Why did PPL raise its capital plan and what does it mean for growth?

PPL increased planned infrastructure investment to $20 billion for 2025 through 2028, up from $14.3 billion in the prior plan. The company says this raises average annual rate base growth to 9.8% through 2028, compared with 6.3% under the prior plan period, and it targets $4.3 billion of investment in 2025.

Will the dividend growth keep pace with EPS growth?

The company announced an approximately 6% dividend increase, to $0.2725 per share quarterly, and said this is at the low end of its 6% to 8% dividend growth target because of the larger capital investments in the updated plan.

How will the larger investment program be funded?

PPL projects $2.5 billion of equity needs over the plan period to support the higher capital spending. It expects to maintain a balance sheet among the best in the U.S. utility sector, with an FFO/CFO to debt ratio of 16% to 18% throughout the updated plan period.

What drove the difference between reported and ongoing earnings in 2024?

Reported 2024 earnings of $1.20 per share were lower than earnings from ongoing operations of $1.69 per share because of net special-item after-tax charges of $362 million, or $0.49 per share, primarily tied to integration and related expenses for the Rhode Island Energy acquisition.

What is the outlook for operating cost savings?

PPL achieved cumulative annual O&M savings at the top end of its targeted $120 to $130 million range in 2024 and expects to remain on target for at least $150 million of cumulative annual O&M efficiencies in 2025, compared with its 2021 baseline.

PPL/PPLC 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed February 13, 2025. Cited figures are marked; the original filing is the authoritative source.

PPL Corporation reported 2024 reported earnings (GAAP) of $888 million^a, or $1.20 per share, compared with $740 million, or $1.00 per share, in 2023.

Earnings from ongoing operations (non-GAAP) were $1.25 billion^b, or $1.69 per share, versus $1.18 billion, or $1.60 per share, a year earlier. Fourth-quarter 2024 reported earnings were $177 million, or $0.24 per share, and fourth-quarter earnings from ongoing operations were $256 million, or $0.34 per share. Reported 2024 results included net special-item after-tax charges of $362 million, or $0.49 per share, primarily tied to integration costs for the Rhode Island Energy acquisition.

The company updated its business plan and extended its 6% to 8% annual EPS and dividend growth targets through at least 2028, with EPS growth expected in the top half of that range. It issued a 2025 earnings forecast of $1.75 to $1.87^c per share, with a $1.81 midpoint. Planned infrastructure investment rose to $20 billion for 2025 through 2028, up from a prior plan of $14.3 billion for 2024 through 2027, supporting 9.8% average annual rate base growth.

The company projects $2.5 billion^d of equity needs over the plan period and expects to keep its FFO/CFO to debt ratio at 16% to 18%. PPL also announced an approximately 6% increase in its quarterly common dividend, from $0.2575 to $0.2725 per share, payable April 1, 2025.

The filing states the increase is at the low end of the targeted dividend growth range because of the higher capital spending in the updated plan. The results and guidance were presented in a press release (Exhibit 99.1) and a related analyst teleconference and webcast on February 13, 2025.

02—Key points

Key Highlights

2024 reported EPS of $1.20 (GAAP) versus $1.00 in 2023; earnings from ongoing operations of $1.69 per share versus $1.60.
2025 earnings forecast range of $1.75 to $1.87 per share, midpoint $1.81, a 7% increase over the 2024 original ongoing forecast midpoint of $1.69.
EPS and dividend growth targets of 6% to 8% annually extended through at least 2028, with EPS growth expected in the top half of the range.
Infrastructure capital plan increased to $20 billion for 2025 through 2028 (from $14.3 billion for 2024 through 2027), with 9.8% average annual rate base growth.
Projected equity needs of $2.5 billion over the plan period; FFO/CFO to debt ratio targeted at 16% to 18%.
Quarterly common dividend increased about 6%, from $0.2575 to $0.2725 per share, payable April 1, 2025.
Full-year 2024 special items reduced reported earnings by $362 million ($0.49 per share), mainly Rhode Island Energy integration costs.

03—Questions

Frequently Asked Questions

Why did PPL raise its capital plan and what does it mean for growth?
PPL increased planned infrastructure investment to $20 billion for 2025 through 2028, up from $14.3 billion in the prior plan. The company says this raises average annual rate base growth to 9.8% through 2028, compared with 6.3% under the prior plan period, and it targets $4.3 billion of investment in 2025.
Will the dividend growth keep pace with EPS growth?
The company announced an approximately 6% dividend increase, to $0.2725 per share quarterly, and said this is at the low end of its 6% to 8% dividend growth target because of the larger capital investments in the updated plan.
How will the larger investment program be funded?
PPL projects $2.5 billion of equity needs over the plan period to support the higher capital spending. It expects to maintain a balance sheet among the best in the U.S. utility sector, with an FFO/CFO to debt ratio of 16% to 18% throughout the updated plan period.
What drove the difference between reported and ongoing earnings in 2024?
Reported 2024 earnings of $1.20 per share were lower than earnings from ongoing operations of $1.69 per share because of net special-item after-tax charges of $362 million, or $0.49 per share, primarily tied to integration and related expenses for the Rhode Island Energy acquisition.
What is the outlook for operating cost savings?
PPL achieved cumulative annual O&M savings at the top end of its targeted $120 to $130 million range in 2024 and expects to remain on target for at least $150 million of cumulative annual O&M efficiencies in 2025, compared with its 2021 baseline.

04—Continue

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