Ppl Corporation · NYSE:PPL
Ppl — Barclays 2015 CEO Energy-Power Conference
35 slides from Ppl's conference presentation, Sep 10, 2015
Slide 1: PPL: A Diverse Pure-Play Electric Utility Company
© PPL Corporation 2015 PPL: A Diverse Pure-Play Electric Utility Company Barclays 2015 CEO Energy -Power Conference September 10, 2015
Slide 2: Cautionary Statements and Factors That May Affect Future Results
© PPL Corporation 2015 1 Cautionary Statements and Factors That May Affect Future Results Anystatementsmadeinthispresentationaboutfutureoperating resultsorotherfutureeventsareforward-lookingstatements under the Safe Harbor Provisions of the Private Securities LitigationReformActof1995.Actualresultsm
Slide 3: Pennsylvania Rate Case Update
© PPL Corporation 2015 Pennsylvania Rate Case Update • Settlement agreement reached • Includes an annual revenue increase of $124 million • Black box settlement with no stated ROE • Subject to approval by the state administrative law judge and the Public Utility Commission • If approved, the increas
Slide 4: Investment Proposition
© PPL Corporation 2015 Investment Proposition 100% rate-regulated business model • Pure-play utility modelwith strong earnings and dividend growth potential • Top 10 U.S. utility market capitalization and part of the S&P 500 • Annual total return proposition of 8% –11% • Diversified by region, regul
Slide 5: Leading Energy Delivery Platform with Scale and Diversity
© PPL Corporation 2015 Leading Energy Delivery Platform with Scale and Diversity Pennsylvania Regulated Segment • Customers: 1.4 million Electricity Distribution • Allowed Distribution ROE: 10.40% • Rate Base: $4.9 billion (1) • 5-Year Transmission Rate Base CAGR: 16.3% • 5-Year Distribution Rate Ba
Slide 6: Significant Investment Opportunity with Constructive Rate Mechanisms Drives Earnings Growth
© PPL Corporation 2015 Significant Investment Opportunity with Constructive Rate Mechanisms Drives Earnings Growth (2) Earnings from Ongoing Operations based on 2014 adjusted actual earnings and midpoint of 2015 forecast. (3) Projection based on midpoint of 4% -6% CAGR off 2014 adjusted earnings. Do
Slide 7: Constructive Regulatory Framework Supports Robust Financial Performance
© PPL Corporation 2015 Rate Base (2015E) Equity Ratio (1) Allowed ROE PPL Electric Utilities D: $3.0 billion T: $2.5 billion 51.60% D: 10.40% T: 11.68% (2) LG&E $3.7 billion 52.75% 10.00% (3) Kentucky Utilities $5.1 billion 53.02% 10.00% (3) Constructive Regulatory Framework Supports Robust Financia
Slide 8: The U.K.: a Premium Regulatory Jurisdiction
© PPL Corporation 2015 The U.K.; a PremiumRegulatory Jurisdiction The U.K. OFGEM’s RIIO framework (Revenue = Incentives + Innovation + Outputs) allows Distribution Network Operators (DNOs) to earn premium returns for strong performance and innovation. WPD Investment Advantage Regulatory cycle Fast t
Slide 9: Significant Ongoing Capital Expenditure Program
© PPL Corporation 2015 8 Note: Corporate and Other capital expenditures average approximately $5million per year. (1) WPD figures based on assumed exchange rate of $1.60 / £. (2) Expect between 80% and 90% to receive timely returns via ECR mechanism based on historical experience and future projecti
Slide 10: Strong Regulated Rate Base Growth
© PPL Corporation 2015 9 ( $ i n b i l l i o n s ) (1) WPD figures based on assumed exchange rate of $1.60 / £ for 2015 -2019. (2) Represents capitalization for LKE, as LG&E and KU rate constructs are based on capitalization. Represents Regulatory Asset Value (RAV) for WPD. Strong regulated rate bas
Slide 11: Pennsylvania: Continuing to Grow Transmission
© PPL Corporation 2015 $2.1 $2.5 $2.9 $3.5 $4.1 $4.5 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 2014A 2015E 2016E 2017E 2018E 2019E ( $ i n B i l l i o n s ) Pennsylvania: Continuing to Grow Transmission Projected Transmission Rate Base Growth • Excellent growth in Transmission business
Slide 12: Proven Track Record of Transmission Capability
© PPL Corporation 2015 Proven Track Record of Transmission Capability • Susquehanna –Roseland • $630 million Project • 150 miles from Berwick, PA into New Jersey including through Delaware Water Gap • Successful partnership with a neighboring utility in New Jersey • Cooperation with multiple state r
Slide 13: Pennsylvania: Strong Distribution Growth Platform
© PPL Corporation 2015 $2.8 $3.0 $3.2 $3.5 $3.7 $3.9 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2014A 2015E 2016E 2017E 2018E 2019E ( $ i n B i l l i o n s ) Pennsylvania: Strong Distribution Growth Platform Projected Distribution Rate Base Growth Total: $24.6 bn • Reliability initiatives drive di
Slide 14: Kentucky: Strong Rate Base Growth Driven By Environmental Investments
© PPL Corporation 2015 $8.3 $8.8 $9.2 $9.5 $10.1 $10.9 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2014A 2015E 2016E 2017E 2018E 2019E ( $ i n B i l l i o n s ) Kentucky: Strong Rate Base Growth Driven By Environmental Investments • Constructive regulatory environment that provides a timely return on a sub
Slide 15: WPD: Top Performing Electricity Distribution Business in the U.K.
© PPL Corporation 2015 WPD: Top Performing Electricity Distribution Business in the U.K. • Highly attractive regulated business • Regulator-accepted 8 year forward-looking revenues based on future business plan, including capital expenditures and O&M plus incremental financial adjustments to base re
Slide 16: Foreign Currency Risk Management
© PPL Corporation 2015 Foreign Currency Risk Management • 3-year forward hedging program to manage PPL’s GBP vs. USD earnings translation risk • The program consists of declining hedge percentage ratios on a “rolling” 36-month basis allocated into 12-month periods • Hedge bands provide flexibility f
Slide 17: Retail Price Index - RPI
© PPL Corporation 2015 Retail Price Index -RPI • Revenue: • Annually, tariffs will be set in the November timeframe using the forecasted RPI for the next two regulatory years (i.e. 2016/2017 and 2017/2018 tariffs will be based on forecasted RPI in Nov 2015) • In addition, the 2017/2018 revenues will
Slide 18: Foreign Currency Hedging Status and RPI Sensitivity
© PPL Corporation 2015 Foreign Currency Hedging Status and RPI Sensitivity Note: FX hedging status as of 09/03/2015. (1) Sensitivity includes the net effects on revenue, O&M and interest expense on index-linked debt. 17 GBP Foreign Currency 2015 2016 2017 Percentage Hedged 100% 90% 60% Hedged Rate (
Slide 19: Funding the Growth
© PPL Corporation 2015 Funding the Growth Strong domestic operating cash flows plus the U.K. dividend sufficient to fund the PPL dividend. Domestic debt and equity issuances fund domestic utility growth. 18 (5) 2013A (3) 2014A (3) 2015E (4) Domestic Cash from Operations $1,707 $2,219 $1,610 Domestic
Slide 20: Summary
© PPL Corporation 2015 Summary 19 • Pure-play regulated business profile operating in premium jurisdictions • 4% -6% forecasted earnings growth with above sector- average dividend yield • Strong dividend growth potential • Low risk business plan • Confident in our ability to deliver on commitments t
Slide 21: Appendix
© PPL Corporation 2015 Appendix 20
Slide 22: PPL Fact Sheet
© PPL Corporation 2015 PPL Fact Sheet CORPORATE DATA Ticker symbol and stock exchange PPL-NYSE At August31, 2015 Average daily trading volume (3 mos.) 4.76mm shares Closing price $30.99 52-week price range $29.05 –$35.39 Annualized dividend per share $1.51 ($0.3775/qtr) Enterprise value ~$38.7billio
Slide 23: Increasing 2015 Ongoing Earnings Forecast
© PPL Corporation 2015 $0.00 $1.00 $2.00 $3.00 2014 Adj Previous 2015E Revised 2015E $2.15 22 P e r S h a r e Increasing 2015 Ongoing Earnings Forecast $2.25 $2.03 Note: See Appendix for the reconciliation of 2014 reported earnings (loss) to earnings from ongoing operations. (1) 2015 earnings and 20
Slide 24: Summary of Drivers of 4% to 6% EPS Growth Through 2017
© PPL Corporation 2015 Summary of Drivers of 4% to 6% EPS Growth Through 2017 8% -10% Domestic Utility Earnings Growth: PA Regulated • Transmission Cap Ex of $2.0 billion at 11.68% base ROE, 12.93% for $630 million Susquehanna Roseland project drives transmission rate base growth of 18.9% through 20
Slide 25: Continued Dividend Growth
© PPL Corporation 2015 24 $1.40 $1.44 $1.47 $1.49 $1.51 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 2011 2012 2013 2014 2015E (1) $/Share Annualized Continued Dividend Growth (1) Annualized dividend based on 8/3/2015 announced increase. Actual dividends to be determined by Board of Directors.
Slide 26: Kentucky Environmental Controls
© PPL Corporation 2015 Kentucky Environmental Controls 25 Low Nox Burners SCR/SNCR Scrubbers Closed Cycle Cooling Tower Dry Handling/Disposal/Beneficial Use Baghouses NO x NO x SO 2 Water Intake Coal Combustion Residuals (CCRs) (2) Hg (Particulates) Unit 1 x x x x (1) (3) Unit 2 x x x x (1) x Unit 1
Slide 27: U.K. Regulated Segment EPS from Ongoing Operations Projection
© PPL Corporation 2015 U.K. Regulated Segment EPS from Ongoing Operations Projection ($ Per Share) Note: See Appendix for the 2014 reconciliation of reported earnings (loss) to earnings from ongoing operations. Assumes foreign currency exchange rate of $1.60/£ for 2015E and 2016E on open positions.
Slide 28: U.K. Regulated Segment Cash Repatriation
© PPL Corporation 2015 U.K. Regulated Segment Cash Repatriation Note: Assumes foreign currency exchange rate of $1.60/£ for 2015E, 2016E and 2017E. ($ in millions) Flexible strategy for meaningful U.K. cash repatriation. 27
Slide 29: Strong Credit Ratings
© PPL Corporation 2015 WPD Holding Company LKE Holding Company PPL Electric UtilitiesLKE Operating Companies PPL Capital Funding Credit Rating Secured Unsecured Long-term Issuer Outlook S&P NR BBB+ NR Stable Moody’s NR Baa2 NR Stable Credit Rating Secured Unsecured Long-term Issuer Outlook S&P NR BB
Slide 30: Strong Financial Foundation
© PPL Corporation 2015 Strong Financial Foundation Limited maturity schedule and strong liquidity profile provide financial flexibility. Debt Maturity Distribution 2015 -2019 as of June 30, 2015 Liquidity Profile as of June 30, 2015 ($ in millions) Note: GBP debt maturities converted at 5/31/2015 sp
Slide 31: Reconciliation of Reported Earnings (Loss) to Earnings from Ongoing Operations (Adjusted)
© PPL Corporation 2015 30 Reconciliation of Reported Earnings (Loss) to Earnings from Ongoing Operations (Adjusted) (1) The "If-Converted Method" has been applied to PPL's 2011 Equity Units, resulting in $9 million of interest charges (after-tax) being added back to earnings and approximately 11 mil
Slide 32: Reconciliation of PPL's Forecast of Reported Earnings to Earnings from Ongoing Operations
© PPL Corporation 2015 31 Reconciliation of PPL’s Forecast of Reported Earnings (Loss) to Earnings from Ongoing Operations (After-Tax) Unaudited Forecast (per share -diluted) Midpoint U.K. Kentucky Pennsylvania Corporate Discontinued High Low Regulated Regulated Regulated and Other Operations Total
Slide 33: Reconciliation of Domestic Cash Flows
© PPL Corporation 2015 32 Reconciliation of Domestic Cash Flows Note: For 2015, due to the generalized and forward-looking nature of this information, the Company has not reconciled the presented non-GAAP financial measures to the most directly comparable GAAP financial measures. (1) Primarily repre
Slide 34: Forward-Looking Statements Risk Factors
© PPL Corporation 2015 33 Statementscontainedinthispresentation,includingstatementswithrespecttofutureearnings,cashflows,financing,regulationandcorporate strategyare"forward-lookingstatements"withinthemeaningofthefederalsecuritieslaws.AlthoughPPLCorporationbelievesthatthe expectationsandassumptionsr
Slide 35: Definitions of Non-GAAP Financial Measures
© PPL Corporation 2015 34 Definitions of Non-GAAP Financial Measures “Earningsfromongoingoperations,”shouldnotbeconsideredasanalternativetoreportedearnings,ornetincome,whichisanindicatorof operatingperformancedeterminedinaccordancewithU.S.generallyacceptedaccountingprinciples(GAAP). PPLbelievesthat“