Income Taxes (Tables)

6 Months Ended

Jun. 30, 2016

Reconciliations of income taxes for the periods ended June 30 are as follows.



(PPL)
	Three Months						Six Months
	2016			2015			2016			2015
Federal income tax on Income from Continuing Operations Before Income Taxes at statutory tax rate - 35%	$	236		$	112		$	467		$	382
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	9			9			22			29
Valuation allowance adjustments	3			5			9			8
Impact of lower U.K. income tax rates	(45		)	(36		)	(99		)	(98		)
Federal and state tax reserve adjustments (a)	—			(12		)	—			(12		)
Interest benefit on U.K. financing entities	(4		)	(3		)	(9		)	(11		)
Stock-based compensation (b)	(3		)	—			(11		)	—
Other	(4		)	(4		)	(8		)	(10		)
Total increase (decrease)	(44		)	(41		)	(96		)	(94		)
Total income taxes	$	192		$	71		$	371		$	288


(a)	During the three and six months ended June 30, 2015, PPL recorded a tax benefit to adjust the settled refund amount approved by Joint Committee of Taxation for the open audit years 1998 - 2011.


(b)	During the three and six months ended June 30, 2016, PPL recorded lower income tax expense related to the application of new stock-based compensation accounting guidance. See Note 2 for additional information.

Reconciliations of income taxes for the periods ended June 30 are as follows.



(PPL Electric)
	Three Months						Six Months
	2016			2015			2016			2015
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	44		$	30		$	97		$	81
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	8			4			18			14
Federal and state tax reserve adjustments	—			2			—			2
Depreciation not normalized	(2		)	(1		)	(3		)	(2		)
Stock-based compensation (a)	(2		)	—			(7		)	—
Other	—			1			(1		)	—
Total increase (decrease)	4			6			7			14
Total income taxes	$	48		$	36		$	104		$	95


(a)	During the three and six months ended June 30, 2016, PPL Electric recorded lower income tax expense related to the application of new stock-based compensation accounting guidance. See Note 2 for additional information.

Reconciliations of income taxes for the periods ended June 30 are as follows.



(LKE)
	Three Months						Six Months
	2016			2015			2016			2015
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	47		$	37		$	114		$	104
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	5			4			12			11
Valuation allowance adjustments (a)	—			5			—			8
Stock-based compensation	—			—			(1		)	—
Other	(1		)	(1		)	(2		)	(2		)
Total increase (decrease)	4			8			9			17
Total income taxes	$	51		$	45		$	123		$	121


(a)	Represents a valuation allowance against tax credits expiring in 2016 and 2017 that are more likely than not to expire before being utilized.

Reconciliations of income taxes for the periods ended June 30 are as follows.



(LG&E)
	Three Months				Six Months
	2016		2015		2016			2015
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	22	$	20	$	54		$	50
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	2		2		6			5
Other	—		—		(1		)	—
Total increase (decrease)	2		2		5			5
Total income taxes	$	24	$	22	$	59		$	55

Reconciliations of income taxes for the periods ended June 30 are as follows.



(KU)
	Three Months				Six Months
	2016		2015		2016		2015
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	31	$	22	$	73	$	66
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	3		2		7		7
Other	—		—		—		(2		)
Total increase (decrease)	3		2		7		5
Total income taxes	$	34	$	24	$	80	$	71