Slide 1: PPL Corporation 3rd Quarter Earnings Call
PPL Corporation 3rd Quarter Earnings Call November 3, 2011
Slide 2: Cautionary Statements and Factors That May Affect Future Results
Cautionary Statements and Factors That May Affect Future Results Any 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
Slide 3: Agenda
Agenda J. H. Miller W. H. Spence P. A. Farr Third Quarter 2011 Earnings and Outlook Segment Results and Financial Overview Operational Review Q&A
Slide 4: Earnings Results
Earnings Results 4 © PPL Corporation 2011 Earnings Results $0.76 $0.51 $0.00 $0.50 $1.00 3Q 2010 3Q 2011 $0.74 $0.76 $0.00 $0.50 $1.00 3Q 2010 3Q 2011 Third Quarter Reported Earnings Third Quarter Earnings from Ongoing Operations Per Share Per Share Note: See Appendix for the reconciliation of earni
Slide 5: Increased 2011 Earnings from Ongoing Operations Forecast
$2.55 Increased 2011 Earnings from Ongoing Operations Forecast $3.13 $2.75 $/Share (1) Based on mid-point of forecasted earnings range. Note: See appendix for reconciliation of earnings from ongoing operations to reported earnings. (1) 2010A 2011E
Slide 6: Ongoing Earnings Overview
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. Ongoing Earnings Overview $0.02 $0.74 $0.76 Total (0.18) 0.54 0.36 Supply (0.03) 0.08 0.05 Pennsylvania Regulated 0.10 0.12 0.22 International Regulated $0.13 $ - $0.13 Kentucky Regulated Change Q3 Q3
Slide 7: International Regulated Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. Exhibit 99.2 3 rd Quarter 2010 EPS - Ongoing Earnings $0.12 Delivery Revenue 0.03 O&M (0.01) Income Taxes & Other (0.03) Midlands 0.15 Dilution (0.04) Total 0.10 2011 EPS - Ongoing Earnings $0.22 Inte
Slide 8: Pennsylvania Regulated Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 3 rd Quarter 2010 EPS - Ongoing Earnings $0.08 Electric Delivery Margins 0.01 O&M (0.02) Income taxes & other (0.01) Dilution (0.01) Total (0.03) 2011 EPS - Ongoing Earnings $0.05 Pennsylvania Regulat
Slide 9: Supply Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 3 rd Quarter 2010 EPS - Ongoing Earnings $0.54 Margins - East (0.08) Income taxes & other (0.03) Dilution (0.07) Total (0.18) 2011 EPS - Ongoing Earnings $0.36 Supply Segment Earnings Drivers
Slide 10: Free Cash Flow before Dividends
Free Cash Flow before Dividends Millions of Dollars (1) 2010 Free Cash Flow includes two months of the results of the Kentucky Regulated segment. Note: See Appendix for reconciliation of free cash flow before dividends to cash from operations. (1)
Slide 11: Dividend Profile
Dividend Profile $/Share Annualized A significantly more rate-regulated business mix provides strong support for current dividend and a platform for future growth (1) Ongoing EPS based on mid-point of forecast. Annualized dividend based on 3 rd quarter declaration. Actual dividends to be determined
Slide 12: International - Modeling Parameters
International - Modeling Parameters 12 © PPL Corporation 2011 – – – – – – X = Revenues ( £ ) . Regulated Revenues escalate 5.5% annually plus inflation through end of current price control period plus incentives; Energy-related business revenues are flat . Operation and Maintenance expense ( excludi
Slide 13: Operational Review
Operational Review Pennsylvania Regulated Segment • HB 1294 § Passed PA House of Representatives on Oct. 4 by a vote of 183 to 18 § Currently under review in the Senate’s Consumer Protection and Professional Licensure Committee • Susquehanna-Roseland § Named to federal Rapid Response Team for Transm
Slide 14: Operational Review (continued)
Operational Review (continued) International Regulated Segment • Synergy plan for Midlands integration remains on track • Organizational structure and Reorganization plan have been finalized § Total cost of $102 million pre-tax • Transition from a functional structure to a regional structure under w
Slide 15: Kentucky Regulated Volume Variances
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Slide 16: PA Regulated Volume Variances
PA Regulated Volume Variances months Ended 09/9072011 vs, 08/30/2010 a ences Canine ara ora etre Normaios ears) om 30% “2% ae +12 months Ended 09/30/2011 vs. 09/30/2010 01% 8 — ‘| — So 5 10% 09% “08% "3 “08% am ener Conese ara Toa ‘ater Novmaias enres) 20% am 03% oe% ea acne Bodhi Saresneeabine.ishe
Slide 17: Enhancing Value Through Active Hedging
2011 (4) 2012 2013 Baseload Expected Generation (1) (Million MWhs) 47.0 54.7 54.4 East 39.5 46.2 46.0 West 7.5 8.5 8.4 Current Hedges (%) 100% 91% 72% East 100% 90% 72% West 100% 96% 75% Average Hedged Price (Energy Only) ($/MWh) (2) (3) East $57 $54-55 $53-56 West $55 $53-54 $50-51 Current Coal Hed
Slide 18: Appendix
Appendix Appendix
Slide 19: Regulated Rate Base Growth
Regulated Rate Base Growth ($ in billions) (1) Represents capitalization for LKE, as LG&E and KU rate constructs are based on capitalization. Represents Regulatory Asset Value (RAV) for WPD. (2) Includes RAV for WPD Midlands. Figures based on assumed exchange rate of $1.60 / GBP and are as of year-e
Slide 20: Capital Expenditures
Capital Expenditures ($ in billions) (1) Includes capex for WPD Midlands. Figures based on assumed exchange rate of $1.60 / GBP. (2) Expect approximately 85% to receive timely returns via ECR mechanism based on historical experience. (1) (2) $2.6 $3.7 $4.3 $4.1 $3.7
Slide 21: Market Prices
Market Prices (1) 24-hour average. (2) NYMEX and TZ6NNY forward gas prices on 9/30/2011. (3) Market Heat Rate = PJM on-peak power price divided by TZ6NNY gas price. 21 © PPL Corporation 2011 Market Prices Balance of 2011 2012 2013 $46 $52 $56 $36 $39 $42 $41 $45 $48 $33 $33 $41 $29 $24 $30 $31 $29 $
Slide 22: Debt Maturities
Debt Maturities 22 © PPL Corporation 2011 Debt Maturities 2011 2012 2013 2014 2015 PPL Capital Funding $0 $0 $0 (2) $0 (3) $0 LG& E and KU Energy ( Holding Co LKE) 2 (1) 0 0 0 400 Louisville Gas & Electric 0 0 0 0 250 Kentucky Utilities 0 0 0 0 250 PPL Electric Utilities 0 0 0 10 (4) 100 PPL Energy
Slide 23: Liquidity Profile
Liquidity Profile 23 © PPL Corporation 2011 Liquidity Profile Institution Facility Expiration Date Total Facility (Millions) Letters of Credit Outstanding (Millions) Drawn (Millions) Availability (Millions) PPL Energy Supply Syndicated Credit Facility Dec- 2014 $3,000 $ 132 $250 $2,618 Letter of Cre
Slide 24: Reconciliation of Third Quarter Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Third Quarter Earnings from Ongoing Operations to Reported Earnings 24 © PPL Corporation 2011 Reconciliation of Third Quarter Earnings from Ongoing Operations to Reported Earnings $ 78 $ 125 $ 28 $ 208 $ 439 1 ( 10) ( 9) 8 8 Adjustments - nuclear decommissioning trust investments (
Slide 25: Reconciliation of Third Quarter Earnings from Ongoing Operations to Reported Earnings (Per Share)
Reconciliation of Third Quarter Earnings from Ongoing Operations to Reported Earnings 25 © PPL Corporation 2011 Reconciliation of Third Quarter Earnings from Ongoing Operations to Reported Earnings (Per Share) $ 0.13 $ 0.22 $ 0.05 $ 0.36 $ 0.76 (0.03) (0.03) Foreign currency-related economic hedges
Slide 26: Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings 26 © PPL Corporation 2011 Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings $ 184 $ 318 $ 116 $ 481 $ 1,099 1 4 5 8 8 Emission allowances (1) (1) Renewable energy credits (3) (3) 2
Slide 27: Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings (Per Share)
Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings 27 © PPL Corporation 2011 Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings (Per Share) $ 0.34 $ 0.58 $ 0.21 $ 0.89 $ 2.02 0.01 0.01 Renewable energy credits (0.01) (0.01) 2011 Bri
Slide 28: Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings 28 © PPL Corporation 2011 Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings (Per Share) High Low 2011 2011 2010 2009 Earnings from Ongoing Operations 2.75 $ 2.55 $ 3.13 $ 1.95 $ Special Items: A
Slide 29: Gross Margins Summary
Gross Margins Summary 29 © PPL Corporation 2011 $ 419 $ 419 $ 0.50 $ 179 $ 170 $ 9 $ 0.01 46 47 (1) - $ 225 $ 217 $ 8 $ 0.01 Eastern U.S. $ 530 $ 611 $ ( 81) $ (0.10) Western U.S. 92 88 4 - (7) (20) 13 0.02 $ 615 $ 679 $ (64) $ (0.08) ( a) Excludes dilution w hich is primarily associated w ith the A
Slide 30: Reconciliation of Third Quarter Operating Income to Margins
A-10 Reconciliation of Third Quarter Operating Income to Margins 30 © PPL Corporation 2011 A-10 Reconciliation of Third Quarter Operating Income to Margins $ 734 $ 454 $ 487 ( c) $ 1,675 $ 570 $ 162 ( c) $ 732 P LR intersegment Utility (5) $ 5 ( 71) $ 71 186 3 189 108 8 116 897 10 ( e) 907 916 276 (
Slide 31: Margins Footnotes
Margins Footnotes a) Represents amounts that are excluded from Margins. b) As reported on the Statement of Income. c) Primarily represents WPD's utility revenue. d) Primarily related to PLR supply sold by PPL EnergyPlus to PPL Electric. e) Represents energy-related economic activity as described in
Slide 32: Reconciliation of Cash from Operations to Free Cash Flow before Dividends
2009 2010 2011 Cash from Operations $1,852 $2,034 $2,500 Increase (Decrease) in cash due to: Capital Expenditures (1,265) (1,644) (2,650) Sale of Assets 84 161 381 Other Investing Activities - Net (71) (20) 70 Free Cash Flow before Dividends $ 600 $ 531 $ 301 PPL Corporation Reconciliation of Cash f
Slide 33: Forward-Looking Information Statement
Forward-Looking Information Statement Statements contained in this presentation, including statements with respect to future earnings, cash flows, financing, regulation and corporate strategy are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corporation
Slide 34: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures “Earnings from ongoing operations” should not be considered as an alternative to reported earnings, or net income attributable to PPL, which is an indicator of operating performance determined in accordance with generally accepted accounting principles (GAA
Slide 35: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures "Kentucky Gross Margins" is a single financial performance measure of the Kentucky Regulated segment's electricity generation, transmission and distribution operations as well as its distribution and sale of natural gas. In calculating this measure, utility