Good day, and welcome to the PPL Corporation Third Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded. I'd now like to turn the conference over to Joe Bergstein, Vice President, Investor Relations. Please, go ahead, sir.

Thank you. Good morning, everyone. Thank you for joining the PPL conference call on third quarter results as well as our general business outlook. We're providing slides to this presentation on our website at www.pplweb.com. Any statements made in this presentation about future operating results or other future events are forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the forward-looking statements. A discussion of factors that could cause actual results to differ is contained in the Appendix to this presentation and in the company's SEC filings. We will refer to earnings from ongoing operations or ongoing earnings, a non-GAAP measure, on this call. For reconciliations to the GAAP measure, you should refer to the press release, which has been posted on our website and furnished to the SEC. At this time, I'd like to turn the call over to Bill Spence, PPL Chairman, President and CEO.

Thank you, Joe, and good morning, everyone. We're pleased that you joined us this morning. With me on the call today are Vince Sorgi, PPL's Chief Financial Officer; and the Heads of our U.S. and U.K. Utility businesses. Since we will see many of you at EEI next week and considering the number of earnings calls being held this week, we plan to keep our prepared remarks brief and move quickly to the Q&A. Moving to slide 2, our agenda this morning starts with an update to our 2017 full year earnings guidance, which we are increasing today, and a brief discussion of our longer-term growth trajectory. Vince will then provide an overview of our quarterly and year-to-date earnings results along with the more detailed financial review. Then, we'll get right to your questions. Turning to slide 3, based on our strong performance year-to-date, we're raising the midpoint of our 2017 ongoing earnings guidance, despite the unfavorable effects of weather in Kentucky and Pennsylvania. We're updating our 2017 forecast range from the previous $2.05 to $2.25 per share to $2.10 to $2.25 per share, increasing the midpoint of our forecast from $2.15 to $2.18 per share. Strong year-to-date earnings in the U.K. Regulated segment give us the confidence to raise the low end of our guidance. Drivers behind the strong U.K. performance include higher sales volumes, primarily from weather, lower operating and maintenance expense, and lower income taxes. As a result, we updated the segment forecasts since the second quarter call, by increasing the U.K. Regulated segment by $0.04 and by lowering the Kentucky Regulated segment $0.01 due to the continued impacts of unfavorable weather, which Vince will comment on later in his remarks. The Pennsylvania segment and Corporate and Other are expected to deliver in line with the second quarter earnings forecast. We continue to expect 5% to 6% compound annual earnings per share growth from 2017 through 2020, measured against the original 2017 ongoing earnings forecast midpoint of $2.15 per share. We're in the process of updating our business plans now, and we will provide earnings guidance for 2018 and an update to our longer-term growth rate on the year-end call. Our current plan includes investing more than $16 billion in infrastructure from 2017 through 2021 and achieving essentially real-time recovery for more than three-quarters of that investment. Our investments are focused on expanding and modernizing the grid, adding smart grid technology and automation, as well as strengthening physical and cyber security. We also continue to target annual dividend growth of about 4% a year through 2020. And as I've indicated in the past, the strength of our growth plan is built on the low risk nature of our business plans and is supported by the strength of our hedging program and our stable stream of utility earnings and cash flows. Now, I'll turn the call over to Vince to cover the financial highlights. Vince?

Thank you, Bill, and good morning, everyone. Let's move to slide 5 for a review of our financial results. Today, we announced third quarter 2017 reported earnings of $0.51 per share compared with $0.69 per share a year ago. Year-to-date through the third quarter, reported earnings were $1.53 per share compared to $2.11 per share through the first nine months of 2016. Adjusting for special items, third quarter 2017 earnings from ongoing operations were $0.56 per share compared with $0.63 per share a year ago. The $0.07 per share decrease was driven by lower earnings from the U.K. Regulated segment of $0.11 per share, primarily due to $0.07 from lower foreign currency exchange rates in 2017. Corporate and Other was positive by $0.04 per share due to the partial reversal of the timing impact created in the first quarter related to recording our annual estimated income taxes. I'll cover the quarterly segment earnings drivers in more detail in a moment. Moving to the bottom table, earnings from ongoing operations were $1.70 per share through the first nine months of 2017 compared with $1.86 per share through the same period a year ago. Our year-to-date earnings from ongoing operations were lower by $0.16 per share driven by lower earnings from the U.K. Regulated segment of $0.10, lower earnings from our Kentucky and Pennsylvania segments, $0.02 each, and an unfavorable variance for Corp and Other of $0.02, again due to the timing impact created in the first quarter related to recording annual estimated income taxes. Expected lower foreign currency exchange rates resulted in $0.24 per share of lower earnings in 2017 compared to 2016. We've included to the right, additional drivers contributing to our year-to-date earnings variance. The April 1, 2016 price increase in the U.K., the base rate increases in Kentucky…

Thank you, Vince. In summary, we're confident we can deliver on our 2017 earnings forecast. We're also confident in our ability to deliver the 5% to 6% compound annual earnings growth off of the $2.15 per share through 2020. And we remain confident in our ability to deliver targeted annual dividend growth of about 4% through the same period. Before we open the call to questions, I would like to recognize and thank the men and women of PPL for their hard work and dedication in supporting the storm response efforts from Hurricanes Harvey and Irma. We have used our industry's mutual assistance program in the past, especially during Superstorm Sandy, and we are proud to provide that much needed support to our friends in Texas and Florida. With that, operator, let's open the call to questions, please.

Absolutely. We will now begin the question-and-answer session. Today's first question comes from Julien Dumoulin-Smith of Bank of America Merrill Lynch. Please go ahead.

Hey, good morning.

Good morning, Julien.

Hey. So, I suppose the best way to frame this is, can you give us a little bit of context into what's going on in the U.K. with respect to the bill, let's call it bill inflation, and everything with respect to the retailers, to how and if – to what degree would you ever expect that to impact you all, I perceive a good degree of confidence. Can you expand on that confidence on your side?

Sure. So, just so folks on the call are aware, I think, in the U.K., there's been a lot of concern on behalf of some consumer advocates in particular about the total effect of electricity and natural gas prices in the U.K. and the focus has been predominantly on the suppliers. So, in the U.K., every consumer has to pick an independent gas or electric supply source, most of those come from fairly good-sized marketer. So, there's been a lot of focus on the volatility and the overall cost associated with the supply component of the bill. So, obviously, the distribution component is much lower, supply being typically about 70% of the bill. So, thus far, we still feel confident as you described, Julien, not only because the focus has predominately been on the suppliers, but also because there's a great track record with Ofgem and the value that their process regulatory framework has provided to the ultimate consumers. That value is measured directly, and very openly and transparently, to consumers through things like customer service metrics, reliability metrics and the overall very reasonable cost to deliver power to the customers. So, again, we feel confident that the overall regulatory framework will remain intact and, as you know, we're really set up for continuing to deliver on the approved plan through 2023. So we have a long runway, yet, on the current process, and the new process for beyond 2023 is just now kicking off.

Right. That's actually a perfect segue into the next question, just real quickly, as a follow-up. Can you give us any color on the ongoing workshops surrounding the RIIO-2, the published framework in 1Q 2018? What do you think will be the focus?

Sure. So, the stakeholder responses to the first element, if you will, of the new – of the process was an open letter that Ofgem published back in the late summer. Responses to that letter, which essentially asked for comments on how various stakeholders felt about the current processes, not only for the electric companies, but also for the gas companies, specifically for the electric companies, the responses were due on September 4th. We didn't see anything in the responses that concerned us in this – in the stakeholder comments that we read. The purpose of the framework review is really to build on the lessons learned from the current price control review and develop a framework that would be adaptable to meeting the needs of kind of the evolving U.K. energy sector. As you're aware, we've been successful in the past at navigating through new price controls and feel there's ample time to effectively prepare for the start of RIIO-ED2, which is the next process we get into. We're very early in that process and, as I mentioned, no changes would take effect until 2023; it'd be April of 2023. So, again, we've got a lot of opportunity to participate constructively and shape the framework associated with RIIO-2 to have an outcome that we think is fair to shareowners as well as stakeholders in the U.K.

Great. Excellent. Thank you very much.

You're welcome, Julien.

And our next questions come from Ali Agha of SunTrust. Please go ahead.

Thank you. Good morning.

Good morning.

Good morning. First question, as you're looking at this mid-period review on RIIO-1, can you again verify, of course, you're still confident you don't expect anything to change for you through that process? And what's the key milestone or date in your mind to get full clarity on this mid-period review?

Sure. We don't see any justification for an adjustment to our RIIO-1 business plan, and that's based upon the criteria that they've set out for any types of adjustments, but also our past experience, where we haven't seen anything meaningful be adjusted in the past. I would also point out that we were, fast-track, the only companies to be fast-tracked in the U.K. and that basically was because we had fully justified very sound business plans. So, again, we feel there is no justification at this time for any adjustment. As far as when the clarity comes, we do have a slide in the deck, I think it's slide 22, that shows the indicative timetable. So, if you look at kind of a go/no-go decision, we're looking at something probably in early 2018 timeframe.

Okay. And on the RIIO-2 process, Bill, as you mentioned, that goes on, for you, until April 2023 when things turn. As you know, the water utilities and the gas transmission relays, obviously, have earlier dates coming up. How significant, in your mind, are the parameters that will be set, for example, for the water companies that will be still a few years ahead of you as far as read-through to your parameters, cost of equity, et cetera, or do you think that, given the timeframe difference, you wouldn't extrapolate from that? How are you thinking about that?

Yeah. So, relative to the water companies, Ofwat, which is a different regulator than Ofgem, that regulates the electric and gas utilities, Ofwat has a different process and the way in which they deal with things like cost of capital has historically been different. So, we haven't seen an ability to kind of do a read-across or read-through from outcomes in Ofwat in the past and I would suspect that it would be difficult as well given as you mentioned there is a time difference, number one. But, number two, the framework and the way that they deal with the water companies has historically been quite a bit different than on the electric and gas side.

Last question, again, on the U.K. Well, lot of speculation that at some point maybe whenever the elections come up, the opposition party may come to power. Any read on views on the sector from that side that would concern you, as you are thinking about any political change in the U.K.?

Sure. I think, the framework itself has worked historically very, very well. So, there is a great track record to defend, if you will, the framework. And I think to kind of put the toothpaste back in the tube, if you will, to try to change the model very significantly would be a very big challenge. I'm sure you can appreciate that, in general, it's easy for politicians to make promises and much harder for them to deliver on those promises, given the realities of some of these situations. So, it could change, we could see some pressure. I don't think that in the end because of the great track record that this framework has delivered for customers that you're going to see a major shift.

I see. Thank you.

You're welcome.

And our next question today comes from Jonathan Arnold of Deutsche Bank. Please, go ahead.

Yeah. Good morning, guys.

Good morning, Jonathan.

Same topic, I'm afraid, but, I mean just, I saw a stat the other day that the public opinion now apparently almost 80% in favor of electric sector being under national ownership – or public ownership, what do you make of that? And just how are they going to – why are you so confident that the things stay on the current track when you've got those kind of numbers floating around?

I think that number one is, I'm not sure that the public probably has the full picture of how the framework exists or works today, not that they have been educated on it at all. So, it's not surprising. I think that in the end, the Ofgem is an independent regulatory body. So, they're going to be the ones making the decision, whether the framework gets changed or not. Now politically, someone could propose legislation and either change that process, so that it's not independent as it is today. But, again, that would take significant movement in parliament on both sides. So, even if the Labour Party were to come to power in an election and start to change things, it still got to go through a process, a fairly lengthy process, given that that's going to be a lengthy process and given that we've seen changes in the political landscape, significant ones, just in the last five years and we've still got six years to run on the current timeframe till we get to 2023. So, I guess my view is a lot of things are likely to change between now and 2023. It's going to be a long and, I think, a difficult process to put that toothpaste back in the tube, as I describe it, after a very long and successful kind of run with the framework. So, that's kind of our opinion on it. Obviously, we continue to monitor it. And I think once we know what the outcome might be in any kind of new political regime, we'll then begin to reach out and make sure that all those on the political side are aware of the positive track record and what this really means if they were to move in a different direction.

Okay. But what do you make of the recent consultant report the government commissioned, which raised the possibility of intervening in RIIO-1 prior to the end of the period, and kind of also had this concept, I think they call it arm-twisting, where it would be policy to try and pressure network owners into some sort of pre-emptive concession? If someone else was to kind of cave to that kind of pressure, how do you think you would handle that?

Well, I think it would depend on the specific circumstances. If, for example, one of the other companies is significantly under spending, I believe there was already an adjustment made on the transmission side because it was a very large transmission project that's not going to go forward, that was included in the transmission revenue construct. So, a major project like that, maybe that arm-twisting, as you put it, could be effective. I think in our case, first, as I mentioned earlier, we are the only companies to be fast-tracked, meaning that we had a very well justified business plan and, therefore, we don't see any justification for an adjustment based on the rules that are set forth today. If one of our peers on the distribution side were to acquiesce, if you will, and adjust the revenues downward, we have to look at their circumstance. I think if you look at what we're delivering compared to the business plan we put forth, we're right on track, if not slightly ahead. So, I think we're well-positioned to defend any type of challenge to an adjustment to our plan.

So, your strong operating performance would give you at least a stronger position to argue from, I would guess?

Absolutely.

Yeah. Okay. And then, can I just ask, Bill, sort of a related topic, but given all of this focus which doesn't seem to be showing any signs of dying down, does it change your sort of level of comfort with the current mix in the business and potential appetite to sort of address that through maybe M&A domestically?

No, we're very confident in the business mix. We think for the long-term, it's the right type of balance that we have. And we do think that in the longer-term, this is going to work itself out and that the jurisdiction, as it exists today and even with some tweaks, we think is still going to be a premium jurisdiction that's going to provide really great returns for shareowners. So, we're happy with the business mix; don't see any need to change it at this time.

Thank you very much.

You're welcome.

And our next question today comes from Michael Lapides of Goldman Sachs. Please go ahead. Michael Lapides - Goldman Sachs & Co. LLC: Hey, guys. I want to come to the U.S. business for a second, and when we look at both Pennsylvania and Kentucky, one of the things that stands out, really in both states, is neither state has very much in the way of renewable supply. Just curious how you're thinking about whether the generation portfolio mix in the state – and in one state, Kentucky, you own the generation and rate base, in the other you obviously don't, but just curious how you think the supply mix changes over time, meaning five years, seven years, eight years, and what your role, if any, is in the changing of that supply mix?

Sure. So, let me touch on Kentucky, first. Then, I'll turn it over to Vic Staffieri to maybe comment on that. So, Vic, do you want to take that one?

Yes. In Kentucky, we're driven by the regulatory process, which is at least-cost basis. And so, we'll be within the control of the economics, frankly, and so we would see, over time, a migration more towards natural gas, depending on the pricing. Right now, we don't show a customer need for additional generation, but I would expect in the future that it'll move more towards gas, just given the economic framework and the regulatory process, which is a least-cost approach.

Do think, Michael, we're well-positioned in Kentucky. We have the largest solar facility in the state that was approved by the commission as Vic mentioned. We do have to go through a process there. It's an integrated resource plan that we put together roughly every three years. We've also got customer options that are available to them for solar if they choose to install it, we can do that within the regulated framework. So, I think we're well-positioned. Should customers want additional solar, either on their own or as we go through the regulatory process, we'll look to see what's the most economic thing to do for our customers. Relative to Pennsylvania, I'll let Greg comment, but maybe just to mention that, as you're aware, we do not own generation any longer in the State of Pennsylvania. We're required to purchase for those that don't shop for their electricity, we're required to purchase a component of renewable energy based on some guidelines that the state has put forth. Those haven't been that significant over time in terms of specifically solar and wind. We are seeing a bit more activity on the solar front. Maybe, Greg, you could comment about how you see things from a renewable energy mix based on what you're seeing in Pennsylvania.

Yeah. So, I guess – so, we are, just as Bill said, when we purchase our default supply, we go out for bids and the mix, we have to have a certain percentage of renewables in that mix, and that's set by legislation. Beyond that, now, we're seeing an uptick in solar applications on a part of our customers. So, it's – we're starting to see the impact in our business already. So, we see it continuing just like it is across the country. Michael Lapides - Goldman Sachs & Co. LLC: Got it, guys. Thank you. Much appreciated.

You're welcome. Michael Lapides - Goldman Sachs & Co. LLC: Okay.

And our next question comes from Steve Fleishman of Wolfe Research. Please go ahead.

Yeah, hi. So, just, Bill, you mentioned, you'll be reviewing the 2018 and growth rate on the year-end call. Just any high level color on the trend in the capital plan, I guess in particular, and it seems like it's pretty stable overall, but just is there any kind of upward movement at all in capital needs in the utilities?

I think it is, Steve, pretty stable, so, I don't see any significant changes once we update the plan on the capital side.

Okay. Thank you.

Okay, you're welcome.

Okay. Well, thanks, everyone, for your participation on today's call and we look forward to seeing everyone at EEI next week. Thank you.

And thank you, sir. The conference has now concluded. And we thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.