Slide 1: PPL 4th Quarter Earnings Call
PPL 4th Quarter Earnings Call February 18, 2021
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 process to sell PPL’s U.K. business, are forward- looking statements under the Safe Harbor provisions of the Private Securities L
Slide 3: Agenda
Agenda I. Executive Review and Operational Updates Vince Sorgi II. Financial Review Joe Bergstein III. Closing Remarks Vince Sorgi IV. Q&A PPL 4th Quarter Earnings Call – February 18, 2021 3
Slide 4: 2020 Executive Review
2020 Executive Review Delivered results within original guidance range despite COVID-19 impacts Effective Response to COVID-19 Pandemic Solid 2020 Financial Performance (Earnings Per Share) ➢ Kept employees safe and informed $2.60 ✓ Implemented social distancing, PPE and revised $2.40 $0.07 work pra
Slide 5: 2020 Executive Review (continued)
2020 Executive Review (continued) PPL continues to execute its strategy to advance a sustainable energy future Delivered Capex Plan with Minimal Delays Steadfast on Sustainability Commitments ($ in billions) ➢ Advanced economic development of $3.3 renewables and clean energy technology $3.2 ✓ Obtain
Slide 6: Regulatory Updates
Regulatory Updates Applied for New Base Rates in Kentucky Other Notable Updates KU LG&E ➢ RFP for 300-900MW of generation capacity Electric Electric Gas in Kentucky beginning in 2025 to 2028 Revenue Increase Requested $170 million $131 million $30 million Requested ROE 10.0% 10.0% 10.0% ▪ Capacity w
Slide 7: 2021 – 2025 Capital Plan
2021 – 2025 Capital Plan $14 billion investment plan supports advancing a cleaner energy future Capex by Utility Notable Changes (1) ($ in billions) + $400 million to KY plan Added ~$1 billion of incremental investments vs. prior plan ▪ AMI investments of ~$325M $3.3 + $300 million to PA plan $2.7 $
Slide 8: Financial Review
Financial Review \
Slide 9: Q4 2020 Financial Results
Q4 2020 Financial Results (Earnings Per Share) $0.01 impact due to lower U.K. sales volumes to be recovered through decoupling mechanism in 2022-2023 $0.02 $0.59 $0.57 $0.02 $0.00 $0.00 $0.10 $0.11 ($0.01) ($0.01) KY ($0.01) U.K. ($0.01) Adj. Margin ($0.01) Adj. Margin $0.01 Adj. Margin ($0.01) Othe
Slide 10: 2020 Financial Results
2020 Financial Results (Earnings Per Share) $0.07 impact due to lower U.K. sales volumes to be recovered through decoupling mechanism in 2022-2023 (3) $2.45 $2.40 $0.07 $0.03 $0.03 $0.59 ($0.06) ($0.11) ($0.01) $0.55 PA ($0.01) U.K. ($0.06) Adj. Margin ($0.06) Adj. Margin $0.07 Adj. Margin $0.02 Oth
Slide 11: COVID-19 Implications on Sales by Segment
COVID-19 Implications on Sales by Segment Commercial and industrial sales continue to improve, while the most significant remaining impacts are from lower U.K. sales volumes recoverable in two years Weather-Normalized Electricity Sales Volume Variances by Quarter (2020 vs. 2019) Pennsylvania Regulat
Slide 12: Closing Remarks
Closing Remarks \
Slide 13: 2021 Strategic Priorities
2021 Strategic Priorities Clear focus on delivering long-term value for customers and shareowners ➢ Complete the U.K. sale process; continue to expect to announce in 1H 2021 (1) ▪ Simplifying PPL’s business mix ▪ Reducing leverage ▪ Improving earnings growth rate ▪ Enhancing PPL’s ability to invest
Slide 14: Appendix
, ig i ‘ 1 i a é Appendix Nee : bie ;
Slide 15: Projected Rate Base by Utility
Projected Rate Base by Utility ($ in billions) 2020A-2025E CAGR Breakdown $34.0 $34.8 $32.3 $33.2 $31.3 $29.8 $12.5 $13.2 $13.9 $11.2 $11.9 $10.7 5.4% $3.9 $4.0 $4.1 $4.1 $4.2 $3.7 2.6% $4.6 $4.8 $5.0 $5.1 $5.2 $5.2 2.5% $5.8 $6.3 $6.5 $6.7 $7.0 $7.2 4.4% $5.0 $5.1 $4.9 $4.8 $4.5 $4.3 2020A 2021E 20
Slide 16: Kentucky Regulated: Rate Case Procedural Schedule
Kentucky Regulated: Rate Case Procedural Schedule Completion Timing Milestone ✓ 11/25/2020 LG&E/KU filed application to adjust rates ✓ 12/2/2020 KPSC approved rate case applications without deficiencies ✓ 12/23/2020 Last day for intervention requests to be accepted ✓ 1/8/2021 Initial request for inf
Slide 17: Kentucky Regulated: Economic Useful Lives of Baseload Generation
Kentucky Regulated: Economic Useful Lives of Baseload Generation Summary of PPL’s Kentucky Baseload Generation Resources Owned Currently Projected Capacity Factor Capacity End of Economic (1) Power Plant Unit COD MW 2019A 2020A Useful Life Coal Mill Creek 1 1972 300 57% 64% 2024 E.W. Brown 3 1971 41
Slide 18: U.K. Regulated: RIIO-2 Projected Timelines
U.K. Regulated: RIIO-2 Projected Timelines Proposed Electricity Distribution Timeline (1) RIIO-ED2 RIIO-ED2 RIIO-ED2 Open Letter Sector Methodology RIIO-ED2 Final Consultation Consultation Draft Business Plan Determination (August) ✓ (July) ✓ Submission (July) (December) RIIO-ED2 RIIO-ED2 RIIO-ED2 F
Slide 19: Debt Maturities
Debt Maturities 2026 and ($ in Millions) 2021 2022 2023 2024 2025 Beyond Total PPL Capital Funding $0 $900 $600 $350 $0 $3,780 $5,630 PPL Electric Utilities (1) $400 $474 $340 $0 $0 $3,075 $4,289 LG&E and KU Energy $250 $0 $0 $0 $0 $0 $250 Louisville Gas & Electric (1) $292 $0 $0 $0 $300 $1,432 $2,0
Slide 20: 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 (M illions) (M illions) (M illions) (M illions) PPL C apital F unding Syndicated Credit Facility Jan-2024 $1,450 $0 $402 $1,048 Term Loan Credit Facility Mar-2022
Slide 21: PPL's Credit Ratings
PPL’s Credit Ratings PPL Corporation PPL Capital Funding Credit Rating S&P Moody’s Credit Rating S&P Moody’s Secured NR NR Secured NR NR Unsecured NR NR Unsecured BBB+ Baa2 Long-term Issuer A- Baa2 Long-term Issuer A- NR Outlook Stable Stable Outlook Stable Stable WPD Holding Company LKE Holding Com
Slide 22: 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 Twelve Months Ended (millions of dollars) December 31, 2020 December 31, 2020 U.K. KY PA Corp. & U.K. KY PA Corp. & Total Total Reg. Reg. Reg. Other Reg. Reg. Reg. Other Reported
Slide 23: Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations After-Tax Three Months Ended Twelve Months Ended (millions of dollars) December 31, 2019 December 31, 2019 U.K. KY PA Corp. & U.K. KY PA Corp. & Total Total Reg. Reg. Reg. Other Reg. Reg. Reg. Other Reported Earnings (1)
Slide 24: Adjusted Gross Margins Summary
Adjusted Gross Margins Summary (Unaudited) Three Months Ended December 31, (millions of dollars, except share data) Per Share Diluted 2020 2019 Change (after-tax) U.K. Adjusted Gross Margins $ 509 $ 506 $ 3 $ 0.00 Less: Impact of changes in foreign currency exchange rates 16 0.01 U.K. Adjusted Gross
Slide 25: Reconciliation of Adjusted Gross Margins to Operating Income
Reconciliation of Adjusted Gross Margins to Operating Income (Unaudited) Three Months Ended December 31, 2020 Twelve Months Ended December 31, 2020 (millions of dollars) U.K. KY PA U.K. KY PA Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Gross Gross Gross Operating Gross Gross Gross Operatin
Slide 26: 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 process to sell PPL Corporation’s U.K. business, are “forward-looking statements”
Slide 27: 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 28: 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: "U.K. Adjusted Gross Margins" is a single financial performance measure of the electricity distribution operations of the U.K. Regulated segm