Slide 1: 1st Quarter Earnings Call
© PPL Corporation 2015 1st Quarter Earnings Call PPL Corporation May 7, 2015 U.K. Regulated KY Regulated PA Regulated Supply Exhibit 99.2
Slide 2: Cautionary Statements and Factors That May Affect Future Results
© PPL Corporation 2015 2 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
Slide 3: Agenda
© PPL Corporation 2015 3 First Quarter Earnings Results, Operational Overview and 2015 Earnings Forecast Talen Update Segment Results and Financial Overview Q&A W. H. Spence V. Sorgi Agenda W. H. Spence
Slide 4: Earnings Results: First Quarter Earnings per Share
© PPL Corporation 2015 $0.66 $0.77 ($0.75) ($0.25) $0.25 $0.75 $1.25 $1.75 $2.25 $2.75 1Q 2014 (adj) 1Q 2015 First Quarter Regulated Utility Earnings from Ongoing Operations 4 P e r S h a r e Note: See Appendix for the reconciliation of reported earnings (loss) to Regulated Utility Earnings from ong
Slide 5: 2015 Ongoing Earnings Forecast
© PPL Corporation 2015 $0.00 $1.00 $2.00 $3.00 2014A 2014 Adj 2015E 5 P e r S h a r e 2015 Ongoing Earnings Forecast $2.45 $2.25 $2.03 Note: See Appendix for the reconciliation of 2014 reported earnings (loss) to earnings from ongoing operations to regulated utility earnings from ongoing operations
Slide 6: Kentucky Operational Overview
© PPL Corporation 2015 6 • Kentucky Rate Case – Unanimous settlement agreement reached, subject to KPSC approval – Includes annual revenue increase of $132 million, including cost recovery for the new Cane Run gas plant – Provides for deferred cost recovery on a portion of costs associated with pens
Slide 7: Pennsylvania Operational Overview
© PPL Corporation 2015 7 • Pennsylvania Rate Case – Distribution Revenue Increase Requested $167.5 million – Future Test Year 2016 – Requested ROE 10.95% – 2016 Distribution Rate Base $3.16 billion – 2016 Common Equity Ratio 51.66% – Docket No. R-2015-2469275 Complete filings will be available at ww
Slide 8: U.S. Regulated Volume Variances
© PPL Corporation 2015 8 Note: Total includes Residential, Commercial and Industrial customer classes as well as “Other”, which is not depicted on the charts above. U.S. Regulated Volume Variances Residential Commercial Industrial Total Residential Commercial Industrial Total Weather-Normalized (cha
Slide 9: Talen Update
© PPL Corporation 2015 Talen Update • All regulatory approvals received • Record date set for May 20 th – “When-issued” trading begins May 18 th under symbol “TLN WI” • Preliminary exchange ratio set at 0.125 shares of Talen per share of PPL – PPL Board to announce definitive ratio promptly after re
Slide 10: Ongoing Earnings Overview
© PPL Corporation 2015 10 Q1 2015 Q1 2014 (adj) Change U.K. Regulated $0.50 $0.41 $0.09 Kentucky Regulated 0.16 0.16 0.00 Pennsylvania Regulated 0.13 0.13 0.00 Corporate and Other (0.02) (0.04) 0.02 Total Regulated Utility $0.77 $0.66 $0.11 Q1 2015 Q1 2014 Change Supply $0.11 $0.11 $0.00 Ongoing Ear
Slide 11: U.K. Regulated Segment Earnings Drivers
© PPL Corporation 2015 11 1 st Quarter 2014 EPS –Ongoing Earnings $0.41 Utility revenue 0.04 Depreciation 0.02 Financing costs 0.01 Foreign currency 0.01 Income taxes and other 0.01 Total 0.09 2015 EPS –Ongoing Earnings $0.50 U.K. Regulated Segment Earnings Drivers Note: See Appendix for the reconci
Slide 12: Kentucky Regulated Segment Earnings Drivers
© PPL Corporation 2015 12 1 st Quarter 2014 EPS –Ongoing Earnings $0.16 Gross margins 0.01 Income taxes and other (0.01) Total 0.00 2015 EPS –Ongoing Earnings $0.16 Kentucky Regulated Segment Earnings Drivers Note: See Appendix for the reconciliation of reported earnings (loss) to Regulated Utility
Slide 13: Pennsylvania Regulated Segment Earnings Drivers
© PPL Corporation 2015 13 1 st Quarter 2014 EPS –Ongoing Earnings $0.13 Gross delivery margins 0.01 Depreciation (0.01) Total 0.00 2015 EPS –Ongoing Earnings $0.13 Pennsylvania Regulated Segment Earnings Drivers Note: See Appendix for the reconciliation of reported earnings (loss) to Regulated Utili
Slide 14: Supply Segment Earnings Drivers
© PPL Corporation 2015 14 1 st Quarter 2014 EPS –Ongoing Earnings $0.11 East energy margins (0.03) O&M 0.01 Financing costs 0.01 Income taxes and other 0.01 Total 0.00 2015 EPS –Ongoing Earnings $0.11 Supply Segment Earnings Drivers Note: See Appendix for the reconciliation of reported earnings (los
Slide 15: Foreign Currency Hedging Status and RPI
© PPL Corporation 2015 Foreign Currency Hedging Status and RPI 15 Note: FX hedging status as of 05/01/2015 2015 2016 2017 Percentage Hedged 97% 72% 20% Hedged Rate (USD/GBP) $1.60 $1.61 $1.60 Budgeted Rate on Open Position (GBP/USD) $1.60 $1.60 $1.60 EPS Sensitivities: Decrease in Rate (GBP/USD) 0.0
Slide 16: U.K. Regulated Segment Cash Repatriation
© PPL Corporation 2015 U.K. Regulated Segment Cash Repatriation 16 Note: Assumes foreign currency exchange rate of $1.60/£ for 2015E, 2016E and 2017E. ($ in millions)
Slide 17: Appendix
© PPL Corporation 2015 17 Appendix
Slide 18: Operating Segment Capital Expenditures
© PPL Corporation 2015 18 ($ in billions) Note: Corporate and Other capital expenditures average approximately $5million per year. (1) WPD figures based on assumed exchange rate of $1.60 / GBP. (2) Expect between 80% and 90% to receive timely returns via ECR mechanism based on historical experience
Slide 19: Projected Regulated Rate Base Growth
© PPL Corporation 2015 19 ($ in billions) (1) Represents capitalization for LKE, as LG&E and KU rate constructs are based on capitalization. Represents Regulatory Asset Value (RAV) for WPD. (2) WPD figures based on assumed exchange rate of $1.60 / £ for 2015 -2019. 5-Year Regulatory Asset Base (1) C
Slide 20: Free Cash Flow before Dividends
© PPL Corporation 2015 20 Free Cash Flow before Dividends Free Cash Flow before Dividends (Millions of Dollars) Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions of dollars) Note: Free Cash Flow forecast updated on an annual basis. (1) 2015E Cash from Operations inc
Slide 21: Pennsylvania Rate Case Preliminary Schedule
© PPL Corporation 2015 21 Pennsylvania Rate Case Preliminary Schedule Timing Milestone April Discovery phase begins June Public hearings July –August Parties submit testimony, hearings held September Briefs and reply briefs due October Administrative Law Judge issues recommended decision December PU
Slide 22: Enhancing Value Through Active Hedging
© PPL Corporation 2015 2015 2016 Baseload Expected Generation (1) (Million MWhs) 49.0 45.5 East 45.0 41.6 West 4.0 3.9 Current Hedges (%) 97-99% 28-30% East 98-100% 26-28% West 93-95% 48-50% Average Hedged Price (Energy Only) ($/MWh) (2) East $40-42 $43-45 West $39-41 $39-41 Current Coal Hedges (%)
Slide 23: Competitive Generation Overview
© PPL Corporation 2015 23 Competitive Generation Overview (2) Q1 2015 output (1) higher than prior year due to improved gas and nuclear performance, partially offset by lower economic operation of coal and sale of Montana hydro assets 4.3 5.0 7.4 6.9 2.2 2.9 1.0 0.2 0.6 0.9 0.0 5.0 10.0 15.0 20.0 1Q
Slide 24: Market Prices
© PPL Corporation 2015 24 (1) Hourly average. (2) NYMEX and TETCO M3 forward gas prices on 3/31/2015. (3) Market Heat Rate = PJM on-peak power price divided by TETCO M3 gas price. Market Prices Balance of 2015 2016 $43 $46 $29 $32 $36 $39 $27 $28 $21 $22 $24 $26 $2.78 $3.11 $2.04 $3.03 21.3 15.3 $15
Slide 25: Debt Maturities
© PPL Corporation 2015 25 Debt Maturities Note: As of March 31, 2015 (1) Louisville Gas & Electric has several municipal bonds that may be put by the holders before the bonds’ final maturities. These amounts reflect the timing of any put option. (2) This amount includes $81 million of Pennsylvania E
Slide 26: Liquidity Profile
© PPL Corporation 2015 26 Liquidity Profile Note: As of March 31, 2015 (1) As a result of the proposed spinoff transaction, PPL Energy Supply has syndicated a $1.85 billion credit facility which is currently fully committed. This syndicated credit facility is replacing the existing $3 billion PPL En
Slide 27: Reconciliation of Segment Reported Earnings to Regulated Utility Earnings from Ongoing Operations
© PPL Corporation 2015 27 Reconciliation of Segment Reported Earnings (Loss) to Regulated Utility Earnings from Ongoing Operations DRAFT (After-Tax) (Unaudited) 1st Quarter 2015 (millions of dollars) U.K. Kentucky Pennsylvania Corporate Regulated Regulated Regulated and Other Supply Total Reported E
Slide 28: Reconciliation to Regulated Utility Earnings from Ongoing Operations (Adjusted)
© PPL Corporation 2015 28 Reconciliation of Segment Reported Earnings (Loss) to Regulated Utility Earnings from Ongoing Operations (Adjusted) (After -Tax) (Unaudited) 1st Quarter 2014 (millions of dollars) U.K. Kentucky Pennsylvania Corporate Regulated Regulated Regulated and Other Supply Total Repo
Slide 29: Reconciliation of Supply Segment Reported Earnings to Ongoing Operations
© PPL Corporation 2015 29 Reconciliation of Supply Segment Reported Earnings (Loss) to Supply Earnings from Ongoing Operations (After-Tax) (Unaudited) 1st Quarter 2015 1st Quarter 2014 (Millions of Dollars) (Per Share- Diluted) (Millions of Dollars) (Per Share- Diluted) Supply Reported Earnings (Los
Slide 30: Reconciliation of Reported Earnings to Earnings from Ongoing Operations
© PPL Corporation 2015 30 Reconciliation of Reported Earnings (Loss) to Earnings from Ongoing Operations (After-Tax) (Unaudited) Year-to-Date December31, 2014 (millions of dollars) U.K. Kentucky Pennsylvania Corporate Regulated Regulated Regulated Supply and Other Total Reported Earnings (Loss) $ 98
Slide 31: Reconciliation of Reported Earnings to Regulated Utility Earnings (Adjusted)
© PPL Corporation 2015 31 Reconciliation of Reported Earnings (Loss) to Earnings from Ongoing Operations to Regulated Utility Earnings from Ongoing Operations (Adjusted) (After-Tax) (Unaudited) Year-to-Date December 31, 2014 (per share -diluted) (a) U.K. Kentucky Pennsylvania Corporate Regulated Reg
Slide 32: Gross Margins Summary
© PPL Corporation 2015 32 Gross Margins Summary $ 522 $ 508 $ 14 $ 0.01 Distribution $ 242 $ 249 $ (7) $ (0.01) Transmission 93 73 20 0.02 $ 335 $ 322 $ 13 $ 0.01 Eastern U.S. $ 405 $ 435 $ (30) $ (0.03) Western U.S. 21 49 (28) (0.02) $ 426 $ 484 $ (58) $ (0.05) Total Unregulated Gross Energy Margin
Slide 33: Reconciliation of First Quarter Margins to Operating Income
© PPL Corporation 2015 33 Reconciliation of First Quarter Margins to Operating Income $ 899 $ 630 $ 685 $ 2,214 $ 934 $ 592 $ 636 $ 2,162 PLR intersegment utility (9) $ 9 (27) $ 27 614 (93) 521 (665) (792) (1,457) 324 (14) 310 377 (29) 348 120 120 141 141 Total Operating Revenues 899 621 947 698 3,1
Slide 34: Forward-Looking Statements and Risk Factors
© PPL Corporation 2015 34 Statementscontainedinthispresentation,includingstatementswithrespecttofutureearnings,cashflows,financing,regulationand corporatestrategyare"forward-lookingstatements"withinthemeaningofthefederalsecuritieslaws.AlthoughPPLCorporation believesthattheexpectationsandassumptionsr
Slide 35: Definitions of Non-GAAP Financial Measures
© PPL Corporation 2015 35 Definitions of Non-GAAP Financial Measures “Regulated utility earnings from ongoing operations,” should not be considered as an alternative to reported earnings, or net income, which is an indicator of operating performance determined in accordance with U.S. generally accep
Slide 36: Definitions of Non-GAAP Financial Measures
© PPL Corporation 2015 36 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