Slide 1: Third Quarter Earnings Call October 29, 2009
Third Quarter Earnings Call October 29, 2009 Exhibit 99.2
Slide 2: Cautionary Statements and Factors That May Affect Future Results
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 1995. Actual results may
Slide 3: Agenda
Agenda • Third Quarter 2009 Earnings, 2009 and 2010 Earnings Forecast and Outlook • Segment Results and Financial Overview • Operational Review • Q&A J. H. Miller P. A. Farr W. H. Spence 2
Slide 4: Earnings Results
Earnings Results Third Quarter Earnings from Ongoing Operations $0.45 $0.52 $0.00 $0.50 $1.00 3Q 2008 3Q 2009 Per Share $0.54 $0.05 $0.00 $0.50 $1.00 3Q 2008 3Q 2009 Per Share Third Quarter Reported Earnings Note: See Appendix for the reconciliation of reported earnings and earnings from ongoing ope
Slide 5: Strong Expected Earnings Growth Forecast
$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2008A* 2009* 2010 Strong Expected Earnings Growth Forecast 4 * Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. $2.02 $3.50 Per Share $1.90 $1.60 $3.10
Slide 6: Ongoing Earnings Overview
Ongoing Earnings Overview $ 0.07$0.45$0.52Total (0.08)0.200.12International Delivery (0.02)0.090.07Pennsylvania Delivery $ 0.17$0.16$0.33Supply Change Q3 2008 Q3 2009 5 Note: See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations.
Slide 7: Supply Segment Earnings Drivers
Supply Segment Earnings Drivers 0.01Margins – West (0.02)O&M (0.01)Depreciation $0.332009 EPS – Ongoing Earnings 0.17Total 0.19Margins – East $0.162008 EPS – Ongoing Earnings 3rd Quarter Note: See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. 6
Slide 8: Pennsylvania Delivery Segment Earnings Drivers
Pennsylvania Delivery Segment Earnings Drivers (0.01)Delivery Margins $0.072009 EPS – Ongoing Earnings (0.02)Total (0.01)Financing Costs $0.092008 EPS – Ongoing Earnings 3rd Quarter 7 Note: See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations.
Slide 9: International Delivery Segment Earnings Drivers
International Delivery Segment Earnings Drivers (0.03)Effect of Exchange Rates 0.02Financing Costs $0.122009 EPS – Ongoing Earnings (0.08)Total (0.08)Income Taxes & Other 0.01O&M $0.202008 EPS – Ongoing Earnings 3rd Quarter 8 Note: See Appendix for the per share reconciliation of reported earnings a
Slide 10: Strong Expected Earnings Growth Forecast
$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2008A* 2009* 2010 Strong Expected Earnings Growth Forecast 9 * Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. $2.02 $3.50 Per Share $1.90 $1.60 $3.10
Slide 11: Free Cash Flow before Dividends Forecast
($605) $189 ($318) $523 $367 $266 ($21) ($180) $1 ($800) ($600) ($400) ($200) $0 $200 $400 $600 $800 2008A 2009E 2010E Supply Segment PA Delivery Segment International Delivery Segment Free Cash Flow before Dividends Forecast Millions 10 Note: See Appendix for reconciliation of cash from operations
Slide 12: PA and International Delivery Segment Operational Update
PA and International Delivery Segment Operational Update PA Delivery • Sixth and final RFP for 2010 POLR load completed on October 8 – Solicitations resulted in a total increase of 29.7% for average residential customers • Second solicitation completed for the 2011 to mid-2013 Procurement • PA PUC c
Slide 13: Supply Segment Operational Update
Supply Segment Operational Update • Brunner Island’s Unit 1 passed a record run mark of 165 consecutive days • PPL Montana began work on the Rainbow hydroelectric plant – Upon completion in 2012, project will increase amount of clean, renewable power generated by the facility by 70 percent • Expect
Slide 14: Supply Segment Asset Hedge Positions
Supply Segment Asset Hedge Positions 2009 2010 2011 2012 Baseload Expected Generation* (1,000 MWhs) 51.4 52.0 52.2 53.4 East 42.9 43.5 43.9 45.0 West 8.5 8.5 8.3 8.4 Current Hedges (%) 99% 99% 89% 58% East 99% 100% 90% 55% West 96% 90% 83% 73% Average Hedged Price (Energy Only) ($/MWh) $46 $59 $59 $
Slide 15: Current Fuel Hedge Positions
Current Fuel Hedge Positions (1)Base prices for East wholly owned plants which include Montour & Brunner Island but not Keystone & Conemaugh. (2)Excludes contracts subject to mining-related oil surcharges and/or price collars. Note: As of 9/30/2009 2009 2010 2011 2012 Uranium 100% 100% 100% 100% Coa
Slide 16: Appendix
ppl
Slide 17: Market Prices
Market Prices ELECTRIC PJM On-Peak Off-Peak ATC(2) Mid-Columbia On-Peak Off-Peak ATC(2) GAS(3) NYMEX TZ6NNY PJM MARKET HEAT RATE(4) CAPACITY PRICES (Per MWD) EQA Actual 2008 2009 2010 2011 2012 $81 $44 $59 $63 $65 $49 $32 $39 $41 $43 $69 $38 $48 $52 $53 $65 $36 $52 $56 $57 $51 $29 $41 $45 $45 $59 $3
Slide 18: PPL Supply Business Overview
PPL Supply Business Overview 2009E Production GWh A-2 Gas/Oil 38% Coal 34% Nuclear 18% Hydro8% QFs 2% 2009E Installed Capacity MW Gas/Oil 10% Coal 49% Nuclear 32% Hydro 9% Note: Graphs include tolling agreements
Slide 19: PPL's Generation Portfolio
PPL’s Generation Portfolio Total Domestic Generation: 12,181 MW Planned Uprate Projects or Additions: 208 MW (1) Reflects reduction of 60 MW expected loss due to increased plant usage during scrubber operation. (2) Includes tolling agreement and renewable energy projects (3) Includes MWs associated
Slide 20: Capital Expenditures by Segment
Millions $939 $753 $892 $936 $809 $649 $286 $295 $568 $801 $664 $719 $278 $251 $428 $448 $460 $477 $0 $400 $800 $1,200 $1,600 $2,000 $2,400 2008A 2009E 2010E 2011E 2012E 2013E Supply PA Delivery International Delivery $1,503 $2,185 $1,888 $1,299 Capital Expenditures by Segment $1,933 $1,845 A-4
Slide 21: Pennsylvania Delivery Rate Base
Millions $833 $1,093 $1,358 $1,569 $1,791 $1,998 $2,173 $2,349 $2,549 $2,721 $2,888 $3,093 $0 $1,000 $2,000 $3,000 $4,000 $5,000 2008A 2009E 2010E 2011E 2012E 2013E Transmission Distribution & Other Pennsylvania Delivery Rate Base $3,442 $3,907 $4,290 $4,679 $5,091 $3,006 A-5
Slide 22: PPL Electric Utilities 2011 to mid-2013 Procurement Plan Schedule
• Due dates for bids: PPL Electric Utilities 2011 to mid-2013 Procurement Plan Schedule A-6 August 11, 2009 July 19, 2011 October 20, 2009 October 18, 2011 January 19, 2010 January 9, 2012 April 20, 2010 April 3, 2012 July 20, 2010 July 17, 2012 October 19, 2010 October 16, 2012 April 18, 2011 Janua
Slide 23: Continued Dividend Growth
$1.00 $1.10 $1.22 $1.34 $1.38 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 2005 2006 2007 2008 2009 $/Share Annualized Continued Dividend Growth A-7
Slide 24: Debt Maturities
Debt Maturities (1) PPL Capital Funding $201 million maturity paid off in March 2009 (2) PPL Electric Utilities $486 million maturity paid off in August 2009 Note: As of 9/30/2009 A-8 2009 2010 2011 2012 2013 PPL Energy Supply $0 $0 $500 $0 $737 PPL Capital Funding 0 (1) 0 0 0 0 PPL Electric Utiliti
Slide 25: Liquidity Profile
Liquidity Profile (1) Reported as of 9/30/2009 Domestic facilities consist of a diverse bank group, with no bank and its affiliates providing an aggregate commitment of more than 15% of the total committed capacity. A-9 Institution Facility Expiration Date Total Facility (Millions) Letters of Credit
Slide 26: PPL Energy Supply Collateral Profile
PPL Energy Supply Collateral Profile A-10 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Letters of Credit Borrowings/CP Outstanding Cash Posted Available Credit Ca
Slide 27: Supply Segment Reconciliation of Cash from Operations to Free Cash Flow
Supply Segment Reconciliation of Cash from Operations to Free Cash Flow before Dividends A-11 39216Asset Sales (203)Investment in Energy Project $523$189($605)Free Cash Flow before Dividends (61)(15)(58)Other Investing Activities-net (892)(753)(939)Capital Expenditures Increase/(Decrease) in cash du
Slide 28: PA Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow
PA Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions) A-12 303Asset Sales & Other ($318)$266$367Free Cash Flow before Dividends (568)(295)(286)Capital Expenditures (293)Less Transition Bond Repayment Increase/(Decrease) in cash due to: $250$561$643C
Slide 29: International Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow
International Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions) A-13 ($180)($21)$1Free Cash Flow before Dividends (428)(251)(278)Capital Expenditures Increase/(Decrease) in cash due to: $248$230$279Cash from Operations 201020092008 Actual Projected
Slide 30: Third Quarter Reported to Ongoing Earnings Reconciliation (Millions)
Pennsylvania International Supply Delivery Delivery Total Quarter Ending September 30, 2009 Reported earnings* ($31) $27 $24 $20 Special Items: Unrealized losses from energy-related, non-trading economic hedges (130) (130) Unrealized gains from foreign currency economic hedges 4 4 Income taxes - Lat
Slide 31: Third Quarter Reported to Ongoing Earnings Reconciliation (Per Share)
Pennsylvania International Supply Delivery Delivery Total Quarter Ending September 30, 2009 Reported earnings ($0.08) $0.07 $0.06 $0.05 Special Items: Unrealized losses from energy-related, non-trading economic hedges (0.34) (0.34) Income taxes - Latin American businesses (0.06) (0.06) Changes in ta
Slide 32: Year-to-Date Reported to Ongoing Earnings Reconciliation (Millions)
Pennsylvania International Supply Delivery Delivery Total Year-to-Date September 30, 2009 Reported earnings* ($12) $93 $173 $254 Special Items: Unrealized losses from energy-related, non-trading economic hedges (168) (168) Unrealized losses from foreign currency economic hedges (2) (2) Adjustments -
Slide 33: Year-to-Date Reported to Ongoing Earnings Reconciliation (Per Share)
Pennsylvania International Supply Delivery Delivery Total Year-to-Date September 30, 2009 Reported earnings ($0.04) $0.25 $0.46 $0.67 Special Items: Unrealized losses from energy-related, non-trading economic hedges (0.45) (0.45) Unrealized losses from foreign currency economic hedges (0.01) (0.01)
Slide 34: Reconciliation of Third Quarter Operating Income and Energy Margins
Reconciliation of Third Quarter Operating Income and Energy Margins A-18 2009 2008 Change Per Share (after-tax) Eastern U.S., pre-tax $391 $269 $122 $0.19 Western U.S., pre-tax 85 75 10 0.01 Domestic gross energy margins, pre-tax $476 $344 $132 $0.20 2009 2008 Operating Income $181 $384 Adjustments:
Slide 35: Reconciliation of Third Quarter Operating Income and Energy Margins
Reconciliation of Third Quarter Operating Income and Energy Margins A-19 2009 2008 Revenue adjustments WPD utility revenue ($165) $ (195) Domestic delivery component of utility revenue (302) (325) Other utility revenue (17) (12) Unrealized (gains) losses from economic hedge activity 307 (1,160) Marg
Slide 36: Reconciliation of PPL's Reported Earnings and Earnings from Ongoing Operations
Reconciliation of PPL’s Reported Earnings and Earnings from Ongoing Operations High Low 2009 2009 2008 2007 Earnings from Ongoing Operations per share of common stock $1.90 $1.60 $2.02 $2.60 Special items (net of taxes): economic hedges (0.45) (0.45) 0.67 0.08 Unrealized losses from foreign currency
Slide 37: Credit Ratings
Credit Ratings A-21 BBB Issuer Rating AAA Aaa Tax-Exempt Bonds (1) STABLE NEGATIVE NEGATIVE Outlook A-A-A3Senior Secured Debt F-2A-2P-2Commercial Paper BBB BBB Baa3 Preferred Stock BBBA-Baa1 Issuer Rating A-A-A3 First Mortgage Bonds A/A-A3/Baa1 Tax-Exempt Bonds (2) BBB BBB Baa3 Preference Stock PPL
Slide 38: Credit Ratings (cont.)
Credit Ratings (cont.) A-22 Commercial Paper A-BBB+ Baa1Senior Unsecured Debt F2A-2P-2Commercial Paper POSITIVENEGATIVESTABLE Outlook BBB+ BBB+ Baa1Issuer Rating A-BBB+ Baa1Senior Unsecured Debt F2A-2Commercial Paper POSITIVENEGATIVESTABLE Outlook Western Power Distribution (South West) PLC BBB+ BBB
Slide 39: Forward-Looking Information Statement
Forward-Looking Information Statement A-23 Statements contained in this presentation, including statements with respect to future earnings, energy prices, margins and sales, growth, revenues, expenses, cash flow, asset disposition, marketing performance, hedging, regulation, corporate strategy and g
Slide 40: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures A-24 “Earnings from ongoing operations” excludes the impact of special items. Special items include charges or credits that are unusual or nonrecurring. Special items also include unrealized gains and losses from energy-related, non-trading economic hedges,