Ppl Corporation · NYSE:PPL
Ppl — Merger or Acquisition (March 2021)
21 slides from Ppl's merger presentation, Mar 18, 2021
Slide 1: Strategic Repositioning of PPL Corporation
Strategic Repositioning of PPL Corporation March 18, 2021 Exhibit 99.2
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, including the anticipated sale of PPL Corporation’s U.K. business, the anticipated acquisition of The Narragansett Electric Company (Narraganse
Slide 3: Agenda
Agenda Transaction Announcements and Strategic Rationale PPL Investment Highlights Post Transactions Transaction Approvals Closing Remarks and Questions
Slide 4: Overview of Transactions
Overview of Transactions Unlocking value for shareowners Based on average foreign currency rate of $1.35/£ as of March 12, 2021, inclusive of hedges. Assumes approximately $300 million of transaction-related cash taxes and fees. Assumes foreign currency rate of $1.35/£ for comparability purposes. PP
Slide 5: Address valuation discount and improve expected long-term earnings growth
Address valuation discount and improve expected long-term earnings growth Simplifies structure with clear focus on U.S. rate-regulated utilities Removes U.K. political, regulatory and foreign currency risk Increases long-term earnings growth and dividend growth rate Increase relative size of U.S. op
Slide 6: Narragansett Business Profile
Largest electricity T&D and gas distribution provider in Rhode Island ~510,000 electric customers ~270,000 gas customers No ownership of generation facilities Adjusted net income estimate of $150 million for FY ended March 31, 2021 Significant geographical overlap across electric and gas operational
Slide 7: Narragansett Regulatory Overview
Narragansett Regulatory Overview Constructive regulatory features Represents estimated year-end rate base for 2020. Reflects base allowed ROE. Narragansett can earn higher returns than the base allowed ROE through incentive mechanisms and efficiencies that are supported by customer sharing mechanism
Slide 8: Narragansett Investment Overview
Narragansett Investment Overview Historically robust capital profile with stable growth Source: National Grid data book – fiscal year ended March 31, 2020. ISR – an annual recovery mechanism for certain capital and O&M costs for electric and gas Infrastructure, Safety and Reliability (ISR) projects
Slide 9: PPL's Superior Track Record: Electric
PPL’s Superior Track Record: Electric Proven ability to drive value for customers and shareholders Note:See Appendix for the reconciliation of Adjusted Gross Margins to Operating Income. Reflects O&M costs excluding certain pass-through costs and rider costs. System Average Interruption Frequency In
Slide 10: PPL's Superior Track Record: Gas
PPL’s Superior Track Record: Gas Focus on investments that provide a safe and reliable system Represents average of other major gas utilities in Kentucky (Atmos, Columbia, Delta, and Duke). Gas Distribution Pipeline by Material Type Gas Cost of LG&E vs. Other Kentucky LDCs (Gas Cost Adjustment Rate
Slide 11: Why Narragansett and PPL Are a Great Fit
Why Narragansett and PPL Are a Great Fit An opportunity for both RI customers and PPL shareowners We believe PPL’s customer-focused strategies can deliver real value to Rhode Island PPL’s utilities are premier operators that have consistently demonstrated proficiency in delivering affordable electri
Slide 12: Pro forma PPL Overview
Pro forma PPL Overview A compelling, low-risk investment opportunity Leading U.S. energy company focused on strong, high-performing, rate-regulated electricity and natural gas utilities Attractive Portfolio of U.S. Regulated Utilities Regulated Utility Combined Statistics PPL Narragansett Electric t
Slide 13: Pro forma Rate Base
Pro forma Rate Base Significant scale with asset and regulatory diversification Portfolio of U.S. rate-regulated utility asset base totaling approximately $22 billion Increasing PPL’s U.S. Rate Base Rate Base by Regulated Asset Type (2020) ($ in billions) ~80% Transmission, distribution, and non-coa
Slide 14: Pro forma Financial Outlook
Pro forma Financial Outlook Strong earnings growth and credit metrics Expect earnings growth rate to be competitive with U.S. utility peers post transactions Underpinned by rate base growth prospects, improved credit profile, and proven track record of delivering operational efficiencies Lower paren
Slide 15: Transaction Approvals
Transaction Approvals Expected regulatory and other transaction approvals Sale of U.K. Utility Business (expected approval within 4 months) U.K. Financial Conduct Authority (FCA) Guernsey Financial Services Commission (GFSC) National Grid Shareowners Acquisition of Narragansett (expected approval wi
Slide 16: Summary
Summary Transactions to reposition PPL as a high-growth, low-risk, U.S.-based energy company focused on building the utilities of the future Leverages PPL’s culture of operational excellence to further enhance growth, while eliminating risks associated with foreign ownership Significantly improves P
Slide 17: Appendix
Appendix
Slide 18: Select Combined Regulatory Attributes
Select Combined Regulatory Attributes (1) Utility 2020 Rate Base ($bn) Cap. Structure (Equity/Debt) Allowed ROE Decoupling Energy Supply Costs Energy Supply Costs Storms Forward Test Year Other KY – Fully Integrated $10.8 53:47 9.725% ü ü ü ü ü PA – Distribution $3.7 55:45 (2) ü ü ü ü ü PA – Transmi
Slide 19: Non-GAAP Measure Reconciliation
Non-GAAP Measure Reconciliation Adjusted Gross Margins to Operating Income
Slide 20: 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, including the anticipated sale of PPL Corporation’s U.K. business, the anticipated acquisition o
Slide 21: 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: "Pennsylvania Adjusted Gross Margins" is a single financial performance measure of the electricity transmission and distribution operations o