Ppl Corporation · NYSE:PPL
Ppl — Q1 2023 Earnings Presentation
37 slides from Ppl's earnings presentation, May 4, 2023
Slide 1: 1st Quarter Investor Update
1st Quarter Investor Update May 4, 2023 PPL Corporation
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 Investor Update May 4, 2023 Vince Sorgi PPL Corporation President & Chief Executive Officer 3
Slide 4: 1st Quarter Highlights
1st Quarter Highlights ➢ Reported Q1 2023 GAAP results of $0.39 per share and ongoing earnings of $0.48 per share ➢ Reaffirmed 2023 ongoing earnings forecast range of $1.50 to $1.65 per share and midpoint of $1.58 per share ➢ Provided strong Q1 storm response to our customers ➢ Continued progress on
Slide 5: Received Regulatory Approval for $290 Million of ISR Investments in Rhode Island
Received Regulatory Approval for $290 Million of ISR Investments in Rhode Island Approval of Infrastructure, Safety, and Reliability (ISR) plans covers spending from April 1, 2023 to March 31, 2024 ➢ RIPUC approved ~$127 million of RIE's Electric ISR plan Summary of RIE’s FY2024 ISR Plan Approval •
Slide 6: Advancing Our Plan to Invest in Kentucky’s Future
Advancing Our Plan to Invest in Kentucky’s Future CPCN filing for generation investment plan on track ➢ Remain confident our CPCN plan is the best path forward Kentucky Generation Investment Plan (1) for our Kentucky customers • Plan is more affordable, maintains reliability and represents significa
Slide 7: Financial Update
Financial Update 1st Quarter Investor Update May 4, 2023 Joe Bergstein PPL Corporation Executive Vice President & Chief Financial Officer 7
Slide 8: Financial Overview
Financial Overview Overview of 1st Quarter Financial Results (Earnings per share) ➢ Q1 2023 GAAP earnings of $0.39 per share Q1 2023 Q1 2022 • Q1 2023 special items of $0.09 per share, primarily related to RI integration costs Reported Earnings (GAAP) $0.39 $0.37 ➢ Q1 2023 ongoing earnings of $0.48
Slide 9: Review of 1st Quarter Financial Results
Review of 1st Quarter Financial Results Ongoing Earnings Walk: Q1 2023 vs. Q1 2022 (Earnings per share) O&M $0.01 Transmission Interest Expense ($0.01) $0.01 Revenue Distribution Sales Volumes Other(1) $0.01 $0.01 ($0.04) Addition of RIE(2) $0.10 Rider Recovery (Primarily Weather) Sales Volumes ($0.
Slide 10: 1st Quarter Financing Activity Emphasizes the Value of PPL’s Strong Credit Profile
1st Quarter Financing Activity Emphasizes the Value of PPL’s Strong Credit Profile in a Volatile Market ➢ Successfully executed 1st utility investment grade Q1 2023 Financing Summary convertible debt deal since 2003 Note Principal Coupon Executed • $1 billion of convertible debt at PPL Capital Fundi
Slide 11: Closing Remarks
Closing Remarks 1st Quarter Investor Update May 4, 2023 Vince Sorgi PPL Corporation President & Chief Executive Officer 11
Slide 12: Advancing 2023 Outlook and Priorities
Advancing 2023 Outlook and Priorities Solid 1st Quarter Keeps Us on Track to Execute on PPL’s Goals ➢ Deliver the midpoint of our 2023 earnings forecast range of $1.58 per share (1) ➢ Complete $2.4 billion capex plan to provide safe, reliable and affordable energy to our customers ➢ Remain on track
Slide 13: Investment Overview
Investment Overview May 4, 2023 PPL Corporation – 1st Quarter Investor Update
Slide 14: PPL Investment Highlights
PPL Investment Highlights A large-cap, regulated U.S. utility in constructive regulatory jurisdictions Visible and predictable 6% - 8% annual EPS and dividend growth (1) Robust $12B regulated capital investment plan from 2023 to 2026 One of the strongest balance sheets in the U.S. utility sector – n
Slide 15: Projecting 6% to 8% Earnings and Dividend Growth Through at Least 2026
Projecting 6% to 8% Earnings and Dividend Growth Through at Least 2026 Projected Earnings Per Share Projected Annualized Dividends Per Share (2) 6% - 8% 6% - 8% CAGR CAGR $1.58 $0.96 (2) 2023 2024 2025 2026 2023 2024 2025 2026 (1) Midpoint Projecting predictable, stable annual EPS growth Dividend gr
Slide 16: A Robust Capital Plan
A Robust Capital Plan Significant investment opportunities across all utilities 2023-2026 Plan: $11.9 billion ($ in billions) (1) Note: Totals may not sum due to rounding. (1) Includes projected capital expenditures related to replacement generation in Kentucky based upon LG&E’s and KU’s CPCN filing
Slide 17: Rate Base CAGR of Over 5.5% Through 2026
Rate Base CAGR of Over 5.5% Through 2026 Projected Annual Rate Base Growth (2022 – 2026) Plan CAGR (2022-2026): 5.6% (Year-end rate base, $ in billions) Rate Base Growth Improving from 4% To >7% in Back Half of Plan 7.2% CAGR 4.1% CAGR (1) (2) Note: Totals may not sum due to rounding. (1) Reflects i
Slide 18: Significantly Improving PPL’s Carbon Footprint
Significantly Improving PPL’s Carbon Footprint Plan is consistent with PPL’s long-term emission reduction targets with near-term tangible progress Plan Aligns with Pathway to Net Zero Emissions by 2050 (1) Reduces Carbon Intensity by More Than 25% (2) (Metric tons, in millions) (Metric tons per MWh)
Slide 19: Business Transformation Prioritizes Efficiency and Affordability While Staying Out of Rate Cases
Business Transformation Prioritizes Efficiency and Affordability While Staying Out of Rate Cases A clear path to deliver at least $175M of savings through 2026 from 2021 baseline (O&M savings, $ in millions) ✓ T&D Operations At least • Smart Grid Technology – more efficient and condition- $175M base
Slide 20: Our Business Transformation Strategy Will Deliver Material Cost Savings
Our Business Transformation Strategy Will Deliver Material Cost Savings Non-Fuel O&M/Customer for Electric T&D Businesses (1) Non-Fuel O&M/Customer for Gas T&D Businesses (1) ($ per customer) ($ per customer) TARGETING 1st TARGETING 2nd TARGETING 1st TARGETING 2nd quartile for PA quartile for KY and
Slide 21: Premier Balance Sheet Supports Organic Growth and Provides Financial Flexibility
Premier Balance Sheet Supports Organic Growth and Provides Financial Flexibility One of the sector’s best credit profiles supports higher relative valuation 2025 P/E Multiple (1) ✓ Premier credit ratings among peers Discount Valuation: Average Valuation: Premium Valuation: 14.0x – 15.0x 15.0x – 17.5
Slide 22: Quarterly Supplemental Info.
Quarterly Supplemental Info. May 4, 2023 PPL Corporation – 1st Quarter Investor Update
Slide 23: Select Regulatory Procedural Schedule
Select Regulatory Procedural Schedule Regulatory Filing Docket Number Dates Event Description 5/4/23 LG&E/KU shall file responses to supplemental requests for information no later than 5/25/23 Intervenor testimony, if any, in verified prepared form shall be filed no later than 6/28/23 All requests f
Slide 24: Electricity Sales Volumes
Electricity Sales Volumes Quarterly and trailing twelve-month retail sales comparison 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
Slide 25: Capital Expenditure Plan
Capital Expenditure Plan ($ in millions) 2023 2024 2025 2026 4-Year Total Pennsylvania Electric Distribution $300 $300 $300 $325 $1,225 Electric Transmission 550 675 775 650 2,650 Pennsylvania Total $850 $975 $1,075 $975 $3,875 (1) Kentucky Electric Distribution $375 $325 $300 $400 $1,400 Electric T
Slide 26: Projected Rate Base (Year-End)
Projected Rate Base (Year-End) (Year-end rate base, $ in billions) 2022A 2023 2024 2025 2026 Pennsylvania Electric Distribution $4.1 $4.2 $4.3 $4.3 $4.4 Electric Transmission 5.2 5.5 5.7 6.1 6.6 Pennsylvania Total $9.3 $9.7 $10.0 $10.4 $11.0 Kentucky (1) Electric Distribution $2.7 $3.0 $3.2 $3.3 $3.
Slide 27: Debt Maturities
Debt Maturities ($ in millions) 2023 2024 2025 2026 2027 2028+ Total PPL Capital Funding $0 $0 $0 $650 $0 $2,396 $3,046 PPL Electric Utilities $90 $0 $0 $0 $108 $4,541 $4,739 Louisville Gas & Electric(1) $0 $0 $300 $90 $195 $1,839 $2,424 Kentucky Utilities(1) $13 $0 $250 $164 $0 $2,615 $3,042 Rhode
Slide 28: Liquidity Profile
Liquidity Profile ($ in millions) Entity Facility Expiration Date Capacity Borrowed LCs & CP Issued (1)(2) Unused Capacity PPL Capital Funding Syndicated Credit Facility (3) Dec-2027 $1,250 $0 $0 $1,250 Bilateral Credit Facility Mar-2024 $100 $0 $0 $100 Uncommitted Credit Facility Mar-2024 $100 $0 $
Slide 29: 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 30: Appendix
Appendix May 4, 2023 PPL Corporation – 1st Quarter Investor Update
Slide 31: 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, 2023 Three Months Ended March 31, 2022 ($ in millions) KY PA RI Corp. & KY PA Corp. & Total Total Reg. Reg. Reg. Other Reg. Reg. Other Reported Earnings ( 1) $ 166 $ 138
Slide 32: Adjusted Gross Margins Summary
Adjusted Gross Margins Summary (Unaudited) Three Months Ended March 31, (millions of dollars, except share data) Per Share Diluted 2023 2022 Change (after-tax) Kentucky Adjusted Gross Margins $ 633 $ 659 $ (26) $ (0.03) Pennsylvania Adjusted Gross Margins Distribution $ 261 $ 265 $ (4) $ - Transmiss
Slide 33: Reconciliation of Adjusted Gross Margins
Reconciliation of Adjusted Gross Margins (Unaudited) Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 (millions of dollars) KY PA RI KY PA Adjusted Adjusted Adjusted Operating Adjusted Adjusted Operating (1) Gross Margins Gross Margins Gross Margins Other Income (2) Gross Margins
Slide 34: Reconciliation of PPL’s Earnings Forecast
Reconciliation of PPL’s Earnings Forecast After-Tax (Unaudited) 2023 Forecast Range (per-share diluted) Midpoint High Low Estimate of Reported Earnings $ 1.49 $ 1.56 $ 1.41 Less: Special Items (expense) benefit: (1) Acquisition integration(2) (0.08) (0.08) (0.08) Sale of Safari Holdings(3) (0.01) (0
Slide 35: 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 36: 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 reported earnings, or net income, an indicator of operating performance determined in accordance
Slide 37: 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