Thank you, Phil. Good morning everyone. And thank you for joining the PPL conference call on fourth quarter and year end 2018 financial results. We've provided slides for this presentation in our earnings release issued this morning on the investor section of our Web site. Our presentation and earnings release, which we will discuss during today's call, contain forward-looking statements about future operating results or other future events. Actual results may differ materially from these forward-looking statements. Please refer to the appendix to this presentation and PPL's SEC filings for a discussion of factors that could cause actual results to differ from the forward-looking statements. We will also 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 appendix of this presentation and our earnings release. I will now turn the call over to Bill Spence, PPL Chairman, President and CEO.

Thank you, Andy and good morning everyone. We’re pleased that you joined us for our 2018 year-end earnings call. With me on the call today are Vince Sorgi, PPL's Chief Financial Officer; Greg Dudkin and Paul Thompson, the heads of our U.S. utility businesses; and Phil Swift, who is recently named Chief Executive of Western Power Distribution in the UK, following the unfortunate passing of Robert Simons in November. While we are deeply saddened by Robert's passing and he will be sorely missed, we are very fortunate to have Phil who has a wealth of experience with over 25 years at WPD. I have great confidence in Phil's ability to read our tremendous team there, and to continue the company's proven track record of outstanding execution established by Robert over the past 20 years. Moving to Slide 3. Our agenda this morning begins with a brief overview of 2018 results and PPL's business outlook for 2019. I will also provide a brief update on key regulatory developments. Vince will then provide a more detailed financial review of 2018 and 2019 and a discussion on our earnings guidance for 2021. As always, we'll leave ample time to answer your questions. Turning to Slide 4, 2018 marked another successful year for PPL as we delivered on our strategy of best in sector operational performance, investing in a sustainable energy future, maintaining a strong financial foundation and engaging and developing our people. We closed the year with strong operational and financial results. As announced earlier today, we achieved the high-end of our 2018 ongoing earnings forecast range or $2.40 per share. 2018 was the ninth consecutive year that we exceeded the midpoint of our guidance. It was the second straight year that we achieved the high-end of our forecast. We’re very proud of…

Thank you, Bill and good morning everyone. Let's move to Slide 8 for a brief financial overview before I get into the details. Regarding 2018, I will focus my prepared remarks this morning on the full year results. Please refer to the news release for additional details on the fourth quarter results. Today, we announced 2018 reported earnings of $2.58 per share compared to $1.64 per share a year ago. 2018 reported earnings reflect net special item benefits of $0.18 per share, primarily due to unrealized foreign currency economic hedges. 2017 reported results reflect net special item expenses of $0.61 per share, primarily due to the impact of U.S. tax reform and the unrealized foreign currency economic hedges. Adjusting for these special items, 2018 earnings from ongoing operations were $2.40 per share compared to $2.25 per share a year ago. A solid execution of our business plan and benefits from weather during the year enabled us to achieve the high-end of our ongoing earnings guidance range. Looking at 2019, as Bill indicated, we announced formal guidance of $2.30 to $2.50 per share. As you may recall, we accelerated the timing of some planned equity issuances into 2018 and 2019 as a result of U.S. tax reform to support our credit metrics and significant capital investment program. While this results in higher dilution in 2018 and 2019, we continue to expect 5% to 6% compound annual EPS growth through 2020 based on the 2018 original ongoing earnings guidance midpoint of $2.30 per share. In addition, we continue to project growth through 2021 and have initiated a guidance range of $2.50 and $2.80 per share, which I'll discuss in detail in few moments. Turning to Slide 9 for a detailed review of 2018 financial results. Overall, we continue to deliver strong year-over-year…

Thanks, Vince. In closing, PPL delivered another strong performance in 2018 as we continue to execute on our strategy for growth and operational excellence. Once again, we delivered strong financial results. We executed on our financing plan and positioned the company well post tax reform. We provided award-winning customer service and reliability to our more than 10 million customers. With an eye towards the future, we invested in infrastructure to make the grid smarter, more reliable and more resilient, and to advance a cleaner energy future. We continue to deliver on our commitments to customers and shareowners and we will continue to deliver long-term value for those who invest in PPL. That concludes our prepared remarks. Operator, let's open the call up for questions, please.

Thank you. We will now begin the question-and-answer session [Operator Instructions]. The first question comes from Ali Agha with SunTrust. Please go ahead.

My first question comes back to one of the assumptions you've made for 2021, which has UK pension income and a couple of other factors. Just wanted to get a sense of how much UK pension income are you currently booking? And that negative $0.05 to $0.10 you assumed in '21. Is that primarily pension income reduction or is it the other factors driving it? And also when will you know for certain what the pension income will be for 2021?

Let me start and then I'll turn part of this over to Vince. We’re expecting about a negative $0.05 impact from the pension deficit in our base case, so that that is the number that's really associated directly with the pension deficit. As you noted, there are some other drivers which are some other true ups that could impacted, but that's the primary amounts and the $0.05 what’s built into the base case for now. Relative to the amounts that we’re collecting it's about $180 million of revenue that we're collecting in pension deficit funding. Based on the current assumptions and as Vince noted, the lower asset returns and balances we believe are still going to require continued deficit funding certainly over the next several years. So just for sensitivity purposes, as we noted, we stressed another $0.05 in the low case. So the primary drivers to the high and low guidance range that we gave are the FX and UK pension and other true ups, which we discussed. Relative to the more detailed question, I'll turn it over to Vince.

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And I guess just to conclude the thought here on the pension deficit. We’re not expecting that the entire amount of the pension deficit would go way through the ED1 process. So we think there could be the negative impacts some reductions but certainly don't believe at this point that the majority of it would go away.

Second question, Vince, just looking at the -- or Bill for that matter. The dividend increase when I compare it to the last couple of year, it was much more modest. Just again wanted to get a sense of your thinking on the dividend and what brought it to a substantially lower growth rate than what we’ve been seeing the last couple of years?

I think it's not just one factor, there is couple of factors. Maybe the first is we look at the dividend in the context of the overall total return that we expect to deliver to the shareowners. And currently with the 5.5% EPS growth and the almost 5.5% dividend growth, we’re looking at about an 11% total return for shareholders, which we think puts us in the top quartile of the peer group. So we think that that's competitive overall with the peer group. The second factor that we typically look at is the payout ratio compared to our peer group. And we're currently at nearly 70% payout, so that's on the high end of the peer group. So we'd like to work that down more in line with peers over time. So those are two of several factors that go into our thought process.

Last question, Bill, again to you. As it currently relates to UK assets, just wondering are there any other proactive strategic options still left on the table worth looking at, or is it more a sense of just keep executing hunkering down and letting the uncertainties play themselves out over time?

As I previously have mentioned, we continuously look for opportunities to create shareowner value as we've really done over the past decade. And if there is a clear and compelling path that we can take to drive additional value for the shareowners, we are certainly going to consider it. And I think our track record has clearly demonstrated that. So I think we continue to operate exceptionally well and believe the current business mix and plan is going to generate long-term shareowner value. And certainly, I believe we have a very strong business plan with significant rate base and earnings growth and a very competitive dividend. So I don't think we're compelled to react hastily to political or regulatory aspects that quite frankly are out of our control and take options that might destroy shareowner value not created. So we continue to look at that but that at the moment, nothing clear and compelling to drive additional value for shareowners.

The next question comes from Greg Gordon with Evercore ISI. Please go ahead.

I think you mentioned the question of the pension pretty well. But when you look at the drivers that the overall set of drivers that that $0.05 to $0.10 range, are there other offsetting things in there that are actually positives like thinking about the level of negative delta associated with interest? So I know people tend to be hyper-focused on like this, oh, we can lose $0.20 on the pension. Are there other things going from '20 to '21 in that driver basket that actually could be positive drivers that mitigate that, and having less of a pension deficit?

So a couple of things I would point to. One is and you alluded to it as inflation. To the extent that inflation is driving the RPI or CPI in the UK upwards, which it has been, that's actually a positive, because that creates incremental revenue for us. And certainly, we've seen some benefit from that here lately. I think also incremental cost efficiency, we've done an excellent job, both in the UK and in the domestic utilities, to really try to take cost out wherever we can and that’s certainly an area that we're going to continue to look at. I think the other things are customer and load growth. I think you see that with our year end 2018 on a weather adjusted basis, we did see some uptick in low growth. I'm not sure that that's indicative of what we're going to see going forward but built into our plan is actually slightly negative will grow. So certainly anything flat to positive will be upside to the current plan. And then of course regulatory outcomes could always, whether it'd be in Kentucky or Pennsylvania could help lift earnings higher as well. So those are just to set some of the other ones that I would add and potentially incremental CapEx towards the back end of the plan. As Vince mentioned, our CapEx plan is really just based on specific projects that we already know about and have high confidence that we can execute on. But I'm sure that there will be additional incremental CapEx as we look towards the back end of the plan.

And my next question goes to the attestations you're making with regard to your views on the trajectory of what the negotiation with Ofgem will look like on RIIO-ED2, differences between the way distribution will be -- might be treated versus the way it appears at least with the outset transmission and gas are being treated. When you look at where this 3% number that they are testing to starting at in terms of ROE. How do you think about walking that up to what you think you'll really be what the real earnings opportunity is going to look like? Because I think in prior conversations you've talked about how that really masks an opportunity when you add everything up to get back to the types of returns on equity that are consistent with what we earn here in the U.S.?

So starting from that base, number one would be probably an expectation that we’re not going to be in a negative risk-free return environment by the time our ROE is actually set. So that would be probably point number one. Point number two would be the upside potential from incentive revenue that we've had a long history of doing very, very well at. The third element would probably be the shift from fast flat to slow flat , putting more of our revenue into the, if you want to call it, the fast flat, the operating and maintenance bucket and a little bit less in the CapEx for slow flat bucket. And I believe that would have been about $140 million that we shifted at about 10% in the current RIIO-ED1 regulatory process. Other potential upsides we know that Ofgem is going to have a keen focus on how do they incentivize the electric distribution companies to meet some of the clean energy objectives, policy objectives, in the UK. And we believe that's going to result in some other opportunities, whether that'd be CapEx or otherwise. But also in our case, the one element that we do have that we mentioned earlier on the pension deficit funding that’s $180 million that could be converted from arguably less quality earnings to more higher quality earnings through additional CapEx that we could spend and still not raise customer rates, because of that production coming off the pension deficit we can replace it with something that's going to be longer-term an earnings drivers. So those are I would say the major drivers as we look to RIIO-ED2, which again doesn't start for us until April 2023.

Bill, maybe just a couple additional comments. So Greg, when you look at the expected ROREs, which are the RIIO returns in the gas sector, they're projected to be close to 11% for the electric distribution sector, it's projected to be under 9.5%. So I don't think you're necessarily going to see the same level of adjustment for the electric distribution companies as what’s been contemplated for gas. We've in our conversations with Ofgem and they've made it clear in the consultation that this does not apply to electric distribution. They've affirmed that to us in our direct conversations with them. And as Bill said, I think we all agree that there will be additional capital requirements going into electric distribution in RIIO2 as compared to RIIO1, all the electrification needs. And so again our sense is that Ofgem will ultimately for the electric distribution companies come out with their returns to incentivize that investment.

The next question comes from Jonathan Arnold with Deutsche Bank. Please go ahead.

I think most of my questions have been answered. But I’m just curious in your comments on your approach to hedging and the currency. How long will you wait before you start looking in some more of 2020 and start on 2021? And how much flexibility do you have within the policy?

We do have quite a bit of flexibility. But Vince, maybe you can give some color around that.

Yes, our current projection would suggest that we would need to start layering in around April to be remained compliant with the policy.

April of '19?

Correct, for hedges beginning in the backend of 2020.

[Operator Instructions] The next question comes from Michael Lapides with Goldman Sachs. Please go ahead.

Just a little confused about the 2021 guidance, and then have a question about rate base and cash flow. On the '21 guidance, your range includes an FX range that honestly we haven’t seen in a couple of years. We haven’t seen that since the middle of 2016. So if I would just say what's used current today, you would be at the very low end of the guidance range. Is that the right way to think about it or are there other puts and takes in there?

Go ahead, Vince, I will let you take that one.

I think that if you just adjust that assumption on its own, it would suggest that Michael. But I would be hesitant to confirm that conclusion, because of all the items that Bill talked about before. So, the regulatory outcomes in Kentucky could come out better than what we are projecting. Again, we use pretty conservative assumptions when we model some of this base stuff out. And so customer and load growth were flat for Kentucky, slightly negative for PA. If we determine that, the solid sales growth that we’re seeing in 2018, is not just the weather anomaly and that actually continues going forward. That would provide some upside to that base number. Again, we talked about the additional capital investment as we go through the plan, none of that is built into the low end of the range. So of course, we have O&M and inflation assumption in there. So, I wouldn’t necessarily say that if it stayed at 135 we would only be it at 250 in 2021. But clearly, that’s the assumption we put into that low end of the range.

And I would say just the mixture of that put a point on this, the $1.35. We've certainly seen that number in the forwards for post Brexit. So I think you were probably, Michael, referring to the $1.60 to high end, we haven’t seen since Brexit. So I just want to be clear. And that number is really informed by two things; one is, some bank forecasts that we've seen; and the second is that had been, prior to Brexit, I think around the 10 year average of actually, I think the 10 year average was slightly higher, maybe around $1.65. So, I think it has some basis for our forecast in reality assuming that Brexit is behind us by the time we get to 2021.

And then a question on rate base and cash flow. It seems that you’re moderating your rate base growth a little base growth as you extend for the year versus what you gave out at EEI. Is it right to think about one of two things is happening; A, there's just not that much clarity on the back end of the forecasting. Meaning, four or five years is a long way out, CapEx could change a lot between now and then; and two, would that imply that pay, even if rate base growth does slow, it means cash flow would pick up. And if so, how would you utilize that extra cash?

So actually under the existing capital plan that we've presented, we've become cash flow positive in the back end of the plan to you point Michael. And so really that additional cash is reducing the amount of debt and equity that we need to fund the CapEx plan. So at this point that cash would still be utilized to feed the capital.

Meaning, it would be utilized to fund the CapEx and potentially to de-lever up top of the holding company?

Correct.

The next question comes from Praful Mehta with Citigroup. Please go ahead.

I just wanted to follow up on the strategic question that was addressed earlier around WPD. You had mentioned that you always look at strategic options as you've done in the past. Just wanted to check, the key constraint always seem to be the tax angle, right, the tax leakage that was related with any strategic transaction around WPD. Has anything changed around that or are there new options that have come up that may limit the tax leakage, in which case, there are more options to consider, or is it status quo around the tax leakage point?

On the tax leakage, it's pretty much status quo. We have investigated many times different structures and alternatives that would significantly reduce the tax leakage, and none of those to-date at least have made it still shareowner positive, meaning, we're not destroying shareowner value. The other item that we talked about on one of the previous calls was that credit act of the sale -- the potential sale of WPD as being negative as well. So, there'd be both a tax and a credit impact that we'd have to overcome to make this shareowner accretive or in benefit for the shareowners.

And so no such solution exists at this point based on your review?

Correct, none at this point.

And then secondly, on the rate base side, you have -- we were just comparing the rate base at EEI or the guidance on the rate base at EEI versus rate base guidance in your -- in your presentation today, and it looks like it's lowered a little bit. Is that -- firstly, is there anything specific on the reason driving it, is it just timing of CapEx or is there something else that should -- that we should be thinking about around the rate base projections going forward?

There's not really anything major or specific, other than I would say, I believe, we've taken out Advanced Metering project in Kentucky. So that was a fairly sizable one and maybe some of the other projects that were probably lower probability projects that could come back into the plan. But I think it's just -- as we roll forward. It's just refining the numbers that we presented at EEI. And since EEI, we've had more planning done and we've presented our CapEx to our Board of Directors and had the latest numbers approved. So it's really kind of an update, a more specific update than we had at EEI.

Praful, it's really just the math of dropping off a $3.5 billion a year and adding a $2.5 billion a year at the back end until we identify additional capital to be spent out there. So it's really, really just that.

Got you, super helpful. Appreciate it. Thanks so much guys.

Thank you. Well, thanks everyone for joining today's call and we look forward to talking with you on the first quarter call.

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