PPL(PPL) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - PPL Corporation reported ongoing earnings of $1.69 per share for 2024, slightly below the increased guidance of$ 1.70 per share due to mild weather in December [10][37] - GAAP earnings for Q4 2024 were $0.24 per share, compared to$ 0.15 per share in Q4 2023, while annual GAAP earnings for 2024 were $1.20 per share, up from$ 1.00 per share in 2023 [36][37] - The company achieved cumulative annual O&M savings of $130 million from a 2021 baseline, with expectations to reach at least$ 175 million through 2026 [11][16] Business Line Data and Key Metrics Changes - Kentucky segment results were flat compared to Q4 2023, driven by higher sales volumes offset by increased operating costs [38] - Pennsylvania segment results were also flat, with higher transmission revenues countered by increased operating costs, including vegetation management [39] - Rhode Island segment results decreased by $0.03 per share due to lower transmission and distribution revenues [40] Market Data and Key Metrics Changes - The company anticipates a 7% growth in ongoing earnings forecast for 2025, with a range of$ 1.75 to $1.87 per share [12] - The updated capital plan includes$ 20 billion in expected infrastructure investments from 2025 to 2028, compared to $14.3 billion in the prior plan [13][14] - The company expects average annual rate base growth of 9.5% to 10% through 2028, up from 6.3% in the previous plan period [14][52] Company Strategy and Development Direction - PPL Corporation is focused on becoming more efficient and keeping energy affordable, with a strategy to balance reliability and cost for customers [9][15] - The company has restructured its business to enhance operational efficiencies and drive continuous improvement [18] - A significant emphasis is placed on advancing a cleaner energy mix while maintaining reliability and affordability [14][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the updated business plan, which supports long-term earnings and dividend growth [12][60] - The company remains focused on improving operational efficiency to support customer affordability, with expectations that average bill increases will remain within the rate of inflation [101][102] - Management highlighted the importance of regulatory developments in Pennsylvania and Kentucky for future growth and resource adequacy [90][104] Other Important Information - A quarterly common stock dividend of 27.25 cents per share was announced, representing a 6% increase from the previous dividend [17][58] - The company is committed to supporting economic development in its service territories, particularly through data center growth [23][34] Q&A Session Summary Question: Update on Kentucky CPCN and capital investment - Management confirmed that the updated capital plan includes$ 2.5 billion for generation, with CPCN filings expected by the end of Q1 and a decision anticipated by Q4 [66][70] Question: Equity issuance timing and structure - Management indicated flexibility in timing equity issuances, estimating $400 to$ 500 million this year, with potential for other equity-like financing structures [73][76] Question: Resource adequacy in Pennsylvania - Management discussed ongoing legislative efforts and the potential for utilities to invest in generation resources, emphasizing the importance of energy policy [90][92] Question: Customer bills and affordability - Management reiterated a focus on affordability, stating that operational efficiencies will help keep average bill increases within inflation rates [101][102] Question: Rate base growth and earnings trajectory - Management explained that while rate base growth is accelerating, earnings growth may not immediately reflect this due to equity financing needs [126][127]