Slide 1: 3rd Quarter Earnings Call
3rd Quarter Earnings Call Energy forward. Tuesday, November 5, 2019
Slide 2: Cautionary Statements and Factors That May Affect Future Results
Cautionary Statements and Factors That May Affect Future Results Statements made in this presentation about future operating results or other future events are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may diff
Slide 3: Agenda
Agenda I. Executive Overview Bill Spence II. Financial Review Joe Bergstein III. Closing Remarks and Q&A Bill Spence 3 3rd Quarter Earnings Call – November 5, 2019 © PPL Corporation 2019
Slide 4: Executive Overview
Executive Overview Q3 2019 Highlights Q3 Earnings Results (Earnings Per Share) ➢ Delivered Q3 2019 ongoing earnings results of $0.61 per share $0.62 $0.65 $0.61 $0.59 ➢ On track to achieve financial targets ▪ Narrowed 2019 ongoing earnings guidance range to $2.35 - $2.45 per share (1) ▪ Reaffirmed 5
Slide 5: Q3 Financial Results
Q3 Financial Results (Earnings Per Share) $ 0 .03 $ 0 .01 $ 0 .61 $ 0 .59 $ 0 .01 $ 0 .00 ($ 0 .02) ($ 0 .01) $ 0 .17 $ 0 .20 U.K. ($0.01) KY $0.01 Other Income $0.02 Adj. Margin $0.03 Adj. Margin $0.04 Other $0.01 $ 0 .16 KY ($0.01) Currency ($0.02) O&M ($0.01) O&M $0.01 $ 0 .16 Other ($0.01) Other
Slide 6: Foreign Currency Update
Foreign Currency Update Foreign Currency Hedge Status (1) Indicates percentage of ongoing earnings hedged 100% 70% 0% (3) 2019 2020 2021 Average Hedge Rate(2) $1.45/£ $1.46/£ - ➢ Increased 2020 hedge position to 70% from 63% during Q3 ➢ Continue to utilize options in our hedging strategy; options re
Slide 7: Appendix
Appendix
Slide 8: U.S. Regulated Volume Variances
U.S. Regulated Volume Variances Kentucky Regulated Weather-Normalized Retail Sales 3-months ended 9/30/2019 vs 9/30/2018 12-months ended 9/30/2019 vs 9/30/2018 5.0% 3.0% 1.7% 0.8% % Change 1.0% (1.0%) (0.3%) (0.1%) (0.0%) (0.4%) (0.7%) (3.0%) (1.7%) (5.0%) Residential Commercial Industrial Total Res
Slide 9: YTD Financial Results
YTD Financial Results (Earnings Per Share) $ 1 .88 $ 0 .06 $ 1 .88 $ 0 .08 $ 0 .01 ($ 0 .01) $ 0 .48 ($ 0 .08) $ 0 .50 ($ 0 .06) U.K. ($0.04) U.K. ($0.03) Adj. Margin $0.04 Adj. Margin $0.04 Adj. Margin $0.06 O&M ($0.02) PA ($0.02) PA ($0.01) Depreciation ($0.01) Utility Depreciation ($0.02) Other I
Slide 10: Capital Expenditure Plan
Capital Expenditure Plan ($ in billions) ~$15 Billion $3.3 $3.1 $0.4 $2.9 $0.4 $0.4 $2.6 $2.6 $0.7 $0.7 $0.4 $0.3 $0.4 $0.3 $0.4 $1.2 $1.0 $0.7 $0.9 $0.7 $1.3 $1.0 $1.1 $1.1 $1.1 2019E 2020E 2021E 2022E 2023E U.K. Regulated KY Regulated PA Transmission PA Distribution Note: U.K. capital plan is base
Slide 11: Projected Rate Base Growth
Projected Rate Base Growth ($ in billions) 2018A-2023E ~4.7% CAGR CAGR Breakdown $33.2 $34.1 $32.0 $30.4 $4.3 $29.0 $4.2 $4.1 $27.1 $3.9 4.2% $3.7 $5.0 $5.2 $3.5 $4.7 $4.4 $4.0 $3.5 $11.2 $11.3 8.2% $10.7 $11.1 $9.8 $10.4 2.9% $12.1 $12.8 $13.3 $10.3 $10.9 $11.4 5.2% 2018A 2019E 2020E 2021E 2022E 20
Slide 12: Drive 5-6% EPS Growth Through 2020
Prudent Investments, Timely Recovery Drive 5-6% EPS Growth Through 2020 Strong Rate Base Growth Supported by constructive regulatory recovery mechanisms 5-7% CAGR Rate Base CAGR 2018-2020 ~80% Capex Earns Return within 1 year EPS Growth 2018-2020 ($ in billions) $30.4 $ 2 .58 $27.1 $3.9 $ 2 .54 $3.5
Slide 13: Commitment to Dividend Growth
Commitment to Dividend Growth Dividends are a key component Delivers consistent dividend to PPL’s investment proposition 10-Year Dividend History PPL Dividend Yield vs. Large Cap Utilities (2) ($ per share) Large Cap Utility Average: 3.4% $1.64 $1.65 $1.58 $1.51 $1.52 4.9% $1.47 $1.49 4.4% $1.44 4.0
Slide 14: U.K. Regulated Incentive Revenues
U.K. Regulated Incentive Revenues WPD continues to demonstrate how premier network operators deliver value for customers and shareowners Incentive Revenues (1) Excellent Customer Satisfaction Ratings Customer Service Rating (10 point scale) $110 $110 9 .1 $103 $96 9 .0 9 .0 9 .0 $100 $100 8.8 2018/2
Slide 15: U.K. Regulated: True-up Mechanisms
U.K. Regulated: True-up Mechanisms ➢ TRU Adjustment ▪ Tariffs are set using a forecasted RPI as determined by HM Treasury ▪ Forecasted RPI is trued up to actuals and the corresponding revenue adjustment is collected from or returned to customers two regulatory years later ➢ MOD Adjustment ▪ On an an
Slide 16: U.K. Regulated: RIIO-2 Projected Timelines
U.K. Regulated: RIIO-2 Projected Timelines Proposed Electricity Distribution Timeline(1) RIIO-ED2 RIIO-ED2 RIIO-ED2 Open Letter Sector methodology RIIO-ED2 RIIO-ED2 Final Consultation Consultation Initial Business Final Business Determination (August) ✓ (June) Plan Submission Plan Submission (Novemb
Slide 17: Funding Growth
Funding Growth 2018A 2019E (1) ($ in millions) Domestic Cash from Operations $1,905 $1,800 (2) Domestic Maintenance Capex (844) (950) Dividend From U.K. Regulated 399 400 Cash Available for Distribution $1,460 $1,250 Common Dividend (1,133) (1,200) Cash Available for Reinvestment $327 $50 Domestic G
Slide 18: Debt Maturities
Debt Maturities 2024 and ($ in Millions) 2019 2020 2021 2022 2023 Beyond Total PPL Capital Funding $0 $0 $0 $800 $600 $3,130 $4,530 PPL Electric Utilities (1) 0 100 400 474 90 3,075 4,139 LG&E and KU Energy 0 475 250 0 0 0 725 Louisville Gas & Electric (1) 0 0 292 0 0 1,732 2,024 Kentucky Utilities(
Slide 19: Liquidity Profile
Liquidity Profile Letters of C redit & C om m ercial Unused Ex piration C apacity Borrow ed Paper Issued C apacity Entity F acility Date (M illions) (M illions) (M illions) (M illions) PPL C apital F unding Syndicated Credit Facility Jan-2024 $1,450 $0 $981 $469 Bilateral Credit Facility Mar-2020 10
Slide 20: PPL's Credit Ratings
PPL’s Credit Ratings PPL Corporation PPL Capital Funding Credit Rating S&P Moody’s Credit Rating S&P Moody’s Secured NR NR Secured NR NR Unsecured NR NR Unsecured BBB+ Baa2 Long-term Issuer A- Baa2 Long-term Issuer A- NR Outlook Stable Stable Outlook Stable Stable WPD Holding Company LKE Holding Com
Slide 21: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 3rd Quarter Year-to-Date (millions of dollars) September 30, 2019 September 30, 2019 U.K. KY PA Corp. & U.K. KY PA Corp. & Total Total Reg. Reg. Reg. Other Reg. Reg. Reg. Other Reported Earnings $ 2
Slide 22: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 3rd Quarter Year-to-Date (millions of dollars) September 30, 2018 September 30, 2018 U.K. KY PA Corp. & U.K. KY PA Corp. & Total Total Reg. Reg. Reg. Other Reg. Reg. Reg. Other Reported Earnings $ 2
Slide 23: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) Twelve Months Ended (millions of dollars) December 31, 2018 U.K. KY PA Corp. & Total Reg. Reg. Reg. Other Reported Earnings $ 1,114 $ 411 $ 431 $ (129) $ 1,827 Less: Special Items (expense) benefit:
Slide 24: Adjusted Gross Margins Summary
Adjusted Gross Margins Summary (Unaudited) Three Months Ended September 30, (millions of dollars, except share data) Per Share Diluted 2019 2018 Change (after-tax) U.K. Adjusted Gross Margins $ 446 $ 467 $ (21) $ (0.02) Less: Impact of changes in foreign currency exchange rates (24) (0.02) U.K. Adju
Slide 25: Reconciliation of Adjusted Gross Margins to Operating Income
Reconciliation of Adjusted Gross Margins to Operating Income (Unaudited) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (millions of dollars) U.K. KY PA U.K. KY PA Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Gross Gross Gross Operating Gross Gross Gross Operatin
Slide 26: Reconciliation of PPL's Earnings Forecast
Reconciliation of PPL’s Earnings Forecast After-Tax (Unaudited) 2019 Forecast (per share - diluted) Midpoint Forecast Range U.K. KY PA Corp. & High Low Total Reg. Reg. Reg. Other 2019 2019 Estimate of Reported Earnings $ 1.41 $ 0.58 $ 0.60 $ (0.18) $ 2.41 $ 2.46 $ 2.36 Less: Special Items (expense)
Slide 27: Reconciliation of Domestic Cash Flows
Reconciliation of Domestic Cash Flows Year Ended December 2018 (millions of dollars) Presentation of Funding Growth Reclassifications Adjustments PPL Global, LLC PPL Consolidated Statement of Cash Flows non-GAAP Domestic Dividend From Common Other Domestic Statement of GAAP Description Amount Maint.
Slide 28: Forward-Looking Information Statement
Forward-Looking Information Statement Statements contained in this presentation, including statements with respect to future earnings, cash flows, dividends, financing, regulation and corporate strategy are "forward-looking statements" within the meaning of the federal securities laws. Although PPL
Slide 29: Definitions of non-GAAP Financial Measures
Definitions of non-GAAP Financial Measures Management utilizes "Earnings from Ongoing Operations" as a non-GAAP financial measure that should not be considered as an alternative to reported earnings, or net income, an indicator of operating performance determined in accordance with GAAP. PPL believe
Slide 30: Definitions of non-GAAP Financial Measures
Definitions of non-GAAP Financial Measures Management also utilizes the following non-GAAP financial measures as indicators of performance for its businesses: "U.K. Adjusted Gross Margins" is a single financial performance measure of the electricity distribution operations of the U.K. Regulated segm