retirement or open-market buyback appears in that nine-month equity reconciliation.
Source: PPL Form 10-Q, balance sheets and equity statement, pp. 7–9; Notes 7 and 16.
This report is for informational purposes and is not investment advice.