Q4 2021 PPL Corp Earnings Call
[music].
Good morning, and welcome to the PPL Corporation fourth quarter earnings Conference call.
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Please note this event is being recorded.
I'd now like to turn the conference over to Andy Ludwig Vice President of Investor Relations. Please go ahead.
Thank you.
Morning, everyone and thank you for joining the PPL conference call on fourth quarter and full year 2021 financial results.
We provided slides for this presentation and our earnings release issued this morning on the investors section of our website.
Before we get started I'll draw your attention to slide two and a brief cautionary statement.
Our presentation and earnings release, which we will discuss during today's call contain 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.
For a discussion of factors that could cause actual results to differ from the forward looking statements.
We will also refer to non-GAAP measures.
<unk> earnings from ongoing operations and adjusted gross margins on this call.
A reconciliation to the comparable GAAP measures please refer to the appendix.
Participating on our call this morning.
<unk> <unk> <unk>, President and CEO .
Joe Bergstein Chief Financial Officer.
And Greg Doug.
<unk> operating officer.
With that I'll now turn the call over to Vince.
Thank you Andy and good morning, everyone.
We appreciate you joining us for our 2021 year end earnings call.
Moving to slide three in the agenda for today's call.
I'll begin this morning, with an overview of 2021, and what was clearly a significant transition year for PPL.
I'll highlight key achievement.
Made throughout the year, including our progress in strategically repositioning PPL for future growth and success.
Joe will provide a financial update include.
Including the previously discussed reset of our first quarter dividend, we announced this morning, and a detailed overview of our 2021 financial result.
And as always we'll leave ample time for your questions.
Turning to slide four.
I'm incredibly proud of how our team performed in what was truly a remarkable year for peak.
As we began our new century in our company's history.
We took bold steps to strategically reposition PPL as a U S focused energy company.
Committed to sustainable growth and well positioned to lead the clean energy transition, while maintaining affordability and reliability for our customers.
We completed the sale of our UK utility business in June .
<unk> exceptional value at almost $11 billion, while eliminating risks associated with foreign operations.
We then took steps to strengthen <unk> balance sheet by reducing $3 5 billion of our holding company debt.
Which provides us with significant financial flexibility going forward.
We advanced our planned acquisition of Narragansett electric.
Which will expand and diversify our U S presence at.
I had another high quality regulated utility to our portfolio.
Additional opportunities to leverage our proven operating model to drive value for customers and shareowners.
We anticipate receiving a final order from the Rhode Island Division of public utilities and carriers with respect to the acquisition by March of 2022.
While the strategic repositioning was a key priority in 2021 does that PPL up for long term success.
We also remained focused on achieving our near term objectives.
In 2021, we continued our track record of earning equity return that were in line with those allowed by our regulators.
We also achieved constructive regulatory outcomes in 2021 with the settlements on the Pennsylvania, FERC ROE challenge in the rate case in Kentucky, which will provide added stability and predictability to our plan over the next several years.
We also returned over $2 billion to shareowners through dividends as well as share repurchases, which included the completion of our targeted $1 billion share buyback through December 31st.
And true to our mission we.
We delivered energy safely reliably and affordably for our $2 5 million customers in the United States.
And as the pandemic refused to yield we stayed resilient acted responsibly to protect our employees and remain focused on continuous improvement.
From Kentucky to Pennsylvania, we delivered exceptional service throughout 2020.
We maintained transmission and distribution reliability as well as generation availability that was among the best in the industry.
Despite PPL electric utilities experiencing significant storms during 2021, it maintained top quartile performance for safety, which measures the average number of outages our customers experience. Meanwhile.
Meanwhile, our Kentucky operations posted their second best year on record for Steve.
When severe weather struck either in Pennsylvania, Kentucky, we responded quickly and effectively.
For example, after December tornadoes tour through portions of our service territory in Kentucky.
Imaging or destroying more than 500 transmission and distribution, Paul we restored power to most customers within 48 hours.
Similarly, when the remnants of Hurricane Aida sweat to our Pennsylvania service territory.
King out power to tens of thousands of customers, we mobilized quickly and effectively to get the lights back on as soon as possible.
Our restoration performance in the wake of Hurricane Ida was recognized with an <unk> Emergency response award.
This performance is the result of the investments we've made in our grid and our dedicated employees, who pride themselves on delivering this superior level of service each day.
And that service was once again reflected in our customer satisfaction scores.
We were honored to receive four new J D Power Awards in 2021 for electric utility residential and business customer satisfaction with PPL electric utilities, and Kentucky utilities, both ranking highest.
Similarly sized utilities in their respective regions.
And following an independent survey of customers at 140 of the largest utilities in the U S. P.
PPL electric and Kentucky utilities were recognized by escalate as two of the most trusted utility brands in the nation.
Across PPL.
We also continue to foster a culture of innovation.
Investing in advanced technology, and data analytics to deliver industry, leading reliability and enterprise wide cost efficiency.
This resulted in multiple industry awards in 2021, including the use of dynamic line rating technology and the use of data analytics to better target vegetation management.
With an eye toward keeping reliability strong and empowering our customers. We also continue to invest in the future.
This included executing more than $2 billion in infrastructure improvements to further strengthen grid resilience modernized our network incorporate advanced technology and pave the way for increased electrification in renewable energy in our service territory.
Turning to slide five.
Over the past year, we also delivered on our commitments to deliver a sustainable PPL for our shareowners employees and the communities we serve.
We made significant progress in advancing our clean energy strategy.
We adopted a net zero carbon emissions goal accelerated our interim emissions reduction target to 70% from 2010 levels by 2035, and 80% by 2040, and we also accelerated our coal plant retirement schedule.
Separately, we announced the commitment of over $50 million in new investments.
Fund research and development in the clean energy space with our planned investments in EAP and low carbon resources initiatives.
We also launched a new partnership to study carbon capture at natural gas combined cycle power plant.
And reached new agreements to provide an additional 125 megawatt solar power to major Kentucky customers.
In November we published our latest comprehensive climate assessment report, which highlights the risks associated with climate change and the opportunities and responding to it and evaluate the potential future emissions under multiple scenarios.
This included a scenario consistent with limiting global warming to one five degrees Celsius.
Our climate assessment outlines our clean energy strategy goal.
To enable a responsible transition that balances our commitment to the environment.
Our customers our employees and our communities.
<unk> also submitted their triangle joint integrated resource plan, which reflected a significant increase in projected renewable additions and the 15 year planning horizon compared to our prior plan.
We expect the trend of a more rapid decarbonization of our generation fleet in Kentucky to continue with further improvements in cost and technology for renewables as well as other clean energy technology.
In addition to our focus on advancing our clean energy transition. We also remain very engaged in the communities, we serve and with our employees throughout 2021.
We continue to move PPL forward by creating a more diverse and inclusive workplace.
We implemented an enterprise wide diversity equity and inclusion strategy.
Adopt the DDI commitment.
Increased diversity within our leadership ranks overall workforce and the board.
We expanded our support for social Justice and equity initiatives in the communities we serve.
In addition, we continued to create new opportunities to business resource groups for employees of all backgrounds and experiences to collaborate.
Their perspectives and contribute to <unk> success.
Our strong commitment to diversity and inclusion received recognition from multiple organizations in 2021.
With <unk> being named the best place to work for LGBTQ equality, and disability inclusion as well as the top company for ESG.
And this January PPL. Once again was named a best place to work for LGBTQ equality, marking the sixth straight year PPL has received this recognition.
During our fall, giving campaign PPL employees and retirees collectively raised more money than ever before.
More than $7 million in individual pledges and corporate matching contribution that will help lift individuals families and communities.
And in the aftermath of the Kentucky tornadoes, we responded quickly providing financial support to assist Kentucky families and businesses.
In other highlights we continued to build an exceptional management team and we believe will lead PPL to its best years to come.
Promoted Greg that can to chief operating officer and are leveraging his experience in building one of the most advanced utilities in the nation and PPL electric utilities to.
To drive further value for stakeholders across all of Ppl's operator.
We're extremely excited to have when do you start on our team as our new General counsel.
Wendy's extensive experience in regulatory matters and her deep knowledge of our industry have made her a great addition to PPL.
We named two new utility precedence in Pennsylvania, and Kentucky, with Stephanie Raymond in Pennsylvania, and John Crockett in Kentucky.
Stephanie as the first female utility president in our company's 100 gig.
We also named a highly qualified and experienced leadership team in Rhode Island led.
Led by Dave <unk> Burger from PPL, and numerous talented employees from national grid to lead our electric and gas operations pending the completion of the acquisition.
We also took steps to strengthen our corporate governance during the year.
Our board of directors.
Wanted an outstanding leader and experienced board member as independent Board Chair and Craig Rogerson.
Reflecting ppl's continued commitment to strong corporate governance and independent oversight by a diverse engaged board.
And Heather Redmen co founder and managing partner of flying fish partners.
Was a welcomed addition to our highly experienced board of directors and brings a wealth of expertise in disruptive technologies and the energy industry.
In summary across our business, we made tremendous progress in 2021, as we pursued our strategy to deliver sustainable value for all stakeholders and position PPL for future growth and success.
With that I'll now turn the call over to Joe for the financial update John .
Thank you Vince and good morning, everyone.
Turning to slide seven for the financial update.
Today, we announced fourth quarter reported earnings of <unk> 18 per share.
Special items in the fourth quarter were <unk> <unk> per share primarily due to integration expenses associated with the planned acquisition of Narragansett electric and discontinued operations associated with the UK utility business.
Adjusting for special items fourth quarter earnings from ongoing operations were <unk> 22 per share.
Our fourth quarter results bring our total 2021 results to a net loss of $1 93 per share.
Special items for 2021 were $2 98 per share primarily due to discontinued operations associated with the UK utility business.
K tax rate change prior to the sale.
And a loss on the early extinguishment of debt.
Adjusting for special items 2021 earnings from ongoing operations were $1 five per share.
Before turning to the 2021 earnings walk.
Delighted a few other financial updates.
The most notable being the first quarter dividend, we announced this morning.
As we indicated on our third quarter earnings call.
Planned to update the dividend following the January 3rd payment as we continued to progress on PPL strategic repositioning.
Recall that we had maintained the dividend at the prior rate. Despite the sales WPB, providing $350 million dividend to reward long term shareowners as we work to close the transactions and deploy the cash proceeds from the WP D sale in a value accretive manner.
Today, we've announced the first quarter 2022 dividend of <unk> 20 per share payable April one.
The updated quarterly dividend aligns with our earnings projections for <unk> current businesses.
<unk> payout ratio of 60% to 65%.
We plan to provide an updated annualized dividend rate and growth projections.
Line with earnings growth during an Investor day, following the completion of the Narragansett regulatory review process.
We recognize that it would have been optimal so declare the April 1st dividend when we provide our annualized earnings forecast.
However, since we haven't completed the Narragansett regulatory review process, we wanted to be transparent today by providing clarity on the dividend reset.
Following the sale of WPZ.
We plan to reflect any increase in the dividend due to the inclusion of Narragansett in our forecast when we provide a comprehensive financial update at the Investor day.
As Vince noted one of the key financial highlights for 2021 was a reduction in our holding company debt as we allocated a significant amount of the WPS sales proceeds to strengthen <unk> balance sheet.
We had a unique opportunity to establish one of the leading credit profiles in the sector.
Attribute we see is increasingly important with the growing capital needs to fund the clean energy transition and now amid the backdrop of rising interest rates.
And other financial updates, we amended and extended our credit facilities during the fourth quarter to better align our liquidity needs post the strategic repositioning.
In short, we slightly reduced the capacity at PPL capital funding to $1 $2 5 billion.
From $145 billion as we no longer need the same level of liquidity without the foreign currency risk associated with the U K.
We've also included an option to add Narragansett as a co borrower to the PPL capital funding credit facility pending the closing of the acquisition.
And we continue to target, 16% to 18% CFO and <unk> to debt metrics, including Narragansett Electric acquisition.
We believe these actions provide a very strong financial foundation in place PPL, among the best credit profiles and our industry.
Let's move to our full year 2021 earnings results on slide eight.
I would note that while I will compare 2021 earnings to our 2020 results.
Periods are not truly comparable given the sale of the UK businesses, the reallocation of certain costs the balance sheet recapitalization, along with the outcome of the transmission ROE challenge.
Similar to prior quarters, we've adjusted the 2020 corporate other amount to reflect certain costs previously allocated to the UK regulated segment.
Primarily interest expense and other support costs.
These costs totaled about <unk> <unk> per share for the year.
Turning to the ongoing segment drivers.
Our Pennsylvania regulated segment earned <unk> 61 per share a 4% year over year decrease.
Earnings results in Pennsylvania were primarily driven by a reduction in the transmission formula rate return on equity.
Lower peak transmission demand and higher operation and maintenance expense.
These decreases were partially offset by returns on additional capital investments in transmission.
Turning to our Kentucky segment, we earned <unk> 61 per share in 2021, 6% increase over comparable results one year ago.
The increase was primarily due to higher base retail rates effective July one.
Lower interest expense, primarily due to lower interest costs that were previously allocated to the Kentucky regulated segment.
Lower interest rates.
Partially offsetting these items were higher operation and maintenance expense related to several factors, including support cost generation plant costs T&D.
<unk> costs and higher depreciation due to the additions to PP&E.
Results of corporate and other were <unk> <unk> higher compared to the prior year.
Factors driving earnings results of corporate and other primarily include.
Included lower interest expense, primarily due to less outstanding long term holding company debt partially.
Partially offset by interest costs previously allocated to the Kentucky segment.
Partially offsetting this increase were several factors that were not significant.
Moving to slide nine the.
The capital investments made in Pennsylvania, and Kentucky during 2021 to pulmonary grid modernization grid, resiliency and reliability and improve service for our customers.
Of the $2 billion of Capex. It Vince noted, we invested about $1 billion in each of the segment.
In Pennsylvania investments in distribution were made.
We maintained top quartile industry reliability and performance and investments in more advanced systems.
Meanwhile, on the transmission side invest.
Investments were primarily related to asset health and reliability for.
With a focus on smart related equipment monitoring and automation to support a more advanced grid.
Our Kentucky investments were primarily related to replacing aging transmission infrastructure, maintaining and enhancing our electric distribution network.
<unk> outages.
<unk> compliance and grid modernization.
This resulted in total rate base growth of nearly 6% even as rate base related to our coal fired generation facilities decline.
That concludes my prepared remarks, and I'll turn the call back over to Vince for some closing comments.
Thank you Joe.
As I mentioned at the outset of my remarks, 2021 was very much a transition year for PPL.
It was about Reimagining, PPL and laying a firm foundation for the company's future growth and success.
And I believe we achieved just that.
Looking forward our focus is on completing the acquisition of Narragansett electric and introducing a new PPL to shareowners.
<unk> is committed to delivering sustainable value for shareowners.
Backed by one of the strongest balance sheets in the U S utility sector.
Extinguished by best in class customer service commit.
Committed to net zero carbon emissions.
And well positioned to lead the clean energy transition, while maintaining affordable reliable service for our customers.
We look forward to sharing further details on our strategy and the exciting growth prospects for the new PPL at our Investor day.
With that operator, let's open the call for Q&A.
We will now begin the question and answer session.
You asked a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the key.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
And our first question will come from Shar <unk> of Guggenheim Partners. Please go ahead.
Hey, good morning, guys.
Good morning, Sean.
So thats, perhaps if we can just start on the process in Rhode Island. It seems like there's been some noise.
Things like cost and mutual assistance versus grids ownership in the docket any kind of color you can provide around your interactions is the decision target date approaches by the end of this month.
Yeah sure first of all let me just say that we think we've met the standards for approval.
Thank you Jay.
Decision coming out.
From the division and.
Again, as we've seen it really from the outset of this process. We believe that <unk> is uniquely positioned to serve customers at this point in time.
When you look at our long history of providing energy safely reliably and affordably for our customers.
We consistently rank among the very best for customer satisfaction.
We did a clear leader in developing and deploying the kind of smart grid technology, that's going to be critical to helping Rhode Island.
They are very ambitious decarbonization goals.
With the additional commitment that we've made we believe the transaction is clearly the public interest in Rhode Island.
Yeah, I'll just reiterate that we believe we've met the standard.
And we're looking forward to the decision.
Got it got it I got it. So just there is a high level of confidence that we're going to close okay.
And then just Vince you completed the $1 billion buybacks right increased capex by the by $1 billion at EI.
Just check back in on the remaining amount of unallocated cash year, and how youre thinking about the toggle allocation between buybacks and more capex in light of the current EPS guidance.
Yes, Sean I would say we don't have.
Detailed update on that will provide a full update at the Investor day.
Really it's important that we get through the regulatory process in Rhode Island of course, we've made some commitments as part of the process.
Should we factor all of that.
And the proceeds discussion.
Follow up data.
Hey, Paul.
Got it understood and then just a little bit more of a minor thing is maybe just can you comment on the safari sale process I mean, it seems like there was some interest there previously I guess what drove the decision to put it on the block in any material amount of cash expected there.
Okay.
Well, Sean as you know.
Comment on market rumors.
Okay.
Try to get it past events that you are too good alright, thanks, guys appreciate it.
Okay.
The next question comes from Paul Zimbardo of Bank of America. Please go ahead.
Hi, good morning.
Good morning.
Okay.
I know you comment a little bit on that Joe, but just on the decision around the dividend and the timing now versus maybe wait until you have clarity in a month or so.
Any perspective, there and it sounds like the plan would be more of a kind of a one time Bob.
Narragansett closes versus.
A faster growth rate on the dividend, but just any perspective, you can provide there would be helpful.
Yes sure Paul.
While it's certainly possible that we'll receive a decision as early as next week division, we're not certain of that.
And we are still.
In the middle of the regulatory approval process and as we discussed on the third quarter call.
We didn't want to reduce the uncertainty related.
Sure.
David.
The size of the dividend following the sale.
And just without firm timeline for the Verizon transaction, we just felt it was.
To keep our normal cadence, which as you know we would normally announced first quarter dividend Paul.
On our year end call and so as we were contemplating whether to move from that model.
Alright, potentially hold off Paul.
We also realized that we didn't do today, we actually risks.
In the 8-K.
Which would not.
And of course, we wanted to make sure that we can provide an opportunity for questions.
That was really the.
The nature of the decision to announce it today versus waiting.
And then in terms of.
The second part of your question as Joe noted.
The Q1 dividend is based on our current operations only we would plan to.
Increased that following the closing of the Narragansett trend.
Transaction.
Again, we'll provide that update.
Once we close the deal and then.
The analyst day.
The festival.
Okay, Great and then.
One last question on the strategic corporate initiative costs, you incurred in the quarter, particularly at Kentucky as well as just the corporate overall just what's the thought process. There and is there anything you are considering specifically with that Kentucky property.
Okay.
Yes.
Thanks.
The costs associated with the strategic repositioning.
We are global in nature related to.
So the Narragansett electric.
Acquisition really the the amount thats associated with Kentucky is is really immaterial.
And nothing related to <unk>.
It related to any strategic.
Strategic I'll talk to you. It's all it's all essentially for the generic asset acquisition.
Okay, great. Thank you have a nice weekend.
Okay. Thanks, Paul.
The next question comes from <unk> Chopra of Evercore ISI. Please go ahead.
Good morning, Thank you for taking my question.
Good morning.
I know theres a update coming.
Both the.
The Narragansett transaction, but just so we have the numbers right.
Am I right that.
With the share buybacks.
I am focused on the leftover cash with the share buybacks and the additional Capex announced.
Ed.
The U S utilities, you still have roughly about $1 billion left.
Left to allocate do I have that number right.
Well I guess, we'll get into the total use of proceeds.
<unk>.
And how that's utilized when we get to the Investor day.
Okay, that's fair.
Just one.
And you may not be able to answer this.
Also but.
I'll just ask is the.
Sort of 2022 going to be the base year for any term any long term.
<unk> that you give out our long term earnings growth target that you gave out.
Yes, that's the plan.
Okay.
Okay. Thank you guys I appreciate the time.
Sure.
The next question comes from Paul Patterson of Glen Rock Associates. Please go ahead.
Hello.
Can you hear me.
Okay, Paul Yes, we can Paul.
So just to sort of follow up on the win.
When.
I guess.
How should we think I mean, I know you guys are obviously feeling confident about.
Now against the closure, but.
It doesn't appear that there is any settlement and.
And it appears that there is some uncertainty just generically speaking.
So the dividend action that you guys have been describing how should we think about what the scenario would be if.
If the deal doesn't come about it.
Don't get approval for it.
Yeah.
Yeah, Paul I don't know.
Really want to.
Talk about some hypothetical we are we're really focused again I'll just go back to what I.
Set to Shar.
We think we've clearly met the standard for approval from the state.
With what we bring to the table in terms of our operating experience the financial strength of our company of course, the commitments that we've made.
Throughout the process there, so we we and national grid.
We are very focused on getting to closing.
In the last year on transition planning integration planning.
We're getting a lot of 100 people identify and ready to start on day one.
Paul we are all very focused on getting this deal over the goal line and bring real value to us.
Okay.
But given the the.
The idea that the target date and again Youre hearing let me ask you that you are hearing that there is any change in that.
And the target date decision because thats almost.
Just a week away.
Seems to me that.
With the dividend acts and everything.
That perhaps.
You could have.
Weighted too.
You know the earnings release and everything else unless you think that there's maybe a potential that that target data isn't.
There's going to be pushed back or something.
How should we think about when we're going to get more clarity, Rhode Island is it still the target date kind of thing or is there something else, we should think about.
Yes, Paul.
Based on the schedule that we have targeted decision date.
Is the 25th.
But you.
We just we recognize that there is a lot in this case.
Through the written testimony race the oil.
The hearings.
We just wanted to.
Recognize the fact that the 25 is the target.
There's a lot that the hearing officer as the division needs to get through.
And so there's been no change in the 2000 and fitness that target, but we're just trying to.
We are realistic that there is no guarantee that.
Okay.
Thanks.
Sure.
The next question comes from Michael <unk> of Goldman Sachs. Please go ahead.
Hey, guys. Thank you Hey, guys. Thank you for taking my question I actually wanted to just ask about Pennsylvania, and Kentucky items. Firstly in Kentucky can you remind us what the results of the IRS.
When the material fleet generation changes or transformation would likely play out over that.
And the timeframe.
Like what happens in the next three to five years, what happens in year six.
Okay.
Sure. So we have been.
Next round.
Retirement.
I recall are in 2024.
Based on our reserve margins, we don't anticipate.
A significant need to replace generation for those retiring.
The next room would be in 2028, we would need to replace the 2028 retirement and so.
Probably see.
Capital start to be spent in 2026 ish timeframe.
That and then the next.
Around the retirement Sir.
This side of 2035, and 2034 35 ish.
And so you'll see capital early thirties to prepare for Notre Dame.
Got it and given the move in commodity pricing, both natural gas power and coal.
You see for the next couple of years your co pay it's actually running at a higher capacity factor in Kentucky that maybe what you had seen previously.
An opportunity to maybe save O&M and scale back.
The output levels of that source and either.
Run gas units more or buy more power from the market.
Yes, so it's a good question.
So as you know we're incredibly focused on.
Decarbonising the overall generation fleet.
Thank you.
You bring up.
Good point around the cost of natural gas versus the cost of call. So.
When you think about it Michael will continue to look at.
How we best.
Utilize the fleet to ensure reliability.
Lowest cost for our customers at the same time.
So that could be.
Additional renewables.
Q2, renewable ppas or.
<unk>.
We're always looking at.
Does it makes sense too.
Shift between natural gas and coal.
Those are all things that we continue to iterate as we look at that the carbonization with overall revenue position strategy.
Got it and then one last quick housekeeping question can you just remind me.
Remember.
I think I remember correctly smart meter implementation in the company, it's been a while but did Kentucky you have a similar level of that relative.
Thank you.
In Pennsylvania.
Yes, so we've done two rounds of smart meter deployment in Pennsylvania, we are doing our initial.
Duane in Kentucky.
I think that to be completed in 2026.
And then you Havent asked but in Rhode Island, they don't have smart meters, but that would be something we would be deploying.
Quickly after acquisition.
Okay as well.
Got it. Thank you that's much appreciated.
Sure.
The next question comes from Steve Fleishman of Wolfe Research. Please go ahead.
Thanks, I appreciate it got a few questions. So.
I guess first of all.
You had said in the past that you were going to use like a pro forma.
As for your growth rate.
<unk> like a full year of it.
Not not just 2022.
Is that correct or are you going to use 2022.
Yes.
Yes, sorry, if I wasn't clear on that.
While we entered 2022.
Pro forma.
Alright, okay.
And just.
You have a new pay our dividend and you gave a payout ratio. So you can kind of back.
Back into what the earnings power from our core businesses.
Roughly are expected to be without any C is that like a fair representation of.
2022 core businesses.
Without any sea.
That's really a small yet.
Okay.
And then just on on any C has.
I know initially the attorney general.
I talked about being opposed.
Given an official.
Opposition now with the commission or.
Or where does that stand.
Yes, Steve.
I don't think.
The attorney General.
Modify their original position as we can.
Okay and so there is no at this point, there's no like settlement talks.
I was just going to be a decision.
At this point, we're just wait decision okay.
Okay.
Okay.
Then just.
On another thing you had talked about was potentially I think.
Essentially trying to kind of resolve future rate case as part of this too.
But if you have to just get a decision.
When would be the next rate case in Rhode Island.
Yes, so we've agreed to not file a rate case for a period of three years time.
And so that I think in Rhode Island at 910 months.
Yes.
So.
Depending on when it closes that can give you right now okay. So that's a can do at.
At least the euro proposal about the condition of your file.
<unk> filing.
Yes, so that is.
Okay.
That is correct.
Yes.
Okay.
And then.
Sure.
So maybe just to sum up on the on the dividend. So you have this new dividend level based on the existing businesses.
Youll when you close any C youll reset.
Some pay out additional dividend related just to that business as well.
Well.
And then.
Beyond that dividends will grow in line with earnings growth is that kind of a way to rebuild this up.
That's exactly correct.
Okay.
Last question can you give any information on.
What safari.
We have in terms of earnings or EBITDA.
Debt.
On Safari, if theres any separate debt.
In 2021.
Yes, yes.
Included in our corporate and other.
Segment Steve.
We don't break it out from that part of that it's really not.
<unk>.
Overall, we feel corporation earnings and its just not.
We felt that we provide is given its materiality.
Is there any debt on it or is it just part of PPL corporate.
Okay.
Yes.
Okay.
Alright, thank you.
Thanks, Steve.
The next question comes from Ryan Levine of Citi. Please go ahead.
Good morning.
Good morning.
I was hoping that you could elaborate on what factors drove where PPL wants to be in terms of dividend payout ratio relative to the the range that you highlighted in your slide deck and any color as to how youre thinking about that for subsequent.
And decisions.
Yes.
Joe covered the details.
High level right.
We wanted to make sure again this is a.
Broader strategic repositioning obviously.
The sale of U K acquisition of Nico.
David and reset.
Part of that so making sure of that.
We have one of the strongest balance sheets and want to make sure that the dividend side.
Appropriately.
The new businesses going forward.
And make sure that we're set up to be able to grow that dividend in line with earnings.
We think we've positioned ourselves very well to accomplish all of that.
Okay.
Okay.
Yes.
Ed.
For a while that we would we would set the dividend at 60% to 65% of earnings.
And with the dividend announcement today.
And that range on the base business.
We move forward.
And then Derek answered in the forecast and provide the update.
To continue the.
And in the <unk>.
65% payout range.
Thank you and then you highlighted some of the preview to the analyst day, it's starting with pro forma 2022, Etfs and growing it up there is it going to be a five year growth that you are looking to provide any other color you could share around by both detail that we should expect.
You get updated at the at your Analyst day.
Yes, it will be.
Comprehensive update but we haven't provided.
A lot of information since the sale of WPZ, we recognize that.
We've repositioned the company significantly.
At Borgata.
It provides a lot of detail on the new PPL, including the growth rate and the duration of the growth rates of all.
All of that for now until we get there, but you should expect a detailed update.
Okay. Appreciate the color. Thank you.
The next question comes from Greg <unk> of UBS. Please go ahead.
Yeah.
Yes. Thank you.
Good morning.
Regarding the dividend.
Assuming narragansett electric closes when would you provide that.
New.
New level.
Would that be.
Closing or at the analyst day or.
How would that work.
Yes, so we will provide an update on that.
At the Investor day.
Just on the current schedule, which.
Which would support a margin close as we've been saying.
We would then.
Target to have the Investor day within a few weeks of closing.
And so that potentially could cut.
Our second quarter dividend in place.
Okay. Thank you.
Okay.
The next question comes from Anthony crowd well of Mizuho. Please go ahead.
Hey, good morning, Vince.
Thanks for taking thanks for taking my question.
Two quick ones.
Not specific to Narragansett I know you don't want to.
Talk about the approval process there, but just it's my first transaction in Rhode Island, what's the process.
The emerging.
Decline is there a re filing process, where I can.
Yes.
But can accompany appeal to a higher court.
So there is an appeal.
Anthony.
Yes, certainly we're focused on getting.
Getting the approvals done.
It really depends.
On.
What would be in the order.
It's really hard to say.
Predict what our next steps would be.
Could potentially be carrying VW filings.
We also have the option to appeal.
Really speculating at this point, we're hopeful that.
We met again, we think we've met.
Andrew for approval.
And we're hopeful that that decision will come out.
When it comes out.
Okay.
You know what court the appeal takes place in.
Or is it with the same regulator.
Ah.
Im not sure about that.
Okay, and then if I could just pivot probably off of Michael's question earlier on Kentucky.
<unk>.
How should we think about the growth.
The growth in Kentucky from this level.
Just if you could maybe give some clarity on that.
Yes, we're not providing really growth targets for for any parts of the business at this point, but we will provide.
Full updates on all of that on Investor day, and to Joe's point, we recognize that we've been in this.
And those kind of point between filing Wpa in closing eco.
Without providing a lot of financial detail.
We're doing that on Investor day.
We're not ready to do that.
Great. Thanks for taking my question Vince.
Thanks, Andy.
This concludes our question and answer session I would like to turn the conference back over to Vince <unk> for any closing remarks.
Thanks, and just wanted to thank everybody for joining us. This morning, we certainly look forward to introducing the new PPL to investors.
We remain very confident.
Talk a little bit today that our strategic repositioning will deliver long term value for our shareowners.
Do see robust capital investment opportunities going forward to deliver clean energy future.
That investment will fuel competitive earnings and dividend growth going forward.
And we believe we can deliver that clean energy future in a way that's affordable for our customers.
No equity needs in the foreseeable future given the strength of our balance sheet.
So again.
Forward to seeing you all at the Investor day and providing.
The details that I know youre looking for for the detail. Thanks, everybody.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Okay.
[music].
Gary.
Yes.
Okay.
Sure.
Thank you.
Okay.
[music].
Thank you.
Okay.