Ppl Corporation · NYSE:PPL
Ppl — Lehman Brothers Power Conference 2008
30 slides from Ppl's conference presentation, Aug 29, 2008
Slide 1: Lehman Brothers Power Conference September 3, 2008
Lehman Brothers Power Conference September 3, 2008 Exhibit 99.2
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: Management Focus
Management Focus • Operational execution • Financial discipline • Strategic foresight • Delivering on promises • Growing shareowner value 2
Slide 4: Current Hedge Positions - Electricity and Fuel
Current Hedge Positions -Electricity and Fuel 3 2008 2009 2010 2010 Baseload Electricity Sales East 98% 97% 69% 81% West 100% 83% 68% 68% Total 99% 94% 69% 79% Uranium 100% 100% 100% Coal East 100% 97% 88% West 100% 100% 100% Total 100% 98% 91% Unhedged Coal – (million tons) Montour & Brunner Island
Slide 5: East Coal Risks and Hedging Approach
East Coal Risks and Hedging Approach Volume Risk PPL Approach Expected Power Plant Consumption Mix of short and long-term contracts and spot purchases; diverse suppliers and markets Non-delivery or delayed delivery • Maintain inventory at power plants • Non-performance provisions in contract Price R
Slide 6: Current East Coal Contracts - Base Prices
Current East Coal Contracts -Base Prices $35 $40 $45 $50 $55 min collar price fixed base price max collar price 2008 2009 2010 5 Weighted Average $/Ton at Mine Base Prices for Wholly Owned Plants* *East wholly owned plants include Montour & Brunner Island but not Keystone & Conemaugh. **Excludes con
Slide 7: Expansion of Generation Portfolio
Expansion of Generation Portfolio • Acquired long-term tolling agreement of 664 MW natural-gas combined-cycle plant in PJM • Susquehanna Unit 1 uprate, phase 1, is now complete • Susquehanna Unit 2 uprate following Spring 2009 refueling outage • Progressing on other announced uprate and hydro expans
Slide 8: Requirements for New Nuclear Development
Requirements for New Nuclear Development • Expansion of Federal loan guarantee program • Timely approval of reference COLA by NRC • Timely execution and cost performance from EdF on Flamanville Carbon legislation would enhance the potential economics 7
Slide 9: Renewable Energy Development
Renewable Energy Development • Objective: Generate Renewable Energy Credits (RECs) and improve carbon footprint • Large Projects: – Holtwood Hydro expansion project: • 125MW, completion in 2012 – Maine and Montana Hydro expansion projects: • 31MW, completion in 2009, 2011 – Developing utility scale
Slide 10: Pennsylvania Update
Pennsylvania Update • PUC approved PPL Rate Stabilization Plan • House session scheduled September 15 – November 25 (16 working days) • Senate session scheduled September 16 – October 8 (9 working days) • Open energy issues that may be addressed – Conservation – Demand Side Management – Procurement
Slide 11: PPL Electric Utilities Procurement Plan for 2011 and Beyond
PPL Electric Utilities Procurement Plan for 2011 and Beyond • PPL filed procurement plan with PUC on August28; review expected to take seven months • Purchase electricity supply for 2011 to mid-2014four times a year, beginning 3Q 2009 • Solicit supply contracts for 12-and 24-month increments and spo
Slide 12: Transmission Expansion Susquehanna-Roseland Line
Transmission Expansion 11 Susquehanna-Roseland Line
Slide 13: Long-Term Fundamentals Remain Intact
$2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 2007A* 2008* 2010 Long-Term Fundamentals Remain Intact Forecast 12 *Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. $2.60 $2.17 $2.27 $4.00 $4.60 Per Share
Slide 14: PPL
PPL
Slide 15: Market Prices
Market Prices EAST PJM On-Peak Off-Peak ATC (3) WEST Mid-Columbia On-Peak Off-Peak ATC (3) GAS (4) NYMEX TZ6NNY PJM MARKET HEAT RATE (5) Actual Forward (1) At 10/2007(2) 2007 2008 2009 2010 2010 9.4 $7.78 $6.86 $51 $45 $57 $57 $43 $73 8.8 $9.04 $8.08 $60 $53 $67 $64 $51 $79 8.38.18.0 $12.68$13.96$12
Slide 16: Key Driver of Fleet Value: Open EBITDA
Key Driver of Fleet Value: Open EBITDA A-2 2010E Generation Output -millions of MWH 56.2 Implied Gross Margin -millions * 4,299 $ O&M - -millions (814) $ Open EBITDA -millions $ 3,485 Below-Market Value of Hedges -millions * (738) $ * Based on forward market prices as of June 30, 2008
Slide 17: PPL Supply Business Overview
PPL Supply Business Overview 2008E Production GWH A-3 Gas/Oil 33% Coal 37% Nuclear 19% Hydro8% QFs 3% 2008E Installed Capacity MW Gas/ Oil 6% Coal 54% Nuclear 32% Hydro 8%
Slide 18: Proactive Coal Supply Management Supports Growth in Margins
Proactive Coal Supply Management Supports Growth in Margins Projected 2009* Central PA 14% PRB 6% Montana Mine-mouth 21% Central Appalachia 5% Northern Appalachia52% Illinois Basin 2% A-4 • Supply region diversity • Fleet trains (>1700 cars) Central PA 11% PRB 7% Montana Mine-mouth 23% Central Appal
Slide 19: Load-following Components Example
0 20 40 60 80 100 120 2009 2009 2010 $/MWH Shaped Energy & Capacity Including Congestion Other Adders Line Losses GRT Load-following Components Example A-5 Total $105 $82.00* $45.47 Total $51.23 * Shaped price based on $63/MWH ATC energy price, $150/MW-Day capacity price, and congestion. $48.29 Tota
Slide 20: PPL's Generation Portfolio
PPL’s Generation Portfolio Total Domestic Generation: 11,358 MW Planned Uprate Projects: 331 MW * Reflects reduction of 60 MW expected loss due to increased plant usage during scrubber operation. Coal 3,483* Nuclear 2,117 Oil 1,795 Gas 1,503 Hydro 343 CTs 474 QFs 356 East 10,071 MW* Coal 683 Hydro 6
Slide 21: Nuclear Development Schedule
Nuclear Development Schedule 2009 (Estimate) Order Long Lead-Time Materials 2017 to 2019 (Estimate) Commercial Operation 2012 to 2013 (Estimate) Begin Construction 2012 (Estimate) NRC Approval of COLA Sept. 2008 (part I) Dec. 2008 (part II) Submit DOE Loan Application Oct. 2008Submit COLA PPL has no
Slide 22: 2007 Synfuel and Divested Assets Ongoing Earnings Contributions
2007 Synfuel and Divested Assets Ongoing Earnings Contributions A-8 Synfuel Q1 Q2 Q3 Q4 2007 Synfuel Earnings $0.07 $0.01 $0.02 $0.04 $0.14 Fuel Costs 0.01 0.01 0.01 0.01 0.04 Total Synfuel Contribution $0.08 $0.02 $0.03 $0.05 $0.18 Net Impact of Asset Divestitures $0.03 $0.03 $0.02 $0.00 $0.08
Slide 23: Capital Expenditures by Segment
Millions $1,043 $1,030 $824 $750 $692 $514 $302 $281 $305 $404 $521 $511 $340 $298 $327 $336 $343 $351 $0 $400 $800 $1,200 $1,600 $2,000 2007A 2008E 2009E 2010E 2011E 2012E Supply PA Delivery International Delivery $1,685 $1,556 $1,376 $1,490$1,456 $1,609 Capital Expenditures by Segment A-9 *Does no
Slide 24: Reconciliation of PPL's Reported Earnings and Earnings from Ongoing Operations
Reconciliation of PPL’s Reported Earnings and Earnings from Ongoing Operations A-10 High Low 2008 2008 2007 2006 Per Share Earnings from Ongoing Operations $2.27 $2.17 $2.60 $2.25 Special items (net of taxes): economic hedges 0.14 0.14 0.08 (0.03) Reversal of cost recovery - Hurricane Isabel (0.02)
Slide 25: Credit Ratings
Credit Ratings A-11 BBB Issuer Rating AAAAaa Tax-Exempt Bonds* STABLE STABLE STABLE Outlook A-A-A3Senior Secured Debt F-2A-2P-2Commercial Paper BBBBBBBaa3Preferred Stock BBBA-Baa1Issuer Rating A-A-A3First Mortgage Bonds AA/A*** Aa3/Baa1***Tax-Exempt Bonds** BBBBBBBaa3Preference Stock PPL Electric Ut
Slide 26: Credit Ratings (cont.)
Credit Ratings (cont.) A-3 Commercial Paper A-BBB+ Baa1 Senior Unsecured Debt F2A-2P-2 Commercial Paper POSITIVE STABLE STABLE Outlook BBB+ BBB+ Baa1 Issuer Rating A-BBB+ Baa1 Senior Unsecured Debt F2A-2Commercial Paper POSITIVE STABLE STABLE Outlook Western Power Distribution (South West) PLC BBB+
Slide 27: PPL Facts
PPL Corporation (NYSE: PPL) is a Fortune 500 company with headquarters in Allentown, Pa. The Company’s diversified corporate strategy is to achieve growth in energy supply margins while limiting volatility in both cash flows and earnings and to achieve stable, long-term growth in regulated delivery
Slide 28: PPL Facts (cont.) Financial and Operating Information
PPL Facts (cont.) Financial and Operating Information Note: See Appendix for the reconciliation of reported earnings per share and earnings from ongoing operations. ii (Unaudited) ($ in millions, except per share amounts) 12 Months Ended June 2008 June 2007 Common Equity $5,183 $5,369 Preferred Secu
Slide 29: Forward-Looking Information Statement
Forward-Looking Information Statement A-15 Statements contained in this presentation, including statements with respect to future earnings, energy prices, margins, sales and supply, marketing performance, growth, revenues, expenses, rates, regulation, cash flows, credit profile, financing, dividends
Slide 30: Definitions of Financial Measures
Definitions of Financial Measures A-16 “Earnings from ongoing operations” excludes the impact of special items. Special items include charges, credits or gains that are unusual or nonrecurring. Special items also include the mark-to-market impact of energy-related, non-trading economic hedges and im