PPL Corporation

Good day and welcome to the PPL Corporation Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Andy Ludwig, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining the PPL Corporation conference call on second quarter 2023 financial results. We provided slides for this presentation on the investor section of our website. We begin today's call with updates from Vince Sorge, PPL President and CEO, and Joe Bergstein, Chief Financial Officer. And we'll conclude with a Q&A session following our prepared remarks. Before we get started, I'll draw your attention to slide two in a brief cautionary statement. Our presentation today contains forward-looking statements about future operating results or other future events. Actual results may differ materially from these forward-looking statements. Please refer to the appendix of this presentation and PPL's SEC filings for a discussion of some of the factors that could cause actual results to differ from the forward-looking statements. We will also refer to non-GAAP measures, including earnings from ongoing operations on this call. For reconciliation to the comparable GAAP measures, please refer to the appendix. I'll now turn the call over to Vince.

Thank you, Andy, and good morning, everyone. Welcome to our second quarter investor update. Let's start with our financial results and a few highlights from the quarter on slide four. Today we announced second quarter reported earnings of 15 cents per share. Adjusting for special items, second quarter earnings from ongoing operations were 29 cents per share, compared with 30 cents per share a year ago. Overall, second quarter results were in line with our expectations. Apart from the continued mild weather and storm activity in Kentucky and Pennsylvania, as this has been one of the most active storm years we've ever experienced. Between the mild weather and storm O&M, our year-to-date results were negatively impacted by about $0.09 per share compared to our original plan. But despite these impacts, we remain confident in our ability to deliver on our 2023 ongoing earnings forecast of $1.50 to $1.65 per share with a midpoint of $1.58 per share. We have identified several areas in which we can offset the headwinds from weather and storms, and Joe will cover that in detail in his financial review. As you know, one area we remain extremely focused on is O&M, and we are on track to achieve the $50 to $60 million targeted reductions this year. And despite the incremental storm expenses, we are tracking slightly ahead of our O&M forecast through June. We expect that trend to continue and improve through the second half of the year. In addition, today we reaffirmed our projected earnings per share and dividend growth rates of 6% to 8% through at least 2026, as we remain confident in our low-risk business plan. This will be supported by our $12 billion capital investment plan and targeted O&M savings of at least $175 million by 2026 to advance a reliable, resilient, affordable, and clean energy future. Turning to a few second quarter operational highlights, we continue to deliver excellent reliability for our customers across our jurisdiction. Again, despite the increased storm activity in both Kentucky and Pennsylvania. This is a direct result of our ongoing investments, not only in system hardening that prevents outages, but also smart grid technology and automation that enables us to respond more quickly when outages do occur. On the integration of Rhode Island Energy, we remain well positioned to complete our transition services with National Grid next year. We also continue to make progress on an important filing before the Rhode Island Public Utilities Commission as we seek to deploy advanced metering functionality across our service territory and build a smarter grid that supports the state's leading climate goals. Hearings before the Rhode Island PUC were held in late July to review our business case and cost recovery proposals. We expect a decision on our AMF filing later this fall. We also remain on track with the Kentucky CPCN process, which I'll cover in more detail on the next slide. Finally, we continue to receive awards for our industry-leading approach in grid innovation, as both the Edison Electric Institute and the Southeastern Electric Exchange recognize PPL Electric utilities for its groundbreaking use of dynamic line rating technology. PPL Electric is the first utility in the nation to integrate this technology with its transmission management system. DLR sensors provide real-time information that enables us to better utilize our existing transmission line capacity and reduce congestion on the grid. Burke has also recognized the value that this technology can bring to the industry in better managing congestion on the transmission network. Turning to slide five and an update on the CPCN process in Kentucky, we remain focused on advancing our generation investment plan as we seek to replace 1500 megawatts of aging coal generation with an affordable, reliable, and cleaner energy mix by 2028. We remain confident our plan represents the best path forward for our Kentucky customers. As proposed, it would replace several 1970s era coal units with over 1200 megawatts of new combined cycle natural gas generation, nearly 1000 megawatts of solar generation, and 125 megawatts of battery storage. In addition, it would establish more than a dozen new energy efficiency programs. In May, the Kentucky Public Service Commission approved our request to consolidate the CPCN filing and our generation retirement request as required by Senate Bill 4. The Commission approved the consolidation while keeping the CPCN procedural schedule largely unchanged. Further schedule intervener testimony was filed July 14th with no real surprises. Next up is our rebuttal testimony due August 9th, followed by an informal conference scheduled for August 15th to explore a potential settlement. Public hearings are then set to begin August 22nd and could last several days. Again, we are very confident that the plan we've proposed is in our customers' and the state's best interest, but we are also open to settlement discussions with the parties to the case. Ultimately, with or without a settlement, we anticipate a decision on our filings from the commission by November 6th. That concludes my strategic and operational update. I'll now turn the call over to Joe for the financial update.