Slide 1: 4th Quarter Earnings Call
© PPL Corporation 2016 4th Quarter Earnings Call PPL Corporation February 4, 2016 Exhibit 99.2
Slide 2: Cautionary Statements and Factors That May Affect Future Results
© PPL Corporation 2016 Cautionary Statements and Factors That May Affect Future Results Anystatementsmadeinthispresentationaboutfutureoperating resultsorotherfutureeventsareforward-lookingstatements under the Safe Harbor Provisions of the Private Securities LitigationReformActof1995.Actualresultsmay
Slide 3: Agenda
© PPL Corporation 2016 2015 Earnings Results, Operational Overview and 2016 Earnings Forecast Segment Results and Financial Overview Q&A W. H. Spence V. Sorgi Agenda 3
Slide 4: Earnings Results
© PPL Corporation 2016 P e r S h a r e Note: See Appendix for the reconciliation of reported earnings (loss) to earnings from ongoing operations. (1) Year-to-date reported earnings includes a $921 million loss from discontinued operations, or $1.36 per share. (2) 2014 was adjusted for Supply segment
Slide 5: Operational Update
© PPL Corporation 2016 Pennsylvania • Rate Case Update —PUC Approval in November —Includes an annual revenue increase of $124 million —Rate increase effective January 1, 2016 Kentucky • Filed the $1 billion ECR Plan for Approval U.K. • Final DPCR5Performance • Strong performance against RIIO-ED1 inc
Slide 6: 2016 Earnings Forecast
© PPL Corporation 2016 $0.00 $1.00 $2.00 $3.00 2014 Adj 2015A 2016E $2.25 $2.21 P e r S h a r e 2016 Earnings Forecast $2.03 Note: See Appendix for the reconciliation of reported earnings (loss) to earnings from ongoing operations. (1) Earnings presented here exclude any earnings from the Supply seg
Slide 7: Continued Dividend Growth
© PPL Corporation 2016 $/Share Annualized Continued Dividend Growth (1) Annualized dividend based on 2/4/2016 announced increase. $1.44 $1.47 $1.49 $1.51 $1.52 2012 2013 2014 2015 2016 (1) 14 th dividend increase in 15 years. 7
Slide 8: 2016 Objectives/Highlights
© PPL Corporation 2016 2016 Objectives/Highlights Pennsylvania • Executing on capital investment of $1.2 billion • Advance Project Compass • Completion of ~$350 million Northeast Pocono Transmission Line Kentucky • Executing on capital investment of $1.0 billion • Develop Clean Power Plan strategy •
Slide 9: Significant Investment Opportunity Drives Projected Earnings Growth
© PPL Corporation 2016 Significant Investment Opportunity with Constructive Rate Mechanisms Drives Projected Earnings Growth (2) Projection based on midpoint of 5-6% CAGR off 2014 adjusted earnings. Does not represent earnings forecast or guidance for 2018. S t r o n g R e g u l a t e d R a t e B a
Slide 10: Summary Financial Highlights
© PPL Corporation 2016 Summary Financial Highlights 10
Slide 11: Ongoing Earnings Overview
© PPL Corporation 2016 Q4 2015 Q4 2014 (adj) Change Pennsylvania Regulated $0.09 $0.10 $(0.01) Kentucky Regulated 0.09 0.10 (0.01) U.K. Regulated 0.29 0.36 (0.07) Corporate and Other (0.04) (0.07) 0.03 Total $0.43 $0.49 $(0.06) Ongoing Earnings Overview Note: See Appendix for the reconciliation of r
Slide 12: Pennsylvania Regulated Segment Earnings Drivers
© PPL Corporation 2016 Year-to-date 2014 EPS –Ongoing Earnings $0.40 Gross margins 0.06 Operation and maintenance (0.05) Depreciation (0.03) Taxes, other than income 0.02 Financing costs (0.01) Taxes and other (0.02) Total (0.03) 2015 EPS –Ongoing Earnings $0.37 Pennsylvania Regulated Segment Earnin
Slide 13: Kentucky Regulated Segment Earnings Drivers
© PPL Corporation 2016 Year-to-date 2014 EPS –Ongoing Earnings $0.47 Gross margins 0.08 Operation and maintenance (0.02) Financing costs (0.01) Other (0.01) Total 0.04 2015 EPS –Ongoing Earnings $0.51 Kentucky Regulated Segment Earnings Drivers Note: See Appendix for the reconciliation of reported e
Slide 14: U.K. Regulated Segment Earnings Drivers
© PPL Corporation 2016 Year-to-date 2014 EPS –Ongoing Earnings $1.37 Gross margins (0.13) Operation and maintenance (0.02) Depreciation 0.09 Income taxes 0.14 Other (0.01) Total 0.07 2015 EPS –Ongoing Earnings $1.44 U.K. Regulated Segment Earnings Drivers Note: See Appendix for the reconciliation of
Slide 15: 2015 Ongoing Earnings to 2016E Earnings Walk
© PPL Corporation 2016 2015 Ongoing Earnings to 2016E Earnings Walk Note: See Appendix for the reconciliation of reported earnings (loss) to earnings from ongoing operations. 15 Margins: $.11 Depreciation: ($.01) Interest: ($.03) Other: ($.01) Margins: $.03 O&M: $.07 Depreciation: ($.03) Interest: (
Slide 16: Summary of Drivers to Achieve 5-6% EPS Growth Through 2018
© PPL Corporation 2016 Summary of Drivers to Achieve 5-6% EPS Growth Through 2018 11% -13% Domestic Operations Earnings Growth: PA Regulated • Transmission Cap Ex of $2.7 billion at 11.68% base ROE, 12.93% for approximately $650 million Susquehanna Roseland project drives transmission rate base grow
Slide 17: Funding the Growth
© PPL Corporation 2016 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. 17 Note: Information provided on this slide to be updated on an annual basis. See appendix for t
Slide 18: Significant Ongoing Capital Expenditure Program
© PPL Corporation 2016 Note: Corporate and Other capital expenditures average approximately $10 million per year. (1) 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 projections. Significa
Slide 19: 2016-2020 Capital Plan Comparison to Prior Year Capital Plan
© PPL Corporation 2016 2016 –2020 Capital Plan Comparison to Prior Year Capital Plan 19 (1) Based on assumed foreign exchange rate of $1.60/£. WPD • Spending generally consistent with prior plan with slight increase in 2016 faults overhead repairs Kentucky • Environmental spending generally consiste
Slide 20: Capital Plan is Driving Rate Base Growth
© PPL Corporation 2016 ( $ i n b i l l i o n s ) (1) Based on assumed exchange rate of $1.60/£ for 2016 -2020. (2) Represents utility capitalization for LKE. Represents Regulatory Asset Value (RAV) for WPD. Strong regulated rate base growth will drive EPS growth. Capital Plan is Driving Rate Base Gr
Slide 21: Foreign Currency Hedging Status and RPI Sensitivity
© PPL Corporation 2016 Foreign Currency Hedging Status and RPI Sensitivity 21 GBP Foreign Currency 2016 2017 2018 Percentage Hedged 95% 89% 20% Hedged Rate (GBP/USD) $1.56 $1.58 $1.60 Budgeted Rate on Open Position (GBP/USD) $1.60 $1.60 $1.60 EPS Sensitivities: Decrease in Rate (USD/GBP) (1) 0.05 $0
Slide 22: Appendix
© PPL Corporation 2016 Appendix 22
Slide 23: U.S. Regulated Volume Variances
© PPL Corporation 2016 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 23 Residential Commercial Industrial Total Residential Commercial Industrial Total Weather-Normalized (ch
Slide 24: Project Compass Summary
© PPL Corporation 2016 24 Proposed First Segment: • 95-mile initial segment from Blakely, PA to Ramapo, NY —PPL Electric filed interconnection request with NYISO on October 27th —Estimated cost of $500 -$600 million —Estimated in-service date in 2023 • Benefits as proposed include: —Substantial annu
Slide 25: Project Compass
© PPL Corporation 2016 Project Compass 25
Slide 26: Kentucky Environmental Controls
© PPL Corporation 2016 Low Nox Burners SCR/SNCR Scrubbers Closed Cycle Cooling Tower Dry Handling/ Disposal/ Beneficial Use Baghouses Mw of Capacity NO x NO x SO 2 Water Intake Coal Combustion Residuals (CCRs) Particulates and Hg (with PAC injection) Unit 1 383 (2) x x x x (1) x Unit 2 549 (2) x x x
Slide 27: U.K. Regulated Segment EPS Projection
© PPL Corporation 2016 U.K. Regulated Segment EPS Projection ($ Per Share) Note: Assumes foreign currency exchange rate of $1.60/£ for 2016E and 2017E on open positions. (1) 2015 represents earnings from ongoing operations. See Appendix for the reconciliation of reported earnings (loss) to earnings
Slide 28: U.K. Regulated Segment Cash Repatriation
© PPL Corporation 2016 U.K. Regulated Segment Cash Repatriation Note: Assumes foreign currency exchange rate of $1.60/£ for 2016E and 2017E. ($ in millions) Flexible strategy for meaningful U.K. cash repatriation. 28
Slide 29: Retail Price Index - RPI
© PPL Corporation 2016 Retail Price Index -RPI • Revenue: —In November 2015, tariffs for 2016/2017 and 2017/2018 were set using the forecasted RPI for the next two regulatory years. —In November 2016 and going forward, one additional year of tariffs will be set. Therefore 2018/2019 tariffs will be s
Slide 30: TRU and MOD Adjustments
© PPL Corporation 2016 TRU and MOD Adjustments • Two new adjustments to annual allowed revenue were introduced in RIIO-ED1, known as TRU and MOD adjustments: — TRU Adjustment ▪ Tariffs are set using a forecasted RPI as determined by HM Treasury. ▪ Forecasted RPI is trued up to actuals and the corres
Slide 31: U.K. Incentive Revenues - Summary
© PPL Corporation 2016 U.K. Incentive Revenues -Summary • Annual performance above or below the Ofgem targets for Customer Minutes Lost (CML), Customer Interruptions (CI) and the Broad Measure of Customer Satisfaction Survey is rewarded or penalized on a 2-year lag (i.e. 2015/2016 earned performance
Slide 32: U.K. Incentive Revenue - Quality of Service
© PPL Corporation 2016 U.K. Incentive Revenue –Quality of Service • WPD is on pace to be near the maximum reward for Customer Minutes Lost and Customer Interruptions for the 2015/2016 regulatory year. Note: Based on an average for all four DNOs. Actual results calculated at an individual DNO level.
Slide 33: U.K. Incentive Revenue - Customer Satisfaction
© PPL Corporation 2016 U.K. Incentive Revenue –Customer Satisfaction • The Broad Measure of Customer Satisfaction Survey rewards or penalizes DNOs for the levels of customer satisfaction. • Through December 2015, WPD performance is near or at the maximum reward levels. Note: Based on an average for
Slide 34: Debt Maturities
© PPL Corporation 2016 ($ in millions) 2016 2017 2018 2019 2020 PPL Capital Funding $0 $0 $250 $0 $0 PPL Electric Utilities 0 0 0 0 100 LG&E and KU Energy 0 0 0 0 475 Louisville Gas & Electric (1) 25 194 98 40 0 Kentucky Utilities 0 0 0 0 500 WPD 460 100 0 0 226 Total $485 $294 $348 $40 $1,301 Debt
Slide 35: Liquidity Profile
© PPL Corporation 2016 Liquidity Profile Note: As of December 31, 2015. Entity Facility Expiration Date Capacity (Millions) Letters of Credit & Commercial Paper Issued (Millions) Borrowed (Millions) Unused Capacity (Millions) PPL Capital Funding Syndicated Credit Facility Nov-2018 $300 $151 $0 $149
Slide 36: Strong Credit Ratings
© PPL Corporation 2016 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 37: Reconciliation of Segment Reported Earnings to Ongoing Earnings
© PPL Corporation 2016 37 Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations (1) Includes an $879 million charge reflecting the difference between PPL's recorded value for the Supply segment and the estimated fair value determined in accordance with applicable acc
Slide 38: Reconciliation of Segment Reported Earnings to Ongoing Earnings (per share)
© PPL Corporation 2016 Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations After-Tax (Unaudited) (per share - diluted) Reported Earnings (Loss) $ 0.45 $ 0.09 $ 0.09 $ (0.03) $ (0.01) $ 0.59 $ 1.66 $ 0.48 $ 0.37 $ (0.14) $ (1.36) $ 1.01 Less: Special Items (expense)
Slide 39: Reconciliation of Reported to Ongoing Earnings (Adjusted)
© PPL Corporation 2016 39 Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations (Adjusted) (1) Certain amounts have been reclassified to reflect the Supply segment as a discontinued operation. (2) Represents 2014 costs allocated to the Supply segment that remained wi
Slide 40: Reconciliation of Reported to Ongoing Earnings (Adjusted, per share)
© PPL Corporation 2016 Reconciliation of Segment 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 1
Slide 41: Gross Margins Summary
© PPL Corporation 2016 Gross Margins Summary $ 2,243 $ 2,527 $ (284) $ (0.33) Impact of changes in foreign currency exchange rates (174) (0.20) $ (110) $ (0.13) $ 1,926 $ 1,838 $ 88 $ 0.08 Distribution $ 842 $ 837 $ 5 $ 0.01 Transmission 395 335 60 0.05 $ 1,237 $ 1,172 $ 65 $ 0.06 (Unaudited) (milli
Slide 42: Reconciliation of Year-to-Date Margins to Operating Income
© PPL Corporation 2016 Reconciliation of Year-to-Date Margins to Operating Income $ 2,364 $ 3,115 $ 2,124 $ 66 $ 7,669 $ 2,638 $ 3,168 $ 2,044 $ 2 $ 7,852 863 863 965 965 184 657 14 855 253 587 84 924 14 (14) 84 (84) 121 100 114 1,603 1,938 111 99 103 1,543 1,856 38 845 883 11 912 923 4 102 193 299
Slide 43: Reconciliation of Domestic Cash Flows
© PPL Corporation 2016 Reconciliation of Domestic Cash Flows 43 Note: For 2016, 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) Domestic Cash f
Slide 44: Forward-looking statements
© PPL Corporation 2016 Statementscontainedinthispresentation,includingstatementswithrespecttofutureearnings,cashflows,financing,regulationandcorporate strategyare"forward-lookingstatements"withinthemeaningofthefederalsecuritieslaws.AlthoughPPLCorporationbelievesthatthe expectationsandassumptionsrefl
Slide 45: Definitions of Non-GAAP Financial Measures
© PPL Corporation 2016 Definitions of Non-GAAP Financial Measures "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 accepted accounting princip
Slide 46: Definitions of Non-GAAP Financial Measures
© PPL Corporation 2016 Definitions of Non-GAAP Financial Measures PPLutilizesthefollowingnon-GAAPfinancialmeasuresasindicatorsofperformanceforitsbusinesses.Thesemeasuresarenotintendedtoreplace "OperatingIncome,"whichisdeterminedinaccordancewithGAAP,asanindicatorofoveralloperatingperformance. Otherco