With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

Providing electricity in Pennsylvania, Kentucky, and the U.K., the energy company has over 10 million customers across its different regions of operation. But a March 2021 deal is likely to remake the company's geographic profile; in the deal, PPL agreed to sell its U.K. utility business to the British company National Grid, while buying National Grid's Rhode Island unit, The Narragansett Electric Co.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-408-PPL

The Allentown, Pa.-based utility provides power to some 10 million customers in Pennsylvania, Kentucky, and the U.K.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

World's Most Admired Companies

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Established in 1920, PPL is a U.S. energy company that provides electricity and natural gas to approximately 3.5 million customers, operating through three main segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company supplies electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island, and delivers natural gas to customers in Kentucky and Rhode Island. PPL also generates electricity from power plants located in Kentucky.

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PPL (PPL): Company Profile, Stock Price, News, Rankings

legacy

Good day, and welcome to the PPL Corporation Fourth Quarter and Full Year 2025 Earnings 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 touchtone 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, and thank you for joining the PPL Corporation Fourth Quarter and Full Year 2025 Earnings Call. We provide you presentation materials on the investor section of our website. This morning, you'll 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 2 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. Reconciliation 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 4 with a look back at 2025. I'm proud to report that we finished the year exactly where we said we would: delivering safe and reliable electricity and natural gas service to more than 3.5 million customers and achieving our stated financial targets for investors. Operationally, our teams performed at an extremely high level across the company, directly resulting from years of intentional investment in our infrastructure, combined with strong day-to-day execution by our workforce. We achieved first quartile or near first quartile T&D reliability in all of our jurisdictions and top decile generation performance in Kentucky. I will say first quartile T&D performance is trending worse overall for the industry as a result of more frequent and severe storms as well as more extreme weather events.

This is causing utilities across the country to increase their capital investment plans significantly to combat Mother Nature, and the same applies here at PPL. During 2025, we continued to clearly focus on innovation as this will be a significant source of continued operating efficiency across our business in support of customer affordability. We are developing several digital solutions to improve customer service, including an agentic AI digital customer service agent and a recently released customer app at PPL Electric Utilities. We will expand the rollout of these and other digital solutions across our business in the coming years, and we're really excited about the digital future for utilities. From a financial perspective, we achieved ongoing earnings of $1.81 per share, 7.1% growth from our prior-year results and in line with the midpoint of our forecast.

From a capital investment standpoint, we executed $4.4 billion of planned investments focused on grid hardening and modernization, advanced metering, pipeline replacement in our natural gas businesses, and the initial stages of building new generation in Kentucky. These investments directly support reliability, resilience, and long-term affordability for our customers. On the cost efficiency front, we outperformed our O&M savings target by about $20 million, achieving approximately $170 million in run rate savings from our 2021 baseline, about a year ahead of our $175 million target for the end of 2026. Our O&M efficiency strategy has been a key component of our affordability strategy here at PPL, and that will continue to be the case as we move forward beyond 2026.

Finally, we engaged extensively with a wide range of stakeholders to power economic development in our territories. These actions have supported the growth of our significant data center pipeline while fueling some of the largest economic development projects our territories have seen, including the $3.5 billion advanced manufacturing investment by Eli Lilly, announced earlier this month, right here in Allentown, Pennsylvania. In summary, this past year reflects what we strive for as a company. Consistently high levels of execution, disciplined financial performance, a forward-looking strategy, and results that create value for both customers and shareowners. Let's turn to Slide 5. Building off our strong year in 2025, today, we announced an updated business plan that extends our growth outlook while keeping customer affordability and our strong credit profile front and center.

For 2026, we're issuing ongoing earnings guidance of $1.90-$1.98 per share, with a midpoint of $1.94 per share, representing 7.2% growth from 2025. We're extending our 6%-8% annual EPS growth target through at least 2029, expecting the EPS CAGR through 2029 to be near the top end of that range based off of our 2025 ongoing earnings. We're expecting stronger growth beginning in 2027 and continuing through 2029 compared to the midpoint of our 2026 growth range, since the full year impacts of our current rate cases don't kick in until next year. Importantly, beyond this strong base plan, we see several identifiable upside opportunities to further enhance or extend our earnings growth over time.

These include earnings from competitive transmission projects, additional transmission and distribution investments to support the significant economic development that we're seeing in both Pennsylvania and Kentucky, and additional generation needs in Kentucky. It also includes earnings from our joint venture with Blackstone, which I'll cover in more detail in a few slides. Our earnings growth is supported by our capital investment plan. We project capital investment needs of $23 billion from 2026 through 2029, up from $20 billion in our prior plan period. Our updated plan includes the critical investments that strengthen our networks against those more frequent and severe storms and other extreme weather impacts.

These investments will accelerate our ability to restore power when storms do strike and deliver the new generation resources approved by the Kentucky Public Service Commission last year, ensuring we continue to deliver safe, reliable, and affordable energy for our customers. The result of these investments is an estimated rate base CAGR of about 10.3%, providing a strong foundation for predictable and durable earnings growth. Our updated plan supports PPL's strong credit metrics, including 16%-18% FFO to debt throughout the plan period. In support of our expected capital expenditures, the plan reflects total equity needs of about $3 billion from 2026 to 2029. Importantly, we already executed about $1 billion of that equity need last year, leaving about $2 billion of equity to be issued going forward in support of this updated plan.

Finally, in connection with the updated capital needs, we modified our annual dividend growth rate target to 4%-6%, while we are issuing equity to fund our capital plan. Overall, our updated business plan balances growth, affordability, and financial discipline, while continuing to provide top-tier returns for shareowners relative to our peers. Turning to Slide 6 and an update on the final Kentucky rate case orders that were issued earlier this week. Overall, the outcome of these cases allows us to deliver on the business plan we've outlined for you today. The commission approved an aggregate increase of approximately $233 million in annual electric and gas revenues, which is within $2 million of the stipulation we had agreed upon with most interveners in the case.

In addition, the KPSC approved allowed ROEs of 9.775% for both utilities, with 9.675% for our capital-related mechanisms. These ROEs are 35 and 32.5 basis points higher, respectively, than our previously approved levels. Importantly, the commission approved the pilot generation recovery mechanism, which enables recovery of and a return on investments associated with new generation and energy storage projects that were previously authorized by the commission. This mechanism supports improving reliability and resilience of our networks, as well as our ability to meet growing demand on the system. The mechanism also provides for the recovery of and on certain costs related to keeping the Mill Creek Unit 2 plant online beyond its original retirement date, which was originally scheduled for 2027.

We were also pleased to receive approval for our extremely high load factor tariff, which is designed to protect existing customers from the impacts of large data center loads. One element not approved was the proposed earnings sharing mechanism, which had been tied to our agreement to stay out of rate cases through mid-2028. As a result, we are reassessing the timing of our next Kentucky rate case to ensure we continue to balance customer affordability and the capital required to support system needs. While we are disappointed that the commission modified a settlement that we and the intervening parties worked very hard to achieve, overall, the revenue requirement remained effectively unchanged from the stipulation. From here, we will move forward with implementing the new rates, issuing required refunds related to interim rates, and filing a motion for reconsideration with the KPSC on several items.

Moving to Slide 7, we continue to advance progress on our ongoing rate case in Pennsylvania. Earlier this week, evidentiary hearings were held and concluded in one day. We are also actively working towards a settlement with interveners. If we cannot agree to a settlement, we remain very confident in the strength of our case and are well prepared to fully litigate if necessary. Our case balances PPL Electric's need to make critical distribution system and IT investments to maintain and improve reliability, customer service, and storm response, while providing important customer protections and maintaining affordable rates for our customers. A decision is expected in June, with new rates effective on July 1st, 2026. Continuing with Rhode Island regulatory updates on Slide 8.

In the fourth quarter, Rhode Island Energy filed its first base rate request since 2017, seeking a two-year phased increase aligned with the cost of delivering safe, reliable energy while supporting critical infrastructure improvements and affordability programs. This includes a redesigned low-income rate, offering deeper, targeted support for those in greatest need, importantly, without raising costs for our other customers. The decision is expected this summer, with new rates effective on September 1st, 2026. We also filed our annual electric and gas ISR plans in late December, totaling about $350 million, which primarily relates to capital investments to sustain and enhance the safety and reliability of our electric and gas distribution systems. We expect a PUC decision on the ISR filings by the end of March.

Finally, we remain committed to reaching a new hold harmless settlement in Rhode Island to provide meaningful near-term rate relief to our customers. As a reminder, the settlement that we reached with the division last year provided for about $70 a month credit to combined electric and gas customers in the winter months of 2026 and 2027. So very meaningful credits in the months where energy bills tend to be the highest. We'll be engaging with the division and the PUC on a new settlement in parallel with the base rate case proceeding currently underway. Moving to Slide 9 and an update on our Pennsylvania data center pipeline. PPL Electric Utilities service territory continues to see rapid growth in data center interconnection requests.

As of today's update, projects in advanced stages, meaning they have executed agreements and have meaningful financial commitments attached to them, now total approximately 25.2 GW, up another 23% since our last quarterly update. We now expect at least 10 GW to be under ESAs by the end of the first quarter. About 5 GW remain under construction, which is consistent with our last update. That said, we believe all of the 25.2 GW of projects have a high probability of completion, and our ESAs include strong customer protections such as prepayments and credit support, as well as minimum load requirements for data center customers to pay approximately 80% of forecasted load until the costs incurred to extend service are fully recovered. So data center developers will bear the financial risk of a data center project not getting completed versus our existing customers.

Turning our attention to Kentucky on Slide 10. Economic development overall remains strong. Our current pipeline reflects more than 9 GW of potential new load through the early 2030s. Load related to data centers exceeds 8 GW, and about 4 GW of these requests are considered highly active, with 500 MW under construction. The development pipeline also includes 1.1 GW of advanced manufacturing and other non-data center requests, up about 150 MW from our prior update. We are continuing to see robust economic development, with several major manufacturers announcing almost $500 million of new investments in our service territories, including Toyota, Foxconn, GE, and Anthro Energy. Our probability weighted demand growth projections remain at about 2.8 GW or about 1 GW more than what was reflected in the load forecast in our 2025 CPCN.

If this potential growth continues to materialize, additional generation resources will absolutely be required. In summary, continued strong interest from both data centers and manufacturing customers validates our long-term generation planning and the recent CPCN approvals in Kentucky. Turning to Slide 11. As we've been discussing for several years now, affordability remains a core commitment across everything we do. It has been a foundational element of the new PPL strategy since 2022. Since that time, we have reduced O&M by nearly 3% annually, reaching $170 million in run rate savings by the end of 2025. About $100 million of those savings benefited our Kentucky customers alone and directly reduced the increases needed in our most recent Kentucky rate cases. In the end, residential bill increases were in the 5%-11% range after roughly five years without base rate increases.

This is significantly below the level of inflation over the same period and reflects the tangible benefits of sustained cost discipline. The $170 million of total O&M savings that we've achieved has helped to fund approximately $1.4 billion of capital investment without incremental pressure on customer bills, enabling longer intervals between base rate cases. It's been 10 years in Pennsylvania, eight years in Rhode Island, and as I said, about five years in Kentucky, without requesting base rate increases, a direct result of this strategy. Looking ahead, cost discipline will remain a critical component of our affordability strategy. In our updated plan, we project O&M growth of approximately 1% annually, well below inflation. We expect additional structural savings as we continue to harden the grid and deploy smart grid technologies and improve overall system efficiency.

We also see AI as an incremental but meaningful driver of efficiency across customer service, grid operations, and back-office functions. Beyond cost control, continued economic development across our jurisdictions also supports customer affordability. Over time, and under the tariff structures we've put in place, incremental load growth, including large load data centers and smaller distribution connected customers, improves system utilization and helps moderate costs for existing customers. We also continue to support targeted customer assistance programs to help our customers afford their energy bills. For example, PPL Electric's Operation HELP leaned in during the 2025 government shutdown to support low-income customers when LIHEAP grants were unavailable. In addition to the low-income program I talked about as part of our Rhode Island Energy rate case, we've also created a new employee-funded assistance program that provides support to Rhode Island customers that meet various income thresholds.

As mentioned earlier, we remain committed to a solution on a hold harmless settlement in Rhode Island and to get those credits reflected in customer bills. In deregulated states like Pennsylvania and Rhode Island, we do not control every aspect of the customer bill, but we are focused on lowering those costs as well. Let's move to Slide 12 and talk about what we're doing in this regard. As an example, more than half of the customer bill in Pennsylvania comes from costs we do not control, with energy supply costs being the largest component. For several years, we have been sounding the alarm on a worsening generation supply situation in PJM, which has been the primary driver of higher customer bills.

Since December 2020, energy supply costs have increased by roughly 200%, and over that time, PPL Electric's average monthly residential bill has increased by about $68, with approximately $50 of that increase coming from energy supply costs alone. The takeaway is straightforward: The single biggest driver of long-term affordability in PJM will be increasing generation supply. And with the scale of data center growth we're seeing, we absolutely need to build new, reliable generation to meet that demand. The recent call by President Trump and the state governors in PJM for an emergency auction to spur construction of generation, that's a clear acknowledgment of what we've been saying for years. At PPL, we're focused on supporting the build-out of new generation in a number of ways.

First, we formed a strategic partnership with Blackstone to build, own, and operate new electric generating stations to directly power data centers. Second, we're actively supporting legislation that's been proposed in Pennsylvania to allow regulated utilities to enter into long-term resource adequacy agreements with independent power producers. The legislation would also permit utilities, where appropriate, to build and own generation to support reliability and affordability. At the same time, we continue to invest in a robust transmission grid, capable of quickly connecting both new large load customers and generation. At PPL, our grid will not be what stalls either new generation or data center development. I'll note that even with the emergency auction envisioned by President Trump and the governors, a lot more generation will be needed. We estimate the auction, if it comes to fruition, could produce about 6 GW-7 GW.

This, however, wouldn't address the expected data center demand in PPL Electric service territory, let alone data center demand across all of PJM. What the auction does signal, however, is increased pressure on data centers to bring their own generation to market or at least pay for the new generation required to power their data centers. Building new generation will directly lower capacity prices in PJM by increasing supply, thus lowering customer bills over time. Bilateral arrangements to bring new generation online will continue to play a key role here as well, and our joint venture with Blackstone is perfectly positioned to enter those agreements now without needing to wait for future PJM reforms. That brings me to an update on the joint venture on Slide 13. We've made meaningful progress over the past year as momentum within the PJM market continues to build.

Hyperscalers are increasingly seeking bring your own generation solutions, and their sense of urgency is significantly higher now. We're extremely well positioned to support this need, given our expertise in PJM and the significant generation fleet we operate in our utilities in Kentucky. Recent market developments are only increasing pressure on large load customers to secure dedicated generation solutions, and we've uniquely positioned the JV to deliver speed to market at scale, which we all know is the number one priority for these customers. In support of this need, we have diligently executed contracts for several strategic land parcels over the past year and are securing natural gas capacity. We've also evolved our generation solutions in the past few months to meet hyperscalers' changing needs.

In addition to natural gas combined cycle units, which take about five years to come online, we now offer alternate generation solutions to enable new generation to come online, more commensurate with the ramping requirements of data centers. While we do not have a hyperscaler agreement to announce on our call today, it is important to note that we have not embedded any earnings, contributions, or CapEx from the JV in our updated business plan. However, depending on the timing of executing these agreements and the generation mix selected by hyperscalers, we could see earnings contributions as early as the back end of our updated planning horizon.

Taken together, the policy signals, the market response, the engagement we're seeing from hyperscalers and other data center developers, and all the legwork that we've done over the past year, our joint venture is perfectly positioned for this moment, and we look forward to providing you with more updates as contracts are finalized. I'll now turn the call over to Joe for our financial update. Joe?

Thank you, Vince, and good morning, everyone. Let's turn to Slide 15. On a full-year basis, our 2025 GAAP earnings were $1.59 per share, compared to $1.20 per share in 2024. Excluding special items, our 2025 ongoing earnings were $1.81 per share, an improvement of $0.12 and in line with expectations. From an earnings quality perspective, the year-over-year growth was driven primarily by incremental returns on capital investments across our regulated businesses, supported by higher transmission revenues, rider recovery, and continued cost discipline, resulting in lower O&M. Those benefits were partially offset by higher interest expense, reflecting the additional financing to support our CapEx plan. Kentucky results increased by $0.09 per share, driven by higher sales volumes, largely due to weather, higher earnings from additional CapEx, and lower O&M, partially offset by interest expense.

Pennsylvania results increased by $0.04 per share, led by higher transmission revenue and distribution rider recovery, along with higher sales volumes and lower operating costs, partially offset by higher depreciation and interest expense. Rhode Island results decreased by $0.02 per share compared to 2024. This was due to higher operating costs and other factors that were not individually significant, partially offset by higher distribution revenue. When compared to our 2025 forecast, the Rhode Island segment decreased by $0.06 per share due to several true ups and higher operating costs related to system costs, non-recoverable storm costs, and several miscellaneous costs. We do not expect those items to reoccur and therefore do not expect these pressures to carry forward into future periods.

Finally, Corporate and Other was $0.01 better than last year, driven by lower income taxes and other factors, partially offset by higher interest expense. Turning to the ongoing segment drivers for the fourth quarter on Slide 16. Our Kentucky segment results increased by $0.02 per share compared to the fourth quarter of 2024, driven by higher sales volumes due to favorable weather and higher earnings from additional capital investments, partially offset by higher interest expense. Our Pennsylvania regulated segment increased by $0.01 compared to the same period a year ago, primarily driven by higher transmission revenues, higher distribution rider recovery, and lower operating costs, partially offset by higher interest expense and other factors. Our Rhode Island segment results increased by $0.01 per share compared to the same period a year ago, driven by higher distribution revenue.

Finally, results at Corporate and Other increased by $0.03 per share compared to the same period a year ago, due to lower interest expense and lower income taxes. Moving to Slide 17. We continue to execute a plan that has consistently delivered at least the midpoint of our 6%-8% annual growth target since our strategic repositioning three years ago. Over that time period, we achieved a 7% EPS CAGR, and the plan we announced today further strengthens our growth outlook. Turning to Slide 18. We are extremely confident in the growth outlined in our updated plan. As Vince noted, we've extended our 6%-8% annual EPS growth target through 2029, and we expect to deliver a compound annual growth rate near the top end of that range over the period.

We see several upside opportunities to bolster that growth even further. These include transmission investments, where we continue to see potential investment needs to further guide reliability and support growth in large load customers. While much of the material transmission upgrades to support our current data center pipeline are reflected in the plan, additional interconnections could enhance our outlook. We also see opportunities in competitive transmission. Last year, we were awarded almost $600 million of competitive transmission projects in our PPL Electric Utilities territory, and we believe we can be competitive more broadly in PJM and even in MISO. On the Kentucky generation side, should economic development continue to come to fruition, as our pipeline would suggest, we will need to build even more generation in Kentucky to meet the increased demand, especially if it is data center demand.

Depending on the type of resources needed to meet that demand, this could result in upside to our current plan or support capital spend and earnings beyond 2029. Finally, on the Blackstone JV, as we have said, we are not assuming any earnings contribution from the partnership in our updated plan. However, depending on the timing of when we sign agreements with hyperscalers and what type of generation they desire, we could see some upside in the back end of the plan. Importantly, most of these upsides do not necessarily drive customer bills higher, but could actually lower them over time. Overall, our updated plan supports a disciplined approach to capital deployment, providing safe, reliable, affordable service for our customers and a focus on delivering strong, sustainable growth for shareowners with a number of upside opportunities. Moving to Slide 19.

We've provided a walk from our 2025 ongoing earnings results of $1.81 per share to our 2026 forecast midpoint of $1.94 per share. Across our business segments, we project this forecast midpoint to be primarily driven by improved rate recovery and higher revenues associated with ongoing capital investment programs. We expect these drivers to be partially offset by higher depreciation and higher interest expense. Taken together, these drivers underscore our continued ability to deliver steady, predictable earnings growth across our segments, despite operating in a higher cost environment. Turning to Slide 20. Our updated capital plan supports customer-focused investments of $23 billion over the next four years, a $3 billion increase in CapEx needs compared to our prior plan.

Overall, the primary areas driving the increase relate to electric transmission and distribution investments. On the transmission side, we're projecting an increase of nearly $2 billion, with nearly $1.3 billion supporting Pennsylvania's data center development and reliability projects. The remaining $700 million of that increase will support system hardening and smart grid deployment in our Kentucky service territory. We're also projecting an $800 million increase in electric distribution investments, with the majority of that focused on strengthening and modernizing the grid across Pennsylvania and Kentucky. And in Rhode Island, we've adjusted some of the timing of our prior planned spend, which lowers our capital expenditures throughout this time period. Turning to Slide 21. Our updated capital investment plan supports annual rate-based growth of 10.3% from 2025 to 2029.

As shown on this slide, two-thirds of our rate base relates to investments in our electric transmission and distribution networks, and about 80% of our expected generation rate base increase is based on projects that have already been approved by the KPSC. Moving to an update on PPL's financing plan on Slide 22. We continue to believe that having one of the sector's strongest balance sheets is a clear strategic advantage that provides the company with significant financial flexibility, benefiting both customers and shareholders. Our updated business plan maintains strong credit metrics throughout, while supporting our updated earnings growth targets. This includes maintaining a 16%-18% FFO to debt ratio and a holding company to total debt ratio below 25%. We have included a new funding sources chart outlining how we plan to finance approximately $23 billion of capital investment needs.

We expect roughly half of the plan to be funded through cash flow from operations, which is net of common dividends, with approximately 40% financed through debt, primarily at the utilities. This results in total equity needs of about $3 billion over the 2026-2029 period, including about $1 billion of forward equity transactions already executed in 2025. That leaves approximately $2 billion of equity that will opportunistically execute through 2029. We expect to continue utilizing our established ATM program and may supplement it with other equity-like financing structures where they provide an efficient cost of capital consistent with our approach in 2025. Moving to Slide 23. The dividend remains a key component of PPL's total return proposition.

As such, our board of directors declared a quarterly cash dividend of $0.285 per share to be paid on April 1st to shareowners of record as of March 10th. This represents a nearly 5% increase from our previously issued quarterly dividend, resulting in an annualized dividend of $1.14 per share. The increase aligns with our updated dividend growth target of 4%-6% per year. We expect the dividend payout ratio to remain within a 50%-60% range over the plan period. The combination of PPL's EPS growth and current dividend yield continues to provide investors with a top-tier total return proposition in the range of 10%-12%. This concludes my prepared remarks. I'll now turn the call back over to Vince.

Thank you, Joe. Let's move to Slide 25. In closing, I'll leave you with a few thoughts. First, 2025 was a year of delivery. We told you what we were going to do, and we did it operationally, financially, and strategically. That consistency is the foundation of who we are as a company. Second, our long-term outlook has never been stronger. The updated business plan we introduced today extends our growth trajectory, strengthens the predictability of our earnings, and does so with continued discipline around affordability and credit quality, keeping our customers front and center in everything we do. We're entering 2026 with a clear line of sight to the investments, cost structure, and regulatory frameworks that will support sustained, durable value creation. Third, the trends shaping our industry, data center growth, electrification, and the need for new generation, are all moving in our favor.

The momentum we highlighted today across Pennsylvania and Kentucky, and through our joint venture with Blackstone, reinforces the central message you've heard from us for more than three years: The system needs new, reliable, dispatchable generation, and the market is now aligning around that reality. We are positioned exactly where we want to be as these forces accelerate and converge. And finally, none of this happens without our people. Our teams continue to deliver for our customers with professionalism, skill, and care. Whether it's restoring power and natural gas during severe weather, operating one of the nation's most reliable grids, or advancing the technology and partnerships that will define the next decade of energy delivery, I can't thank our electric, gas, and generation crews enough.

They are the unsung heroes of our industry as they work in some of the worst conditions possible to ensure our customers have the energy they need to power their lives and businesses. So we enter 2026 with confidence. Confidence in our strategy, confidence in our execution, and confidence in the opportunities ahead of us. And we are focused on the long game. We're aligned around the right priorities, and we're committed to delivering value for both customers and shareowners. And for our shareowners, we offer you a top-tier 10%-12% total return proposition, a return grounded in long-term earnings growth, with expectations to achieve compound annual growth near the top end of our 6%-8% target through at least 2029.

That earnings growth is supplemented with a dividend that we have paid consistently for every quarter over the past 80 years and expect to grow in the 4%-6% range over the planning horizon. This growth is driven by the rate-based growth being generated by the critical investments we need to make to stay ahead of mother nature, resulting in a rate-based growth of over 10%. None of this is achievable if our customers cannot afford to pay their bills, and that is what sets PPL apart from our peers. We have been, and will continue to be, laser-focused on minimizing bill increases or even reducing overall bills for our customers. We'll do that through our actions over those areas of the bill that we directly control and even attacking those parts of the bill that we don't.

All of this creates the balance between customers and shareowners that we believe utility investors are focused on. We thank you for your continued interest and support of PPL. Operator, let's open it up for questions.

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. The first question will come from Shar Pourreza with Wells Fargo. Please go ahead.

Hey, guys. Good morning, Vince. Just first on Pennsylvania, I mean, there's, there's lots of debates and theories with sort of the investment community around the process. Obviously, you guys don't want to front run the process, but maybe just a bit more color around how the conversations are going. Are there any kind of sticky points here? And, and should we read into anything, given the fact that the hearings were done in a day versus the expected three days? We just saw two black box settlements, so just maybe a little bit more color there would be great.

Sure. There's a lot there, Shar. Let's see. Maybe, maybe we'll start with the rate case and then, maybe more broadly about Governor Shapiro's comments. Does that work?

Okay, so, so on the rate case, you know, you asked what are the areas of focus, if you will. Look, besides the usual suspects, I would say generally pretty light, Shar. So a lot of discussion around the impact of data centers on customer affordability. You mentioned the hearings. It was one day, pretty much, the entire hearing was on data center load impact on customers, which, as you know, that's all connected to the transmission grid, so not really directly relevant to a distribution rate case, but that was the main focus of the hearing. So yes, I would say that was positive. The other area is area of focus from the interveners is really the proposed changes to the net metering rules that we have for non-load generators.

These are like the solar projects that are connecting to the distribution grid. In terms of settlement, you know, as you know, no hard deadline there. I will say we are actively engaged with the parties, and we continue to be, as I speak, here right now. From an overall process standpoint, I think the case continues to advance. It's going as we would expect. Briefings are scheduled in March, with a final order expected in June, and then rates effective July 1. I will say I think maybe there was some hope or expectation in the market that we would have had a settlement announcement before the hearings.

I think if you look back at when those announcements generally happen in Pennsylvania, it's more around the main brief meeting and or a deadline, not necessarily the initial hearings that we just had. So just FYI on that. But look, we feel really good about the underlying strength of our filing and the investments that are in there that are supported, particularly around, you know, improving the reliability of the system. As I talked about in my prepared remarks, we do have some affordability measures included in there, including memorializing what we have in our ESAs into a large load tariff. But with all that said, I would say, you know, a constructive outcome really does not hinge on a settlement in our view.

We're comfortable whether this resolves through settlement or a commission decision. So, we're feeling good either way. And then more broadly, just on the Shapiro comments, look, I think the state remains incredibly constructive and supportive of its utilities, and I think they recognize the investments that are needed to not just ensure that we can continue to provide safe, reliable energy to our customers, but it's critical to help drive all this economic growth that we see coming to the state. And you may have heard Senator Yaw just recently made some comments, which we completely agree with, that the core issue around affordability and high prices is that generation has not kept pace with demand, and it's really the imbalance between supply and demand that's driving those pressures.

Obviously, affordability is clearly a concern at the state level, but it's important to focus on really what's driving that. And, and as we said, you know, about 50% of the energy bill or electricity bill is that energy supply cost, and those costs are up about 200% over the last five years, represents $50 a month increase of the total $68 a month that we've seen over that time period. So, you know, we'll continue to engage with the governor and his team just to make sure that he recognizes the importance of, of having strong utilities, that they're financially strong, and the role that we play in driving all of this economic development. So I think those conversations continue to be constructive.

I think the state overall continues to be constructive, despite, you know, some of the comments that we may have heard that might suggest otherwise. From our perspective, Shar, we just keep doing the right thing for our customers as we've been doing over the last decade or more, not because we're told to do it that way, but that's just how we operate. So every dollar we've spent and will continue to spend is critical to ensure that we can deliver that safe and affordable, reliable energy, but also drive that economic growth. There's no question in my mind, none, that everything we've done is well justified.

Got it. Super comprehensive answers to my 25-part question, Vince. I appreciate it. I'll pass it to someone else. Thanks.

The next question will come from Jeremy Tonet with JPMorgan. Please go ahead.

Just wanted to pivot over to GenCo, if I could. It sounds like contracts could be in the near term there. And so just wondering, is this something that you would wait for an earnings call to announce, or could something be communicated earlier than that if a deal comes together?

Yeah, I don't think we would necessarily need to wait for an earnings call. No, I think that would be a significant event that we would do that off cycle, for sure.

Got it. Thank you for that. And for the JV, would the JV look to bid into the Base Residual Auction, or just wondering your thoughts around that?

Yeah. So right now, we're still evaluating, Jeremy, whether that's something that we would participate in. In the normal auction, I don't see the JV participating in that. But the special auction that PJM might be holding for the backstop creation or incentivization of new generation, perhaps, but we really need to see the final structure, if that even comes to fruition, what that's gonna look like. We have to see if it fits within the risk profile that we've set up here.

You know, I've said all along that the joint venture with Blackstone, while that could be meaningful for us, for sure, we are not looking to significantly modify the risk profile of the company with it, which is why we've talked about regulated like structures of the contracts, et cetera, et cetera. So, really depends on what the details of that auction might look like, and we'll have to determine if that fits the risk profile that we're looking for.

Understood. That makes sense. One quick one, if I could, just as it regards to the nature of the generation, when you're talking about the alternative, generation solutions, that could come online, more commensurate with the ramping requirements of data centers. If you could share a little bit more color on what that could look like?

Yeah, I'd prefer not to talk about the actual types of technology that we're looking at, but just suffice it to say, these are technologies that we could get online more in kind of the 2028, 2029 time frame versus call it 2031, 2032, like what we're seeing with the, the larger CCGTs.

Got it. That makes sense. I'll leave it there. Thank you.

The next question will come from Steve Fleishman with Wolfe Research. Please go ahead.

Hi, good morning. Morning, Vince. Just a follow-up to that last one. Is it fair to say that it would be mainly other gas fuel technologies, or would you even be looking at things like fuel, well, I guess fuel cells or, which I guess is gas fuel too, but fuel cells or storage?

Okay. And maybe switching gears back to the, your data center backlog, the—could you just give some color on all these, you know, this 10 GW that's supposed to come on by, by the end of the decade, or might even be more than that, or the ones that are highly likely? Like, what were these customers thinking they were gonna get their generation from? Just like, buy it off PJM market or, I mean, obviously, you have Susquehanna 1, but just, I mean, could—And, and I guess the second part of that is, are they—what is the risk that they switch gears from the region if, if this doesn't get resolved soon, or are they pretty committed to come either way?

Yeah, sure. So, look, as we've talked about in the past, I think the key for the hyperscalers has been speed to getting connected to the grid, and that has been something that we have been able to deliver consistently since we've been talking about this. To your point, I'm not sure they were that focused or concerned about where the actual generation was coming. We're in an RTO, we're in the PJM ISO. The market takes care of that. They didn't really have to worry about it. You know, they have energy procurement parts of their business that, you know, procure the energy if they want to do that on a forward basis or, you know, as part of power loads or just shopping, et cetera. So I think they, they were just thinking through the normal process there.

Obviously, the heat has been turned up on just resource adequacy in PJM. The amount of load that is connecting here versus the lack of generation, obviously, all of that's moving in our favor. So they're, you know, they're to the table, which is kind of where we thought they would be when it was apparent that they were gonna have to worry about this, I would say, more pointedly than they had in the past. So, the good news is they are. They're extremely focused on it. Our engagement with them is incredibly constructive. Their sense of urgency is much higher than it was, probably because of some of the political pressure now that's being put on them and the industry overall. But yeah, I think they were just planning on, you know, getting it from the market. What was the second part of your question? Sorry.

It sounds like they're still willing to stay-- stick with it and not, like, divert, you know?

We'll pay you the money. We'll pay you the money, and then we're going elsewhere.

Yeah. So we're. Yeah, I mean, look, we're up another 23% this quarter versus last. I will tell you, the interest is continuing to be there, so we're not seeing people pulling out as a result of the gen issue. We just see them engaging in a very different way to help solve it. I would even say, I think Pennsylvania itself, Steve, is starting to look better and better to the hyperscalers. They took notice during this latest cold spell that, you know, our transmission network performed flawlessly through that event. And, you know, Pennsylvania was the one that was generating and exporting the vast majority of the energy, including down to Virginia, which is where, obviously, current Data Center Alley is.

So, what we've heard directly from some of the hyperscalers is they're, they're actually very impressed with the reliability, both on the gen and transmission side in PA. So if anything, I would say they're coming. They're getting more comfortable staying here versus thinking about leaving.

The next question will come from Michael Lonegan with Barclays. Please go ahead.

Hi, thanks for taking my questions. So you highlighted increased upside to your EPS forecast. You talked about competitive transmission projects, you know, additional T&D in Pennsylvania and Kentucky, more generation in Kentucky and Blackstone JV. I was just wondering if you could talk about, you know, the potential size of the investment opportunity here, what it could, you know, maybe increase your EPS CAGR to, and, you know, what portion of the investment would be financed with equity?

Yeah, thanks, Mike. It's Joe. Well, good job in recapping all of the drivers there. So, I mean, look, I'm not going to quantify that today from either an EPS or a capital perspective. The intent there really was to show you what gives us confidence in our plan, right? Delivering the plan that we laid out today, and then where we see the upside potential coming from. So look, I mean, we think we have. We believe that all of these areas can certainly come through for us to some extent. Ultimately, the size and timing of that will depend on a number of factors.

But they're all areas that we're active and successful in, to date, and we think that they continue to provide, more, more benefit as we go forward. As far as your funding question, I think, look, all of that is dependent on, on what type of capital it is, how we get recovery of that, rate cases and other things. I would say, though, if you, you know, we added $3 billion of capital to the plan, and we increased the equity amount by $1 billion. I, you know, I guess generally speaking, that's a decent rule of thumb, but there are other factors that could influence, that amount.

Yeah, Mike, I would just add to that, that those, those upside opportunities for both CapEx and EPS are not the type that necessarily will drive rates up for our customers, which is incredibly important. So obviously, the, the Blackstone JV, building new generation increases supply. That should put pressure, downward pressure on wholesale energy costs that flow back to the customers. On the transmission side, right, we've talked about, you know, every, every gigawatt that we connect on the transmission side, that continues to lower the bills for everybody else, just because we're spreading fixed costs over more customers, and those large loads end up taking a big piece of that fixed cost. So that's good for our customers.

So many of those areas are actually, while they're upsides to the earnings, they're not pressuring the bill, which is, in some cases, they could actually lower the bill. So, really, really pleased with the makeup of those upsides.

Great. Thank you. And then secondly, for me, you know, for the Blackstone JV, I know in the past you talked about having to secure turbines still. So just wondering if you could provide an update on where you stand in sourcing the supply chain. And, you know, I know you said you secured land parcels. I was just wondering if you could talk about more strategic advantages your JV has that you would highlight.

Yeah, sure. So, I mean, not going to talk about, you know, the size or where the land parcels are, obviously, for competitive reasons, but I, I will say that they are in Pennsylvania, and they can support multiple gigawatts of generation. And obviously, we strategically locate those where transmission and natural gas can easily be, interconnected. So, making really good progress there. On the JV side, sorry, what, what was the second part of your question, Mike?

You know, securing turbines. I was just wondering if you could provide an update.

Yeah, on the turbines. Yeah. So, a lot's happening on the turbine front. As you probably know, GE was certainly early on with their commitment to build new capacity for turbines. We're seeing the same now with Siemens and Mitsubishi. So, while we have not formally locked in any reservation agreements with either of the three parties, we are very actively engaged with all three, and actually feel pretty good about our ability to get turbines from either or all of those to meet the needs of the data centers.

The bigger issue, right, is providing generation sooner for them that can kind of match the load forecast and the ramping schedule that they have, and we wouldn't be using the combined cycles for those, and those are those other types of technologies. And supply chains look good for those. And again, but we should be able to get some of that in, call it, late 2028, 2029 timeframe. So, we're focused on that as well for the near term. But we feel good about our ability to get the turbines that we need for that 2031, 2032 timeframe for the big CCGTs.

The next question will come from David Arcaro with Morgan Stanley. Please go ahead.

Hey, I was wondering if you could might be able to elaborate a little bit on the EPS growth trajectory. Excuse me, sorry. It looks like growing, you know, 7%-ish into 2026, and then looks like it, it accelerates beyond that point. Wondering if you could just kind of frame out, you know, does it go above the top end of the annual kind of growth rate at some point looking out through the forecast? And how does, how does that shaping look?

Yeah, Dave, it's Joe. Yeah, you're right. It does increase, as we said, starting in 2027. It's not a back-end loaded plan. I would say the growth between 2027 and 2029 is, generally speaking, pretty linear. So I think you can think of it in that regard.

Okay, got it. And then, maybe on O&M, you've had a, you know, a very successful O&M cutting program here, and I guess as you look out to the, you know, the 1%, kind of inflationary rate, wondering if you could just talk to levers to manage that, and look for more cost-cutting opportunities going forward within the plan.

Yeah, there's certainly more opportunities in the plan that we'll look to as we deploy capital across the networks. Continued deployment of smart grid technology can drive costs lower. We've seen that already. I think there's more to do there. System IT system upgrades can certainly provide a benefit to us. And then we're looking at deployment of AI across O&M savings, besides beyond what we're seeing. Some of those we have in the plan and get us to that 1%, but certainly others, we'll look to improve upon that once we deploy the various forms of technology.

PPL (PPL) Q4 2025 Earnings Call Transcript

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