PPL Corporation

Good day, and welcome to the PPL Corporation's conference call on second quarter 2026 financial results. All participants will be in 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 that this event is being recorded. I would now like to turn the conference over to Andy Ludwig, Vice President of Investor Relations. Please go ahead.

Andy Ludwig Good morning and thank you for joining PPL Corporation's conference call on second quarter 2026 financial results. We provided presentation materials on the investor section of our website. This morning you will hear from Vince Sorgi, PPL President and CEO, and Joe Bergstein, Chief Financial Officer. We'll conclude with a Q&A session following our prepared remarks. Before we get started, please turn to slide two for our cautionary statement. Today's presentation contains forward-looking statements subject to risks and uncertainties. Actual results may differ materially. Please refer to our SEC filings and the appendix for additional information. We will also refer to non-GAAP measures, including earnings from ongoing operations. Reconciliations to the corresponding GAAP measures are provided in the appendix. I'll now turn the call over to Vince.

Thank you, Andy, and good morning, everyone. Let's begin on slide four with an overview of our second quarter performance. Q2 was another quarter of disciplined execution, supporting our 2026 commitments while strengthening confidence in our long-term outlook. Today we reported ongoing earnings of 33 cents per share. Based on our results through the first half of the year and our expectations for the remainder of 2026, we are reaffirming our ongoing earnings forecast range of $1.90 to $1.98 per share, with a midpoint of $1.94 per share. We expect stronger earnings growth in the second half of the year, supported by rate case outcomes in both Pennsylvania and Rhode Island, with Pennsylvania rates effective July 1st and Rhode Island rates expected to be effective September 1st. We are on pace to deploy approximately $5 billion of capital investments in 2026 to support the delivery of safe, reliable, and affordable energy service. As our investment plan has expanded, our teams have continued to demonstrate the ability to execute these programs safely, efficiently, and on schedule. Longer term, we continue to project $23 billion of capital investment needs through 2029, supporting average annual rate-based growth of over 10%. We also reaffirmed our long-term financial targets, including 6% to 8% annual EPS growth through at least 2029, with compound annual growth expected to be near the top end of that range. Four to six percent annual dividend growth and FFO to debt of 16 to 18 percent. Importantly, these targets exclude any contribution from NVIDIA Energy, our joint venture with Blackstone, which represents meaningful long term earnings and cash flow upside beyond the current plan. Turn to slide five for a more comprehensive regulatory update. Coming into 2026, we had base rate case proceedings underway in all three of our primary jurisdictions. These rate case filings were after significant periods of stay out, ranging from five years in Kentucky, eight years in Rhode Island, and over 10 years in Pennsylvania. We made excellent progress in these proceedings during the second quarter, continuing to achieve constructive outcomes that de-risk our plan. In Pennsylvania, PPL Electric's rate case settlement became effective July 1st with a positive outcome for both customers and share owners. The approved increase of $275 million supports critical investments we are making while reflecting less than a 4% increase across all of our rate classes. Importantly, even after our recent rate adjustment, PPL Electric's delivery rates remain nearly 20% below the latest published state average. This outcome reflects the benefits of our utility of the future strategy that prioritizes system hardening, disciplined cost management, strategic use of technology, constructive engagement with stakeholders, and a strong focus on affordability. The settlement also includes a two-year stay-out provision. Through the continued use of the DIS mechanism and disciplined cost management, we will target remaining out-of-base rate cases beyond that period. In Kentucky, we're awaiting the Commission's decision on our reconsideration request following another thorough and constructive regulatory process. While we believe the original KPSC decision allows us to deliver on our overall plan objectives, we believe there were some flaws in that decision that require reconsideration by the KPSC. We appreciate the Commission's thoughtful review of our filing and continue to believe the investments and mechanisms supporting this filing are important to maintaining safe, reliable, and increasingly resilient service to our customers.