Slide 1: PPL 2nd Quarter Investor Update
PPL 2nd Quarter Investor Update | August 5, 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 2nd Quarter Investor Update – August 5, 2021 3
Slide 4: Strategic Repositioning Update
Strategic Repositioning Update Sale of U.K. business complete; On track in Rhode Island Highlights Since 1st Quarter Investor Update ➢ Completed sale of U.K. utility business on June 14th ▪ Resulted in net cash proceeds of $10.4 billion (1) ➢ Successful execution of liability management to strengthe
Slide 5: Update to Carbon Reduction Goals
Update to Carbon Reduction Goals Targeting net-zero by 2050; Advancing interim targets Clean Energy Strategy Supports Updated Targets ➢ Anticipate hitting current greenhouse gas reduction goals earlier than expected (1) ▪ 70% reduction by 2035 and 80% reduction by 2040 ➢ Collaboration with industry-
Slide 6: Creating Our Path to Net-Zero Emissions
Creating Our Path to Net-Zero Emissions 2050 goal, while aspirational, is backed by action Projected reductions show progress ahead of Trajectory of Projected Coal Capacity (2) (in MW) prior goal from original 2010 baseline (1) 2020 – 2035 Est. (Metric Tonnes, in millions) Retirements: (3) 62.6 Mill
Slide 7: Kentucky Rate Case Update
Kentucky Rate Case Update New rate orders completed with rates effective July 1, 2021 Settlement Outcome Key Considerations of Approved Settlement Revenue Increase ➢ Annual revenue increase of $199 million ($ in millions) ▪ First year includes a $53 million billing credit KU: Electric $106 for custo
Slide 8: Commitment to Excellence
Commitment to Excellence Continuously recognized industry leader Recent awards reflect commitments to diversity, equity and inclusion, innovation, and safety ➢ Top Utility for Diversity, Equity and Inclusion – DiversityInc ➢ Top 50 Company for ESG – DiversityInc ➢ Best Place to Work for Disability I
Slide 9: Financial Update
Financial Update
Slide 10: 2nd Quarter Financial Results
2nd Quarter Financial Results Reported Earnings Ongoing Earnings (Earnings Per Share) (Earnings Per Share) $0.45 $0.20 $0.19 $0.03 2020 Q2 2021 Q2 2020 Q2 2021 Q2 Reported Reported Ongoing (1) Ongoing (1) ➢ 2nd quarter 2021 results reflect special items of ($0.16) per share, primarily items related
Slide 11: 2nd Quarter Segment Results
2nd Quarter Segment Results Q2 2021 vs. Q2 2020 Key Earnings Drivers (Earnings Per Share) ➢ Pennsylvania Regulated: ▪ Adjusted Margins $0.20 − Lower peak transmission demand $0.01 $0.00 $0.19 − Increased reserve as a result of challenge to FERC transmission $0.10 ($0.02) ROE $0.11 Adj . Ma r gi n ($
Slide 12: Financing Update
Financing Update Successful execution of liability management Significant Reduction in HoldCo Debt Notable Financing Highlights ($ in billions) ➢ Reduced PPL Capital Funding long-term $14.8 debt outstanding by ~$3.5 billion ~40% $11.3 $5.9 ~20% ▪ Successful execution of Tender Offer in June $2.1 res
Slide 13: Appendix
Appendix
Slide 14: Narragansett Electric Acquisition Update
Narragansett Electric Acquisition Update Regulatory approvals on track Acquisition of Narragansett (expected approval within 12 months of transaction announcement) Status Federal Approvals: Hart-Scott-Rodino (DOJ) ✓ Waiting Period Expired 6/2 Federal Communications Commission (FCC) ✓ Approval Receiv
Slide 15: Liability Management Summary
Liability Management Summary Long-term debt retirements via liability management activity PPL Capital Funding, Inc. 3/31/2021 7/31/2021 Stated Amount Outstanding Amount Outstanding Amount Retired CUSIP / ISIN Maturity Date Coupon ($ in thousands) ($ in thousands) ($ in thousands) Senior Unsecured No
Slide 16: YTD 2021 Financial Results
YTD 2021 Financial Results YTD 2021 vs. YTD 2020 YTD Highlights: 2021 vs. 2020 (Earnings Per Share) ➢ Pennsylvania Regulated: ▪ Adjusted Margins $0.03 − Lower peak transmission demand $0.47 $0.47 − Recorded reserve as a result of challenge ($0.02) to transmission ROE ($0.01) Returns on additional
Slide 17: Electricity Sales Trends
Electricity Sales Trends COVID-19 implications continue to moderate Weather-Normalized Electricity Sales Volumes Compared to 2019 Sales Volumes (1) Pennsylvania Regulated Kentucky Regulated Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 7.3% 7.1% 6.9% 4.9% 5.7% 4.8%
Slide 18: 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 Q2 2021 Q2 2020 % Change Q2 2021 Q2 2020 % Change Residential 3,017 3,093 (2.5%) Residential 2,234 2,346 (4.8%) Commercial 3,308 2
Slide 19: Baseload Generation Summary
Baseload Generation Summary Key Attributes 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
Slide 20: PPL’s Clean Energy Transition Strategy
PPL’s Clean Energy Transition Strategy Investments in smarter, more resilient power grids Our Clean Energy Strategy To Achieve Net Zero by 2050 1 2 3 4 DECARBONIZE DECARBONIZE OUR FURTHER ENABLE OUR NON-GENERATION RESEARCH AND THIRD-PARTY GENERATION OPERATIONS DEVELOPMENT DECARBONIZATION Invest in t
Slide 21: Fostering an Exceptional Workplace
Fostering an Exceptional Workplace Committed to diversity, equity, and inclusion PPL’s Diversity, Equity, and Inclusion Commitments Key Initiatives Implemented in 2021 Recognition for DE&I Efforts ➢ Implemented company-wide DE&I strategy aligned around five DEI commitments to focus efforts and remai
Slide 22: Corporate Governance Highlights
Corporate Governance Highlights Led by a balanced and diverse board Independent Oversight by a Diverse Board Tenure-balanced 3 (0-4 Years) 56% 50% Women-led 67% With 10 years Diverse Committees or less 3 (11-15 years) 3 (5-10 Years) Diverse Board Members Independent Board Committees led (based on ge
Slide 23: Debt Maturities
Debt Maturities Debt Maturities at June 30, 2021: 2026 and ($ in millions) 2021 2022 2023 2024 2025 Beyond Total PPL Capital Funding $0 $527 $389 $156 $0 $2,496 $3,568 PPL Electric Utilities (1) $400 $474 $340 $650 $0 $3,075 $4,939 LG&E and KU Energy $250 $0 $0 $0 $0 $0 $250 Louisville Gas & Electri
Slide 24: 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 $0 $1,450 Bilateral Credit Facility Mar-2022 50
Slide 25: PPL’s Credit Ratings
PPL’s Credit Ratings PPL Corporation Credit Rating S&P Moody’s Secured NR NR PPL Capital Funding Unsecured NR NR Credit Rating S&P Moody’s Long-term Issuer A- Baa2 Outlook Stable Positive Secured NR NR Unsecured BBB+ Baa2 Long-term Issuer A- NR Outlook Stable Positive LKE Holding Company PPL Electri
Slide 26: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 2nd Quarter Year-to-Date ($ in millions) June 30, 2021 June 30, 2021 KY PA Corp. & Disc. KY PA Corp. & Disc. Total Total Reg. Reg. Other Ops.(2) Reg. Reg. Other Ops.(2) Reported Earnings (1) $ 84 $
Slide 27: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 2nd Quarter Year-to-Date ($ in millions) June 30, 2020 June 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 Earnings (1)
Slide 28: Adjusted Gross Margins Summary
Adjusted Gross Margins Summary (1) (Unaudited) Three Months Ended June 30, (millions of dollars, except share data) Per Share Diluted 2021 2020 Change (after-tax) Kentucky Adjusted Gross Margins $ 489 $ 479 $ 10 $ 0.01 Pennsylvania Adjusted Gross Margins Distribution $ 211 $ 218 $ (7) $ (0.01) Trans
Slide 29: Reconciliation of Adjusted Gross Margins to Operating Income
Reconciliation of Adjusted Gross Margins to Operating Income (1) (Unaudited) Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 (millions of dollars) KY PA KY PA Adjusted Adjusted Adjusted Adjusted Gross Gross Operating Gross Gross Operating Margins Margins Other Income Margins Margins
Slide 30: 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 31: 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 32: 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