Slide 1: First Quarter Earnings Call May 1, 2009
First Quarter Earnings Call May 1, 2009 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 • First Quarter 2009 Earnings, 2009 and 2010 Earnings Forecast and Outlook • Segment Results and Financial Overview • Operational Review • Q&A J. H. Miller P. A. Farr W. H. Spence 2
Slide 4: First Quarter Results
First Quarter Results Earnings from Ongoing Operations Per share $0.61 $0.60 $0.00 $0.50 $1.00 1Q 2008 1Q 2009 3 Note: See Appendix for the reconciliation of reported earnings and earnings from ongoing operations. Per share $0.69 $0.64 $0.00 $0.50 $1.00 1Q 2008 1Q 2009 Reported Earnings
Slide 5: Strong Expected Earnings Growth Forecast
$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2008A* 2009* 2010 Strong Expected Earnings Growth Forecast 4 * Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. $2.02 $4.20 Per Share $1.90 $1.60 $3.60
Slide 6: Ongoing Earnings Overview
Ongoing Earnings Overview $(0.01)$0.61$0.60Total (0.02)0.260.24International Delivery (0.02)0.160.14Pennsylvania Delivery $ 0.03$0.19$0.22Supply Change Q1 2008 Q1 2009 5 Note: See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations.
Slide 7: Supply Segment Earnings Drivers
Supply Segment Earnings Drivers (0.04)Income taxes and other 0.03Margins - -West 0.04O&M 0.04Financing Costs $0.222009 EPS – Ongoing Earnings 0.03Total (0.04)Margins - -East $0.192008 EPS – Ongoing Earnings 1st Quarter Note: See Appendix for the per share reconciliation of reported earnings and earn
Slide 8: Pennsylvania Delivery Segment Earnings Drivers
Pennsylvania Delivery Segment Earnings Drivers $0.142009 EPS – Ongoing Earnings (0.02)Total (0.01) (0.02) Financing Costs Other 0.01O&M $0.162008 EPS – Ongoing Earnings 1st Quarter 7 Note: See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations.
Slide 9: International Delivery Segment Earnings Drivers
International Delivery Segment Earnings Drivers (0.09)Effect of Exchange Rates 0.04Financing Costs $0.242009 EPS – Ongoing Earnings (0.02)Total 0.02Income Taxes & Other 0.01O&M $0.262008 EPS – Ongoing Earnings 1st Quarter 8 Note: See Appendix for the per share reconciliation of reported earnings and
Slide 10: Strong Expected Earnings Growth Forecast
$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2008A* 2009* 2010 Strong Expected Earnings Growth Forecast 9 * Earnings from ongoing operations – See Appendix for the per share reconciliation of reported earnings and earnings from ongoing operations. $2.02 $4.20 Per Share $1.90 $1.60 $3.60
Slide 11: Supply Segment Open EBITDA
Supply Segment Open EBITDA *Based on forward market prices as of 3/31/09 2010E (Millions) Generation Output - MWh 55.5 Unhedged Gross Margin* 2,310 O&M (859) Open EBITDA 1,451 Fuel 176 Power 617 Above/(Below) Market Value of Hedges* 793 Expected Margin 3,103 10
Slide 12: Free Cash Flow before Dividends Forecast
($605) ($38) ($315) $685 $367 $280 ($30) ($134) $1 ($700) ($400) ($100) $200 $500 $800 2008A 2009E 2010E Supply Segment PA Delivery Segment International Delivery Segment Free Cash Flow before Dividends Forecast Millions 11
Slide 13: Continued Dividend Growth
$1.00 $1.10 $1.22 $1.34 $1.38 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 2005 2006 2007 2008 2009 $/Share Annualized Continued Dividend Growth 12
Slide 14: Liquidity Profile
Liquidity Profile (1) Reported as of 3/31/2009 Diverse bank group consisting of 23 banks committed under domestic facilities, with no bank having more than 14% of commitments. 13 Institution Facility Expiration Date Total Facility (Millions) Letters of Credit Outstanding (1) (Millions) Drawn (1) (Mi
Slide 15: PPL Energy Supply Collateral Profile
PPL Energy Supply Collateral Profile Millions 14 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Available Credit Capacity Cash Posted Borrowings/CP Outstanding Lett
Slide 16: Debt Maturities
Debt Maturities (1) PPL Capital Funding $201 million maturity paid off in March 2009 (2) PPL Electric Utilities prefunding done in 10/2008 for 2009 maturity Note: As of 3/31/2009 15 2009 2010 2011 2012 2013 PPL Energy Supply $0 $0 $500 $0 $737 PPL Capital Funding 0 (1) 0 0 0 0 PPL Electric Utilities
Slide 17: PA and International Delivery Operational Update
PA and International Delivery Operational Update PA Delivery • PPLEU completed 5 of 6 RFPs • Bids due for final RFP October 5, 2009 with PUC approval expected October 8 • Filed rate deferral plan with the PUC • Act 129 compliance plan filing on target for July 1requirement International Delivery • D
Slide 18: Supply Segment Operational Update
Supply Segment Operational Update • Strong plant performance in Q109 • Susquehanna Unit 2 set generation record with 723 consecutive days generating electricity • Unit 2 up-rate of 45 MW to be completed in Q209 • Reapplied for Holtwood hydroelectric plant expansion project • Scrubbers on schedule fo
Slide 19: Current Hedge Positions - Electricity and Fuel
Current Hedge Positions -Electricity and Fuel Note: As of 3/31/2009 18 2009 2010 2011 2012 Electricity Sales East 98% 88% 51% 28% West 95% 78% 78% 65% Total 97% 86% 55% 34% Uranium 100% 100% 100% 100% Coal East 100% 98% 73% 52% West 100% 100% 86% 77% Total 100% 98% 77% 59% Unhedged Coal – million to
Slide 20: Current East Coal Contracts - Base Prices
Current East Coal Contracts -Base Prices 19 Base Prices for Wholly Owned Plants* *East wholly owned plants include Montour & Brunner Island but not Keystone & Conemaugh. **Excludes contracts subject to mining-related oil surcharges and/or price collars. Note: As of 3/31/2009 $35 $40 $45 $50 $55 max
Slide 21: Hedged Baseload Electricity 2009-2012
Hedged Baseload Electricity 2009-2012 Hedged Baseload Electricity Sales 0% 20% 40% 60% 80% 100% 2009 2010 2011 2012 % of Coal, Hydro & Nuclear O utput$20 $30 $40 $50 $60 $70 $80 $/M W h Average Sale Price 20
Slide 22: Capital Expenditures by Segment
Millions $939 $691 $869 $938 $798 $648 $286 $295 $576 $649 $504 $535 $278 $251 $428 $448 $460 $477 $0 $400 $800 $1,200 $1,600 $2,000 $2,400 2008A 2009E 2010E 2011E 2012E 2013E Supply PA Delivery International Delivery $1,503 $2,035 $1,873 $1,237 Capital Expenditures by Segment 21 $1,762 $1,660
Slide 23: Pennsylvania Delivery Rate Base
Millions $693 $811 $952 $1,221 $1,469 $1,528 $2,081 $2,207 $2,353 $2,513 $2,664 $2,803 $0 $1,000 $2,000 $3,000 $4,000 $5,000 2008A 2009E 2010E 2011E 2012E 2013E Transmission Distribution & Other Pennsylvania Delivery Rate Base $3,018 $3,305 $3,734 $4,133 $4,331 $2,774 22
Slide 24: PPL
PPL
Slide 25: Market Prices
Market Prices ELECTRIC PJM On-Peak Off-Peak ATC(2) Mid-Columbia On-Peak Off-Peak ATC(2) GAS(3) NYMEX TZ6NNY PJM MARKET HEAT RATE(4) CAPACITY PRICES (Per MWD) EQA Actual 2008 2009 2010 2011 2012 $81 $51 $58 $63 $66 $49 $39 $43 $46 $50 $69 $45 $50 $54 $58 $65 $35 $46 $52 $56 $51 $28 $37 $41 $44 $59 $3
Slide 26: PPL Supply Business Overview
PPL Supply Business Overview 2009E Production GWh A-2 Gas/Oil 38% Coal 34% Nuclear 18% Hydro8% QFs 2% 2009E Installed Capacity MW Gas/Oil 9% Coal 52% Nuclear 31% Hydro 8% Note: Graphs include tolling agreements
Slide 27: PPL's Generation Portfolio
PPL’s Generation Portfolio Total Domestic Generation: 12,104 MW Planned Uprate Projects or Additions: 270 MW (1) Reflects reduction of 60 MW expected loss due to increased plant usage during scrubber operation. (2) Includes tolling agreements A-3 Coal 3,500 Nuclear 2,165 Oil 1,817 Gas 2,282 Hydro 36
Slide 28: Supply Segment Reconciliation of Cash from Operations to Free Cash Flow
Supply Segment Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions) A-4 (203)Investment in Energy Project $685($38)($605)Free Cash Flow before Dividends (61)10(58)Other Investing Activities-net (869)(691)(939)Capital Expenditures Increase/(Decrease) in cash due to: $1
Slide 29: PA Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow
PA Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions) A-5 8303Asset Sales & Other ($315)$280$367Free Cash Flow before Dividends (576)(295)(286)Capital Expenditures (293)Less Transition Bond Repayment Increase/(Decrease) in cash due to: $261$567$ 643
Slide 30: International Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow
International Delivery Segment Reconciliation of Cash from Operations to Free Cash Flow before Dividends (Millions) A-6 ($134)($ 30)$ 1Free Cash Flow before Dividends (428)(251)(278)Capital Expenditures Increase/(Decrease) in cash due to: $294$221$ 279Cash from Operations 201020092008 Actual Project
Slide 31: 2009-2010 Sensitivities
2009 - -2010 Sensitivities EPS Impact See Appendix A-1 for market price assumptions A-7 Note: Discrete sensitivities based on changes to individual item, which ultimately may be interrelated. 2009 2010 $10/MW-Day Capacity Price Change >$0.00 >$0.00 $1/MWh of Unhedged Baseload Sales ±<$0.01 ±$0.01 $1
Slide 32: Reconciliation of First Quarter Reported Earnings and Ongoing Earnings
Reconciliation of First Quarter Reported Earnings and Earnings from Ongoing Operations A-8 (Millions) Pennsylvania International Supply Delivery Delivery Total Qtr. Ending March 31, 2009 Reported earnings* $105 $49 $87 $241 Special Items: MTM adj's from energy-related, non- trading economic hedges 5
Slide 33: Reconciliation of First Quarter Reported Earnings and Ongoing Earnings (Per Share)
Reconciliation of First Quarter Reported Earnings and Earnings from Ongoing Operations A-9 Pennsylvania International Supply Delivery Delivery Total Qtr. Ending March 31, 2009 Reported earnings* $0.28 $0.13 $0.23 $0.64 Special Items: MTM adj's from energy-related, non- trading economic hedges 0.13 0
Slide 34: Reconciliation of Year-to-Date Operating Income and Energy Margins
Reconciliation of Year-to-Date Operating Income and Energy Margins A-10 2009 2008 Change Per Share (after-tax) Eastern U.S., pre-tax $312 $340 ($28) ($0.04) Western U.S., pre-tax 83 61 22 0.03 Domestic gross energy margins, pre-tax $395 $401 ($6) ($0.01) 2009 2008 Operating Income $417 $480 Adjustme
Slide 35: Reconciliation of Year-to-Date Operating Income and Energy Margins
Reconciliation of Year-to-Date Operating Income and Energy Margins A-11 2009 2008 Revenue adjustments WPD utility revenue $ (176) $ (241) Domestic delivery component of utility revenue (354) (354) Other utility revenue (14) (12) Mark-to-market adjustments from economic activity (353) 180 Gains from
Slide 36: Reconciliation of PPL's Reported Earnings and Earnings from Ongoing Operations
Reconciliation of PPL’s Reported Earnings and Earnings from Ongoing Operations High Low 2009 2009 2008 2007 Earnings from Ongoing Operations per share of common stock $1.90 $1.60 $2.02 $2.60 Special items (net of taxes): economic hedges 0.13 0.13 0.67 0.08 Impairment of nuclear decom. trust investme
Slide 37: Credit Ratings
Credit Ratings A-13 BBB Issuer Rating AAA Aaa Tax-Exempt Bonds* STABLE NEGATIVESTABLE Outlook A-A-A3Senior Secured Debt F-2A-2P-2Commercial Paper BBBBBBBaa3Preferred Stock BBBA-Baa1Issuer Rating A-A-A3First Mortgage Bonds AA-/A-A3/Baa1Tax-Exempt Bonds** BBBBBBBaa3Preference Stock PPL Electric Utilit
Slide 38: Credit Ratings (cont.)
Credit Ratings (cont.) A-14 A-3Commercial Paper A-BBB+ Baa1Senior Unsecured Debt F2A-2P-2Commercial Paper POSITIVENEGATIVESTABLE Outlook BBB+ BBB+ Baa1Issuer Rating A-BBB+ Baa1Senior Unsecured Debt F2A-2Commercial Paper POSITIVENEGATIVESTABLE Outlook Western Power Distribution (South West) PLC BBB+
Slide 39: 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, hedging, growth, revenues, expenses, rates, regulation, cash flows, credit profile, financing,
Slide 40: Earnings from ongoing operations definition
“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 impairments of securities in PPL’s nuclea