Ppl Corporation · NYSE:PPL
Ppl — Barclays CEO Energy-Power Conference 2014
36 slides from Ppl's conference presentation, Sep 3, 2014
Slide 1: Barclays CEO Energy-Power Conference
Exhibit 99.1 Barclays CEO Energy- Power Conference New York, NY September 3, 2014
Slide 2: Cautionary Statements and Factors That May Affect Future Results
Cautionary Statements and Factors That May Affect Future Results Any 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
Slide 3: Commitment to Creating Shareholder Value
Commitment to Creating Shareholder Value Evolution of PPL 2008 2009 2010 2011 2012 2013 2014 Future 2010 (1) 2012 (2) 2013 (3) Pro-Forma PPL Corporation Market Cap ($bn) $12.8 $16.4 $18.8 Enterprise Value ($bn) $17.2 $35.1 $37.8 FY+1 P/E Business Profile (4) % Utility % Competitive Energy 100% Regul
Slide 4: PPL Overview
PPL Overview PPL Electric Utilities • Customers: 1.4 million Electric • Allowed Distribution ROE: 10.40% • Rate Base: $4.2 billion (1) • 5-Year Transmission Rate Base CAGR: 12.5% • 5-Year Distribution Rate Base CAGR: 6.4% • Regulatory Entity: Pennsylvania PUC U.K. Delivery • Customers: 7.8 million E
Slide 5: PPL Corporation Investment Highlights
PPL Corporation Investment Highlights • 100% rate-regulated business model provides earnings and dividend growth potential – Substantial projected growth in rate base: 6.3% CAGR from 2014-2018 – Target EPS compound annual growth rate of at least 4%, excluding PPL Energy Supply(1) – Maintain current
Slide 6: Real-Time Recovery of Regulated Capex Spending
Real-Time Recovery of Regulated Capex Spending Approximately 75% of regulated capital expenditures earn returns subject to minimal or no regulatory lag ($ in billions) 75% 74% 75% 74% 72% $0.1 $0.1 $0.2 $0.2 $0.2 $0.6 $0.6 $0.5 $0.6 $0.6 $0.5 $0.3 $0.4 $0.3 $0.3 $1.3 $1.3 $1.4 $1.3 $1.3 (1) (2) (3)
Slide 7: Increasing 2014 Ongoing Earnings Forecast
Increasing 2014 Ongoing Earnings Forecast $2.40 $2.30 $2.25 $2.15 $2.20 $2.05 (1) Previous 2014E Revised 2014E Segment 2015E Midpoint Ongoing Midpoint Ongoing Midpoint U.K. Regulated $1.34 $1.35 $1.36 Kentucky Regulated 0.45 0.45 0.48 PA Regulated 0.39 0.39 0.39 Supply 0.11 0.17 -- Corporate and Oth
Slide 8: PPL Energy Supply Transaction Overview
PPL Energy Supply Transaction Overview • PPL Energy Supply, LLC (“PPL Energy Supply”) will be spun off from PPL Corporation (“PPL”) and combined with Riverstone’s power generation business (“RJS Power Holdings LLC”) to form Talen Energy Corporation (“Talen Energy”) • Creates a highly competitive 15
Slide 9: Talen Transaction: Activities Since June 9th Announcement
Talen Transaction: Activities Since June 9th Announcement • Talen credit facility syndication process – $1.85 billion 5-year 1st lien revolving credit facility – Facility is fully committed and will be available upon transaction close • RJS Power Holdings bond offering – Riverstone formed RJS Power
Slide 10: Appendix
Appendix © PPL Corporation 2014 10
Slide 11: Dividend Profile
Dividend Profile A predominantly rate-regulated business mix provides strong support for current dividend and a platform for future growth $/Share Annualized (1) (2) (3) (1) Based on mid-point of forecast. Annualized dividend based on 2/6/2014 announced increase. Actual dividends to be determined by
Slide 12: U.K. Regulated Segment Investment Highlights
U.K. Regulated Segment Investment Highlights • Highly attractive rate-regulated business – Regulator-approved multi-year forward-looking revenues based on future business plan, including capital expenditures and O&M plus adjustments for inflation – Real-time return of and return on capital investmen
Slide 13: Kentucky Regulated Segment Investment Highlights
Kentucky Regulated Segment Investment Highlights • Efficient, well-run utilities focused on safety, reliability and customer service • Constructive regulatory environment that provides a timely return on a substantial amount of planned capex over the next 5 years – Environmental Cost Recovery (ECR):
Slide 14: Pennsylvania Regulated Segment Investment Highlights
Pennsylvania Regulated Segment Investment Highlights Projected Transmission Rate Base • Significant growth in transmission portion of Growth business which earns a favorable rate of return on a near real-time basis – CAGR of 12.5% in transmission rate base through 2018 driven by initiatives to impro
Slide 15: Projected Capital Expenditures
Projected Capital Expenditures Significant and stable investment opportunities in regulated utilities $4.19 $3.79 $3.65 $3.68 $3.51 (1) (2) (3) (1) Figures based on assumed exchange rate of $1.67 / £. (2) Expect between 80% and 90% to receive timely returns via ECR mechanism based on historical expe
Slide 16: Projected Regulated Rate Base Growth
Projected Regulated Rate Base Growth 5-Year Regulatory Asset Base(1) CAGR: 6.3% ($ in billions) $29.0 $27.6 $26.4 $24.8 $23.2 $21.3 (2) (1) Represents capitalization for LKE, as LG&E and KU rate constructs are based on capitalization. Represents Regulatory Asset Value (RAV) for WPD. (2) Figures base
Slide 17: U.K. Regulated Segment EPS from Ongoing Operations Projection
U.K. Regulated Segment EPS from Ongoing Operations Projection ($ Per Share) Note: Assumes foreign currency exchange rate of $1.67/£ for any unhedged projection. See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. © PPL Corporation 2014 17
Slide 18: U.K. Regulated Segment Cash Repatriation Projection
U.K. Regulated Segment Cash Repatriation Projection ($ in millions) Note: Assumes foreign currency exchange rate of $1.67/£ for any unhedged projection. © PPL Corporation 2014 18
Slide 19: Regulated Volume Variances
Regulated Volume Variances Note: Total includes Residential, Commercial and Industrial customer classes as well as “Other”, which is not depicted on the charts above. © PPL Corporation 2014 19
Slide 20: Energy Supply Hedge Update
Energy Supply Hedge Update Capacity revenues are expected to be $560 and $505 million for 2014 and 2015 respectively. Note: As of June 30, 2014 Includes PPL Montana's hydroelectric facilities through the 3rd quarter of 2014. On September 26, 2013, PPL Montana, LLC reached an agreement to sell all 11
Slide 21: Competitive Generation Overview
Competitive Generation Overview (1) Other includes PPAs, renewables and NUGS. © PPL Corporation 2014 21
Slide 22: Market Prices
Market Prices (1) 24-hour average. (2) NYMEX and TETCO M3 forward gas prices on 6/30/2014. (3) Market Heat Rate = PJM on-peak power price divided by TETCO M3 gas price. © PPL Corporation 2014 22 Market Prices On-Peak Off-Peak (Per M W D) EQA HEAT RATE(3) TETCO M3 PJM MARKET CAPACITY PRICES ELECTRIC
Slide 23: Free Cash Flow before Dividends
Free Cash Flow before Dividends Free Cash Flow before Reconciliation of Cash from Dividends Operations to Free Cash Flow (Millions of Dollars) before Dividends (Millions of dollars) (1) Note: Free Cash Flow forecast updated on an annual basis. (1) 2014E reflects anticipated proceeds from pending sal
Slide 24: Debt Maturities
Debt Maturities Note: As of June 30, 2014 (1) This amount includes $81 million of Pennsylvania Economic Development Financing Authority bonds due 2037 and $150 million of Pennsylvania Economic Development Financing Authority bonds due 2038 that may be put by the holders in September 2015. This amoun
Slide 25: Liquidity Profile
Liquidity Profile Note: As of June 30, 2014 Credit facilities consist of a diverse bank group, with no bank and its affiliates providing an aggregate commitment of more than 10% of the total committed capacity for the domestic facilities and 13% of the total committed capacity for WPD’s facilities.
Slide 26: Talen Energy Market Presence
Gas Oil Coal Nuclear Hydro Operating Capacity (MW) < 300 300 - 750 750 - 1,000 > PJM 1,000 (1) Based on percentage of generating capacity. Excludes 11 Montana hydro assets to be sold under a September 26, 2013 Purchase and Sale Agreement with NorthWestern Corporation. (2) Does not account for any ma
Slide 27: Talen Energy Asset Overview
Talen Energy Asset Overview PPL Energy Supply Assets (1)(2) (a) (b) (1) Excludes 11 Montana hydro assets to be sold under a September 26, 2013 Purchase and Sale Agreement with NorthWestern Corporation. (2) Prior to any market mitigation that will be required to achieve regulatory approvals. (3) Incl
Slide 28: Talen Energy Asset Overview (cont'd)
Talen Energy Asset Overview (cont’d) RJS Power Holdings LLC Assets(1) Raven Portfolio (b) (a) (b) (a) (b) Sapphire (a) (b) Portfolio (a) (b) (a) (b) (a) (b) Jade Portfolio (1) Prior to any market mitigation that will be required to achieve regulatory approvals. (a) Included in market mitigation Opti
Slide 29: Reconciliation of PPL's Forecast of Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Forecast of Earnings from Ongoing Operations to Reported Earnings © PPL Corporation 2014 29 Reconciliation of PPL’s Forecast of Earnings from Ongoing Operations to Reported Earnings (After- Tax) (Unaudited) Forecast (per share - diluted) 2014 Midpoint U.K. Kentucky Pennsylvan
Slide 30: Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings © PPL Corporation 2014 30 Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings (After- Tax) (Unaudited) Year-to-Date De
Slide 31: Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings (a) WPD Midlands' results are consolidated on a one-month lag, and include eight months of results in 2011, as the date of acquisition was April 1, 2011. © PPL Corporation 2014 31 Reconciliation of PPL’s Earnings from Ongo
Slide 32: Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings © PPL Corporation 2014 32 Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings (After- Tax) (Unaudited) Year-to-date December 31, 2010 (per share - diluted) U.K. Kentucky Pennsylvania Regulated Reg
Slide 33: Reconciliation of U.K. Regulated Segment Earnings from Ongoing Operations to Reported Earnings
Reconciliation of U.K. Regulated Segment Earnings from Ongoing Operations to Reported Earnings © PPL Corporation 2014 33 Reconciliation of U.K. Regulated Segment Earnings from Ongoing Operations to Reported Earnings (After- tax) (Unaudited) High Low High Projections (per share - diluted) Low 2014 20
Slide 34: Forward-Looking Information Statement
Forward-Looking Information Statement Statements contained in this presentation, including statements with respect to future earnings, cash flows, financing, regulation and corporate strategy are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corporation
Slide 35: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures "Earnings from ongoing operations," also referred to as "ongoing earnings," should not be considered as an alternative to reported earnings, or net income attributable to PPL shareowners, which is an indicator of operating performance determined in accordan
Slide 36: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures PPL utilizes the following non-GAAP financial measures as indicators of performance for its businesses. These measures are not intended to replace "Operating Income," which is determined in accordance with GAAP, as an indicator of overall operating performa