Ppl Corporation · NYSE:PPL

Ppl — Q1 2016 Earnings Presentation

39 slides from Ppl's earnings presentation, Apr 28, 2016

  1. Slide 1: 1st Quarter Earnings Call

    © PPL Corporation 2016 DRAFT 1st Quarter Earnings Call –4th DRAFT PPL Corporation April 28, 2016 Exhibit 99.2

  2. Slide 2: Cautionary Statements and Factors That May Affect Future Results

    © PPL Corporation 2016 DRAFT Cautionary Statements and Factors That May Affect Future Results Anystatementsmadeinthispresentationaboutfutureoperating resultsorotherfutureeventsareforward-lookingstatements under the Safe Harbor Provisions of the Private Securities LitigationReformActof1995.Actualresu

  3. Slide 3: Agenda

    © PPL Corporation 2016 DRAFT 1 st Quarter 2016 Earnings Resultsand Operational Overview U.K. Incentive Revenues Update Segment Results and Financial Overview Q&A W. H. Spence V. Sorgi Agenda 3 R. Symons

  4. Slide 4: Earnings Results

    © PPL Corporation 2016 DRAFT $0.96 $0.71 ($0.75) ($0.25) $0.25 $0.75 $1.25 $1.75 $2.25 $2.75 1Q 2015 1Q 2016 First Quarter Reported Earnings P e r S h a r e Note: See Appendix for the reconciliation of reported earnings (loss) to earnings from ongoing operations. Earnings Results $0.77 $0.67 ($0.75)

  5. Slide 5: 2016 Earnings Forecast

    © PPL Corporation 2016 DRAFT $0.00 $1.00 $2.00 $3.00 2014 Adj 2015A 2016E $2.25 $2.21 P e r S h a r e 2016 Earnings Forecast $2.03 Note: See Appendix for the reconciliation of reported earnings (loss) to earnings from ongoing operations. (1) For 2014, earnings from ongoing operations reflects the fu

  6. Slide 6: Operational Update

    © PPL Corporation 2016 DRAFT Pennsylvania • $350M Northeast Pocono Transmission Line In-Service Kentucky • Environmental Update • Construction projects progressing as scheduled U.K. • Strong performance against RIIO-ED1 incentive targets Operational Update 6

  7. Slide 7: U.K. Incentive Revenues – Summary

    © PPL Corporation 2016 DRAFT U.K. Incentive Revenues –Summary • Annual performance above or below the Ofgem targets for Customer Minutes Lost (CML), Customer Interruptions (CI) and the Broad Measure of Customer Satisfaction Survey is rewarded or penalized on a 2-year lag (i.e. 2015/2016 earned perfo

  8. Slide 8: U.K. Incentive Revenue

    © PPL Corporation 2016 DRAFT U.K. Incentive Revenue 8 In the 2015/16 regulatory year, WPD improved performance by xx%over prior year which resulted in earning 77% of the maximum payout. Based on assumed exchange rate of $1.60/£. Subject to Ofgem audit in November 2016. Max. Payout Actual Max. Payout

  9. Slide 9: Summary Financial Highlights

    © PPL Corporation 2016 DRAFT Summary Financial Highlights 9

  10. Slide 10: Ongoing Earnings Overview

    © PPL Corporation 2016 DRAFT Q1 2016 Q1 2015 Change Pennsylvania Regulated $0.14 $0.13 $0.01 Kentucky Regulated 0.16 0.16 0.00 U.K. Regulated 0.39 0.50 (0.11) Corporate and Other (0.02) (0.02) 0.00 Total $0.67 $0.77 $(0.10) Ongoing Earnings Overview Note: See Appendix for the reconciliation of repor

  11. Slide 11: Pennsylvania Regulated Segment Earnings Drivers

    © PPL Corporation 2016 DRAFT 1 st Quarter 2015 EPS –Ongoing Earnings $0.13 Gross margins 0.03 Operation and maintenance (0.02) Depreciation (0.01) Income Taxes 0.01 Total 0.01 2016 EPS –Ongoing Earnings $0.14 Pennsylvania Regulated Segment Earnings Drivers Note: See Appendix for the reconciliation o

  12. Slide 12: Kentucky Regulated Segment Earnings Drivers

    © PPL Corporation 2016 DRAFT 1 st Quarter 2015 EPS –Ongoing Earnings $0.16 Operation and maintenance 0.01 Financing costs (0.01) Total 0.00 2016 EPS –Ongoing Earnings $0.16 Kentucky Regulated Segment Earnings Drivers Note: See Appendix for the reconciliation of reported earnings (loss) to earnings f

  13. Slide 13: U.K. Regulated Segment Earnings Drivers

    © PPL Corporation 2016 DRAFT 1 st Quarter 2015 EPS –Ongoing Earnings $0.50 Gross margins (0.08) Operation and maintenance 0.01 Depreciation (0.01) Financing Costs (0.01) Taxes and Other 0.01 Currency (0.03) Total (0.11) 2016 EPS –Ongoing Earnings $0.39 U.K. Regulated Segment Earnings Drivers Note: S

  14. Slide 14: Foreign Currency Hedging Status

    © PPL Corporation 2016 DRAFT Foreign Currency Hedging Status 14 Note: FX hedging status as of 4/11/2016. (1) FX sensitivities do not reflect the potential risk mitigation from restriking existing hedges. GBP Foreign Currency 2016 2017 2018 Percentage Hedged 93% 89% 41% Hedged Rate (GBP/USD) $1.54 $1

  15. Slide 15: RPI Update and Sensitivity

    © PPL Corporation 2016 DRAFT RPI Update and Sensitivity 15 RPI (Regulatory Year) 2015/16 2016/17 2017/18 2018/19 Budget RPI assumption 1.3% 2.3% 3.1% 3.1% Current RPI actual/forecast (1,3) 1.1% 2.3% 3.1% 3.2% RPI (Calendar Year) 2015 2016 2017 2018 Budget RPI assumption 1.5% 2.0% 2.8% 3.1% Current R

  16. Slide 16: Appendix

    © PPL Corporation 2016 DRAFT Appendix 16

  17. Slide 17: Significant Ongoing Capital Expenditure Program

    © PPL Corporation 2016 DRAFT Note: Corporate and Other capital expenditures average approximately $10 million per year. (1) Based on assumed exchange rate of $1.60/£. (2) Expect between 80% and 90% to receive timely returns via ECR mechanism based on historical experience and future projections. Sig

  18. Slide 18: Capital Plan is Driving Rate Base Growth

    © PPL Corporation 2016 DRAFT ( $ i n b i l l i o n s ) (1) Based on assumed exchange rate of $1.60/£ for 2016 -2020. (2) Represents utility capitalization for LKE. Represents Regulatory Asset Value (RAV) for WPD. Strong regulated rate base growth will drive EPS growth. Capital Plan is Driving Rate B

  19. Slide 19: U.S. Regulated Volume Variances

    © PPL Corporation 2016 DRAFT Note: Total includes Residential, Commercial and Industrial customer classes as well as “Other”, which is not depicted on the charts above. U.S. Regulated Volume Variances 19 Residential Commercial Industrial Total Residential Commercial Industrial Total Weather-Normaliz

  20. Slide 20: Project Compass Summary

    © PPL Corporation 2016 DRAFT 20 Proposed First Segment: • 95-mile initial segment from Blakely, PA to Ramapo, NY —PPL Electric filed interconnection request with NYISO on October 27th —Estimated cost of $500 -$600 million —Estimated in-service date in 2023 • Benefits as proposed include: —Substantia

  21. Slide 21: Project Compass

    © PPL Corporation 2016 DRAFT Project Compass 21

  22. Slide 22: Kentucky Environmental Controls

    © PPL Corporation 2016 DRAFT Low Nox Burners SCR/SNCR Scrubbers Closed Cycle Cooling Tower Dry Handling/ Disposal/ Beneficial Use Baghouses Mw of Capacity NO x NO x SO 2 Water Intake Coal Combustion Residuals (CCRs) Particulates and Hg (with PAC injection) Unit 1 383 (2) x x x x (1) x Unit 2 549 (2)

  23. Slide 23: U.K. Regulated Segment EPS Projection

    © PPL Corporation 2016 DRAFT U.K. Regulated Segment EPS Projection ($ Per Share) Note: Assumes foreign currency exchange rate of $1.60/£ for 2016E and 2017E on open positions. (1) 2015 represents earnings from ongoing operations. See Appendix for the reconciliation of reported earnings (loss) to ear

  24. Slide 24: U.K. Regulated Segment Cash Repatriation

    © PPL Corporation 2016 DRAFT U.K. Regulated Segment Cash Repatriation Note: Assumes foreign currency exchange rate of $1.60/£ for 2016E and 2017E. ($ in millions) Flexible strategy for meaningful U.K. cash repatriation. 24

  25. Slide 25: Funding the Growth

    © PPL Corporation 2016 DRAFT 2014A (1) 2015A (2) 2016E Domestic Cash from Operations $2,145 $1,546 $1,615 Domestic Maintenance Capex (3) (900) (640) (707) Dividend From UK Regulated 263 319 400 Cash Available for Distribution $1,508 $1,225 $1,308 Common Dividend (967) (1,004) (1,025) Cash Available

  26. Slide 26: Debt Maturities

    © PPL Corporation 2016 DRAFT ($ in millions) 2016 2017 2018 2019 2020 PPL Capital Funding $0 $0 $250 $0 $0 PPL Electric Utilities (1) 0 224 0 0 100 LG&E and KU Energy 0 0 0 0 475 Louisville Gas & Electric (2) 25 194 98 40 0 Kentucky Utilities 0 0 0 0 500 WPD 460 100 0 0 209 Total $485 $518 $348 $40

  27. Slide 27: Liquidity Profile

    © PPL Corporation 2016 DRAFT Liquidity Profile Note: As of March 31, 2016. (1) In March 2016, PPL amended and extended the credit facility agreement to March 2017. Entity Facility Expiration Date Capacity (Millions) Letters of Credit & Commercial Paper Issued (Millions) Borrowed (Millions) Unused Ca

  28. Slide 28: Strong Credit Ratings

    © PPL Corporation 2016 DRAFT WPD Holding Company LKE Holding Company PPL Electric UtilitiesLKE Operating Companies PPL Capital Funding Credit Rating Secured Unsecured Long-term Issuer Outlook S&P NR BBB+ NR Stable Moody’s NR Baa2 NR Stable Credit Rating Secured Unsecured Long-term Issuer Outlook S&P

  29. Slide 29: Reconciliation of Segment Reported Earnings to Ongoing Earnings

    © PPL Corporation 2016 DRAFT 29 Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations After-Tax (Unaudited) (millions of dollars) Reported Earnings (Loss) $ 289 $ 112 $ 94 $ (14) $ 481 Less: Special Items (expense) benefit: Foreign currency-related economic hedges 24

  30. Slide 30: Reconciliation of Segment Reported Earnings to Ongoing Earnings

    © PPL Corporation 2016 DRAFT Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations 30 After-Tax (Unaudited) (millions of dollars) Reported Earnings (Loss) $ 375 $ 109 $ 87 $ (19) $ 95 $ 647 Less: Special Items (expense) benefit: Foreign currency-related economic hedg

  31. Slide 31: Reconciliation of Segment Reported Earnings to Ongoing Earnings

    © PPL Corporation 2016 DRAFT 31 Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations (1)Includes an $879 million charge reflecting the difference between PPL's recorded value for the Supply segment and the estimated fair value determined in accordance with applicabl

  32. Slide 32: Reconciliation of Segment Reported Earnings to Ongoing Earnings (Adjusted)

    © PPL Corporation 2016 DRAFT Reconciliation of Segment Reported Earnings (Loss) to Earnings from Ongoing Operations (Adjusted) (1) The "If-Converted Method" has been applied to PPL's 2011 Equity Units, resulting in $9 million of interest charges (after-tax) being added back to earnings and approxima

  33. Slide 33: Reconciliation of Forecast Reported Earnings to Ongoing Earnings

    © PPL Corporation 2016 DRAFT Reconciliation of PPL's Forecast of Reported Earnings (Loss) to Earnings from Ongoing Operations 33 After-Tax (Unaudited) Reported Earnings (Loss) $ 1.47 $ 0.57 $ 0.47 $ (0.12) $ 2.39 $ $ 2.29 Less: Special Items (expense) benefit: Foreign currency-related economic hedge

  34. Slide 34: Gross Margins Summary

    © PPL Corporation 2016 DRAFT Gross Margins Summary $ 557 $ 657 $ (100) $ (0.12) Impact of changes in foreign currency exchange rates (31) (0.04) $ (69) $ (0.08) $ 525 $ 522 $ 3 $ - Distribution $ 258 $ 242 $ 16 $ 0.02 Transmission 107 93 14 0.01 $ 365 $ 335 $ 30 $ 0.03 Total KY Gross Margins PA Gros

  35. Slide 35: Reconciliation of First Quarter Margins to Operating Income

    © PPL Corporation 2016 DRAFT Reconciliation of First Quarter Margins to Operating Income $ 584 $ 826 $ 585 $ 16 $ 2,011 $ 686 $ 899 $ 630 $ 15 $ 2,230 198 (1) 197 253 253 66 167 233 92 227 10 329 9 (9) 27 24 25 374 450 29 24 26 377 456 12 217 229 7 209 216 1 28 50 79 1 33 52 86 Total Operating Expen

  36. Slide 36: Reconciliation of Domestic Cash Flows

    © PPL Corporation 2016 DRAFT Reconciliation of Domestic Cash Flows 36 Year Ended December 2015 Additional (Millions of Dollars) Domestic Domestic Funding Sources PPL Consolidated Cash from Cash Available Cash Available Growth for Domestic Statement of Operations for Distribution for Reinvestment Cap

  37. Slide 37: Forward-Looking Statements Risk Factors

    © PPL Corporation 2016 DRAFT Statementscontainedinthispresentation,includingstatementswithrespecttofutureearnings,cashflows,financing,regulationandcorporate strategyare"forward-lookingstatements"withinthemeaningofthefederalsecuritieslaws.AlthoughPPLCorporationbelievesthatthe expectationsandassumptio

  38. Slide 38: Definitions of Non-GAAP Financial Measures

    © PPL Corporation 2016 DRAFT Definitions of Non-GAAP Financial Measures Management utilizes "Earnings from ongoing operations" as a non-GAAP financial measure, and it should not be considered as an alternative to reported earnings, or net income, which is an indicator of operating performance determ

  39. Slide 39: Definitions of Non-GAAP Financial Measures

    © PPL Corporation 2016 DRAFT Definitions of Non-GAAP Financial Measures Managementalsoutilizesthefollowingnon-GAAPfinancialmeasuresasindicatorsofperformanceforitsbusinesses. "U.K.GrossMargins"isasinglefinancialperformancemeasureoftheelectricitydistributionoperationsoftheU.K.Regulatedsegment.Incalcul

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