PPL (PPL) 10-K risk factor changes: FY2021 vs FY2019

Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 14 to the Financial Statements for [removed: more] [added: additional] information concerning the risks described below and for other risks, uncertainties and factors that could impact our businesses and financial results.

As used in this Item 1A., the terms "we," "our" and "us" generally refer to PPL and its consolidated subsidiaries taken as a whole, or PPL Electric and its consolidated subsidiaries taken as a whole within the Pennsylvania Regulated segment [removed: discussion, or LKE] [added: discussion] and its consolidated subsidiaries taken as a whole within the Kentucky Regulated segment discussion.

[removed: B.Risks] [added: A.Risks] Related to Registrant Holding [removed: Companies][added: Company]

[removed: C.Risks] [added: B.Risks] Related to [removed: Domestic] Regulated Utility Operations

[removed: D.Risks] [added: C.Risks] Specific to Kentucky Regulated Segment

[removed: E.Risks] [added: D.Risks] Specific to Pennsylvania Regulated Segment

[removed: F.Risks] [added: E.Risks] Related to All Segments

[removed: *(PPL] [added: (*PPL, LG&E] and [removed: LKE)*][added: KU*)]

Risk Related to Registrant Holding [removed: Companies][added: Company]

PPL [removed: and LKE are] [added: is a] holding [removed: companies] [added: company] and [removed: their] [added: its] cash flows and ability to meet [removed: their] [added: its] obligations with respect to indebtedness and under guarantees, and [removed: PPL's] [added: its] ability to pay dividends, largely depends on the financial performance of [removed: their] [added: its] respective subsidiaries and, as a result, is effectively subordinated to all existing and future liabilities of those subsidiaries.

PPL [removed: and LKE are] [added: is a] holding [removed: companies] [added: company] and [removed: conduct their] [added: conducts its] operations primarily through subsidiaries.

Substantially all of the consolidated assets of [removed: these Registrants] [added: PPL] are held by [removed: their] [added: its] subsidiaries.

Accordingly, [removed: these Registrants'] [added: PPL's] cash flows and ability to meet debt and guaranty obligations, as well as PPL's ability to pay dividends, are largely dependent upon the earnings of those subsidiaries and the distribution or other payment of such earnings in the form of dividends, distributions, loans, advances or repayment of loans and advances.

The ability of [removed: the Registrants'] [added: PPL's] subsidiaries to pay dividends or distributions in the future will depend on the subsidiaries' future earnings and cash flows and the needs of their businesses, and may be restricted by their obligations to holders of their outstanding debt and other creditors, as well as any contractual or legal restrictions in effect at such time, including the requirements of state corporate law applicable to payment of dividends and distributions, and regulatory requirements, including restrictions on the ability of PPL Electric, LG&E and KU to pay dividends under Section 305(a) of the Federal Power Act.

Because PPL [removed: and LKE are] [added: is a] holding [removed: companies, their] [added: company, its] debt and guaranty obligations are effectively subordinated to all existing and future liabilities of [removed: their] [added: its] subsidiaries.

Although certain agreements to which certain subsidiaries are parties limit their ability to incur additional indebtedness, PPL and [removed: LKE and their] [added: its] subsidiaries retain the ability to incur substantial additional indebtedness and other liabilities.

Therefore, PPL's [removed: and LKE's] rights and the rights of [removed: their] [added: its] creditors, including rights of debt holders, to participate in the assets of any of [removed: their] [added: its] subsidiaries, in the event that such a subsidiary is liquidated or reorganized, will be subject to the prior claims of such subsidiary's creditors.

[removed: *(PPL Electric, LG&E] [added: (*PPL] and [removed: KU)*][added: LG&E*)]

Risks Related to [removed: Domestic] Regulated Utility Operations

Our [removed: domestic] regulated utility businesses face many of the same risks, in addition to those risks that are unique to each of the Kentucky Regulated and Pennsylvania Regulated segments.

Our [removed: domestic] regulated utility businesses are subject to substantial capital expenditure requirements over the next several years, which [removed: will likely] [added: may] require rate increase requests to the [removed: regulators.][added: regulators in the future.]

Our [removed: domestic] utility businesses are subject to significant and complex governmental regulation.

Our [removed: domestic] regulated businesses undertake significant capital projects and these activities are subject to unforeseen costs, delays or failures, as well as risk of inadequate recovery of resulting costs.

The [removed: domestic] regulated utility businesses are capital intensive and require significant investments in energy generation (in the case of LG&E and KU) and transmission, distribution and other infrastructure projects, such as projects for environmental compliance and system reliability.

- increases in commodity prices or labor rates; [removed: and]

[removed: We also have current or previous ownership interests in sites associated with the production of] manufactured gas for which we may be liable for additional costs related to investigation, remediation and monitoring of these sites.

The [removed: new U.S. presidential] [added: Biden] administration is considering a wide range of potential policies, executive orders, rules, legislation and other initiatives in connection with climate change that may affect these costs.

[removed: The PPL Electric transmission business, operating under a FERC-approved PJM Open Access Transmission Tariff, is subject to] competition pursuant to FERC Order 1000 from entities that are not incumbent PJM transmission owners with respect to the construction and ownership of transmission facilities within PJM.

The COVID-19 pandemic has disrupted the U.S. and global economies and continues to present [removed: extraordinary] challenges to businesses, communities, [removed: workforces] [added: workforces, markets] and [removed: markets.][added: increasingly to supply chains.]

In the U.S. and throughout the world, governmental authorities have taken [removed: urgent and extensive] actions to contain the spread of the virus and mitigate known or foreseeable impacts.

At this time, the Registrants’ cannot predict the extent to which these or other pandemic-related factors may affect their business, earnings or other financial results, as it depends on the duration and scope of the outbreak, the measures undertaken in response and other future developments, all of which are highly [removed: uncertain.][added: uncertain and continue to evolve in response to additional variants.]

In addition to the factors discussed above, investors should be aware that other COVID-19-related risks may emerge in the future and may prove to be [removed: significant.][added: significant, including potentially the cost of ongoing remediation efforts, such as testing, and the potential for increased effects on global markets and supply chains.]

The operation of our transmission and distribution systems, [added: including gas distribution systems,] as well as our generation plants, are all reliant on cyber-based technologies and, therefore, subject to the risk that these systems could be the target of disruptive [removed: actions by terrorists or criminals or otherwise be compromised by unintentional events.]

As a result, operations could be interrupted, property could be damaged and sensitive customer information lost or stolen, causing us to incur significant losses of revenues, other substantial [added: liabilities and damages, costs to replace or repair damaged equipment and damage to our reputation.]

As an operator of natural gas distribution systems, LG&E is also subject to mandatory reliability standards of the U.S. Department of [removed: Transportation.][added: Transportation and is also subject to certain security directives related to cybersecurity issued by the Department of Homeland Security (DHS) Transportation Security Administration (TSA) in 2021.]

Our operating revenues could fluctuate on a seasonal basis, especially as a result of extreme weather [removed: conditions.][added: conditions, including conditions caused or exacerbated by climate change.]

In addition, unrest could lead to acts of terrorism in the United [removed: States, the United Kingdom] [added: States] or elsewhere, and acts of terrorism could be directed against companies such as ours.

As a result, we are subject to risks of disruptions, curtailments or increased costs in the operation of our businesses if such goods or services are unavailable or become subject to price spikes or if a [added: counterparty fails to perform.]

The performance of coal markets and producers may be the subject of increased counterparty risk to [removed: LKE,] LG&E and KU currently due to weaknesses in such markets and suppliers.

- potential supply chain disruptions or delays; and

We also have current or previous ownership interests in sites associated with the production of

The PPL Electric transmission business, operating under a FERC-approved PJM Open Access Transmission Tariff, is subject to

(*All Registrants*)

The Delta and Omicron variants of the virus have extended and exacerbated the risks arising from the pandemic and have led to the extension of many of these remediation strategies.

The responses to these variants may continue to affect risks and related remediation efforts going forward, perhaps substantially, and future variants may have similar effects.

The COVID-19 pandemic is also subjecting the Registrants to growing shortages that are creating risks of potential equipment and fuel supply chain disruptions.

If issues in the supply chains continue, Registrants may be forced to rely on a larger pool of suppliers, which could pose operational risks.

Such suppliers may fail to follow established health, safety and other regulatory standards.

Additionally, suppliers may need to engage subcontractors that have not been previously vetted, which could result in contractual and regulatory risks.

This could also create an inability to effectively monitor a supplier’s work or the need to depend on limited contractors, resulting in higher costs and potential financial and reputational risks.

Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships.

actions by terrorists, nation state actors or criminals or otherwise be compromised by unintentional events.

Attacks may come through ransomware, software updates or patches, use of opensource software, firmware that hackers can manipulate to include malicious codes for exploitation at a later date, or the compromising of hardware by bad actors, creating serious risks to our security, the security of our customers' information, and potentially to our ability to provide power.

Threats to our systems and operations continue to emerge as new ways to compromise components of our systems or networks are developed.

Additionally, cybersecurity risks also threaten our supply chains, including aspects that are not under our control, such as the incorporation of opensource software in systems or software that we use, that despite our efforts do not meet our current security standards.

The effects of climate change may accelerate or magnify fluctuations in our operating results.

The Registrants' responses to such climate-related risks include compliance with evolving governmental policy and developing and implementing strategies designed to meet net zero carbon emissions goals, which may affect our financial condition, results of operations or cash flows.

A.Risks Related to Our U.K. Regulated Segment

Risks Related to Our U.K. Regulated Segment

Our U.K. distribution business contributes a significant amount of PPL's earnings and exposes us to the following additional risks related to operating outside the U.S., including risks associated with changes in U.K. laws and regulations, taxes, economic conditions and political conditions and policies of the U.K. government and the European Union.

These risks may adversely impact the results of operations of our U.K. distribution business or affect our ability to access U.K. revenues for payment of distributions or for other corporate purposes in the U.S.

- changes in laws or regulations relating to U.K. operations, including rate regulations beginning in April 2023 under RIIO-ED2, ability to recover previously incurred costs, operational performance and tax laws and regulations;

- changes in government policies, personnel or approval requirements;

- changes in general economic conditions affecting the U.K.;

- regulatory reviews of tariffs for DNOs;

- changes in labor relations;

- limitations on foreign investment or ownership of projects and returns or distributions to foreign investors;

- limitations on the ability of foreign companies to borrow money from foreign lenders and lack of local capital or loans;

- changes in U.S. tax law applicable to taxation of foreign earnings;

- compliance with U.S. foreign corrupt practices laws; and

- prolonged periods of low inflation or deflation.

PPL's earnings may be adversely affected by the U.K. withdrawal from the European Union.

The U.K. formally left the EU on January 31, 2020 and entered into a transition period that ended on December 31, 2020 through which the U.K. sought to negotiate a free trade agreement with the EU and new trade terms with countries outside of the EU.

Successively, the EU-UK Trade and Cooperation Agreement was agreed on December 24, 2020 and ratified by the U.K. Parliament on December 30, 2020 and was provisionally applied by the EU from December 31, 2020.

While significant progress has been made, uncertainty continues to surround the economic impact of Brexit.

PPL believes that its greatest risks relate to any extended period of depressed value of the GBP or the potential further decline in the value of the GBP compared to the U.S. dollar.

We are subject to foreign currency exchange rate risks because a significant portion of our cash flows and reported earnings are currently generated by our U.K. business operations.

These risks relate primarily to changes in the relative value of the British pound sterling and the U.S. dollar between the time we initially invest U.S. dollars in our U.K. businesses, and our strategy to hedge against such changes, and the time that cash is

repatriated to the U.S. from the U.K., including cash flows from our U.K. businesses that may be distributed to PPL or used for repayments of intercompany loans or other general corporate purposes.

In addition, PPL's consolidated reported earnings on a GAAP basis may be subject to earnings translation risk, which results from the conversion of earnings as reported in our U.K. businesses on a British pound sterling basis to a U.S. dollar basis in accordance with GAAP requirements.

Our U.K. segment's earnings are subject to variability based on fluctuations in RPI, which is a measure of inflation.

In RIIO-ED1, WPD's base revenue was established by Ofgem based on 2012/13 prices.

Base revenue is subsequently adjusted to reflect any increase or decrease in RPI for each year to determine the amount of revenue WPD can collect in tariffs.

The RPI is forecasted annually by HM Treasury and subject to true-up in subsequent years.

Consequently, fluctuations between forecasted and actual RPI can result in variances in base revenue.

Although WPD also has debt indexed to RPI and certain components of operations and maintenance expense are affected by inflation, these may not offset changes in base revenue and timing of such offsets would likely not be correlated precisely with the calendar year in which the variance in demand revenue was initially incurred.

Further, as RAV is indexed to RPI under U.K. rate regulations, a reduction in RPI could adversely affect a borrower's debt-to-RAV ratio, potentially limiting future borrowings at WPD's holding company.

Our U.K. delivery business is subject to revenue variability based on operational performance.

Our U.K. delivery businesses operate under an incentive-based regulatory framework.

Managing operational risk and delivering agreed-upon performance are critical to the U.K. Regulated segment's financial performance.

Disruption to these distribution networks could reduce profitability both directly by incurring costs for network restoration and also through the system of penalties and rewards that Ofgem administers relating to customer service levels.

A failure by any of our U.K. regulated businesses to comply with the terms of a distribution license may lead to the issuance of an enforcement order by Ofgem that could have an adverse impact on PPL.

Ofgem has powers to levy fines of up to ten percent of revenue for any breach of a distribution license or, in certain circumstances, such as insolvency, the distribution license itself may be revoked.

Ofgem also has formal powers to propose modifications to each distribution license and there can be no assurance that a restrictive modification will not be introduced in the future, which could have an adverse effect on the operations and financial condition of the U.K. regulated businesses and PPL.

(*PPL, LKE, LG&E and KU*)

(*PPL, LKE and LG&E*)

F.

[added: Other Contingent Obligations] *(All Registrants)*

Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" is separately filed by PPL, PPL Electric, [removed: LKE,] LG&E and KU.

- "Results of Operations" for all Registrants includes a "Statement of Income Analysis," which discusses significant changes in principal line items on the Statements of Income, comparing [removed: 2020] [added: 2021] with [removed: 2019.][added: 2020.]

For comparison of the Registrants’ results of operations and cash flows for the years ended December 31, [removed: 2019] [added: 2020] to December 31, [removed: 2018,] [added: 2019,] refer to “Item 7.

Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the [removed: 2019] [added: 2020] Form 10-K, filed with the SEC on February [removed: 14, 2020.][added: 18, 2021.]

PPL operates [removed: seven] [added: three] fully regulated high-performing utilities.

These utilities are located in [removed: the U.K.,] Pennsylvania and Kentucky, constructive regulatory jurisdictions with distinct regulatory structures and customer classes.

[removed: For the U.S. businesses, central] [added: Central] to PPL's [added: and the other Registrants'] strategy is recovering capital project costs efficiently through various rate-making mechanisms, including periodic base rate case proceedings using forward test years, annual FERC formula rate mechanisms [removed: and other regulatory agency-approved recovery mechanisms designed to limit regulatory lag.]

In Kentucky, the KPSC has adopted a series of regulatory mechanisms (ECR, DSM, GLT, fuel adjustment [removed: clause] [added: clause,] and gas supply clause) and recovery on construction work-in-progress that reduce regulatory lag and provide timely recovery of and return on, as appropriate, prudently incurred costs.

See Note [removed: 21] [added: 9] to the Financial Statements for additional information on [removed: accumulated other comprehensive income and losses.][added: the Narragansett SPA.]

See Note [removed: 6] [added: 11] to the Financial Statements for additional [removed: information on income taxes.][added: information.]

[removed: See "Current Expected Credit Losses" in] [added: (c)See] Note [removed: 1] [added: 9] to the Financial Statements for additional information.

In [removed: October 2020,] [added: June 2021, Moody’s and S&P assigned ratings of A1 and A to] PPL [removed: Electric issued $250] [added: Electric’s $650] million [removed: of] First Mortgage Bonds, Floating Rate [removed: Series] [added: Series,] due [removed: 2023.][added: 2024.]

See Note [removed: 8] [added: 7] to the Financial Statements for additional information.

| LKE | | | | | | | | | | | | | | | | | | | | | [removed: (32)] | | | [removed: | | |] [added: P] | | | | | | [removed: 7] [added: P] | | |

[removed: *Goodwill Assessment* *(PPL, LKE,] [added: *(PPL,] LG&E and KU)*

See [removed: "Long-Lived and Intangible Assets - Asset Impairment (Excluding Investments)"] [added: "Long Term Debt"] in Note [removed: 1] [added: 8] to the Financial Statements for additional information.

[removed: *U.K.] [added: U.K.] Corporation Tax Rate [removed: Change* *(PPL)*][added: Change]

[removed: The] [added: (b)The] U.K. corporation tax rate was scheduled to be reduced from 19% to 17%, effective April 1, 2020.

[removed: On March 11,] [added: In] 2020, the U.K. Finance Act 2020 [removed: included a cancellation of] [added: cancelled] the tax rate reduction to 17%, thereby maintaining the corporation tax rate at [removed: 19%.][added: 19% for financial years 2020 and 2021.]

[removed: *Regulatory Requirements*][added: Regulatory Requirements]

[removed: *(PPL, LKE,] [added: *(PPL Electric,] LG&E and KU)*

The businesses of [removed: LKE,] LG&E and KU are subject to extensive federal, state and local environmental laws, rules and regulations, including those pertaining to CCRs, GHG, and ELGs.

[removed: Business" and] [added: See] Notes 7, 14 and 20 to the Financial Statements for a discussion of these significant environmental matters.

These and other environmental requirements led PPL, [removed: LKE,] LG&E and KU to retire approximately 1,200 MW of coal-fired generating plants in Kentucky since 2010.

[removed: Some of the] [added: The] key aspects [removed: in Ofgem’s consultation] [added: of the Settlement] include:

[removed: *Challenge to PPL] [added: *PPL] Electric Transmission Formula Rate Return on Equity* [added: *(PPL and PPL Electric)*]

[removed: *(PPL] [added: *(PPL Electric, LG&E] and [removed: PPL Electric)*][added: KU)*]

On May 21, 2020, PP&L Industrial Customer Alliance (PPLICA) filed a complaint with the FERC alleging that PPL Electric's base return on equity (ROE) of 11.18% used to determine PPL Electric's formula transmission rate [removed: is] [added: was] unjust and [removed: unreasonable, and proposing an alternative ROE of 8.00% based on its interpretation of FERC Opinion No. 569.][added: unreasonable.]

*FERC Transmission Rate Filing* [added: *(PPL, LG&E and KU)*]

In [removed: March] 2019, the FERC granted LG&E's and KU's request to remove the ongoing credits, conditioned upon the implementation by LG&E and KU of a transition mechanism for certain existing power supply arrangements, [removed: subject to] [added: which was subsequently filed, modified, and approved by the] FERC [removed: review] [added: in 2020] and [removed: approval.][added: 2021.]

LG&E and KU cannot predict the outcome of [removed: these] [added: the respective appellate and FERC] proceedings.

LG&E and KU currently receive recovery of the waivers and credits provided through other rate [removed: mechanisms.][added: mechanisms and such rate recovery would be anticipated to be adjusted consistent with potential changes or terminations of the waivers and credits, as such become effective.]

[removed: *Rate] [added: Rate] Case [removed: Proceedings*][added: Proceedings]

The revenue increases [removed: would be] [added: represented] an increase of 11.6% and 10.4% in electricity revenues at LG&E and KU, and an increase of 8.3% in gas revenues at LG&E.

[added: In recognition of the economic impact of COVID-19,] LG&E and KU [removed: are also requesting] [added: requested] approval of a one-year billing credit which will credit customers approximately $53 million ($41 million at LG&E and $12 million at KU).

LG&E’s and KU’s applications also [removed: include] [added: included] a request for a CPCN to deploy Advanced Metering Infrastructure across LG&E’s and KU’s service territories in Kentucky.

The applications [removed: are] [added: were] based on a forecasted test year of July 1, 2021 through June 30, 2022 and [removed: request] [added: requested] an authorized return on equity of 10.0%.

[removed: In July 2019,] [added: On August 31, 2021,] KU filed a request with the VSCC for an [added: annual] increase in [removed: annual] Virginia base electricity [removed: revenues] [added: rates] of approximately [removed: $13 million, representing an increase of 18.2%.][added: $12 million.]

[removed: *(PPL)*][added: | | | | PPL | | | | | | PPL Electric | | | | | | LG&E | | | | | | KU | | |]

PPL's strategy, which is supported by the other Registrants, is to achieve industry-leading performance in safety, reliability,

customer satisfaction and operational efficiency; to advance a clean energy transition while maintaining affordability and

reliability; to maintain a strong financial foundation and create long-term value for our shareowners; to foster a diverse and

exceptional workplace; and to build strong communities in areas that we serve.

and other regulatory agency-approved recovery mechanisms designed to limit regulatory lag.

In March 2021, PPL entered into definitive agreements that strategically reposition the company as a U.S.-based energy

company focused on building the utilities of the future.

These transactions are intended to strengthen PPL’s credit metrics,

enhance long-term earnings growth and predictability, and provide the company with greater financial flexibility to invest in

sustainable energy solutions.

See Note 9 to the Financial Statements, and the "Sale of the U.K. Utility Business" and "Share Purchase Agreement to Acquire Narragansett Electric" discussions in "Financial and Operational Developments" below for additional information.

Sale of the U.K. Utility Business

On March 17, 2021, PPL WPD Limited (WPD Limited) entered into a share purchase agreement (WPD SPA) to sell PPL's U.K. utility business to National Grid Holdings One plc (National Grid U.K.), a subsidiary of National Grid plc.

Pursuant to the WPD SPA, National Grid U.K. would acquire 100% of the issued share capital of PPL WPD Investments Limited (WPD Investments) for £7.8 billion in cash.

WPD Limited would also receive an additional amount of £548,000 for each day during the period from January 1, 2021 to the closing date if the dividends usually declared by WPD Investments to WPD Limited were not paid for that period.

On June 14, 2021, the sale of the U.K. utility business was completed.

The transaction resulted in cash proceeds of $10.7 billion inclusive of foreign currency hedges executed by PPL.

PPL received net proceeds, after taxes and fees, of $10.4 billion, resulting in a pre-tax loss on sale of $1.6 billion.

WPD Limited and National Grid U.K. each made customary representations and warranties in the WPD SPA.

National Grid

U.K., at its expense, purchased warranty and indemnity insurance.

WPD Limited agreed to indemnify National Grid U.K. for

certain tax related matters.

PPL has not had and will not

have any significant involvement with the U.K. utility business after completion of the sale.

Share Purchase Agreement to Acquire Narragansett Electric

On March 17, 2021, PPL and its subsidiary, PPL Energy Holdings, entered into a share purchase agreement (Narragansett SPA) with National Grid USA (National Grid U.S.), a subsidiary of National Grid plc, to acquire 100% of the outstanding shares of common stock of Narragansett Electric for approximately $3.8 billion in cash.

On May 3, 2021, an Assignment and Assumption Agreement was entered into by PPL, PPL Energy Holdings, PPL Rhode Island Holdings and National Grid U.S. whereby certain interests of PPL Energy Holdings in the Narragansett SPA were assigned to and assumed by PPL Rhode Island Holdings.

Pursuant to that Assignment and Assumption Agreement, PPL Rhode Island Holdings became the purchasing entity under the Narragansett SPA.

The acquisition is expected to be funded with proceeds from the sale of the U.K. utility business.

PPL has agreed to guarantee all obligations of PPL Energy Holdings and PPL Rhode Island Holdings under the Narragansett SPA and the related Assignment and Assumption Agreement.

The closing of the acquisition is subject to the receipt of certain U.S. regulatory approvals or waivers, and other customary conditions to closing.

To date, several required regulatory approvals or waivers have been received, though the order granting the waiver by the Massachusetts Department of Public Utilities is subject to a pending appeal.

See Note 9 to the Financial Statements for additional information regarding the current status of this appeal.

PPL anticipates receiving a final order from the Rhode Island Division of Public Utilities and Carriers with respect to the acquisition by March 2022.

The regulatory approvals remain subject to any applicable appeal periods.

The consummation of the transaction is not subject to a financing condition.

Debt Redemption

PPL Capital Funding paid $3.883 billion to tender and/or redeem an aggregate total of $3.484 billion of outstanding debt during 2021, resulting in a loss on extinguishment of $395 million for the year ended December 31, 2021.

Share Repurchases

PPL's strategy, and that of the other Registrants, is to deliver best-in-sector operational performance, invest in a sustainable energy future, provide superior customer service, maintain a strong financial foundation, and engage and develop its people.

PPL's business plan is designed to achieve growth by providing efficient, reliable and safe operations and strong customer service, maintaining constructive regulatory relationships and achieving timely recovery of costs.

These businesses are expected to achieve long-term growth in rate base in the U.S. and RAV in the U.K. Rate base growth is being driven by planned significant capital expenditures to maintain existing assets and improve system reliability and, for LKE, LG&E and KU, to comply with federal and state environmental regulations related to coal-fired electricity generation facilities.

In addition, the KPSC requires a utility to obtain a CPCN prior to constructing a facility, unless the construction is an ordinary extension of existing facilities in the usual course of business or does not involve sufficient capital expenditures to materially affect the utility's financial condition.

Although such KPSC proceedings do not directly address cost recovery issues, the KPSC, in awarding a CPCN, concludes that the public convenience and necessity require the construction of the facility on the basis that the facility is the lowest reasonable cost alternative to address the need.

To manage financing costs and access to credit markets, and to fund capital expenditures, a key objective of the Registrants is to maintain their investment grade credit ratings and adequate liquidity positions.

In addition, the Registrants have financial and operational risk management programs that, among other things, are designed to monitor and manage exposure to earnings and cash flow volatility, as applicable, related to changes in interest rates, foreign currency exchange rates and counterparty credit quality.

To manage these risks, PPL generally uses contracts such as forwards, options and swaps.

See "Financial Condition - Risk Management" below for further information.

Earnings generated by PPL's U.K. subsidiaries are subject to foreign currency translation risk.

Because WPD's earnings represent such a significant portion of PPL's consolidated earnings, PPL enters into foreign currency contracts to economically hedge the value of the GBP versus the U.S. dollar.

These hedges do not receive hedge accounting treatment under GAAP.

The U.K. subsidiaries also have currency exposure to the U.S. dollar to the extent of their U.S. dollar denominated debt.

To manage these risks, PPL generally uses contracts such as forwards, options and cross-currency swaps that contain characteristics of both interest rate and foreign currency exchange contracts.

As discussed above, a key component of this strategy is to maintain constructive relationships with regulators in all jurisdictions in which the Registrants operate (U.K., U.S. federal and state).

This is supported by a strong culture of integrity and delivering on commitments to customers, regulators and shareowners, and a commitment to continue to improve customer service, reliability and operational efficiency.

*Initiation of Formal Process to Sell U.K. Utility Business* *(PPL)*

On August 10, 2020, PPL announced that it initiated a formal process to sell its U.K. utility business.

There can be no assurance of any specific outcome, including whether the sale process will result in the completion of any potential transaction, the timing or terms thereof, the value or benefits that may be realized or the effect that any potential transaction will have on future financial results.

As a result of the potential sale, PPL assessed the recoverability of the assets of its U.K. utility business.

PPL prepared probability-weighted undiscounted cash flow estimates as of December 31, 2020 and September 30, 2020 that considered the likelihood of the possible outcomes of the sale process, including the possibility of not selling the U.K. utility business.

The resulting cash flow analyses exceeded the carrying value of the assets of the U.K. utility business.

A change in the possible outcomes of the sale process could result in the carrying value of the assets of the U.K. utility business not being recoverable, which could result in an impairment in future periods.

The U.K. utility business will continue to be classified as held and used until it meets the criteria to be classified as held for sale, which includes management obtaining a commitment to a plan to sell from its Board of Directors.

Should the U.K. utility business meet the criteria to be classified as held for sale in a future period, PPL will be required at that time to compare the estimated fair value of its investment in the U.K. utility business, less costs to sell, to its carrying value, including accumulated other comprehensive losses related to the U.K. utility business, for impairment purposes.

The resulting measurement may result in a loss.

In addition, PPL will reassess its assertion of the indefinite reinvestment of the unremitted earnings of the U.K. utility business.

*Outbreak of COVID-19* *(All Registrants)*

The continued spread of COVID-19 has disrupted the U. S. and global economies and continues to present extraordinary challenges to businesses, communities, workforces and markets.

The Registrants have taken significant steps to mitigate the potential spread of COVID-19 to our customers, suppliers and employees.

PPL has successfully implemented its company-wide pandemic plan, which guides the emergency response.

Business continuity and other precautionary measures have been taken to ensure we can continue to safely provide reliable electricity and gas service to our customers.

The Registrants have implemented social distancing measures for all employees including work from home arrangements where possible and continue to implement strong physical and cyber security measures to ensure that systems function effectively to serve operational and remote workforce needs.

The Registrants continue to monitor developments affecting their workforces and customers and will take additional actions as appropriate to respond to changing conditions and mitigate the impacts.

This rapidly evolving situation could lead to continued disruption of economic activity in the Registrants’ markets for an undetermined period of time.

Lock-down or closure of non-essential businesses has occurred in each of the Registrants’ service territories, which has resulted in reductions in commercial and industrial demand and an increase in residential demand for electricity service.

The impact of this net reduction in load has not been material to the Registrants' 2020 financial condition.

The impact on future periods will depend upon various factors, including the pace and extent to which the Registrants' jurisdictions reopen their economies and community response to the reopening of businesses as well as the extent that businesses continue work from home protocols.

We cannot predict these factors and therefore cannot quantify the overall impact COVID-19 will have on our future results of operations.

The Registrants are committed to supporting their customers and communities and have followed federal and state mandates related to suspending disconnections for non-payment and new late fees, reconnecting service for customers who had previously been disconnected and developing late payment plans with customers, where appropriate.

PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

We have audited the accompanying consolidated balance sheets of PPL Corporation and subsidiaries (the "Company") as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 18, [removed: 2021,] [added: 2022,] expressed an unqualified opinion on the Company's internal control over financial reporting.

Critical Audit [removed: Matters][added: Matter]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current-period audit of the financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

Regulatory Assets and Liabilities – Impact of [removed: Rate-Regulation] [added: Rate Regulation] on Various Account Balances and Disclosures – Refer to Notes 1 and 7 to the [removed: Financial Statements][added: financial statements]

As discussed in Note 1 to the financial statements, PPL Corporation owns and operates three cost-based rate-regulated utilities [removed: in the United States (U.S.)] for which rates are set by the Federal Energy Regulatory Commission (FERC), the Kentucky Public Service Commission (KPSC), the Virginia State Corporation Commission [removed: (VSCC)] [added: (VSCC),] and the Pennsylvania Public Utility Commission (PUC) to enable the regulated utilities to recover the costs of providing electric or gas [removed: service,] [added: services,] as applicable, and to provide a reasonable return to shareholders.

As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by [removed: accounting principles] generally accepted [removed: in the United States of America] [added: accounting principles] and reflect the effects of regulatory actions.

The accounting for regulatory assets and regulatory liabilities is based on specific ratemaking decisions or precedent for each transaction or event as prescribed by the FERC, KPSC, [removed: VSCC] [added: VSCC,] and PUC.

The accounting for the economics of [removed: rate regulation] [added: rate-regulation] also impacts other financial statement line items, including regulated utility plant, operating revenues, depreciation, and income [removed: taxes] [added: taxes,] and [removed: impacts multiple note disclosures.]

As of December 31, [removed: 2020,] [added: 2021,] PPL Corporation had a recorded regulatory assets balance of [removed: $1,361] [added: $1,300] million and regulatory liabilities balance of [removed: $2,609] [added: $2,604] million.

PPL Corporation’s [removed: U.S.] regulated utilities’ rates are subject to cost-based rate-setting processes and annual earnings oversight.

Rates are established based on an analysis of the costs incurred and the regulated utility’s capital structure and must be approved by one or more federal or state regulatory commissions, including the FERC, KPSC, [removed: VSCC] [added: VSCC,] and PUC.

The FERC, KPSC, [removed: VSCC] [added: VSCC,] and PUC regulation of rates is premised on the full recovery of prudently incurred costs and an adequate return on capital investments.

Decisions to be made by the FERC, KPSC, [removed: VSCC] [added: VSCC,] and PUC in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required.

While PPL Corporation’s [removed: U.S.] utilities have indicated that they expect to recover costs from customers through regulated rates, there is a risk that the FERC, KPSC, [removed: VSCC] [added: VSCC,] or PUC will not approve full recovery of such costs or approve recovery on a timely basis in future regulatory decisions.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets are probable of future recovery by considering factors, such as changes in the applicable regulatory and political environments, the ability to recover costs through regulated rates, recent rate [removed: orders] [added: orders,] and the status of any pending legislation.

Our audit procedures related to the uncertainty of future decisions by the FERC, KPSC, [removed: VSCC] [added: VSCC,] and PUC included the following, among others:

[removed: -] We tested the effectiveness of management’s internal controls over [removed: evaluating] the [added: monitoring and evaluation of regulatory developments that may affect the] likelihood of [removed: recovery] [added: recovering costs] in future rates [added: or] of [removed: costs deferred as regulatory assets.][added: a future reduction in rates.]

We tested the effectiveness of management’s controls over the recognition of amounts as regulated utility plant, regulatory assets or liabilities, operating revenues, [removed: depreciation expense,] [added: depreciation,] income [removed: tax expense,] [added: taxes,] and note disclosures.

- We obtained and read relevant regulatory orders issued by the FERC, KPSC, [removed: VSCC] [added: VSCC,] and PUC for PPL Corporation’s [removed: U.S.] regulated utilities and other public utilities, regulatory statutes, interpretations, procedural memorandums, filings made by interveners, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances.

We evaluated the external information and compared [added: it] to management’s recorded regulatory asset and liability balances for completeness.

We inspected minutes of the Board of Directors, [added: other public information,] regulatory orders and other filings with the [removed: FERC, KPSC, VSCC and PUC] [added: commissions] to identify any evidence that may contradict management’s assertion regarding probability of an abandonment.

- We evaluated PPL Corporation’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory [removed: developments.][added: developments, in the financial statements.]

We have audited the internal control over financial reporting of PPL Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2020,] [added: 2021,] of the Company and our report dated February 18, [removed: 2021,] [added: 2022,] expressed an unqualified opinion on those financial statements.

We have audited the accompanying consolidated balance sheets of PPL Electric Utilities Corporation and subsidiaries (the "Company") as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with accounting principles generally accepted in the United States of America.

Regulatory Assets and Liabilities – Impact of [removed: Rate-Regulation] [added: Rate Regulation] on Various Account Balances and Disclosures – Refer to Notes 1 and 7 to the [removed: consolidated] financial statements

The accounting for the economics of rate-regulation also impacts other financial statement [added: line items,]

[removed: line items,] including regulated utility plant, operating revenues, depreciation, and income [removed: taxes,] [added: taxes] and impacts multiple note disclosures.

As of December 31, [removed: 2020,] [added: 2021,] PPL Electric had a recorded [removed: consolidated] regulatory assets balance of [removed: $581] [added: $510] million and regulatory liabilities balance of [removed: $646] [added: $712] million.

PPL Electric’s [removed: U.S.] regulated utility’s rates are subject to cost-based rate-setting processes and annual earnings oversight.

Regulatory decisions can have an impact on the recovery of costs, the rate earned on invested [removed: capital] [added: capital,] and the timing and amount of assets to be recovered by rates.

Auditing these judgments required specialized knowledge of accounting for rate regulation and the [removed: rate setting] [added: rate-setting] process due to its inherent complexities.

Our audit procedures related to the uncertainty of future decisions by the FERC and [removed: PUC,] [added: PUC included the following,] among others:

We tested the effectiveness of management’s [added: internal] controls over the [removed: initial recognition of amounts as regulated utility plant, regulatory assets or liabilities, operating revenues, depreciation expense, income tax expense, and note disclosures and the] monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.

February 18, 2022

February 18, 2022

February 18, 2022

February 18, 2022

impacts multiple note disclosures.

We tested the effectiveness of management’s controls over the recognition of amounts as regulated utility plant, regulatory assets or liabilities, operating revenues, depreciation, income taxes, and note disclosures.

February 18, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Opinion on the Financial Statements

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

*Critical Audit Matter Description*

Base rates are generally established based on a future test period.

Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.

The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense.

Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates.

*How the Critical Audit Matter Was Addressed in the Audit*

- We inquired of management about regulated utility plant that may be abandoned.

Impairment of Long-lived Assets – Recoverability of U.K. Utility Business - Refer to Notes 1 and 9 to the Financial Statements

*Critical Audit Matter Description*

As discussed in Note 9 to the financial statements, on August 10, 2020, PPL announced that it initiated a formal process to sell its U.K. utility business.

As a result of the potential sale, PPL assessed the recoverability of the long-lived assets of the U.K. utility business as of September 30, 2020 and December 31, 2020.

To test recoverability of long-lived assets of the U.K. utility business, PPL Corporation prepared probability-weighted undiscounted cash flow estimates that assumed estimates of selling price, expected forecasted cash flows from the operations of the U.K. utility business (which included significant assumptions made by management to estimate projected operating and capital cash flows, regulatory asset value (RAV) and the finalization of RIIO-ED2) and weighted average probability of sale.

The resulting cash flow analyses exceeded the carrying value of the assets of the U.K. utility business.

We identified PPL Corporation’s impairment evaluation of long-lived assets of the U.K. utility business as a critical audit matter because of significant judgments made by management to estimate selling price, expected forecasted cash flows from the operations of the U.K. utility business and weighted average probability of sale.

The significant judgments and assumptions made by management to estimate probabilities and future cash flows, include management's intended use of the assets, estimates of selling price, RAV, the finalization of RIIO-ED2, and projected operating and capital cash flows.

A high degree of auditor judgment and an increased effort was required when performing audit procedures to evaluate the reasonableness of management’s estimates and judgments related to each of these assumptions.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to the significant judgments and assumptions made by management to estimate selling price, expected forecasted cash flows from the operations of the U.K. utility business and weighted average probability of sale included the following, among others:

- We tested the effectiveness of management’s internal controls over their long-lived asset recoverability test, including the significant judgments and assumptions made by management in determining management's intended use of the assets, estimates of selling price, RAV, the finalization of RIIO-ED2 and projected operating and capital cash flows.

- We evaluated the reasonableness of management’s projected operating and capital cash flows by:

◦Comparing current year forecasts to prior year forecasts to understand if any significant changes occurred and why they are appropriate.

◦Comparing information included in communications to the Board of Directors.

◦Comparing information from the Office of Gas and Electricity Markets (Ofgem), including total expenditures assumptions in RIIO-ED2.

◦Comparing information included in PPL Corporation’s press releases as well as in analyst and industry reports for PPL Corporation.

- We evaluated the reasonableness of the RAV by:

- Comparing information to the Ofgem Price Control Finance Model.

- Recalculating projected RAV and understanding changes in the RAV for each period.

- We evaluated management’s assumptions related to values assigned to each probability-weighted outcome.

- We evaluated estimates of selling price by evaluating sector market performance and comparable market transactions.

[removed: *PPL Corporation*,] [added: *PPL*,] headquartered in Allentown, Pennsylvania, is a utility holding company, incorporated in 1994, in connection with the deregulation of electricity generation in Pennsylvania, to serve as the parent company to the regulated utility, PPL Electric, and to generation and other unregulated business activities.

PPL Electric was [removed: founded] [added: organized] in 1920 as Pennsylvania Power & Light Company.

PPL, through its regulated utility subsidiaries, delivers electricity to customers in [removed: the U.K.,] Pennsylvania, Kentucky and Virginia; delivers natural gas to customers in Kentucky; and generates electricity from power plants in Kentucky.

PPL's principal subsidiaries at December 31, [removed: 2020] [added: 2021] are shown below (* denotes a Registrant).

[removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PPL] [added: PPL] Capital [removed: Funding *Provides] [added: Funding provides] financing for the operations of PPL and certain [removed: subsidiaries* | | | | | | | | | | | | | | | | | | | | |][added: subsidiaries.]

| | | | | | | | | | | | | LG&E* *Engages in the regulated generation, transmission, distribution and sale of electricity and [removed: the] regulated distribution and sale of natural gas in Kentucky* | | | | | | | | | | | | | | | | | | KU* *Engages in the regulated generation, transmission, distribution and sale of electricity, primarily in Kentucky* | | | | | | | | | | | | | | | | | | | | | | | |

| | | | [removed: U.K.] [added: Pennsylvania] Regulated Segment | | | | | | | | | | | | | | | | | | Kentucky Regulated Segment | | | | | | | | | | | | | | | | | | [removed: Pennsylvania Regulated Segment] | | | | | | | | | | | | | | |

*PPL [removed: Electric Utilities Corporation*,] [added: Electric*,] headquartered in Allentown, Pennsylvania, is a wholly owned subsidiary of PPL [removed: organized in Pennsylvania in 1920] and a regulated public utility that is an electricity transmission and distribution service provider in eastern and central Pennsylvania.

LG&E and KU are engaged in the [added: regulated] generation, transmission, distribution and sale of [removed: electricity.][added: electricity in Kentucky and, in KU's case, also Virginia.]

[removed: *Louisville Gas and Electric Company,*] [added: *LG&E,*] headquartered in Louisville, Kentucky, is a wholly owned subsidiary of LKE and a regulated utility engaged in the generation, transmission, distribution and sale of electricity and distribution and sale of natural gas in Kentucky.

[removed: *Kentucky Utilities Company,*] [added: *KU,*] headquartered in Lexington, Kentucky, is a wholly owned subsidiary of LKE and a regulated utility engaged in the generation, transmission, distribution and sale of electricity in Kentucky and Virginia.

PPL is organized into [removed: three] [added: two] reportable segments as depicted in the chart above: [removed: U.K. Regulated,] Kentucky Regulated, [added: which primarily represents the results of LG&E] and [added: KU, and] Pennsylvania [removed: Regulated.][added: Regulated, which primarily represents the results of PPL Electric.]

[removed: PPL also has corporate] [added: "Corporate] and [removed: other costs,] [added: Other"] primarily [removed: including] [added: includes] financing costs incurred at the corporate level that have not been allocated or assigned to the [removed: segments, as well as certain other unallocated costs.][added: segments.]

A comparison of PPL's [removed: three regulated] [added: Regulated] segments is shown below.

| | | | [removed: | | | | | |] Kentucky | | | | | | Pennsylvania | | |

| | | | [removed: U.K. Regulated | | | | | |] Regulated | | | | | | Regulated | | |

| For the year ended December 31, [removed: 2020: | | | | | |] [added: 2021:] | | | | | | | | | | | |

| Regulatory Asset Base (in billions) (a) | | | $ | [removed: 10.9 | | | | | $ | 10.8] [added: 11.3] | | | | | $ | [removed: 8.3] [added: 8.9] | |

| Service area (in square miles) | | | [removed: 21,600 | | | | | |] 9,400 | | | | | | 10,000 | | |

| End-users (in millions) | | | [removed: 8.0 | | | | | |] 1.3 | | | | | | 1.4 | | |

(a)Represents [removed: RAV for U.K. Regulated,] capitalization for Kentucky Regulated and rate base for Pennsylvania Regulated.

*(PPL Electric, [removed: LKE,] LG&E and KU)*

PPL Electric has two operating [removed: segments that] [added: segments, distribution and transmission, which] are aggregated into a single reportable segment.

[removed: LKE,] LG&E and KU are individually single operating and reportable segments.

See Note [removed: 3] [added: 9] to the Financial Statements for [removed: revenue] [added: additional] information.

See Note [removed: 12] [added: 14] to the Financial Statements for additional information on [removed: pension costs/income recognized under GAAP.][added: these directives.]

See [removed: "Revenue Recognition" in] Note [removed: 1] [added: 7] to the Financial Statements for additional [removed: information.][added: information on rate mechanisms and legislative and regulatory matters.]

Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" [added: and Note 7 to the Financial Statements] for [added: additional] information on [removed: the RIIO-2 Framework which will commence on April 1, 2023.][added: rate mechanisms and regulatory matters.]

*The Kentucky Regulated segment consists [added: primarily] of the [removed: operations of LKE, which owns and operates] regulated [removed: public utilities engaged in the] [added: electricity] generation, [removed: transmission, distribution] [added: transmission] and [removed: sale of electricity] [added: distribution operations conducted by LG&E] and [added: KU, as well as LG&E's regulated] distribution and sale of natural [removed: gas, representing*][added: gas.]

In addition, [removed: certain acquisition-related financing costs are allocated to] the Kentucky Regulated [removed: segment.*][added: segment includes certain financing and other costs at LKE.*]

*(PPL, [removed: LKE,] LG&E and KU)*

LG&E provides electricity service to approximately [removed: 425,000] [added: 429,000] customers in Louisville and adjacent areas in Kentucky, covering approximately 700 square miles in nine counties and provides natural gas service to approximately [removed: 332,000] [added: 333,000] customers in its electricity service area and eight additional counties in Kentucky.

KU provides electric service to approximately [removed: 536,000] [added: 538,000] customers in 77 counties in central, southeastern and western Kentucky and approximately 28,000 customers in five counties in southwestern Virginia, covering approximately 4,800 non-contiguous square miles.

There are currently no other electric public utilities operating within the electricity service areas of [removed: LKE.][added: LG&E and KU.]

The nature or timing of legislative or regulatory actions, if any, regarding industry restructuring and their impact on [removed: LKE,] [added: LG&E and KU,] which may be significant, cannot currently be predicted.

Properties - Kentucky Regulated Segment" for a complete list of [removed: LKE's] generating facilities.

The system capacity of [removed: LKE's] [added: LG&E's and KU's] owned [removed: or controlled] generation is based upon [removed: a number of] [added: several] factors, including the operating experience and physical condition of the units, and may be revised periodically to reflect changes in circumstances.

During [removed: 2020, LKE's] [added: 2021, LG&E's and KU's] power plants generated the following amounts of electricity:

| | | | GWh | | | | | | | | | [removed: | | | | | |]

| Fuel Source | | | [removed: LKE | | | | | |] LG&E | | | | | | KU | | |

| | | | PPL Electric* *Engages in the regulated transmission and distribution of electricity in Pennsylvania* | | | | | | | | | | | | | | | | | | LKE *A holding company that owns regulated utility operations through its subsidiaries, LG&E and KU* | | | | | | | | | | | | | | | | | | PPL Capital Funding *Provides financing for the operations of PPL and certain subsidiaries* | | | | | | | | | | | | | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Operating Revenues (in billions) | | | $ | 3.3 | | | | | $ | 2.4 | |

| Net Income (in millions) | | | $ | 468 | | | | | $ | 445 | |

| Electricity delivered (GWh) | | | 30,317 | | | | | | 37,005 | | |

| At December 31, 2021: | | | | | | | | | | | |

The sale of the U.K. utility business, which substantially represented PPL’s U.K. Regulated segment as reported in prior years, was completed on June 14, 2021, pursuant to a share purchase agreement entered into on March 17, 2021.

As a result, PPL determined segment information for the U.K. Regulated segment would no longer be provided beginning with the Form 10-Q for the quarter ended March 31, 2021.

At December 31, 2021, LG&E owned generating capacity of 2,760 MW and KU owned generating capacity of 4,775 MW.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Coal | | | 10,297 | | | | | | 14,718 | | |

| | | | | | | | | | | | |

| Gas | | | 1,395 | | | | | | 4,382 | | |

| Hydro | | | 263 | | | | | | 89 | | |

| Total (a) | | | 11,962 | | | | | | 19,201 | | |

The generation facility is currently expected to be operational in the second quarter of 2023.

On October 6, 2021, LG&E and KU entered into an agreement to purchase the initial 20 years of output of a proposed 125 MW third-party solar generation facility in connection with the Green Tariff option established in the 2018 Kentucky base rate cases.

Pursuant to the agreements, LG&E and KU would purchase output of the facility and resell power as renewable energy to certain large customers.

The generation facility is currently expected to be operational in the fourth quarter of 2024.

PPL, LG&E and KU do not anticipate that this agreement will have a significant impact on their results of operations or financial condition.

With this same pipeline, LG&E also has another contract for

The first two auctions of the plan were completed in 2021.

Through January 2022, two alternative energy credit solicitations have been completed.

All contracts from previous default service plans concluded on or before November 30, 2021.

In 2021, corporate level financing costs are no longer allocated to the reportable segments.

Additionally, the EPA reversed its previous approval of the Kentucky State Implementation Plan with respect to these requirements.

The CSAPR revisions are aimed at ensuring compliance with the 2008 ozone NAAQS, so additional nitrogen oxide emission reductions could potentially be required for compliance with the revised 2015 ozone NAAQS.

PPL, LG&E and KU do not currently expect the impact of the CSAPR revisions on operations to be material.

Pursuant to the President’s executive order, the EPA is currently reconsidering its previous determinations made in December 2020 to retain the existing NAAQS for ozone and particulate matter without change, with final determinations by the EPA expected in 2022 for particulate matter and 2023 for ozone.

PPL, LG&E, and KU are unable to predict future emission reductions that may be required by future federal rules or state implementation actions.

The Biden administration is exploring wide-ranging efforts to address climate change.

Recent government actions and policy developments, including the President’s announced goal of a carbon free electricity sector by 2035, and targeting net-zero emissions for the federal government by 2050, could have significant impacts on PPL’s business operations, products, and services.

Certain of the efforts announced by the Biden administration are preliminary or ongoing in nature.

PPL has adopted a goal of net-zero carbon emissions by 2050, which includes continuing to retire coal-fired generation and investing in research and innovation that will help to achieve this goal, while maintaining reliable and affordable energy in our service territories.

The net-zero goal relates to direct and indirect carbon emissions consistent with Greenhouse Gas Protocol guidance and referenced by the EPA Center for Corporate Climate Leadership.

Through 2020, PPL has reduced carbon emissions nearly 60% from 2010 levels and is targeting a 70% reduction from 2010 levels by 2035 and an 80% reduction by 2040.

PPL is also aware of the various risks associated with climate change, including increased frequency and severity of severe weather.

To address these risks, PPL continues to work to advance the grid and improve the Company's equipment to help mitigate the impacts of extreme weather events and improve reliability.

| | | | PPL Global *Engages in the regulated distribution of electricity in the U.K.* | | | | | | | | | | | | | | | | | | LKE* | | | | | | | | | | | | | | | | | | PPL Electric* *Engages in the regulated transmission and distribution of electricity in Pennsylvania* | | | | | | | | | | | | | | |

PPL Global is not a registrant.

Unaudited annual consolidated financial statements for the U.K. Regulated Segment are furnished contemporaneously with this report on a Form 8-K with the SEC.

*LG&E and KU Energy LLC,* headquartered in Louisville, Kentucky, is a wholly owned subsidiary of PPL and a holding company that owns regulated utility operations through its subsidiaries, LG&E and KU, which constitute substantially all of LKE's assets.

LG&E also engages in the distribution and sale of natural gas.

LG&E and KU maintain separate corporate identities and serve customers in Kentucky under their respective names.

KU also serves customers in Virginia under the Old Dominion Power name.

LKE, formed in 2003, is the successor to a Kentucky entity incorporated in 1989.

The U.K. Regulated segment has no related subsidiary Registrants.

PPL's other reportable segments' results primarily represent the results of its related subsidiary Registrants, except that the reportable segments are also allocated certain corporate level financing costs that are not included in the results of the applicable subsidiary Registrants.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Operating Revenues (in billions) | | | $ | 2.1 | | | | | $ | 3.1 | | | | | $ | 2.3 | |

| Net Income (in millions) | | | $ | 686 | | | | | $ | 418 | | | | | $ | 497 | |

| Electricity delivered (GWh) | | | 68,133 | | | | | | 29,016 | | | | | | 36,008 | | |

| At December 31, 2020: | | | | | | | | | | | | | | | | | |

U.K. Regulated Segment *(PPL)*

*The U.K. Regulated segment consists of PPL Global, which primarily includes WPD's regulated electricity distribution operations, the results of hedging the translation of WPD's earnings from British pound sterling into U.S. dollars, and certain costs, such as U.S. income taxes, administrative costs and acquisition-related financing costs.*

WPD operates four of the 14 Ofgem regulated DNOs providing electricity service in the U.K. through wholly owned subsidiaries: WPD (South West), WPD (South Wales), WPD (East Midlands) and WPD (West Midlands).

The number of network customers (end-users) served by WPD totals 8.0 million across 21,600 square miles in south Wales and southwest and central England.

WPD's operating revenues are translated from GBP to U.S. dollars using the average exchange rates in effect each month.

The annual weighted average of the monthly GBP

to U.S. dollar exchange rates used for the years ended December 2020, 2019 and 2018 were $1.28 per GBP, $1.28 per GBP, and $1.34 per GBP.

In August 2020, PPL announced that it initiated a formal process to sell its U.K. utility business.

See “Item 7.

Combined Management's Discussion and Analysis of Financial Condition and Results of Operations – Overview – Financial and Operational Developments – Initiation of Formal Process to Sell U.K. Utility Business.

*Franchise and Licenses*

WPD’s operations are regulated by Ofgem under the direction of the Gas and Electricity Markets Authority.

Ofgem is a non-ministerial government department and an independent National Regulatory Authority responsible for protecting the interests of existing and future electricity and natural gas consumers.

The Electricity Act 1989 provides the fundamental framework for electricity companies and established licenses that require each DNO to develop, maintain and operate efficient distribution networks.

WPD’s operations are regulated under these licenses which set the outputs WPD needs to deliver to customers and associated revenues WPD is allowed to earn.

WPD operates under a regulatory year that begins April 1 and ends March 31 of each year.

Ofgem has the formal power to propose modifications to each distribution license; however, licensees can appeal such changes to the U.K.’s Competition and Markets Authority.

Generally, any potential changes to these licenses are reviewed with stakeholders in a formal regulatory consultation process prior to a formal change proposal.

*Competition*

Although WPD operates in non-exclusive concession areas in the U.K., it currently faces little competition with respect to end-users connected to its network.

WPD's four DNOs are, therefore, regulated monopolies, operating under regulatory price controls.

*Customers*

WPD provides regulated electricity distribution services to licensed third-party energy suppliers who use WPD's networks to transfer electricity to their customers, the end-users.

WPD bills energy suppliers for this service and the supplier is responsible for billing its end-users.

See Notes 6, [removed: 7] [added: 7, 9] and 14 to the Financial Statements for information regarding legal, tax and regulatory matters and proceedings.

| ☒ | | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, [removed: 2020] [added: 2021] | | |

As of June 30, [removed: 2020,] [added: 2021,] PPL Corporation had [removed: 768,782,588] [added: 769,564,404] shares of its $0.01 par value Common Stock outstanding.

The aggregate market value of these common shares (based upon the closing price of these shares on the New York Stock Exchange on that date) held by non-affiliates was [removed: $19,865,342,074.][added: $21,524,716,380.]

As of January 31, [removed: 2021,] [added: 2022,] PPL Corporation had [removed: 768,984,785] [added: 735,361,885] shares of its $0.01 par value Common Stock outstanding.

As of January 31, [removed: 2021,] [added: 2022,] PPL Corporation held all 66,368,056 outstanding common shares, no par value, of PPL Electric Utilities Corporation.

As of January 31, [removed: 2021,] [added: 2022,] LG&E and KU Energy LLC held all 21,294,223 outstanding common shares, no par value, of Louisville Gas and Electric Company.

As of January 31, [removed: 2021,] [added: 2022,] LG&E and KU Energy LLC held all 37,817,878 outstanding common shares, no par value, of Kentucky Utilities Company.

PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company meet the conditions set forth in General Instructions (I)(1)(a) and (b) of Form 10-K and are therefore filing this form with the reduced disclosure format.

PPL Corporation has incorporated herein by reference certain sections of PPL Corporation's [removed: 2021] [added: 2022] Notice of Annual Meeting and Proxy Statement, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, [removed: 2020] [added: 2021] and which will provide the information required by Part III of this Report.

FOR THE YEAR ENDED DECEMBER 31, [removed: 2020][added: 2021]

This combined Form 10-K is separately filed by the following Registrants in their individual capacity: PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company.

Information contained herein relating to any individual Registrant is filed by such Registrant solely on its own behalf and no Registrant makes any representation as to information relating to any other Registrant, except that information under "Forward-Looking Information" relating to subsidiaries of PPL Corporation is also attributed to PPL [removed: Corporation and information relating to the subsidiaries of LG&E and KU Energy LLC is also attributed to LG&E and KU Energy LLC.][added: Corporation.]

Unless otherwise specified, references in this Report, individually, to PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company are references to such entities directly or to one or more of their subsidiaries, as the case may be, the financial results of which subsidiaries are consolidated into such Registrants' financial statements in accordance with GAAP.

| | | | | | | [Glossary of Terms and [removed: Abbreviations](#i965cdfcbb5474c3ea630e7209952158c_10)] [added: Abbreviations](#ib14821098d2144cb8e07f05335bc2031_10)] | | | [removed: [i](#i965cdfcbb5474c3ea630e7209952158c_10)] [added: [i](#ib14821098d2144cb8e07f05335bc2031_10)] | | |

| | | | | | | [Forward-Looking [removed: Information](#i965cdfcbb5474c3ea630e7209952158c_16)] [added: Information](#ib14821098d2144cb8e07f05335bc2031_16)] | | | [removed: [1](#i965cdfcbb5474c3ea630e7209952158c_16)] [added: [1](#ib14821098d2144cb8e07f05335bc2031_16)] | | |

| 1A. | | | | | | [Risk [removed: Factors](#i965cdfcbb5474c3ea630e7209952158c_25)] [added: Factors](#ib14821098d2144cb8e07f05335bc2031_25)] | | | [removed: [23](#i965cdfcbb5474c3ea630e7209952158c_25)] [added: [15](#ib14821098d2144cb8e07f05335bc2031_25)] | | |

| 1B. | | | | | | [Unresolved Staff [removed: Comments](#i965cdfcbb5474c3ea630e7209952158c_28)] [added: Comments](#ib14821098d2144cb8e07f05335bc2031_28)] | | | [removed: [31](#i965cdfcbb5474c3ea630e7209952158c_28)] [added: [22](#ib14821098d2144cb8e07f05335bc2031_28)] | | |

| 3. | | | | | | [Legal [removed: Proceedings](#i965cdfcbb5474c3ea630e7209952158c_34)] [added: Proceedings](#ib14821098d2144cb8e07f05335bc2031_34)] | | | [removed: [33](#i965cdfcbb5474c3ea630e7209952158c_34)] [added: [24](#ib14821098d2144cb8e07f05335bc2031_34)] | | |

| 4. | | | | | | [Mine Safety [removed: Disclosures](#i965cdfcbb5474c3ea630e7209952158c_37)] [added: Disclosures](#ib14821098d2144cb8e07f05335bc2031_37)] | | | [removed: [33](#i965cdfcbb5474c3ea630e7209952158c_37)] [added: [24](#ib14821098d2144cb8e07f05335bc2031_37)] | | |

| 5. | | | | | | [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i965cdfcbb5474c3ea630e7209952158c_43)] [added: Securities](#ib14821098d2144cb8e07f05335bc2031_43)] | | | [removed: [34](#i965cdfcbb5474c3ea630e7209952158c_43)] [added: [25](#ib14821098d2144cb8e07f05335bc2031_43)] | | |

| 6. | | | | | | [Selected Financial and Operating [removed: Data](#i965cdfcbb5474c3ea630e7209952158c_46)] [added: Data](#ib14821098d2144cb8e07f05335bc2031_46)] | | | [removed: [34](#i965cdfcbb5474c3ea630e7209952158c_46)] [added: [25](#ib14821098d2144cb8e07f05335bc2031_46)] | | |

| 7. | | | | | | [Combined Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i965cdfcbb5474c3ea630e7209952158c_49)] [added: Operations](#ib14821098d2144cb8e07f05335bc2031_49)] | | | [removed: [35](#i965cdfcbb5474c3ea630e7209952158c_49)] [added: [26](#ib14821098d2144cb8e07f05335bc2031_49)] | | |

| | | | | | | [Business [removed: Strategy](#i965cdfcbb5474c3ea630e7209952158c_55)] [added: Strategy](#ib14821098d2144cb8e07f05335bc2031_55)] | | | [removed: [35](#i965cdfcbb5474c3ea630e7209952158c_55)] [added: [26](#ib14821098d2144cb8e07f05335bc2031_55)] | | |

| | | | | | | [Financial and Operational [removed: Developments](#i965cdfcbb5474c3ea630e7209952158c_58)] [added: Developments](#ib14821098d2144cb8e07f05335bc2031_58)] | | | [removed: [36](#i965cdfcbb5474c3ea630e7209952158c_58)] [added: [27](#ib14821098d2144cb8e07f05335bc2031_58)] | | |

| | | | | | | [Results of [removed: Operations](#i965cdfcbb5474c3ea630e7209952158c_61)] [added: Operations](#ib14821098d2144cb8e07f05335bc2031_61)] | | | [removed: [42](#i965cdfcbb5474c3ea630e7209952158c_61)] [added: [30](#ib14821098d2144cb8e07f05335bc2031_61)] | | |

| | | | | | | [PPL Corporation and Subsidiaries - Statement of Income Analysis, Segment Earnings and Adjusted Gross [removed: Margins](#i965cdfcbb5474c3ea630e7209952158c_64)] [added: Margins](#ib14821098d2144cb8e07f05335bc2031_64)] | | | [removed: [43](#i965cdfcbb5474c3ea630e7209952158c_64)] [added: [31](#ib14821098d2144cb8e07f05335bc2031_64)] | | |

| | | | | | | [PPL Electric Utilities Corporation and Subsidiaries - Statement of Income [removed: Analysis](#i965cdfcbb5474c3ea630e7209952158c_67)] [added: Analysis](#ib14821098d2144cb8e07f05335bc2031_67)] | | | [removed: [53](#i965cdfcbb5474c3ea630e7209952158c_67)] [added: [40](#ib14821098d2144cb8e07f05335bc2031_67)] | | |

| | | | | | | [Louisville Gas and Electric Company - Statement of Income [removed: Analysis](#i965cdfcbb5474c3ea630e7209952158c_73)] [added: Analysis](#ib14821098d2144cb8e07f05335bc2031_73)] | | | [removed: [55](#i965cdfcbb5474c3ea630e7209952158c_73)] [added: [41](#ib14821098d2144cb8e07f05335bc2031_73)] | | |

| | | | | | | [Kentucky Utilities Company - Statement of Income [removed: Analysis](#i965cdfcbb5474c3ea630e7209952158c_76)] [added: Analysis](#ib14821098d2144cb8e07f05335bc2031_76)] | | | [removed: [57](#i965cdfcbb5474c3ea630e7209952158c_76)] [added: [42](#ib14821098d2144cb8e07f05335bc2031_76)] | | |

| | | | | | | [Financial [removed: Condition](#i965cdfcbb5474c3ea630e7209952158c_79)] [added: Condition](#ib14821098d2144cb8e07f05335bc2031_79)] | | | [removed: [58](#i965cdfcbb5474c3ea630e7209952158c_79)] [added: [43](#ib14821098d2144cb8e07f05335bc2031_79)] | | |

| | | | | | | [Liquidity and Capital [removed: Resources](#i965cdfcbb5474c3ea630e7209952158c_82)] [added: Resources](#ib14821098d2144cb8e07f05335bc2031_82)] | | | [removed: [58](#i965cdfcbb5474c3ea630e7209952158c_82)] [added: [43](#ib14821098d2144cb8e07f05335bc2031_82)] | | |

| | | | | | | [Risk [removed: Management](#i965cdfcbb5474c3ea630e7209952158c_85)] [added: Management](#ib14821098d2144cb8e07f05335bc2031_85)] | | | [removed: [69](#i965cdfcbb5474c3ea630e7209952158c_85)] [added: [53](#ib14821098d2144cb8e07f05335bc2031_85)] | | |

| | | | | | | [Foreign Currency [removed: Translation](#i965cdfcbb5474c3ea630e7209952158c_88)] [added: Translation](#ib14821098d2144cb8e07f05335bc2031_88)] | | | [removed: [71](#i965cdfcbb5474c3ea630e7209952158c_88)] [added: [55](#ib14821098d2144cb8e07f05335bc2031_88)] | | |

| | | | | | | [Related Party [removed: Transactions](#i965cdfcbb5474c3ea630e7209952158c_91)] [added: Transactions](#ib14821098d2144cb8e07f05335bc2031_91)] | | | [removed: [71](#i965cdfcbb5474c3ea630e7209952158c_91)] [added: [55](#ib14821098d2144cb8e07f05335bc2031_91)] | | |

| | | | | | | [Acquisitions, Developments and [removed: Divestitures](#i965cdfcbb5474c3ea630e7209952158c_94)] [added: Divestitures](#ib14821098d2144cb8e07f05335bc2031_94)] | | | [removed: [72](#i965cdfcbb5474c3ea630e7209952158c_94)] [added: [56](#ib14821098d2144cb8e07f05335bc2031_94)] | | |

| | | | | | | [Environmental [removed: Matters](#i965cdfcbb5474c3ea630e7209952158c_97)] [added: Matters](#ib14821098d2144cb8e07f05335bc2031_97)] | | | [removed: [72](#i965cdfcbb5474c3ea630e7209952158c_97)] [added: [56](#ib14821098d2144cb8e07f05335bc2031_97)] | | |

| | | | | | | [removed: [Sustainability](#i965cdfcbb5474c3ea630e7209952158c_100)] [added: [Sustainability](#ib14821098d2144cb8e07f05335bc2031_100)] | | | [removed: [72](#i965cdfcbb5474c3ea630e7209952158c_100)] [added: [56](#ib14821098d2144cb8e07f05335bc2031_100)] | | |

| | | | | | | [removed: [Cybersecurity](#i965cdfcbb5474c3ea630e7209952158c_103)] [added: [Cybersecurity](#ib14821098d2144cb8e07f05335bc2031_103)] | | | [removed: [73](#i965cdfcbb5474c3ea630e7209952158c_103)] [added: [56](#ib14821098d2144cb8e07f05335bc2031_103)] | | |

| | | | | | | [removed: [Competition](#i965cdfcbb5474c3ea630e7209952158c_106)] [added: [Competition](#ib14821098d2144cb8e07f05335bc2031_106)] | | | [removed: [73](#i965cdfcbb5474c3ea630e7209952158c_106)] [added: [57](#ib14821098d2144cb8e07f05335bc2031_106)] | | |

| | | | | | | [New Accounting [removed: Guidance](#i965cdfcbb5474c3ea630e7209952158c_109)] [added: Guidance](#ib14821098d2144cb8e07f05335bc2031_109)] | | | [removed: [73](#i965cdfcbb5474c3ea630e7209952158c_109)] [added: [57](#ib14821098d2144cb8e07f05335bc2031_109)] | | |

| OR | | | | | |

| 1. | | | | | | [Business](#ib14821098d2144cb8e07f05335bc2031_22) | | | [3](#ib14821098d2144cb8e07f05335bc2031_22) | | |

| 2. | | | | | | [Properties](#ib14821098d2144cb8e07f05335bc2031_31) | | | [23](#ib14821098d2144cb8e07f05335bc2031_31) | | |

| | | | | | | [Overview](#ib14821098d2144cb8e07f05335bc2031_52) | | | [26](#ib14821098d2144cb8e07f05335bc2031_52) | | |

| | | | | | | [Consolidated Balance Sheets at December 31,](#ib14821098d2144cb8e07f05335bc2031_157) [2021 and 2020](#ib14821098d2144cb8e07f05335bc2031_142) | | | [81](#ib14821098d2144cb8e07f05335bc2031_157) | | |

| | | | | | | [Balance Sheets at December 31,](#ib14821098d2144cb8e07f05335bc2031_190) [2021 and 2020](#ib14821098d2144cb8e07f05335bc2031_142) | | | [87](#ib14821098d2144cb8e07f05335bc2031_190) | | |

| | | | | | | [Balance Sheets at December 31,](#ib14821098d2144cb8e07f05335bc2031_205) [2021 and 2020](#ib14821098d2144cb8e07f05335bc2031_142) | | | [93](#ib14821098d2144cb8e07f05335bc2031_205) | | |

| | | | | | | [4. Preferred Securities](#ib14821098d2144cb8e07f05335bc2031_226) | | | [113](#ib14821098d2144cb8e07f05335bc2031_226) | | |

| | | | | | | [5. Earnings Per Share](#ib14821098d2144cb8e07f05335bc2031_229) | | | [113](#ib14821098d2144cb8e07f05335bc2031_229) | | |

| | | | | | | [7. Utility Rate Regulation](#ib14821098d2144cb8e07f05335bc2031_235) | | | [122](#ib14821098d2144cb8e07f05335bc2031_235) | | |

| | | | | | | [8. Financing Activities](#ib14821098d2144cb8e07f05335bc2031_238) | | | [130](#ib14821098d2144cb8e07f05335bc2031_238) | | |

| | | | | | | [10. Leases](#ib14821098d2144cb8e07f05335bc2031_244) | | | [138](#ib14821098d2144cb8e07f05335bc2031_244) | | |

| 9B. | | | | | | [Other Information](#ib14821098d2144cb8e07f05335bc2031_301) | | | [180](#ib14821098d2144cb8e07f05335bc2031_301) | | |

| 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ib14821098d2144cb8e07f05335bc2031_2764) | | | [180](#ib14821098d2144cb8e07f05335bc2031_2764) | | |

| | | | | | | | | | | | |

| 11. | | | | | | [Executive Compensation](#ib14821098d2144cb8e07f05335bc2031_310) | | | [183](#ib14821098d2144cb8e07f05335bc2031_310) | | |

| | | | | | | | | | | | |

| | | | | | | [Exhibit Index](#ib14821098d2144cb8e07f05335bc2031_334) | | | [190](#ib14821098d2144cb8e07f05335bc2031_334) | | |

| | | | | | | [Signatures](#ib14821098d2144cb8e07f05335bc2031_337) | | | [205](#ib14821098d2144cb8e07f05335bc2031_337) | | |

| | | | | | | | | | | | |

PPL Energy Holdings \- PPL Energy Holdings, LLC, a subsidiary of PPL and the parent holding company of PPL Energy Funding, LKE and other subsidiaries.

As of January 1, 2022, PPL Energy Holdings became the parent holding company of PPL Electric and PPL Services.

On December 31, 2021, PPL EU Services merged into PPL Services.

PPL Rhode Island Holdings - PPL Rhode Island Holdings, LLC, a subsidiary of PPL Energy Holdings formed for the purpose of acquiring Narragansett Electric to which certain interests of PPL Energy Holdings in the Narragansett SPA were assigned.

PPL WPD Limited - PPL WPD Limited, a U.K. subsidiary of PPL Global.

Prior to the sale of the U.K. utility business on June 14, 2021, PPL WPD Limited was an indirect parent to WPD.

PPL WPD Limited was not included in the sale of the U.K. utility business on June 14, 2021.

Green Tariff \- a KPSC approved rate schedule, permitting customers to contract with LG&E or KU for the purchase of renewable energy certificates, construction of solar generation and use of the energy produced, or the purchase of energy from a renewable energy generator.

Narragansett Electric - The Narragansett Electric Company, an entity that serves electric and natural gas customers in Rhode Island.

In March 2021, PPL and its subsidiary, PPL Energy Holdings announced a pending acquisition of Narragansett Electric.

In light of the transformational nature of the potential sale of the U.K. utility business in 2021, PPL's ROE-based performance units issued for 2021 were based on a one-year performance period from January 1, 2021 to December 31, 2021; however, these units retained the three year vesting schedule and other characteristics.

PPL WPD Investments Limited was included in the sale of the U.K. utility business on June 14, 2021.

The U.K. utility business was sold on June 14, 2021.

WPD was included in the sale of the U.K. utility business on June 14, 2021.

WPD (East Midlands) was included in the sale of the U.K. utility business on June 14, 2021.

WPD plc was included in the sale of the U.K. utility business on June 14, 2021.

WPD Midlands was included in the sale of the U.K. utility business on June 14, 2021.

WPD (South Wales) was included in the sale of the U.K. utility business on June 14, 2021.

WPD (South West) was included in the sale of the U.K. utility business on June 14, 2021.

WPD (West) Midlands) was included in the sale of the U.K. utility business on June 14, 2021.

| | | | OR | | |

| 333-173665 | | | LG&E and KU Energy LLC (Exact name of Registrant as specified in its charter) Kentucky 220 West Main Street Louisville, KY 40202-1377 (502) 627-2000 | | | 20-0523163 | | |

| 2013 Series B due 2073 | | | PPX | | | New York Stock Exchange | | |

| LG&E and KU Energy LLC | | | Yes | | | ☐ | | | No | | | ☒ | | | | | |

| LG&E and KU Energy LLC | | | Yes | | | ☐ | | | No | | | ☒ | | | | | |

| LG&E and KU Energy LLC | | | Yes | | | ☒ | | | No | | | ☐ | | | | | |

| LG&E and KU Energy LLC | | | Yes | | | ☒ | | | No | | | ☐ | | | | | |

| LG&E and KU Energy LLC | | | ☐ | | | ☐ | | | ☒ | | | ☐ | | | ☐ | | |

| LG&E and KU Energy LLC | | | ☐ | | | | | | | | | | | | | | |

| LG&E and KU Energy LLC | | | ☐ | | | | | | | | | | | | | | |

| LG&E and KU Energy LLC | | | Yes | | | ☐ | | | No | | | ☒ | | | | | |

As of January 31, 2021, PPL Corporation held all of the membership interests in LG&E and KU Energy LLC.

LG&E AND KU ENERGY LLC

| 1. | | | | | | [Business](#i965cdfcbb5474c3ea630e7209952158c_22) | | | [3](#i965cdfcbb5474c3ea630e7209952158c_22) | | |

| 2. | | | | | | [Properties](#i965cdfcbb5474c3ea630e7209952158c_31) | | | [32](#i965cdfcbb5474c3ea630e7209952158c_31) | | |

| | | | | | | [Overview](#i965cdfcbb5474c3ea630e7209952158c_52) | | | [35](#i965cdfcbb5474c3ea630e7209952158c_52) | | |

| | | | | | | [LG&E and KU Energy LLC and Subsidiaries - Statement of Income Analysis](#i965cdfcbb5474c3ea630e7209952158c_70) | | | [54](#i965cdfcbb5474c3ea630e7209952158c_70) | | |

| | | | | | | [Consolidated Balance Sheets at December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_166)[20](#i965cdfcbb5474c3ea630e7209952158c_166) [and 201](#i965cdfcbb5474c3ea630e7209952158c_166)[9](#i965cdfcbb5474c3ea630e7209952158c_166) | | | [105](#i965cdfcbb5474c3ea630e7209952158c_166) | | |

| | | | | | | LG&E and KU Energy LLC and Subsidiaries | | | | | |

| | | | | | | [Consolidated Balance Sheets at December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_193)[20](#i965cdfcbb5474c3ea630e7209952158c_193) [and 20](#i965cdfcbb5474c3ea630e7209952158c_193)[19](#i965cdfcbb5474c3ea630e7209952158c_193) | | | [111](#i965cdfcbb5474c3ea630e7209952158c_193) | | |

| | | | | | | [Statements of Income for the years ended December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_205)[20](#i965cdfcbb5474c3ea630e7209952158c_205)[, 20](#i965cdfcbb5474c3ea630e7209952158c_205)[19](#i965cdfcbb5474c3ea630e7209952158c_205) [and 20](#i965cdfcbb5474c3ea630e7209952158c_205)[18](#i965cdfcbb5474c3ea630e7209952158c_205) | | | [115](#i965cdfcbb5474c3ea630e7209952158c_205) | | |

| | | | | | | [Balance Sheets at December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_211)[20](#i965cdfcbb5474c3ea630e7209952158c_211) [and 20](#i965cdfcbb5474c3ea630e7209952158c_211)[19](#i965cdfcbb5474c3ea630e7209952158c_211) | | | [117](#i965cdfcbb5474c3ea630e7209952158c_211) | | |

| | | | | | | [Statements of Income for the years ended December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_223)[20](#i965cdfcbb5474c3ea630e7209952158c_223)[, 201](#i965cdfcbb5474c3ea630e7209952158c_223)[9](#i965cdfcbb5474c3ea630e7209952158c_223) [and 2](#i965cdfcbb5474c3ea630e7209952158c_223)[018](#i965cdfcbb5474c3ea630e7209952158c_223) | | | [121](#i965cdfcbb5474c3ea630e7209952158c_223) | | |

| | | | | | | [Statements of Cash Flows for the years ended December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_226)[20](#i965cdfcbb5474c3ea630e7209952158c_226)[, 201](#i965cdfcbb5474c3ea630e7209952158c_226)[9](#i965cdfcbb5474c3ea630e7209952158c_226) [and 20](#i965cdfcbb5474c3ea630e7209952158c_226)[18](#i965cdfcbb5474c3ea630e7209952158c_226) | | | [122](#i965cdfcbb5474c3ea630e7209952158c_226) | | |

| | | | | | | [Balance Sheets at December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_229)[20](#i965cdfcbb5474c3ea630e7209952158c_229) [and 20](#i965cdfcbb5474c3ea630e7209952158c_229)[19](#i965cdfcbb5474c3ea630e7209952158c_229) | | | [123](#i965cdfcbb5474c3ea630e7209952158c_229) | | |

| | | | | | | [Statements of Equity for the years ended December 31, 20](#i965cdfcbb5474c3ea630e7209952158c_235)[20](#i965cdfcbb5474c3ea630e7209952158c_235)[, 201](#i965cdfcbb5474c3ea630e7209952158c_235)[9](#i965cdfcbb5474c3ea630e7209952158c_235) [and 20](#i965cdfcbb5474c3ea630e7209952158c_235)[18](#i965cdfcbb5474c3ea630e7209952158c_235) | | | [125](#i965cdfcbb5474c3ea630e7209952158c_235) | | |

| | | | | | | [4. Preferred Securities](#i965cdfcbb5474c3ea630e7209952158c_259) | | | [145](#i965cdfcbb5474c3ea630e7209952158c_259) | | |

| | | | | | | [5. Earnings Per Share](#i965cdfcbb5474c3ea630e7209952158c_265) | | | [145](#i965cdfcbb5474c3ea630e7209952158c_265) | | |

| | | | | | | [7. Utility Rate Regulation](#i965cdfcbb5474c3ea630e7209952158c_277) | | | [158](#i965cdfcbb5474c3ea630e7209952158c_277) | | |

| | | | | | | [8. Financing Activities](#i965cdfcbb5474c3ea630e7209952158c_283) | | | [167](#i965cdfcbb5474c3ea630e7209952158c_283) | | |

| | | | | | | [10. Leases](#i965cdfcbb5474c3ea630e7209952158c_289) | | | [173](#i965cdfcbb5474c3ea630e7209952158c_289) | | |

| | | | | | | SUPPLEMENTARY DATA | | | | | |

| | | | | | | Schedule I - Condensed Unconsolidated Financial Statements | | | | | |

| | | | | | | [LG&E and KU Energy LLC](#i965cdfcbb5474c3ea630e7209952158c_355) | | | [223](#i965cdfcbb5474c3ea630e7209952158c_355) | | |

| 9B. | | | | | | [Other Information](#i965cdfcbb5474c3ea630e7209952158c_373) | | | [228](#i965cdfcbb5474c3ea630e7209952158c_373) | | |

| 11. | | | | | | [Executive Compensation](#i965cdfcbb5474c3ea630e7209952158c_382) | | | [230](#i965cdfcbb5474c3ea630e7209952158c_382) | | |

| | | | | | | [Exhibit Index](#i965cdfcbb5474c3ea630e7209952158c_406) | | | [237](#i965cdfcbb5474c3ea630e7209952158c_406) | | |

| | | | | | | [Signatures](#i965cdfcbb5474c3ea630e7209952158c_409) | | | [257](#i965cdfcbb5474c3ea630e7209952158c_409) | | |

PPL WPD Limited - a U.K. subsidiary of PPL Global, following reorganizations in October 2015 and 2017.

PPL WPD Limited is an indirect parent to WPD plc having previously been a sister company.

PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

[removed: U.K.] [added: Kentucky] Regulated Segment [removed: *(PPL)*][added: *(PPL, LG&E and KU)*]

[removed: At December 31, 2020, WPD's] [added: PPL Electric's] distribution system [removed: in the U.K.] includes [removed: 1,895] [added: 352] substations with a total capacity of [removed: 74] [added: 14] million kVA, [removed: 55,637] [added: 36,488] circuit miles of overhead lines and [removed: 85,333] [added: 8,714] underground [removed: cable] [added: circuit] miles.

The electricity generating capacity at December 31, [removed: 2020] [added: 2021] was:

| Primary Fuel/Plant | | | | | | Total MW Capacity Summer | | | | | | [removed: Ownership or Other Interest in MW | | | | | |] % Ownership or Other Interest | | | | | | Ownership or Other Interest in MW | | | | | | % Ownership or Other Interest | | | | | | Ownership or Other Interest in MW | | |

| Coal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | |]

| Ghent - Units 1- 4 | | | | | | 1,919 | | | | | | [removed: 1,919] | | | | | | | | | | | | [removed: | | | | | |] 100.00 | | | | | | 1,919 | | |

| Mill Creek - Units 1- 4 | | | | | | 1,465 | | | | | | [removed: 1,465 | | | | | |] 100.00 | | | | | | 1,465 | | | | | | | | | | | | | | |

| E.W. Brown - Unit 3 | | | | | | 412 | | | | | | [removed: 412] | | | | | | | | | | | | [removed: | | | | | |] 100.00 | | | | | | 412 | | |

| Trimble County - Unit 1 (a) | | | | | | 493 | | | | | | [removed: 370 | | | | | |] 75.00 | | | | | | 370 | | | | | | | | | | | | | | |

| Trimble County - Unit 2 (a) | | | | | | 732 | | | | | | [removed: 549 | | | | | |] 14.25 | | | | | | 104 | | | | | | 60.75 | | | | | | 445 | | |

| | | | | | | 5,021 | | | | | | [removed: 4,715] | | | | | | [removed: | | | | | |] 1,939 | | | | | | | | | | | | 2,776 | | |

| Natural Gas/Oil | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | |]

| E.W. Brown Unit 5 (b) | | | | | | 130 | | | | | | [removed: 130 | | | | | |] 53.00 | | | | | | 69 | | | | | | 47.00 | | | | | | 61 | | |

| E.W. Brown Units 6 - 7 | | | | | | 292 | | | | | | [removed: 292 | | | | | |] 38.00 | | | | | | 111 | | | | | | 62.00 | | | | | | 181 | | |

| E.W. Brown Units 8 - 11 (b) | | | | | | 484 | | | | | | [removed: 484] | | | | | | | | | | | | [removed: | | | | | |] 100.00 | | | | | | 484 | | |

| Trimble County Units 5 - 6 | | | | | | 318 | | | | | | [removed: 318 | | | | | |] 29.00 | | | | | | 92 | | | | | | 71.00 | | | | | | 226 | | |

| Trimble County Units 7 - 10 | | | | | | 636 | | | | | | [removed: 636 | | | | | |] 37.00 | | | | | | 235 | | | | | | 63.00 | | | | | | 401 | | |

| Paddy's Run [removed: Units 11 -] [added: Unit] 12 | | | | | | [removed: 35 | | | | | | 35] [added: 23] | | | | | | 100.00 | | | | | | [removed: 35] [added: 23] | | | | | | | | | | | | | | |

| Paddy's Run Unit 13 | | | | | | 147 | | | | | | [removed: 147 | | | | | |] 53.00 | | | | | | 78 | | | | | | 47.00 | | | | | | 69 | | |

| Haefling - Units 1 - 2 | | | | | | 24 | | | | | | [removed: 24] | | | | | | | | | | | | [removed: | | | | | |] 100.00 | | | | | | 24 | | |

| Cane Run Unit 7 | | | | | | 662 | | | | | | [removed: 662 | | | | | |] 22.00 | | | | | | 146 | | | | | | 78.00 | | | | | | 516 | | |

| Hydro | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | |]

| Ohio Falls - Units 1-8 | | | | | | 64 | | | | | | [removed: 64 | | | | | |] 100.00 | | | | | | 64 | | | | | | | | | | | | | | |

| Dix Dam - Units 1-3 | | | | | | 32 | | | | | | [removed: 32] | | | | | | | | | | | | [removed: | | | | | |] 100.00 | | | | | | 32 | | |

| Solar | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | |]

| E.W. Brown Solar (c) | | | | | | 8 | | | | | | [removed: 8 | | | | | |] 39.00 | | | | | | 3 | | | | | | 61.00 | | | | | | 5 | | |

Business - General - Segment Information - Kentucky Regulated Segment." At December 31, [removed: 2020,] [added: 2021,] LG&E's and KU's electricity transmission and distribution systems and LG&E's natural gas transmission and distribution systems were:

| | | | | | | Distribution | | | | | | Transmission | | | | | | Distribution | | | | | | Transmission | | | [removed: | | | Distribution | | | | | | Transmission | | |]

| Electricity System | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Capacity (in millions of kVA) | | | | | | [removed: 13 | | | | | | 22 | | | | | |] 5 | | | | | | 8 | | | | | | 8 | | | | | | [removed: 14] [added: 15] | | |

| Overhead lines (circuit miles) | | | | | | [removed: 17,892 | | | | | | 4,728 | | | | | |] 3,883 | | | | | | 669 | | | | | | [removed: 14,009] [added: 14,046] | | | | | | [removed: 4,059] [added: 4,056] | | |

| Underground lines (circuit miles) | | | | | | [removed: 5,354 | | | | | | — | | | | | | 2,706] [added: 2,753] | | | | | | — | | | | | | [removed: 2,648] [added: 2,699] | | | | | | — | | |

| Natural Gas System | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Distribution mains (miles) | | | | | | [removed: 4,398 | | | | | | — | | | | | | 4,398] [added: 4,418] | | | | | | — | | | | | | — | | | | | | — | | |

| Transmission pipeline (miles) | | | | | | — | | | | | | [removed: 234 | | | | | | — | | | | | | 234] [added: 233] | | | | | | — | | | | | | — | | |

| Transmission storage lines (miles) | | | | | | — | | | | | | [removed: 117 | | | | | | — | | | | | | 117] [added: 118] | | | | | | — | | | | | | — | | |

| Combustion turbine lines (miles) | | | | | | — | | | | | | [removed: 30 | | | | | | — | | | | | |] 19 | | | | | | — | | | | | | [removed: 11] [added: 12] | | |

| Storage fields | | | | | | — | | | | | | 5 | | | | | | — | | | | | | [removed: 5 | | | | | |] — | | | [removed: | | | — | | |]

| Storage field capacity (Bcf) | | | | | | — | | | | | | 15 | | | | | | — | | | | | | [removed: 15 | | | | | |] — | | | [removed: | | | — | | |]

[removed: (a)192] [added: (a)191] substations [removed: (62] [added: (61] at LG&E and 130 at KU) are shared between the distribution and transmission systems.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | LG&E | | | | | | | | | | | | KU | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2,716 | | | | | | | | | | | | 754 | | | | | | | | | | | | 1,962 | | |

| | | | | | | 96 | | | | | | | | | | | | 64 | | | | | | | | | | | | 32 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total | | | | | | 7,841 | | | | | | | | | | | | 2,760 | | | | | | | | | | | | 4,775 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | LG&E | | | | | | | | | | | | KU | | | | | | | | |

| Substations (a) | | | | | | 96 | | | | | | 77 | | | | | | 460 | | | | | | 211 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

For a description of WPD's service territory, see "Item 1.

Business - General - Segment Information - U.K. Regulated Segment." WPD has electric distribution lines in public streets and highways pursuant to legislation and rights-of-way secured from property owners.

Kentucky Regulated Segment *(PPL, LKE, LG&E and KU)*

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | LKE | | | | | | LG&E | | | | | | | | | | | | KU | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Zorn Unit | | | | | | 14 | | | | | | 14 | | | | | | 100.00 | | | | | | 14 | | | | | | | | | | | | | | |

| | | | | | | 2,742 | | | | | | 2,742 | | | | | | | | | | | | 780 | | | | | | | | | | | | 1,962 | | |

| | | | | | | 96 | | | | | | 96 | | | | | | | | | | | | 64 | | | | | | | | | | | | 32 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total | | | | | | 7,867 | | | | | | 7,561 | | | | | | | | | | | | 2,786 | | | | | | | | | | | | 4,775 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | LKE | | | | | | | | | | | | LG&E | | | | | | | | | | | | KU | | | | | | | | |

| Substations (a) | | | | | | 556 | | | | | | 289 | | | | | | 96 | | | | | | 76 | | | | | | 460 | | | | | | 213 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

PPL Electric's distribution system includes 352 substations with a total capacity of 14 million kVA, 36,453 circuit miles of overhead lines and 8,610 underground circuit miles.

At January 31, [removed: 2021,] [added: 2022] there were [removed: 50,548] [added: 48,597] common stock shareowners of record.

PPL Electric paid common stock dividends to PPL of [removed: $400] [added: $334] million in [removed: 2020] [added: 2021] and [removed: $486] [added: $400] million in [removed: 2019.][added: 2020.]

LG&E paid common stock dividends to LKE of [removed: $161] [added: $192] million in [removed: 2020] [added: 2021] and [removed: $182] [added: $161] million in [removed: 2019.][added: 2020.]

KU paid common stock dividends to LKE of [removed: $200] [added: $250] million in [removed: 2020] [added: 2021] and [removed: $229] [added: $200] million in [removed: 2019.][added: 2020.]

The following table provides information about PPL's purchases of equity securities that are registered by PPL Corporation pursuant to Section 12 of the Exchange Act of 1934 for the quarter ended December 31, 2021:

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | | Total Number of Shares (or Units) Purchased | | | | | | Average Price Paid per Share (or Unit) | | | | | | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | | | | | | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (a) | | |

| October 1 to October 31, 2021 | | | 8,257,699 | | | | | | $ | 28.60 | | | | | 8,257,699 | | | | | | $ | 2,450,000,033 | |

| November 1 to November 30, 2021 | | | 11,453,324 | | | | | | 28.65 | | | | | | 11,453,324 | | | | | | 2,121,807,982 | | |

| December 1 to December 31, 2021 | | | 4,309,556 | | | | | | 28.76 | | | | | | 4,309,556 | | | | | | 1,997,876,503 | | |

| Total | | | 24,020,579 | | | | | | $ | 28.65 | | | | | 24,020,579 | | | | | | $ | 1,997,876,503 | |

(a)PPL Corporation's Board of Directors approved a share repurchase plan in August 2021.

See "Combined Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial and Operational Developments - Share Repurchases" for additional information.

There were no purchases by PPL of its common stock during the fourth quarter of 2020.

LG&E and KU Energy LLC

There is no established public trading market for LKE's membership interests.

PPL owns all of LKE's outstanding membership interests.

Distributions on the membership interests are paid as determined by LKE's Board of Directors.

LKE made cash distributions to PPL of $283 million in 2020 and $308 million in 2019.

PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

\[Reserved\]

Omitted as permitted in SEC Release No. 33-10890.

[removed: CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31,][added: Following are the components of discontinued operations in the Statements of Income for the years ended December 31:]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| [removed: Operating Expenses] [added: Operating Expenses] | | | [added: 467] | | | | | | [added: 916] | | | | | | [added: 853] | | |

| Fuel | | | [removed: 632] [added: 710] | | | | | | [removed: 709] [added: 632] | | | | | | [removed: 799] [added: 709] | | |

| Energy purchases | | | [removed: 634] [added: 752] | | | | | | [removed: 723] [added: 634] | | | | | | [removed: 745] [added: 723] | | |

| Other operation and maintenance | | | [removed: 1,944] [added: 1,608] | | | | | | [removed: 1,985] [added: 1,420] | | | | | | [removed: 1,983] [added: 1,509] | | |

| Taxes, other than income | | | [removed: 307] [added: 46] | | | | | | [removed: 313] [added: 40] | | | | | | [removed: 312] [added: 39] | | |

| Other Income (Expense) - net | | | [removed: 169] [added: 15] | | | | | | [removed: 309] [added: 2] | | | | | | [removed: 396] [added: 14] | | |

| Interest Expense | | | [removed: 1,001] [added: 81] | | | | | | [removed: 994] [added: 87] | | | | | | [removed: 963] [added: 87] | | |

| Income Taxes | | | [removed: 502] [added: 54] | | | | | | [removed: 409] [added: 62] | | | | | | [removed: 458] [added: 63] | | |

| Net [removed: Income] [added: Income (Loss)] | | | $ | [removed: 1,469] [added: (1,480)] | | | | | $ | [removed: 1,746] [added: 1,469] | | | | | $ | [removed: 1,827] [added: 1,746] | |

| [removed: Net Income] Available to PPL [removed: Common Shareowners:] [added: common shareowners:] | | | | | | | | | | | | | | | | | |

| Basic | | | [removed: 768,590] [added: 762,902] | | | | | | [removed: 728,512] [added: 768,590] | | | | | | [removed: 704,439] [added: 728,512] | | |

| Diluted | | | [removed: 769,384] [added: 764,819] | | | | | | [removed: 736,754] [added: 769,384] | | | | | | [removed: 708,619] [added: 736,754] | | |

CONSOLIDATED STATEMENTS OF COMPREHENSIVE [removed: INCOME][added: INCOME (LOSS)]

[removed: FOR THE YEARS ENDED DECEMBER 31,][added: The following table shows the lease income recognized for the years ended December 31:]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net [removed: income] [added: income (loss)] | | | $ | [removed: 1,469] [added: (1,480)] | | | | | $ | [removed: 1,746] [added: 1,469] | | | | | $ | [removed: 1,827] [added: 1,746] | |

| [removed: Other] [added: Other] comprehensive income [removed: (loss):] [added: (loss)] | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | (394) | | | | | | | | | | | | (394) | | |]

| Foreign currency translation adjustments, net of tax of [removed: $0,] [added: ($123),] $0, [removed: ($2)] [added: $0] | | | [removed: 267] [added: 372] | | | | | | [removed: 108] [added: 267] | | | | | | [removed: (444)] [added: 108] | | |

| Qualifying derivatives, net of tax of [removed: $5, 2, ($9)] [added: ($5), ($8), ($5)] | | | [removed: (19)] [added: 25] | | | | | | [removed: (11)] [added: 24] | | | | | | [removed: 36] [added: 13] | | |

| Defined benefit [removed: plans:] [added: plans] | | | [added: 95] | | | | | | [added: 60] | | | | | | [added: 28] | | | [added: | | | 18 | | |]

| Prior service costs, net of tax of $0, $0, [removed: $3] [added: $0] | | | [removed: (1)] [added: —] | | | | | | (1) | | | | | | [removed: (11)] [added: (1)] | | |

| Net actuarial gain (loss), net of tax of [added: $1,] $74, [removed: $119, $44] [added: $119] | | | [removed: (341)] [added: (1)] | | | | | | [removed: (592)] [added: (341)] | | | | | | [removed: (187)] [added: (592)] | | |

| Qualifying derivatives, net of tax of [removed: ($8), $(5), $6] [added: $0, $0, $0] | | | [removed: 24] [added: 15] | | | | | | [removed: 13] [added: —] | | | | | | [removed: (29)] [added: —] | | |

| Prior service costs, net of tax of ($1), [removed: $(1), $0] [added: ($1), ($1)] | | | [removed: 3] [added: 2] | | | | | | [removed: 2] [added: 3] | | | | | | 2 | | |

| Net actuarial (gain) loss, net of tax of [added: ($33),] ($51), [removed: $(22), ($36)] [added: ($22)] | | | [removed: 205] [added: 126] | | | | | | [removed: 87] [added: 205] | | | | | | [removed: 142] [added: 87] | | |

| Total other comprehensive income (loss) | | | [removed: 138] [added: 4,063] | | | | | | [removed: (394)] [added: 138] | | | | | | [removed: (491)] [added: (394)] | | |

| Comprehensive income | | | $ | [removed: 1,607] [added: 2,583] | | | | | $ | [removed: 1,352] [added: 1,607] | | | | | $ | [removed: 1,336] [added: 1,352] | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| [removed: Cash Flows from] Operating [removed: Activities] [added: cash flows from operating leases] | | | [added: $] | [added: 23] | | | | | [added: $] | [added: 24] | | | | | [added: $] | [added: 26] | |

| Net income [added: (loss)] | | | $ | [removed: 1,469] [added: (1,480)] | | | | | $ | [removed: 1,746] [added: 1,469] | | | | | $ | [removed: 1,827] [added: 1,746] | |

| Amortization | | | [removed: 72] [added: 39] | | | | | | [removed: 81] [added: 58] | | | | | | [removed: 78] [added: 58] | | |

| Defined benefit plans [removed: -] [added: expense] (income) | | | [removed: (201)] [added: (10)] | | | | | | [removed: (263)] [added: (1)] | | | | | | [removed: (192)] [added: —] | | |

| Deferred income taxes and investment tax credits | | | [removed: 402] [added: 79] | | | | | | [removed: 309] [added: 83] | | | | | | [removed: 355] [added: 90] | | |

| [removed: Stock] [added: Stock-based] compensation [removed: expense] | | | [removed: 29] | | | | | | [removed: 36] | | | | | | [removed: 26] [added: 9] | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | 9 | | |]

| Other | | | [removed: (12)] [added: 20] | | | | | | [removed: (22)] [added: 67] | | | | | | [removed: (3)] [added: 69] | | |

| [removed: Change in current] [added: Regulatory] assets and [removed: current liabilities] [added: liabilities, net] | | | [added: 52] | | | | | | [added: (63)] | | | | | | [added: (88)] | | |

| Accounts receivable | | | [removed: (82)] [added: (14)] | | | | | | [removed: 4] [added: (70)] | | | | | | [removed: 28] [added: (3)] | | |

| Accounts payable | | | [removed: 10] [added: 24] | | | | | | [removed: (77)] [added: (1)] | | | | | | [removed: 78] [added: (66)] | | |

| Operating Revenues | | | $ | 5,783 | | | | | $ | 5,474 | | | | | $ | 5,602 | |

| Depreciation | | | 1,082 | | | | | | 1,022 | | | | | | 949 | | |

| Total Operating Expenses | | | 4,359 | | | | | | 3,888 | | | | | | 4,076 | | |

| Operating Income | | | 1,424 | | | | | | 1,586 | | | | | | 1,526 | | |

| Income (Loss) from Continuing Operations Before Income Taxes | | | 521 | | | | | | 954 | | | | | | 919 | | |

| Income (Loss) from Continuing Operations After Income Taxes | | | 18 | | | | | | 640 | | | | | | 736 | | |

| Income (Loss) from Discontinued Operations (net of income taxes) (Note 9) | | | (1,498) | | | | | | 829 | | | | | | 1,010 | | |

| Basic | | | | | | | | | | | | | | | | | |

| Income (Loss) from Continuing Operations After Income Taxes | | | $ | 0.03 | | | | | $ | 0.83 | | | | | $ | 1.01 | |

| Income (Loss) from Discontinued Operations (net of income taxes) | | | (1.96) | | | | | | 1.08 | | | | | | 1.38 | | |

| Diluted | | | | | | | | | | | | | | | | | |

| Income (Loss) from Continuing Operations After Income Taxes | | | $ | 0.03 | | | | | $ | 0.83 | | | | | $ | 1.00 | |

| Income (Loss) from Discontinued Operations (net of income taxes) | | | (1.96) | | | | | | 1.08 | | | | | | 1.37 | | |

| Qualifying derivatives, net of tax of $11, $5, $2 | | | (39) | | | | | | (19) | | | | | | (11) | | |

| Reclassifications from AOCI due to sale of the U.K. utility business - (gains) losses, net of tax expense (benefit): | | | | | | | | | | | | | | | | | |

| Foreign currency translation adjustments, net of tax of $140, $0, $0 | | | 786 | | | | | | — | | | | | | — | | |

| Loss (income) from discontinued operations (net of income taxes) | | | 1,498 | | | | | | (829) | | | | | | (1,010) | | |

| Income from continuing operations (net of income taxes) | | | 18 | | | | | | 640 | | | | | | 736 | | |

| Depreciation | | | 1,082 | | | | | | 1,022 | | | | | | 949 | | |

| Impairment of solar panels | | | 37 | | | | | | — | | | | | | — | | |

| Loss on extinguishment of debt | | | 395 | | | | | | — | | | | | | — | | |

| Taxes payable | | | 27 | | | | | | 131 | | | | | | 9 | | |

| Net cash provided by operating activities - continuing operations | | | 1,544 | | | | | | 1,872 | | | | | | 1,607 | | |

| Net cash provided by operating activities - discontinued operations | | | 726 | | | | | | 874 | | | | | | 820 | | |

| Proceeds from sale of discontinued operations, net of cash divested | | | 10,560 | | | | | | — | | | | | | — | | |

| Net cash provided by (used in) investing activities - discontinued operations | | | (607) | | | | | | (992) | | | | | | (847) | | |

| Purchase of treasury stock | | | (1,003) | | | | | | — | | | | | | — | | |

| Retirement of term loan | | | (300) | | | | | | — | | | | | | — | | |

| Contributions from discontinued operations | | | 365 | | | | | | 78 | | | | | | 257 | | |

| Customer | | | 583 | | | | | | 603 | | |

| Current assets held for sale (Note 9) | | | — | | | | | | 18,983 | | |

| Goodwill | | | 716 | | | | | | 716 | | |

| Other noncurrent assets (less reserve for accounts receivable: 2021, $2; 2020, $0) | | | 451 | | | | | | 387 | | |

| Current liabilities held for sale (Note 9) | | | — | | | | | | 11,023 | | |

| Treasury stock | | | (1,003) | | | | | | — | | |

(a)1,560,000 shares authorized; 769,890 shares issued and 735,112 shares outstanding at December 31, 2021.

| Treasury stock | | | (34,778) | | | | | | | | | | | | | | | | | | (1,003) | | | | | | | | | | | | | | | | | | | | | | | | (1,003) | | |

| December 31, 2021 | | | 735,112 | | | | | | $ | 8 | | | | | $ | 12,303 | | | | | $ | (1,003) | | | | | $ | 2,572 | | | | | $ | (157) | | | | | | | | | | | $ | 13,723 | |

| Notes receivable from affiliate | | | 499 | | | | | | — | | |

| Return of capital to parent | | | | | | | | | | | | | | | (574) | | | | | | | | | | | | (574) | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Operating Revenues | | | $ | 7,607 | | | | | $ | 7,769 | | | | | $ | 7,785 | |

| | | | | | | | | | | | | | | | | | |

| Operation | | | | | | | | | | | | | | | | | |

| Depreciation | | | 1,287 | | | | | | 1,199 | | | | | | 1,094 | | |

| Total Operating Expenses | | | 4,804 | | | | | | 4,929 | | | | | | 4,933 | | |

| | | | | | | | | | | | | | | | | | |

| Operating Income | | | 2,803 | | | | | | 2,840 | | | | | | 2,852 | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| Income Before Income Taxes | | | 1,971 | | | | | | 2,155 | | | | | | 2,285 | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| Basic | | | $ | 1.91 | | | | | $ | 2.39 | | | | | $ | 2.59 | |

| Diluted | | | $ | 1.91 | | | | | $ | 2.37 | | | | | $ | 2.58 | |

| | | | | | | | | | | | | | | | | | |

*The accompanying Notes to Financial Statements are an integral part of the financial statements.*

*(Millions of Dollars)*

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| Amounts arising during the period - gains (losses), net of tax (expense) benefit: | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

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*The accompanying Notes to Financial Statements are an integral part of the financial statements.*

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,

*(Millions of Dollars)*

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Depreciation | | | 1,287 | | | | | | 1,199 | | | | | | 1,094 | | |

| Unrealized (gains) losses on derivatives, and other hedging activities | | | 280 | | | | | | 73 | | | | | | (186) | | |

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PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

The Registrants' principal executive officers and principal financial officers, based on their evaluation of the Registrants' disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934) have concluded that, as of December 31, [removed: 2020,] [added: 2021,] the Registrants' disclosure controls and procedures are effective to ensure that material information relating to the Registrants and their consolidated subsidiaries is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, particularly during the period for which this annual report has been prepared.

PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company, and Kentucky Utilities Company

Based on our evaluation under the framework in "Internal Control - Integrated Framework" (2013), our management concluded that our internal control over financial reporting was effective December 31, [removed: 2020.][added: 2021.]

The effectiveness of our internal control over financial reporting has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report contained on page [removed: 85.][added: 64.]

PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

Management of PPL's non-accelerated filer companies, PPL Electric, [removed: LKE,] LG&E and KU, are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) or 15d-15(f).

Each of the aforementioned companies' internal control over financial reporting is a process designed to [added: provide reasonable assurance to management and Board of Directors of these companies regarding the reliability of financial]

[removed: provide reasonable assurance to management and Board of Directors of these companies regarding the reliability of financial] reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Based on our evaluation under the framework in "Internal Control - Integrated Framework" (2013), management of these companies concluded that our internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

PPL Corporation, PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

PART III

PPL Corporation, PPL Electric Utilities Corporation, Louisville Gas and Electric Company and Kentucky Utilities Company

Not applicable.

PART III

Additional information for this item will be set forth in the sections entitled "Nominees for Directors" and "Board Committees - Board Committee Membership" in PPL's [removed: 2021] [added: 2022] Notice of Annual Meeting and Proxy Statement, which will be filed with the SEC not later than 120 days after December 31, [removed: 2020,] [added: 2021,] and which information is incorporated herein by reference.

There have been no changes to the procedures by which shareowners may recommend nominees to PPL's [removed: board] [added: Board] of [removed: directors] [added: Directors] since the filing with the SEC of PPL's [removed: 2020] [added: 2021] Notice of Annual Meeting and Proxy [removed: Statement.][added: Statement except that on October 22, 2021, PPL's Board of Directors approved and adopted amendments to the Bylaws of the Company, which now require that, to be properly considered, nominations must be submitted to the Company during a window of 90 to 120 days before the first anniversary of the prior year's annual meeting (Article III, Section 3.16).]

PPL has adopted a code of ethics entitled "Standards of Integrity" that applies to all directors, managers, trustees, officers (including the principal executive officers, principal financial officers and principal accounting officers (each, a "principal officer")), employees and agents of PPL and PPL's subsidiaries for which it has operating control (PPL Electric, [removed: LKE,] LG&E and KU).

PPL Electric Utilities Corporation, [removed: LG&E and KU Energy LLC,] Louisville Gas and Electric Company and Kentucky Utilities Company

Item 10 is omitted as PPL Electric, [removed: LKE,] LG&E and KU meet the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K.

Listed below are the executive officers at December 31, [removed: 2020.][added: 2021.]

| Vincent Sorgi | | | | | | [removed: 49] [added: 50] | | | | | | President and Chief Executive Officer | | | | | | June 2020 - present | | |

| [removed: Joanne H. Raphael] [added: Wendy E. Stark (b)] | | | | | | [removed: 61] [added: 49] | | | | | | [removed: Executive] [added: Senior] Vice President, General Counsel and Corporate Secretary | | | | | | [removed: January 2019] [added: April 2021] - present | | |

[removed: | | | | | | | | | | | | |] [added: Stark was elected] Senior Vice President, General [removed: Counsel and] [added: Counsel,] Corporate Secretary [removed: | | | | | | June 2015 - January 2019 | | |][added: and Chief Legal Officer of PPL Corporation.]

| Joseph P. Bergstein, Jr. | | | | | | [removed: 50] [added: 51] | | | | | | [removed: Senior] [added: Executive] Vice President and Chief Financial Officer | | | | | | [removed: July 2019] [added: April 2021] - present | | |

| [removed: Gregory N. Dudkin (a)] | | | | | | [removed: 63] | | | | | | President-PPL Electric | | | | | | March 2012 - [removed: present] [added: April 2021] | | |