Good morning and welcome to the PPL Corporation Second 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 note, this event is being recorded. I would now like to turn the conference over to Joseph Bergstein, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning and thank you for joining the PPL conference call on second quarter results and our general business outlook. We are providing slides of 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 such forward-looking statements. A discussion of factors that could cause actual results or events 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 reconciliation to the GAAP measures, you should refer to the press release which has been posted to our website and has been furnished with the SEC. At this time, I would like to turn the call over to Bill Spence, PPL's Chairman, President and CEO. William H. Spence - Chairman, President & Chief Executive Officer: Thank you, Joe. Good morning, everyone. We're very pleased that you've joined us this morning. With me on the call today are Vince Sorgi, PPL's Chief Financial Officer, and the presidents of our U.S. and U.K. utility businesses. Moving to slide 3, our agenda this morning starts with an overview of our quarterly and year-to-date 2016 earnings results. We will also provide an update to our 2016 full-year earnings guidance, which we are reaffirming today. We will then turn our discussion to the impact that the U.K. decision to leave the European Union has had on PPL. We are also initiating earnings guidance for 2017 and updating our long-term EPS growth rates. Following my remarks, Vince will review our segment results and provide an overview of…

The first question comes from Greg Gordon at Evercore ISI. Mr. Gordon? William H. Spence - Chairman, President & Chief Executive Officer: Good morning, Greg.

Oh. Hi. Good morning. Sorry about that. So, absolutely the right decision to reset the currency hedges from my perspective. I just have one clarifying question and I thought your presentation was pretty clear, but when you look at the balance sheets of the U.K. versus the U.S. entities, presumably before you were going to be leveraging up a little bit in the U.K. in order to repatriate that cash. Now, you're going to have a higher equity capitalization in the U.K. But where on the U.S. corporate structure are you going to be issuing the incremental leverage, and how does that change in the capital structure in the U.K. flow through the U.K. earnings? Essentially because you have an eight-year deal, the real cost of capital will essentially now be slightly different than the prior projected cost of capital. I'm sorry I'm asking a belabored question, but I just want a little more details on how to bridge the cash flow. William H. Spence - Chairman, President & Chief Executive Officer: Sure. No, I understand. So, just a couple of comments and then I'll turn it over to Vince. So, yeah, you're absolutely right. So the capitalization program for the U.K. is going to be different. So, as you recall in the past, we were looking at leverage at the U.K. holding company over time approaching 80% to 85%. That's more likely now to be down around the 75% level. That's going to give us about $1 billion, roughly, of headroom, if you will, for future investments from the U.K. once the exchange rates settle out and we look at the financial strategy for the U.K. going forward. So that's one – clearly one piece of it. Maybe, Vince, you can take the other elements of the question. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Sure, and I'll just follow up on that. So that borrowing, generally, Greg, was up at the WPD holding company level, so it wasn't part of the rate-making within the U.K. It did help drive the higher ROEs at the segment level because the debt was up at the holding company level, but it doesn't really impact the revenue projections within the U.K. And then the U.S. entity would be PPL Capital Funding would be the one that's issuing that debt to replace the lower amounts coming back.

Great. And then my second to last question, when I think about post-2017 total earnings growth, the aspiration is 5% to 6%. I know you're through sort of the big reset years in the U.K. under the new rate scheme in terms of having the incentives come down, having to reset and you want to have the incentives come down as you transition, and I see the rate base growth profile in the U.S. Based on your current assumptions and understanding things could change a lot as we move forward in time, do you expect that the earnings growth path to be somewhat linear inside that 5% to 6% growth path or are there like sort of chunky CapEx rate base rate-making assumptions we have to think about between 2017 and 2020? William H. Spence - Chairman, President & Chief Executive Officer: Yeah, good question, Greg. No, we expect it to be relatively linear or consistent year-over-year and not lumpy or chunky over that 2017 to 2020 timeframe.

Okay. Thank you, guys. William H. Spence - Chairman, President & Chief Executive Officer: Sure. Thank you, Greg.

The next question is from Jonathan Arnold at Deutsche Bank.

Good morning, guys. William H. Spence - Chairman, President & Chief Executive Officer: Good morning. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Good morning.

Two things. I think I heard you mention that you'd changed the – you'd adjusted the pension to expectation of lower for longer with the guidance reset. So can I just clarify? Does that mean you've put the pension assumption where rates are currently into 2017? Vincent Sorgi - Chief Financial Officer & Senior Vice President: Yes. This is Vince, yes. We're assuming a below-4% discount rate in both the U.S. and the U.K., and actually our 2017 U.K. discount rate is even below 3%.

Okay. Great. Thank you for that. And then just can I – also on hedging strategy going forward, you're obviously 50% covered on 2018 with this kind of upward – upside bias and the way you've done it. How should we think about your willingness to keep currency open as we move forward? And are you likely to – is this kind of 50% of this effectively third year where you would expect to be, say, on 2019 by this time next year or are you kind of ahead of where you'd expect to be, some feel for how you'll do this going forward? Vincent Sorgi - Chief Financial Officer & Senior Vice President: Sure, Jonathan. I think it would be fairly consistent with the approach that we've taken in the past where we would certainly be highly hedged for the upcoming period in which we give specific guidance. So, in this case, it was 2017, so we thought it was appropriate even though we issued guidance a little bit early to go ahead and hedge that up a little bit further than we normally would at this point. So looking at 2018, we would begin hedging in or looking to hedge in the rest of 2018 sometime beginning next year, and then probably start to layer in some 2019 hedges next year as well. And we'd probably look to, depending on the volatility in the currency rate and other market conditions, we may look to do something similar with collars like we've done here to either preserve some of the upside and protect the downside or to lock in something above our plan. So to the extent that we can improve upon the growth rate by hedging in at numbers stronger than the plan, that would obviously be something we'd look closely at doing.

Great. So we should think of you as being a little ahead of what the typical plan will be at this point. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Yeah. A little bit, yes.

Okay. Thank you. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Sure.

The next question is from Gregg Orrill at Barclays. William H. Spence - Chairman, President & Chief Executive Officer: Good morning, Gregg.

Good morning. Thank you. Just, again, your thoughts on how you're doing with the U.K. incentive scheme there and program and if there was any notable change outside of FX for your assumptions. William H. Spence - Chairman, President & Chief Executive Officer: Yeah. We're very happy with the performance. Obviously, we've got one full year behind us. We're into the second year, which started April 1, 2016. So I think the team in the U.K. is doing a great job. And I'll let Robert Symons, the CEO of our U.K. business, comment on kind of expectations going forward and what we've built into the plan here.

Yes. Thanks, Bill. Very much on track in the same way as we were last year. If we have storms, then – if they're of sufficient size, then they're excluded from the numbers. So our ongoing numbers are looking very similar to the previous year. So really no worries where that's concerned at the moment. In terms of what are we doing, we increase all the time. We're increasing the level of automation. I'm looking at new ways in terms of getting those numbers better year-on-year.

Great. Thanks, Robert.

One thing that has happened is that we've came top of the pops in terms of social responsibility and time to connect. There are some incentive to actually measure how well companies were doing in terms of how they treat vulnerable customers and also a hot topic in the U.K. is the time taken to connect, and we've come out with the top incentive payment in both those two areas. William H. Spence - Chairman, President & Chief Executive Officer: Yes. So, Gregg, I would just say that the amount received for those two incentives was significantly higher than what we had originally expected. And so, we did update the incentives for that as well. It's about $10 million, $12 million or so.

Got it. Thank you. William H. Spence - Chairman, President & Chief Executive Officer: Sure.

The next question is from Michael Lapides at Goldman Sachs. Michael Lapides - Goldman Sachs & Co.: Hey, guys. Just looking at the bridge for 2016 versus 2017 guidance, and one of the things that stands out a little bit is the U.K., not the currency side, but, honestly, the fact that your expectation that D&A and taxes other than income taxes, interest, will all offset any revenue change. Just curious, do you view that $0.04 headwind in the U.K. as kind of a one-off deal in 2017; and then beginning in 2018, you'll get earnings growth out of the U.K.? And also, can you talk about expectations for O&M, just local currency, not currency-adjusted, in the U.K. in 2017 and beyond? Vincent Sorgi - Chief Financial Officer & Senior Vice President: Sure. So, on the revenue and the offsets on depreciation interest, some of that is a one-time transition or specifically limited to 2017. So yes, that's a little bit of an anomaly in terms of that transition, 2016 to 2017. Relative to O&M, really I don't think there's any change expected in O&M. Much of the work that Robert and his team are doing is very predictable and very kind of standard blocking and tackling type work, so no expectation there. As I know you can appreciate, Michael, the RPI could be an uplift to us because that retail price index is expected to probably go higher as the economy in the U.K. is under some pressure. So that's a potential upside to the plan should it go beyond what we have assumed today. So other than that – and our revenues would be adjusted for that – really no other impacts on the negative side. William H. Spence - Chairman, President & Chief Executive Officer: Yeah. It's…

The next question is from Paul Patterson at Glenrock Associates.

Good morning. Can you hear me? William H. Spence - Chairman, President & Chief Executive Officer: Good morning.

Just a philosophical question, I guess. I mean, if you're basically canceling out your hedge and taking the money, why re-hedge, I guess? Do you follow me? I mean, if you could just sort of like – is it just because of near-term volatility and the idea that investors want some protection in that versus being way out of the money? If you could just elaborate a little bit on that, I'd like that. William H. Spence - Chairman, President & Chief Executive Officer: Sure. That's a good question. So we thought that the opportunity to cash out the hedges would allow us to provide that certainty on the dividend growth rate of 4% that we noted we are committing to or at least targeting, I should say, for the 2017 to 2020 period. So that was one of the real values of that. Plus it helps to offset from a cash perspective the lower amount that we would be repatriating back from the U.K. in light of the lower exchange rates. So, philosophically that was kind of how we looked at it. Vince, do you want to provide any additional color to that? But I think those are two of the main elements. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Sure. I think as we've also – when we come out and kind of reset our earnings, we wanted to make sure we had a strong degree of confidence in those earnings that we were coming out within the growth rates that we've provided. As we talk with economists in the U.K., banks – a number of banks, both in the U.K. and here in the U.S. – I think there was some view that in the back half of 2016, there could be some additional…

Okay. Thanks for that. And then, just – other than on this tax differential, other than the borrowings that you're talking about, like increasing them in the U.S. versus the U.K., are there any other strategies that you guys might be thinking that could further optimize that in terms of cost shifting or there's some derivative things that could theoretically take place. William H. Spence - Chairman, President & Chief Executive Officer: I wouldn't think that there'd be anything of a significant or material amount. I think we'll continue to look to tweak the strategy and look for other optimization. But I think, at the moment, I can't envision something that would be very significant. But we'll continue to look at it. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Yeah. I mean, the real thing we're looking at is the after-tax cost of borrowing. And so, obviously, the interest rates play into that as well. But interest rates are fairly consistent between the two countries, and it really, at least right now, boils down to the tax effects of those – of that interest expense. But that's something we'll continue to monitor.

Great. Thanks a lot. William H. Spence - Chairman, President & Chief Executive Officer: Sure.

The next question is from Anthony Crowdell at Jefferies.

Guys, my question has been answered. Thank you. William H. Spence - Chairman, President & Chief Executive Officer: Okay. You're welcome.

The next question is from Steve Fleishman at Wolfe Research.

Yeah. Hi. Good morning. A couple of quick questions. First, on the – just to clarify a prior answer on the incentives, if you exclude currency and the like, what – how much have the incentives gone up, I guess, on a non-currency basis from your last guidance? William H. Spence - Chairman, President & Chief Executive Officer: So as Vince said, on a dollar basis, about $10 million to $12 million. Vincent Sorgi - Chief Financial Officer & Senior Vice President: Yeah. That's the social responsibility. Did we raise it above that?

Okay. William H. Spence - Chairman, President & Chief Executive Officer: Yeah.

Sorry if I missed that. William H. Spence - Chairman, President & Chief Executive Officer: Yeah. That's okay. So, Steve, it would be $10 million to $12 million.

Okay. And then just in terms of your kind of overall rate base growth plan through 2020, are there some – I recall you in the past talking about some projects or opportunities, maybe, that could be added to rate base growth over time. Are there some things in the hopper that are not included in this plan to 2020 right now? William H. Spence - Chairman, President & Chief Executive Officer: Yeah. We do have on our transmission group several projects we're pursuing. The one that we have talked about in the past is Compass. That's a very large – if you looked at all the phases, $3 billion to $5 billion potential project. The first phase, which is Western Pennsylvania into New York, would still be material. But most of those, Steve, would be pretty late in this decade into the next decade, so no real significant spending on those bigger projects until probably you get out to 2019, 2020, and even then it would probably be a slow build, and then really more significant in the 2021-2022 timeframe. But we continue to look at some competitive transmission projects both within PJM and outside of PJM, none of which are embedded in our guidance at all, so those projects would all be upside to the plan.

Okay. And then just curious, just are the rating agencies kind of comfortable with your updated U.K. distribution plan, issuing debt at the parent, to cash from the hedges, all that? I'm just curious kind of their reaction to it, if at all? William H. Spence - Chairman, President & Chief Executive Officer: Yes. So, when the impact of the pound was evident, we did have conversations with the rating agencies, and their initial report was to maintain the ratings with a stable outlook. And our commitment, obviously, as I stated earlier, to maintaining the investment-grade credit ratings is solid, so we wouldn't expect any significant change.

Okay. And then one last question just strategically. Obviously, this is a bit of a freak event, but I'm curious, Bill, either you or the board, how does this kind of maybe color your view on wanting to strategically get more domestically oriented in terms of mix of earnings, if at all? William H. Spence - Chairman, President & Chief Executive Officer: Yeah, because it is such a unique event, it really doesn't change the view that we have about the strengths of the U.K. business mode, so we're not going to, obviously, overreact to any event like this. So, yeah, it really doesn't change our view of the business mix. As we stated before, to the extent that we would engage in M&A, clearly, we would probably look more significantly at domestic opportunities than we would opportunities in the U.K. But having said that, there are no plans to change the mix at this time.

Okay. Thank you. William H. Spence - Chairman, President & Chief Executive Officer: Sure.

The next question is from Shar Pourreza of Guggenheim.

Hey, guys. Just – most of my questions were answered. But on domestic growth, it looks like utility growth is slightly down. I'm having trouble finding out, is that just a function of rolling forward to 2019 and 2020 versus your prior plan, or is the CapEx sort of leveling off in 2019 and 2020? William H. Spence - Chairman, President & Chief Executive Officer: I think it's a combination of the different time frames. So before we were looking at the 2014 to 2018 period, the 24 (49:01) was kind of an adjusted number that we were growing off of. So we've re-based now on the 2017 guidance that we just provided through 2020, so that's probably the biggest driver is just that time period and extending, as you point out, extending it through 2019 and 2020 so – which, as I mentioned earlier, even though we've got a slightly lower growth rate, we would expect that to be fairly ratable over the years 2017 through 2020, so no real lumpiness to it. Vince? Vincent Sorgi - Chief Financial Officer & Senior Vice President: Yeah, Shar, I would say there's probably two main points in driving the delta. One, as you may recall, we had about that $100 million of corporate restructuring in the 2014 to 2018 growth rate. That's obviously not in the 2017 to 2020 growth rate. And then we were also transitioning in Kentucky from a historical test year to a forward test year back then. Now, we're all on future test years and so you don't get that bump in the initial growth rate that we had back in the 2014 to 2018 period.

Got it. And then just one real last question here on WPD. I know we've historically talked about the business will naturally dilute itself as U.S. utilities grow. But now, it looks like U.K. and U.S. more or less growth almost similar, maybe the U.S. growth a little bit more. I just want to reinforce, Bill, like the board is still comfortable with the WPD business despite this discount continuing. William H. Spence - Chairman, President & Chief Executive Officer: Yes, they are. I think we, again, have great confidence in the underlying fundamentals of that business and like all the attributes of the regulatory construct there that provides us recovery of and on capital as we deploy it. So I think the very positive attributes of that business really offset, to a degree, any type of downside we see. And again, we believe the Brexit was a unique event and we don't anticipate events like that coming along again in the future. But we are, yes, comfortable and the board is comfortable with the business model.

Excellent. Thanks. William H. Spence - Chairman, President & Chief Executive Officer: Sure.

This concludes our question-and-answer session. I would like to turn the conference back over to William Spence for closing remarks. William H. Spence - Chairman, President & Chief Executive Officer: Okay. I'd just like to thank everyone for joining us today. As I mentioned, we believe that the steps we took today were absolutely the right ones for share owners and we look forward to executing on our new plans for 2020 and appreciate the support of share owners as we go forward. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.