Slide 1: 4th Quarter Earnings Call
4 th Quarter Earnings Call ©PPL Corporation 2012 PPL Corporation February 10, 2012 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: Agenda
Agenda J. H. Miller W. H. Spence P. A. Farr 2011 Earnings Results 2011 Operational Overview and 2012 Earnings Forecast 2011 Segment Results and Financial Overview Q&A
Slide 4: Earnings Results
Earnings Results Fourth Quarter Reported Earnings Fourth Quarter Earnings from Ongoing Operations Year-to-Date Reported Earnings Year-to-Date Earnings from Ongoing Operations
Slide 5: PPL Well-Positioned for Future Success
PPL Well-Positioned for Future Success Increased mix of rate-regulated earnings provides stability in weak economic environment Approximately 70% of projected 2012 EPS from regulated businesses Substantial organic growth in rate base: ~8% CAGR from 2012-2016 Business Risk Profile rated “Excellent” b
Slide 6: 2011 Operational Review
2011 Operational Review Midlands Integration Kentucky ECR approval Pennsylvania storm restorations Overcame Susquehanna outages Supply rail contract negotiation
Slide 7: International Regulated Segment Investment Highlights
International Regulated Segment Investment Highlights Highly attractive rate-regulated business with significant growth prospects Regulator-approved 5-year forward-looking revenues based on future business plan, including capital expenditures and O&M plus adjustments for inflation Real-time return o
Slide 8: Kentucky Regulated Segment Investment Highlights
Kentucky Regulated Segment Investment Highlights Efficient, well-run utility focused on safety, reliability and customer service Projected rate base CAGR of 9.6% through 2016 Constructive regulatory environment that provides a timely return on a substantial amount of planned capex over the next 5 ye
Slide 9: Pennsylvania Regulated Segment Investment Highlights
Pennsylvania Regulated Segment Investment Highlights Significant growth in transmission portion of business which earns a favorable rate of return on a near real-time basis CAGR of 21.7% in transmission rate base through 2016 driven by initiatives to improve aging infrastructure and Susquehanna-Rose
Slide 10: Supply Segment Investment Highlights
Supply Segment Investment Highlights Very well-positioned competitive generation PJM assets: Low marginal cost nuclear and hydro facilities Efficient supercritical coal units with fuel switching optionality Attractive gas-fired assets that capture market opportunity and back-stop base load unit avai
Slide 11: Enhancing Value Through Active Hedging
2012 2013 Baseload Expected Generation (1) (Million MWhs) 53.7 53.1 East 45.5 44.8 West 8.2 8.3 Current Hedges (%) 95-99% 80-84% East 94-98% 80-84% West (4) 98-102% 82-86% Average Hedged Price (Energy Only) ($/MWh) (2) (3) East $54-55 $49-52 West (4) $50-52 $47-50 Current Coal Hedges (%) 98% 89% Eas
Slide 12: 2012 Earnings Forecast
$2.15 2012 Earnings Forecast $2.72 $/Share Note: See appendix for reconciliation of earnings from ongoing operations to reported earnings. $2.45
Slide 13: Ongoing Earnings Overview
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. Ongoing Earnings Overview ($0.13) $0.83 $0.70 Total (0.38) 0.64 0.26 Supply 0.05 0.05 0.10 Pennsylvania Regulated 0.21 0.07 0.28 International Regulated ($0.01) $0.07 $0.06 Kentucky Regulated Change Q
Slide 14: International Regulated Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. (1) Includes interest expense from the 2011 equity units and Bridge Facility borrowings. 2011 2010 EPS - Ongoing Earnings $0.53 Midlands (1) 0.50 Delivery revenue 0.13 O&M (0.02) Income taxes & other
Slide 15: Pennsylvania Regulated Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 2011 2010 EPS - Ongoing Earnings $0.27 Electric Delivery Margins 0.09 O&M 0.01 Income taxes & other 0.03 Dilution (0.09) Total 0.04 2011 EPS - Ongoing Earnings $0.31 Pennsylvania Regulated Segment Ear
Slide 16: Supply Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 2011 2010 EPS - Ongoing Earnings $2.27 Margins (0.55) O&M (0.10) Income taxes & other (0.17) Dilution (0.31) Total (1.13) 2011 EPS - Ongoing Earnings $1.14 Supply Segment Earnings Drivers
Slide 17: 2011A to 2012E Earnings Walk
2011A to 2012E Earnings Walk O&M: ($0.08) Other: ($0.05) Margins: $0.04 Midlands: $0.28 (1) Revenue: $0.14 O&M: ($0.06) Other: ($0.11) Currency: ($0.02) Margins: ($0.19) O&M: ($0.10) Other: ($0.10) O&M: ($0.07) Other: ($0.03) Margins: $0.06 (1) 4 months of Midlands operating results, net of interest
Slide 18: Free Cash Flow before Dividends
Free Cash Flow before Dividends Free Cash Flow before Dividends (Millions of Dollars) (1) 2010 Free Cash Flow includes two months of the results of the Kentucky Regulated segment. (1) Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions of Dollars)
Slide 19: Continued Dividend Increases
Continued Dividend Increases A significantly more rate-regulated business mix provides strong support for current dividend and a platform for future growth (1) Ongoing EPS based on mid-point of forecast. Annualized dividend based on 2/10/2012 announced increase. Actual dividends to be determined by
Slide 20: Appendix
Appendix
Slide 21: Midlands Integration - Improved Network Performance
Midlands Integration - Improved Network Performance
Slide 22: Regulated Volume Variances
Regulated Volume Variances Note: Total includes Residential, Commercial and Industrial customer classes as well as “Other”, which is not depicted on the charts above.
Slide 23: Market Prices
Market Prices (1) 24-hour average. (2) NYMEX and TZ6NNY forward gas prices on 12/31/2011. (3) Market Heat Rate = PJM on-peak power price divided by TZ6NNY gas price.
Slide 24: Capital Expenditures
Capital Expenditures ($ in billions) (1) Includes capex for WPD Midlands. Figures based on assumed exchange rate of $1.57 / GBP. (2) Expect between 80% and 90% to receive timely returns via ECR mechanism based on historical experience and future projections. (1) (2) $3.8 $4.2 $4.1 $3.7 $2.9
Slide 25: Regulated Rate Base Growth and Debt Maturities
Regulated Rate Base Growth Debt Maturities Debt Maturities Debt Maturities ( Millions) PPL Capital Funding LG&E and KU Energy ( Holding Co LKE) Louisville Gas & Electric Kentucky Utilities PPL Electric Utilities PPL Energy Supply WPD 2012 $0 0 0 0 0 0 0 2013 $ 0 0 0 0 0 737 0 (1) 2014 $0 (2) 0 0 0 1
Slide 26: Debt Maturities
Debt Maturities Debt Maturities Debt Maturities Debt Maturities ( Millions) PPL Capital Funding LG& E and KU Energy ( Holding Co LKE) Louisville Gas & Electric Kentucky Utilities PPL Electric Utilities PPL Energy Supply WPD 2012 $0 0 0 0 0 0 0 2013 $ 0 0 0 0 0 737 0 (1) 2014 $0 (2) 0 0 0 10 (3) 300
Slide 27: Liquidity Profile
(1) Liquidity Profile Note: As of December 31, 2011 · Credit facilities consist of a diverse bank group, with no bank and its affiliates providing an aggregate commitment of more than 9% of the total committed capacity for the domestic facilities and 17% of the total committed capacity for WPD’s fac
Slide 28: Reconciliation of Fourth Quarter Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Fourth Quarter Earnings from Ongoing Operations to Reported Earnings Reconciliation of Fourth Quarter Earnings from Reconciliation of Fourth Quarter Earnings from Reconciliation of Fourth Quarter Earnings from Ongoing Operations to Reported Earnings Ongoing Operations to Reported E
Slide 29: Reconciliation of Fourth Quarter Earnings from Ongoing Operations to Reported Earnings (Per Share)
Reconciliation of Fourth Quarter Earnings from Ongoing Operations to Reported Earnings Reconciliation of Fourth Quarter Earnings from Reconciliation of Fourth Quarter Earnings from Reconciliation of Fourth Quarter Earnings from Ongoing Operations to Reported Earnings Ongoing Operations to Reported E
Slide 30: Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings Reconciliation of Year Reconciliation of Year-- to to-- Date Earnings from Date Earnings from Ongoing Operations to Reported Earnings Ongoing Operations to Reported Earnings Reconciliation of Year Reconciliation of
Slide 31: Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings Reconciliation of Year Reconciliation of Year-- to to-- Date Earnings from Date Earnings from Ongoing Operations to Reported Earnings Ongoing Operations to Reported Earnings Reconciliation of Year Reconciliation of
Slide 32: 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 Reconciliation of Year Reconciliation of Year Reconciliation of Year Reconciliation of Year Reconciliation of Year- -- to to to- -- Date Earnings from Date Earnings from Date Earnings from Ongoing Operations to Repo
Slide 33: 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 Reconciliation of Year Reconciliation of Year-- to to-- Date Earnings from Date Earnings from Ongoing Operations to Reported Earnings Ongoing Operations to Reported Earnings Reconciliation of Year Reconciliation of
Slide 34: Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings Reconciliation of PPL Reconciliation of PPL Reconciliation of PPL Reconciliation of PPL Reconciliation of PPL’ ’’ s Earnings from Ongoing s Earnings from Ongoings Earnings from Ongoing Operations to Reported Earnings Opera
Slide 35: Gross Margins Summary
Gross Margins Summary Gross Margins Summary Gross Margins Summary Gross Margins Summary Gross Margins Summary ( Millions of Dollars) Twelve Months Ended December 31, Per Share Diluted 2011 2010 Change (after-tax) (a) KY Gross Margins $ 1,548 $ - $ 1,548 $ 2.12 PA Gross Delivery Margins by Component
Slide 36: Reconciliation of Year-to-Date Operating Income to Margins
Reconciliation of Year-to-Date Operating Income to Margins Reconciliation of Year Reconciliation of Year-to to-Date Date Operating Income to Margins Operating Income to Margins Reconciliation of Year Reconciliation of Year-- to to-- Date Date Operating Income to Margins Operating Income to Margins T
Slide 37: Margins Footnotes
Margins Footnotes a) Represents amounts that are excluded from Margins. b) As reported on the Statement of Income. c) Kentucky Gross Margins were not used to measure the financial performance of LKE for the two-month period subsequent to the acquisition in 2010. d) Primarily represents WPD's utility
Slide 38: 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 39: 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 40: 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