Defined Benefits

(PPL, LKE and LG&E)

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



	Pension Benefits
	Three Months												Nine Months
	U.S.						U.K.						U.S.						U.K.
	2016			2015			2016 (a)			2015			2016			2015			2016 (a)			2015
PPL
Service cost	$	16		$	20		$	17		$	21		$	49		$	76		$	53		$	60
Interest cost	44			42			58			80			131			152			182			236
Expected return on plan assets	(57		)	(56		)	(124		)	(133		)	(171		)	(201		)	(389		)	(393		)
Amortization of:
Prior service cost	2			1			—			—			6			5			—			—
Actuarial loss	12			18			34			39			37			65			107			118
Net periodic defined benefit costs (credits) before settlements	17			25			(15		)	7			52			97			(47		)	21
Settlements	3			—			—			—			3			—			—			—
Net periodic defined benefit costs (credits) (b)	$	20		$	25		$	(15	)	$	7		$	55		$	97		$	(47	)	$	21



	Pension Benefits
	Three Months								Nine Months
	U.S.						U.K.		U.S.						U.K.
	2016			2015			2016 (a)	2015	2016			2015			2016 (a)	2015
LKE
Service cost	$	6		$	7				$	18		$	20
Interest cost	18			17					53			51
Expected return on plan assets	(23		)	(22		)			(68		)	(66		)
Amortization of:
Prior service cost	2			1					6			5
Actuarial loss	5			9					15			26
Net periodic defined benefit costs	$	8		$	12				$	24		$	36

LG&E
Service cost	$	—		$	—				$	1		$	1
Interest cost	4			3					11			10
Expected return on plan assets	(5		)	(5		)			(15		)	(15		)
Amortization of:
Prior service cost	1			1					3			2
Actuarial loss	2			3					5			9
Net periodic defined benefit costs	$	2		$	2				$	5		$	7


(a)	See Note 2 for a discussion of changes to the discount rate used for the U.K. Pension Plans.


(b)	For the nine months ended September 30, 2015, the total net periodic defined benefit cost includes $18 million reflected in discontinued operations related to costs allocated from PPL's plans to PPL Energy Supply prior to the spinoff.



	Other Postretirement Benefits
	Three Months						Nine Months
	2016			2015			2016			2015
PPL
Service cost	$	2		$	2		$	6		$	9
Interest cost	6			6			19			20
Expected return on plan assets	(6		)	(6		)	(17		)	(20		)
Amortization of actuarial loss	1			—			1			—
Net periodic defined benefit costs	$	3		$	2		$	9		$	9

LKE
Service cost	$	1		$	1		$	3		$	4
Interest cost	2			2			7			7
Expected return on plan assets	(2		)	(1		)	(5		)	(4		)
Amortization of prior service cost	1			1			2			2
Net periodic defined benefit costs	$	2		$	3		$	7		$	9

(PPL Electric, LG&E and KU)

In addition to the specific plans it sponsors, LG&E is allocated costs of defined benefit plans sponsored by LKE. PPL Electric and KU do not directly sponsor any defined benefit plans. PPL Electric is allocated costs of defined benefit plans sponsored by PPL Services and KU is allocated costs of defined benefit plans sponsored by LKE. These allocations are based on participation in those plans, which management believes are reasonable. For the periods ended September 30, 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:



	Three Months				Nine Months
	2016		2015		2016		2015
PPL Electric	$	6	$	8	$	17	$	24
LG&E	2		3		7		10
KU	2		4		8		13

Cash Flows - U.S. Pension Plans

(PPL & LKE)

During the nine months ended September 30, 2016, LKE contributed $66 million to its pension plans. LKE does not anticipate making any additional significant contributions to these plans in 2016.

(PPL, LKE and LG&E)

During the nine months ended September 30, 2016, LG&E contributed $35 million to its pension plan. LG&E does not anticipate making any additional contributions to the plan in 2016.