SCHEDULE I - CONDENSED UNCONSOLICATED FINANCIAL STATEMENTS AND NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2015

Condensed Unconsolidated Financial Information [Line Items]

Schedule I - Condensed Unconsolidated Financial Information

SCHEDULE I - PPL CORPORATION
CONDENSED UNCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31,
(Millions of Dollars, except share data)

			2015		2014		2013

Operating Revenues

Operating Expenses
Other operation and maintenance			$	9	$	16	$	1
Total Operating Expenses				9		16		1

Operating Loss				(9)		(16)		(1)

Other Income (Expense) - net
	Equity in earnings of subsidiaries			711		1,776		1,171
	Other income (expense)			(15)		(18)		(13)
		Total		696		1,758		1,158

Interest Expense				9		15		21

Interest Expense with Affiliates				10		10		29

Income Before Income Taxes				668		1,717		1,107

Income Taxes				(14)		(20)		(23)

Net Income			$	682	$	1,737	$	1,130

Comprehensive Income Attributable to PPL Shareowners			$	252	$	1,028	$	1,505

Earnings Per Share of Common Stock:
	Net Income Available to PPL Common Shareowners:
		Basic	$	1.01	$	2.64	$	1.85
		Diluted	$	1.01	$	2.61	$	1.76

Weighted-Average Shares of Common Stock Outstanding (in thousands)
		Basic		669,814		653,504		608,983
		Diluted		672,586		665,973		663,073

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

SCHEDULE I - PPL CORPORATION
CONDENSED UNCONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(Millions of Dollars)

		2015		2014		2013

Cash Flows from Operating Activities
Net cash provided by (used in) operating activities		$	993	$	1,633	$	968

Cash Flows from Investing Activities
	Capital contributions to affiliated subsidiaries		(491)		(1,045)		(496)
	Return of capital from affiliated subsidiaries		112		247		213
Net cash provided by (used in) investing activities			(379)		(798)		(283)

Cash Flows from Financing Activities
	Issuance of equity, net of issuance costs		203		1,074		1,411
	Net increase (decrease) in short-term debt with affiliates		215		(913)		(1,057)
	Payment of common stock dividends		(1,004)		(967)		(878)
	Contract adjustment payments on Equity Units				(22)		(82)
	Repurchase of common stock						(74)
	Other		(28)		(7)		(5)
Net cash provided by (used in) financing activities			(614)		(835)		(685)

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period		$		$		$


Supplemental Disclosures of Cash Flow Information:
Cash Dividends Received from Affiliated Subsidiaries		$	1,198	$	1,388	$	960

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

SCHEDULE I - PPL CORPORATION
CONDENSED UNCONSOLIDATED BALANCE SHEETS AT DECEMBER 31,
(Millions of Dollars, shares in thousands)

			2015		2014
Assets

Current Assets
	Accounts Receivable
		Other	$	10	$	53
		Affiliates		20		149
	Price risk management assets			139		148
	Total Current Assets			169		350

Investments
	Affiliated companies at equity			10,479		15,426

Other Noncurrent Assets
	Deferred income taxes			100		34
	Price risk management assets			133		75
	Other noncurrent assets			1		13
	Total Other Noncurrent Assets			234		122

Total Assets			$	10,882	$	15,898


Liabilities and Equity

Current Liabilities
	Short-term debt with affiliates		$	385	$	170
	Accounts payable with affiliates			16		1,513
	Dividends			255		249
	Price risk management liabilities			268		227
	Other current liabilities					65
	Total Current Liabilities			924		2,224

Deferred Credits and Other Noncurrent Liabilities				39		46

Equity
	Common stock - $0.01 par value (a)			7		7
	Additional paid-in capital			9,687		9,433
	Earnings reinvested			2,953		6,462
	Accumulated other comprehensive loss			(2,728)		(2,274)
	Total Equity			9,919		13,628

Total Liabilities and Equity			$	10,882	$	15,898

(a) 780,000 shares authorized; 673,857 and 665,849 shares issued and outstanding at December 31, 2015 and 2014.

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

SCHEDULE I - PPL CORPORATION

NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

PPL Corporation is a holding company and conducts substantially all of its business operations through its subsidiaries. Substantially all of its consolidated assets are held by such subsidiaries. Accordingly, its cash flow and its ability to meet its obligations are largely dependent upon the earnings of these subsidiaries and the distribution or other payment of such earnings to it in the form of dividends, loans or advances or repayment of loans and advances from it. These condensed financial statements and related footnotes have been prepared in accordance with Reg. §210.12-04 of Regulation S-X. These statements should be read in conjunction with the consolidated financial statements and notes thereto of PPL Corporation.

PPL Corporation indirectly or directly owns all of the ownership interests of its significant subsidiaries. PPL Corporation relies on dividends or loans from its subsidiaries to fund PPL Corporation's dividends to its common shareowners and to meet its other cash requirements. See Note 7 to PPL Corporation’s consolidated financial statements for discussions related to restricted net assets of its subsidiaries for the purposes of transferring funds to PPL in the form of distributions, loans or advances.

Balance Sheet Classification of Deferred Taxes

Effective October 1, 2015, PPL Corporation retrospectively adopted accounting guidance to simplify the presentation of deferred taxes which requires that deferred tax assets and deferred tax liabilities be classified as noncurrent on the balance sheet.

The adoption of this guidance required PPL Corporation to reclassify deferred tax assets and deferred tax liabilities from current to noncurrent on the balance sheet, and did not have a significant impact. PPL Corporation reclassified $34 million from current deferred tax assets to noncurrent deferred tax assets and $5 million from current deferred tax liabilities to noncurrent deferred tax liabilities on the balance sheet as of December 31, 2014.

2. Commitments and Contingencies

See Note 13 to PPL Corporation’s consolidated financial statements for commitments and contingencies of its subsidiaries.

Guarantees and Other Assurances

PPL Corporation's subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts that may become due under PPL Corporation's guarantees or other assurances or to make any funds available for such payment.

PPL Corporation fully and unconditionally guarantees the payment of principal, premium and interest on all of the debt securities of PPL Capital Funding. The estimated maximum potential amount of future payments that could be required under the guarantees at December 31, 2015 was $8.4 billion. These guarantees will expire in 2073. The probability of expected payment under these guarantees is remote.

L G And E And K U Energy L L C Unconsolidated [Member]

Condensed Unconsolidated Financial Information [Line Items]

Schedule I - Condensed Unconsolidated Financial Information

SCHEDULE I - LG&E and KU Energy LLC
CONDENSED UNCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31,
(Millions of Dollars)

	2015		2014		2013

Equity in Earnings of Subsidiaries	$	390	$	368	$	376

Interest Income with Affiliate		4		5		5

Interest Expense		39		41		39

Interest Expense with Affiliate		5		3		3

Income Before Income Taxes		350		329		339

Income Tax Expense (Benefit)		(14)		(15)		(8)

Net Income Attributable to Member	$	364	$	344	$	347

Comprehensive Income Attributable to Member	$	363	$	286	$	375

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

SCHEDULE I - LG&E and KU Energy LLC
CONDENSED UNCONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
(Millions of Dollars)

		2015		2014		2013

Cash Flows from Operating Activities
Net cash provided by (used in) operating activities		$	246	$	(183)	$	136

Cash Flows from Investing Activities
	Capital contributions to affiliated subsidiaries		(140)		(248)		(243)
	Net decrease (increase) in notes receivable from affiliates		73		555		(122)
Net cash provided by (used in) investing activities			(67)		307		(365)

Cash Flows from Financing Activities
	Net increase (decrease) in notes payable with affiliates		315		58		171
	Net increase (decrease) in short-term debt						75
	Retirement of long-term debt		(400)
	Contribution from member		125		248		243
	Distribution to member		(219)		(436)		(254)
Net cash provided by (used in) financing activities			(179)		(130)		235

Net Increase (Decrease) in Cash and Cash Equivalents					(6)		6
Cash and Cash Equivalents at Beginning of Period					6
Cash and Cash Equivalents at End of Period		$		$		$	6


Supplemental disclosures of cash flow information:
Cash Dividends Received from Affiliated Subsidiaries		$	272	$	260	$	223

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

SCHEDULE I - LG&E and KU Energy LLC
CONDENSED UNCONSOLIDATED BALANCE SHEETS AT DECEMBER 31,
(Millions of Dollars)

		2015		2014
Assets

Current Assets
	Accounts receivable	$	1	$	8
	Accounts receivable from affiliates		3
	Notes receivable from affiliates		1,054		1,127
	Total Current Assets		1,058		1,135

Investments
	Affiliated companies at equity		5,076		4,818

Other Noncurrent Assets
	Deferred income taxes		228		205
	Other noncurrent assets				1
	Total Other Noncurrent Assets		228		206

Total Assets		$	6,362	$	6,159

Liabilities and Equity

Current Liabilities
	Short-term debt	$	75	$	75
	Notes payable to affiliates		69		58
	Long-term debt due within one year				400
	Accounts payable to affiliates		469		451
	Taxes		3		2
	Other current liabilities		5		8
	Total Current Liabilities		621		994

Long-term Debt
	Long-term debt		720		718
	Notes payable to affiliates		500		196
	Total Long-term Debt		1,220		914

Deferred Credits and Other Noncurrent Liabilities			4		3

Equity			4,517		4,248

Total Liabilities and Equity		$	6,362	$	6,159

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

Schedule I – LG&E and KU Energy LLC

Notes to Condensed Unconsolidated Financial Statements

1. Basis of Presentation

LG&E and KU Energy LLC (LKE) is a holding company and conducts substantially all of its business operations through its subsidiaries. Substantially all of its consolidated assets are held by such subsidiaries. Accordingly, its cash flow and its ability to meet its obligations are largely dependent upon the earnings of these subsidiaries and the distribution or other payment of such earnings to it in the form of dividends or repayment of loans and advances from the subsidiaries. These condensed financial statements and related footnotes have been prepared in accordance with Reg. §210.12-04 of Regulation S-X. These statements should be read in conjunction with the consolidated financial statements and notes thereto of LKE.

LKE indirectly or directly owns all of the ownership interests of its significant subsidiaries. LKE relies primarily on dividends from its subsidiaries to fund LKE's dividends to its member and to meet its other cash requirements. See Note 7 to LKE’s consolidated financial statements for discussions related to restricted net assets of its subsidiaries for the purposes of transferring funds to LKE in the form of distributions, loans or advances.

Balance Sheet Classification of Deferred Taxes

Effective October 1, 2015, LKE retrospectively adopted accounting guidance to simplify the presentation of deferred taxes which requires that deferred tax assets and deferred tax liabilities be classified as noncurrent on the balance sheet.

The adoption of this guidance required LKE to reclassify deferred tax assets and deferred tax liabilities from current to noncurrent on the balance sheet, and did not have a significant impact. LKE reclassified $2 million from current deferred tax assets to noncurrent deferred tax assets on the balance sheet as of December 31, 2014.

Presentation of Debt Issuance Costs

Effective December 31, 2015, LKE retrospectively adopted accounting guidance to simplify the presentation of debt issuance costs. The guidance requires certain debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying amount of the associated debt liability.

The adoption of this guidance required LKE to reclassify debt issuance costs not associated with a line of credit from noncurrent assets to Long-term debt, and did not have a significant impact on the Registrants. LKE reclassified $4 million from Other noncurrent assets to Long-term debt on the balance sheet as of December 31, 2014.

2. Commitments and Contingencies

See Note 13 to LKE’s consolidated financial statements for commitments and contingencies of its subsidiaries.

Guarantees

LKE provides certain indemnifications, the most significant of which relate to the termination of the WKE lease in July 2009. These guarantees cover the due and punctual payment, performance and discharge by each party of its respective present and future obligations. The most comprehensive of these WKE-related guarantees is the LKE guarantee covering operational, regulatory and environmental commitments and indemnifications made by WKE under the WKE Transaction Termination Agreement. This guarantee has a term of 12 years ending July 2021, and a cumulative maximum exposure of $200 million. Certain items such as government fines and penalties fall outside the cumulative cap. Another WKE-related LKE guarantee covers other indemnifications, has a term expiring in 2023 and a maximum exposure of $100 million. In May 2012, LKE's indemnitee received an unfavorable arbitration panel's decision interpreting this matter. In October 2014, LKE's indemnitee filed a motion for discretionary review with the Kentucky Supreme Court seeking to overturn the arbitration decision, and such motion was denied by the court in September 2015. In September 2015, a counterparty issued a demand letter to LKE's indemnitee. LKE does not believe appropriate contractual, legal or commercial grounds exist for the claim made and anticipates the indemnitee to dispute the demand. LKE believes its indemnification obligations in the WKE matter remain subject to various uncertainties, including additional legal and contractual developments, as well as future prices, availability and demand for the subject excess power. The ultimate outcomes of the WKE termination-related indemnifications cannot be predicted at this time.

Additionally, LKE has indemnified various third parties related to historical obligations for other divested subsidiaries and affiliates. The indemnifications vary by entity and the maximum exposures range from being capped at the sale price to no specified maximum; LKE could be required to perform on these indemnifications in the event of covered losses or liabilities being claimed by an indemnified party. LKE cannot predict the ultimate outcomes of the indemnification circumstances, but does not currently expect such outcomes to result in significant losses above the amounts recorded.

3. Long-term Debt

See Note 7 to LKE’s consolidated financial statements for the terms of LKE’s outstanding senior unsecured notes outstanding. Of the total outstanding, $475 million matures in 2020 and $250 million matures in 2021. These maturities are based on stated maturities.