Slide 1: PPL Corporation 2nd Quarter Earnings Call
PPL Corporation 2nd Quarter Earnings Call August 5, 2011 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 Second 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 $0.35 $0.22 $0.00 $0.50 $1.00 2Q 2010 2Q 2011 $0.62 $0.45 $0.00 $0.50 $1.00 2Q 2010 2Q 2011 Second Quarter Reported Earnings Second Quarter Earnings from Ongoing Operations Per SharePer Share Note: See Appendix for the reconciliation of earn
Slide 5: 2011 Earnings from Ongoing Operations Forecast
$2.50 2011 Earnings from Ongoing Operations Forecast 5 © PPL Corporation 2011 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 2010A 2011E 2011 Earnings from Ongoing Operations Forecast 27% 73% Regulated Competitive $3.13 $2.75 $/Share (1) Based on mid- point of forecasted earnings range. Note:
Slide 6: Ongoing Earnings Overview
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. Ongoing Earnings Overview ($0.17) $0.62 $0.45 Total (0.31) 0.43 0.12 Supply 0.02 0.04 0.06 Pennsylvania Regulated 0.06 0.15 0.21 International Regulated $0.06 $ - $0.06 Kentucky Regulated Change Q2 Q2
Slide 7: International Regulated Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 2 nd Quarter 2010 EPS - Ongoing Earnings $0.15 Delivery Revenue 0.03 Financing (0.01) Income Taxes & Other (0.02) Midlands 0.16 Dilution (0.10) Total 0.06 2011 EPS - Ongoing Earnings $0.21 Internation
Slide 8: Pennsylvania Regulated Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 2 nd Quarter 2010 EPS - Ongoing Earnings $0.04 Electric Delivery Margins 0.03 O&M 0.01 Income taxes & other 0.01 Dilution (0.03) Total 0.02 2011 EPS - Ongoing Earnings $0.06 Pennsylvania Regulated Seg
Slide 9: Supply Segment Earnings Drivers
Note: See Appendix for the reconciliation of earnings from ongoing operations to reported earnings. 2 nd Quarter 2010 EPS - Ongoing Earnings $0.43 Margins - East (0.20) O&M (0.06) Discontinued Operations 0.01 Dilution (0.06) Total (0.31) 2011 EPS - Ongoing Earnings $0.12 Supply Segment Earnings Driv
Slide 10: Free Cash Flow before Dividends
Free Cash Flow before Dividends 10 © PPL Corporation 2011 $600 $531 ( $ 290) ( $ 400) ( $ 300) ( $ 200) ( $ 100) $0 $100 $200 $300 $400 $500 $600 $700 2009 Actual 2010 Actual Free Cash Flow before Dividends Millions of Dollars (1) 2010 Free Cash Flow includes two months of the results of the Kentuck
Slide 11: Dividend Profile
Dividend Profile 11 © PPL Corporation 2011 Dividend Profile $/Share Annualized A significantly more rate-regulated business mix provides strong support for current dividend and a platform for future growth (1) Ongoing EPS based on mid- point of forecast. Annualized dividend based on 1st quarter decl
Slide 12: Operational Review
Operational Review Kentucky Regulated Segment • Environmental Cost Recovery (ECR) filing with Kentucky PSC § Filed in June 2011 § Discovery phase in process § PSC order to be received by year-end 2011 Supply Segment • Susquehanna Units 1 & 2 return to service after turbine blade replacement • Genera
Slide 13: Operational Review (continued)
Operational Review (continued) International Regulated Segment • Synergy plan for Midlands integration on track • Organizational structure and Reorganization plan have been determined • Transition from a functional structure to a regional structure under way and will result in: § Smaller support str
Slide 14: Kentucky Regulated Volume Variances
14 © PPL Corporation 2011 Kentucky Regulated Volume Variances % Change% Change Note: Total includes Residential, Commercial and Industrial customer classes as well as “Other” , which is not depicted on the charts above. 3- months Ended 6/ 30/2011 vs. 06/ 30/2010 -0.8% -2.9% -3.0% -2.8% -5% -4% -3% -
Slide 15: PA Regulated Volume Variances
15 © PPL Corporation 2011 PA Regulated Volume Variances % Change% Change Note: Total includes Residential, Commercial and Industrial customer classes as well as “Other” , which is not depicted on the charts above. 3- months Ended 6/30/ 2011 vs. 06/30/ 2010 3.5% 2.3% 0.0% 2.1% -1.0% 0.0% 1.0% 2.0% 3.
Slide 16: Enhancing Value Through Active Hedging
2011 (4) 2012 2013 Baseload Expected Generation (1) (Million MWhs) 47.9 54.7 54.4 East 40.1 46.2 46.0 West 7.8 8.5 8.4 Current Hedges (%) 98% 97% 69% East 99% 98% 69% West 97% 95% 72% Average Hedged Price (Energy Only) ($/MWh) (2) (3) East $57 $54-55 $53-56 West $54 $53-54 $50-51 Current Coal Hedges
Slide 17: Appendix
Appendix
Slide 18: Regulated Rate Base Growth
Regulated Rate Base Growth 18 © PPL Corporation 2011 $8.2 $8.7 $9.2 $9.7 $10.1 $6.6 $7.2 $8.5 $9.7 $10.6 $3.1 $3.4 $3.9 $4.4 $4.8 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 2011E 2012E 2013E 2014E 2015E WPD LKE PPL EU Regulated Rate Base Growth ($ in billions) (1) Represents capitalization for LKE, as
Slide 19: Capital Expenditures
Capital Expenditures 19 © PPL Corporation 2011 $0.8 $1.0 $1.1 $1.1 $1.2 $0.2 $0.8 $0.9 $0.8 $0.6 $0.5 $0.7 $0.8 $0.6 $0.3 $0.6 $0.5 $0.4 $0.3 $0.3 $0.3 $0.3 $0.9 $0.8 $0.7 $0.6 $0.6 $0.4 $0.2 $0.3 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 2011E 2012E 2013E 2014E 2015E WPD LKE ECR LKE ba
Slide 20: Market Prices
Market Prices (1) 24-hour average. (2) NYMEX and TZ6NNY forward gas prices on 6/30/2011. (3) Market Heat Rate = PJM on-peak power price divided by TZ6NNY gas price. 20 © PPL Corporation 2011 Market Prices Balance of 2011 2012 2013 $54 $54 $55 $38 $39 $41 $46 $46 $48 $38 $39 $44 $26 $28 $31 $31 $34 $
Slide 21: Debt Maturities
Debt Maturities 21 © PPL Corporation 2011 Debt Maturities Note: As of June 30, 2011 ( 1) Excludes $1.15 billion of junior subordinated notes due 2018 that are a component of PPL’s 2010 Equity Units and may be put back to PPL Capital Funding if the remarketing in 2013 is not successful. ( 2) Bonds we
Slide 22: Liquidity Profile
Liquidity Profile 22 © PPL Corporation 2011 Liquidity Profile Note: As of June 30, 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 to
Slide 23: Reconciliation of Second Quarter Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Second Quarter Earnings from Ongoing Operations to Reported Earnings 23 © PPL Corporation 2011 Reconciliation of Second Quarter Earnings from Ongoing Operations to Reported Earnings $ 31 $ 118 $ 36 $ 68 $ 253 ( 3) ( 3) 1 1 Non-core generation facilities (2) ( 2) 2011 Bridge Facilit
Slide 24: Reconciliation of Second Quarter Earnings from Ongoing Operations to Reported Earnings (Per Share)
Reconciliation of Second Quarter Earnings from Ongoing Operations to Reported Earnings 24 © PPL Corporation 2011 Reconciliation of Second Quarter Earnings from Ongoing Operations to Reported Earnings (Per Share) $ 0.06 $ 0.21 $ 0.06 $ 0.12 $ 0.45 (0.01) (0.01) 2011 Bridge Facility costs (0.04) (0.04
Slide 25: Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings
Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings 25 © PPL Corporation 2011 Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings $ 106 $ 193 $ 88 $ 273 $ 660 14 14 Non-core generation facilities (3) (3) Emission allowances (1) (1) Re
Slide 26: 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 26 © PPL Corporation 2011 Reconciliation of Year-to-Date Earnings from Ongoing Operations to Reported Earnings (Per Share) $ 0.20 $ 0.37 $ 0.17 $ 0.52 $ 1.26 0.01 0.01 2011 Bridge Facility costs (0.06) (0.06) Foreig
Slide 27: Reconciliation of PPL's Earnings from Ongoing Operations to Reported Earnings
Reconciliation of PPL’s Earnings from Ongoing Operations to Reported Earnings 27 © 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 $ 2.50 $ 3.13 $ 1.95 $ Special Items: E
Slide 28: Gross Margins Summary
Gross Margins Summary 28 © PPL Corporation 2011 $ 360 $ 360 $ 0.55 $ 173 $ 157 $ 16 $ 0.03 45 42 3 - $ 218 $ 199 $ 19 $ 0.03 Eastern U.S. $ 395 $ 528 $ (133) $ ( 0.20) Western U. S. 88 88 - - 10 5 5 - $ 493 $ 621 $ (128) $ ( 0.20) ( a) Excludes dilution which is primarily associated with the June 20
Slide 29: Reconciliation of Second Quarter Operating Income to Margins
A-10 Reconciliation of Second Quarter Operating Income to Margins 29 © PPL Corporation 2011 A-10 Reconciliation of Second Quarter Operating Income to Margins $ 639 $ 436 $ 409 ( c) $ 1,484 $ 520 $ 172 ( c) $ 692 P LR intersegment Utility (4) $ 4 ( 64) $ 64 180 1 ( e) 181 103 ( 2) ( e) 101 716 16 ( e
Slide 30: Margins footnotes
Margins footnotes a) Represents amounts that are excluded from Margins. b) As reported on the Statement of Income. c) Represents WPD's utility revenue. d) Primarily related to PLR supply sold by PPL EnergyPlus to PPL Electric. e) Represents revenue associated with energy-related economic activity. T
Slide 31: Reconciliation of Cash from Operations to Free Cash Flow before Dividends
2009 2010 2011 Cash from Operations $1,852 $2,034 $2,020 Increase (Decrease) in cash due to: Capital Expenditures (1,265) (1,644) (2,805) Sale of Assets 84 161 384 Other Investing Activities - Net (71) (20) 111 Free Cash Flow before Dividends $ 600 $ 531 $ (290) PPL Corporation Reconciliation of Cas
Slide 32: 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 33: 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 34: 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