PPL Corporation (NYSE:PPL) Q4 2019 Earnings Conference Call - Final Transcript
Feb 14, 2020 • 10:00 am ET
[Operator Instructions] Today's first question comes from Ali Agha of STRH. Please go ahead.
Thank you. Good morning.
William H. Spence
Good morning, Ali.
Good morning. First question. I just wanted to reconcile your 2020 guidance of $2.40 to $2.60 with the numbers you've been showing us for quite a while up until recently, a 2020 projected range of $2.54 to $2.58. I guess when I think about the midpoint -- I know that was a narrower range, but the midpoint was certainly higher than what you're showing us today. Could you just reconcile what changed from the numbers you've been sharing with us?
William H. Spence
Sure. I'll make a couple of opening comments, and I'll pass it on to Joe. One of the things you just pointed out was the very tight range that we had established for 2020.
Having said that, we still are kind of within that range, but towards the lower end. Operationally, when you look at the assumptions behind the 2020, we're largely consistent with the prior forecast. The primary change was really a significant decline in corporate bond rates in the UK, resulting in some lower discount rates, which had a negative impact on our UK pension obligations. Those factors really resulted in about a $0.06 impact compared to our prior plan. But as I mentioned, despite this, we're still in the prior range for 2020.
Joe, do you want to say anything more?
Joseph P. Bergstein
Yeah. We saw a sharp decline in corporate bond rates in the UK that lowered the discount rates, resulting in the increased UK pension obligations under US GAAP. The discount rate declined by more than 100 basis points. It went from about 3% to less than 2%, and that's really what's causing the difference from our prior forecast. And again, to those point, operationally everything else remains unchanged.
Got it. And then second question. Vince, I just wanted to be clear. When you talked about the capex opportunities that you're seeing across the different utility segments, did I hear it right that over this five year period, '19 through '24 -- or '23/24, I should say, that you're seeing potentially another $800 million of additional capex? Or was the number even larger than that? I just wanted to be very clear what's the opportunity size that you see that's not yet embedded in your official capex numbers.
Yeah. Sure, Ali. In my remarks, I indicated that was about $0.5 billion, so $500 million.
$500 million. And I think separately you also talked about $300 million of AMI. That's not yet in that, is that correct?
Yeah, that's part of the $500 million.
Oh, that's part of the $500 million. I got you. Okay.
And the other thing I would note is that just changing that FX assumption from $1.40, our previous assumption, down to $1.30, as indicated on our slide 12, cut about $300 million from the forecast. So, depending on when we get out particularly to 2022 and beyond, to the extent the FX rate