Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

PPL Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars, except share data)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Operating Revenues			$	2,066					$	2,043					$	6,251					$	6,281
Operating Expenses
Operation
Fuel			207						199						597						567
Energy purchases			338						356						1,133						1,430
Other operation and maintenance			681						637						1,930						1,805
Depreciation			322						314						957						940
Taxes, other than income			90						100						271						299
Total Operating Expenses			1,638						1,606						4,888						5,041
Operating Income			428						437						1,363						1,240
Other Income (Expense) - net (Note 12)			32						16						86						51
Interest Expense			188						165						549						494
Income Before Income Taxes			272						288						900						797
Income Taxes			58						58						189						170
Net Income			$	214					$	230					$	711					$	627
Earnings Per Share of Common Stock:
Basic and Diluted
Net Income Available to PPL Common Shareowners			$	0.29					$	0.31					$	0.96					$	0.85
Weighted-Average Shares of Common Stock Outstanding (in thousands)
Basic			737,773						737,107						737,678						737,005
Diluted			739,965						738,184						739,450						738,021

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

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

PPL Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Net income			$	214					$	230					$	711					$	627
Other comprehensive income (loss):
Amounts arising during the period - gains (losses), net of tax (expense) benefit:
Equity investees' other comprehensive income (loss), net of tax of $0, $0, $0, $0			—						—						1						1
Defined benefit plans:
Net actuarial gain (loss), net of tax of $1, $2, $0, $7			(4)						(6)						(2)						(21)
Reclassifications from AOCI - (gains) losses, net of tax expense (benefit):
Qualifying derivatives, net of tax of $1, $0, $0, ($1)			2						1						3						2
Defined benefit plans:
Prior service costs, net of tax of $0, $0, $0, $0			—						—						—						1
Net actuarial (gain) loss, net of tax of $0, ($1), $1, $0			(1)						—						(2)						(1)
Total other comprehensive income (loss)			(3)						(5)						—						(18)
Comprehensive income			$	211					$	225					$	711					$	609

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

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

PPL Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars)

			Nine Months Ended September 30,
			2024						2023
Cash Flows from Operating Activities
Net income			$	711					$	627
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			957						940
Amortization			61						61
Defined benefit plans - income			(52)						(55)
Deferred income taxes and investment tax credits			147						142
Other			13						(1)
Change in current assets and current liabilities
Accounts receivable			259						(37)
Accounts payable			(236)						(129)
Unbilled revenues			109						224
Fuel, materials and supplies			(9)						(43)
Prepayments			(75)						(44)
Taxes payable			(8)						(15)
Regulatory assets and liabilities, net			(54)						(27)
Accrued interest			104						123
Other			(78)						(2)
Other operating activities
Defined benefit plans - funding			(10)						(14)
Other assets			(66)						(58)
Other liabilities			56						(44)
Net cash provided by operating activities			1,829						1,648
Cash Flows from Investing Activities
Expenditures for property, plant and equipment			(1,945)						(1,741)
Other investing activities			1						2
Net cash used in investing activities			(1,944)						(1,739)
Cash Flows from Financing Activities
Issuance of long-term debt			1,894						3,127
Retirement of long-term debt			—						(1,763)
Payment of common stock dividends			(557)						(526)
Net decrease in short-term debt			(992)						(698)
Other financing activities			(29)						(52)
Net cash provided by financing activities			316						88
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash			201						(3)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period			382						357
Cash, Cash Equivalents and Restricted Cash at End of Period			$	583					$	354
Supplemental Disclosures of Cash Flow Information
Significant non-cash transactions:
Accrued expenditures for property, plant and equipment at September 30,			$	281					$	200

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

Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEETS

PPL Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Assets
Current Assets
Cash and cash equivalents			$	542					$	331
Accounts receivable (less reserve: 2024, $137; 2023, $123)
Customer			939						950
Other			61						271
Unbilled revenues (less reserve: 2024, $3; 2023, $4)			319						428
Fuel, materials and supplies			517						505
Prepayments			179						103
Regulatory assets			342						293
Other current assets			75						51
Total Current Assets			2,974						2,932
Property, Plant and Equipment
Regulated utility plant			40,097						38,608
Less: accumulated depreciation - regulated utility plant			9,647						9,156
Regulated utility plant, net			30,450						29,452
Non-regulated property, plant and equipment			76						72
Less: accumulated depreciation - non-regulated property, plant and equipment			28						23
Non-regulated property, plant and equipment, net			48						49
Construction work in progress			2,129						1,917
Property, Plant and Equipment, net			32,627						31,418
Other Noncurrent Assets
Regulatory assets			1,894						1,874
Goodwill			2,247						2,247
Other intangibles			314						306
Other noncurrent assets (less reserve for accounts receivable: 2024, $2; 2023, $2)			416						459
Total Other Noncurrent Assets			4,871						4,886
Total Assets			$	40,472					$	39,236

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

Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEETS

PPL Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Liabilities and Equity
Current Liabilities
Short-term debt			$	—					$	992
Long-term debt due within one year			1						1
Accounts payable			920						1,104
Taxes			122						130
Interest			228						124
Dividends			186						173
Regulatory liabilities			246						225
Other current liabilities			603						591
Total Current Liabilities			2,306						3,340
Long-term Debt			16,499						14,611
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes			3,305						3,105
Investment tax credits			112						114
Accrued pension obligations			218						275
Asset retirement obligations			139						133
Regulatory liabilities			3,371						3,340
Other deferred credits and noncurrent liabilities			430						385
Total Deferred Credits and Other Noncurrent Liabilities			7,575						7,352
Commitments and Contingent Liabilities (Notes 6 and 10)
Equity
Common stock - $0.01 par value (a)			8						8
Additional paid-in capital			12,328						12,326
Treasury stock			(929)						(948)
Earnings reinvested			2,848						2,710
Accumulated other comprehensive loss			(163)						(163)
Total Equity			14,092						13,933
Total Liabilities and Equity			$	40,472					$	39,236

(a)1,560,000 shares authorized, 770,015 shares issued and 737,778 shares outstanding at September 30, 2024. 1,560,000 shares authorized, 770,013 shares issued and 737,130 shares outstanding at December 31, 2023.

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

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

PPL Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars)

			Common stock shares outstanding (a)			Common stock			Additional paid-in capital			Treasury stock			Earnings reinvested			Accumulated other comprehensive loss			Noncontrolling interests			Total
June 30, 2024			737,762			$	8		$	12,321		$	(930)		$	2,826		$	(160)		$	—		$	14,065
Common stock issued			2																					—
Treasury stock issued			14									1												1
Stock-based compensation									7															7
Net income															214									214
Dividends and dividend equivalents (b)															(192)									(192)
Other comprehensive income (loss)																		(3)						(3)
September 30, 2024			737,778			$	8		$	12,328		$	(929)		$	2,848		$	(163)		$	—		$	14,092
December 31, 2023			737,130			$	8		$	12,326		$	(948)		$	2,710		$	(163)		$	—		$	13,933
Common stock issued			2																					—
Treasury stock issued			646									19												19
Stock-based compensation									2															2
Net income															711									711
Dividends and dividend equivalents (b)															(573)									(573)
Other comprehensive income (loss)																								—
September 30, 2024			737,778			$	8		$	12,328		$	(929)		$	2,848		$	(163)		$	—		$	14,092
June 30, 2023			737,086			$	8		$	12,316		$	(949)		$	2,721		$	(137)		$	—		$	13,959
Treasury stock issued			38									1												1
Stock-based compensation									3															3
Net income															230									230
Dividends and dividend equivalents (b)															(176)									(176)
Other comprehensive income (loss)																		(5)						(5)
September 30, 2023			737,124			$	8		$	12,319		$	(948)		$	2,775		$	(142)		$	—		$	14,012
December 31, 2022			736,487			$	8		$	12,317		$	(967)		$	2,681		$	(124)		$	3		$	13,918
Treasury stock issued			637						3			19												22
Stock-based compensation									(1)															(1)
Net income															627									627
Dividends and dividend equivalents (b)															(533)									(533)
Preferred stock																					(3)			(3)
Other comprehensive income (loss)																		(18)						(18)
September 30, 2023			737,124			$	8		$	12,319		$	(948)		$	2,775		$	(142)		$	—		$	14,012

(a)Shares in thousands. Each share entitles the holder to one vote on any question presented at any shareowners' meeting.

(b)Dividends declared per share of common stock were $0.2575 and $0.7725 for the three and nine months ended September 30, 2024 and $0.2400 and $0.7200 for the three and nine months ended September 30, 2023.

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

Table of Contents

THIS PAGE INTENTIONALLY LEFT BLANK.

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

PPL Electric Utilities Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Operating Revenues			$	716					$	737					$	2,159					$	2,295
Operating Expenses
Operation
Energy purchases			177						226						544						788
Other operation and maintenance			176						151						511						454
Depreciation			101						99						300						297
Taxes, other than income			32						36						98						110
Total Operating Expenses			486						512						1,453						1,649
Operating Income			230						225						706						646
Other Income (Expense) - net (Note 12)			13						8						33						29
Interest Income from Affiliate			7						—						27						—
Interest Expense			61						54						184						165
Income Before Income Taxes			189						179						582						510
Income Taxes			47						43						141						126
Net Income (a)			$	142					$	136					$	441					$	384

(a)Net income equals comprehensive income.

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

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

PPL Electric Utilities Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars)

			Nine Months Ended September 30,
			2024						2023
Cash Flows from Operating Activities
Net income			$	441					$	384
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			300						297
Amortization			35						31
Defined benefit plans - income			(30)						(32)
Deferred income taxes and investment tax credits			91						59
Other			(9)						(19)
Change in current assets and current liabilities
Accounts receivable			67						(104)
Accounts payable			(63)						(56)
Unbilled revenues			50						110
Materials and supplies			(16)						(33)
Prepayments			(64)						(22)
Regulatory assets and liabilities, net			(77)						(41)
Taxes payable			(36)						(24)
Accrued interest			32						50
Other			(4)						(5)
Other operating activities
Defined benefit plans - funding			(2)						(5)
Other assets			(24)						(2)
Other liabilities			(2)						1
Net cash provided by operating activities			689						589
Cash Flows from Investing Activities
Expenditures for property, plant and equipment			(820)						(653)
Expenditures for intangible assets			(6)						(4)
Notes receivable from affiliates			(418)						—
Other investing activities			4						2
Net cash used in investing activities			(1,240)						(655)
Cash Flows from Financing Activities
Issuance of long-term debt			649						1,329
Retirement of long-term debt			—						(1,150)
Contributions from parent			685						200
Return of capital to parent			—						(75)
Payment of common stock dividends to parent			(283)						(235)
Net decrease in short-term debt			(509)						42
Debt issuance costs			(7)						(14)
Net cash provided by (used in) financing activities			535						97
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash			(16)						31
Cash, Cash Equivalents and Restricted Cash at Beginning of Period			51						25
Cash, Cash Equivalents and Restricted Cash at End of Period			$	35					$	56
Supplemental Disclosure of Cash Flow Information
Significant non-cash transactions:
Accrued expenditures for property, plant and equipment at September 30,			$	168					$	119

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

Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEETS

PPL Electric Utilities Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Assets
Current Assets
Cash and cash equivalents			$	35					$	51
Accounts receivable (less reserve: 2024, $40; 2023, $46)
Customer			360						434
Other			8						8
Accounts receivable from affiliates			15						10
Notes receivable from affiliate			418						—
Unbilled revenues (less reserve: 2024, $1; 2023, $2)			99						149
Materials and supplies			115						99
Prepayments			108						44
Regulatory assets			117						57
Other current assets			29						17
Total Current Assets			1,304						869
Property, Plant and Equipment
Regulated utility plant			16,193						15,575
Less: accumulated depreciation - regulated utility plant			3,994						3,822
Regulated utility plant, net			12,199						11,753
Construction work in progress			823						680
Property, Plant and Equipment, net			13,022						12,433
Other Noncurrent Assets
Regulatory assets			622						598
Intangibles			272						269
Other noncurrent assets (less reserve for accounts receivable: 2024, $2; 2023, $2)			108						125
Total Other Noncurrent Assets			1,002						992
Total Assets			$	15,328					$	14,294

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

Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEETS

PPL Electric Utilities Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Liabilities and Equity
Current Liabilities
Short-term debt			$	—					$	509
Accounts payable			442						454
Accounts payable to affiliates			35						44
Taxes			15						51
Interest			75						43
Regulatory liabilities			69						91
Other current liabilities			113						100
Total Current Liabilities			749						1,292
Long-term Debt			5,213						4,567
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes			1,677						1,573
Regulatory liabilities			844						836
Other deferred credits and noncurrent liabilities			99						123
Total Deferred Credits and Other Noncurrent Liabilities			2,620						2,532
Commitments and Contingent Liabilities (Notes 6 and 10)
Equity
Common stock - no par value (a)			364						364
Additional paid-in capital			4,725						4,040
Earnings reinvested			1,657						1,499
Total Equity			6,746						5,903
Total Liabilities and Equity			$	15,328					$	14,294

(a)170,000 shares authorized; 66,368 shares issued and outstanding at September 30, 2024 and December 31, 2023.

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

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

PPL Electric Utilities Corporation and Subsidiaries

(Unaudited)

(Millions of Dollars)

			Common stock shares outstanding (a)						Common stock						Additional paid-in capital						Earnings reinvested						Total
June 30, 2024			66,368						$	364					$	4,720					$	1,614					$	6,698
Net income																					142						142
Capital contributions from parent															5												5
Dividends declared																					(99)						(99)
September 30, 2024			66,368						$	364					$	4,725					$	1,657					$	6,746
December 31, 2023			66,368						$	364					$	4,040					$	1,499					$	5,903
Net income																					441						441
Capital contributions from parent															685												685
Dividends declared																					(283)						(283)
September 30, 2024			66,368						$	364					$	4,725					$	1,657					$	6,746
June 30, 2023			66,368						$	364					$	4,259					$	1,388					$	6,011
Net income																					136						136
Return of capital to parent															(50)												(50)
Dividends declared																					(72)						(72)
September 30, 2023			66,368						$	364					$	4,209					$	1,452					$	6,025
December 31, 2022			66,368						$	364					$	4,084					$	1,303					$	5,751
Net income																					384						384
Capital contributions from parent															200												200
Return of capital to parent															(75)												(75)
Dividends declared																					(235)						(235)
September 30, 2023			66,368						$	364					$	4,209					$	1,452					$	6,025

(a)Shares in thousands. All common shares of PPL Electric stock are owned by PPL Energy Holdings.

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

Table of Contents

THIS PAGE INTENTIONALLY LEFT BLANK.

Table of Contents

CONDENSED STATEMENTS OF INCOME

Louisville Gas and Electric Company

(Unaudited)

(Millions of Dollars)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Operating Revenues
Retail and wholesale			$	396					$	396					$	1,219					$	1,204
Electric revenue from affiliate			1						2						20						23
Total Operating Revenues			397						398						1,239						1,227
Operating Expenses
Operation
Fuel			75						70						228						217
Energy purchases			19						17						105						123
Energy purchases from affiliate			11						8						19						11
Other operation and maintenance			84						91						259						275
Depreciation			76						76						229						227
Taxes, other than income			13						12						38						36
Total Operating Expenses			278						274						878						889
Operating Income			119						124						361						338
Other Income (Expense) - net (See Note 12)			3						—						9						2
Interest Income from Affiliate			1						1						1						1
Interest Expense			26						25						78						76
Income Before Income Taxes			97						100						293						265
Income Taxes			20						21						61						55
Net Income (a)			$	77					$	79					$	232					$	210

(a)Net income equals comprehensive income.

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

Table of Contents

CONDENSED STATEMENTS OF CASH FLOWS

Louisville Gas and Electric Company

(Unaudited)

(Millions of Dollars)

			Nine Months Ended September 30,
			2024						2023
Cash Flows from Operating Activities
Net income			$	232					$	210
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			229						227
Amortization			10						9
Deferred income taxes and investment tax credits			3						(3)
Other			(3)						(7)
Change in current assets and current liabilities
Accounts receivable			(13)						37
Accounts receivable from affiliates			—						17
Accounts payable			—						(51)
Accounts payable to affiliates			(3)						(9)
Unbilled revenues			21						43
Fuel, materials and supplies			(2)						25
Regulatory assets and liabilities, net			4						34
Taxes payable			(1)						(4)
Accrued interest			22						29
Other			(20)						(3)
Other operating activities
Defined benefit plans - funding			(1)						(1)
Expenditures for asset retirement obligations			(8)						(9)
Other assets			(12)						(19)
Other liabilities			(2)						1
Net cash provided by operating activities			456						526
Cash Flows from Investing Activities
Expenditures for property, plant and equipment			(327)						(277)
Net cash used in investing activities			(327)						(277)
Cash Flows from Financing Activities
Net increase in notes payable to affiliates			34						6
Issuance of long-term debt			—						399
Retirement of long-term debt			—						(300)
Net increase (decrease) in short-term debt			—						(179)
Payment of common stock dividends to parent			(138)						(115)
Contributions from parent			37						20
Return of capital to parent			(76)						(161)
Other financing activities			—						(4)
Net cash used in financing activities			(143)						(334)
Net Decrease in Cash, Cash Equivalents, and Restricted Cash			(14)						(85)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			44						93
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	30					$	8
Supplemental Disclosure of Cash Flow Information
Significant non-cash transactions:
Accrued expenditures for property, plant and equipment at September 30,			$	43					$	30

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

Table of Contents

CONDENSED BALANCE SHEETS

Louisville Gas and Electric Company

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Assets
Current Assets
Cash and cash equivalents			$	10					$	18
Accounts receivable (less reserve: 2024, $4; 2023, $6)
Customer			122						116
Other			24						17
Unbilled revenues (less reserve: 2024, $0; 2023, $0)			67						88
Accounts receivable from affiliates			29						29
Fuel, materials and supplies			145						143
Prepayments			14						11
Regulatory assets			5						7
Other current assets			7						—
Total Current Assets			423						429
Property, Plant and Equipment
Regulated utility plant			7,826						7,669
Less: accumulated depreciation - regulated utility plant			1,683						1,549
Regulated utility plant, net			6,143						6,120
Construction work in progress			423						312
Property, Plant and Equipment, net			6,566						6,432
Other Noncurrent Assets
Regulatory assets			389						395
Goodwill			389						389
Other intangibles			14						18
Other noncurrent assets			97						90
Total Other Noncurrent Assets			889						892
Total Assets			$	7,878					$	7,753

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

Table of Contents

CONDENSED BALANCE SHEETS

Louisville Gas and Electric Company

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Liabilities and Equity
Current Liabilities
Short-term debt			$	—					$	—
Notes payable to affiliates			34						—
Accounts payable			127						115
Accounts payable to affiliates			46						49
Customer deposits			35						34
Taxes			40						41
Price risk management liabilities			1						1
Regulatory liabilities			18						16
Interest			43						21
Asset retirement obligations			11						13
Other current liabilities			38						47
Total Current Liabilities			393						337
Long-term Debt			2,470						2,469
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes			794						776
Investment tax credits			30						31
Price risk management liabilities			6						6
Asset retirement obligations			73						72
Regulatory liabilities			821						827
Other deferred credits and noncurrent liabilities			64						63
Total Deferred Credits and Other Noncurrent Liabilities			1,788						1,775
Commitments and Contingent Liabilities (Notes 6 and 10)
Stockholder's Equity
Common stock - no par value (a)			424						424
Additional paid-in capital			1,954						1,993
Earnings reinvested			849						755
Total Equity			3,227						3,172
Total Liabilities and Equity			$	7,878					$	7,753

(a)75,000 shares authorized; 21,294 shares issued and outstanding at September 30, 2024 and December 31, 2023.

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

Table of Contents

CONDENSED STATEMENTS OF EQUITY

Louisville Gas and Electric Company

(Unaudited)

(Millions of Dollars)

			Common stock shares outstanding (a)						Common stock						Additional paid-in capital						Earnings reinvested						Total
June 30, 2024			21,294						$	424					$	1,979					$	813					$	3,216
Net income																					77						77
Return of capital to parent															(25)												(25)
Dividends declared																					(41)						(41)
September 30, 2024			21,294						$	424					$	1,954					$	849					$	3,227
December 31, 2023			21,294						$	424					$	1,993					$	755					$	3,172
Net income																					232						232
Capital contributions from parent															37												37
Return of capital to parent															(76)												(76)
Dividends declared																					(138)						(138)
September 30, 2024			21,294						$	424					$	1,954					$	849					$	3,227
June 30, 2023			21,294						$	424					$	1,987					$	700					$	3,111
Net income																					79						79
Return of capital to parent															(41)												(41)
Dividends declared																					(29)						(29)
September 30, 2023			21,294						$	424					$	1,946					$	750					$	3,120
December 31, 2022			21,294						$	424					$	2,087					$	655					$	3,166
Net income																					210						210
Capital contributions from parent															20												20
Return of capital to parent															(161)												(161)
Dividends declared																					(115)						(115)
September 30, 2023			21,294						$	424					$	1,946					$	750					$	3,120

(a)Shares in thousands. All common shares of LG&E stock are owned by LKE.

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

Table of Contents

THIS PAGE INTENTIONALLY LEFT BLANK.

Table of Contents

CONDENSED STATEMENTS OF INCOME

Kentucky Utilities Company

(Unaudited)

(Millions of Dollars)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Operating Revenues
Retail and wholesale			$	498					$	497					$	1,479					$	1,428
Electric revenue from affiliate			11						8						19						11
Total Operating Revenues			509						505						1,498						1,439
Operating Expenses
Operation
Fuel			131						129						369						350
Energy purchases			7						6						19						18
Energy purchases from affiliate			1						2						20						23
Other operation and maintenance			103						101						306						327
Depreciation			102						98						302						294
Taxes, other than income			12						12						36						34
Total Operating Expenses			356						348						1,052						1,046
Operating Income			153						157						446						393
Other Income (Expense) - net (See Note 12)			4						1						10						6
Interest Expense			35						33						102						99
Interest Expense with Affiliate			—						—						1						1
Income Before Income Taxes			122						125						353						299
Income Taxes			24						24						70						59
Net Income (a)			$	98					$	101					$	283					$	240

(a)Net income equals comprehensive income.

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

Table of Contents

CONDENSED STATEMENTS OF CASH FLOWS

Kentucky Utilities Company

(Unaudited)

(Millions of Dollars)

			Nine Months Ended September 30,
			2024						2023
Cash Flows from Operating Activities
Net income			$	283					$	240
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			302						294
Amortization			14						14
Defined benefit plans - income			(8)						(4)
Deferred income taxes and investment tax credits			(12)						(7)
Other			(2)						—
Change in current assets and current liabilities
Accounts receivable			(25)						10
Accounts receivable from affiliates			(2)						—
Accounts payable			(3)						(31)
Accounts payable to affiliates			7						(27)
Unbilled revenues			9						28
Fuel, materials and supplies			19						(8)
Regulatory assets and liabilities, net			27						30
Taxes payable			7						8
Accrued interest			31						37
Other			(6)						(2)
Other operating activities
Defined benefit plans - funding			(1)						(1)
Expenditures for asset retirement obligations			(7)						(17)
Other assets			(6)						(22)
Other liabilities			(15)						(2)
Net cash provided by operating activities			612						540
Cash Flows from Investing Activities
Expenditures for property, plant and equipment			(463)						(430)
Other investing activities			—						5
Net cash used in investing activities			(463)						(425)
Cash Flows from Financing Activities
Net increase in notes payable to affiliates			128						21
Issuance of long-term debt			—						399
Retirement of long-term debt			—						(313)
Net decrease in short-term debt			(93)						(76)
Payment of common stock dividends to parent			(167)						(125)
Contributions from parent			84						54
Return of capital to parent			(103)						(84)
Other financing activities			—						(4)
Net cash used in financing activities			(151)						(128)
Net Decrease in Cash, Cash Equivalents, and Restricted Cash			(2)						(13)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			38						21
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	36					$	8
Supplemental Disclosure of Cash Flow Information
Significant non-cash transactions:
Accrued expenditures for property, plant and equipment at September 30,			$	54					$	45

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

Table of Contents

CONDENSED BALANCE SHEETS

Kentucky Utilities Company

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Assets
Current Assets
Cash and cash equivalents			$	16					$	14
Accounts receivable (less reserve: 2024, $2; 2023, $2)
Customer			161						143
Other			13						12
Unbilled revenues (less reserve: 2024, $0; 2023, $0)			88						97
Accounts receivable from affiliates			2						—
Fuel, materials and supplies			168						185
Prepayments			16						13
Regulatory assets			1						3
Other current assets			10						1
Total Current Assets			475						468
Property, Plant and Equipment
Regulated utility plant			10,369						9,896
Less: accumulated depreciation - regulated utility plant			2,647						2,476
Regulated utility plant, net			7,722						7,420
Construction work in progress			508						604
Property, Plant and Equipment, net			8,230						8,024
Other Noncurrent Assets
Regulatory assets			438						439
Goodwill			607						607
Other intangibles			29						19
Other noncurrent assets			160						157
Total Other Noncurrent Assets			1,234						1,222
Total Assets			$	9,939					$	9,714

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

Table of Contents

CONDENSED BALANCE SHEETS

Kentucky Utilities Company

(Unaudited)

(Millions of Dollars, shares in thousands)

			September 30, 2024						December 31, 2023
Liabilities and Equity
Current Liabilities
Short-term debt			$	—					$	93
Notes payable to affiliates			128						—
Accounts payable			85						80
Accounts payable to affiliates			78						72
Customer deposits			39						35
Taxes			39						32
Regulatory liabilities			26						1
Interest			55						24
Asset retirement obligations			10						13
Other current liabilities			59						52
Total Current Liabilities			519						402
Long-term Debt			3,065						3,064
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes			921						912
Investment tax credits			82						83
Asset retirement obligations			56						53
Regulatory liabilities			1,014						1,018
Other deferred credits and noncurrent liabilities			33						30
Total Deferred Credits and Other Noncurrent Liabilities			2,106						2,096
Commitments and Contingent Liabilities (Notes 6 and 10)
Stockholder's Equity
Common stock - no par value (a)			308						308
Additional paid-in capital			3,014						3,033
Earnings reinvested			927						811
Total Equity			4,249						4,152
Total Liabilities and Equity			$	9,939					$	9,714

(a)80,000 shares authorized; 37,818 shares issued and outstanding at September 30, 2024 and December 31, 2023.

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

Table of Contents

CONDENSED STATEMENTS OF EQUITY

Kentucky Utilities Company

(Unaudited)

(Millions of Dollars)

			Common stock shares outstanding (a)						Common stock						Additional paid-in capital						Earnings reinvested												Total
June 30, 2024			37,818						$	308					$	3,067					$	879											$	4,254
Net income																					98												98
Return of capital to parent															(53)																		(53)
Dividends declared																					(50)												(50)
September 30, 2024			37,818						$	308					$	3,014					$	927											$	4,249
December 31, 2023			37,818						$	308					$	3,033					$	811											$	4,152
Net income																					283												283
Capital contributions from parent															84																		84
Return of capital to parent															(103)																		(103)
Dividends declared																					(167)												(167)
September 30, 2024			37,818						$	308					$	3,014					$	927											$	4,249
June 30, 2023			37,818						$	308					$	3,041					$	736											$	4,085
Net income																					101												101
Return of capital to parent															(30)																		(30)
Dividends declared																					(33)												(33)
September 30, 2023			37,818						$	308					$	3,011					$	804											$	4,123
December 31, 2022			37,818						$	308					$	3,041					$	689											$	4,038
Net income																					240												240
Capital contributions from parent															54																		54
Return of capital to parent															(84)																		(84)
Dividends declared																					(125)												(125)
September 30, 2023			37,818						$	308					$	3,011					$	804											$	4,123

(a)Shares in thousands. All common shares of KU stock are owned by LKE.

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

Table of Contents

Combined Notes to Condensed Financial Statements (Unaudited)

Index to Combined Notes to Condensed Financial Statements

The notes to the condensed financial statements that follow are a combined presentation. The following list indicates the Registrants to which the notes apply:

						Registrant
						PPL						PPL Electric						LG&E						KU
1. Interim Financial Statements						x						x						x						x
2. Segment and Related Information						x						x						x						x
3. Revenue from Contracts with Customers						x						x						x						x
4. Earnings Per Share						x
5. Income Taxes						x						x						x						x
6. Utility Rate Regulation						x						x						x						x
7. Financing Activities						x						x						x						x
8. Acquisitions, Development and Divestitures						x												x						x
9. Defined Benefits						x						x						x						x
10. Commitments and Contingencies						x						x						x						x
11. Related Party Transactions												x						x						x
12. Other Income (Expense) - net						x						x						x						x
13. Fair Value Measurements						x						x						x						x
14. Derivative Instruments and Hedging Activities						x						x						x						x
15. Asset Retirement Obligations						x												x						x
16. Accumulated Other Comprehensive Income (Loss)						x
17. New Accounting Guidance Pending Adoption						x						x						x						x

1. Interim Financial Statements

(All Registrants)

Capitalized terms and abbreviations appearing in the unaudited combined notes to condensed financial statements are defined in the glossary. Dollars are in millions, except per share data, unless otherwise noted. The specific Registrant to which disclosures are applicable is identified in parenthetical headings in italics above the applicable disclosure or within the applicable disclosure for each Registrant's related activities and disclosures. Within combined disclosures, amounts are disclosed for any Registrant when significant.

The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all of the information and footnote disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation in accordance with GAAP are reflected in the condensed financial statements. All adjustments are of a normal recurring nature, except as otherwise disclosed. Each Registrant's Balance Sheet at December 31, 2023 is derived from that Registrant's 2023 audited Balance Sheet. The financial statements and notes thereto should be read in conjunction with the financial statements and notes contained in each Registrant's 2023 Form 10-K. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024 or other future periods, because results for interim periods can be disproportionately influenced by various factors, developments and seasonal variations.

Table of Contents

2. Segment and Related Information

(PPL)

PPL is organized into three segments: Kentucky Regulated, Pennsylvania Regulated and Rhode Island Regulated. PPL's segments are determined by geographic location.

The Kentucky Regulated segment includes the regulated electricity generation, transmission and distribution operations conducted by LG&E and KU, as well as LG&E's regulated distribution and sale of natural gas.

The Pennsylvania Regulated segment includes the regulated electricity transmission and distribution operations of PPL Electric.

The Rhode Island Regulated segment includes the regulated electricity transmission and distribution and natural gas distribution operations of RIE.

"Corporate and Other" primarily includes corporate level financing costs, certain unallocated costs and certain non-recoverable costs incurred in conjunction with the acquisition of Narragansett Electric. "Corporate and Other" is presented to reconcile segment information to PPL's consolidated results.

Income Statement data for the segments and reconciliation to PPL's consolidated results for the periods ended September 30 are as follows:

			Three Months												Nine Months
			2024						2023						2024						2023
Operating Revenues from external customers
Kentucky Regulated			$	895					$	893					$	2,698					$	2,631
Pennsylvania Regulated			716						737						2,159						2,295
Rhode Island Regulated			455						413						1,393						1,355
Corporate and Other			—						—						1						—
Total			$	2,066					$	2,043					$	6,251					$	6,281
Net Income (Loss)
Kentucky Regulated			$	169					$	175					$	493					$	432
Pennsylvania Regulated			142						136						441						384
Rhode Island Regulated			14						6						90						70
Corporate and Other			(111)						(87)						(313)						(259)
Total			$	214					$	230					$	711					$	627

The following provides Balance Sheet data for the segments and reconciliation to PPL's consolidated Balance Sheets as of:

			September 30, 2024						December 31, 2023
Assets
Kentucky Regulated			$	17,356					$	17,029
Pennsylvania Regulated			15,328						14,294
Rhode Island Regulated			6,953						6,515
Corporate and Other (a)			835						1,398
Total			$	40,472					$	39,236

(a)Primarily consists of unallocated items, including cash, PP&E, goodwill and the elimination of inter-segment transactions.

(PPL Electric, LG&E and KU)

PPL Electric has two operating segments, distribution and transmission, which are aggregated into a single reportable segment. Each of LG&E and KU operate as a single operating and reportable segment.

Table of Contents

3. Revenue from Contracts with Customers

(All Registrants)

See Note 3 in the Registrants' 2023 Form 10-K for a discussion of the principal activities from which PPL Electric, LG&E and KU and PPL’s Pennsylvania Regulated, Rhode Island Regulated, and Kentucky Regulated segments generate their revenues. The following tables reconcile "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the periods ended September 30.

			2024 Three Months
			PPL						PPL Electric						LG&E						KU
Operating Revenues (a)			$	2,066					$	716					$	397					$	509
Revenues derived from:
Alternative revenue programs (b)			17						(3)						11						7
Other (c)			(6)						(4)						(1)						(1)
Revenues from Contracts with Customers			$	2,077					$	709					$	407					$	515
			2023 Three Months
			PPL						PPL Electric						LG&E						KU
Operating Revenues (a)			$	2,043					$	737					$	398					$	505
Revenues derived from:
Alternative revenue programs (b)			1						(2)						—						—
Other (c)			(6)						(4)						(1)						(2)
Revenues from Contracts with Customers			$	2,038					$	731					$	397					$	503
			2024 Nine Months
			PPL						PPL Electric						LG&E						KU
Operating Revenues (a)			$	6,251					$	2,159					$	1,239					$	1,498
Revenues derived from:
Alternative revenue programs (b)			21						(14)						15						13
Other (c)			(18)						(12)						(3)						(3)
Revenues from Contracts with Customers			$	6,254					$	2,133					$	1,251					$	1,508
			2023 Nine Months
			PPL						PPL Electric						LG&E						KU
Operating Revenues (a)			$	6,281					$	2,295					$	1,227					$	1,439
Revenues derived from:
Alternative revenue programs (b)			42						5						1						(3)
Other (c)			(17)						(11)						(3)						(3)
Revenues from Contracts with Customers			$	6,306					$	2,289					$	1,225					$	1,433

(a)PPL includes $455 million and $1.4 billion for the three and nine months ended September 30, 2024 and $413 million and $1.4 billion for the three and nine months ended September 30, 2023 of revenues from external customers reported by the Rhode Island Regulated segment. PPL Electric represents revenues from external customers reported by the Pennsylvania Regulated segment and LG&E and KU, net of intercompany power sales and transmission revenues, represent revenues from external customers reported by the Kentucky Regulated segment. See Note 2 for additional information.

(b)This line item shows the over/under collection of rate mechanisms deemed alternative revenue programs with over-collections of revenue shown as positive amounts in the table above and under-collections shown as negative amounts.

(c)Represents additional revenues outside the scope of revenues from contracts with customers, such as lease and other miscellaneous revenues.

Table of Contents

The following tables show revenues from contracts with customers disaggregated by customer class for the periods ended September 30.

			Three Months
			Residential						Commercial						Industrial						Other (a)						Wholesale - municipality						Wholesale - other (b)						Transmission						Revenues from Contracts with Customers
PPL
2024
PA Regulated			$	367					$	111					$	12					$	15					$	—					$	—					$	204					$	709
KY Regulated			378						268						161						76						7						20						—						910
RI Regulated			112						38						5						251						—						—						52						458
Total PPL			$	857					$	417					$	178					$	342					$	7					$	20					$	256					$	2,077
2023
PA Regulated			$	389					$	113					$	13					$	14					$	—					$	—					$	202					$	731
KY Regulated			367						260						162						79						6						17						—						891
RI Regulated			110						32						4						223						—						—						47						416
Total PPL			$	866					$	405					$	179					$	316					$	6					$	17					$	249					$	2,038
PPL Electric
2024			$	367					$	111					$	12					$	15					$	—					$	—					$	204					$	709
2023			$	389					$	113					$	13					$	14					$	—					$	—					$	202					$	731
LG&E
2024			$	190					$	132					$	48					$	31					$	—					$	6					$	—					$	407
2023			$	182					$	127					$	49					$	33					$	—					$	6					$	—					$	397
KU
2024			$	188					$	136					$	113					$	45					$	7					$	26					$	—					$	515
2023			$	185					$	133					$	113					$	45					$	6					$	21					$	—					$	503

			Nine Months
			Residential						Commercial						Industrial						Other (a)						Wholesale - municipality						Wholesale - other (b)						Transmission						Revenues from Contracts with Customers
PPL
2024
PA Regulated			$	1,125					$	318					$	34					$	43					$	—					$	—					$	613					$	2,133
KY Regulated			1,147						780						479						248						18						48						—						2,720
RI Regulated			480						182						17						593						—						—						128						1,400
Corp and Other			—						—						—						1						—						—						—						1
Total PPL			$	2,752					$	1,280					$	530					$	885					$	18					$	48					$	741					$	6,254
2023
PA Regulated			$	1,266					$	346					$	44					$	40					$	—					$	—					$	593					$	2,289
KY Regulated			1,108						771						486						205						17						37						—						2,624
RI Regulated			480						182						17						586						—						—						128						1,393
Total PPL			$	2,854					$	1,299					$	547					$	831					$	17					$	37					$	721					$	6,306

Table of Contents

			Nine Months
			Residential						Commercial						Industrial						Other (a)						Wholesale - municipality						Wholesale - other (b)						Transmission						Revenues from Contracts with Customers
PPL Electric
2024			$	1,125					$	318					$	34					$	43					$	—					$	—					$	613					$	2,133
2023			$	1,266					$	346					$	44					$	40					$	—					$	—					$	593					$	2,289
LG&E
2024			$	571					$	391					$	141					$	114					$	—					$	34					$	—					$	1,251
2023			$	574					$	398					$	145					$	75					$	—					$	33					$	—					$	1,225
KU
2024			$	576					$	389					$	338					$	134					$	18					$	53					$	—					$	1,508
2023			$	534					$	373					$	341					$	130					$	17					$	38					$	—					$	1,433

(a)Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses. The Rhode Island Regulated segment primarily includes open access tariff revenues, which are calculated on combined customer classes.

(b)Includes wholesale power and transmission revenues. LG&E and KU amounts include intercompany power sales and transmission revenues, which are eliminated upon consolidation at the Kentucky Regulated segment.

As discussed in Note 2, PPL segments its business by geographic location. Revenues from external customers for each segment are reconciled to revenues from contracts with customers in the footnotes to the tables above.

Contract receivables from customers are primarily included in "Accounts receivable - Customer", "Unbilled revenues", and "Other noncurrent assets" on the Balance Sheets.

The following table shows the accounts receivable and unbilled revenues balances that were impaired for the periods ended September 30.

			Three Months												Nine Months
			2024						2023						2024						2023
PPL (a)			$	28					$	20					$	72					$	47
PPL Electric (a)			13						10						37						27
LG&E			1						2						2						3
KU			2						1						3						2

(a) For the nine months ended September 30, 2024, balances include amounts impaired related to PPL Electric's billing issues. See Note 6 for additional information.

The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.

			PPL						PPL Electric						LG&E						KU
Contract liabilities at December 31, 2023			$	43					$	29					$	6					$	7
Contract liabilities at September 30, 2024			31						21						5						5
Revenue recognized during the nine months ended September 30, 2024 that was included in the contract liability balance at December 31, 2023			26						12						6						7
Contract liabilities at December 31, 2022			$	34					$	23					$	5					$	6
Contract liabilities at September 30, 2023			33						21						5						6
Revenue recognized during the nine months ended September 30, 2023 that was included in the contract liability balance at December 31, 2022			21						10						5						6

Contract liabilities result from recording contractual billings in advance for customer attachments to the Registrants' infrastructure and payments received in excess of revenues earned to date. Advanced billings for customer attachments are generally recognized as revenue ratably over the quarterly billing period. Payments received in excess of revenues earned to date are recognized as revenue as services are delivered in subsequent periods.

Table of Contents

4. Earnings Per Share

(PPL)

Basic EPS is computed by dividing income available to PPL common shareowners by the weighted-average number of common shares outstanding during the applicable period. Diluted EPS is computed by dividing income available to PPL common shareowners by the weighted-average number of common shares outstanding, increased by the number of incremental shares that would be outstanding if potentially dilutive share-based payment awards were converted to common shares as calculated using the Two-Class Method or Treasury Stock Method. Incremental non-participating securities that have a dilutive impact are detailed in the table below.

Reconciliations of the amounts of income and shares of PPL common stock (in thousands) for the periods ended September 30 used in the EPS calculation are:

			Three Months												Nine Months
			2024						2023						2024						2023
Income (Numerator)
Net income attributable to PPL			$	214					$	230					$	711					$	627
Less amounts allocated to participating securities			1						—						2						1
Net income available to PPL common shareowners - Basic and Diluted			$	213					$	230					$	709					$	626
Shares of Common Stock (Denominator)
Weighted-average shares - Basic EPS			737,773						737,107						737,678						737,005
Add: Dilutive share-based payment awards (a)			2,192						1,077						1,772						1,016
Weighted-average shares - Diluted EPS			739,965						738,184						739,450						738,021
Basic and Diluted EPS
Net Income available to PPL common shareowners			$	0.29					$	0.31					$	0.96					$	0.85

(a) The Treasury Stock Method was applied to non-participating share-based payment awards.

For the periods ended September 30, the following shares (in thousands) were excluded from the computations of diluted EPS because the effect would have been antidilutive.

			Three Months												Nine Months
			2024						2023						2024						2023
Stock-based compensation awards			—						179						—						324

5. Income Taxes

Reconciliations of income tax expense (benefit) for the periods ended September 30 are as follows.

(PPL)
			Three Months												Nine Months
			2024						2023						2024						2023
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%			$	57					$	60					$	189					$	167
Increase (decrease) due to:
State income taxes, net of federal income tax benefit			20						16						48						49
Income tax credits (a)			(2)						(9)						(4)						(11)
Utility rate-making tax adjustments (b)			(4)						(2)						(14)						(9)
Amortization of excess deferred federal and state income taxes			(13)						(13)						(33)						(33)
Other			—						6						3						7
Total increase (decrease)			1						(2)						—						3
Total income tax expense (benefit)			$	58					$	58					$	189					$	170

(a) The amounts for the three and nine month periods ended September 30, 2023 primarily consist of a deferred tax benefit from renewable tax credits acquired at a discount.

Table of Contents

(b) Primarily consists of tax impacts of AFUDC equity and related depreciation across PPL's regulated utility subsidiaries and flow through tax impacts of Pennsylvania utility ratemaking. Flow through occurs when the regulator excludes deferred tax expense or benefit from recoverable costs when determining income tax expense.

(PPL Electric)
			Three Months												Nine Months
			2024						2023						2024						2023
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%			$	40					$	38					$	122					$	107
Increase (decrease) due to:
State income taxes, net of federal income tax benefit			13						13						39						36
Utility rate-making tax adjustments (a)			(2)						(1)						(12)						(8)
Amortization of excess deferred federal and state income taxes			(3)						(4)						(8)						(8)
Other			(1)						(3)						—						(1)
Total increase (decrease)			7						5						19						19
Total income tax expense (benefit)			$	47					$	43					$	141					$	126

(a) Primarily consists of tax impacts of AFUDC equity and related depreciation and flow through tax impacts of Pennsylvania utility ratemaking. Flow through occurs when the regulator excludes deferred tax expense or benefit from recoverable costs when determining income tax expense.

(LG&E)
			Three Months												Nine Months
			2024						2023						2024						2023
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%			$	20					$	21					$	62					$	56
Increase (decrease) due to:
State income taxes, net of federal income tax benefit			4						4						11						10
Amortization of excess deferred federal and state income taxes			(3)						(3)						(9)						(9)
Other			(1)						(1)						(3)						(2)
Total increase (decrease)			—						—						(1)						(1)
Total income tax expense (benefit)			$	20					$	21					$	61					$	55

(KU)
			Three Months												Nine Months
			2024						2023						2024						2023
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%			$	26					$	26					$	74					$	63
Increase (decrease) due to:
State income taxes, net of federal income tax benefit			4						5						13						12
Amortization of excess deferred federal and state income taxes			(4)						(5)						(13)						(13)
Other			(2)						(2)						(4)						(3)
Total increase (decrease)			(2)						(2)						(4)						(4)
Total income tax expense (benefit)			$	24					$	24					$	70					$	59

Other

IRS Revenue Procedure 2023-15 (PPL and LG&E)

On April 14, 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting that taxpayers may use to determine whether expenses to repair, maintain, replace, or improve natural gas transmission and distribution property must be capitalized for tax purposes. PPL and LG&E are currently reviewing the revenue procedure to determine what impact the guidance may have on their financial statements.

Transfer of Certain Credits under the Inflation Reduction Act (PPL)

The IRS released the final Internal Revenue Code Section 6418 regulations related to the transfer of certain credits under the Inflation Reduction Act. The regulations became effective on July 1, 2024 and did not and are not expected to have a material impact on the financial statements regarding prior or future credit transfers.

Table of Contents

6. Utility Rate Regulation

(All Registrants)

The following table provides information about the regulatory assets and liabilities of cost-based rate-regulated utility operations.

			PPL												PPL Electric												LG&E												KU
			September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023
Current Regulatory Assets:
Rate adjustment mechanisms			$	118					$	118					$	—					$	—					$	—					$	—					$	—					$	—
Renewable energy certificates			15						14						—						—						—						—						—						—
Derivative instruments			20						51						—						—						—						—						—						—
Smart meter rider			7						6						7						6						—						—						—						—
Universal service rider			7						—						7						—						—						—						—						—
Storm damage costs			51						12						51						12						—						—						—						—
Fuel adjustment clause			—						4						—						—						—						3						—						—
Transmission service charge			56						43						34						31						—						—						—						—
Transmission formula rate			15						5						—						—						—						—						—						—
Distribution system improvement charge			8						7						8						7						—						—						—						—
Tax Cuts and Jobs Act (over/under)			9						—						9						—						—						—						—						—
Gas line tracker			4						—						—						—						4						—						—						—
Other			32						33						1						1						1						4						1						3
Total current regulatory assets			$	342					$	293					$	117					$	57					$	5					$	7					$	1					$	3
Noncurrent Regulatory Assets:
Defined benefit plans			$	882					$	887					$	428					$	417					$	205					$	217					$	132					$	136
Plant outage costs			32						38						—						—						8						10						25						28
Net metering			140						112						—						—						—						—						—						—
Environmental cost recovery			97						99						—						—						—						—						—						—
Storm costs			108						97						17						—						19						15						23						14
Unamortized loss on debt			20						22						3						3						9						10						6						7
Interest rate swaps			7						7						—						—						7						7						—						—
Terminated interest rate swaps			54						58						—						—						32						34						22						24
Accumulated cost of removal of utility plant			173						178						173						178						—						—						—						—
AROs			284						289						—						—						75						76						209						213
Derivatives instruments			5						8						—						—						—						—						—						—
Gas line inspections			24						21						—						—						22						19						2						2
Advanced metering infrastructure			24						15						—						—						12						7						12						8
Other			44						43						1						—						—						—						7						7
Total noncurrent regulatory assets			$	1,894					$	1,874					$	622					$	598					$	389					$	395					$	438					$	439

Table of Contents

			PPL												PPL Electric												LG&E												KU
			September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023						September 30, 2024						December 31, 2023
Current Regulatory Liabilities:
Generation supply charge			$	59					$	51					$	59					$	51					$	—					$	—					$	—					$	—
Environmental cost recovery			14						—						—						—						8						—						6						—
Tax Cuts and Jobs Act customer refund			—						5						—						5						—						—						—						—
Act 129 compliance rider			7						15						7						15						—						—						—						—
Transmission formula rate			6						21						3						18						—						—						—						—
Rate adjustment mechanism			87						72						—						—						—						—						—						—
Energy efficiency			25						23						—						—						—						—						—						—
Gas supply clause			—						15						—						—						—						15						—						—
DSM			15						1						—						—						7						—						8						1
Fuel adjustment clause			13						—						—						—						2						—						11						—
Other			20						22						—						2						1						1						1						—
Total current regulatory liabilities			$	246					$	225					$	69					$	91					$	18					$	16					$	26					$	1
Noncurrent Regulatory Liabilities:
Accumulated cost of removal of utility plant			$	1,033					$	996					$	—					$	—					$	316					$	306					$	411					$	399
Power purchase agreement - OVEC			12						19						—						—						8						13						4						6
Net deferred taxes			1,923						1,977						750						763						445						459						503						523
Defined benefit plans			280						252						94						73						21						20						63						59
Terminated interest rate swaps			55						57						—						—						28						29						27						28
Energy efficiency			32						5						—						—						—						—						—						—
Other			36						34						—						—						3						—						6						3
Total noncurrent regulatory liabilities			$	3,371					$	3,340					$	844					$	836					$	821					$	827					$	1,014					$	1,018

Regulatory Matters

Rhode Island Activities (PPL)

Rate Case Proceedings

Pursuant to Report and Order No. 23823 issued May 5, 2020, the RIPUC approved the terms of an Amended Settlement Agreement (the ASA), reflecting an allowed return on equity (ROE) rate of 9.275% based on a common equity ratio of approximately 51%. RIE is currently in year six of the multi-year rate plan (Rate Plan). On June 30, 2021, the Rhode Island Division of Public Utilities and Carriers consented to an open-ended extension of the term of the Rate Plan. Pursuant to the settlement with the Rhode Island Office of the Attorney General in connection with the acquisition of RIE by PPL, RIE currently does not anticipate filing a new base rate case before October 1, 2025. Pursuant to the open-ended extension, the Rate Year 3 level of base distribution rates under the ASA will remain in effect and RIE will continue to operate under the current Rate Plan until a new Rate Plan is approved by the RIPUC.

The ASA includes additional provisions, including (i) an Electric Transportation Initiative (the ET Initiative) to facilitate the growth of Electric Vehicle (EV) adoption and scaling of the market for EV charging equipment to advance Rhode Island's zero emission vehicles and greenhouse gas emissions policy goals, (ii) two energy storage demonstration projects, which are online and fully connected, (iii) a performance incentive for System Efficiency: Annual Megawatt Capacity Savings, which sunset in 2021 and is a tracking and reporting only metric, and (iv) several additional metrics for tracking and reporting purposes only. The RIPUC discussed the ET Initiative at an Open Meeting on August 30, 2022, advising RIE to seek RIPUC authorization to continue the ET Initiative and/or to alter any of the targets established in the ASA for Rate Year 5 and beyond. No votes or official rulings were taken; however, based on this feedback, RIE paused the ET programs in Rate Year 5.

Table of Contents

Advanced Metering Functionality (AMF)

In 2021, RIE filed its Updated AMF Business Case and Grid Modernization Plan (GMP) with the RIPUC in accordance with the ASA approved by the RIPUC in August 2018, and which, among other things, sought approval to deploy smart meters throughout the service territory. After PPL completed the acquisition of RIE, RIE filed a new AMF Business Case with the RIPUC in 2022, consisting of a detailed proposal for full-scale deployment of AMF across its electric service territory.

On September 27, 2023, the RIPUC unanimously approved RIE to deploy an AMF-based metering system for the electric distribution business. RIE is authorized to seek recovery of the approved capital investment through the ISR process with an overall multi-year cap on recovery at approximately $153 million, subject to certain terms, conditions and limitations with respect to the potential offsets and recoverability of certain costs. RIE is required to continue spending, even if above the recovery cap, until it achieves the functionalities outlined in the AMF Business Case. RIE filed with the RIPUC for approval (i) an updated electric Service Quality Plan on December 27, 2023, (ii) additional compliance tariff provisions regarding recovery and updated cost schedules to reflect the RIPUC's decision on December 22, 2023, and (iii) electric and gas tariff advice filings for Automatic Meter Reading/AMF meter opt-out tariff provisions on September 19, 2024. RIE cannot predict the outcome of these matters.

Grid Modernization

RIE filed a new GMP with the RIPUC on December 30, 2022. The new GMP filing consists of a holistic suite of grid modernization investments that will provide RIE with the tools and capability to manage the electric distribution system more granularly considering a range of distributed energy resources adoption levels, accelerated by Rhode Island's climate mandates, while at the same time maintaining a safe and reliable electric distribution system. The GMP is an informational guidance document that supports the grid modernization investments to be proposed in future electric ISR plans. Consequently, RIE did not request approval from the RIPUC for any specific investments or seek cost recovery as part of the GMP; rather, RIE requested that the RIPUC issues an order affirming RIE's compliance with its obligation to file a GMP that meets the requirements of the ASA. The RIPUC held a status conference on October 26, 2023 to discuss the scope of the RIPUC's review of the GMP and its potential impact on future electric ISR plans. RIE cannot predict the outcome of this matter.

Petition for Deferral of Credit Card Fees

On January 31, 2024, RIE filed a petition with the RIPUC requesting authority to recognize regulatory assets related to credit card, debit card and related fees transactions ("Electronic Transaction Fees") that RIE has waived and will continue to waive pursuant to the RIPUC orders related to COVID-19 impacts. On July 30, 2024, the RIPUC unanimously approved RIE's request to record a regulatory asset for Electronic Transaction Fees that have been incurred since July 1, 2020 until RIE's next general rate case or as otherwise determined by the RIPUC. RIE plans to include a proposal as part of its next base distribution rate case for the amortization and recovery of the regulatory assets and to include future Electronic Transaction Fees in base distribution rates.

On January 31, 2024, RIE also filed a Notice of Withdrawal of its April 2021 petition to create regulatory assets for COVID-19 related bad debt expense and the lost revenue from unassessed late payment charges. RIE is continuing to evaluate these other COVID-19 related costs and intends to reserve its rights to file for recovery of these costs in the future. RIE cannot predict the outcome of this matter.

FY 2023 Gas Infrastructure, Safety and Reliability (ISR) Plan

At an Open Meeting on March 29, 2022, the RIPUC conditionally approved RIE's FY 2023 Gas ISR Plan and associated revenue requirement, subject to further review regarding RIE's Proactive Main Replacement Program and its decision to reconstruct and purchase heating and pressure regulation equipment located at RIE's Wampanoag and Tiverton take stations. In response to RIPUC direction, RIE filed testimony with the RIPUC on May 16, 2022 regarding its replacement of heating and pressure regulation facilities at the Wampanoag and Tiverton take stations and addressing: (i) a cost-benefit analysis arising from RIE's decision to take ownership of the reconstructed take station equipment; (ii) the potential that the benefits derived from the reconstruction and ownership transfer of the take station equipment will not be realized due to the future use of hydrogen or abandonment of the gas system; and (iii) the depreciation and accounting treatment of the reconstructed take station equipment. The RIPUC has not taken any action to date on this issue, including in its action on the FY 2025 Gas ISR Plan.

Table of Contents

FY 2024 Gas ISR Plan

At an Open Meeting on March 29, 2023, the RIPUC approved RIE's FY 2024 Gas ISR Plan with an adjustment to the budget for the Proactive Main Replacement Program category resulting in a total approved FY 2024 Gas ISR Plan of $163 million for capital investment spend. On March 31, 2023, the RIPUC approved RIE's March 30, 2023 compliance filing for rates effective April 1, 2023. Certain open issues regarding the Gas ISR Plan budgetary and reconciliation framework, raised in connection with the FY 2024 Gas ISR Plan, have been resolved in connection with the approval of the FY 2025 Gas ISR Plan, as discussed below.

FY 2025 Gas ISR Plan

On December 22, 2023, RIE filed its FY 2025 Gas ISR Plan with the RIPUC with a budget that includes $185 million of capital investment spend, plus up to an additional $11 million of contingency plan spend in light of the Pipeline and Hazardous Materials Safety Administration's potential enactment of regulations during FY 2025 that, if enacted, would significantly alter RIE's leak detection and repair obligations under such regulations. RIE also filed its proposed gas ISR plan budgetary and reconciliation framework, addressing issues raised in connection with its FY 2024 submission, with its FY 2025 ISR Plan. The RIPUC held hearings in March 2024, and on March 26, 2024, approved the plan, including the proposed budgetary and reconciliation framework, with a total approved FY 2025 Gas ISR Plan of $180 million of which $168 million is for capital investment spend and $12 million spend for paving costs as operations and maintenance (O&M), plus the potential additional $11 million available if the above-mentioned regulations are implemented by the Pipeline and Hazardous Materials Safety Administration. On March 28, 2024, the RIPUC approved RIE's compliance filing for rates effective April 1, 2024.

FY 2024 Electric ISR Plan

The RIPUC held hearings in March 2023, and on March 29, 2023, approved RIE's FY 2024 Electric ISR Plan, as supplemented, with modifications to the proposed capital investment spend, resulting in a total approved FY 2024 Electric ISR Plan of $112 million for capital investment spend, $14 million for vegetation management O&M spend, and $1 million for Other O&M spend.

On March 31, 2023, the RIPUC approved RIE's compliance filing for rates effective April 1, 2023. Certain open issues regarding the Electric ISR Plan budgetary and reconciliation framework, raised in connection with the FY 2024 Electric ISR Plan, have been resolved in connection with the approval of the FY 2025 Electric ISR plan, as discussed below.

FY 2025 Electric ISR Plan

On December 21, 2023, RIE filed its FY 2025 Electric ISR Plan with the RIPUC with a budget that includes $141 million of capital investment spend, $13 million of vegetation O&M spend and $1 million of Other O&M spend. RIE also filed its proposed electric ISR plan budgetary and reconciliation framework, addressing issues raised in connection with its FY 2024 submission, with its FY 2025 ISR Plan. The RIPUC held hearings in March 2024, and on March 26, 2024, approved the plan, including the proposed budgetary and reconciliation framework, with modifications to the proposed capital investment spend, resulting in a total approved FY 2025 Electric ISR Plan of $132 million for capital investment spend, $13 million for vegetation management O&M spend, and $1 million for Other O&M spend. On March 28, 2024, the RIPUC approved RIE's compliance filing for rates effective April 1, 2024.

Kentucky Activities

(PPL, LG&E and KU)

Kentucky September 2024 Storm

In September 2024, LG&E and KU experienced significant winds and rain activity in their service territories, resulting in substantial damage to certain of LG&E's and KU's assets with total estimated storm costs incurred through September 30, 2024 of $12 million ($2 million at LG&E and $10 million at KU). On October 15, 2024, LG&E and KU submitted a filing with the KPSC requesting regulatory asset treatment of the extraordinary operations and maintenance expenses portion of the costs incurred related to the storm. As of September 30, 2024, LG&E and KU recorded regulatory assets related to the storm of $1 million and $5 million. LG&E and KU cannot predict the outcome of this matter.

Table of Contents

Kentucky May 2024 Storm

In May 2024, LG&E and KU experienced significant windstorm activity in their service territories, resulting in substantial damage to certain of LG&E's and KU's assets with total estimated costs incurred through September 30, 2024 of $28 million ($16 million at LG&E and $12 million at KU). On June 13, 2024, LG&E and KU submitted a filing with the KPSC requesting regulatory asset treatment of the extraordinary operations and maintenance expenses portion of the costs incurred related to the storm. On July 2, 2024, the KPSC issued an order provisionally approving the request for accounting purposes, noting that the decision on approval of recovery would be determined in the future. On August 18, 2024, LG&E and KU submitted a request that the matter be decided by the KPSC based upon the written record. As of September 30, 2024**,** LG&E and KU each recorded regulatory assets related to the storm of $4 million. LG&E and KU cannot predict the outcome of this matter.

KPSC Investigation Related to Winter Storm Elliott

On December 22, 2023, the KPSC initiated an investigation into the practices of LG&E and KU regarding the provision of electric service from December 23, 2022 through December 25, 2022, during a period of extreme temperatures during Winter Storm Elliott. The investigation is the result of LG&E's and KU's need to implement brief service interruptions to approximately 55,000 customers during this period. The purpose of the investigation is to supplement discovery and examination already completed through LG&E's and KU's CPCN proceedings, a legislative hearing completed in February 2023 and reports completed by the NERC and the FERC related to the issue. Additionally, the investigation will evaluate LG&E's and KU's actions taken, or planned to be taken, since Winter Storm Elliott that affect their ability to provide service during periods of variable weather and power system stress. LG&E and KU believe actions taken during the period under question were necessary and appropriate. Several parties were granted intervenor status for the proceeding and, after completion of written discovery, a hearing on the matter occurred on May 23, 2024. The parties have filed post-hearing briefs and the case has been submitted for decision. LG&E and KU cannot predict the outcome of this matter, and an estimate of the impact, if any, cannot be determined, but LG&E and KU do not believe this matter will have a significant impact on their operations or financial condition.

Mill Creek Unit 1 Retired Asset Recovery (RAR) Application (PPL and LG&E)

On October 4, 2024, LG&E submitted an application related to the expected retirement of Mill Creek Unit 1 by December 31, 2024, requesting recovery of associated costs under the RAR rider. The RAR rider was established by KPSC orders in 2021 to provide recovery of and return on the remaining investment in certain electric generating units, including the remaining net book value of each unit, materials and supplies that cannot be used at other plants and any associated removal costs, upon their retirement over a ten-year period following retirement. LG&E expects these costs to be approximately $125 million and proposes to begin application of the RAR rider with bills issued in March 2025. On October 28, 2024, the KPSC issued an order to establish a procedural schedule regarding its investigation of the reasonableness of the proposed tariff. The KPSC intends to rule on the matter by February 28, 2025. LG&E cannot predict the outcome of this proceeding.

Pennsylvania Activities (PPL and PPL Electric)

PAPUC investigation into billing issues

On January 31, 2023, the PAPUC initiated an investigation focused on billing issues related to estimated, irregular bills and customer service concerns following customer complaints, which for many customers were driven by increased prices for electricity supply. Certain bills issued during the time period of December 20, 2022 through January 9, 2023 were estimated due to a technical issue that prevented PPL Electric from providing actual collected meter data to customer facing and other internal systems. Customers also reported difficulties accessing PPL Electric's website and contacting the customer service call center. The PAPUC's Bureau of Investigation & Enforcement (I&E) has directed PPL Electric to respond to certain inquiries and document requests. PPL Electric submitted its responses to the information request and cooperated fully with the investigation. PPL Electric reached a Settlement Agreement with I&E on November 21, 2023. In the settlement, PPL Electric agreed to pay a civil penalty of $1 million, make certain remedial improvements to its billing systems and processes, and agreed to not seek recovery for extraordinary costs incurred in responding to or resulting from the billing event. On November 21, 2023, PPL Electric and I&E submitted a Joint Petition for Approval of Settlement to the PAPUC. On January 18, 2024, the PAPUC issued an Order requesting public comment prior to the PAPUC entering a Final Order on the petition. Comments were due on February 28, 2024, and comments were filed by the Office of Consumer Advocate, CAUSE-PA (low-income advocate), and individual customers. On March 19, 2024, PPL Electric filed reply comments. On April 25, 2024, the PAPUC announced at its public meeting that it would be issuing an order approving the Settlement Agreement with modifications. The modifications

Table of Contents

included converting the $1 million civil penalty to a $1 million donation to PPL Electric's hardship fund, Operation HELP, and requiring PPL Electric to make various progress reports on efforts to remediate the billing issue. PPL Electric and I&E had 20 business days from the issuance of the PAPUC order to accept or reject the proposed modifications to the Settlement Agreement. The time period to withdraw from the Settlement Agreement expired on June 14, 2024, without PPL Electric or I&E withdrawing from the Settlement Agreement, and the terms of the Settlement Agreement, as modified by the PAPUC's order, are now final. PPL Electric is in the process of complying with the terms of the Settlement Agreement, including making the $1 million contribution to Operation HELP on June 24, 2024.

PPL Electric incurred no costs and $17 million for the three and nine month periods ended September 30, 2024 and $12 million and $21 million for the three and nine month periods ended September 30, 2023 related to the billing issue. PPL Electric will not seek regulatory recovery of these costs.

DSIC Petition

On April 26, 2024, PPL Electric filed a Petition with the PAPUC requesting that the PAPUC waive PPL Electric's DSIC cap of 5% of billed revenues and increase the maximum allowable DSIC to 9% for bills rendered on or after January 1, 2025. The publicly available procedural and litigation schedule currently contemplates that the PAPUC would issue a final order at its January 23, 2025 Public Meeting. PPL Electric cannot predict the outcome of this matter.

Act 129

The Pennsylvania Public Utility Code requires electric distribution companies, including PPL Electric, to act as a DSP, which provides electricity generation supply service to customers pursuant to a PAPUC-approved default service procurement plan. A DSP is able to recover the costs associated with its default service procurement plan.

In March 2024, PPL Electric filed a Petition for Approval of a new default service program and procurement plan with the PAPUC for the period June 1, 2025 through May 31, 2029. In August 2024, PPL Electric submitted a Joint Petition for Settlement in the proceeding. In September 2024, the Administrative Law Judge issued an Interim Order approving the proposed settlement without modification which remains pending before the PAPUC. PPL Electric cannot predict the outcome of this proceeding.

Federal Matters

FERC Transmission Rate Filing (PPL, LG&E and KU)

In 2018, LG&E and KU applied to the FERC requesting elimination of certain on-going waivers and credits to a sub-set of transmission customers relating to the 1998 merger of LG&E's and KU's parent entities and the 2006 withdrawal of LG&E and KU from the Midcontinent Independent System Operator, Inc. (MISO), a regional transmission operator and energy market. The application sought termination of LG&E's and KU's commitment to provide certain Kentucky municipalities mitigation for certain horizontal market power concerns arising out of the 1998 LG&E and KU merger and 2006 MISO withdrawal. The amounts at issue are generally waivers or credits granted to a limited number of Kentucky municipalities for either certain LG&E and KU or MISO transmission charges incurred for transmission service received. In 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, which was subsequently filed, modified, and approved by the FERC in 2020 and 2021. In 2020, LG&E and KU and other parties filed appeals with the U.S. Court of Appeals - D.C. Circuit (D.C. Circuit Court of Appeals) regarding the FERC's orders on the elimination of the mitigation and required transition mechanism. In August 2022, the D.C. Circuit Court of Appeals issued an order remanding the proceedings back to the FERC. On May 18, 2023, the FERC issued an order on remand reversing its 2019 decision and requiring LG&E and KU to refund credits previously withheld, including under such transition mechanism. LG&E and KU filed a petition for review of the FERC's May 18, 2023 order with the D.C. Circuit Court of Appeals and provided refunds in accordance with the FERC order on December 1, 2023. The FERC issued an order on LG&E's and KU's compliance filing on November 16, 2023, and LG&E and KU filed a petition for review of this November 16, 2023 order on February 14, 2024. FERC issued the substantive order on rehearing on March 21, 2024, reaffirming its prior decision. LG&E and KU filed their opening brief with the D.C. Circuit Court of Appeals on June 24, 2024 and the FERC and the intervenors have filed briefs as well. LG&E's and KU's reply brief is due November 4, 2024. LG&E and KU cannot predict the ultimate outcome of the proceedings or any other post decision process but do not expect the annual impact to have a material effect on their operations or financial condition. LG&E and KU currently receive recovery of certain waivers and credits primarily through base rates increases, provided, however, that increases associated with the FERC's May 18, 2023 order are expected to be subject to future rate proceedings.

Table of Contents

Recovery of Transmission Costs (PPL)

Until December 2022, RIE's transmission facilities were operated in combination with the transmission facilities of National Grid USA's New England affiliates, Massachusetts Electric Company (MECO) and New England Power (NEP), as a single integrated system with NEP designated as the combined operator. As of January 1, 2023, RIE operates its own transmission facilities. NE-ISO allocates RIE's costs among transmission customers in New England, in accordance with the ISO Open Access Transmission Tariff (ISO-NE OATT). According to the FERC orders, RIE is compensated for its actual monthly transmission costs, with its authorized maximum ROE of 11.74% on its transmission assets.

The ROE for transmission rates under the ISO-NE OATT is the subject of four complaints that are pending before the FERC. On October 16, 2014, the FERC issued an order on the first complaint, Opinion No. 531-A, resetting the base ROE applicable to transmission assets under the ISO-NE OATT from 11.14% to 10.57% effective as of October 16, 2014 and establishing a maximum ROE of 11.74%. On April 14, 2017, this order was vacated and remanded by the D. C. Circuit Court of Appeals (Court of Appeals). After the remand, the FERC issued an order on October 16, 2018 applicable to all four pending cases where it proposed a new base ROE methodology that, with subsequent input and support from the New England Transmission Owners (NETO), yielded a base ROE of 10.41%. Subsequent to the FERC's October 2018 order in the NETO cases, the FERC further refined its ROE methodology in another proceeding and has applied that refined methodology to transmission owners' ROEs in other jurisdictions, and the NETOs filed further information in the New England matters to distinguish their case. The proceeding and the final base rate ROE determination in the New England matters remain open, pending a final order from the FERC. PPL cannot predict the outcome of this matter, and an estimate of the impact cannot be determined.

Other

Purchase of Receivables Program

(PPL and PPL Electric)

In accordance with a PAPUC-approved purchase of accounts receivable program, PPL Electric purchases certain accounts receivable from alternative electricity suppliers at a discount, which reflects a provision for uncollectible accounts. The alternative electricity suppliers have no continuing involvement or interest in the purchased accounts receivable. Accounts receivable that are acquired are initially recorded at fair value on the date of acquisition. During the three months and nine months ended September 30, 2024, PPL Electric purchased $404 million and $1 billion of accounts receivable from alternative suppliers. During the three and nine months ended September 30, 2023, PPL Electric purchased $391 million and $1 billion of accounts receivable from alternative suppliers.

(PPL)

In 2021 and 2022, the RIPUC approved various components of a Purchase of Receivables Program (POR) in Rhode Island for effect on April 1, 2022. Municipal aggregators and non-regulated power producers (collectively, Competitive Suppliers) are eligible to participate in accordance with RIE's approved electric tariffs for municipal aggregation and non-regulated power producers. Under the POR program, RIE will purchase the Competitive Suppliers' accounts receivables, including existing receivables, at discounted rates, regardless of whether RIE has collected the owed monies from customers. The program is intended to make RIE whole through the implementation of a discount rate or Standard Complete Bill Percentage (SCBP) paid by Competitive Suppliers. RIE calculates the SCBP for each customer class and files the calculations with the RIPUC for review and approval by February 15 of each year. At an Open Meeting on March 26, 2024, the RIPUC approved the SCBP for effect beginning on April 1, 2024, for a one-year period.

7. Financing Activities

Credit Arrangements and Short-term Debt

(All Registrants)

The Registrants maintain credit facilities to enhance liquidity, provide credit support and provide a backstop to commercial paper programs. For reporting purposes, on a consolidated basis, the credit facilities and commercial paper programs of PPL Electric, LG&E and KU are attributable to PPL. The amounts listed in the borrowed column below are recorded as "Short-term debt" on the Balance Sheets. The following credit facilities were in place at:

Table of Contents

			September 30, 2024																														December 31, 2023
			Expiration Date						Capacity						Borrowed						Letters of Credit and Commercial Paper Issued (c)						Unused Capacity						Borrowed						Letters of Credit and Commercial Paper Issued (c)
PPL
PPL Capital Funding (a)
Syndicated Credit Facility (b)			Dec. 2028						$	1,250					$	—					$	—					$	1,250					$	—					$	390
Bilateral Credit Facility			Feb. 2025						100						—						—						100						—						—
Bilateral Credit Facility			Feb. 2025						100						—						14						86						—						13
Total PPL Capital Funding Credit Facilities									$	1,450					$	—					$	14					$	1,436					$	—					$	403
PPL Electric
Syndicated Credit Facility			Dec. 2028						$	650					$	—					$	1					$	649					$	—					$	511
Total PPL Electric Credit Facilities									$	650					$	—					$	1					$	649					$	—					$	511
LG&E
Syndicated Credit Facility			Dec. 2028						$	500					$	—					$	—					$	500					$	—					$	—
Total LG&E Credit Facilities									$	500					$	—					$	—					$	500					$	—					$	—
KU
Syndicated Credit Facility			Dec. 2028						$	400					$	—					$	—					$	400					$	—					$	93
Total KU Credit Facilities									$	400					$	—					$	—					$	400					$	—					$	93

(a)PPL Capital Funding's obligations are fully and unconditionally guaranteed by PPL.

(b)The PPL Capital Funding $1.25 billion syndicated credit facility includes a $250 million borrowing sublimit for RIE and a $1 billion sublimit for PPL Capital Funding at September 30, 2024 and December 31, 2023. RIE’s borrowing sublimit is adjustable, at the borrowers’ option, from $0 to $600 million, with the remaining balance of the $1.25 billion available under the facility allocated to PPL Capital Funding. At September 30, 2024, PPL Capital Funding and RIE had no commercial paper outstanding. At December 31, 2023, PPL Capital Funding had $365 million commercial paper outstanding and RIE had $25 million commercial paper outstanding. RIE's obligations under the facility are not guaranteed by PPL.

(c)Commercial paper issued reflects the undiscounted face value of the issuance.

PPL Capital Funding, RIE, PPL Electric, LG&E and KU maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's credit facilities. The following commercial paper programs were in place at:

			September 30, 2024																								December 31, 2023
			Weighted - Average Interest Rate						Capacity						Commercial Paper Issuances (c)						Unused Capacity						Weighted - Average Interest Rate						Commercial Paper Issuances (c)
PPL Capital Funding (a) (b)									$	1,350					$	—					$	1,350					5.66%						$	365
RIE (b)									400						—						400						5.72%						25
PPL Electric									650						—						650						5.67%						510
LG&E									500						—						500												—
KU									400						—						400						5.64%						93
Total									$	3,300					$	—					$	3,300											$	993

(a)PPL Capital Funding's obligations are fully and unconditionally guaranteed by PPL.

(b)Issuances under the PPL Capital Funding and RIE commercial paper programs are supported by the PPL Capital Funding syndicated credit facility, which has a total capacity of $1.25 billion. At September 30, 2024 and December 31, 2023, the borrowing sublimits were $250 million for RIE and $1 billion for PPL Capital Funding. PPL Capital Funding’s commercial paper program is also backed by a separate bilateral credit facility for $100 million.

(c)Commercial paper issued reflects the undiscounted face value of the issuance.

(PPL Electric, LG&E, and KU)

See Note 11 for discussion of intercompany borrowings.

Table of Contents

Long-term Debt

(PPL)

In March 2024, RIE issued $500 million of 5.35% Senior Notes due 2034. RIE received proceeds of $496 million, net of discounts and underwriting fees, to be used to repay short-term debt and for other general corporate purposes.

In August 2024, PPL Capital Funding issued $750 million of 5.25% Senior Notes due 2034. PPL Capital Funding received proceeds of $741 million, net of discounts and underwriting fees, to be used to repay short-term debt and for other general corporate purposes.

(PPL and PPL Electric)

In January 2024, PPL Electric issued $650 million of 4.85% First Mortgage Bonds due 2034. PPL Electric received proceeds of $644 million, net of discounts and underwriting fees, to be used to repay short-term debt and for other general corporate purposes.

Dividends

In August 2024, PPL declared a quarterly cash dividend on its common stock, payable October 1, 2024, of 25.75 cents per share (equivalent to $1.03 per annum).

8. Acquisitions, Developments and Divestitures

Acquisitions (PPL)

Acquisition of Narragansett Electric

On May 25, 2022, PPL Rhode Island Holdings acquired 100% of the outstanding shares of common stock of Narragansett Electric from National Grid USA, a subsidiary of National Grid plc (the Acquisition) for approximately $3.8 billion. Following the closing of the Acquisition, Narragansett Electric provides services doing business under the name Rhode Island Energy (RIE).

In connection with the Acquisition, National Grid USA Service Company, Inc., National Grid USA and Narragansett Electric entered into a transition services agreement (TSA), pursuant to which the National Grid entities agreed to provide certain transition services to Narragansett Electric to facilitate the transition of the operation of Narragansett Electric to PPL following the Acquisition, as agreed upon in the Narragansett share purchase agreement. The TSA was for an initial two-year term and was completed in the third quarter of 2024. TSA costs were $32 million and $129 million during the three and nine months ended September 30, 2024, and $59 million and $179 million during the three and nine months ended September 30, 2023.

Commitments to the Rhode Island Division of Public Utilities and Carriers and the Attorney General of the State of Rhode Island

As a condition to the Acquisition, PPL made certain commitments to the Rhode Island Division of Public Utilities and Carriers and the Attorney General of the State of Rhode Island. See Note 9 in PPL's 2023 Form 10-K for a complete listing of those commitments. The following represents an update to the remaining commitments:

• RIE will forgo potential recovery of any and all transition costs, which includes (1) the installation of certain information technology systems; (2) modification and enhancements to physical facilities in Rhode Island; and (3) costs related to severance payments, communications and branding changes, and other transition related costs. These costs, which are being expensed as incurred, were $85 million and $250 million for the three and nine months ended September 30, 2024, and $69 million and $193 million for the three and nine months ended September 30, 2023.

• RIE will not seek to recover in rates any markup charged by National Grid USA and/or its affiliates under the TSA, which were $5 million and $8 million for the three and nine months ended September 30, 2024, and $2 million and $6 million for the three and nine months ended September 30, 2023.

Table of Contents

Developments (PPL, LG&E and KU)

Mill Creek Unit 5 Construction

In December 2022, LG&E and KU filed a CPCN with the KPSC requesting approval to construct a 640 MW net summer rating Natural Gas Combined Cycle (NGCC) combustion turbine at LG&E’s Mill Creek Generating Station. In November 2023, the KPSC issued an order approving the request as well as the requested AFUDC accounting treatment for associated financing costs relating to the NGCC. The new NGCC facility will be jointly owned by LG&E (31%) and KU (69%). In February 2024, LG&E and KU entered into agreements to begin construction. Total project costs are estimated at approximately $1.0 billion, including AFUDC. Commercial operation of the facility is anticipated to begin mid-2027.

See Note 7 in PPL's 2023 Form 10-K for additional information on the CPCN filing.

9. Defined Benefits

(PPL)

Certain net periodic defined benefit costs are applied to accounts that are further distributed among capital, expense, regulatory assets and regulatory liabilities, including certain costs allocated to applicable subsidiaries for plans sponsored by PPL Services and LKE. Following are the net periodic defined benefit costs (credits) of the plans sponsored by PPL and its subsidiaries for the periods ended September 30:

			Pension Benefits
			Three Months												Nine Months
			2024						2023						2024						2023
PPL
Service cost			$	9					$	8					$	26					$	25
Interest cost			45						47						137						141
Expected return on plan assets			(74)						(77)						(224)						(232)
Amortization of:
Prior service cost			1						2						2						5
Actuarial loss			3						1						8						2
Net periodic defined benefit costs (credits)			$	(16)					$	(19)					$	(51)					$	(59)

			Other Postretirement Benefits
			Three Months												Nine Months
			2024						2023						2024						2023
PPL
Service cost			$	2					$	1					$	5					$	4
Interest cost			8						8						22						23
Expected return on plan assets			(8)						(7)						(23)						(22)
Amortization of:
Prior service cost			—						—						1						1
Actuarial loss			(1)						(1)						(4)						(4)
Net periodic defined benefit costs (credits)			$	1					$	1					$	1					$	2

(All Registrants)

The non-service cost components of net periodic defined benefit costs (credits) (interest cost, expected return on plan assets, amortization of prior service cost and amortization of actuarial gain and loss) are presented in "Other Income (Expense) - net" on the Statements of Income. See Note 12 for additional information.

Table of Contents

10. Commitments and Contingencies

Legal Matters

(All Registrants)

PPL and its subsidiaries are involved in legal proceedings, claims and litigation in the ordinary course of business. PPL and its subsidiaries cannot predict the outcome of such matters, or whether such matters may result in material liabilities, unless otherwise noted.

Narragansett Electric Litigation (PPL)

Energy Efficiency Programs Investigation

Narragansett Electric, while under the ownership of National Grid, performed an internal investigation into conduct associated with its energy efficiency programs. On June 27, 2022, the RIPUC opened a new docket (RIPUC Docket No. 22-05-EE) to investigate RIE’s actions and the actions of employees of National Grid USA and affiliates during the time RIE was a National Grid USA affiliate being provided services by National Grid USA Service Company, Inc. relating to the manipulation of the reporting of invoices affecting the calculation of past energy efficiency shareholder incentives and the resulting impact on customers. The Rhode Island Attorney General and National Grid USA intervened in the docket.

On January 19, 2023, the Rhode Island Division of Public Utilities and Carriers (the Division) filed a motion to dismiss RIPUC Docket No. 22-05-EE without prejudice. As grounds for its motion, the Division stated that sufficient evidence exists in the docket to warrant an independent summary investigation by the Division, to include an audit of RIE. If the Division finds sufficient grounds, the Division may proceed to a formal hearing regarding the matters under investigation. Upon the conclusion of its investigation, the Division will provide the RIPUC with a report outlining the Division’s findings and final decision. On January 30, 2023, the Rhode Island Attorney General filed an objection to the Division’s motion to dismiss; RIE and National Grid USA each filed responses with the RIPUC requesting that any additional action taken by the RIPUC or the Division be considered after National Grid USA completes its internal investigation report, which National Grid USA filed with the RIPUC on March 10, 2023. On February 24, 2023, the Division initiated the independent summary investigation that it had referenced in its motion to dismiss. The RIPUC held a hearing on March 28, 2023 to hear oral arguments regarding the Division’s motion to dismiss and subsequently denied the motion. On November 27, 2023, the Division filed testimony recommending the RIPUC disallow a portion of the performance incentive awarded from 2012 through 2021. On January 19, 2024, the Division and the Rhode Island Attorney General filed their respective briefs recommending that the RIPUC assess financial penalties on the Company. The Division also recommended that the RIPUC consider further regulatory investigations and analysis within each of the energy efficiency dockets from 2012 through 2020, to confirm the accuracy of claimed savings and to document all conduct and actions that would trigger penalties. On April 2, 2024, the RIPUC issued an amended order that expressly expands the scope of the proceeding to address issues of accountability and the question of whether statutory penalties should be assessed against RIE relating to the manipulation of the reporting of invoices affecting the recovery of past shareholder incentives and the resulting impact on RIE’s customers. This RIPUC proceeding remains open and, in parallel, the Division’s summary investigation remains ongoing. In the RIPUC proceeding, RIE and National Grid USA filed testimony on June 14, 2024, supporting their position that the appropriate amount to be refunded to the energy efficiency program is less than $1 million. The Division’s current position is that $11 million is the appropriate amount to be refunded to the energy efficiency program. The Division’s testimony on statutory penalties was due October 15, 2024. On October 14, 2024, the Division filed a motion to suspend the procedural schedule and requirement for filing testimony. At this time, it is not possible to predict the final outcome, or determine the total amount of any additional liabilities that may be incurred by RIE in connection with this matter or the Division’s summary investigation. RIE does not expect this matter will have a material adverse effect on its results of operations, financial position or cash flows.

E.W. Brown Environmental Assessment *(*PPL and KU)

KU is undertaking extensive remedial measures at the E.W. Brown plant including closure of the former ash pond, implementation of a groundwater remedial action plan and performance of a corrective action plan including aquatic study of adjacent surface waters and risk assessment. The aquatic study and risk assessment are being undertaken pursuant to a 2017 agreed Order with the Kentucky Energy and Environment Cabinet (KEEC). KU conducted sampling of Herrington Lake in 2017 and 2018. In June 2019, KU submitted to the KEEC the required aquatic study and risk assessment, conducted by an independent third-party consultant, finding that discharges from the E.W. Brown plant have not had any significant impact on Herrington Lake and that the water in the lake is safe for recreational use and meets safe drinking water standards. On May 31,

Table of Contents

2021, the KEEC approved the report and released a response to public comments. On August 6, 2021, KU submitted a Supplemental Remedial Alternatives Analysis report to the KEEC that outlines proposed additional fish, water, and sediment testing. On February 18, 2022, the KEEC provided approval to KU to proceed with the proposed sampling, which commenced in the spring of 2022. On November 17, 2022, KU submitted a Supplemental Performance Monitoring Report to the KEEC finding that there are no significant unaddressed risks to human health or the environment at the plant. KU revised the Supplemental Performance Monitoring Report on June 8, 2023, in response to KEEC comments from April 24, 2023. On September 1, 2023, the KEEC requested KU to propose additional monitoring or remedial measures. KU submitted a revised Supplemental Performance Monitoring and Corrective Action Completion on December 28, 2023. In August 2024, KU submitted a proposed environmental covenant to the KEEC specifying certain site restrictions. Discussions between KU and the KEEC are ongoing.

Water/Waste (PPL, LG&E and KU)

ELGs

In 2015, the EPA finalized ELGs for wastewater discharge permits for new and existing steam electricity generating facilities. These guidelines require deployment of additional control technologies providing physical, chemical and biological treatment and mandate operational changes including "zero discharge" requirements for certain wastewaters. The implementation date for individual generating stations was to be determined by the states on a case-by-case basis according to criteria provided by the EPA. In September 2017, the EPA issued a rule to postpone the compliance date for certain requirements. In October 2020, the EPA issued revisions to its best available technology standards for certain wastewaters and potential extensions to compliance dates (the Reconsideration Rule). On May 9, 2024, the EPA issued a final rule modifying the 2020 ELG revisions. The rule increases the stringency of previous control technology and zero discharge requirements, revises certain exemptions for generating units planned for retirement, and requires case-by-case limitations for legacy wastewaters based on the best professional judgment of the state regulators. Legal challenges to the final rule have been consolidated before the U.S. Court of Appeals for the Eighth Circuit. The final rule is currently under evaluation by PPL, LG&E, and KU, but could potentially result in significant operational changes and additional controls for LG&E and KU plants. The ELGs are expected to be implemented by the states or applicable permitting authorities in the course of their normal permitting activities. Certain costs are included in the Registrants' capital plans and expected to be recovered from customers through rate recovery mechanisms, but additional costs and recovery will depend on further regulatory developments at the state level.

CCRs

In 2015, the EPA issued a final rule governing management of CCRs which include fly ash, bottom ash and sulfur dioxide scrubber wastes (2015 CCR Rule). The 2015 CCR Rule imposed extensive new requirements for certain CCR impoundments and landfills, including public notifications, location restrictions, design and operating standards, groundwater monitoring and corrective action requirements, and closure and post-closure care requirements, and specifies restrictions relating to the beneficial use of CCRs. In January 2022, the EPA issued several proposed regulatory determinations, facility notifications, and public announcements which indicate increased scrutiny by the EPA to determine the adequacy of measures taken by facility owners and operators to achieve closure of CCR surface impoundments and landfills. In particular, the agency indicated that it will focus on certain practices which it views as posing a threat of continuing groundwater contamination. On May 8, 2024, the EPA issued a final rule (2024 CCR Rule) establishing regulatory requirements for inactive surface impoundments at inactive electricity generation facilities (legacy impoundments). The 2024 CCR Rule also establishes identification, groundwater monitoring, corrective action, closure, and post-closure care requirements for all CCR management units, as defined in the rule, at regulated CCR facilities regardless of how or when the CCR was placed. The rule also requires LG&E and KU to complete applicability determinations, implement site security measures, initiate weekly inspections and monthly monitoring of the impoundment, create a website, and complete hazard assessments and reports for its legacy impoundments. Additionally, the rule could potentially subject CCR management units that have previously completed remedial action and closure and certain beneficial use projects to additional federal regulatory requirements. Legal challenges to the rule have been filed in the D.C. Circuit Court.

In connection with the 2015 CCR Rule, LG&E and KU recorded adjustments to existing AROs beginning in 2015. In connection with the 2024 CCR Rule, in the second quarter of 2024, LG&E and KU recognized ARO obligations related to preliminary risk assessments, facility evaluations, feasibility studies and sampling. See Note 15 for additional information. The results of those evaluations, as well as future guidance, regulatory determinations, rulemakings, implementation determinations and other developments could potentially require revisions to current LG&E and KU compliance plans including additional monitoring and remediation at surface impoundments and landfills, the cost of which could be material. PPL, LG&E and KU are unable to predict the outcome of the ongoing litigation, rulemaking, and regulatory determinations or potential impacts on

Table of Contents

current LG&E and KU compliance plans. PPL, LG&E and KU are currently finalizing or revising closure plans and schedules in accordance with applicable regulations and further material changes to AROs, current capital plans or operating costs may be required as estimates are refined based on closure developments, groundwater monitoring results, and regulatory or legal proceedings. Costs relating to this rule are expected to be subject to rate recovery.

LG&E and KU received KPSC approval for a compliance plan associated with the 2015 CCR Rule providing for the closure of impoundments at the Mill Creek, Trimble County, E.W. Brown, and Ghent stations, and construction of process water management facilities at those plants. In addition to the foregoing measures required for compliance with the federal CCR Rule, KU also received KPSC approval for its plans to close impoundments at the retired Green River, Pineville and Tyrone plants to comply with applicable state law. LG&E and KU have completed planned closure measures at most of the subject impoundments and have commenced post closure groundwater monitoring as required at those facilities. LG&E and KU generally expect to complete all impoundment closures within five years of commencement, although a longer period may be required to complete closure of some facilities. Associated costs are expected to be subject to rate recovery.

Superfund and Other Remediation

(All Registrants)

The Registrants are potentially responsible for investigating and remediating contamination under the federal Superfund program and similar state programs. Actions are under way at certain sites including former manufactured gas plants in Pennsylvania, Rhode Island and Kentucky previously owned or operated by, or currently owned by predecessors or affiliates of, PPL subsidiaries.

Depending on the outcome of investigations at identified sites where investigations have not begun or been completed, or developments at sites for which information is incomplete, additional costs of remediation could be incurred. PPL, PPL Electric, LG&E and KU lack sufficient information about such additional sites to estimate any potential liability or range of reasonably possible losses, if any, related to these sites. Such costs, however, are not currently expected to be significant.

The EPA is evaluating the risks associated with polycyclic aromatic hydrocarbons and naphthalene, chemical by-products of manufactured gas plant operations. As a result, individual states may establish stricter standards for water quality and soil cleanup, that could require several PPL subsidiaries to take more extensive assessment and remedial actions at former manufactured gas plants. The Registrants cannot reasonably estimate a range of possible losses, if any, related to these matters.

(PPL and PPL Electric)

PPL Electric is a potentially responsible party for a share of clean-up costs at certain sites. Cleanup actions have been or are being undertaken at these sites as requested by governmental agencies, the costs of which have not been and are not expected to be significant to PPL Electric.

As of September 30, 2024 and December 31, 2023, PPL Electric had a recorded liability of $8 million, representing its best estimate of the probable loss incurred to remediate these sites.

(PPL)

RIE is a potentially responsible party for a share of clean-up costs at certain sites including former manufactured gas plant facilities formerly owned by the Blackstone Valley Gas and Electric Company and the Rhode Island gas distribution assets of the New England Gas division of Southern Union Company and electric operations at certain RIE facilities. RIE is currently investigating and remediating, as necessary, those sites and certain other properties under agreements with governmental agencies, the costs of which have not been and are not expected to be significant to PPL.

As of September 30, 2024 and December 31, 2023, PPL had a recorded liability of $99 million, representing its best estimate of the remaining costs of RIE's environmental remediation activities. These undiscounted costs are expected to be incurred over approximately 30 years and generally to be subject to rate recovery. However, remediation costs for each site may be materially higher than estimated, depending on changing technologies and regulatory standards, selected end uses for each site, and actual environmental conditions encountered. RIE has recovered amounts from certain insurers and potentially responsible parties, and, where appropriate, may seek additional recovery from other insurers and potentially responsible parties, but it is uncertain whether, and to what extent, such efforts will be successful.

Table of Contents

The RIPUC has approved two settlement agreements that provide for rate recovery of qualified remediation costs of certain contaminated sites located in Rhode Island and Massachusetts. Rate-recoverable contributions for electric operations of approximately $3 million are added annually to RIE's Environmental Response Fund, established with RIPUC approval in March 2000 to address such costs, along with interest and any recoveries from insurance carriers and other third parties. In addition, RIE recovers approximately $1 million annually for gas operations under a distribution adjustment charge in which the qualified remediation costs are amortized over 10 years. See Note 6 for additional information on RIE's recorded environmental regulatory assets and liabilities.

Regulatory Issues

(All Registrants)

See Note 6 for information on regulatory matters related to utility rate regulation.

Electricity - Reliability Standards

The NERC is responsible for establishing and enforcing mandatory reliability standards (Reliability Standards) regarding the bulk electric system in North America. The FERC oversees this process and independently enforces the Reliability Standards.

The Reliability Standards have the force and effect of law and apply to certain users of the bulk electric system, including electric utility companies, generators and marketers. Under the Federal Power Act, the FERC may assess civil penalties for certain violations.

PPL Electric, LG&E, KU and RIE monitor their compliance with the Reliability Standards and self-report or self-log potential violations of applicable reliability requirements whenever identified, and submit accompanying mitigation plans, as required. The resolution of a small number of potential violations is pending. Penalties incurred to date have not been significant. Any Regional Reliability Entity determination concerning the resolution of violations of the Reliability Standards remains subject to the approval of the NERC and the FERC.

In the course of implementing their programs to ensure compliance with the Reliability Standards by those PPL affiliates subject to the standards, certain other instances of potential non-compliance may be identified from time to time. The Registrants cannot predict the outcome of these matters, and an estimate or range of possible losses cannot be determined.

Gas - Security Directives (PPL and LG&E)

In May and July of 2021, the Department of Homeland Security’s (DHS) Transportation Security Administration (TSA) released two security directives applicable to certain notified owners and operators of natural gas pipeline facilities (including local distribution companies) that the TSA has determined to be critical. The TSA has determined that LG&E is within the scope of the directive, while RIE has not been notified of this distinction. The first security directive required notified owners/operators to implement cybersecurity incident reporting to the DHS, designate a cybersecurity coordinator, and perform a gap assessment of current entity cybersecurity practices against certain voluntary TSA security guidelines and report relevant results and proposed mitigation to applicable DHS agencies. The second security directive, revised in July of 2024, requires refinement of the cybersecurity implementation plan and the cybersecurity assessment plan. LG&E does not believe the security directives have had or will have a significant impact on LG&E’s operations or financial condition.

Other

Guarantees and Other Assurances

(All Registrants)

In the normal course of business, the Registrants enter into agreements that provide financial performance assurance to third parties on behalf of certain subsidiaries. Examples of such agreements include: guarantees, stand-by letters of credit issued by financial institutions and surety bonds issued by insurance companies. These agreements are entered into primarily to support or enhance the creditworthiness attributed to a subsidiary on a stand-alone basis or to facilitate the commercial activities in which these subsidiaries engage.

Table of Contents

(PPL)

PPL fully and unconditionally guarantees all of the debt securities and loan obligations of PPL Capital Funding.

(All Registrants)

The table below details guarantees provided as of September 30, 2024. "Exposure" represents the estimated maximum potential amount of future payments that could be required to be made under the guarantee. The Registrants believe the probability of expected payment/performance under each of these guarantees is remote, except for the guarantees and indemnifications related to the sale of Safari Holdings, which PPL believes are reasonably possible but not probable of occurring. For reporting purposes, on a consolidated basis, the guarantees of PPL include the guarantees of its subsidiary Registrants.

			Exposure at September 30, 2024									Expiration Date
PPL
Indemnifications related to certain tax liabilities related to the sale of the U.K. utility business			£	50		(a)						2028
PPL guarantee of Safari payment obligations under certain sale/leaseback financing transactions related to the sale of Safari Holdings			$	105		(b)						2028
Indemnifications for losses suffered related to items not covered by Aspen Power's representation and warranty insurance associated with the sale of Safari Holdings			140			(c)						2028
LG&E and KU
LG&E and KU obligation of shortfall related to OVEC						(d)

(a)PPL WPD Limited, a PPL indirect U.K. subsidiary, entered into a Tax Deed dated June 9, 2021, in which it agreed to a tax indemnity regarding certain potential tax liabilities of the entities sold with respect to periods prior to the completion of the sale, subject to customary exclusions and limitations. Because National Grid Holdings One plc, the buyer, agreed to purchase indemnity insurance, the amount of the cap on the indemnity for these liabilities is £1, except with respect to certain surrenders of tax losses, for which the amount of the cap on the indemnity is £50 million.

(b)PPL guaranteed the payment obligations of Safari under certain sale/leaseback financing transactions executed by Safari. These guarantees will remain in place until Safari exercises its option to buy-out the projects under the sale/leaseback financings by the year 2028. Safari will indemnify PPL for any payments made by PPL or claims against PPL under the sale/leaseback transaction guarantees up to $25 million.

(c)Aspen Power has obtained representation and warranty insurance, therefore, PPL generally has no liability for its representations and warranties under the agreement except for losses suffered related to items not covered. Pursuant to the agreement, expiration of these indemnifications range from 18 months to 6 years from the date of the closing of the transaction, and PPL’s aggregate liability for these claims will not exceed $140 million, pursuant to the agreement, subject to certain adjustments plus the support obligations provided by PPL under sale-leaseback financings.

(d)Pursuant to the OVEC power purchase contract, LG&E and KU are obligated to pay for their share of OVEC's excess debt service, post-retirement, and decommissioning costs, as well as any shortfall from amounts included within a demand charge designed and expected to cover these costs over the term of the contract. PPL's proportionate share of OVEC's outstanding debt was $82 million at September 30, 2024, consisting of LG&E's share of $57 million and KU's share of $25 million. The maximum exposure and the expiration date of these potential obligations are not presently determinable. See "Energy Purchase Commitments" in Note 13 in PPL's, LG&E's and KU's 2023 Form 10-K for additional information on the OVEC power purchase contract.

The Registrants provide other miscellaneous guarantees through contracts entered into in the normal course of business. These guarantees are primarily in the form of indemnification or warranties related to services or equipment and vary in duration. The amounts of these guarantees often are not explicitly stated, and the overall maximum amount of the obligation under such guarantees cannot be reasonably estimated. Historically, no significant payments have been made with respect to these types of guarantees and the probability of payment/performance under these guarantees is generally remote.

PPL, on behalf of itself and certain of its subsidiaries, maintains insurance that covers liability assumed under contract for bodily injury and property damage. The coverage provides maximum aggregate coverage of $231 million. This insurance may be applicable to obligations under certain of these contractual arrangements.

11. Related Party Transactions

Support Costs (PPL Electric, LG&E and KU)

PPL Services and LKS provide the Registrants, their respective subsidiaries and each other with administrative, management and support services. For all services companies, the costs of directly assignable and attributable services are charged to the respective recipients as direct support costs. General costs that cannot be directly attributed to a specific entity are allocated and charged to the respective recipients as indirect support costs. PPL Services and LKS use a three-factor methodology that includes the applicable recipients' invested capital, operation and maintenance expenses and number of employees to allocate indirect costs. PPL Services and LKS charged the following amounts for the periods ended September 30, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.

Table of Contents

			Three Months												Nine Months
			2024						2023						2024						2023
PPL Electric from PPL Services			$	53					$	52					$	159					$	166
LG&E from LKS			25						25						82						85
LG&E from PPL Services			15						10						46						30
KU from LKS			31						35						99						110
KU from PPL Services			15						11						45						33

In addition to the charges for services noted above, LKS makes payments on behalf of LG&E and KU for fuel purchases and other costs for products or services provided by third parties. LG&E and KU also provide services to each other and to LKS. Billings between LG&E and KU relate to labor and overheads associated with union and hourly employees performing work for the other company, charges related to jointly-owned generating units and other miscellaneous charges. Tax settlements between PPL and LG&E and KU are reimbursed through LKS.

Intercompany Borrowings

(PPL Electric)

CEP Reserves maintains a $800 million revolving line of credit with a PPL Electric subsidiary. At September 30, 2024, CEP Reserves had $418 million of borrowings outstanding. At December 31, 2023, CEP Reserves had no borrowings outstanding. The interest rates on borrowings are equal to an adjusted one-month SOFR plus a spread. Interest income is reflected in "Interest Income from Affiliate" on the PPL Electric Income Statements.

(LG&E and KU)

LG&E participates in an intercompany money pool agreement whereby LKE and/or KU make available to LG&E funds up to the difference between LG&E's FERC borrowing limit and LG&E's commercial paper issued at an interest rate based on the lower of a market index of commercial paper issues and two additional rate options based on SOFR. At September 30, 2024, LG&E's money pool unused capacity was $716 million. At September 30, 2024, LG&E had borrowings outstanding from KU and/or LKE of $34 million. These balances are reflected in "Notes payable to affiliates" on the LG&E Balance Sheets. At December 31, 2023, LG&E had insignificant borrowings outstanding from KU and/or LKE.

KU participates in an intercompany money pool agreement whereby LKE and/or LG&E make available to KU funds up to the difference between KU's FERC borrowing limit and KU's commercial paper issued at an interest rate based on the lower of a market index of commercial paper issues and two additional rate options based on SOFR. At September 30, 2024, KU's money pool unused capacity was $522 million. At September 30, 2024, KU had borrowings outstanding from LG&E and/or LKE of $128 million. These balances are reflected in "Notes payable to affiliates" on the KU Balance Sheets. At December 31, 2023, KU had no borrowings outstanding from LG&E and/or LKE.

Table of Contents

12. Other Income (Expense) - net

(PPL)

The details of "Other Income (Expense) - net" for the periods ended September 30, were:

			Three Months												Nine Months
			2024						2023						2024						2023
Defined benefit plans - non-service credits (Note 9)			$	9					$	13					$	32					$	30
Interest income			10						4						25						22
AFUDC - equity component			13						7						33						21
Charitable contributions			—						(1)						(4)						(3)
Miscellaneous (a)			—						(7)						—						(19)
Other Income (Expense) - net			$	32					$	16					$	86					$	51

(a)2023 includes legal expenses incurred related to litigation with a former affiliate, Talen Montana.

(PPL Electric)

The details of "Other Income (Expense) - net" for the periods ended September 30, were:

			Three Months												Nine Months
			2024						2023						2024						2023
Defined benefit plans - non-service credits (Note 9)			$	4					$	5					$	13					$	15
Interest income			3						1						5						6
AFUDC - equity component			6						4						17						12
Charitable contributions			—						—						(3)						(2)
Miscellaneous			—						(2)						1						(2)
Other Income (Expense) - net			$	13					$	8					$	33					$	29

(LG&E)

The details of "Other Income (Expense) - net" for the periods ended September 30, were:

			Three Months												Nine Months
			2024						2023						2024						2023
Defined benefit plans - non-service credits (Note 9)			$	—					$	—					$	3					$	—
Interest income			—						—						1						—
AFUDC - equity component			2						1						5						2
Miscellaneous			1						(1)						—						—
Other Income (Expense) - net			$	3					$	—					$	9					$	2

(KU)

The details of "Other Income (Expense) - net" for the periods ended September 30, were:

			Three Months												Nine Months
			2024						2023						2024						2023
Defined benefit plans - non-service credits (Note 9)			$	2					$	—					$	6					$	4
Interest income			—						—						1						—
AFUDC - equity component			3						1						6						2
Miscellaneous			(1)						—						(3)						—
Other Income (Expense) - net			$	4					$	1					$	10					$	6

Table of Contents

13. Fair Value Measurements

(All Registrants)

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). A market approach (generally, data from market transactions), an income approach (generally, present value techniques and option pricing models) and/or a cost approach (generally, replacement cost) are used to measure the fair value of an asset or liability, as appropriate. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. The fair value of a group of financial assets and liabilities is measured on a net basis. See Note 1 in each Registrant's 2023 Form 10-K for information on the levels in the fair value hierarchy.

Recurring Fair Value Measurements

The assets and liabilities measured at fair value were:

			September 30, 2024																								December 31, 2023
			Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3
PPL
Assets
Cash and cash equivalents			$	542					$	542					$	—					$	—					$	331					$	331					$	—					$	—
Restricted cash and cash equivalents (a)			41						41						—						—						51						51						—						—
Total Cash, Cash Equivalents and Restricted Cash (b)			583						583						—						—						382						382						—						—
Special use funds (a):
Money market fund			1						1						—						—						1						1						—						—
Commingled debt fund measured at NAV (c)			4						—						—						—						9						—						—						—
Commingled equity fund measured at NAV (c)			4						—						—						—						8						—						—						—
Total special use funds			9						1						—						—						18						1						—						—
Price risk management assets (d):
Gas contracts			2						—						1						1						1						—						1						—
Total assets			$	594					$	584					$	1					$	1					$	401					$	383					$	1					$	—
Liabilities
Price risk management liabilities (d):
Interest rate swaps			$	7					$	—					$	7					$	—					$	7					$	—					$	7					$	—
Gas contracts			27						—						22						5						60						—						41						19
Total price risk management liabilities			$	34					$	—					$	29					$	5					$	67					$	—					$	48					$	19
PPL Electric
Assets
Cash and cash equivalents			$	35					$	35					$	—					$	—					$	51					$	51					$	—					$	—
Total assets			$	35					$	35					$	—					$	—					$	51					$	51					$	—					$	—
LG&E
Assets
Cash and cash equivalents			$	10					$	10					$	—					$	—					$	18					$	18					$	—					$	—
Restricted cash and cash equivalents (a)			20						20						—						—						26						26						—						—
Total Cash, Cash Equivalents and Restricted Cash (b)			30						30						—						—						44						44						—						—
Total assets			$	30					$	30					$	—					$	—					$	44					$	44					$	—					$	—

Table of Contents

			September 30, 2024																								December 31, 2023
			Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3
Liabilities
Price risk management liabilities:
Interest rate swaps			$	7					$	—					$	7					$	—					$	7					$	—					$	7					$	—
Total price risk management liabilities			$	7					$	—					$	7					$	—					$	7					$	—					$	7					$	—
KU
Assets
Cash and cash equivalents			$	16					$	16					$	—					$	—					$	14					$	14					$	—					$	—
Restricted cash and cash equivalents (a)			20						20						—						—						24						24						—						—
Total Cash, Cash Equivalents and Restricted Cash (b)			36						36						—						—						38						38						—						—
Total assets			$	36					$	36					$	—					$	—					$	38					$	38					$	—					$	—

(a)Current portion is included in "Other current assets" and noncurrent portion is included in "Other noncurrent assets" on the Balance Sheets.

(b)Total Cash, Cash Equivalents and Restricted Cash provides a reconciliation of these items reported within the Balance Sheets to the sum shown on the Statements of Cash Flows.

(c)In accordance with accounting guidance, certain investments that are measured at fair value using net asset value per share (NAV), or its equivalent, have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Balance Sheets.

(d)Current portion is included in "Other current assets" and "Other current liabilities" and noncurrent portion is included in "Other noncurrent assets" and "Other deferred credits and noncurrent liabilities" on the Balance Sheets.

A reconciliation of net liabilities classified as Level 3 for the nine months ended September 30 is as follows:

			Gas Contracts
2024
Balance at beginning of period			$	19
Total unrealized gains (losses) recognized as Regulatory Assets/Regulatory Liabilities:			4
Settlements			(19)
Balance at end of period			$	4

Special Use Funds (PPL)

The special use funds are investments restricted for paying active union employee medical costs. In 2018, PPL received a favorable private letter ruling from the IRS permitting a transfer of excess funds from the PPL Bargaining Unit Retiree Health Plan VEBA to a new subaccount within the VEBA to be used to pay medical claims of active bargaining unit employees. The funds are invested primarily in commingled debt and equity funds measured at NAV and are classified as investments in equity securities. Changes in the fair value of the funds are recorded to the Statements of Income.

Price Risk Management Assets/Liabilities

*Interest Rate Swaps (*PPL, LG&E and KU)

To manage interest rate risk, PPL, LG&E and KU use interest rate contracts such as forward-starting swaps, floating-to-fixed swaps and fixed-to-floating swaps. An income approach is used to measure the fair value of these contracts, utilizing readily observable inputs, such as forward interest rates (e.g., SOFR and government security rates), as well as inputs that may not be observable, such as credit valuation adjustments. In certain cases, market information cannot practicably be obtained to value credit risk and therefore internal models are relied upon. These models use projected probabilities of default and estimated recovery rates based on historical observances. When the credit valuation adjustment is significant to the overall valuation, the contracts are classified as Level 3.

Gas Contracts (PPL)

To manage gas commodity price risk associated with natural gas purchases, RIE utilizes over-the-counter (OTC) gas swaps contracts with pricing inputs obtained from the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE), except in cases where the ICE publishes seasonal averages or where there were no transactions within the last seven

Table of Contents

days. RIE may utilize discounting based on quoted interest rate curves, including consideration of non-performance risk, and may include a liquidity reserve calculated based on bid/ask spread. Substantially all of these price curves are observable in the marketplace throughout at least 95% of the remaining contractual quantity, or they could be constructed from market observable curves with correlation coefficients of 95% or higher. These contracts are classified as Level 2.

RIE also utilizes gas option and purchase and capacity transactions, which are valued based on internally developed models. Industry-standard valuation techniques, such as the Black-Scholes pricing model, are used for valuing such instruments. For valuations that include both observable and unobservable inputs, if the unobservable input is determined to be significant to the overall inputs, the entire valuation is classified as Level 3. This includes derivative instruments valued using indicative price quotations whose contract tenure extends into unobservable periods. In instances where observable data is unavailable, consideration is given to the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility, and contract duration. Such instruments are classified as in Level 3 as the model inputs generally are not observable. RIE considers non-performance risk and liquidity risk in the valuation of derivative instruments classified as Level 2 and Level 3.

The significant unobservable inputs used in the fair value measurement of the gas derivative instruments are implied volatility and gas forward curves. A relative change in commodity price at various locations underlying the open positions can result in significantly different fair value estimates.

Financial Instruments Not Recorded at Fair Value (All Registrants)

Long-term debt is classified as Level 2. The effect of third-party credit enhancements is not included in the fair value measurement. The carrying amounts of long-term debt on the Balance Sheets and their estimated fair values are set forth below.

			September 30, 2024												December 31, 2023
			Carrying Amount (a)						Fair Value						Carrying Amount (a)						Fair Value
PPL			$	16,500					$	16,431					$	14,612					$	14,031
PPL Electric			5,213						5,230						4,567						4,475
LG&E			2,470						2,424						2,469						2,369
KU			3,065						2,940						3,064						2,861

(a)Amounts are net of debt issuance costs.

The carrying amounts of other current financial instruments (except for long-term debt due within one year) approximate their fair values because of their short-term nature.

14. Derivative Instruments and Hedging Activities

(All Registrants)

Risk Management Objectives

PPL has a risk management policy approved by the Board of Directors to manage market risk associated with commodities, interest rates on debt issuances (including price, liquidity and volumetric risk) and credit risk (including non-performance risk and payment default risk). The Risk Management Committee, comprised of senior management and chaired by the Vice President-Financial Strategy and Chief Risk Officer, oversees the risk management function. Key risk control activities designed to ensure compliance with the risk policy and detailed programs include, but are not limited to, credit review and approval, validation of transactions, verification of risk and transaction limits, value-at-risk analyses (VaR, a statistical model that attempts to estimate the value of potential loss over a given holding period under normal market conditions at a given confidence level) and the coordination and reporting of the Enterprise Risk Management program.

Market Risk

Market risk includes the potential loss that may be incurred as a result of price changes associated with a particular financial or commodity instrument as well as market liquidity and volumetric risks. Forward contracts, futures contracts, options, swaps and structured transactions are utilized as part of risk management strategies to minimize unanticipated fluctuations in earnings caused by changes in commodity prices and interest rates. Many of these contracts meet the definition of a derivative. All derivatives are recognized on the Balance Sheets at their fair value, unless NPNS is elected.

Table of Contents

The following summarizes the market risks that affect PPL and its subsidiaries.

Interest Rate Risk

• PPL and its subsidiaries are exposed to interest rate risk associated with forecasted fixed-rate and existing floating-rate debt issuances. PPL and LG&E utilize over-the-counter interest rate swaps to limit exposure to market fluctuations on floating-rate debt. PPL, LG&E and KU utilize forward starting interest rate swaps to hedge changes in benchmark interest rates, when appropriate, in connection with future debt issuance.

• PPL and its subsidiaries are exposed to interest rate risk associated with debt securities and derivatives held by defined benefit plans. This risk is significantly mitigated to the extent that the plans are sponsored at, or sponsored on behalf of, the regulated utilities due to the recovery methods in place.

Commodity Price Risk

PPL is exposed to commodity price risk through its subsidiaries as described below.

• PPL Electric is required to purchase electricity to fulfill its obligation as a PLR. Potential commodity price risk is mitigated through its PAPUC-approved cost recovery mechanism and full-requirement supply agreements to serve its PLR customers which transfer the risk to energy suppliers.

• LG&E's and KU's rates include certain mechanisms for fuel, fuel-related expenses and energy purchases. In addition, LG&E's rates include a mechanism for natural gas supply costs. These mechanisms generally provide for timely recovery of market price fluctuations associated with these costs.

• RIE utilizes derivative instruments pursuant to its RIPUC-approved plan to manage commodity price risk associated with its natural gas purchases. RIE's commodity price risk management strategy is to reduce fluctuations in firm gas sales prices to its customers. RIE's costs associated with derivatives instruments are recoverable through its RIPUC-approved cost recovery mechanisms. RIE is required to purchase electricity to fulfill its obligation to provide Last Resort Service (LRS). Potential commodity price risk is mitigated through its RIPUC-approved cost recovery mechanisms and full requirements service agreements to serve LRS customers, which transfer the risk to energy suppliers. RIE is required to contract through long-term agreements for clean energy supply under the Rhode Island Renewable Energy Growth program and Long-term Clean Energy Standard. Potential commodity price risk is mitigated through its RIPUC-approved cost recovery mechanisms, which true-up cost differences between contract prices and market prices.

Volumetric Risk

Volumetric risk is the risk related to the changes in volume of retail sales due to weather, economic conditions or other factors. PPL is exposed to volumetric risk through its subsidiaries as described below:

• PPL Electric, LG&E and KU are exposed to volumetric risk on retail sales, mainly due to weather and other economic conditions for which there is limited mitigation between rate cases.

• RIE is exposed to volumetric risk, which is significantly mitigated by regulatory mechanisms. RIE's electric and gas distribution rates both have a revenue decoupling mechanism, which allows for annual adjustments to RIE's delivery rates.

Equity Securities Price Risk

• PPL and its subsidiaries are exposed to equity securities price risk associated with the fair value of the defined benefit plans' assets. This risk is significantly mitigated due to the recovery methods in place.

• PPL is exposed to equity securities price risk from future stock sales and/or purchases.

Credit Risk

Credit risk is the potential loss that may be incurred due to a counterparty's non-performance.

PPL is exposed to credit risk from "in-the-money" transactions with counterparties as well as additional credit risk through certain of its subsidiaries, as discussed below.

In the event a supplier of PPL, PPL Electric, LG&E or KU defaults on its contractual obligation, those Registrants would be required to seek replacement power or replacement fuel in the market. In general, subject to regulatory review or other

Table of Contents

processes, appropriate incremental costs incurred by these entities would be recoverable from customers through applicable rate mechanisms, thereby mitigating the financial risk for these entities.

PPL and its subsidiaries have credit policies in place to manage credit risk, including the use of an established credit approval process, daily monitoring of counterparty positions and the use of master netting agreements or provisions. These agreements generally include credit mitigation provisions, such as margin, prepayment or collateral requirements. PPL and its subsidiaries may request additional credit assurance, in certain circumstances, if a counterparty's credit ratings fall below investment grade, their tangible net worth falls below specified percentages or its exposures exceed an established credit limit.

Master Netting Arrangements (PPL, LG&E and KU)

Net derivative positions on the balance sheets are not offset against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements.

PPL, LG&E and KU had no obligation to return or post cash collateral under master netting arrangements at September 30, 2024 and December 31, 2023.

See "Offsetting Derivative Instruments" below for a summary of derivative positions presented in the balance sheets where a right of setoff exists under these arrangements.

Interest Rate Risk

(All Registrants)

PPL and its subsidiaries issue debt to finance their operations, which exposes them to interest rate risk. A variety of financial derivative instruments are utilized to adjust the mix of fixed and floating interest rates in their debt portfolios, adjust the duration of the debt portfolios and lock in benchmark interest rates in anticipation of future financing, when appropriate. Risk limits under PPL's risk management program are designed to balance risk exposure to volatility in interest expense and changes in the fair value of the debt portfolio due to changes in benchmark interest rates. In addition, the interest rate risk of certain subsidiaries is potentially mitigated as a result of the existing regulatory framework or the timing of rate cases.

Cash Flow Hedges (PPL)

Interest rate risks include exposure to adverse interest rate movements for outstanding variable rate debt and for future anticipated financings. Financial interest rate swap contracts that qualify as cash flow hedges may be entered into to hedge floating interest rate risk associated with both existing and anticipated debt issuances. PPL had no such contracts at September 30, 2024.

Cash flow hedges are discontinued if it is no longer probable that the original forecasted transaction will occur by the end of the originally specified time period and any amounts previously recorded in AOCI are reclassified into earnings once it is determined that the hedged transaction is not probable of occurring.

For the three and nine months ended September 30, 2024 and 2023, PPL had no cash flow hedges reclassified into earnings associated with discontinued cash flow hedges.

At September 30, 2024, the amount of accumulated net unrecognized after-tax gains (losses) on qualifying derivatives expected to be reclassified into earnings during the next 12 months is insignificant. Amounts are reclassified as the hedged interest expense is recorded.

Economic Activity (PPL and LG&E)

LG&E enters into interest rate swap contracts that economically hedge interest payments. Because realized gains and losses from the swaps, including terminated swap contracts, are recoverable through regulated rates, any subsequent changes in fair value of these derivatives are included in regulatory assets or liabilities until they are realized as interest expense. Realized gains and losses are recognized in "Interest Expense" on the Statements of Income at the time the underlying hedged interest expense is recorded. At September 30, 2024, LG&E held contracts with a notional amount of $64 million that mature in 2033.

Table of Contents

Commodity Price Risk (PPL)

Economic Activity

RIE enters into derivative contracts that economically hedge natural gas purchases. Realized gains and losses from the derivatives are recoverable through regulated rates, therefore subsequent changes in fair value are included in regulatory assets or liabilities until they are realized as purchased gas. Realized gains and losses are recognized in "Energy Purchases" on the Statements of Income upon settlement of the contracts. At September 30, 2024, RIE held contracts with notional volumes of 55 Bcf that range in maturity from 2024 through 2029.

Accounting and Reporting

(All Registrants)

All derivative instruments are recorded at fair value on the Balance Sheet as an asset or liability unless NPNS is elected. NPNS contracts include certain full requirement purchase contracts and other physical purchase contracts. Changes in the fair value of derivatives not designated as NPNS are recognized in earnings unless specific hedge accounting criteria are met and designated as such, except for the changes in fair values of LG&E's interest rate swaps and certain RIE commodity gas contracts that are recognized as regulatory assets or regulatory liabilities. See Note 6 for amounts recorded in regulatory assets and regulatory liabilities at September 30, 2024 and December 31, 2023.

See Note 1 in each Registrant's 2023 Form 10-K for additional information on accounting policies related to derivative instruments.

(PPL)

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

															September 30, 2024																								December 31, 2023
															Assets						Liabilities																		Assets						Liabilities
Current:
Price Risk Management Assets/Liabilities (a):
Interest rate swaps															$	—					$	1																	$	—					$	1
Gas contracts															2						22																		1						51
Total current															2						23																		1						52
Noncurrent:
Price Risk Management Assets/Liabilities (a):
Interest rate swaps															—						6																		—						6
Gas contracts															—						5																		—						9
Total noncurrent															—						11																		—						15
Total derivatives															$	2					$	34																	$	1					$	67

(a)Current portion is included in "Other current assets" and "Other current liabilities" and noncurrent portion is included in "Other noncurrent assets" and "Other deferred credits and noncurrent liabilities" on the Balance Sheets. Excludes accrued interest, if applicable.

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the period ended September 30, 2024.

						Three Months						Nine Months												Three Months						Nine Months
Derivative Relationships						Derivative Gain (Loss) Recognized in OCI						Derivative Gain (Loss) Recognized in OCI						Location of Gain (Loss) Recognized in Income on Derivative						Gain (Loss) Reclassified from AOCI into Income						Gain (Loss) Reclassified from AOCI into Income
Cash Flow Hedges:
Interest rate swaps						$	—					$	—					Interest expense						$	(1)					$	(3)

Table of Contents

Derivatives Not Designated as Hedging Instruments						Location of Gain (Loss) Recognized in Income on Derivative						Three Months						Nine Months
Gas contracts						Energy purchases						$	(6)					$	(31)
						Total						$	(6)					$	(31)
Derivatives Not Designated as Hedging Instruments						Location of Gain (Loss) Recognized as Regulatory Liabilities/Assets						Three Months						Nine Months
Interest rate swaps						Regulatory assets - noncurrent						$	(3)					$	—
Gas contracts						Regulatory assets - current						(2)						31
						Regulatory assets - noncurrent						(3)						3
						Total						$	(8)					$	34

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the period ended September 30, 2023.

						Three Months						Nine Months												Three Months						Nine Months
Derivative Relationships						Derivative Gain (Loss) Recognized in OCI						Derivative Gain (Loss) Recognized in OCI						Location of Gain (Loss) Recognized in Income on Derivative						Gain (Loss) Reclassified from AOCI into Income						Gain (Loss) Reclassified from AOCI into Income
Cash Flow Hedges:
Interest rate swaps						$	—					$	—					Interest expense						$	(1)					$	(3)

Derivatives Not Designated as Hedging Instruments						Location of Gain (Loss) Recognized in Income on Derivative						Three Months						Nine Months
Gas contracts						Energy purchases						$	(4)					$	(11)
						Other income (expense) - net						(1)						(1)
						Total						$	(5)					$	(12)
Derivatives Not Designated as Hedging Instruments						Location of Gain (Loss) Recognized as Regulatory Liabilities/Assets						Three Months						Nine Months
Interest rate swaps						Regulatory assets - noncurrent						$	4					$	4
Gas contracts						Regulatory assets - current						(14)						12
						Regulatory assets - noncurrent						2						(5)
						Total						$	(8)					$	11

The following table presents the effect of cash flow hedge activity on the Statement of Income for the period ended September 30, 2024.

			Location and Amount of Gain (Loss) Recognized in Income on Hedging Relationships
			Three Months									Nine Months
			Interest Expense												Interest Expense
Total income and expense line items presented in the income statement in which the effect of cash flow hedges are recorded			$	188											$	549
The effects of cash flow hedges:
Gain (Loss) on cash flow hedging relationships:
Interest rate swaps:
Amount of gain (loss) reclassified from AOCI to income			(1)												(3)

The following table presents the effect of cash flow hedge activity on the Statement of Income for the period ended September 30, 2023.

Table of Contents

			Location and Amount of Gain (Loss) Recognized in Income on Hedging Relationships
			Three Months									Nine Months
			Interest Expense												Interest Expense
Total income and expense line items presented in the income statement in which the effect of cash flow hedges are recorded			$	165											$	494
The effects of cash flow hedges:
Gain (Loss) on cash flow hedging relationships:
Interest rate swaps:
Amount of gain (loss) reclassified from AOCI to income			(1)												(3)

(LG&E)

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

			September 30, 2024												December 31, 2023
			Assets						Liabilities						Assets						Liabilities
Current:
Price Risk Management Assets/Liabilities:
Interest rate swaps			$	—					$	1					$	—					$	1
Total current			—						1						—						1
Noncurrent:
Price Risk Management Assets/Liabilities:
Interest rate swaps			—						6						—						6
Total noncurrent			—						6						—						6
Total derivatives			$	—					$	7					$	—					$	7

The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the period ended September 30, 2024.

						Location of Gain (Loss) Recognized in
Derivative Instruments						Income on Derivatives						Three Months						Nine Months
Interest rate swaps						Interest expense						$	—					$	—
						Location of Gain (Loss) Recognized in
Derivative Instruments						Regulatory Assets						Three Months						Nine Months
Interest rate swaps						Regulatory assets - noncurrent						$	(3)					$	—

The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the period ended September 30, 2023.

						Location of Gain (Loss) Recognized in
Derivative Instruments						Income on Derivatives						Three Months						Nine Months
Interest rate swaps						Interest expense						$	—					$	—
						Location of Gain (Loss) Recognized in
Derivative Instruments						Regulatory Assets						Three Months						Nine Months
Interest rate swaps						Regulatory assets - noncurrent						$	4					$	4

(PPL, LG&E and KU)

Offsetting Derivative Instruments

PPL, LG&E and KU or certain of their subsidiaries have master netting arrangements in place and also enter into agreements pursuant to which they purchase or sell certain energy and other products. Under the agreements, upon termination of the

Table of Contents

agreement as a result of a default or other termination event, the non-defaulting party typically would have a right to set off amounts owed under the agreement against any other obligations arising between the two parties (whether under the agreement or not), whether matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation.

PPL, LG&E and KU have elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivatives agreements. The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

			Assets																								Liabilities
									Eligible for Offset																								Eligible for Offset
			Gross						Derivative Instruments						Cash Collateral Received						Net						Gross						Derivative Instruments						Cash Collateral Pledged						Net
September 30, 2024
Derivatives
PPL			$	2					$	2					$	—					$	—					$	34					$	2					$	—					$	32
LG&E			—						—						—						—						7						—						—						7

			Assets																								Liabilities
									Eligible for Offset																								Eligible for Offset
			Gross						Derivative Instruments						Cash Collateral Received						Net						Gross						Derivative Instruments						Cash Collateral Pledged						Net
December 31, 2023
Derivatives
PPL			$	1					$	—					$	—					$	1					$	67					$	—					$	—					$	67
LG&E			—						—						—						—						7						—						—						7

Credit Risk-Related Contingent Features

Certain derivative contracts contain credit risk-related contingent features which, when in a net liability position, would permit the counterparties to require the transfer of additional collateral upon a decrease in the credit ratings of PPL, LG&E and KU or certain of their subsidiaries. Most of these features would require the transfer of additional collateral or permit the counterparty to terminate the contract if the applicable credit rating were to fall below investment grade. Some of these features also would allow the counterparty to require additional collateral upon each downgrade in credit rating at levels that remain above investment grade. In either case, if the applicable credit rating were to fall below investment grade, and assuming no assignment to an investment grade affiliate were allowed, most of these credit contingent features require either immediate payment of the net liability as a termination payment or immediate and ongoing full collateralization on derivative instruments in net liability positions.

Additionally, certain derivative contracts contain credit risk-related contingent features that require adequate assurance of performance be provided if the other party has reasonable concerns regarding the performance of PPL's, LG&E's and KU's obligations under the contracts. A counterparty demanding adequate assurance could require a transfer of additional collateral or other security, including letters of credit, cash and guarantees from a creditworthy entity. This would typically involve negotiations among the parties. However, such amounts would represent assumed immediate payment or immediate and ongoing full collateralization for derivative instruments in net liability positions with "adequate assurance" features.

(PPL)

At September 30, 2024, derivative contracts in a net liability position that contain credit risk-related contingent features was $18 million. At September 30, 2024, the aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade was $19 million.

Table of Contents

15. Asset Retirement Obligations

(PPL, LG&E and KU)

PPL's, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 10 for information on the CCR rules. LG&E and RIE also have AROs related to natural gas mains and wells. LG&E's and KU's transmission and distribution lines largely operate under perpetual property easement agreements, which do not generally require restoration upon removal of the property. Therefore, no material AROs are recorded for transmission and distribution assets. For LG&E, KU and RIE, all ARO accretion and depreciation expenses are reclassified as a regulatory asset or regulatory liability. ARO regulatory assets associated with certain CCR projects resulting from the 2015 CCR Rule are amortized to expense in accordance with regulatory approvals. For other AROs, deferred accretion and depreciation expense is recovered through cost of removal.

The changes in the carrying amounts of AROs were as follows.

			PPL						LG&E						KU
Balance at December 31, 2023			$	158					$	85					$	66
Accretion			6						3						3
New obligations incurred (a)			8						3						5
Changes in estimated cash flow or settlement date			1						1						(1)
Obligations settled			(15)						(8)						(7)
Other			2						—						—
Balance at September 30, 2024			$	160					$	84					$	66

(a) Primarily includes obligations recognized for preliminary risk assessments, facility evaluations, feasibility studies and sampling related to the CCR rule issued by the EPA in May of 2024. See Note 10 for additional information.

16. Accumulated Other Comprehensive Income (Loss)

(PPL)

The after-tax changes in AOCI by component for the periods ended September 30 were as follows.

																					Unrealized gains (losses) on qualifying derivatives												Defined benefit plans
																		Equity investees' AOCI						Prior service costs						Actuarial gain (loss)						Total
PPL
June 30, 2024																					$	7					$	4					$	(4)					$	(167)					$	(160)
Amounts arising during the period																					—						—						—						(4)						(4)
Reclassifications from AOCI																					2						—						—						(1)						1
Net OCI during the period																					2						—						—						(5)						(3)
September 30, 2024																					$	9					$	4					$	(4)					$	(172)					$	(163)
December 31, 2023																					$	6					$	3					$	(4)					$	(168)					$	(163)
Amounts arising during the period																					—						1						—						(2)						(1)
Reclassifications from AOCI																					3						—						—						(2)						1
Net OCI during the period																					3						1						—						(4)						—
September 30, 2024																					$	9					$	4					$	(4)					$	(172)					$	(163)
June 30, 2023																					$	4					$	3					$	(4)					$	(140)					$	(137)
Amounts arising during the period																					—						—						—						(6)						(6)
Reclassifications from AOCI																					1						—						—						—						1
Net OCI during the period																					1						—						—						(6)						(5)
September 30, 2023																					$	5					$	3					$	(4)					$	(146)					$	(142)

Table of Contents

																					Unrealized gains (losses) on qualifying derivatives												Defined benefit plans
																		Equity investees' AOCI						Prior service costs						Actuarial gain (loss)						Total
December 31, 2022																					$	3					$	2					$	(5)					$	(124)					$	(124)
Amounts arising during the period																					—						1						—						(21)						(20)
Reclassifications from AOCI																					2						—						1						(1)						2
Net OCI during the period																					2						1						1						(22)						(18)
September 30, 2023																					$	5					$	3					$	(4)					$	(146)					$	(142)

The following table presents PPL's gains (losses) and related income taxes for reclassifications from AOCI for the periods ended September 30.

						Three Months												Nine Months												Affected Line Item on the
Details about AOCI						2024						2023						2024						2023						Statements of Income
Qualifying derivatives
Interest rate swaps						$	(1)					$	(1)					$	(3)					$	(3)					Interest Expense
Total Pre-tax						(1)						(1)						(3)						(3)
Income Taxes						(1)						—						—						1
Total After-tax						(2)						(1)						(3)						(2)
Defined benefit plans
Prior service costs (a)						—						—						—						(1)
Net actuarial loss (a)						1						(1)						3						1
Total Pre-tax						1						(1)						3						—
Income Taxes						—						1						(1)						—
Total After-tax						1						—						2						—
Total reclassifications during the period						$	(1)					$	(1)					$	(1)					$	(2)

(a) These AOCI components are included in the computation of net periodic defined benefit cost. See Note 9 for additional information.

17. New Accounting Guidance Pending Adoption

(All Registrants)

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 which improves reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses. The standard also requires public entities to disclose the title and position of the Chief Operating Decision Maker (CODM) and explain how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Certain segment-related disclosures that previously were required only on an annual basis will be required to be disclosed in interim periods. In addition, public entities that have a single reportable segment are required to provide disclosures required by the new ASU and existing segment disclosure in Topic 280 (Segment Reporting).

For public business entities, this guidance will be applied retrospectively and will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.

Adoption of ASU 2023-07 will result in the Registrants including the additional required disclosures. The Registrants plan to adopt ASU 2023-07 effective for the year ending December 31, 2024.

Table of Contents

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 which requires public business entities to provide additional income tax disclosures, including a disaggregated rate reconciliation as well as information on income taxes paid.

For public business entities, this guidance will be applied on a prospective basis. Retrospective application is permitted. This guidance will be effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The Registrants are currently assessing the impact of adopting this guidance.

Table of Contents