Slide 1: PPL 4th Quarter Investor Update
PPL 4th Quarter Investor Update | February 18, 2022
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, including the anticipated effects of the recent sale of PPL Corporation’s U.K. business, the anticipated acquisition of The Narragansett Electr
Slide 3: Agenda
Agenda I. Strategic and Operational Updates Vince Sorgi II. Financial Update Joe Bergstein III. Closing Remarks Vince Sorgi IV. Q&A PPL 4th Quarter Investor Update – February 18, 2022 3
Slide 4: Delivered on our strategic priorities
Delivered on our strategic priorities Driving value for shareowners and customers ➢ Strategically repositioned PPL as a U.S.-focused energy company ✓ Sold U.K. utility business for extraordinary value ✓ Strengthened PPL’s balance sheet and financial flexibility ✓ Anticipate decision in Rhode Island
Slide 5: Delivered on our strategic priorities: sustainability
Delivered on our strategic priorities Driving sustainability for PPL and our communities ➢Excellent progress Advanced PPL’s on Strategy Clean Energy strategic repositioning ✓ Committed to net-zero carbon emissions by 2050; accelerated coal plant retirement schedule ✓ Made investments in R&D to accel
Slide 6: Financial Update
Financial Update
Slide 7: Reported 2021 financial results, declared Q1 2022 dividend
Reported 2021 financial results, declared Q1 2022 dividend ➢ Reported Q4 2021 EPS of $0.18; ongoing EPS of $0.22 (1) ▪ Special items of ($0.04) per share, primarily related to Rhode Island acquisition integration costs and discontinued operations associated with sale of the U.K. utility business (1)
Slide 8: 2021 Segment Results
2021 Segment Results 2021 vs. 2020 Key Earnings Drivers (Earnings Per Share) ➢ Pennsylvania Regulated: $0.06 $0.03 $1.05 $1.00 − Reduction in the transmission formula rate ROE ($0.04 ) − Lower peak transmission demand $0.61 − Higher O&M due to increased storm $0.55 R OE R e ducti o n ($0. 05) R e ta
Slide 9: Growth supported by significant investments to support a clean energy future
Growth supported by significant investments to support a clean energy future Sustainable infrastructure investments… …resulting in rate base growth ($ in billions) ($ in billions) 2021A Utility Capital Investments +5.8% $20.2 $19.1 $3.9 $3.8 $0.5 $5.0 $4.5 $2.0B $1.1 $6.4 $5.8 $0.4 $5.0 $4.9 2020A 2
Slide 10: Appendix
Appendix
Slide 11: 4th Quarter Segment Results
4th Quarter Segment Results Q4 2021 vs. Q4 2020 Key Earnings Drivers (Earnings Per Share) ➢ Pennsylvania Regulated: $0.23 − Higher O&M, primarily due to $0.00 $0.00 $0.22 storm and support costs ($0.01 ) − Reduction in the transmission $0.11 formula rate ROE $0.11 Returns on additional capital O&M
Slide 12: Narragansett Electric Acquisition
Narragansett Electric Acquisition Regulatory approvals required Acquisition of Narragansett (expected approval within 12 months of transaction announcement) Status Federal Approvals: Hart-Scott-Rodino (DOJ) ✓ Waiting Period Expired 6/2/2021 Federal Communications Commission (FCC) ✓ Approval Received
Slide 13: Narragansett Electric Acquisition
Narragansett Electric Acquisition Rhode Island Division procedural schedule Timing Milestone 10/1/2021 Deadline for propounding discovery (all parties) 10/25/2021 Discovery Conference (if needed) 11/3/2021 Deadline for Intervenors and Advocacy Section to submit pre-filed direct testimony 11/23/2021
Slide 14: Electricity Sale Volumes
Electricity Sale Volumes 2021 sales vs. 2020 sales by operating segment Weather-Normalized Electricity Sales Volume Variance (2021 vs. 2020) in GWh Pennsylvania Kentucky Q4 2021 Q4 2020 % Change Q4 2021 Q4 2020 % Change Residential 3,747 3,807 (1.6%) Residential 2,436 2,560 (4.9%) Commercial 3,324 3
Slide 15: Debt Maturities
Debt Maturities 2027 and ($ in millions) 2022 2023 2024 2025 2026 Beyond Total PPL Capital Funding $0 $0 $0 $0 $650 $1,396 $2,046 PPL Electric Utilities(1) $474 $340 $650 $0 $0 $3,075 $4,539 Louisville Gas & Electric(1) $0 $0 $0 $300 $90 $1,634 $2,024 Kentucky Utilities(1) $0 $13 $0 $250 $164 $2,215
Slide 16: Liquidity Profile
Liquidity Profile Letters of C redit & C om m ercial Unused Ex piration C apacity Borrow ed Paper Issued C apacity Entity F acility Date ($ in m illions) ($ in m illions) ($ in m illions) ($ in m illions) PPL C apital F unding Syndicated Credit Facility Dec-2026 $1,250 $0 $0 $1,250 Bilateral Credit
Slide 17: PPL's Credit Ratings
PPL’s Credit Ratings PPL Corporation Credit Rating S&P Moody’s Secured NR NR PPL Capital Funding Unsecured NR NR Credit Rating S&P Moody’s Long-term Issuer A- Baa2 Outlook Stable Positive Secured NR NR Unsecured BBB+ Baa2 Long-term Issuer A- NR Outlook Stable Positive LG&E and KU PPL Electric Utilit
Slide 18: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 4th Quarter Year-to-Date ($ in millions) December 31, 2021 December 31, 2021 KY PA Corp. & Disc. KY PA Corp. & Disc. Total Total Reg. Reg. Other Ops.(2) Reg. Reg. Other Ops.(2) Reported Earnings (1)
Slide 19: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax (Unaudited) 4th Quarter Year-to-Date ($ in millions) December 31, 2020 December 31, 2020 KY PA Corp. & Disc. KY PA Corp. & Disc. Total Total Reg. Reg. Other (2) Ops. (3) Reg. Reg. Other (2) Ops.(3) Reported Ear
Slide 20: Adjusted Gross Margins Summary
Adjusted Gross Margins Summary (1) (Unaudited) Three Months Ended December 31, (millions of dollars, except share data) Per Share Diluted 2021 2020 Change (after-tax) Kentucky Adjusted Gross Margins $ 571 $ 509 $ 62 $ 0.06 Pennsylvania Adjusted Gross Margins Distribution $ 229 $ 222 $ 7 $ 0.01 Trans
Slide 21: Reconciliation of Adjusted Gross Margins to Operating Income
Reconciliation of Adjusted Gross Margins to Operating Income (1) (Unaudited) Three Months Ended December 31, 2021 Twelve Months Ended December 31, 2021 (millions of dollars) KY PA KY PA Adjusted Adjusted Adjusted Adjusted Gross Gross Operating Gross Gross Operating Margins Margins Other Income Margi
Slide 22: 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 23: Definitions of non-GAAP Financial Measures
Definitions of non-GAAP Financial Measures Management utilizes "Earnings from Ongoing Operations" 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 with GAAP. PPL believe
Slide 24: 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