<PAGE>
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) October 19, 1998
PP&L Resources, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-11459 23-2758192
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
PP&L, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-905 23-0959590
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
TWO NORTH NINTH STREET, ALLENTOWN, PA. 18101-1179
___________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-774-5151
___________________________________________________________________________
(Former name or former address, if changed since last report.)
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5. Other Items.
Forward-Looking Statements
Reference is made to the Annual Reports to the Securities
and Exchange Commission ("SEC") on Form 10-K for the year ended
December 31, 1997, and the Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 1998, of PP&L Resources,
Inc. (the "Company") and PP&L, Inc. ("PP&L") for information
regarding (a) PP&L's restructuring plan and associated
proceedings before the Pennsylvania Public Utilities Commission
("PUC") pursuant to the Pennsylvania Electricity Generation
Customer Choice and Competition Act ("Customer Choice Act") and
related matters and (b) the Company's second quarter 1998 charge
of $1.558 billion ($948 million, after-tax) in connection with
PP&L's restructuring proceeding before the PUC and a settlement
with certain municipal utility customers of a proceeding before
the Federal Energy Regulatory Commission ("FERC").
The Company has projected its pre-tax earnings to increase
for 1998 by $56 million over 1997 levels, to decrease for 1999 by
$16 million over 1998 levels, and to increase for 2000 by $109
million over 1999 levels. These projections do not include
extraordinary items such as the 1998 second quarter charge of
$948 million referred to above.
Such forward-looking statements are based upon a series of
projections and estimates regarding numerous factors, and in
particular changes in key components of the Company's net
revenues and expenses from 1997 through 2000, including the
following projected changes, some of which will result from the
Customer Choice Act and PP&L's implementation of its
restructuring plan thereunder:
Projected Revenue Reconciliation
(Millions of Dollars)
Favorable/(Unfavorable) 1998 1999 2000
vs. vs. vs.
1997 1998 1999
Rate Increase (Decrease) --
Non-Shoppers $-- $(65) $65)
Increase in Market Clearing
Price of Generation -- -- 51)
Retail Sales Growth (Net of
Fuel Costs) 2 26 26)
Net Losses from Shoppers
(Net of Fuel Costs) -- (63) (22)
Change in Net Revenue 2 (102) 120)
Projected Expense Reconciliation
(Millions of Dollars)
Favorable/(Unfavorable) 1998 * 1999 2000
vs. vs. vs.
1997 1998 * 1999
Operating Expenses $(10) $64 $(32)
Interest Expense 6 (14) 7
Affiliated Companies 58 ** 36 14
Change in Net Expense 54 86 (11)
Pre-Tax Earnings Effect 56 (16) 109)
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* 1998 amounts exclude extraordinary charge of $948 million
(after-tax) associated with the PUC and FERC proceedings.
** $37 million of change reflects Windfall Profits Tax in 1997
relating to PP&L Global, Inc.'s investment in South Western
Electricity plc.
The Company has made certain assumptions in projecting these
results. These assumptions include the following:
o The Company has assumed that annual operation and maintenance
expenses for each of 1999 and 2000 will decrease by $30
million from 1997 levels.
o The Company has assumed that the market clearing price of
generation ("MCPG") will be 2.85 and 3.10 cents per kwh in
1999 and 2000, respectively. The revenue impact of a 1 mill
change in the MCPG would be approximately $17 million.
o The Company has assumed that PP&L's distribution load growth
will be .5% in 1998 and 1.5% in each of 1999 and 2000.
o Commencing in January 1999, certain PP&L customers will be
able to choose their electricity supplier. The Company has
assumed that the percentage of total customer load that will
"shop" for electricity will be 30% in 1999 and 40% in 2000.
The Company also has assumed that PP&L will retain 55% of such
shopping load each year. The annual revenue effect of each
10% change in the load that shops is approximately $30
million.
o The Company has assumed that its average number of common
stock shares outstanding in 1998, 1999 and 2000 will be 163,
159 and 160 million, respectively.
o The Company has used an effective income tax rate of 41.5% in
its calculations.
If future events and actual performance differ from the key
assumptions noted above, the Company's actual results could vary
significantly from the projected results.
*******
The foregoing statements, including statements with respect
to future revenues, expenses, performance of subsidiaries, market
prices of generation, load growth, customer retention and average
common stock shares outstanding, are "forward-looking statements"
within the meaning of the federal securities laws. Although the
Company and PP&L believe that the expectations and assumptions
reflected in these statements are reasonable, there can be no
assurance that these expectations and assumptions will prove to
have been correct. These statements involve a number of risks
and uncertainties, and actual results may differ materially from
the results discussed in these statements. The following are
among the factors that could cause actual results to differ
materially from these forward-looking statements: state and
federal regulatory treatment; new state or federal legislation;
national or regional economic conditions; market demand and
prices for energy and capacity; weather variations affecting
customer usage; competition in retail and wholesale power
markets; the need for and effect of any business or industry
restructuring; profitability and liquidity of the Company and
PP&L; new accounting requirements or new interpretations or
applications of existing requirements; operating performance of
plants and other facilities; system conditions and operating
costs; performance of new ventures; political, regulatory or
economic conditions in foreign countries; exchange rates; and
commitments and liabilities of the Company and PP&L. Any such
forward-looking statements should be considered in light of these
factors and in conjunction with the Company's and PP&L's
documents on file with the Securities and Exchange Commission.
New factors that could cause actual results to differ materially
from those described in these forward-looking statements emerge
from time to time, and it is not possible for the Company to
predict all of such factors, or the extent to which any such
factor or combination of factors may cause actual results to
differ from those contained in any forward-looking statement.
Any forward-looking statement speaks only as of the date on which
such statement is made, and neither the Company nor PP&L
undertakes any obligation to update the information contained in
such statement to reflect subsequent developments or information.
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 thereunto duly authorized.
PP&L RESOURCES, INC.
PP&L, INC.
By: ________/s/John R. Biggar_______
Senior Vice President-Financial
Date: October 19, 1998
