Slide 1: PPL 3rd Quarter Investor Update
PPL 3rd Quarter Investor Update | November 4, 2021
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 effects of the recent sale of PPL Corporation’s U.K. business, the anticipated acquisition of The Narragansett Electr
Slide 3: Agenda
Agenda I. Strategic and Operational Updates Vince Sorgi II. Financial Update Joe Bergstein III. Closing Remarks Vince Sorgi IV. Q&A PPL 3rd Quarter Investor Update – November 4, 2021 3
Slide 4: Strategic Update
Strategic Update Excellent progress on strategic repositioning Highlights since 2nd quarter investor update ➢ Narragansett Electric acquisition approvals remain on track ▪ 4 of 5 approvals completed - FERC approval received in September ▪ Rhode Island (RI) Division of Public Utilities and Carriers o
Slide 5: Strategic Update: Capital Allocation Priorities
Strategic Update Updated views on capital allocation priorities post-WPD sale ➢ Plan to invest at least $1 billion in additional regulated utility Capex through 2025 ➢ Additional $500 million allocated to share repurchases (1) ▪ Targeting $1 billion of total repurchases by year end with $550 million
Slide 6: Advancing PPL's Clean Energy Strategy
Advancing PPL’s Clean Energy Strategy Initiatives supporting overall goal of net zero emissions ➢ New 125-megawatt solar facility planned for Kentucky ▪ Renewable Power Agreements with five major customers in LG&E and KU’s service territories ▪ Agreements are under LG&E and KU’s existing Green Tarif
Slide 7: Kentucky Integrated Resource Plan
Kentucky Integrated Resource Plan Expecting meaningful shift to cleaner generation mix (1) Projected generation mix over 15-year planning period (Percentage of projected GWh) 2021E 2036E 1% 18% 19% Coal 38% Current Base High Gas 52% 50% Mix (2) Case (2) Case (3) Renewables 29% 81% 12% ➢ Anticipate m
Slide 8: Operational and Regulatory Update
Operational and Regulatory Update Innovation driving value for our customers and shareowners ➢ Constructive settlement on PA transmission formula rate (1) ▪ Agreement lowers base ROE, partially offset by other formula changes ➢ PPL’s utilities named among the most trusted utility brands in the natio
Slide 9: 3rd Quarter Financial Results
3rd Quarter Financial Results Reported Earnings Ongoing Earnings (Earnings Per Share) (Earnings Per Share) $0.37 $0.36 $0.30 $0.27 2020 Q3 2021 Q3 2020 Q3 2021 Q3 Reported Reported Ongoing (1) Ongoing (1) ➢ 3rd quarter 2021 results reflect special items of ($0.09) per share, primarily related to los
Slide 10: 3rd Quarter Segment Results
3rd Quarter Segment Results Q3 2021 vs. Q3 2020 Key Earnings Drivers (Earnings Per Share) $0.03 $0.36 ➢ Pennsylvania Regulated: $0.04 − Higher O&M, primarily due to $0.30 storm and support costs − Reserve recorded for a ($0.01 ) reduction in the transmission $0.21 $0.17 O&M ($0. 01) R e ta i l R a t
Slide 11: Appendix
Appendix
Slide 12: YTD 2021 Financial Results
YTD 2021 Financial Results YTD 2021 vs. YTD 2020 YTD Highlights: 2021 vs. 2020 (Earnings Per Share) ➢ Pennsylvania Regulated: $0.07 $0.01 $0.83 − Reserve recorded for a reduction in the $0.77 transmission formula rate ROE ($0.02 ) − Lower peak transmission demand Returns on additional capital $0.5
Slide 13: Narragansett Electric Acquisition
Narragansett Electric Acquisition Regulatory approvals on track Acquisition of Narragansett (expected approval within 12 months of transaction announcement) Status Federal Approvals: Hart-Scott-Rodino (DOJ) ✓ Waiting Period Expired 6/2 Federal Communications Commission (FCC) ✓ Approval Received 7/14
Slide 14: Narragansett Electric Acquisition
Narragansett Electric Acquisition Rhode Island Division procedural schedule Timing Milestone 10/1/2021 Deadline for propounding discovery (all parties) 10/25/2021 Discovery Conference (if needed) 11/3/2021 Deadline for Intervenors and Advocacy Section to submit pre-filed direct testimony 11/23/2021
Slide 15: FERC Transmission ROE Settlement
FERC Transmission ROE Settlement Constructive agreement on PA transmission formula rate Notable aspects of Settlement (1) (2) ➢ Changes to PPL Electric’s base return on equity (ROE) ▪ 9.90% ROE from 5/21/2020 – 5/31/2022 ▪ 9.95% ROE from 6/1/2022 – 5/31/2023 (3) ▪ 10.00% ROE beginning 6/1/2023 ➢ Cha
Slide 16: Electricity Sales Trends
Electricity Sales Trends Sales comparison to pre-pandemic levels Weather-Normalized Electricity Sales Volumes Compared to 2019 Sales Volumes (1) Pennsylvania Regulated Kentucky Regulated Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 7.2% 7.1% 6.9% 4.9% 4.6% 4.8% 3.5
Slide 17: Electricity Sale Volumes
Electricity Sale Volumes 2021 sales vs. 2020 sales by operating segment Weather-Normalized Electricity Sales Volume Variance (2021 vs. 2020) in GWh Pennsylvania Kentucky Q3 2021 Q3 2020 % Change Q3 2021 Q3 2020 % Change Residential 3,525 3,449 2.2% Residential 2,854 3,019 (5.5%) Commercial 3,747 3,6
Slide 18: Kentucky Integrated Resource Plan
Kentucky Integrated Resource Plan Potential generation capacity additions and retirements Base Case (1) High Case (2) (Cumulative New Generation and Retirements in MW) (Cumulative New Generation and Retirements in MW) 9,225 2,300 3,845 200 3,125 5,825 300 2,325 1,165 1,725 Cumulative Cumulative New
Slide 19: Kentucky Integrated Resource Plan
Kentucky Integrated Resource Plan Key Forecast Assumptions & Uncertainties Base Case High Case Key Load Assumptions Customer Growth 0.4% CAGR 50% faster (0.6% CAGR) >6% reduction in Residential/ >6% reduction in Residential/ Energy Efficiency Small Commercial use-per-customer by 2036 Small Commercia
Slide 20: Baseload Generation Resources
Baseload Generation Resources Summary of Kentucky’s baseload generation fleet PPL’s Kentucky Baseload Generation Resources Owned Currently Projected Capacity Factor Capacity End of Economic (1) Power Plant Unit COD MW 2019A 2020A Useful Life Coal Mill Creek 1 1972 300 57% 64% 2024 E.W. Brown 3 1971
Slide 21: Debt Maturities
Debt Maturities 2026 and ($ in millions) 2021 2022 2023 2024 2025 Beyond Total PPL Capital Funding $0 $0 $0 $0 $0 $2,046 $2,046 PPL Electric Utilities(1) $0 $474 $340 $650 $0 $3,075 $4,539 Louisville Gas & Electric $0 $0 $0 $0 $300 $1,724 $2,024 Kentucky Utilities $0 $0 $13 $0 $250 $2,379 $2,642 Tot
Slide 22: Liquidity Profile
Liquidity Profile Letters of C redit & C om m ercial Unused Ex piration C apacity Borrow ed Paper Issued C apacity Entity F acility Date ($ in m illions) ($ in m illions) ($ in m illions) ($ in m illions) PPL C apital F unding Syndicated Credit Facility Jan-2024 $1,450 $0 $0 $1,450 Bilateral Credit
Slide 23: PPL's Credit Ratings
PPL’s Credit Ratings PPL Corporation Credit Rating S&P Moody’s Secured NR NR PPL Capital Funding Unsecured NR NR Credit Rating S&P Moody’s Long-term Issuer A- Baa2 Outlook Stable Positive Secured NR NR Unsecured BBB+ Baa2 Long-term Issuer A- NR Outlook Stable Positive LG&E and KU PPL Electric Utilit
Slide 24: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 3rd Quarter Year-to-Date ($ in millions) September 30, 2021 September 30, 2021 KY PA Corp. & Disc. KY PA Corp. & Disc. Total Total Reg. Reg. Other Ops.(2) Reg. Reg. Other Ops.(2) Reported Earnings (
Slide 25: 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 ($ in millions) September 30, 2020 September 30, 2020 KY PA Corp. & Disc. KY PA Corp. & Disc. Total Total Reg. Reg. Other (2) Ops. (3) Reg. Reg. Other (2) Ops.(3) Reported E
Slide 26: Adjusted Gross Margins Summary
Adjusted Gross Margins Summary (1) (Unaudited) Three Months Ended September 30, (millions of dollars, except share data) Per Share Diluted 2021 2020 Change (after-tax) Kentucky Adjusted Gross Margins $ 625 $ 546 $ 79 $ 0.08 Pennsylvania Adjusted Gross Margins Distribution $ 228 $ 225 $ 3 $ 0.00 Tran
Slide 27: Reconciliation of Adjusted Gross Margins to Operating Income
Reconciliation of Adjusted Gross Margins to Operating Income (1) (Unaudited) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 (millions of dollars) KY PA KY PA Adjusted Adjusted Adjusted Adjusted Gross Gross Operating Gross Gross Operating Margins Margins Other Income Margi
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, including the anticipated acquisition of Narragansett from National Grid, and its impact on 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: "Kentucky Adjusted Gross Margins" is a single financial performance measure of the electricity generation, transmission and distribution oper