Ppl Corporation · NYSE:PPL
Ppl — Q1 2024 Earnings Presentation
38 slides from Ppl's earnings presentation, May 1, 2024
Slide 1: 1st Quarter 2024 Investor Update
PPL CORPORATION 1st Quarter 2024 Investor Update May 1, 2024
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 are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may diff
Slide 3: Business Update
Business Update 1st QUARTER 2024 INVESTOR UPDATE Vince Sorgi President & Chief Executive Officer May 1, 2024 3
Slide 4: 1st Quarter Financial Highlights
1st Quarter Financial Highlights ➢ Continued execution, delivered solid 1st quarter financial results • Reported Q1 2024 GAAP results of $0.42 per share and ongoing earnings of $0.54 per share, representing 12.5% increase year-over-year ➢ Reaffirmed 2024 ongoing earnings forecast range of $1.63 - $1
Slide 5: Operational and Regulatory Updates
Operational and Regulatory Updates ➢ Received approval for $326 million Infrastructure, Safety and Reliability (ISR) plans that support critical investment needs in Rhode Island • Includes capital investments for $132 million of electric distribution and $168 million of gas distribution, plus an add
Slide 6: Advancing Plans to Support Prospective Data Centers
Advancing Plans to Support Prospective Data Centers ➢ PPL is well positioned to serve the needs of data centers in both Pennsylvania and Kentucky • Favorable attributes include capacity on our electricity grids, strong reliability, an abundance of available land, geographic locations and incentive p
Slide 7: Items on the Horizon
Items on the Horizon ➢ Assessing potential impact of new suite of finalized EPA rules • Finalized rules include Section 111 Greenhouse Gas (GHG) CO2 Standards, Mercury and Air Toxics Standards (MATS), Effluent Limitations Guidelines (ELG), and Coal Combustion Residuals (CCR) • We anticipate these ru
Slide 8: Financial Update
Financial Update 1st QUARTER 2024 INVESTOR UPDATE Joe Bergstein Executive Vice President & Chief Financial Officer May 1, 2024 8
Slide 9: Financial Overview
Financial Overview Overview of 1st Quarter Financial Results (Earnings per share) ➢ Q1 2024 GAAP earnings of $0.42 per share Q1 2024 Q1 2023 • Q1 2024 special items of ($0.12) per share, primarily related to RI integration costs Reported Earnings (GAAP) $0.42 $0.39 ➢ Q1 2024 ongoing earnings of $0.5
Slide 10: Review of 1st Quarter Financial Results
Review of 1st Quarter Financial Results Ongoing Earnings Walk: Q1 2024 vs. Q1 2023 (Earnings per share) Distribution Transmission +$0.01 Revenue +$0.02 Revenue Other(1) ($0.01) Sales Volumes +$0.03 Transmission (Primarily Weather) +$0.01 Operating Costs +$0.01 Revenue Operating Costs +$0.01 Interest
Slide 11: Closing Remarks
Closing Remarks 1st QUARTER 2024 INVESTOR UPDATE Vince Sorgi President & Chief Executive Officer May 1, 2024 11
Slide 12: Advancing PPL's 2024 Priorities
Advancing PPL’s 2024 Priorities Strong 1st Quarter keeps PPL on track to achieve its 2024 goals ➢ Achieve at least the midpoint of our 2024 ongoing earnings forecast range of $1.69 per share (1) ➢ Complete $3.1 billion capex plan to provide safe, reliable and affordable energy to our customers ➢ Rem
Slide 13: Investment Overview
Investment Overview 1st QUARTER 2024 INVESTOR UPDATE May 1, 2024
Slide 14: PPL Investment Highlights
PPL Investment Highlights Large-cap, regulated U.S. utility operating in constructive regulatory jurisdictions • Principal electric/gas utilities serving Kentucky, Pennsylvania, and Rhode Island • Highlighted by future test years in each jurisdiction, FERC formula rates and real-time recovery mechan
Slide 15: Our Strategy: Creating Utilities of the Future
Our Strategy: Creating Utilities of the Future Focused on delivering value for BOTH customers AND shareowners Enhance reliability and resiliency of our electric and gas networks through innovation and strategic investments Advance the clean energy transition affordably and reliably for our customers
Slide 16: The Right Strategy for a Changing Energy Landscape
The Right Strategy for a Changing Energy Landscape Focused on supporting the growth and decarbonization of our economy The U.S. has set Achieving this We will need to reliably Success will require a goal of will require economy- meet this demand while faster net-zero CO2 emissions wide decarbonizati
Slide 17: Projecting 6% to 8% Earnings and Dividend Growth Through at Least 2027
Projecting 6% to 8% Earnings and Dividend Growth Through at Least 2027 Projected Earnings Per Share Projected Annualized Dividends Per Share (2) 6% - 8% 6% - 8% CAGR CAGR (2) (1) Projecting predictable, stable annual EPS growth Dividend growth in line with EPS growth (1) Represents the midpoint of P
Slide 18: 2024 – 2027 Capital Investment Plan of $14.3 Billion
2024 – 2027 Capital Investment Plan of $14.3 Billion Significant capital investments that deliver value for customers across each utility ($ in billions) Note: Totals may not sum due to rounding. 18
Slide 19: Rate Base CAGR of 6.3% Through 2027
Rate Base CAGR of 6.3% Through 2027 Projected Annual Rate Base Growth (2023A – 2027) (1) (Year-end rate base, $ in billions) +6.3% CAGR ➢ Rate base growth of 6.3% over the plan period ➢ Two-thirds of rate base relates to investments in electric transmission and distribution infrastructure ➢ Percenta
Slide 20: Balance Sheet Strength Provides Financial Flexibility
Balance Sheet Strength Provides Financial Flexibility Strong Credit Metrics Position PPL Among the Best in the Sector ➢ Premier credit ratings among peers PPL’s Debt Maturity Outlook (1) ($ in millions) • Baa1 rating at Moody’s • A- rating at S&P ➢ Supported by strong credit metrics • Targeting 16%
Slide 21: Prudently Reducing PPL's Carbon Footprint
Prudently Reducing PPL’s Carbon Footprint Economic transition of Kentucky’s generation fleet aligns with PPL’s net-zero pathway (1) (2) Meaningful Transition to Lower Carbon Generation (% of MWh) % ➢ Retiring ~600 MW of coal-fired generation 1 % capacity in Kentucky by the end of 2027 1% 2023 2030 ➢
Slide 22: Regulatory Overview
Regulatory Overview 1st QUARTER 2024 INVESTOR UPDATE May 1, 2024
Slide 23: Pennsylvania Regulatory Overview
Pennsylvania Regulatory Overview PPL Electric Utilities Key Attributes Constructive Features Mitigating Regulatory Lag 2023 Rate Base ✓ FERC Formula Transmission Rates Year-End Rate Base ($B) $9.8 % of Total PPL Rate Base 38% ✓ Distribution System Improvement Charge (DSIC) ▪ An alternative ratemakin
Slide 24: A Review of the DSIC Mechanism in Pennsylvania
A Review of the DSIC Mechanism in Pennsylvania Reduces regulatory lag associated with certain electric distribution investments ➢ Distribution system improvement charge (DSIC) allows PPL Electric to recover reasonable and prudent costs incurred to repair, improve, or replace eligible property betwee
Slide 25: Kentucky Regulatory Overview
Kentucky Regulatory Overview Louisville Gas & Electric and Kentucky Utilities Key Attributes Constructive Features Mitigating Regulatory Lag 2023 Rate Base ✓ Environmental Cost Recovery (ECR) Surcharge Year-End Rate Base ($B) $11.9 ▪ Provides near real-time recovery for approved environmental projec
Slide 26: Rhode Island Regulatory Overview
Rhode Island Regulatory Overview Rhode Island Energy Key Attributes Constructive Features Mitigating Regulatory Lag 2023 Rate Base ✓ FERC Formula Transmission Rates Year-End Rate Base ($B) $3.7 % of Total PPL Rate Base 15% ✓ Multi-year rate plans for electric and gas distribution Allowed ROE ✓ Infra
Slide 27: Quarterly Supplemental Information
Quarterly Supplemental Information 1st QUARTER 2024 INVESTOR UPDATE May 1, 2024
Slide 28: Electricity Sales Volumes
Electricity Sales Volumes 2024 retail sales vs. 2023 retail sales by operating segment (1) (GWh) Weath er- Normalized Elec tric ity Sales V olume A c tual Elec tric ity Sales V olume Annual EPS Sensitivity Penns ylvania Th ree Month s End ed Marc h 31, Trailing Twelve Month s End ed Marc h 31, Th re
Slide 29: Capital Expenditure Plan
Capital Expenditure Plan ($ in millions) 2024 2025 2026 2027 4-Year Total Pennsylvania Electric Distribution $500 $425 $400 $425 $1,750 Electric Transmission $675 $800 $825 $725 $3,025 Pennsylvania Total $1,175 $1,225 $1,225 $1,150 $4,775 Kentucky Electric Distribution $325 $400 $400 $350 $1,475 Ele
Slide 30: Projected Rate Base (Year-End)
Projected Rate Base (Year-End) (Year-end rate base, $ in billions) 2023A 2024 2025 2026 2027 Pennsylvania Electric Distribution $4.3 $4.6 $4.7 $4.9 $5.0 Electric Transmission $5.5 $5.8 $6.1 $6.6 $6.9 Pennsylvania Total $9.8 $10.3 $10.9 $11.4 $11.9 Kentucky Electric Distribution $3.0 $3.2 $3.5 $3.8 $
Slide 31: Debt Maturities
Debt Maturities ($ in millions) 2024 2025 2026 2027 2028 2029+ Total PPL Capital Funding $0 $0 $650 $0 $1,000 $1,396 $3,046 PPL Electric Utilities $0 $0 $0 $108 $0 $5,191 $5,299 Louisville Gas & Electric(1) $0 $300 $90 $260 $0 $1,839 $2,489 Kentucky Utilities(1) $0 $250 $164 $60 $0 $2,615 $3,089 Rho
Slide 32: Liquidity Profile
Liquidity Profile ($ in millions) Entity F acility Ex piration Date C apacity Borrow ed LC s & C P Issued ( 1) ( 2) Unused C apacity (3) PPL C apital F unding Syndicated Credit Facility Dec-2028 $1,250 $0 $218 $1,032 Bilateral Credit Facility Feb-2025 $100 $0 $0 $100 Bilateral Credit Facility Feb-20
Slide 33: PPL's Credit Ratings
PPL’s Credit Ratings PPL Corporation Credit Rating S&P Moody’s Secured NR NR PPL Capital Funding Unsecured NR NR Credit Rating S&P Moody’s Long-term Issuer A- Baa1 Outlook Stable Stable Secured NR NR Unsecured BBB+ Baa1 Long-term Issuer A- NR Outlook Stable Stable Rhode Island Energy LG&E and KU PPL
Slide 34: Appendix
Appendix 1st QUARTER 2024 INVESTOR UPDATE May 1, 2024
Slide 35: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 ($ in millions) KY Reg. PA Reg. RI Reg. Corp. & Other Total KY Reg. PA Reg. RI Reg. Corp. & Other Total Reported Earnings (1) $ 19
Slide 36: Reconciliation of PPL's Earnings Forecast
Reconciliation of PPL’s Earnings Forecast After-Tax (Unaudited) 2024 Forecast Range (per share - diluted) Midpoint High Low Estimate of Reported Earnings $ 1.57 $ 1.63 $ 1.51 Less: Special Items (expense) benefit: (1) Acquisition integration (2) (0.11) (0.11) (0.11) PPL Electric billing issue (3) (0
Slide 37: 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 38: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures Management utilizes "Earnings from Ongoing Operations" or “Ongoing Earnings” as a non-GAAP financial measure that should not be considered as an alternative to net income, an indicator of operating performance determined in accordance with GAAP. PPL believe