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Delivering today for a brighter tomorrow
New York Investor Meetings Friday, December 8, 2017
© P© PPL Corporation 2017 2
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 differ materially from such forward-looking statements. A discussion of factors that could cause actual results or events to vary is contained in the Appendix to this presentation and in the Company’s SEC filings.
Cautionary Statements and Factors That May Affect Future Results
© P© PPL Corporation 2017 3
Pure-play regulated business
with seven high- performing utilities
Diverse assets in constructive
regulatory jurisdictions
Solid financial position with strong investment-grade
credit ratings
Competitive earnings and dividend growth from 2017 through 2020
EPS CAGR 5-6%
Rate Base CAGR 5.6%
Dividend increase about 4% annually
Annual Total Return 9-10%
PPL Investment Proposition
(1) Projections based on the midpoint of the original 2017 ongoing earnings guidance range of $2.05 - $2.25 per share. (2) Subject to approval by the Board of Directors. (3) Annual total return is the combination of projected annual EPS growth and dividend yield.
(1)
(3)
(2)
© P© PPL Corporation 2017 4
PPL Overview
(1) Actual as of 12/31/2016. Represents Regulatory Asset Value (RAV) for the U.K. and utility capitalization for Kentucky. (2) U.K. Rate Base translated at $1.30/£. (3) % of EPS based on $2.18 midpoint of revised 2017 earnings forecast. Corporate and Other, not shown, accounts for -5% of 2017 EPS forecast.
A diverse family of pure-play regulated utilities with scale
Kentucky Pennsylvania United Kingdom Aggregate PPL
$23.5B Rate Base 10.5M Customers
100% Rate Regulated
Electric Dist.
Electric Trans.
Regulated Gen.
Gas Dist.
Rate Base
Customers
% of EPS
Business:
(2) $6.1B 1.4M 23%
$8.9B 1.0M Electric; 0.3M Gas
25%
$8.5B 7.8M 57%
(3)
(1)
© P© PPL Corporation 2017 5
Commitment to Creating Shareholder Value
Evolution of PPL
2010 (1) 2012 (2) 2013 (3) PPL Corporation (4)
Market Cap ($bn) $12.8 $16.4 $18.8 $25.4
Enterprise Value ($bn) $17.2 $35.1 $37.8 $45.5
Business Profile (5)
Regulatory Asset Base (6) ($bn)
$12.2 $18.8 $21.3 2017 = $24.9 + (5.5% CAGR from 2017 – 2021)
Carbon Footprint (U.S. Tons)
63.9m 62.5m 64.2m 33.4m
84%
16%
Source: FactSet, Company Filings. (1) As of December 31, 2010. (2) As of December 31, 2012. (3) As of December 31, 2013. (4) As of October 31, 2017. (5) Proportion of earnings from ongoing operations. (6) Regulatory Asset Value (RAV) for WPD. Represents utility capitalization for LKE.
2008 2009 2010 2011 2012 2014 2015 and beyond
% Utility
% Competitive Energy 100%
2013
27%
73% 72%
28%
© P© PPL Corporation 2017 6
Operate high-performing utilities in premium jurisdictions
Provide industry-leading customer service and reliability
Invest responsibly in the future, while effectively managing costs
Earn ROEs near authorized levels and recover investments in a timely manner
Maintain strong financial metrics
Deliver best-in-class returns for our shareholders
Developing and Maintaining Sustainable Energy Infrastructure
Delivering extraordinary value to our customers and shareholders
© P© PPL Corporation 2017 7
Pennsylvania Kentucky United Kingdom
Seven High-Performing Utilities in Premium Regulatory Jurisdictions
Most recent rates effective July 1, 2017 at 9.7% ROE
Environmental Cost Recovery (ECR) Mechanism
Forward Test Year for base rate cases
Fuel Adjustment Clause
FERC Formula Transmission Rates 11.68% allowed ROE
DSIC Mechanism
Smart Meter Rider ~$500M project 2017-2019
Storm Cost Recovery
Forward Test Year for Distribution rate cases
Base revenues set for 8 years; through March 2023
Real-time recovery of CAPEX
Incentive revenues available for strong performance and innovation
Accelerated depreciation recovery
(1) DSIC – Distribution System Improvement Charge: an automatic adjustment charge that enables companies to recover certain infrastructure improvement costs between base rate cases.
(2) Kentucky ECR provides near real-time recovery for approved environmental projects on the coal fleet. (3) RIIO-ED1 Price Control extends through 3/31/2023. (4) RAV balance as of 3/31/2015 recovered over 20 years. RAV additions over RIIO-ED1 recovered over an average of 35 years.
(1) (2)
(3)
(4)
PPL Electric Utilities Louisville Gas & Electric (LG&E) and Kentucky Utilities (KU)
WPD East and West Midlands, South West and South Wales
© P© PPL Corporation 2017 8
Track Record of Delivering Results for Shareholders and Customers Operational Excellence
Long history of achieving fair outcomes in all jurisdictions Including successful transition of multiple price controls in the U.K. WPD was the only electric distribution company to be fast-tracked in RIIO-ED1
WPD top performers in Quality of Service and Customer Satisfaction metrics PA & KY utilities have earned over 45 J.D. Power Awards combined
Prudent Capital Deployment Substantial improvements in network reliability and environmental stewardship Delivered significant projects such as the Susquehanna-Roseland Transmission Project
in PA, Smart Grid deployment in PA & the U.K. and construction of first combined-cycle gas plant and utility-scale solar project in Kentucky
Financial Stability Increased dividend 15 out of the last 16 years Consistently achieve/exceed annual earnings projections
Strategic Execution Low premium utility acquisitions in 2010 and 2011 Successful spinoff of competitive supply business in 2015
© P© PPL Corporation 2017 9
$1.12 $1.01 $1.02 $1.06 $1.07
$0.33 $0.44$0.21 $0.22 $0.24
$0.75 $0.80$0.93 $0.75 $0.73
$0.77 $0.74$0.68
$0.70$0.40
$0.43 $0.39$0.39
$0.35
$0.35
2017E 2018E 2019E 2020E 2021E
U.K. KY ECR KY base PA Transmission PA Distribution
Low-Risk Investment Plan Designed to Advance Our Electricity Infrastructure
Expanding, reinforcing and modernizing the grid
Strengthening physical and cyber security
Adding smart grid technology and automation
Connecting more renewable energy
Expanding solar offerings to customers
Piloting new technologies
Improving environmental footprint of Kentucky coal fleet
Investing ~$3 billion annually to develop more resilient electricity networks
$3.40 $3.38 $3.23
$3.08
$2.79
$16 billion of investments over 5-year period
(1) Based on assumed exchange rate of $1.30/£ for all years. (2) Expect between 80% and 90% to receive timely returns via ECR mechanism based on historical experience and future projections.
(1) (2)
© P© PPL Corporation 2017 10
$2.15
$2.49
$2.56
2017E 2020E
($ in billions)
Prudent Investments, Timely Recovery Drive Growth Opportunity
Timely Real-time CAPEX Recovery
Strong Regulated Rate Base Growth
70%
9%
21%
0-6 Months 7-12 Months > 1 Year
~80% CAPEX recovery within one year
Significant investment opportunities and constructive regulatory recovery mechanisms support 5-6% annual EPS growth target through 2020
$9.4 $10.9
$9.3 $10.6
$3.3 $3.6 $2.9 $4.2
2017ERate Base
2020ERate Base
(1) Based on assumed exchange rate of $1.30/£ for all years. (2) Represents Regulatory Asset Value (RAV) for U.K. Represents utility capitalization for KY. (3) Based on the midpoint of the original 2017 ongoing earnings guidance range of $2.05 - $2.25 per share. (4) Does not represent earnings forecast or guidance for 2020.
(1) (2) (2)
Support 5-6% EPS CAGR
+
$24.9
$29.3
5.6% CAGR
U.K. KY
PA Distribution PA Transmission
5-6% EPS Growth
(3) (4)
© P© PPL Corporation 2017 11
99% 100%
15%
Note: GBP forecast range and median sourced from Bloomberg as of 09/30/2017. Forecast range reflects views from up to 16 financial institutions and does not represent PPL’s internal forecast. Not all institutions provide forecasts for all periods.
(1) Budgeted FX rate on open positions of $1.30/£ for all years.
Managing Foreign Currency Risk
Forward FX Rates vs. Hedged Rates
Based on current exchange rates the EPS growth rate would be at the high end of our 5-6% growth range Additional value available to mitigate risk beyond 2020
Even if the market rate for the GBP would hit parity with the USD, we have the ability to achieve the low end of our EPS growth rate through 2020 due to the value of our hedges above the budgeted rate of $1.30/£
PPL’s FX Hedge Status as of 10/18/17 (1)
Year 2018 2019 2020
Hedged Rate (GBP/USD)
1.32 1.39 1.47
Currency hedging strategy positions PPL to achieve 5-6% EPS growth target
Substantially hedged
through 2019 at rates above the $1.30/£
budgeted rate 1.33
1.451.50
1.32
1.39
1.47
1.10
1.20
1.30
1.40
1.50
1.60
2018 2019 2020
($/£) FX Forecast Range Forecast MedianCurrent Hedge Rate Budget FX Rate
© P© PPL Corporation 2017 12
4.4% 4.2%
4.0% 3.8% 3.7%
3.3% 3.2% 3.2% 2.9% 2.8% 2.7%
2.5%
Comp1
PPL Comp2
Comp3
Comp4
Comp5
Comp6
Comp7
Comp8
Comp9
Comp10
Comp11
$1.47 $1.49 $1.51 $1.52$1.58
2013 2014 2015 2016 2017 2020E
PPL Offers an Established, Growing Dividend at an Above-Average Yield
(1) Dividend yield calculated based on share prices and annualized dividends as of 10/31/2017. (2) Annualized dividend based on 02/01/2017 announced increase. Actual dividends to be determined by Board of Directors.
5-Year Dividend History & Future Outlook PPL Dividend Yield vs. Large Cap Utilities
Dividend yield is well above average comparable
PPL has a long standing history of paying dividends to shareholders October 2nd dividend represents the 287th consecutive dividend paid
(2)
~+4%
Targeting ~4% annual growth through 2020
Large Cap Utility Average
($ per share)
The dividend is a key component to PPL’s investment proposition
(1)
© P© PPL Corporation 2017 13
Pure-play regulated business operating in premium jurisdictions
Competitive projected earnings growth of 5-6% through 2020
Top-quartile dividend yield among large-cap utilities
Targeting ~4% annual dividend growth through 2020
Investing responsibly in our networks and improving efficiency
Proven track record of delivering commitments to shareowners and customers
(1) Total annual return is the combination of annual EPS growth and dividend yield. (2) EPS growth rate based on the midpoint of the original 2017 ongoing earnings guidance range of $2.05 - $2.25 per share.
PPL Investment Summary A proven, large-cap regulated utility targeting 9-10% total annual returns (1)
(2)
© P© PPL Corporation 2017 14
Appendix
© P© PPL Corporation 2017 15
CORPORATE DATA
Ticker symbol and stock exchange PPL-NYSE
At November 30, 2017 Average daily trading volume (3 mos.) 3.33 million shares
Closing price $36.67
52-week price range $32.69 – $40.20
Annualized dividend per share $1.58 ($0.395/qtr)
Enterprise value ~$45.2 billion
Market cap ~$25.1 billion
At September 30, 2017 2016 earnings from ongoing operations per share (Non-GAAP)(1)
$2.45 per share
Total assets $40.8 billion
Common shares O/S 688.133 million
Book value per share(2) $15.54
Capitalization: ($ millions)
Total debt $20,769 67%
Common equity $10,129 33%
Total Capitalization $30,898 100%
Employees ~12,700
Long-term debt $19,558 million
Short-term debt $ 1,211 million
Letters of Credit $ 221 million
ANALYST CONTACT: Joe Bergstein – Vice President-Investor Relations & Treasurer 610-774-5609 Andy Ludwig – Director-Investor Relations 610-774-3389 Lisa Pammer – Investor Relations Manager 610-774-3316 [email protected] WEB SITE: www.pplweb.com
(1) See Appendix for the reconciliation of reported earnings to earnings from ongoing operations. (2) Based on 688.133 million shares of common stock outstanding.
PPL Fact Sheet
© P© PPL Corporation 2017 16
Delivering today for a brighter tomorrow
PPL CORPORATION SUSTAINABILITY OVERVIEW
Learn more about PPL’s sustainability efforts Visit www.pplsustainability.com
© P© PPL Corporation 2017 17
The following sustainability
commitments provide a framework for PPL to grow and innovate in a responsible, reliable
way that benefits customers,
shareowners, employees
and society as a whole.
Sustainability Strategy and Commitments
© P© PPL Corporation 2017 18
63.9 65.6 62.5 64.2
56.2
35.1 33.4
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2010 2011 2012 2013 2014 2015 2016
(Millions of U.S. Tons)
Significantly reduced coal intensity and carbon emissions via the strategic spin-off of our competitive generation and coal retirements in Kentucky
PPL’s CO2 Emissions from 2010-2016 PPL’s Power Generation Capacity
~50% Reduction
PPL’s Environmental Stewardship
(MW)
-
2,000
4,000
6,000
8,000
10,000
12,000
Coal Natural Gas/Oil Hydro Nuclear
2010 2012 2014 2016
Coal - 46%
(1) Megawatt (MW) capacity represents PPL’s ownership interest
0 MW Nuclear
Gas/Oil - 55%
(1)
© P© PPL Corporation 2017 19
20,000
40,000
60,000
80,000
100,000
120,000
140,000
20,000
25,000
30,000
35,000
40,000
2010 2011 2012 2013 2014 2015 2016
Generation (GWh) Emissions (Tons)
Note: Emissions include sum of Particulates, SO2, NOX and Mercury
(1) Excludes PPL Energy Supply, LLC for periods prior to its June 2015 spin-off.
Advancing a Cleaner Energy Future
Meaningful Water Conservation in Kentucky Power Generation vs. Total Tons Emitted
PPL’s Kentucky operations have made important investments that have significantly reduced emissions and water consumption
Consumed 61% less water in 2016 than 2012
(1)
~70% Reduction
(Tons) (GWh)
~70% reduction in emissions from 2010 to 2016
(1)
© P© PPL Corporation 2017 20
2017 Ongoing Earnings Forecast
Note: See Appendix for the reconciliation of reported earnings to earnings from ongoing operations. (1) Represents an average exchange rate of $1.45/£ for 2016 earnings per share and $1.20/£ for the original and revised 2017 forecasts.
Segment 2016A
Earnings from Ongoing Operations
Q2 Revised 2017E Earnings from Ongoing Operations
(Midpoint)
Q3 Revised 2017E Earnings from Ongoing Operations
(Midpoint)
U.K. Regulated (1) $1.49 $1.20 $1.24
Kentucky Regulated 0.58 0.56 0.55
Pennsylvania Regulated 0.50 0.50 0.50
Corporate and Other (0.12) (0.11) (0.11)
Total $2.45 $2.15 $2.18
$2.05 $2.10
$2.25 $2.25
Original 2017E Forecast Range
Revised 2017E Forecast Range
Increased the 2017E midpoint to $2.18 from
$2.15 by raising the lower end of the forecast range
© P© PPL Corporation 2017 21
(1) Growth rates off of midpoint of original 2017 ongoing earnings forecast of $2.15 per share. (2) Subject to approval by the Board of Directors. (3) Based on 2017-2020 U.K. Regulated Segment earnings projections. Capital structure adjusted to include debt of $750 million that is
allocated to U.K. Regulated Segment for reporting purposes.
Assumptions to Achieve 5-6% EPS Growth 2017 Through 2020 (1)
Key Corporate-level Assumptions: Annual dividend growth target of approximately 4% through 2020 Equity issuances of approximately $350 million annually
Domestic Growth Assumptions: Net income growth of 5-7% Domestic rate base CAGR of 5.9% PA transmission CAPEX of $2.1 billion at 11.68% base ROE; Project Compass not in plan KY investment of $3.3 billion at 9.7% ROE
U.K. Growth Assumptions: Net income growth of 8-10% $1.30/£ foreign currency rate assumed for all unhedged positions Expected rate base (RAV) CAGR of 5.1% Average expected segment ROEs of 13-15% Incentive revenue assumptions: $85M (2017); $100M (2018); $90-$110M (2019); $95-$115M (2020) RPI (inflation rate): 3.0% (2017); 3.2% (2018); 3.0% (2019 and 2020) Annual repatriation between $100 – $200M Effective tax rate of approximately 11% (2017); Approximately 17% thereafter
(1)
(1)
(1)
(3)
(2)
(1)
© P© PPL Corporation 2017 22
$9.4 $9.9 $10.4 $10.9 $11.6
$9.3 $9.9 $10.2 $10.6 $10.9
$2.9$3.3 $3.7
$4.2$4.6
$3.3$3.4
$3.5$3.6
$3.8
2017E 2018E 2019E 2020E 2021E
U.K. KY PA Transmission PA Distribution
($ in billions)
(1) Based on assumed exchange rate of $1.30/£ for all years. (2) Represents Regulatory Asset Value (RAV) for U.K. Represents utility capitalization for KY.
(1) (2) (2)
Projected Rate Base Growth
~5.5% CAGR
$24.9 $26.5
$27.8 $29.3
$30.9
~5.5% CAGR Breakdown
5.4%
4.1%
12.2%
3.6%
2017E-2021ERate Base
CAGR
© P© PPL Corporation 2017 23
Equity Ratio(1) Allowed ROE
PPL Electric Utilities 54.50% D: N/A T: 11.68%(2)
LG&E 53.27%
9.70%
Kentucky Utilities 53.28% 9.70%
EU LG&E KU
Environmental Cost Recovery
DSIC
Forward test year methodology
CWIP included in rate base (3)(4)
Gas Line Tracker
Pass through of Purchased Power
Fuel and Gas Supply Adj. Clause
Storm Recovery (5)
Smart Meter Rider
Tracker/Mechanism
Transmission Formula Rate
Transmission Incentive Adder(2)
Energy Efficiency/DSM
(1) As filed in most recent completed filings and rate cases. (2) Allowed ROE of 12.93% for Susquehanna-Roseland project. (3) CWIP included in forward test year rate base for LG&E and KU. (4) For PPL EU Transmission, return on CWIP for approved projects. (5) LG&E and KU have historically been able to recover costs from extraordinary storms, but no formal tracker is in place.
Constructive U.S. Regulatory Framework
© P© PPL Corporation 2017 24
Pennsylvania Regulated Overview Pennsylvania Transmission Pennsylvania Distribution
Projected 3.6% CAGR in distribution rate base through 2021
Constructive jurisdiction reduces regulatory lag; supportive of longer rate case cycles ~$500 million Smart Meter
replacement project (<6 months lag on qualifying investments)
~50% of distribution gross margin subject to minimal or no volumetric risk
Projected 12.2% CAGR in transmission rate base through 2021
Base ROE of 11.68%
FERC Formula Rate based on historical test year
Regulatory mechanism to minimize volumetric risk
© P© PPL Corporation 2017 25
$125 $62 $71 $104 $75
$254 $179 $165 $157
$44
$390 $494 $439 $443
$281
2017E 2018E 2019E 2020E 2021E
System Total 2005 2010 2015 2020E Total System Line Mileage 5,007 5,019 5,171 5,179
Rebuilt/New Line Mileage N/A 36 279 1,467
Average System Age (yrs) 45 49 51 40
Line Miles >75 Years 856 (17%) 927 (19%) 902 (17%) 254 (5%)
Line Miles >50 Years 1,694 (34%) 1,861 (37%) 1,936 (37%) 969 (19%)
Line Miles >25 Years 4,344 (87%) 4,534 (90%) 4,486 (87%) 3,227 (62%)
Wood/Total Structures 57% 55% 47% 29%
Steel/Total Structures 43% 45% 53% 71%
Transmission Reliability 5 Year Historical Average 2016 Actual
IEEE SAIFI - Transmission 0.084 0.067
IEEE MAIFI - Transmission 0.853 0.449 Regional Electric System Enhancements (138kV, 115kV, & 69kV)
New / Existing Substation Enhancements (All Voltages)
Bulk Electric System Enhancements (230kV & 500kV)
Compliance with NERC and PJM Criteria Security Improvements Increase System Reliability Sustainability and Survivability
Pennsylvania Transmission Strategy Provide reliable, resilient, safe and cost-effective service to customers
Four Key Focus Areas
Total of $3.3 Billion in Infrastructure Investment ($ in millions)
© P© PPL Corporation 2017 26
(1) Project subject to regulatory approvals and change until final development.
Pennsylvania Transmission: Project Compass
Proposed First Segment 95-mile initial segment from
Lackawanna, PA to Ramapo, NY Interconnection request filed with NYISO in
October 2015 Estimated cost of $500 - $600 million Estimated in-service date in 2023
Benefits as proposed include: Increased access to renewables Substantial annual savings for NY
customers Economic development benefits Grid reliability
Future Project Plan Approximately 475-mile transmission lines in PA and extending to NY
Estimated cost of $3 – $4 billion
(1)
© P© PPL Corporation 2017 27
Tree falls on line, cutting power to 561 customers
13:23:40 Breaker trips
13:23:56 Recloser locks out
13:23:58 System locates fault
13:24:18 FISR starts to solve
13:25:43 Solution found
13:25:50 First switch opened
13:26:00 Second switch closed
543 customers restored in 2 minutes, 20 seconds
Pennsylvania Distribution: Smart Grid Delivering Real Benefits
PPL Smart Grid Overview PPL among U.S. leaders
in distribution automation
Technology capable of sensing and responding to outages
Installed on 100% of PPL Electric circuits
Prevented 100,000 outages in 2016, alone
Distribution Automation Example
© P© PPL Corporation 2017 28
Kentucky Regulated Overview Low-Carbon & Distributed Generation Kentucky Regulatory Summary
Constructive jurisdiction provides a timely return on planned CAPEX Revenue increase of $116 million with a
9.7% ROE, with new rates effective July 1, 2017
Projected 4.1% CAGR in rate base through 2021
Environmental Cost Recovery (ECR): $1.4 billion estimated spend with a 9.7% ROE on projects approved – virtually no regulatory lag
Other supportive recovery mechanisms Return mechanisms include CWIP for ECR
and Gas Line Tracker Pass through clauses include Purchased
Power, Fuel and Gas Supply Adjustment and Energy Efficiency/Demand Side Management recovery
CAPEX plans exclude spending that may be required under the Clean Power Plan
Solar Universal Solar – 10 MW facility at E.W.
Brown Industrial / Large Commercial Solar Community Solar – LKE owns and operates
Electric Vehicle Charging Station Program Three programs offered – LKE owns and
operates in all cases
Green Energy Program Voluntary program for customers to
purchase REC’s
© P© PPL Corporation 2017 29
Kentucky Regulated: Multi-Year Focus on Closing Ash Ponds
Making prudent investments to reduce our impact on the environment
Investing nearly $1.4 billion to comply with EPA rules
Cap and close ash ponds
Build process water treatment facilities
Complete additional phase of dry-ash landfill project
Expected completion: 2023
Waste/water treatment
Trimble County Generating Station
© P© PPL Corporation 2017 30
Note: Based on assumed exchange rate of $1.30/£ for all years. (1) Based on 2017-2020 U.K. Regulated Segment earnings projections. Capital structure adjusted to include debt of $750 million that is allocated to U.K.
Regulated Segment for reporting purposes. (2) RAV balance as of 3/31/15 recovered over 20 years. RAV additions over RIIO-ED1 recovered over an average of 35 years. (3) 2007/08 – 2016/17 regulatory years.
U.K. Regulated Overview Premium Regulatory Mechanisms U.K. Regulatory Summary
Base revenues set for 8 years: Commencing April 2015 through March
2023
Offers real-time returns and provides certainty and visibility
Regulation requires funding to support investment-grade credit ratings
No equity needed from PPL to fund U.K. operations, annually repatriates $100 - $200 million in a tax-efficient manner
Expected earned U.K. Regulated Segment ROE’s in the 13% -- 15% range from 2017 through 2020, including holding company leverage
Annual financial adjustments to base revenues covering inflation, tax, pension and cost of debt
Accelerated recovery of depreciation
Fast-track incentive adds $35 million annually in revenue
WPD companies able to retain 70% of cost efficiencies throughout RIIO-ED1 period due to fast-track status
Significant incentive revenues available for strong performance and innovation WPD has been consistent top-tier
performer and has earned about $725 million in performance awards over the past decade
(3)
(1)
(2)
© P© PPL Corporation 2017 31
U.K. Regulated: Innovation – Electric Vehicle (EV) Project
WPD conducting largest EV trial undertaken in the U.K.
Targeting 700 EVs; currently 500 participants
First phase began in 2016
WPD provides customers with chargers
WPD can control time and speed of charging
Goal is to help WPD reliably manage future EV load
Enables proactive planning by monitoring the usage of various battery sizes and charging speeds
© P© PPL Corporation 2017 32
(1) Represents October 2017 forecast. Source: U.K. HM Treasury RPI forecast: https://www.gov.uk/government/collections/data-forecasts (2) Sensitivities include the net effect on revenue, O&M and interest expense on index-linked debt.
Current RPI forecasts above our planning assumptions
U.K. Regulated: RPI Update and Sensitivity
RPI affects 3 primary financial drivers for WPD: Revenue, O&M and Interest Expense Revenue: In November 2017, tariffs will be set for the 2019/20 regulatory year using forecasted
RPI for that period. Differences between actual and forecasted RPI are trued-up in future regulatory year tariffs. Each November, one additional year of tariffs will be set.
O&M: RPI primarily impacts adjustments to wages, including contract labor with a compounding effect realized in future periods
Interest Expense: Approximately 15% of total U.K. debt is RPI index-linked debt (~$1B). The lower the RPI, the lower the interest expense and vice versa.
RPI Update and Sensitivity
RPI (Regulatory Year) 2017/18 2018/19 2019/20
Budget RPI assumption 3.4% 3.1% 3.0%Current RPI forecast (1) 3.8% 3.2% 3.0%
RPI (Calendar Year) 2017 2018 2019
Budget RPI assumption 3.0% 3.2% 3.0%Current RPI forecast (1) 3.2% 3.4% 3.1%
Increase in 2017/2018 RPI (2)
0.5% $0.00 $0.00 $0.01
EPS Sensitivity
© P© PPL Corporation 2017 33
U.K. Regulated: Incentive Revenues Annual performance above or below the Ofgem targets for Customer
Minutes Lost (CML), Customer Interruptions (CI), the Broad Measure of Customer Satisfaction Survey and Time to Connect is rewarded or penalized on a 2-year lag
On a calendar year basis, WPD projects incentive revenues as follows at $1.30/£:
2018 2019 2020
Current Estimate $100M $90M - $110M $95M - $115M
The following slides provide WPD’s current and projected performance for the 2017/2018 regulatory year for quality of service and customer satisfaction incentive mechanisms
© P© PPL Corporation 2017 34
(1) Ofgem targets adjusted for YTD planned outages. Performance below the Ofgem target results in a reward. Performance above the Ofgem target results in a penalty.
(2012/13 prices) West Midlands East Midlands South Wales South West TotalMax reward/penalty +/-£17.7M +/-£17.1M +/-£8.2M +/-£12.2M +/-£55.2M
2017/2018 Year-to-date Performance
A measurement of the cumulative amount of minutes customers are without electricity.
A measurement of the cumulative amount of interruptions in a customer's electricity supply, per 100 customers.
43.5
01020304050607080
Customer Minutes Lost (CML)
63.9
01020304050607080
Customer Interruptions (CI)
CML and Ofgem target are based on a weighted average of all four DNOs. CI and Ofgem target are based on a weighted average of all four DNOs.
While there are separate CML and CI performance targets, performance is combined when determining the total earned reward.
WPD projects 2017/2018 incentive revenue of approximately £43M (in 2012/2013 prices).
U.K. Regulated Incentive Revenue: Quality of Service
© P© PPL Corporation 2017 35
(2012/13 prices) West Midlands East Midlands South Wales South West TotalMax reward/penalty +/-£4.0M +/-£4.0M +/-£1.9M +/-£2.8M +/-£12.7M
Max Reward
Breakeven
Max Penalty
6.5
7.5
8.5
9.5
Interruptions Connections General Inquiries
Broad Measure Customer Satisfaction Survey Through August 2017
West Midlands East Midlands South Wales South West Average other DNOs
U.K. Regulated Incentive Revenue: Customer Satisfaction
The Broad Measure of Customer Satisfaction Survey rewards or penalizes DNOs for the levels of customer satisfaction
Through August 2017, WPD’s performance is near or at the max reward levels. WPD projects 2017/2018 incentive revenue of approximately £11M (in 2012/2013 prices)
© P© PPL Corporation 2017 36
U.K. Regulated: Expected Ofgem RIIO Timelines
RIIO-ED1 Indicative Timetable
RIIO-ED2 Preparation and Implementation
2019 2020 2021
Slow-track assessmentFast-track assessmentPolicy development
2022 2023
Mid 2020RIIO-ED2 Strategy Consultation
Early 2021RIIO-ED2 Strategy Decision
July 2021RIIO-ED2 Business Plan Submission
Nov 2021RIIO-ED2 Fast Track Decision (Draft)
Feb 2022RIIO-EDFast Track Decision (Final)
July 2022RIIO-ED2 Slow Track Decision (Draft)
Nov 2022RIIO-ED2 Slow Track Decision (Final)
Apr 2023RIIO-ED2 Starts
20182017
Consultation
Q3 2017RIIO-2 Open Letter Consultation
Q1 2018RIIO-2 Strategy Consultation(Draft)
Q2 2018RIIO-2 Strategy Consultation(Final)
RIIO-ED2 Indicative Timetable
2016 2017 2018
RIIO-ED1 Mid-period review (MPR)ED1 running
Sept 2017DPCR5 Close-out Substantially Concluded
Nov 2017RIIO-ED1 MPR “Needs” Consultation
Aug 2018RIIO-ED1MPR Consultation
May 2018RIIO-ED1 MPR Decision (Go/No Go)
Nov/Dec 2018RIIO-ED1MPR Concludes
© P© PPL Corporation 2017 37
U.K. Regulated: Strategy for Transitioning to a Distribution System Operator (DSO)
Smarter high voltage networks which maximize the usage of existing assets and can be flexibly upgraded to enable connection of distributed energy resources to meet the U.K. low carbon targets
1 OPTIMIZE
INVESTMENT IN HIGHER VOLTAGE
NETWORKS
2 CONTRACT WITH CUSTOMERS FOR NON-NETWORK
SOLUTIONS
3 CO-ORDINATE AT TRANSMISSION /
DISTRIBUTION INTERFACE
4 PROTECT THE
INTEGRITY & SAFETY OF LOWER VOLTAGE
NETWORKS
Using customer provided solutions (e.g. storage and distributed generation) to increase our network capacity where this is more economical than reinforcement
Co-ordinating with the Transmission System Operator to enhance system security and efficiency
Safe and robust low voltage networks which meet the current and future needs of end-use
© P© PPL Corporation 2017 38
Funding Growth Strong U.S. operating cash flows plus U.K. dividend sufficient to fund PPL dividend. U.S. debt
and equity issuances fund domestic utility growth. U.K. business completely self-funding.
Note: Information provided on slide to be updated on an annual basis. See Appendix for the reconciliation of Domestic Cash Flows. (1) Represents book depreciation. (2) Includes domestic issuances (short and long term), net of issue costs.
2016A 2017E
Domestic Cash from Operations $1,761 $1,765
Domestic Maintenance Capex(1) (693) (817)
Monetization of foreign currency hedges, pre-tax 310 - Dividend From U.K. Regulated 354 125 Cash Available for Distribution $1,732 $1,073Common Dividend (1,030) (1,071)Cash Available for Reinvestment $702 $2
Domestic Growth Capex ($1,233) ($1,456)
Debt Maturities ($470) $0
Debt Issuances and Change in Cash(2) 907 1,158 Equity Issuances 120 330 Other Investing and Financing Activities (26) (34)Addit ional Funding Sources for Domestic Growth Capex $531 $1,454
($ in millions)
© P© PPL Corporation 2017 39
WPD Holding Company LKE Holding Company
PPL Electric Utilities LKE Operating Companies
PPL Capital Funding Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
NR BBB+ A- Stable
Moody’s
NR Baa2 NR Stable
Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
NR BBB+ A- Stable
Moody’s
NR Baa3 Baa3 Stable
WPD Operating Companies Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
NR A- A- Stable
Moody’s
NR Baa1 Baa1 Stable
Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
A NR A- Stable
Moody’s
A1 NR A3 Stable
Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
NR BBB+ A- Stable
Moody’s
NR Baa1 Baa1 Stable
Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
A NR A- Stable
PPL Corporation Credit Rating
Secured Unsecured Long-term Issuer Outlook
S&P
NR NR A- Stable
Moody’s
NR NR Baa2 Stable
Moody’s
A1 NR A3 Stable
PPL’s Credit Ratings
Note: As of September 30, 2017.
© P© PPL Corporation 2017 40
$3,223
$1,671
$588
$88
$217 $651
Committed Credit Facilities Cash Drawn
Strong Financial Foundation
Note: As of September 30, 2017.
Debt Maturity Distribution 2017 - 2021 Liquidity Profile
Manageable maturity schedule and strong liquidity profile provide financial flexibility
U.S.
($ in millions) ($ in millions)
U.K.
$100
$348 $330
$1,268
$1,150
2017 2018 2019 2020 2021
PPL Capital Funding PPL Electric Utilities Kentucky WPD Group
© P© PPL Corporation 2017 41
Reconciliation of PPL’s Forecast of Reported Earnings to Earnings From Ongoing Operations
After-Tax (Unaudited)
Reported Earnings $ 1.06 $ 0.55 $ 0.50 $ (0.10) $ 2.01 $ 2.08 $ 1.93 Less: Special Items (expense) benefit:Foreign currency economic hedges (0.18) (0.18) (0.18) (0.18) Spinoff of the Supply segment 0.01 0.01 0.01 0.01 Total Special Items (0.18) 0.01 (0.17) (0.17) (0.17) Earnings f rom Ongoing Operations $ 1.24 $ 0.55 $ 0.50 $ (0.11) $ 2.18 $ 2.25 $ 2.10
U.K.Reg.
KY Reg.
PA Reg.
Corp. &Other
Total Low 2017
High 2017
Forecast (per share - diluted)2017 Midpoint
© P© PPL Corporation 2017 42
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations: 2017
After-Tax (Unaudited)(millions of dollars)
Reported Earnings $ 126 $ 125 $ 95 $ 9 $ 355 $ 560 $ 299 $ 251 $ (60) $ 1,050 Less: Special Items (expense) benefit:Foreign currency economic hedges, net of tax of $20, $66 (37) (37) (122) (122) Spinoff of the Supply segment, net of tax of ($2), ($2) 4 4 4 4 Adjustment to investment, net of tax of $0 (1) (1) Total Special Items (37) 4 (33) (122) (1) 4 (119) Earnings f rom Ongoing Operations $ 163 $ 125 $ 95 $ 5 $ 388 $ 682 $ 300 $ 251 $ (64) $ 1,169
After-Tax (Unaudited)(per share - diluted)
Reported Earnings $ 0.18 $ 0.18 $ 0.13 $ 0.02 $ 0.51 $ 0.81 $ 0.44 $ 0.37 $ (0.09) $ 1.53 Less: Special Items (expense) benefit:Foreign currency economic hedges (0.06) (0.06) (0.18) (0.18) Spinoff of the Supply segment 0.01 0.01 0.01 0.01 Total Special Items (0.06) 0.01 (0.05) (0.18) 0.01 (0.17) Earnings f rom Ongoing Operations $ 0.24 $ 0.18 $ 0.13 $ 0.01 $ 0.56 $ 0.99 $ 0.44 $ 0.37 $ (0.10) $ 1.70
U.K.Reg.
U.K.Reg.
KYReg.
PAReg.
Corp. & Other
Total KY
Reg.PA
Reg.
U.K.Reg.
KYReg.
PA Reg.
Corp. & Other
TotalU.K.Reg.
KYReg.
PAReg.
Corp. & Other
Total
September 30, 2017 September 30, 20173rd Quarter Year-to-Date
Corp. & Other
Total
3rd Quarter Year-to-DateSeptember 30, 2017 September 30, 2017
© P© PPL Corporation 2017 43
Reconciliation of Segment Reported Earnings to Earnings From Ongoing Operations: 2016
After-Tax (Unaudited)Year-to-Date December 31, 2016
Reported Earnings $ 1,246 $ 398 $ 338 $ (80) $ 1,902 $ 1.83 $ 0.58 $ 0.50 $ (0.12) $ 2.79 Less: Special Items (expense) benefit:Foreign currency economic hedges, net of tax of $4 (8) (8) (0.01) (0.01) Spinoff of the Supply segment, net of tax of $2 (3) (3) Other:
Settlement of foreign currency contracts, net of tax of ($108) 202 202 0.30 0.30 Change in U.K. tax rate 37 37 0.05 0.05
Total Special Items 231 (3) 228 0.34 0.34 Earnings f rom Ongoing Operations $ 1,015 $ 398 $ 338 $ (77) $ 1,674 $ 1.49 $ 0.58 $ 0.50 $ (0.12) $ 2.45
(millions of dollars) (per share - diluted)U.K.Reg.
KYReg.
PAReg.
Corp. & Other
TotalU.K.Reg.
KYReg.
PAReg.
Corp. & Other
Total
© P© PPL Corporation 2017 44
Note: For 2017, due to the generalized and forward-looking nature of this information, the Company has not reconciled the presented non-GAAP financial measures to the most directly comparable GAAP financial measures.
(1) Includes domestic tax of $108 million associated with the monetization of foreign currency hedges.
Reconciliation of Domestic Cash Flows
Year Ended December 2016(millions of dollars)
Adjustments PPL Global, LLCnon-GAAP Domestic Monetization FX Dividend From Common Other Domestic Statement of GAAP
Description Amount Maint. Capex Hedges (1) U.K. Regulated Dividend Investing Change in Cash Cash Flows Amount DescriptionDomestic Cash from Operations 1,761 Domestic Maintenance Capex (693) Monetization of FX hedges, pre-tax 310 Dividend From U.K. Regulated 354 Cash Available for Distribution 1,732 Common Dividend (1,030)
Cash Available for Reinvestment 702 693 (202) (354) 1,030 1,021 2,890 Net cash provided by operating activities - continuing operations
Domestic Growth Capex (1,233) (693) 24 (1,016) (2,918) Net cash used in investing activities - continuing operations
Debt Maturities (470) Debt Issuances and Change in Cash 907 Equity Issuances 120 Other Investing & Financing Activities (26) Addit ional Funding Sources for Domestic Growth Capex
531 202 354 (1,030) (24) (51) (421) (439) Net cash used in financing activities - continuing operations
(28) (28) Effect of exchange rates on cash and cash equivalents
(51) (444) (495) Net decrease in cash and cash equivalents
Presentation of Funding Growth Reclassifications PPL Consolidated Statement of Cash Flows
© P© PPL Corporation 2017 45
Statements contained in this presentation, including statements with respect to future earnings, cash flows, dividends, financing, regulation and corporate strategy are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: market demand for energy in our service territories, weather conditions affecting customer energy usage and operating costs; the effect of any business or industry restructuring; the profitability and liquidity of PPL Corporation and its subsidiaries; new accounting requirements or new interpretations or applications of existing requirements; operating performance of our facilities; the length of scheduled and unscheduled outages at our generating plants; environmental conditions and requirements and the related costs of compliance; system conditions and operating costs; development of new projects, markets and technologies; performance of new ventures; asset or business acquisitions and dispositions; any impact of hurricanes or other severe weather on our business; receipt of necessary government permits, approvals, rate relief and regulatory cost recovery; capital market conditions and decisions regarding capital structure; the impact of state, federal or foreign investigations applicable to PPL Corporation and its subsidiaries; the outcome of litigation against PPL Corporation and its subsidiaries; stock price performance; the market prices of equity securities and the impact on pension income and resultant cash funding requirements for defined benefit pension plans; the securities and credit ratings of PPL Corporation and its subsidiaries; political, regulatory or economic conditions in states, regions or countries where PPL Corporation or its subsidiaries conduct business, including any potential effects of threatened or actual terrorism or war or other hostilities; British pound sterling to U.S. dollar exchange rates; new state, federal or foreign legislation, including new tax legislation; and the commitments and liabilities of PPL Corporation and its subsidiaries. All forward-looking statements should be considered in light of these important factors and in conjunction with the factors and other matters in PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.
Forward-Looking Information Statement
© P© PPL Corporation 2017 46
Management utilizes "Earnings from Ongoing Operations" as a non-GAAP financial measure that should not be considered as an alternative to reported earnings, or net income, an indicator of operating performance determined in accordance with GAAP. PPL believes that Earnings from Ongoing Operations is useful and meaningful to investors because it provides management's view of PPL's earnings performance as another criterion in making investment decisions. In addition, PPL's management uses Earnings from Ongoing Operations in measuring achievement of certain corporate performance goals, including targets for certain executive incentive compensation. Other companies may use different measures to present financial performance. Earnings from Ongoing Operations is adjusted for the impact of special items. Special items are presented in the financial tables on an after-tax basis with the related income taxes on special items separately disclosed. Income taxes on special items, when applicable, are calculated based on the effective tax rate of the entity where the activity is recorded. Special items include:
• Unrealized gains or losses on foreign currency economic hedges (as discussed below). • Gains and losses on sales of assets not in the ordinary course of business. • Impairment charges. • Significant workforce reduction and other restructuring effects. • Acquisition and divestiture-related adjustments. • Other charges or credits that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing
operations. Unrealized gains or losses on foreign currency economic hedges include the changes in fair value of foreign currency contracts used to hedge GBP-denominated anticipated earnings. The changes in fair value of these contracts are recognized immediately within GAAP earnings. Management believes that excluding these amounts from Earnings from Ongoing Operations until settlement of the contracts provides a better matching of the financial impacts of those contracts with the economic value of PPL's underlying hedged earnings.
Definitions of non-GAAP Financial Measures
© P© PPL Corporation 2017 47
Management also utilizes the following non-GAAP financial measures as indicators of performance for its businesses: "U.K. Gross Margins" is a single financial performance measure of the electricity distribution operations of the U.K. Regulated segment. In calculating this measure, direct costs such as connection charges from National Grid, which owns and manages the electricity transmission network in England and Wales, and Ofgem license fees (recorded in "Other operation and maintenance" on the Statements of Income) are deducted from operating revenues, as they are costs passed through to customers. As a result, this measure represents the net revenues from the delivery of electricity across WPD's distribution network in the U.K. and directly related activities. "Kentucky Gross Margins" is a single financial performance measure of the electricity generation, transmission and distribution operations of the Kentucky Regulated segment, LKE, LG&E and KU, as well as the Kentucky Regulated segment's, LKE's and LG&E's distribution and sale of natural gas. In calculating this measure, fuel, energy purchases and certain variable costs of production (recorded in "Other operation and maintenance" on the Statements of Income) are deducted from operating revenues. In addition, certain other expenses, recorded in "Other operation and maintenance", "Depreciation" and "Taxes, other than income" on the Statements of Income, associated with approved cost recovery mechanisms are offset against the recovery of those expenses, which are included in revenues. These mechanisms allow for direct recovery of these expenses and, in some cases, returns on capital investments and performance incentives. As a result, this measure represents the net revenues from electricity and gas operations. "Pennsylvania Gross Margins" is a single financial performance measure of the electricity transmission and distribution operations of the Pennsylvania Regulated segment and PPL Electric. In calculating this measure, utility revenues and expenses associated with approved recovery mechanisms, including energy provided as a PLR, are offset with minimal impact on earnings. Costs associated with these mechanisms are recorded in "Energy purchases," "Other operation and maintenance," (which are primarily Act 129 and Universal Service program costs), "Depreciation" (which is primarily related to the Act 129 Smart Meter program) and "Taxes, other than income," (which is primarily gross receipts tax) on the Statements of Income. This measure represents the net revenues from the Pennsylvania Regulated segment's and PPL Electric's electricity delivery operations. These measures are not intended to replace "Operating Income," which is determined in accordance with GAAP, as an indicator of overall operating performance. Other companies may use different measures to analyze and report their results of operations. Management believes these measures provide additional useful criteria to make investment decisions. These performance measures are used, in conjunction with other information, by senior management and PPL's Board of Directors to manage operations and analyze actual results compared with budget. Reconciliations of margins for future periods are not provided as certain items excluded from Operating Income are inherently subject to change and are not significant.
Definitions of non-GAAP Financial Measures