Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files).

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies or emerging growth companies. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If emerging growth companies, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

This combined Form 10-Q is separately filed by the following Registrants in their individual capacity: PPL Corporation, PPL Electric Utilities Corporation, LG&E and KU Energy LLC, Louisville Gas and Electric Company and Kentucky Utilities Company. Information contained herein relating to any individual Registrant is filed by such Registrant solely on its own behalf, and no Registrant makes any representation as to information relating to any other Registrant, except that information under "Forward-Looking Information" relating to subsidiaries of PPL Corporation is also attributed to PPL Corporation and information relating to the subsidiaries of LG&E and KU Energy LLC is also attributed to LG&E and KU Energy LLC.

Unless otherwise specified, references in this Report, individually, to PPL Corporation, PPL Electric Utilities Corporation, LG&E and KU Energy LLC, Louisville Gas and Electric Company and Kentucky Utilities Company are references to such entities directly or to one or more of their subsidiaries, as the case may be, the financial results of which subsidiaries are consolidated into such Registrants' financial statements in accordance with GAAP. This presentation has been applied where identification of particular subsidiaries is not material to the matter being disclosed, and to conform narrative disclosures to the presentation of financial information on a consolidated basis.

Statements contained in this Form 10-Q concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact are "forward-looking statements" within the meaning of the federal securities laws. Although the Registrants believe that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. Forward-looking statements are subject to many risks and uncertainties, and actual results may differ materially from the results discussed in forward-looking statements. In addition to the specific factors discussed in each Registrant's ~~2019~~2020 Form 10-K and in "Item 2. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q, the following are among the important factors that could cause actual results to differ materially and adversely from the forward-looking statements:

Any forward-looking statements should be considered in light of these important factors and in conjunction with other documents of the Registrants on file with the SEC.

New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for the Registrants to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and the Registrants undertake no obligation to update the information contained in the statement to reflect subsequent developments or information.

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, ~~2019~~2020 is derived from that Registrant's ~~2019~~2020 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 ~~2019~~2020 Form 10-K. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2020~~2021 or other future periods, because results for interim periods can be disproportionately influenced by various factors, developments and seasonal variations.

On March 17, 2021, PPL WPD Limited entered into a share purchase agreement to sell PPL's U.K. utility business, which substantially represents PPL’s U.K. Regulated segment, to a subsidiary of National Grid plc. The results of operations of the U.K. utility business have been classified as Discontinued Operations on PPL's Statements of Income. The assets and liabilities of the U.K. utility business have been classified as assets and liabilities held for sale on PPL's Balance Sheets. PPL has elected

to separately report the cash flows of continuing and discontinued operations on the Statements of Cash Flows. Unless otherwise noted, the notes to these financial statements exclude amounts related to discontinued operations and assets and liabilities held for sale for all periods presented. See Note 9 for additional information.

The following accounting policy disclosures represent updates to Note 1 in each Registrant's ~~2019~~2020 Form 10-K and should be read in conjunction with those disclosures.

The following provides a reconciliation of Cash, Cash Equivalents and Restricted Cash reported within the Balance Sheets that sum to the total of the same amounts shown on the Statements of Cash Flows:

The following table shows changes in the allowance for credit losses for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:

~~Effective January 1, 2020,~~The TCJA included new provisions requiring that certain income, referred to as global intangible low-tax income (GILTI), earned by certain foreign subsidiaries must be included in the ~~Registrants prospectively adopted accounting~~gross income of their U.S. shareholder. Accounting guidance ~~that requires~~allows a ~~customer~~policy election regarding the timing of inclusion of GILTI in an entity’s financial statements. The election may be either to record deferred taxes for expected GILTI in future periods or record such taxes as a ~~cloud computing hosting arrangement that is a service contract~~current-period expense when incurred. PPL has elected to ~~capitalize implementation costs consistent with internal-use software guidance for non-service arrangements. The guidance requires these capitalized implementation costs~~record the tax effect of expected GILTI inclusions and thus, records deferred taxes relating to ~~be amortized over the term~~such inclusions.

In light of the ~~hosting arrangement to~~anticipated sale of PPL's U.K. utility business and the ~~statement of income line item where the service arrangement costs are recorded. The guidance also prescribes the financial statement~~associated classification of that business as assets held for sale, indefinite reinvestment is no longer relevant. As such, PPL expects to realize the ~~capitalized implementation costs and cash flows~~outside book-tax basis difference in those assets in the foreseeable future. Accordingly, a deferred tax liability is recorded reflecting the expected tax cost associated with the ~~arrangement. The adoption~~realization of ~~this guidance did not have a material impact on the Registrants.~~that basis difference.

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

See Note 2 in PPL's ~~2019~~2020 Form 10-K for a discussion of reportable segments and related information.

Income Statement data for the segments and reconciliation to PPL's consolidated results for the periods ended ~~September 30~~March 31 are as follows:

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

PPL Electric has two operating segments, distribution and transmission, which are aggregated into a single reportable segment. LKE, LG&E and KU are individually single operating and reportable segments.

See Note 3 in PPL's ~~2019~~2020 Form 10-K for a discussion of the principal activities from which the Registrants and PPL’s 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.~~March 31.

The following tables show revenues from contracts with customers disaggregated by customer class for the periods ended ~~September 30.~~March 31.

As discussed in Note 2 in PPL's ~~2019~~2020 Form 10-K, PPL segments its business by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the footnotes to the tables above. PPL Electric's revenues from contracts with customers are further disaggregated by distribution and transmission, which were $407 million and $174 million for the three months ended September 30, 2020 and $1.2 billion and $497 million for the nine months ended September 30, 2020. PPL Electric's revenue from contracts with customers disaggregated by distribution and transmission were $477 million and $112 million for the three months ended September 30, 2019 and $1.4 billion and $318 million for the nine months ended September 30, 2019.

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

The following table shows the accounts receivable and unbilled revenues balances that were impaired for the periods ended ~~September 30.~~March 31.

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

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 recognized as revenue ratably over the billing period. Payments received in excess of revenues earned to date are recognized as revenue as services are delivered in subsequent periods.

At ~~September 30, 2020,~~March 31, 2021, PPL had ~~$40~~$47 million of performance obligations attributable to Corporate and Other that have not been satisfied. Of this amount, PPL expects to recognize approximately ~~$40~~$38 million within the next 12 months.

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 incremental shares that would be outstanding if potentially dilutive ~~non-participating securities~~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. These dilutive securities include the PPL common stock forward sale agreements, which were settled in 2019. The forward sale

Reconciliations of the amounts of income and shares of PPL common stock (in thousands) for the periods ended ~~September 30~~March 31 used in the EPS calculation are:

For the periods ended ~~September 30,~~March 31, PPL issued common stock related to stock-based compensation plans and the DRIP as follows (in thousands):

For the periods ended ~~September 30,~~March 31, the following shares (in thousands) were excluded from the computations of diluted EPS because the effect would have been antidilutive.

Reconciliations of income tax expense (benefit) for the periods ended ~~September 30~~March 31 are as follows.

In July 2020, the IRS issued final and new proposed regulations relating to ~~limitations~~the limitation on interest ~~deductibility for tax purposes.~~deductibility. The ~~Registrants will apply the~~ final regulations ~~beginning in~~do not apply to the Registrants until the 2021 tax year. The new proposed regulations were finalized on January 5, 2021 and will apply to the Registrants in the ~~year in which~~2022 tax year. The Registrants have evaluated the final regulations ~~are~~ issued in ~~final form, which is expected to be in~~ 2021 and concluded that neither the 2020 or ~~later. The Registrants are evaluating the final and proposed~~2021 regulations ~~but do not expect the regulations to~~should have a material impact on the Registrants’ financial condition or results of operations.

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

On ~~October 23,~~November 25, 2020, LG&E and KU filed ~~notices of intent~~requests with the KPSC ~~to file applications~~ for ~~proposed adjustments of general electric~~an increase in annual electricity and gas revenues of approximately $331 million ($131 million and $170 million in electricity revenues at LG&E and KU and $30 million in gas revenues at LG&E). The revenue increases would be an increase of 11.6% and 10.4% in electricity revenues at LG&E and KU, and an increase of 8.3% in gas revenues at LG&E. In recognition of the economic impact of COVID-19, LG&E and KU requested approval of a one-year billing credit which will credit customers approximately $53 million ($41 million at LG&E and $12 million at KU). The billing credit represents the return to customers of certain regulatory liabilities on LG&E’s and KU’s Balance Sheets and serves to partially mitigate the rate increases during the first year in which the new rates ~~on or after November 25, 2020.~~ are in effect.

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

The applications ~~will also include requests~~were based on a forecasted test year of July 1, 2021 through June 30, 2022 and requested an authorized return on equity of 10.0%.

On April 19, 2021, LG&E and KU entered into an agreement with all intervening parties to the proceedings resolving all matters in their applications, with the explicit exception of LG&E's and KU's net metering proposals. The agreement proposes increases in annual revenues of $217 million ($77 million and $116 million in electricity revenues at LG&E and KU and $24 million in gas revenues at LG&E) based on an authorized return on equity of 9.55%. The proposal includes an authorized 9.35% return on equity for the ECR and GLT mechanisms. The agreement does not modify the requested one-year billing credit. The agreement proposes that the KPSC should grant LG&E’s and KU’s request for a CPCN to deploy Advanced Metering Infrastructure and ~~other matters.~~proposes the establishment of a Retired Asset Recovery rider (RAR) to provide for recovery of and return on the remaining investment in certain electric generating units upon their retirement over a ten-year period following retirement. In respect of the RAR rider, the agreement proposes that LG&E and KU will continue to use currently approved depreciation rates for Mill Creek units 1 and 2 and Brown Unit 3. The agreement also proposes a four-year “stay-out” commitment from LG&E and KU to refrain from effective base rate increases before July 1, 2025, subject to certain exceptions.

A hearing on the agreement, and the underlying proceedings, was completed on April 28, 2021. Subject to KPSC approval, the rates, decreased by the amount of the billing credit, are expected to become effective July 1, 2021. An Order on the net metering issues is expected by the end of September 2021. PPL, LKE, LG&E and KU cannot predict the outcome of these ~~potential~~ proceedings.

See Note 12 for discussion of intercompany borrowings.

In April ~~2020,~~2021, PPL Capital Funding ~~entered into a~~repaid the $100 million term loan credit facility expiring in March 2022 and borrowed the full principal amount under the facility at an initial interest rate of 1.72%. The applicable interest rate on borrowings fluctuates periodically and is based on LIBOR plus a spread. The proceeds were used to repay short-term debt and for general corporate purposes.2022.

PPL Electric is allocated costs of defined benefit plans sponsored by PPL Services and LG&E and KU are allocated costs of defined benefit plans sponsored by LKE. LG&E and KU are also allocated costs of defined benefit plans from LKS for defined benefit plans sponsored by LKE. See Note 12 for additional information on costs allocated to LG&E and KU from LKS. These allocations are based on participation in those plans, which management believes are reasonable. For the periods ended ~~September 30,~~March 31, PPL Services allocated the following net periodic defined benefit costs to PPL Electric, and LKE allocated the following net periodic defined benefit costs to LG&E and KU:

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 13 for additional information.

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.

In September 2013, one of PPL's former subsidiaries, PPL Montana entered into an agreement to sell its hydroelectric generating facilities. In June 2014, PPL and PPL Energy Supply, the parent company of PPL Montana, entered into various definitive agreements with affiliates of Riverstone to spin off PPL Energy Supply and ultimately combine it with Riverstone's competitive power generation businesses to form a stand-alone company named Talen Energy. In November 2014, after executing the spinoff agreements but prior to the closing of the spinoff transaction, PPL Montana closed the sale of its hydroelectric generating facilities. Subsequently, on June 1, 2015, the spinoff of PPL Energy Supply was completed. Following the spinoff transaction, PPL had no continuing ownership interest in or control of PPL Energy Supply. In connection with the spinoff transaction, PPL Montana became Talen Montana, LLC (Talen Montana), a subsidiary of Talen Energy. Talen Energy Marketing also became a subsidiary of Talen Energy as a result of the June 2015 spinoff of PPL Energy Supply. Talen Energy has owned and operated both Talen Montana and Talen Energy Marketing since the spinoff. At the time of the spinoff, affiliates of Riverstone acquired a 35% ownership interest in Talen Energy. Riverstone subsequently acquired the remaining interests in Talen Energy in a take private transaction in December 2016.

On November 30, 2018, PPL, certain PPL affiliates, and certain current and former officers and directors (PPL plaintiffs) filed a complaint in the Court of Chancery of the State of Delaware seeking various forms of relief against Riverstone, Talen Energy and certain of their affiliates (Delaware Action), in response to and as part of the defense strategy for an action filed by Talen Montana, LLC (the Talen Direct Action, since dismissed) and the Talen Putative Class Action described above (together, the Montana Actions) originally filed in Montana state court in October 2018. In the complaint, the PPL plaintiffs ask the Delaware Court of Chancery for declaratory and injunctive relief. This includes a declaratory judgment that, under the separation

agreement governing the spinoff of PPL Energy Supply, all related claims that arise must be heard in Delaware; that the statute of limitations in Delaware and the spinoff agreement bar these claims at this time; that PPL is not liable for the claims in either the Talen Direct Action or the Talen Putative Class Action as PPL Montana was solvent at all relevant times; and that the separation agreement requires that Talen Energy indemnify PPL for all losses arising from the debts of Talen Montana, among other things. PPL's complaint also seeks damages against Riverstone for interfering with the separation agreement and against Riverstone affiliates for breach of the implied covenant of good faith and fair dealing. The complaint was subsequently amended on January 11, 2019 and March 20, 2019, to include, among other things, claims related to indemnification with respect to the Montana Actions, request a declaration that the Montana Actions are time-barred under the spinoff agreements, and allege additional facts to support the tortious interference claim. In April 2019, the defendants filed motions to dismiss the amended complaint. In July 2019, the Court heard oral arguments from the parties regarding the motions to dismiss, and in October 2019, the Delaware Court of Chancery issued an opinion sustaining all of the PPL plaintiffs' claims except for the claim for breach of implied covenant of good faith and fair dealing. As a result of the dismissal of the Talen Direct Action in December 2019, in January 2020, Talen Energy filed a new motion to dismiss five of the remaining eight claims in the amended complaint. The Court heard oral argument on the motion to dismiss on May 28, 2020, and on June 22, 2020, issued an opinion denying the motion in its entirety. Discovery is proceeding, and a trial has been scheduled for ~~June 2021.~~February 2022.

With respect to each of the Talen-related matters described above, PPL believes that the 2014 distribution of proceeds was made in compliance with all applicable laws and that PPL Montana was solvent at all relevant times. Additionally, the agreements entered into in connection with the spinoff, which PPL and affiliates of Talen Energy and Riverstone negotiated and executed prior to the 2014 distribution, directly address the treatment of the proceeds from the sale of PPL Montana's hydroelectric generating facilities; in those agreements, Talen Energy and Riverstone definitively agreed that PPL was entitled to retain the proceeds.

PPL believes that it has meritorious defenses to the claims made in the Talen Putative Class Action and intends to continue to vigorously defend against this action. The Talen Putative Class Action and the Delaware Action are both in early stages of litigation; at this time, PPL cannot predict the outcome of these matters or estimate the range of possible losses, if any, that PPL might incur as a result of the claims, although they could be material.

In December 2013, 6 residents, on behalf of themselves and others similarly situated, filed a class action complaint against LG&E and PPL in the U.S. District Court for the Western District of Kentucky (U.S. District Court) alleging violations of the Clean Air Act, RCRA, and common law claims of nuisance, trespass and negligence. In July 2014, the U.S. District Court

In July 2017, the Kentucky Waterways Alliance and the Sierra Club filed a citizen suit complaint against KU in the U.S. District Court for the Eastern District of Kentucky (U.S. District Court) alleging discharges at the E.W. Brown plant in violation of the Clean Water Act and the plant's water discharge permit and alleging contamination that may present an imminent and substantial endangerment in violation of the RCRA. The plaintiffs' suit relates to prior notices of intent to file a citizen suit submitted in October and November 2015 and October 2016. These plaintiffs sought injunctive relief ordering KU

to take all actions necessary to comply with the Clean Water Act and RCRA, including ceasing the discharges in question, abating effects associated with prior discharges and eliminating the alleged imminent and substantial endangerment. These plaintiffs also sought assessment of civil penalties and an award of litigation costs and attorney fees. In December 2017, the U.S. District Court issued an Order dismissing the Clean Water Act and RCRA complaints against KU in their entirety. In January 2018, the plaintiffs appealed the dismissal Order to the U.S. Court of Appeals for the Sixth Circuit. In September 2018, the U.S. Court of Appeals for the Sixth Circuit issued its ruling affirming the lower court's decision to dismiss the Clean Water Act claims but reversing its dismissal of the RCRA claims against KU and remanding the latter to the U.S. District Court. In October 2018, KU filed a petition for rehearing to the U.S. Court of Appeals for the Sixth Circuit regarding the RCRA claims. In November 2018, the U.S. Court of Appeals for the Sixth Circuit denied KU's petition for rehearing regarding the RCRA claims. In January 2019, KU filed an answer to plaintiffs’ complaint in the U.S. District Court. ADiscovery is complete and the parties' motions for partial summary judgment are pending. In December 2020, the U.S. District Court delayed the trial ~~has been~~ scheduled for February 2, 2021 indefinitely due to ~~begin in February 2021.~~pandemic considerations. PPL, LKE and KU cannot predict the outcome of these matters and an estimate or range of possible losses cannot be determined.

KU is undertaking extensive remedial measures at the E.W. Brown plant including ~~work preparing for~~ 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. However, until the KEEC assesses the study and issues any regulatory determinations, PPL, LKE and KU are unable to determine whether additional remedial measures will be required at the E.W. Brown plant.

In June 2016, the EPA issued a notice of violation under the Clean Air Act alleging that LG&E violated applicable rules relating to sulfuric acid mist emissions at its Mill Creek plant. The notice alleges failure to install proper controls, failure to operate the facility consistent with good air pollution control practice, and causing emissions exceeding applicable requirements or constituting a nuisance or endangerment. LG&E believes it has complied with applicable regulations during the relevant time period. On July 31, 2020, the U.S. Department of Justice and Louisville Metro Air Pollution Control District filed a complaint in the U.S. District Court for the Western District of Kentucky alleging violations specified in the EPA notice of violation and seeking civil penalties and injunctive relief. In October 2020, LG&E filed a motion to dismiss the complaint. In ~~October~~December 2020, the U.S. Department of Justice ~~indicated plans to file~~and the Louisville Metro Air Pollution Control District filed an amended ~~complaint, as authorized by an agreed order of~~complaint. In February 2021, LG&E filed a renewed motion to dismiss regarding the ~~court and parties.~~amended complaint. PPL, LKE and LG&E are unable to predict the outcome of this matter or the potential impact on operations of the Mill Creek plant, including increased capital or operating costs, and potential civil penalties or remedial measures, if any. An estimate or range of possible losses cannot be determined.

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 "no 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

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. ~~See Note 7 for additional information regarding LG&E’s and KU’s applications for ECR rate treatment of construction costs relating to regulations addressing ELGs.~~

In 2015, the EPA issued a final rule governing management of CCRs which include fly ash, bottom ash and sulfur dioxide scrubber wastes. The CCR Rule imposes 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 July 2018, the EPA issued a final rule extending the deadline for closure of certain impoundments and adopting other substantive changes. In August 2018, the D.C. Circuit Court of Appeals vacated and remanded portions of the CCR Rule. In December 2019, the EPA addressed the deficiencies identified by the court and proposed amendments to change the closure deadline. In August 2020, the EPA published a final rule extending the deadline to initiate closure to April 11, 2021, while providing for certain extensions. The EPA ~~has announced that additional~~is conducting ongoing rulemaking actions regarding various other amendments to the ~~rule are planned.~~rule. Certain ongoing legal challenges to various provisions of the CCR Rule have been held in abeyance pending review by the EPA pursuant to the President's executive order. PPL, LKE, LG&E and KU are unable to predict the outcome of the ongoing litigation and rulemaking or potential impacts on current LG&E and KU compliance plans. The Registrants are currently finalizing closure plans and schedules.

In January 2017, Kentucky issued a new state rule relating to CCR management, effective May 2017, aimed at reflecting the requirements of the federal CCR rule. As a result of a subsequent legal challenge, in January 2018, the Franklin County, Kentucky Circuit Court issued an opinion invalidating certain procedural elements of the rule. LG&E and KU presently operate their facilities under continuing permits authorized under the former program and do not currently anticipate material impacts as a result of the judicial ruling. The Kentucky Energy and Environmental Cabinet has announced it intends to propose new state rules aimed at addressing procedural deficiencies identified by the court and providing the regulatory framework necessary for operation of the state program in lieu of the federal CCR Rule. Associated costs are expected to be subject to rate recovery.

LG&E and KU received KPSC approval for a compliance plan 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. ~~Since 2017,~~As of April 2021, LG&E and KU have commenced closure of ~~many~~all of the subject impoundments and have completed closure of some of their smaller impoundments. ~~LG&E and KU expect to commence closure of the remaining impoundments no later than April 2021.~~ LG&E and KU generally expect to complete 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.

In connection with the final CCR rule, LG&E and KU recorded adjustments to existing AROs beginning in 2015 and continue to record adjustments as required. See Note 16 for additional information. Further 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 subject to rate recovery.

PPL Electric, LG&E and KU 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 coal gas manufacturing plants in Pennsylvania and Kentucky previously owned or operated by, or currently owned by predecessors or affiliates of, PPL Electric, LG&E and KU. PPL Electric is potentially responsible for a share of clean-up costs at certain sites including the

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, PPL Electric had a recorded liability of $10 million representing its best estimate of the probable loss ~~to be~~ incurred to remediate the sites identified above. 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 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 coal gas manufacturing. 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 coal gas manufacturing plants. PPL, PPL Electric, LKE, LG&E and KU cannot estimate a range of possible losses, if any, related to these matters.

See Note 7 for information on regulatory matters related to utility rate regulation.

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 and KU 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.

In the normal course of business, the Registrants enter into agreements that provide financial performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, 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.

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

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 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 $225 million. This insurance may be applicable to obligations under certain of these contractual arrangements.

The COVID-19 pandemic has disrupted the U.S. and global economies and continues to present extraordinary challenges to businesses, communities, workforces and markets. In the U.S. and throughout the world, governmental authorities have taken urgent and extensive actions to contain the spread of the virus and mitigate known or foreseeable impacts. In the Registrants’ service territories, mitigation measures have included quarantines, stay-at-home orders, travel restrictions, reduced operations or closures of businesses, schools and governmental agencies, and legislative or regulatory actions to address health or other pandemic-related concerns, all of which have the potential to adversely impact the Registrants' business and operations, especially if these measures remain in effect for a prolonged period of time.

To date, ~~the Registrants have not experienced a significant~~there has been no material impact on ~~their business, results of~~the Registrants’ operations, financial condition, liquidity ~~operations~~ or on their supply chain as a result of COVID-19; however, the duration and severity of the outbreak and its ultimate effects on the global economy, the financial markets, or the Registrants’ workforce, customers and suppliers are uncertain. A protracted slowdown of broad sectors of the economy, prolonged or pervasive restrictions on businesses and their workforces, or significant changes in legislation or regulatory policy to address the COVID-19 pandemic all present significant risks to the Registrants. These or other unpredictable events resulting from the pandemic could further reduce customer demand for electricity and gas, impact the Registrants’ employees and supply chains, result in an increase in certain costs, delay payments or increase bad debts, or result in changes in the fair value of their assets and liabilities, which could materially and adversely affect the Registrants’ business, results of operations, financial condition or liquidity.

PPL Services, PPL EU Services and LKS provide PPL, PPL Electric and LKE, their respective subsidiaries, including LG&E and KU, 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 ~~assigned or~~ attributed to a specific entity are allocated and charged to the respective recipients as indirect support costs. PPL Services and PPL EU Services 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 may also use a ratio of overall direct and indirect costs or a weighted average cost ratio. LKS bases its indirect allocations on the subsidiaries' number of employees, total assets, revenues, number of customers and/or other statistical information. PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended ~~September 30,~~March 31, 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.

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 LKE and LG&E and KU are reimbursed through LKS.

PPL Energy Funding maintains a $650 million revolving line of credit with a PPL Electric subsidiary. NaN balance was outstanding at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. The interest rates on borrowings are equal to one-month LIBOR plus a spread. Interest income is reflected in "Interest Income from Affiliate" on the Income Statements.

LKE maintains a $375 million revolving line of credit with a PPL Energy Funding subsidiary whereby LKE can borrow funds on a short-term basis at market-based rates. The interest rates on borrowings are equal to one-month LIBOR plus a spread. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019, $153~~2020, $227 million and ~~$150~~$251 million were outstanding and reflected in "Notes payable with affiliates" on the Balance Sheets. The interest rates on the outstanding borrowings at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were ~~1.66%~~1.62% and ~~3.20%~~1.65%. Interest expense on the revolving line of credit was ~~$1 million and $4 million~~not significant for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~$2 million and $5 million for the three and nine months ended September 30, 2019.~~2020.

LKE maintains an agreement with a PPL affiliate that has a $300 million borrowing limit whereby LKE can loan funds on a short-term basis at market-based rates. NaN balance was outstanding at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. The interest rate on the loan is based on the PPL affiliate's credit rating and equal to one-month LIBOR plus a spread.

LG&E participates in an intercompany money pool agreement whereby LKE and/or KU make available to LG&E funds up to ~~$750 million~~the difference between LG&E's FERC borrowing limit and LG&E's commercial paper capacity limit at an interest rate based on the lower of a market index of commercial paper ~~issues.~~issues and two additional rate options based on LIBOR. LG&E's money pool borrowing limit is $325 million. NaN balances were outstanding at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

KU participates in an intercompany money pool agreement whereby LKE and/or LG&E make available to KU funds up to ~~$650 million~~the difference between KU's FERC borrowing limit and KU's commercial paper capacity limit at an interest rate based on the lower of a market index of commercial paper ~~issues.~~issues and two additional rate options based on LIBOR. KU's money pool borrowing limit is $300 million. NaN balances were outstanding at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

In May 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. Based on PPL Electric's participation in PPL’s Other Postretirement Benefit plan, PPL Electric was allocated a portion of the excess funds from PPL Services. These funds have been recorded as an intercompany receivable on PPL Electric's Balance Sheets. The receivable balance decreases as PPL Electric pays incurred medical claims and is reimbursed by PPL Services. The intercompany receivable balance associated with these funds was ~~$27~~$20 million as of ~~September 30, 2020,~~March 31, 2021, of which $10 million was reflected in "Accounts receivable from affiliates" and ~~$17~~$10 million was reflected in "Other noncurrent assets" on the PPL Electric Balance Sheet. The intercompany receivable balance associated with these funds was ~~$32~~$22 million as of December 31, ~~2019,~~2020, of which $10 million was reflected in "Accounts receivable from affiliates" and ~~$22~~$12 million was reflected in "Other noncurrent assets" on the PPL Electric Balance Sheet.

See Note 10 for discussions regarding intercompany allocations associated with defined benefits.

The details of "Other Income (Expense) - net" for the periods ended ~~September 30,~~March 31, were:

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 ~~2019~~2020 Form 10-K for information on the levels in the fair value hierarchy.

The assets and liabilities measured at fair value were:

The special use funds are investments restricted for paying active union employee medical costs. In May 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 fair value of the funds are recorded to the Statements of Income.

To manage interest rate risk, PPL, LKE, LG&E and KU use interest rate contracts such as forward-starting swaps, floating-to-fixed swaps and fixed-to-floating swaps. To manage foreign currency exchange risk, PPL uses foreign currency contracts such as forwards, options and cross-currency swaps that contain characteristics of both interest rate and foreign currency contracts. An income approach is used to measure the fair value of these contracts, utilizing readily observable inputs, such as forward interest rates (e.g., LIBOR and government security rates) and forward foreign currency exchange rates (e.g., GBP), 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.

The carrying amounts of long-term debt on the Balance Sheets and their estimated fair values are set forth below. 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 other current financial instruments (except for long-term debt due within one year) approximate their fair values because of their short-term nature.

PPL has a risk management policy approved by the Board of Directors to manage market risk associated with commodities, interest rates on debt issuances and foreign exchange (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 Senior Director-Risk Management, 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 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, interest rates and foreign currency exchange 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.

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

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

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.

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" interest rate ~~and foreign currency~~ derivatives with financial institutions, as well as additional credit risk through certain of its subsidiaries, as discussed below.

In the event a supplier of PPL Electric, LG&E or KU defaults on its obligation, those Registrants would be required to seek replacement power or replacement fuel in the market. In general, subject to regulatory review or other 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, in the event that the counterparties' credit ratings fall below investment grade, their tangible net worth falls below specified percentages or their exposures exceed an established credit limit.

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 had ~~a $9 million~~no obligation and ~~$14 million~~an immaterial obligation to return cash collateral under master netting arrangements at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

PPL had a $22 million obligation and 0 obligation to post cash collateral under master netting arrangements at March 31, 2021 and December 31, 2020.

LKE, LG&E and KU had 0 obligation to return cash collateral under master netting arrangements at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

PPL, LKE and LG&E posted $1 million of cash collateral under master netting arrangements at September 30, 2020. KU had 0 obligation to post cash collateral under master netting arrangements at September 30, 2020. PPL, LKE, LG&E and KU had 0 obligation to post cash collateral under master netting arrangements at March 31, 2021.and December 31, ~~2019.~~2020.

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.

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.

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. ~~At September 30, 2020,~~ PPL ~~held an aggregate notional value in interest rate swap~~had no such contracts ~~of £126 million (approximately $168 million based on spot rates) that mature in 2035 to hedge interest payments on WPD's £250 million debt issuance which occurred in October 2020.~~at March 31, 2021.

At ~~September 30, 2020,~~March 31, 2021, PPL held an aggregate notional value in cross-currency interest rate swap contracts of ~~$702~~$202 million that ~~range~~mature in ~~maturity from 2021 through~~ 2028 to hedge the interest payments and principal of WPD's U.S. dollar-denominated senior notes. In March 2021, $500 million of WPD's U.S. dollar-denominated senior notes were repaid prior to maturity and $500 million notional value of cross-currency interest rate swap contracts matured.

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,~~March 31, 2021 and 2020, ~~and 2019,~~ PPL had 0 cash flow hedges reclassified into earnings associated with discontinued cash flow hedges.

At ~~September 30, 2020,~~March 31, 2021, 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.

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

PPL is exposed to foreign currency risk, primarily through investments in and earnings of U.K. affiliates. PPL has adopted a foreign currency risk management program designed to hedge certain foreign currency exposures, including firm commitments, recognized assets or liabilities, anticipated transactions, including the ~~previously announced potential~~anticipated sale of its U.K. utility business and net investments. In addition, PPL enters into financial instruments to protect against foreign currency translation risk of expected GBP earnings.

PPL enters into foreign currency contracts on behalf of a subsidiary to protect the value of a portion of its net investment in WPD. There were no contracts outstanding at ~~September 30, 2020.~~March 31, 2021.

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, PPL had $33 ~~million and $32~~ million of accumulated net investment hedge after tax gains (losses) that were included in the foreign currency translation adjustment component of AOCI.

PPL enters into foreign currency contracts on behalf of a subsidiary to economically hedge GBP-denominated anticipated ~~earnings.~~earnings and anticipated transactions, including the anticipated sale of its U.K. utility business. At ~~September 30, 2020,~~March 31, 2021, the total exposure hedged by PPL was approximately ~~£340 million (approximately $482 million based on contracted rates). These contracts have termination dates ranging from October 2020 through July 2021.~~£7.5 billion.

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 that are recognized as regulatory assets or regulatory liabilities. See Note 7 for amounts recorded in regulatory assets and regulatory liabilities at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

See Note 1 in each Registrant's ~~2019~~2020 Form 10-K for additional information on accounting policies related to derivative instruments.

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

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, 2020.~~March 31, 2021.

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, 2019.~~March 31, 2020.

The following table presents the effect of cash flow hedge activity on the Statement of Income for the period ended ~~September 30, 2020.~~March 31, 2021.

The following table presents the effect of cash flow hedge activity on the Statement of Income for the period ended ~~September 30, 2019.~~March 31, 2020.

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

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, 2020.~~March 31, 2021.

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, 2019.~~March 31, 2020.

PPL, LKE, 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 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, LKE, 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.

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, LKE, 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, LKE'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, amounts disclosed below represent assumed immediate payment or immediate and ongoing full collateralization for derivative instruments in net liability positions with "adequate assurance" features.

At ~~September 30, 2020,~~March 31, 2021, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

PPL's, LKE's, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 11 for information on the CCR rule. LG&E also has 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 LKE, LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. For other AROs, at the time of retirement, the related ARO regulatory asset is offset against the associated cost of removal regulatory liability, PP&E and ARO liability.

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

The after-tax changes in AOCI by component for the periods ended ~~September 30~~March 31 were as follows.

The following table presents PPL's gains (losses) and related income taxes for reclassifications from AOCI for the periods ended ~~September 30.~~March 31.

This "Item 2. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" is separately filed by PPL, PPL Electric, LKE, LG&E and KU. Information contained herein relating to any individual Registrant is filed by such Registrant solely on its own behalf, and no Registrant makes any representation as to information relating to any other Registrant. 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 individual Registrants when significant.

The following should be read in conjunction with the Registrants' Condensed Consolidated Financial Statements and the accompanying Notes and with the Registrants' ~~2019~~2020 Form 10-K. Capitalized terms and abbreviations are defined in the glossary. Dollars are in millions, except per share data, unless otherwise noted.

"Management's Discussion and Analysis of Financial Condition and Results of Operations" includes the following information:

PPL, headquartered in Allentown, Pennsylvania, is a utility holding company. PPL, through its regulated utility subsidiaries, delivers electricity to customers in the U.K., Pennsylvania, Kentucky and Virginia; delivers natural gas to customers in Kentucky; and generates electricity from power plants in Kentucky. On March 17, 2021, PPL WPD Limited entered into a share purchase agreement to sell PPL's U.K. utility business, which substantially represents PPL's U.K. Regulated segment. As a result of this strategic shift in the operations of the business, PPL will no longer provide segment information for the U.K. Regulated segment. See "Financial and Operational Developments - "Share Purchase Agreement to Sell U.K. Utility Business" below for additional information.

PPL's principal subsidiaries are shown below (* denotes a Registrant).

PPL's reportable segments' results primarily represent the results of ~~PPL Global,~~ LKE and PPL Electric, except that in 2020 the reportable segments ~~are~~were also allocated certain corporate level financing and other costs that ~~are~~were not included in the results of ~~PPL Global,~~ LKE and PPL Electric. ~~PPL Global is not a Registrant. Unaudited annual consolidated financial statements for~~In 2021, corporate level financing costs are no longer being allocated to the ~~U.K. Regulated segment are furnished by PPL on a Form 8-K with the SEC.~~reportable segments.

PPL Electric, headquartered in Allentown, Pennsylvania, is a wholly owned subsidiary of PPL and a regulated public utility that is an electricity transmission and distribution service provider in eastern and central Pennsylvania. PPL Electric is subject to regulation as a public utility by the PUC, and certain of its transmission activities are subject to the jurisdiction of the FERC under the Federal Power Act. PPL Electric delivers electricity in its Pennsylvania service area and provides electricity supply to retail customers in that area as a PLR under the Customer Choice Act.

LKE, ~~acquired in 2010 and~~ headquartered in Louisville, Kentucky, is a wholly owned subsidiary of PPL and a holding company that owns regulated utility operations through its subsidiaries, LG&E and KU, which constitute substantially all of LKE's assets. LG&E and KU are engaged in the generation, transmission, distribution and sale of electricity. LG&E also engages in the transmission, distribution and sale of natural ~~gas.~~gas in Kentucky. LG&E and KU maintain separate corporate identities and serve customers in Kentucky under their respective names. KU also serves customers in Virginia under the Old Dominion Power name.

LG&E, headquartered in Louisville, Kentucky, is a wholly owned subsidiary of LKE and a regulated utility engaged in the generation, transmission, distribution and sale of electricity and distribution and sale of natural gas in Kentucky. LG&E is subject to regulation as a public utility by the KPSC, and certain of its transmission activities are subject to the jurisdiction of the FERC under the Federal Power Act.

KU, headquartered in Lexington, Kentucky, is a wholly owned subsidiary of LKE and a regulated utility engaged in the generation, transmission, distribution and sale of electricity in Kentucky and Virginia. KU is subject to regulation as a public

of the FERC under the Federal Power Act. KU serves its Kentucky customers under the KU name and its Virginia customers under the Old Dominion Power name.

PPL operates seven fully regulated, high-performing utilities. These utilities are located in the U.K., Pennsylvania and Kentucky, in constructive regulatory jurisdictions with distinct regulatory structures and customer classes. PPL believes this business portfolio positions the company well for continued success and provides earnings and dividend growth potential.

~~For the U.S. businesses, central~~Central to PPL's strategy is recovering capital project costs efficiently through various rate-making mechanisms, including periodic base rate case proceedings using forward test years, annual FERC formula rate mechanisms and other regulatory agency-approved recovery mechanisms designed to limit regulatory lag. In Kentucky, the KPSC has adopted a series of regulatory mechanisms (ECR, DSM, GLT, fuel adjustment clause, and gas supply clause) and recovery on construction work-in-progress that reduce regulatory lag and provide timely recovery of and return on, as appropriate, prudently incurred costs. In addition, the KPSC requires a utility to obtain a CPCN prior to constructing a facility, unless the construction is an ordinary extension of existing facilities in the usual course of business or does not involve sufficient capital expenditures to materially affect the utility's financial condition. Although such KPSC proceedings do not directly address cost recovery issues, the KPSC, in awarding a CPCN, concludes that the public convenience and necessity require the construction of the facility on the basis that the facility is the lowest reasonable cost alternative to address the need. In Pennsylvania, the FERC transmission formula rate, DSIC mechanism, Smart Meter Rider and other recovery mechanisms operate to reduce regulatory lag and provide for timely recovery of and a return on, as appropriate, prudently incurred costs.

~~To manage financing costs and access to credit markets, and to fund capital expenditures,~~In March 2021, PPL entered into definitive agreements that strategically reposition the company as a ~~key objective~~U.S.-based energy company focused on building the utilities of the ~~Registrants is~~future. PPL WPD Limited entered into a share purchase agreement to maintain their investment grade credit ratings and adequate liquidity positions. In addition, the Registrants have financial and operational risk management programs that, among other things, are designed to monitor and manage exposure to earnings and cash flow volatility, as applicable, related to changes in interest rates, foreign currency exchange rates and counterparty credit quality. To manage these risks, PPL generally uses contracts such as forwards, options and swaps. See "Financial Condition - Risk Management" below for further information.

On ~~August 10, 2020,~~March 17, 2021, PPL ~~announced that it has initiated~~WPD Limited (WPD Limited) entered into a ~~formal process~~share purchase agreement (WPD SPA) to sell ~~its~~PPL's U.K. utility ~~business.~~business to National Grid Holdings One plc (National Grid U.K.), a subsidiary of National Grid plc. Pursuant to the WPD SPA, National Grid U.K. will acquire 100% of the issued share capital of PPL ~~noted~~WPD Investments Limited (WPD Investments) for £7.8 billion in cash. WPD Limited will also receive an additional amount of £548,000 for each day during the period from January 1, 2021 to the closing date if the dividends usually declared by WPD Investments to WPD Limited are not paid for that there can be no assurance of any specific outcome, including whether the sale process will result in the completion of any potential transaction, the timing or terms thereof, the value or benefits that may be realized or the effect that any potential transaction will have on future financial results.period.

~~As a result~~The completion of the ~~potential sale, PPL assessed~~transaction, which is currently expected to occur by the ~~recoverability~~end of July 2021, is subject to approval by National Grid plc's shareholders and receipt of regulatory approvals from the Financial Conduct Authority (the FCA), the Guernsey Financial Services Commission and, if applicable at the time of closing, from the U.K. Secretary of State in connection with the National Security and Investment Bill 2020. On April 22, 2021, National Grid plc’s shareholders approved the transaction pursuant to the listing rules of the ~~assets of its U.K. utility business. PPL prepared a probability-weighted undiscounted cash flow estimate as of September 30, 2020 that considered~~FCA. On May 4, 2021, the ~~likelihood~~Guernsey Financial Services Commission approved the transaction. The approval of the ~~possible outcomes~~FCA is the sole remaining approval before the transaction can be consummated. The consummation of the ~~sale process, including~~transaction is not subject to a financing condition.

In connection with entering into the possibility of not selling the U.K. utility business. The resulting cash flow analysis exceeded the carrying value of the assets of the U.K. utility business. A change in the possible outcomes of the sale process could result in the carrying value of the assets ofWPD SPA, the U.K. utility business ~~not being recoverable, which could result in an impairment in future periods.The U.K. utility business will continue to be classified as held and used until it meets~~has met the accounting criteria to be classified as assets and liabilities held for sale ~~which includes management obtaining a commitment to a plan to sell from its Board~~and discontinued operations beginning with the first quarter of ~~Directors.~~

The increase (decrease) in operating revenues was due to:

Fuel ~~decreased $17~~increased $14 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due to an ~~$13 million decrease~~increase in volumes driven by ~~weather and a $2 million decrease in commodity costs.~~

The increase (decrease) in other operation and maintenance was due to:

The increase in depreciation was due to:

~~The increase (decrease)~~Income taxes decreased $2 million for the three months ended March 31, 2021 compared with 2020, primarily due to a change in pre-tax income. See Note 6 to the Financial Statements for additional information on income ~~taxes was due to:~~

Income (Loss) from Discontinued Operations (net of income taxes) decreased $2.4 billion for the three months ended March 31, 2021 compared with 2020. The ~~U.K. corporation~~decrease was attributable primarily to a loss on sale of approximately $1.6 billion and an increase in income tax ~~rate was scheduled to be reduced from 19% to 17%, effective April 1, 2020. On March 11, 2020,~~expense of $672 million in 2021. The increase in income tax expense includes federal tax expense of $689 million for the ~~U.K. Finance Act 2020 included a cancellation~~recognition of the tax ~~rate reduction to 17%, thereby maintaining~~cost associated with the ~~corporation tax rate at 19%. The Finance Act 2020 was formally enacted on July 22, 2020. The primary impact~~realization of the ~~cancellation~~book-tax outside basis difference in PPL's investment in the U.K. utility business. See "Discontinued Operations" in Note 9 to the Financial Statements for summarized results of operations for the ~~corporation tax rate reduction was an increase in deferred tax liabilities and a corresponding deferred tax expense of $106 million.~~

PPL's Net Income by reportable segment for the periods ended ~~September 30~~March 31 was as follows:

Management utilizes "Earnings from Ongoing Operations" as a non-GAAP financial measure that should not be considered as an alternative to net income, an indicator of operating performance determined in accordance with GAAP. PPL believes that Earnings from Ongoing Operations is useful and meaningful to investors because it provides management's view of PPL's earnings performance as another criterion in making investment decisions. In addition, PPL's management uses Earnings from Ongoing Operations in measuring achievement of certain corporate performance goals, including targets for certain executive incentive compensation. Other companies may use different measures to present financial performance.

Earnings from Ongoing Operations is adjusted for the impact of special items. Special items are presented in the financial tables on an after-tax basis with the related income taxes on special items separately disclosed. Income taxes on special items, when applicable, are calculated based on the statutory tax rate of the entity where the activity is recorded. Special items may include items such as:

• ~~Unrealized gains or losses on foreign currency economic hedges (as discussed below).~~

• Impairment charges.

• Significant workforce reduction and other restructuring effects.

• Acquisition and divestiture-related adjustments.

Unrealized gains or losses on foreign currency economic hedges include the changes in fair value of foreign currency contracts used to hedge GBP-denominated anticipated earnings. The changes in fair value of these contracts are recognized immediately within GAAP earnings. Management believes that excluding these amounts from Earnings from Ongoing Operations until

See "Reconciliation of Earnings from Ongoing Operations" below for a reconciliation of this non-GAAP financial measure to Net Income.

The Kentucky Regulated segment consists primarily of LKE's 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. In addition, certain ~~acquisition-related financing~~ costs are allocated to the Kentucky Regulated segment. The Kentucky Regulated segment represents ~~28%~~72% of PPL's ~~Net~~ Income from Continuing Operations After Income Taxes for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~33%~~54% of PPL's assets excluding "Current assets held for sale" at ~~September 30, 2020.~~March 31, 2021.

Net Income and Earnings from Ongoing Operations for the periods ended ~~September 30~~March 31 include the following results.

The following after-tax gains (losses), which management considers special items, impacted the Kentucky Regulated segment's results and are excluded from Earnings from Ongoing Operations during the periods ended ~~September 30.~~March 31.

The changes in the components of the Kentucky Regulated segment's results between these periods were due to the factors set forth below, which reflect amounts classified as Kentucky Adjusted Gross Margins and the items that management considers special on separate lines and not in their respective Statement of Income line items.

The Pennsylvania Regulated segment includes the regulated electricity transmission and distribution operations of PPL Electric. In addition, certain costs are allocated to the Pennsylvania Regulated segment. The Pennsylvania Regulated segment represents ~~31%~~56% of PPL's ~~Net~~ Income from Continuing Operations After Income Taxes for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~26%~~43% of PPL's assets excluding "Current assets held for sale" at ~~September 30, 2020.~~March 31, 2021.

Net Income and Earnings from Ongoing Operations for the periods ended ~~September 30~~March 31 include the following results.

The following after-tax gains (losses), which management considers special items, impacted the Pennsylvania Regulated segment's results and are excluded from Earnings from Ongoing Operations during the periods ended ~~September 30.~~March 31.

The changes in the components of the Pennsylvania Regulated segment's results between these periods are due to the factors set forth below, which reflect amounts classified as Pennsylvania Adjusted Gross Margins and the items that management considers special on a separate ~~line~~lines and not in their respective Statement of Income line items.

The following tables contain after-tax gains (losses), in total, which management considers special items, that are excluded from Earnings from Ongoing Operations and a reconciliation to PPL's "Net Income" for the periods ended ~~September 30.~~March 31.

Management also utilizes the following non-GAAP financial measures as indicators of performance for its businesses:

These measures are not intended to replace "Operating Income," which is determined in accordance with GAAP, as an indicator of overall operating performance. Other companies may use different measures to analyze and report their results of operations. Management believes these measures provide additional useful criteria to make investment decisions. These performance measures are used, in conjunction with other information, by senior management and PPL's Board of Directors to manage operations and analyze actual results compared with budget.

The following table shows Adjusted Gross Margins by PPL's reportable segment and by component, as applicable for the periods ended ~~September 30~~March 31 as well as the change between periods. The factors that gave rise to the changes are described following the table.

Kentucky Adjusted Gross Margins ~~decreased for the three months ended September 30, 2020 compared with 2019,~~increased due to ~~$18 million of decreased~~increased sales volumes primarily due to ~~weather and $8 million of lower commercial and industrial demand revenue primarily due to impacts of COVID-19.~~

Distribution Adjusted Gross Margins ~~decreased for the three and nine months ended September 30, 2020, compared with 2019. No items were individually significant in comparison~~increased primarily due to ~~the prior year.~~$13 million of higher sales volumes largely due to weather, partially offset by $8 million of lower returns on distribution system improvement capital investments.

Transmission Adjusted Gross Margins ~~increased~~decreased for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared with ~~2019,~~2020, primarily due to a $17 million decrease as a result of a lower PPL zonal peak load billing factor and $8 million due to a reserve recorded as a result of a challenge to the transmission formula rate return on equity. Partially offsetting these unfavorable items was $19 million of returns on additional transmission capital investments focused on replacing aging infrastructure and improving reliability. See Note 7 to the Financial Statements for additional information on the transmission formula rate return on equity challenge.

The following tables contain the components from the Statement of Income that are included in the non-GAAP financial measures and a reconciliation to PPL's "Operating Income" for the periods ended ~~September 30.~~March 31.

Net income for the periods ended ~~September 30~~March 31 includes the following results.

The increase (decrease) in operating revenues was due to:

The increase (decrease) in other operation and maintenance was due to:

~~The increase (decrease)~~Deprecation increased $10 million for the three months ended March 31, 2021 compared with 2020, primarily due to additional assets placed in ~~income taxes was due to:~~

The increase ~~(decrease)~~ in operating revenues was due to:

Fuel ~~decreased $17~~increased $14 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due to ~~a $13 million decrease~~an increase in volumes driven by ~~weather and a $2 million decrease in commodity costs.~~

Energy purchases ~~decreased $28~~increased $14 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019, primarily~~2020, due to an $11 million increase in gas volumes driven by weather and a ~~decrease~~$3 million increase in commodity costs.

The increase in other operation and maintenance was due to:

Depreciation increased $8$7 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due to additional assets placed into service, net of retirements.

Net income for the periods ended ~~September 30~~March 31 includes the following results.

The increase (decrease) in operating revenues was due to:

Fuel decreased ~~$15~~$7 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due ~~a decrease in volumes driven by weather.~~

Energy purchases ~~decreased $27~~increased $14 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019, primarily~~2020, due to an $11 million increase in gas volumes driven by weather and a ~~decrease~~$3 million increase in commodity costs.

Energy purchases from affiliate increased ~~$6 million and $10~~$5 million for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due to the timing of generation maintenance outages.

~~Depreciation increased $25 million for the nine months ended September 30, 2020 compared with 2019, primarily~~The increase in other operation and maintenance was due ~~to a $13 million increase related to higher depreciation rates effective May 1, 2019 and an $11 million increase related to additional assets placed into service, net of retirements.~~to:

Net income for the periods ended ~~September 30~~March 31 includes the following results.

The increase ~~(decrease)~~ in operating revenues was due to:

Fuel ~~decreased $40~~increased $21 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due to ~~a $21 million decrease in commodity costs,~~ an ~~$11 million decrease~~increase in volumes driven by ~~weather~~weather.

Energy purchases from affiliate decreased $7 million for the three months ended March 31, 2021 compared with 2020, primarily due to the timing of generation maintenance outages.

The increase in ~~volumes driven by the termination of eight supply contracts with Kentucky municipalities on April 30, 2019.~~other operation and maintenance was due to:

Depreciation increased $5 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019,~~2020, primarily due to additional assets placed into service, net of retirements.

The remainder of this Item 2 in this Form 10-Q is presented on a combined basis, providing information, as applicable, for all Registrants.

The Registrants had the following at:

The Statements of Cash Flows separately report the cash flows of discontinued operations. The "Operating Activities",

"Investing Activities" and "Financing Activities" sections below include only the cash equivalents were denominated in GBP. If these amounts would be remitted as dividends, PPL would not anticipate an incremental U.S. tax cost. See Note 6 to the Financial Statements in PPL's 2019 Form 10-K for additional information on undistributed earningsflows of ~~WPD.~~ continuing operations.

Net cash provided by (used in) operating, investing and financing activities for the ~~nine~~three month periods ended ~~September 30,~~March 31, and the changes between periods, were as follows.

The components of the change in cash provided by (used in) operating activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019~~2020 were as follows.

PPL's cash provided by operating activities in ~~2020 increased $359~~2021 decreased $17 million compared with ~~2019.~~2020.

PPL Electric's cash provided by operating activities in 2021 decreased $11 million compared with 2020.

LKE's cash provided by operating activities in 2021 increased $56 million compared with 2020.

LG&E's cash provided by operating activities in 2021 increased $10 million compared with 2020.

~~LG&E's~~KU's cash provided by operating activities in ~~2020~~2021 increased $2$31 million compared with ~~2019.~~2020.

The components of the change in cash provided by (used in) investing activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019~~2020 were as follows.

For PPL, the ~~increase~~decrease in expenditures for PP&E was due to ~~higher~~lower project expenditures at ~~WPD and~~Safari Energy, PPL Electric, ~~partially offset by a decrease in project expenditures at~~ LKE, LG&E and KU. The ~~increase~~decrease in expenditures at ~~WPD~~Safari Energy was primarily due to ~~an increase in expenditures to enhance system reliability.~~timing differences on capital spending projects. The ~~increase~~decrease in expenditures at PPL Electric was primarily due to timing differences on capital spending projects related to the ongoing efforts to improve reliability and replace aging infrastructure. The decrease in expenditures at LKE was primarily due to decreased spending for environmental water projects at LG&E and KU's Trimble County plant, LG&E's Mill Creek plant and KU's Ghent plant, ~~partially offset by spending on gas transmission projects at LG&E~~ and decreased spending on various other projects at LG&E and KU that are not individually ~~significant.~~

The components of the change in cash provided by (used in) financing activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared with ~~2019~~2020 were as follows.

See Note 8 to the Financial Statements in this Form 10-Q for information on ~~2020~~2021 short-term and long-term debt activity, equity transactions and PPL dividends. See Note 8 to the Financial Statements in the Registrants' ~~2019~~2020 Form 10-K for information on ~~2019~~2020 activity.

The Registrants maintain credit facilities to enhance liquidity, provide credit support and provide a backstop to commercial paper programs. Amounts borrowed under these credit facilities are reflected in "Short-term debt" on the Balance ~~Sheets except for borrowings of $100 million under PPL Capital Funding's term loan agreement due in March 2022, which are reflected in "Long-term Debt" on the Balance~~ Sheets. At ~~September 30, 2020,~~March 31, 2021, the total committed borrowing capacity under credit facilities and the borrowings under these facilities were:

See Note 8 to the Financial Statements for further discussion of the Registrants' credit facilities.

See Note 12 to the Financial Statements for further discussion of intercompany credit facilities.

PPL, PPL Electric, LG&E and KU maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs, as necessary. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's credit facility. The following commercial paper programs were in place at ~~September 30, 2020:~~March 31, 2021:

See Note 8 to the Financial Statements for information regarding the Registrants’ long-term debt activities.

In February 2018, PPL entered into an equity distribution agreement, pursuant to which PPL may sell, from time to time, up to an aggregate of $1.0 billion of its common stock through an at-the-market offering ~~program;~~program, including a forward sales component. The compensation paid to the selling agents by PPL may be up to 2% of the gross offering proceeds of the shares. There were no issuances under the ATM program for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The ATM program expired in February 2021.

In ~~August 2020,~~February 2021, PPL declared a quarterly common stock dividend, payable ~~October~~April 1, ~~2020,~~2021, of 41.5 cents per share (equivalent to $1.66 per annum). Future dividends, declared at the discretion of the Board of Directors, will depend upon future earnings, cash flows, financial and legal requirements and other factors.

Moody's and S&P periodically review the credit ratings of the debt of the Registrants and their subsidiaries. Based on their respective independent reviews, the rating agencies may make certain ratings revisions or ratings affirmations.

A credit rating reflects an assessment by the rating agency of the creditworthiness associated with an issuer and particular securities that it issues. The credit ratings of the Registrants and their subsidiaries are based on information provided by the Registrants and other sources. The ratings of Moody's and S&P are not a recommendation to buy, sell or hold any securities of the Registrants or their subsidiaries. Such ratings may be subject to revisions or withdrawal by the agencies at any time and should be evaluated independently of each other and any other rating that may be assigned to the securities.

The credit ratings of the Registrants and their subsidiaries affect their liquidity, access to capital markets and cost of borrowing under their credit facilities. A downgrade in the Registrants' or their subsidiaries' credit ratings could result in higher borrowing costs and reduced access to capital markets. The Registrants and their subsidiaries have no credit rating triggers that would result in the reduction of access to capital markets or the acceleration of maturity dates of outstanding debt.

The rating agencies have taken the following actions related to the Registrants and their subsidiaries during ~~2020:~~2021:

In ~~April 2020, Moody’s~~March 2021, Moody's revised its outlook to positive for PPL and ~~S&P assigned ratings of Baa2 and BBB+ to~~ PPL Capital ~~Funding’s $1 billion 4.125% Senior Notes due 2030. The notes were issued April 1, 2020.~~Funding.

In March 2021, S&P revised its outlook to positive for PPL Electric.

In ~~August 2020, Moody's~~March 2021, Moody’s and S&P assigned ratings of A1 and A to the Louisville/Jefferson County Metro Government, ~~Kentucky's $23~~Kentucky’s $128 million ~~0.90%~~2.00% Pollution Control Revenue Bonds, ~~2001~~2003 Series A, due ~~2026,~~2033, previously issued on behalf of LG&E. The bonds were remarketed ~~September 3, 2020.~~April 1, 2021.

In ~~August 2020, Moody's~~March 2021, Moody’s assigned a rating of A1 and in April 2021, S&P assigned ~~ratings~~a rating of ~~A1 and A/A-2~~A to the Louisville/Jefferson County ~~of Trimble, Kentucky's $125~~Metro Government, Kentucky’s $35 million ~~1.30%~~1.35% Pollution Control Revenue ~~Refunding~~ Bonds, ~~2016~~2001 Series A,B, due ~~2044,~~2027, previously issued on behalf of LG&E. The bonds were remarketed ~~September~~May 3, ~~2020.~~

~~(PPL~~In March 2021, Moody’s assigned a rating of A1 and ~~PPL Electric)~~

Various derivative and non-derivative contracts, including contracts for the sale and purchase of electricity and fuel, commodity transportation and storage, interest rate and foreign currency instruments (for PPL), contain provisions that require the posting of additional collateral or permit the counterparty to terminate the contract, if PPL's, LKE's, LG&E's or KU's or their subsidiaries' credit rating, as applicable, were to fall below investment grade. See Note 15 to the Financial Statements for a discussion of "Credit Risk-Related Contingent Features," including a discussion of the potential additional collateral requirements for PPL, LKE and LG&E for derivative contracts in a net liability position at ~~September 30, 2020.~~March 31, 2021.

For additional information on the Registrants' liquidity and capital resources, see "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Registrants' ~~2019~~2020 Form 10-K.

See Notes 14 and 15 to the Financial Statements for information about the Registrants' risk management objectives, valuation techniques and accounting designations.

The forward-looking information presented below provides estimates of what may occur in the future, assuming certain adverse market conditions and model assumptions. Actual future results may differ materially from those presented. These are not precise indicators of expected future losses, but are rather only indicators of possible losses under normal market conditions at a given confidence level.

The Registrants and their subsidiaries issue debt to finance their operations, which exposes them to interest rate risk. The Registrants and their subsidiaries utilize various financial derivative instruments to adjust the mix of fixed and floating interest rates in their debt portfolios, adjust the duration of their debt portfolios and lock in benchmark interest rates in anticipation of future financing, when appropriate. Risk limits under the risk management program are designed to balance risk exposure to volatility in interest expense and changes in the fair value of the debt portfolios due to changes in the absolute level of 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.

The following interest rate hedges were outstanding at ~~September 30, 2020.~~March 31, 2021.

The Registrants are exposed to a potential increase in interest expense and to changes in the fair value of their debt portfolios. The estimated impact of a 10% adverse movement in interest rates on interest expense at ~~September 30, 2020~~March 31, 2021 was insignificant for PPL, PPL Electric, LKE, LG&E and KU. The estimated impact of a 10% adverse movement in interest rates on the fair value of debt at ~~September 30, 2020~~March 31, 2021 is shown below.

PPL is exposed to foreign currency risk, primarily through investments in and earnings of U.K. affiliates. ~~Under its~~PPL has adopted a foreign currency risk management program ~~PPL is permitted to enter into financial instruments~~designed to hedge certain foreign currency exposures, including ~~translation risk of expected earnings,~~ firm commitments, recognized assets or liabilities, anticipated transactions, including the ~~previously announced potential~~anticipated sale of its U.K. utility business and net investments. In addition, PPL enters into financial instruments to protect against foreign currency translation risk of expected GBP earnings.

The following foreign currency hedges were outstanding at ~~September 30, 2020.~~March 31, 2021.

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

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.

See Notes 14 and 15 to the Financial Statements in this Form 10-Q and "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Risk Management - Credit Risk" in the Registrants' ~~2019~~2020 Form 10-K for additional information.

The value of the British pound sterling fluctuates in relation to the U.S. dollar. Changes in this exchange rate resulted in a pre-tax foreign currency translation gain of ~~$292~~$383 million for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, which primarily reflected a ~~$477~~$662 million increase to PP&E, ~~an $85~~a $118 million increase to goodwill and a ~~$46~~$40 million increase to other net assets, partially offset by a ~~$229~~$363 million increase to long-term debt, a ~~$48~~$49 million increase to deferred income taxes and a $25 million increase to long term debt due within one ~~year, and a $39 million increase to deferred income taxes.~~year. Changes in this exchange rate resulted in a pre-tax foreign currency translation loss of ~~$369~~$63 million for the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, which primarily reflected a ~~$599~~$108 million decrease to PP&E and a ~~$114~~$20 million decrease to goodwill, partially offset by a $63 million decrease to long-term debt and a ~~$16~~$2 million decrease to other net ~~assets, partially offset by a $360 million decrease to long-term debt.~~ liabilities.

The impact of foreign currency translation is recorded in AOCI. The assets and liabilities of the U.K. utility business have been classified as held for sale. See Note 9 to the Financial Statements for additional information.

The Registrants are not aware of any material ownership interests or operating responsibility by senior management in outside partnerships, including leasing transactions with variable interest entities, or other entities doing business with the Registrants. See Note 12 to the Financial Statements for additional information on related party transactions for PPL Electric, LKE, LG&E and KU.

The Registrants from time to time evaluate opportunities for potential acquisitions, divestitures and development projects. Development projects are reexamined based on market conditions and other factors to determine whether to proceed with, modify or terminate the projects. Any resulting transactions may impact future financial results. See Note 9 to the Financial Statements for information on significant activities.

Extensive federal, state and local environmental laws and regulations are applicable to PPL's, PPL Electric's, LKE's, LG&E's and KU's air emissions, water discharges and the management of hazardous and solid waste, as well as other aspects of the Registrants' businesses. The costs of compliance or alleged non-compliance cannot be predicted with certainty but could be significant. In addition, costs may increase significantly if the requirements or scope of environmental laws or regulations, or similar rules, are expanded or changed. Costs may take the form of increased capital expenditures or operating and maintenance expenses, monetary fines, penalties or other restrictions. Many of these environmental law considerations are also applicable to the operations of key suppliers, or customers, such as coal producers and industrial power users, and may impact the costs for their products or their demand for the Registrants' services. Increased capital and operating costs are subject to rate recovery. PPL, PPL Electric, LKE, LG&E and KU can provide no assurances as to the ultimate outcome of future environmental or rate proceedings before regulatory authorities.

See "Environmental Matters" in Item 1. "Business" in the Registrants' ~~2019~~2020 Form 10-K for information about environmental laws and regulations affecting the Registrants' business. See "Legal Matters" in Note 11 to the Financial Statements for a discussion of the more significant environmental claims. See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Registrants' ~~2019~~2020 Form 10-K for information on projected environmental capital expenditures for ~~2020~~2021 through ~~2024.~~2025. See Note 16 to the Financial Statements for information related to the impacts of CCRs on AROs.

The information below represents an update to “Item 1. Business – Environmental Matters – Air – NAAQS” and "Item 1. Business -– Environmental Matters ~~- Water/Waste - Clean Water Act Jurisdiction"~~– Air – Climate Change" in the Registrants' ~~2019~~2020 Form 10-K.

In ~~October 2020,~~March 2021, the EPA released ~~proposed~~final revisions to the Cross-State Air Pollution Rule (CSAPR) providing for reductions in ozone season nitrogen oxide emissions for 2021 and subsequent years from sources in 12 states, including Kentucky. Additionally, the EPA reversed its previous approval of the Kentucky State Implementation Plan with respect to these requirements. The CSAPR revisions are aimed at ensuring compliance with the 2008 ozone NAAQS, so additional nitrogen oxide emission reductions could potentially be required for compliance with the revised 2015 ozone NAAQS. PPL, LKE, LG&E and KU are currently assessing the potential impact of the CSAPR revisions on operations, but such impact is not expected to be material. Pursuant to the President’s executive order, the EPA is currently reviewing its previous determinations made in December 2020 to retain the existing NAAQS for ozone and particulate matter without change.

PPL, LKE, LG&E, and KU are unable to ~~determine the impact of the rule on operations until the rule is finalized, and certain~~predict future emission reductions that may be required by future federal rules or state implementation ~~determinations are made by the EPA and Kentucky.~~actions. Compliance with the NAAQS, CSAPR and related requirements may require installation of additional pollution controls or other compliance actions, the costs of which PPL, LKE, LG&E and KU believe would be subject to rate recovery.

~~See Note 2 to the Financial Statements for a discussion of~~There has been no new accounting guidance ~~adopted.~~adopted in 2021 and there is no new significant accounting guidance pending adoption as of March 31, 2021.

Financial condition and results of operations are impacted by the methods, assumptions and estimates used in the application of critical accounting policies. The following table summarizes the accounting policies by Registrant that are particularly important to an understanding of the reported financial condition or results of operations and require management to make estimates or other judgments of matters that are inherently uncertain. See "Item 7. Combined Management's Discussion and

Analysis of Financial Condition and Results of Operations" in the Registrants' ~~2019~~2020 Form 10-K for a discussion of each critical accounting policy.

Following is an update to the critical accounting policies disclosed in PPL's 2020 Form 10-K.

Significant management judgment is required in developing the Registrants' provision for income taxes, primarily due to the uncertainty related to tax positions taken or expected to be taken on tax returns, valuation allowances on deferred tax assets, as well as whether the undistributed earnings of WPD are considered indefinitely reinvested.

Additionally, significant management judgment is required to determine the amount of benefit recognized related to an uncertain tax position. On a quarterly basis, uncertain tax positions are reassessed by considering information known as of the reporting date. Based on management's assessment of new information, a tax benefit may subsequently be recognized for a previously unrecognized tax position, a previously recognized tax position may be derecognized, or the benefit of a previously recognized tax position may be remeasured. The amounts ultimately paid upon resolution of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements in the future.

The need for valuation allowances to reduce deferred tax assets also requires significant management judgment. Valuation allowances are initially recorded and reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred tax asset. Management considers several factors in assessing the expected realization of a deferred tax asset, including the reversal of temporary differences, future taxable income and ongoing prudent and feasible tax planning strategies. Any tax planning strategy utilized in this assessment must meet the recognition and measurement criteria utilized to account for an uncertain tax position. When evaluating the need for valuation allowances, the uncertainty posed by political risk on such factors is also considered by management. The amount of deferred tax assets ultimately realized may differ materially from the estimates utilized in the computation of valuation allowances and may materially impact the financial statements in the future.

The TCJA included new provisions requiring that certain income, referred to as global intangible low-taxed income (GILTI), earned by certain foreign subsidiaries be included in the gross income of their U.S. shareholder. Accounting guidance allows a policy election regarding the timing of inclusion of GILTI in an entity’s financial statements. The election may be either to record deferred taxes for expected GILTI in future periods or record such taxes as a current-period expense when incurred. PPL has elected to record the tax effect of expected GILTI inclusions and thus, records deferred taxes relating to such inclusions.

In light of the anticipated sale of PPL's U.K. utility business and the associated classification of that business as assets held for sale, indefinite reinvestment is no longer relevant. As such, PPL expects to realize the outside book-tax basis difference in those assets in the foreseeable future. Accordingly, a deferred tax liability has been recorded reflecting the expected tax cost associated with the realization of that basis difference.

See Note 6 to the Financial Statements for income tax disclosures, including the impact of the TCJA.

Reference is made to "Risk Management" in "Item 2. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations."

Although the COVID-19 pandemic prompted the Registrants to make certain procedural adjustments to accommodate an increased remote workforce, PPL’s accounting and reporting systems and functions were well prepared to perform necessary accounting and reporting activities as of ~~September 30, 2020~~March 31, 2021 and to maintain the effectiveness of its disclosure controls and procedures and internal control over financial reporting.

(a) Evaluation of disclosure controls and procedures.

(b) Change in internal controls over financial reporting.

For information regarding legal, tax, regulatory, environmental or other administrative proceedings that became reportable events or were pending in the ~~third~~first quarter of ~~2020~~2021 see:

There have been no material changes in the Registrants' risk factors from those disclosed in "Item 1A. Risk Factors" of the Registrants' ~~2019~~2020 Form ~~10-K, except for the following:~~

Not applicable.

The following Exhibits indicated by an asterisk preceding the Exhibit number are filed herewith. The balance of the Exhibits has heretofore been filed with the Commission and pursuant to Rule 12(b)-23 are incorporated herein by reference. Exhibits indicated by a [_] are filed or listed pursuant to Item 601(b)(10)(iii) of Regulation S-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.


Commission File Number	Registrant; State of Incorporation; Address and Telephone Number	IRS Employer Identification No.

1-11459	PPL Corporation (Exact name of Registrant as specified in its charter) Pennsylvania Two North Ninth Street Allentown, PA 18101-1179 (610) 774-5151	23-2758192

1-905	PPL Electric Utilities Corporation (Exact name of Registrant as specified in its charter) Pennsylvania Two North Ninth Street Allentown, PA 18101-1179 (610) 774-5151	23-0959590

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

1-2893	Louisville Gas and Electric Company (Exact name of Registrant as specified in its charter) Kentucky 220 West Main Street Louisville, KY 40202-1377 (502) 627-2000	61-0264150

1-3464	Kentucky Utilities Company (Exact name of Registrant as specified in its charter) (Kentucky and Virginia) One Quality Street Lexington, KY 40507-1462 (502) 627-2000	61-0247570


Title of each class	Trading Symbol:	Name of each exchange on which registered
Common Stock of PPL Corporation	PPL	New York Stock Exchange

Junior Subordinated Notes of PPL Capital Funding, Inc.
2007 Series A due 2067	PPL/67	New York Stock Exchange
2013 Series B due 2073	PPX	New York Stock Exchange


				Page
GLOSSARY OF TERMS AND ABBREVIATIONS				i
FORWARD-LOOKING INFORMATION				1
PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		PPL Corporation and Subsidiaries
			Condensed Consolidated Statements of ~~Income~~Incom e (Loss)	3
			Condensed Consolidated Statements of Comprehensive ~~Income~~Incom e (Loss)	4
			Condensed Consolidated Statements of Cash Flows	5
			Condensed Consolidated Balance Sheets	6
			Condensed Consolidated Statements of Equity	8
		PPL Electric Utilities Corporation and Subsidiaries
			Condensed Consolidated Statements of Income	10
			Condensed Consolidated Statements of Cash Flows	11
			Condensed Consolidated Balance Sheets	12
			Condensed Consolidated Statements of Equity	14
		LG&E and KU Energy LLC and Subsidiaries
			Condensed Consolidated Statements of Income	1516
			~~Condensed Consolidated Statements of Comprehensive Income~~	16
			Condensed Consolidated Statements of Cash Flows	17
			Condensed Consolidated Balance Sheets	18
			Condensed Consolidated Statements of Equity	20
		Louisville Gas and Electric Company
			Condensed Statements of Income	22
			Condensed Statements of Cash Flows	23
			Condensed Balance Sheets	24
			Condensed Statements of Equity	26
		Kentucky Utilities Company
			Condensed Statements of Income	28
			Condensed Statements of Cash Flows	29
			Condensed Balance Sheets	30
			Condensed Statements of Equity	32


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
Operating Revenues	Operating Revenues	$	1,885	$	1,933	$	5,678	$	5,815	Operating Revenues		$	1,498	$	1,440

Operating Expenses	Operating Expenses									Operating Expenses
Operation	Operation									Operation
Fuel	Fuel	177		194		478		556		Fuel		177		163
Energy purchases	Energy purchases	136		150		470		538		Energy purchases		220		201
Other operation and maintenance	Other operation and maintenance	483		480		1,446		1,452		Other operation and maintenance		367		355
Depreciation	Depreciation	323		306		959		890		Depreciation		267		250
Taxes, other than income	Taxes, other than income	79		77		226		232		Taxes, other than income		52		47
Total Operating Expenses	Total Operating Expenses	1,198		1,207		3,579		3,668		Total Operating Expenses		1,083		1,016

Operating Income	Operating Income	687		726		2,099		2,147		Operating Income		415		424

Other Income (Expense) - net	Other Income (Expense) - net	52		126		253		309		Other Income (Expense) - net		0		(5)

Interest Expense	Interest Expense	249		259		750		746		Interest Expense		153		154

Income Before Income Taxes		490		593		1,602		1,710
Income from Continuing Operations Before Income Taxes										Income from Continuing Operations Before Income Taxes		262		265

Income Taxes	Income Taxes	209		118		423		328		Income Taxes		59		61

Income from Continuing Operations After Income Taxes										Income from Continuing Operations After Income Taxes		203		204

Income (Loss) from Discontinued Operations (net of income taxes) (Note 9)										Income (Loss) from Discontinued Operations (net of income taxes) (Note 9)		(2,043)		350

Net Income		$	281	$	475	$	1,179	$	1,382
Net Income (Loss)										Net Income (Loss)		$	(1,840)	$	554

Earnings Per Share of Common Stock:	Earnings Per Share of Common Stock:									Earnings Per Share of Common Stock:

Net Income Available to PPL Common Shareowners:
Basic		$	0.37	$	0.66	$	1.53	$	1.91
Diluted		$	0.37	$	0.65	$	1.53	$	1.89
Basic and Diluted										Basic and Diluted
Income (Loss) from Continuing Operations After Income Taxes										Income (Loss) from Continuing Operations After Income Taxes		$	0.26	$	0.27
Income (Loss) from Discontinued Operations (net of income taxes)										Income (Loss) from Discontinued Operations (net of income taxes)		(2.65)		0.45
Net Income (Loss) Available to PPL Common Shareowners										Net Income (Loss) Available to PPL Common Shareowners		$	(2.39)	$	0.72

Weighted-Average Shares of Common Stock Outstanding (in thousands)	Weighted-Average Shares of Common Stock Outstanding (in thousands)									Weighted-Average Shares of Common Stock Outstanding (in thousands)
Basic	Basic	768,786		722,259		768,502		721,693		Basic		769,159		767,948
Diluted	Diluted	769,660		731,151		769,270		730,677		Diluted		770,710		768,738


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net income	$	281	$	475	$	1,179	$	1,382

Other comprehensive income (loss):
Amounts arising during the period - gains (losses), net of tax (expense) benefit:
Foreign currency translation adjustments, net of tax of $0, $0, $1, $0	643		(285)		291		(368)

Qualifying derivatives, net of tax of $12, ($3), $4, ($7)	(52)		16		(16)		32
Defined benefit plans:

Net actuarial gain (loss), net of tax of $5, $2, $6, $4	(16)		(5)		(17)		(10)
Reclassifications from AOCI - (gains) losses, net of tax expense (benefit):

Qualifying derivatives, net of tax of ($12), $3, ($8), $3	48		(22)		25		(25)

Defined benefit plans:
Prior service costs, net of tax of ($1), ($1), ($1), ($1)	0		0		2		1
Net actuarial (gain) loss, net of tax of ($12), ($5), ($35), ($16)	52		20		146		62
Total other comprehensive income (loss)	675		(276)		431		(308)

Comprehensive income	$	956	$	199	$	1,610	$	1,074


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets					Assets

Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	746	$	815	Cash and cash equivalents	$	421	$	442
Accounts receivable (less reserve: 2020, $73; 2019, $58)
Accounts receivable (less reserve: 2021, $72; 2020, $71)						Accounts receivable (less reserve: 2021, $72; 2020, $71)
Customer	Customer	742		687		Customer	634		603
Other	Other	88		105		Other	77		86
Unbilled revenues (less reserve: 2020, $3; 2019, $0)		382		504
Unbilled revenues (less reserve: 2021, $3; 2020, $4)						Unbilled revenues (less reserve: 2021, $3; 2020, $4)	225		301
Fuel, materials and supplies	Fuel, materials and supplies	351		332		Fuel, materials and supplies	260		302
Prepayments	Prepayments	134		79		Prepayments	132		53
Price risk management assets		136		147
Regulatory assets						Regulatory assets	121		99
Other current assets	Other current assets	116		98		Other current assets	32		31
Current assets held for sale (Note 9)						Current assets held for sale (Note 9)	18,425		18,983
Total Current Assets	Total Current Assets	2,695		2,767		Total Current Assets	20,327		20,900

Property, Plant and Equipment	Property, Plant and Equipment					Property, Plant and Equipment
Regulated utility plant	Regulated utility plant	45,058		42,709		Regulated utility plant	29,354		29,040
Less: accumulated depreciation - regulated utility plant	Less: accumulated depreciation - regulated utility plant	8,726		8,055		Less: accumulated depreciation - regulated utility plant	6,156		6,008
Regulated utility plant, net	Regulated utility plant, net	36,332		34,654		Regulated utility plant, net	23,198		23,032
Non-regulated property, plant and equipment	Non-regulated property, plant and equipment	490		357		Non-regulated property, plant and equipment	245		237
Less: accumulated depreciation - non-regulated property, plant and equipment	Less: accumulated depreciation - non-regulated property, plant and equipment	98		109		Less: accumulated depreciation - non-regulated property, plant and equipment	38		37
Non-regulated property, plant and equipment, net	Non-regulated property, plant and equipment, net	392		248		Non-regulated property, plant and equipment, net	207		200
Construction work in progress	Construction work in progress	1,596		1,580		Construction work in progress	1,292		1,268
Property, Plant and Equipment, net	Property, Plant and Equipment, net	38,320		36,482		Property, Plant and Equipment, net	24,697		24,500

Other Noncurrent Assets	Other Noncurrent Assets					Other Noncurrent Assets
Regulatory assets	Regulatory assets	1,450		1,492		Regulatory assets	1,233		1,262
Goodwill	Goodwill	3,283		3,198		Goodwill	716		716
Other intangibles	Other intangibles	763		742		Other intangibles	348		351
Pension benefit asset	Pension benefit asset	972		464		Pension benefit asset	67		24
Price risk management assets		53		149
Other noncurrent assets	Other noncurrent assets	388		386		Other noncurrent assets	393		363
Total Other Noncurrent Assets	Total Other Noncurrent Assets	6,909		6,431		Total Other Noncurrent Assets	2,757		2,716

Total Assets	Total Assets	$	47,924	$	45,680	Total Assets	$	47,781	$	48,116


		Common stock shares outstanding (a)	Common stock		Additional paid-in capital		Earnings reinvested		Accumulated other comprehensive loss		Total			Common stock shares outstanding (a)	Common stock		Additional paid-in capital		Earnings reinvested		Accumulated other comprehensive loss		Total
June 30, 2020		768,783	$	8	$	12,255	$	5,383	$	(4,602)	$	13,044

December 31, 2020													December 31, 2020	768,907	$	8	$	12,270	$	5,315	$	(4,220)	$	13,373
Common stock issued	Common stock issued	14			1						1		Common stock issued	520			16						16
Stock-based compensation	Stock-based compensation				4						4		Stock-based compensation				(13)						(13)
Net income							281				281
Net income (loss)													Net income (loss)						(1,840)				(1,840)
Dividends and dividend equivalents (b)	Dividends and dividend equivalents (b)						(319)				(319)		Dividends and dividend equivalents (b)						(320)				(320)
Other comprehensive income (loss)	Other comprehensive income (loss)								675		675		Other comprehensive income (loss)								338		338

September 30, 2020		768,797	$	8	$	12,260	$	5,345	$	(3,927)	$	13,686
March 31, 2021													March 31, 2021	769,427	$	8	$	12,273	$	3,155	$	(3,882)	$	11,554

December 31, 2019	December 31, 2019	767,233	$	8	$	12,214	$	5,127	$	(4,358)	$	12,991	December 31, 2019	767,233	$	8	$	12,214	$	5,127	$	(4,358)	$	12,991
Common stock issued	Common stock issued	1,564			48						48		Common stock issued	1,033			34						34
Stock-based compensation	Stock-based compensation				(2)						(2)		Stock-based compensation				(9)						(9)
Net income							1,179				1,179
Dividends and dividend equivalents (b)							(959)				(959)
Other comprehensive income (loss)									431		431
Adoption of financial instrument credit losses guidance cumulative effect adjustment (Note 2), net of tax of $0							(2)				(2)
September 30, 2020		768,797	$	8	$	12,260	$	5,345	$	(3,927)	$	13,686

June 30, 2019		721,840	$	7	$	11,069	$	4,903	$	(3,996)	$	11,983
Common stock issued		467			14						14
Stock-based compensation					4						4
Net income							475				475
Net income (loss)													Net income (loss)						554				554
Dividends and dividend equivalents (b)	Dividends and dividend equivalents (b)						(298)				(298)		Dividends and dividend equivalents (b)						(319)				(319)

Other comprehensive income (loss)	Other comprehensive income (loss)								(276)		(276)		Other comprehensive income (loss)								(8)		(8)
Adoption of financial instrument credit losses guidance cumulative effect adjustment													Adoption of financial instrument credit losses guidance cumulative effect adjustment						(2)				(2)
March 31, 2020													March 31, 2020	768,266	$	8	$	12,239	$	5,360	$	(4,366)	$	13,241

September 30, 2019		722,307	$	7	$	11,087	$	5,080	$	(4,272)	$	11,902

December 31, 2018		720,323	$	7	$	11,021	$	4,593	$	(3,964)	$	11,657
Common stock issued		1,984			61						61
Stock-based compensation					5						5
Net income							1,382				1,382
Dividends and dividend equivalents (b)							(895)				(895)

Other comprehensive income (loss)									(308)		(308)

September 30, 2019		722,307	$	7	$	11,087	$	5,080	$	(4,272)	$	11,902


	Common stock shares outstanding (a)	Common stock		Additional paid-in capital		Earnings reinvested		Total
June 30, 2020	66,368	$	364	$	3,553	$	900	$	4,817
Net income						134		134
Capital contributions from parent				485				485
Return of capital to parent				(485)				(485)
Dividends declared on common stock						(77)		(77)
September 30, 2020	66,368	$	364	$	3,553	$	957	$	4,874

December 31, 2019	66,368	$	364	$	3,558	$	910	$	4,832
Net income						370		370
Capital contributions from parent				740				740
Return of capital to parent				(745)				(745)
Dividends declared on common stock						(323)		(323)
September 30, 2020	66,368	$	364	$	3,553	$	957	$	4,874

June 30, 2019	66,368	$	364	$	3,158	$	939	$	4,461
Net income						118		118
Capital contributions from parent				400				400
Dividends declared on common stock						(61)		(61)
September 30, 2019	66,368	$	364	$	3,558	$	996	$	4,918

December 31, 2018	66,368	$	364	$	3,158	$	939	$	4,461
Net income						333		333
Capital contributions from parent				400				400
Dividends declared on common stock						(276)		(276)
September 30, 2019	66,368	$	364	$	3,558	$	996	$	4,918


	Member's Equity








~~June 30,~~December 31, 2020	$	~~5,022~~5,116
Net income	~~137~~146

Distributions to member	~~(54)~~(62)

Other comprehensive income ~~(loss)~~	~~(3)~~3
~~September 30, 2020~~March 31, 2021	$	~~5,102~~5,203








December 31, 2019	$	4,942
Net income	~~355~~135

Distributions to member	~~(194)~~

~~Other comprehensive income (loss)~~	~~(1)~~
~~September 30, 2020~~	$	~~5,102~~

~~June 30, 2019~~	$	~~4,877~~
~~Net income~~	~~158~~

~~Distributions to member~~	~~(69)~~

~~September 30, 2019~~	$	~~4,966~~

~~December 31, 2018~~	$	~~4,723~~
~~Net income~~	~~388~~
~~Contributions from member~~	63
~~Distributions to member~~	~~(206)~~(52)
Other comprehensive income	~~(2)~~1
~~September 30, 2019~~March 31, 2020	$	~~4,966~~5,026


		PPL		PPL Electric				PPL
		September 30, 2020		December 31, 2019		September 30, 2020			December 31, 2019			March 31, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	746	$	815	$	26		$	262	Cash and cash equivalents	$	421	$	442
Restricted cash - current (a)	Restricted cash - current (a)	3		3		2			2		Restricted cash - current (a)	1		1
Restricted cash - noncurrent (a)		20		18		0			0
Total Cash, Cash Equivalents and Restricted Cash	Total Cash, Cash Equivalents and Restricted Cash	$	769	$	836	$	28		$	264	Total Cash, Cash Equivalents and Restricted Cash	$	422	$	443



	Balance at Beginning of Period (a)		Charged to Income		Deductions (b)		Balance at End of Period
PPL
Accounts Receivable - Customer and Unbilled Revenue	$	30	$	22	$	9	$	43
Other (c)	27		2		0		29


		Three Months				Nine Months					Three Months
		2020		2019		2020		2019				2021		2020

Operating Revenues from external customers	Operating Revenues from external customers									Operating Revenues from external customers
U.K. Regulated		$	485	$	491	$	1,575	$	1,615
Kentucky Regulated	Kentucky Regulated	806		844		2,331		2,421		Kentucky Regulated		$	885	$	825
Pennsylvania Regulated	Pennsylvania Regulated	586		590		1,748		1,756		Pennsylvania Regulated		605		608
Corporate and Other	Corporate and Other	8		8		24		23		Corporate and Other		8		7
Total	Total	$	1,885	$	1,933	$	5,678	$	5,815	Total		$	1,498	$	1,440

Net Income	Net Income									Net Income
U.K. Regulated (a)		$	55	$	236	$	574	$	784
Kentucky Regulated		129		150		330		364
Pennsylvania Regulated		135		118		371		333
Corporate and Other		(38)		(29)		(96)		(99)

Kentucky Regulated (a)										Kentucky Regulated (a)		$	146	$	127
Pennsylvania Regulated (a)										Pennsylvania Regulated (a)		113		118
Corporate and Other (a)										Corporate and Other (a)		(56)		(41)
Discontinued Operations (b)										Discontinued Operations (b)		(2,043)		350
Total	Total	$	281	$	475	$	1,179	$	1,382	Total		$	(1,840)	$	554


	2020 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	1,885	$	586	$	806	$	363	$	452
Revenues derived from:
Alternative revenue programs (b)	(1)		(5)		4		2		2
Other (c)	(5)		0		(4)		(2)		(2)
Revenues from Contracts with Customers	$	1,879	$	581	$	806	$	363	$	452

	2019 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	1,933	$	590	$	844	$	382	$	466
Revenues derived from:
Alternative revenue programs (b)	8		2		6		4		2
Other (c)	(11)		(3)		(6)		(3)		(3)
Revenues from Contracts with Customers	$	1,930	$	589	$	844	$	383	$	465


		2020 Nine Months											2021 Three Months
		PPL		PPL Electric		LKE		LG&E		KU			PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	Operating Revenues (a)	$	5,678	$	1,748	$	2,331	$	1,092	$	1,272	Operating Revenues (a)	$	1,498	$	605	$	885	$	428	$	469
Revenues derived from:	Revenues derived from:											Revenues derived from:
Alternative revenue programs (b)	Alternative revenue programs (b)	(12)		(6)		(6)		(2)		(4)		Alternative revenue programs (b)	24		22		2		0		2
Other (c)	Other (c)	(22)		(3)		(14)		(6)		(8)		Other (c)	(6)		0		(6)		(3)		(3)
Revenues from Contracts with Customers	Revenues from Contracts with Customers	$	5,644	$	1,739	$	2,311	$	1,084	$	1,260	Revenues from Contracts with Customers	$	1,516	$	627	$	881	$	425	$	468

		2019 Nine Months											2020 Three Months
		PPL		PPL Electric		LKE		LG&E		KU			PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	Operating Revenues (a)	$	5,815	$	1,756	$	2,421	$	1,126	$	1,322	Operating Revenues (a)	$	1,440	$	608	$	825	$	407	$	432
Revenues derived from:	Revenues derived from:											Revenues derived from:
Alternative revenue programs (b)	Alternative revenue programs (b)	(18)		(4)		(14)		(1)		(13)		Alternative revenue programs (b)	(3)		0		(3)		(3)		0
Other (c)	Other (c)	(30)		(8)		(16)		(7)		(9)		Other (c)	(8)		(2)		(6)		(3)		(3)
Revenues from Contracts with Customers	Revenues from Contracts with Customers	$	5,767	$	1,744	$	2,391	$	1,118	$	1,300	Revenues from Contracts with Customers	$	1,429	$	606	$	816	$	401	$	429


		2020 Three Months
		PPL (d)		PPL Electric (d)		LKE		LG&E		KU
Licensed energy suppliers (a)		$	440	$	0	$	0	$	0	$	0

													2021 Three Months
													PPL		PPL Electric		LKE		LG&E		KU

Residential	Residential	651		303		348		173		175		Residential	$	774	$	361	$	413	$	205	$	208
Commercial	Commercial	310		79		231		112		119		Commercial	313		82		231		121		110
Industrial	Industrial	156		13		143		47		96		Industrial	152		12		140		46		94
Other (b)		130		12		66		28		38
Other (a)												Other (a)	91		12		71		34		37
Wholesale - municipality	Wholesale - municipality	7		0		7		0		7		Wholesale - municipality	6		0		6		0		6
Wholesale - other (c)		11		0		11		3		17
Wholesale - other (b)												Wholesale - other (b)	20		0		20		19		13
Transmission	Transmission	174		174		0		0		0		Transmission	160		160		0		0		0
Revenues from Contracts with Customers	Revenues from Contracts with Customers	$	1,879	$	581	$	806	$	363	$	452	Revenues from Contracts with Customers	$	1,516	$	627	$	881	$	425	$	468

		2019 Three Months											2020 Three Months
		PPL		PPL Electric		LKE		LG&E		KU			PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)		$	454	$	0	$	0	$	0	$	0

Residential	Residential	708		352		356		177		179		Residential	$	714	$	344	$	370	$	187	$	183
Commercial	Commercial	346		97		249		123		126		Commercial	312		81		231		124		107
Industrial	Industrial	164		16		148		47		101		Industrial	144		8		136		45		91
Other (b)		128		12		73		31		42
Other (a)												Other (a)	87		14		66		28		38
Wholesale - municipality	Wholesale - municipality	6		0		6		0		6		Wholesale - municipality	5		0		5		0		5
Wholesale - other (c)		12		0		12		5		11
Wholesale - other (b)												Wholesale - other (b)	8		0		8		17		5
Transmission	Transmission	112		112		0		0		0		Transmission	159		159		0		0		0
Revenues from Contracts with Customers	Revenues from Contracts with Customers	$	1,930	$	589	$	844	$	383	$	465	Revenues from Contracts with Customers	$	1,429	$	606	$	816	$	401	$	429


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	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2019	$	44	$	21	$	9	$	5	$	4
Contract liabilities at September 30, 2020	40		18		9		5		4
Revenue recognized during the nine months ended September 30, 2020 that was included in the contract liability balance at December 31, 2019	28		9		9		5		4

Contract liabilities at December 31, 2018	$	42	$	23	$	9	$	5	$	4
Contract liabilities at September 30, 2019	42		19		9		5		4
Revenue recognized during the nine months ended September 30, 2019 that was included in the contract liability balance at December 31, 2018	31		11		9		5		4


	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2020	$	40	$	23	$	11	$	5	$	6
Contract liabilities at March 31, 2021	33		16		10		5		5
Revenue recognized during the three months ended March 31, 2021 that was included in the contract liability balance at December 31, 2020	21		9		11		5		6

Contract liabilities at December 31, 2019	$	37	$	21	$	9	$	5	$	4
Contract liabilities at March 31, 2020	34		15		14		10		4
Revenue recognized during the three months ended March 31, 2020 that was included in the contract liability balance at December 31, 2019	19		8		9		5		4


(PPL)	(PPL)									(PPL)
		Three Months				Nine Months					Three Months
		2020		2019		2020		2019				2021		2020
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%		$	103	$	125	$	336	$	359
Federal income tax on Income from Continuing Operations Before Income Taxes at statutory tax rate - 21%										Federal income tax on Income from Continuing Operations Before Income Taxes at statutory tax rate - 21%		$	55	$	56
Increase (decrease) due to:	Increase (decrease) due to:									Increase (decrease) due to:
State income taxes, net of federal income tax benefit	State income taxes, net of federal income tax benefit	15		13		39		34		State income taxes, net of federal income tax benefit		12		13
Valuation allowance adjustments	Valuation allowance adjustments	7		7		20		21		Valuation allowance adjustments		8		6
Impact of lower U.K. income tax rates		2		(6)		(18)		(20)

Impact of the U.K. Finance Acts on deferred tax balances (a)		104		(5)		101		(8)

Depreciation and other items not normalized	Depreciation and other items not normalized	0		(2)		(4)		(5)		Depreciation and other items not normalized		(2)		(2)
Amortization of excess deferred federal and state income taxes	Amortization of excess deferred federal and state income taxes	(11)		(9)		(34)		(30)		Amortization of excess deferred federal and state income taxes		(12)		(11)
Federal and state income tax return adjustments		(9)		0		(9)		1
Interest benefit on U.K. financing entities		(3)		(3)		(8)		(9)
Officers compensation disallowance		1		0		5		2
Kentucky recycling credit, net of federal income tax expense (b)		0		0		0		(20)

Other	Other	0		(2)		(5)		3		Other		(2)		(1)
Total increase (decrease)	Total increase (decrease)	106		(7)		87		(31)		Total increase (decrease)		4		5
Total income tax expense (benefit)	Total income tax expense (benefit)	$	209	$	118	$	423	$	328	Total income tax expense (benefit)		$	59	$	61


(PPL Electric)
	Three Months
		2021		2020
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%		$	32	$	33
Increase (decrease) due to:
State income taxes, net of federal income tax benefit		12		13

Depreciation and other items not normalized		(2)		(2)
Amortization of excess deferred federal and state income taxes		(3)		(3)


Other		(2)		0
Total increase (decrease)		5		8
Total income tax expense (benefit)		$	37	$	41


(PPL Electric)
(LKE)										(LKE)
		Three Months				Nine Months					Three Months
		2020		2019		2020		2019				2021		2020
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	37	$	33	$	104	$	94	Federal income tax on Income Before Income Taxes at statutory tax rate - 21%		$	37	$	35
Increase (decrease) due to:	Increase (decrease) due to:									Increase (decrease) due to:
State income taxes, net of federal income tax benefit	State income taxes, net of federal income tax benefit	14		13		39		36		State income taxes, net of federal income tax benefit		7		7
Federal and state income tax return adjustments		(4)		0		(4)		1
Depreciation and other items not normalized		0		(2)		(4)		(5)

Valuation allowance adjustments										Valuation allowance adjustments		(4)		0
Amortization of excess deferred federal and state income taxes	Amortization of excess deferred federal and state income taxes	(4)		(4)		(12)		(12)		Amortization of excess deferred federal and state income taxes		(7)		(7)

Other	Other	1		0		2		0		Other		(3)		(1)
Total increase (decrease)	Total increase (decrease)	7		7		21		20		Total increase (decrease)		(7)		(1)
Total income tax expense (benefit)	Total income tax expense (benefit)	$	44	$	40	$	125	$	114	Total income tax expense (benefit)		$	30	$	34


(LG&E)
	Three Months
		2021		2020
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%		$	20	$	19
Increase (decrease) due to:
State income taxes, net of federal income tax benefit		4		4

Amortization of excess deferred federal and state income taxes		(3)		(3)


Other		(2)		(1)
Total increase (decrease)		(1)		0
Total income tax expense (benefit)		$	19	$	19


(LKE)
(KU)										(KU)
		Three Months				Nine Months					Three Months
		2020		2019		2020		2019				2021		2020
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	35	$	42	$	92	$	98	Federal income tax on Income Before Income Taxes at statutory tax rate - 21%		$	22	$	21
Increase (decrease) due to:	Increase (decrease) due to:									Increase (decrease) due to:
State income taxes, net of federal income tax benefit	State income taxes, net of federal income tax benefit	7		8		17		18		State income taxes, net of federal income tax benefit		4		4
Amortization of investment tax credit		(1)		(1)		(2)		(2)

Amortization of excess deferred federal and state income taxes										Amortization of excess deferred federal and state income taxes		(4)		(4)

Valuation allowance adjustments (a)		0		0		0		3
Amortization of excess deferred federal and state income taxes		(7)		(5)		(20)		(17)
Federal and state income tax return adjustments		(5)		1		(5)		1
Kentucky recycling credit, net of federal income tax expense (a)		0		0		0		(20)
Other	Other	2		(2)		0		(3)		Other		(1)		(1)
Total increase (decrease)	Total increase (decrease)	(4)		1		(10)		(20)		Total increase (decrease)		(1)		(1)
Total income tax expense (benefit)	Total income tax expense (benefit)	$	31	$	43	$	82	$	78	Total income tax expense (benefit)		$	21	$	20


	September 30, 2020									December 31, 2019
	Expiration Date	Capacity		Borrowed		Letters of Credit and Commercial Paper Issued		Unused Capacity		Borrowed		Letters of Credit and Commercial Paper Issued
PPL
U.K.
WPD plc
Syndicated Credit Facility (a)	Jan. 2023	£	210	£	150	£	0	£	58	£	155	£	0
WPD (South West)
Syndicated Credit Facility (b)	May 2023	220		118		0		102		40		0
WPD (South Wales)
Syndicated Credit Facility	May 2023	125		0		0		125		0		0
WPD (East Midlands)
Syndicated Credit Facility	May 2023	250		0		0		250		0		0
WPD (West Midlands)
Syndicated Credit Facility (c)	May 2023	250		64		0		186		48		0
Uncommitted Credit Facilities		100		0		4		96		0		4
Total U.K. Credit Facilities (d)		£	1,155	£	332	£	4	£	817	£	243	£	4
U.S.
PPL Capital Funding
Syndicated Credit Facility	Jan. 2024	$	1,450	$	0	$	0	$	1,450	$	0	$	450

Term Loan Credit Facility	Mar. 2021	200		200		0		0		0		0
Bilateral Credit Facility	Mar. 2021	50		0		0		50		0		0
Bilateral Credit Facility	Mar. 2021	50		0		15		35		0		15
Term Loan Credit Facility	Mar. 2021	100		100		0		0		0		0
Term Loan Credit Facility	Mar. 2022	100		100		0		0		0		0
Total PPL Capital Funding Credit Facilities		$	1,950	$	400	$	15	$	1,535	$	0	$	465


	Three Months
	2021
Sales proceeds (a)	$	10,806
Costs to sell (b)	48
Carrying value (c)	12,405
Loss on Sale (d)	(1,647)


	Held for Sale at March 31, 2021		Held for Sale at December 31, 2020
Cash and cash equivalents	$	152	$	266
Accounts receivable and unbilled revenues	459		389
Price risk management assets	62		146
Property, plant and equipment, net (a)	15,236		14,392
Goodwill (b)	1,029		2,558
Other intangibles	434		413
Pension benefit asset	911		682
Other assets	142		137
Total Assets	$	18,425	$	18,983

Short-term debt and long-term debt due within one year	$	812	$	994
Accounts payable	199		220
Customer deposits	240		217
Accrued interest	178		190

Long-term debt	8,297		7,938
Total deferred income taxes	1,123		1,032
Price risk management liabilities	180		137
Other deferred credits and liabilities	347		295
Total Liabilities	$	11,376	$	11,023

Net assets (c)	$	7,049	$	7,960


			Pension Benefits
	Three Months
		U.S.	U.K. (a)
			2021		2020		2021		2020
PPL
Service cost			$	13	$	13	$	25	$	23
Interest cost			32		38		29		36
Expected return on plan assets			(61)		(60)		(177)		(158)
Amortization of:
Prior service cost			2		2		0		0
Actuarial loss			25		20		54		54



Net periodic defined benefit costs (credits)			$	11	$	13	$	(69)	$	(45)


		Other Postretirement Benefits										Other Postretirement Benefits
		Three Months				Nine Months					Three Months
		2020		2019		2020		2019				2021		2020
PPL	PPL									PPL
Service cost	Service cost	$	2	$	2	$	5	$	4	Service cost		$	2	$	2
Interest cost	Interest cost	4		5		14		16		Interest cost		4		5
Expected return on plan assets	Expected return on plan assets	(5)		(5)		(16)		(14)		Expected return on plan assets		(5)		(5)
Amortization of:
Prior service cost		0		0		1		0
Actuarial loss		0		1		0		1

Net periodic defined benefit costs	Net periodic defined benefit costs	$	1	$	3	$	4	$	7	Net periodic defined benefit costs		$	1	$	2

LKE	LKE									LKE
Service cost	Service cost	$	1	$	1	$	3	$	3	Service cost		$	1	$	1
Interest cost	Interest cost	2		2		6		6		Interest cost		2		2
Expected return on plan assets	Expected return on plan assets	(2)		(2)		(7)		(6)		Expected return on plan assets		(2)		(2)
Amortization of:
Prior service cost		1		0		1		1
Actuarial gain		(1)		0		(1)		(1)

Net periodic defined benefit costs	Net periodic defined benefit costs	$	1	$	1	$	2	$	3	Net periodic defined benefit costs		$	1	$	1


	September 30, 2020				December 31, 2019
	Carrying Amount (a)		Fair Value		Carrying Amount (a)		Fair Value
PPL	$	22,768	$	28,085	$	21,893	$	25,481
PPL Electric	3,587		5,030		3,985		4,589
LKE	6,073		7,588		6,002		6,766
LG&E	2,006		2,490		2,005		2,278
KU	2,617		3,310		2,623		3,003


	September 30, 2020								December 31, 2019
	Derivatives designated as hedging instruments				Derivatives not designated as hedging instruments				Derivatives designated as hedging instruments				Derivatives not designated as hedging instruments
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
Current:
Price Risk Management
Assets/Liabilities (a):
Interest rate swaps (b)	$	0	$	8	$	0	$	2	$	0	$	0	$	0	$	4
Cross-currency swaps (b)	94		0		0		0		5		0		0		0
Foreign currency contracts	0		0		42		1		0		0		142		5
Total current	94		8		42		3		5		0		142		9
Noncurrent:
Price Risk Management
Assets/Liabilities (a):
Interest rate swaps (b)	0		0		0		24		0		0		0		17
Cross-currency swaps (b)	53		0		0		0		149		0		0		0
Foreign currency contracts	0		0		0		0		0		0		0		0
Total noncurrent	53		0		0		24		149		0		0		17
Total derivatives	$	147	$	8	$	42	$	27	$	154	$	0	$	142	$	26


Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Three Months		Nine Months
Foreign currency contracts	Other income (expense) - net	$	(19)	$	44
Interest rate swaps	Interest expense	(1)		(4)
	Total	$	(20)	$	40
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	$	2	$	(5)


		Location and Amount of Gain (Loss) Recognized in Income on Hedging Relationships										Location and Amount of Gain (Loss) Recognized in Income on Hedging Relationships
		Three Months				Nine Months					Three Months
		Interest Expense		Other Income (Expense) - net		Interest Expense		Other Income (Expense) - net				Interest Expense		Income (Loss) from Discontinued Operations (net of income taxes)
											Interest Expense
Total income and expense line items presented in the income statement in which the effect of cash flow hedges are recorded	Total income and expense line items presented in the income statement in which the effect of cash flow hedges are recorded	$	249	$	52	$	750	$	253	Total income and expense line items presented in the income statement in which the effect of cash flow hedges are recorded		$	153	$	(2,043)
The effects of cash flow hedges:	The effects of cash flow hedges:									The effects of cash flow hedges:
Gain (Loss) on cash flow hedging relationships:	Gain (Loss) on cash flow hedging relationships:									Gain (Loss) on cash flow hedging relationships:
Interest rate swaps:	Interest rate swaps:									Interest rate swaps:
Amount of gain (loss) reclassified from AOCI to income	Amount of gain (loss) reclassified from AOCI to income	(4)		0		(9)		0		Amount of gain (loss) reclassified from AOCI to income		(1)		(1)
Cross-currency swaps:	Cross-currency swaps:									Cross-currency swaps:
Hedged items	Hedged items	0		56		0		24		Hedged items		0		37
Amount of gain (loss) reclassified from AOCI to income		0		(56)		0		(24)
Amount of gain (loss) reclassified from AOCI to Income										Amount of gain (loss) reclassified from AOCI to Income		0		(37)


	PPL		LKE		LG&E
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features	$	6	$	1	$	1
Aggregate fair value of collateral posted on these derivative instruments	0		0		0
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade (a)	6		1		1


	PPL		LKE		LG&E		KU
Balance at December 31, 2019	$	282	$	215	$	73	$	142
Accretion	13		12		4		8


Changes in estimated timing or cost	35		44		16		28
Effect of foreign currency exchange rates	1		0		0		0
Obligations settled	(64)		(64)		(16)		(48)
Balance at September 30, 2020	$	267	$	207	$	77	$	130


	PPL		LKE		LG&E		KU
Balance at December 31, 2020	$	182	$	182	$	67	$	115
Accretion	4		4		1		3




Obligations settled	(15)		(15)		(6)		(9)
Balance at March 31, 2021	$	171	$	171	$	62	$	109


		Foreign currency translation adjustments		Unrealized gains (losses) on qualifying derivatives			Defined benefit plans									Foreign currency translation adjustments (a)		Unrealized gains (losses) on qualifying derivatives			Defined benefit plans (b)
						Prior service costs			Actuarial gain (loss)			Total								Prior service costs			Actuarial gain (loss)			Total
PPL	PPL																PPL
June 30, 2020		$	(1,777)	$	8		$	(16)		$	(2,817)		$	(4,602)

December 31, 2020															December 31, 2020	$	(1,158)	$	0		$	(16)		$	(3,046)		$	(4,220)
Amounts arising during the period	Amounts arising during the period	643		(52)			0			(16)			575		Amounts arising during the period	303		(30)			0			0			273
Reclassifications from AOCI	Reclassifications from AOCI	0		48			0			52			100		Reclassifications from AOCI	0		25			0			40			65
Net OCI during the period	Net OCI during the period	643		(4)			0			36			675		Net OCI during the period	303		(5)			0			40			338
September 30, 2020		$	(1,134)	$	4		$	(16)		$	(2,781)		$	(3,927)
March 31, 2021															March 31, 2021	$	(855)	$	(5)		$	(16)		$	(3,006)		$	(3,882)

December 31, 2019	December 31, 2019	$	(1,425)	$	(5)		$	(18)		$	(2,910)		$	(4,358)	December 31, 2019	$	(1,425)	$	(5)		$	(18)		$	(2,910)		$	(4,358)
Amounts arising during the period	Amounts arising during the period	291		(16)			0			(17)			258		Amounts arising during the period	(61)		8			0			0			(53)
Reclassifications from AOCI	Reclassifications from AOCI	0		25			2			146			173		Reclassifications from AOCI	0		(3)			1			47			45
Net OCI during the period	Net OCI during the period	291		9			2			129			431		Net OCI during the period	(61)		5			1			47			(8)
September 30, 2020		$	(1,134)	$	4		$	(16)		$	(2,781)		$	(3,927)
March 31, 2020															March 31, 2020	$	(1,486)	$	0		$	(17)		$	(2,863)		$	(4,366)

June 30, 2019		$	(1,616)	$	6		$	(18)		$	(2,368)		$	(3,996)
Amounts arising during the period		(285)		16			0			(5)			(274)
Reclassifications from AOCI		0		(22)			0			20			(2)
Net OCI during the period		(285)		(6)			0			15			(276)
September 30, 2019		$	(1,901)	$	0		$	(18)		$	(2,353)		$	(4,272)

December 31, 2018		$	(1,533)	$	(7)		$	(19)		$	(2,405)		$	(3,964)
Amounts arising during the period		(368)		32			0			(10)			(346)
Reclassifications from AOCI		0		(25)			1			62			38
Net OCI during the period		(368)		7			1			52			(308)
September 30, 2019		$	(1,901)	$	0		$	(18)		$	(2,353)		$	(4,272)