PPL (PPL) Interest Coverage : 2.33 (As of Dec. 2023)

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What is PPL Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. PPL's Operating Income for the three months ended in Dec. 2023 was $400 Mil. PPL's Interest Expense for the three months ended in Dec. 2023 was $-172 Mil. PPL's interest coverage for the quarter that ended in Dec. 2023 was 2.33. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. PPL Corp interest coverage is 2.49, which is low.

The historical rank and industry rank for PPL's Interest Coverage or its related term are showing as below:

PPL' s Interest Coverage Range Over the Past 10 Years
Min: 1.57 Med: 3 Max: 3.43
Current: 2.49

PPL's Interest Coverage is ranked worse than
68.1% of 442 companies
in the Utilities - Regulated industry
Industry Median: 3.715 vs PPL: 2.49

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

PPL Interest Coverage Historical Data

The historical data trend for PPL's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

* Premium members only.

PPL Interest Coverage Chart

PPL Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

Get a 7-Day Free Trial

2.47

2.50

1.57

2.77

2.51

PPL Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															2.37	3.08	1.84	2.73	2.33

Competitive Comparison of PPL's Interest Coverage

For the Utilities - Regulated Electric subindustry, PPL's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

PPL's Interest Coverage Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, PPL's Interest Coverage distribution charts can be found below:

* The bar in red indicates where PPL's Interest Coverage falls into.

PPL Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

PPL's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, PPL's Interest Expense was $-666 Mil. Its Operating Income was $1,670 Mil. And its Long-Term Debt & Capital Lease Obligation was $14,611 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	1670	/	-666
	=	2.51

PPL's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, PPL's Interest Expense was $-172 Mil. Its Operating Income was $400 Mil. And its Long-Term Debt & Capital Lease Obligation was $14,611 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	400	/	-172
	=	2.33

The higher the ratio, the stronger the company's Financial Strength is.

PPL (NYSE:PPL) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

PPL Interest Coverage Related Terms

Thank you for viewing the detailed overview of PPL's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

PPL (PPL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » PPL Corp (NYSE:PPL) » Definitions » Interest Coverage

Comparable Companies

AEE ES FE ETR CNP CMS DTE WEC AGR EIX NEE SO DUK LSE:NG. AEP PCG D BOM:532555 EXC PEG

Traded in Other Exchanges

PP9:Germany PP9:Germany

Address

Two North Ninth Street, Allentown, PA, USA, 18101-1179

Website

https://www.pplweb.com

PPL is a holding company of regulated utilities in Pennsylvania, Kentucky, and Rhode Island. The Pennsylvania regulated delivery and transmission segment distributes electricity to customers in central and eastern Pennsylvania. LG&E and KU are involved in regulated electricity generation, transmission, and distribution in Kentucky. The Kentucky utilities also serve gas customers. Narragansett operates electric and gas utilities in Rhode Island.

Executives

Tadd J Henninger	officer: Vice President and Treasurer	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Crockett John R Iii	officer: President of a PPL Subsidiary	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
David J Bonenberger	officer: President of a PPL Subsidiary	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Linda G Sullivan	director	P.O.BOX 800, 2244 WALNUT GROVE AVENUE, ROSEMEAD CA 91770
Francis X Sullivan	officer: EVP and COO	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Bergstein Joseph P Jr	officer: VP-IR and Treasurer	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Vincent Sorgi	officer: Vice President and Controller	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Stephanie R Raymond	officer: President of a PPL Subsidiary	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Gregory N Dudkin	officer: President of a PPL Subsidiary	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Angela K Gosman	officer: SVP and CHRO	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Heather B Redman	director	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Wendy E Stark	officer: SVP, GC and Corp Sec	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Joanne H Raphael	officer: SVP, GC & Corp Sec	TWO NORTH NINTH STREET, ALLENTOWN PA 18101
Art P Beattie	director	600 NORTH 18TH STREET, BIRMINGHAM AL 35291
William H Spence	officer: Executive VP and COO	UNIVERSITY OFFICE PLAZA, 252 CHAPMAN RD., PO BOX 6066, NEWARK DE 19714-0066