Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

5. Income Taxes

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

(PPL)
	Three Months						Six Months
	2017			2016			2017			2016
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	129		$	236		$	315		$	467
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	10			9			23			22
Valuation allowance adjustments	—			3			5			9
Impact of lower U.K. income tax rates	(40		)	(45		)	(88		)	(99		)
U.S. income tax on foreign earnings - net of foreign tax credit (a)	(7		)	—			(16		)	(2		)
Impact of the U.K. Finance Acts	(6		)	(2		)	(9		)	(2		)
Depreciation not normalized	(2		)	(3		)	(5		)	(4		)
Interest benefit on U.K. financing entities	(4		)	(4		)	(8		)	(9		)
Stock-based compensation	(4		)	(3		)	(7		)	(11		)
Other	—			1			(5		)	—
Total increase (decrease)	(53		)	(44		)	(110		)	(96		)
Total income taxes	$	76		$	192		$	205		$	371

(a) Lower income taxes primarily due to the tax benefit of accelerated pension contributions made in the first quarter of 2017. The related tax benefit is recognized over the annual period as a result of utilizing an estimated annual effective tax rate.

(PPL Electric)
	Three Months						Six Months
	2017			2016			2017			2016
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	44		$	44		$	88		$	97
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	9			8			17			18
Depreciation not normalized	(2		)	(2		)	(4		)	(3		)
Stock-based compensation	(3		)	(2		)	(5		)	(7		)
Other	(1		)	—			(1		)	(1		)
Total increase (decrease)	3			4			7			7
Total income taxes	$	47		$	48		$	95		$	104

(LKE)
	Three Months						Six Months
	2017			2016			2017			2016
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	49		$	47		$	107		$	114
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	5			5			11			12
Other	(1		)	(1		)	(2		)	(3		)
Total increase (decrease)	4			4			9			9
Total income taxes	$	53		$	51		$	116		$	123

(LG&E)
	Three Months				Six Months
	2017		2016		2017			2016
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	24	$	22	$	55		$	54
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	3		2		6			6
Other	—		—		(1		)	(1		)
Total increase (decrease)	3		2		5			5
Total income taxes	$	27	$	24	$	60		$	59

(KU)
	Three Months					Six Months
	2017			2016		2017			2016
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%	$	32		$	31	$	67		$	73
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	3			3		7			7
Other	(1		)	—		(1		)	—
Total increase (decrease)	2			3		6			7
Total income taxes	$	34		$	34	$	73		$	80