Stock-Based Compensation

12 Months Ended

Dec. 31, 2016

Stock-Based Compensation [Line Items]

Stock-Based Compensation

10. Stock-Based Compensation

(PPL, PPL Electric and LKE)

Under the ICP, SIP and the ICPKE (together, the Plans), restricted shares of PPL common stock, restricted stock units, performance units and stock options may be granted to officers and other key employees of PPL, PPL Electric, LKE and other affiliated companies. Awards under the Plans are made by the Compensation, Governance and Nominating Committee (CGNC) of the PPL Board of Directors, in the case of the ICP and SIP, and by the PPL Corporate Leadership Council (CLC), in the case of the ICPKE.

The following table details the award limits under each of the Plans.

	Total Plan	Annual Grant Limit Total As % of Outstanding		Annual Grant	Annual Grant Limit For Individual Participants - Performance Based Awards
	Award Limit	PPL Common Stock On First Day of		Limit Options	For awards denominated in	For awards denominated in
Plan	(Shares)	Each Calendar Year		(Shares)	shares (Shares)	cash (in dollars)
SIP	10,000,000			2,000,000	750,000	$	15,000,000
ICPKE	14,199,796	2	%	3,000,000

Any portion of these awards that has not been granted may be carried over and used in any subsequent year. If any award lapses, is forfeited or the rights of the participant terminate, the shares of PPL common stock underlying such an award are again available for grant. Shares delivered under the Plans may be in the form of authorized and unissued PPL common stock, common stock held in treasury by PPL or PPL common stock purchased on the open market (including private purchases) in accordance with applicable securities laws.

Restricted Stock and Restricted Stock Units

Restricted shares of PPL common stock are outstanding shares with full voting and dividend rights. Restricted stock awards are granted as a retention award for select key executives and vest when the recipient reaches a certain age or meets service or other criteria set forth in the executive's restricted stock award agreement.

The Plans allow for the grant of restricted stock units. Restricted stock units are awards based on the fair value of PPL common stock on the date of grant. Actual PPL common shares will be issued upon completion of a restriction period, generally three years.

Under the SIP, each restricted stock unit entitles the executive to accrue additional restricted stock units equal to the amount of quarterly dividends paid on PPL stock. These additional restricted stock units are deferred and payable in shares of PPL common stock at the end of the restriction period. Dividend equivalents on restricted stock unit awards granted under the ICP and the ICPKE are currently paid in cash when dividends are declared by PPL.

The fair value of restricted stock and restricted stock units granted is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value of restricted stock and restricted stock units granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. Recipients of restricted stock units granted under the ICPKE may also be granted the right to receive dividend equivalents through the end of the restriction period or until the award is forfeited. Restricted stock and restricted stock units are subject to forfeiture or accelerated payout under the plan provisions for termination, retirement, disability and death of employees. Restrictions lapse on restricted stock and restricted stock units fully, in certain situations, as defined by each of the Plans.

The weighted-average grant date fair value of restricted stock and restricted stock units granted was:

	2016		2015		2014
PPL	$	33.84	$	34.50	$	31.50
PPL Electric	34.32		34.41		31.81
LKE	33.73		34.89		30.98

Restricted stock and restricted stock unit activity for 2016 was:

	Restricted Shares/Units		Weighted- Average Grant Date Fair Value Per Share
PPL
Nonvested, beginning of period	1,679,475		$	29.65
Granted	536,208		33.84
Vested	(869,932	)	29.30
Forfeited	(8,726	)	32.59
Nonvested, end of period (a)	1,337,025		31.57
PPL Electric
Nonvested, beginning of period	221,085		$	29.48
Transfer between registrants	(10,405	)	30.98
Granted	70,486		34.32
Vested	(73,488	)	28.91
Forfeited	(3,108	)	32.81
Nonvested, end of period	204,570		31.27
LKE
Nonvested, beginning of period	318,963		$	29.65
Transfer between registrants	(24,993	)	30.52
Granted	86,987		33.73
Vested	(137,676	)	28.76
Nonvested, end of period	243,281		31.53

(a) Excludes 862,337 restricted stock units for which restrictions lapsed for former PPL Energy Supply employees as a result of the spinoff, but for which distribution will not occur until the end of the original restriction period of the awards.

Substantially all restricted stock and restricted stock unit awards are expected to vest.

The total fair value of restricted stock and restricted stock units vesting for the years ended December 31 was:

	2016		2015		2014
PPL	$	30	$	28	$	11
PPL Electric	3		4		2
LKE	5		4		—

Performance Units

Performance units are intended to encourage and reward future corporate performance. Performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable performance goal. Performance is determined based on total shareowner return during a three-year performance period. At the end of the period, payout is determined by comparing PPL's performance to the total shareowner return of the companies included in the Philadelphia Stock Exchange Utility Index. Awards are payable on a graduated basis based on thresholds that measure PPL's performance relative to peers that comprise the applicable index on which each years' awards are measured. Awards can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, performance units are subject to forfeiture upon termination of employment except for retirement, disability or death of an employee. For performance units granted prior to 2014, the performance units are eligible for pro-rata vesting at the end of the performance period for retirement, disability or death of an employee.

Beginning in 2014, the fair value of performance units granted to retirement-eligible employees is recognized as compensation expense on a straight-line basis over a one-year period, the minimum vesting period required for an employee to be entitled to payout of the awards with no proration. For employees who are not retirement-eligible, compensation expense is recognized over the shorter of the three-year performance period or the period until the employee is retirement-eligible, with a minimum vesting and recognition period of one-year. If an employee retires before the one-year vesting period, the performance units are forfeited. The fair value of performance units granted in 2013 and prior years was recognized as compensation expense on a straight-line basis over the three-year performance period. Performance units vest on a pro rata basis, in certain situations, as defined by each of the Plans.

The fair value of each performance unit granted was estimated using a Monte Carlo pricing model that considers stock beta, a risk-free interest rate, expected stock volatility and expected life. The stock beta was calculated comparing the risk of the individual securities to the average risk of the companies in the index group. The risk-free interest rate reflects the yield on a U.S. Treasury bond commensurate with the expected life of the performance unit. Volatility over the expected term of the performance unit is calculated using daily stock price observations for PPL and all companies in the index group and is evaluated with consideration given to prior periods that may need to be excluded based on events not likely to recur that had impacted PPL and the companies in the index group. PPL uses a mix of historic and implied volatility to value awards.

The weighted-average assumptions used in the model were:

	2016		2015		2014
Expected stock volatility	19.60	%	15.90	%	15.80	%
Expected life	3 years		3 years		3 years

The weighted-average grant date fair value of performance units granted was:

	2016		2015		2014
PPL	$	35.74	$	36.76	$	34.55
PPL Electric	35.68		37.93		34.43
LKE	35.28		37.10		34.12

Performance unit activity for 2016 was:

	Performance Units		Weighted- Average Grant Date Fair Value Per Share
PPL
Nonvested, beginning of period	993,540		$	33.09
Granted	471,401		35.74
Vested	(375,668	)	31.96
Forfeited	(18,737	)	33.22
Nonvested, end of period (a)	1,070,536		34.65

	Performance Units		Weighted- Average Grant Date Fair Value Per Share
PPL Electric
Nonvested, beginning of period	67,671		$	33.05
Granted	35,694		35.68
Vested	(23,880	)	31.89
Forfeited	(2,759	)	31.74
Nonvested, end of period	76,726		34.68
LKE
Nonvested, beginning of period	193,164		$	32.96
Transfer between registrants	(4,432	)	35.07
Granted	84,298		35.28
Vested	(70,048	)	31.74
Forfeited	(11,381	)	33.61
Nonvested, end of period	191,601		34.34

(a) Excludes 230,196 performance units for which the service vesting requirement was waived for former PPL Energy Supply employees as a result of the spinoff, but for which the ultimate number of shares to be distributed will depend on the actual attainment of the performance goals at the end of the specified performance periods.

The total fair value of performance units vesting for the year ended December 31, 2016, 2015 and 2014 was $12 million, $6 million and $5 million for PPL and insignificant for PPL Electric and LKE.

Stock Options

PPL's CGNC eliminated the use of stock options and changed its long-term incentive mix to 60% performance units and 40% performance-contingent restricted stock units, resulting in 100% performance-based long-term incentive mix for equity awards granted beginning in January 2014.

Under the Plans, stock options had been granted with an option exercise price per share not less than the fair value of PPL's common stock on the date of grant. Options outstanding at December 31, 2016, are fully vested. All options expire no later than ten years from the grant date. The options become exercisable immediately in certain situations, as defined by each of the Plans.

Stock option activity for 2016 was:

	Number of Options		Weighted Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Total Intrinsic Value
PPL
Outstanding at beginning of period	6,385,149		$	28.54
Exercised	(1,903,989	)	27.51
Outstanding and exercisable at end of period	4,481,160		28.98		4.4	$	29
PPL Electric
Outstanding at beginning of period	313,433		$	27.79
Exercised	(72,494	)	28.84
Outstanding and exercisable at end of period	240,939		27.48		4.5	$	2
LKE
Outstanding at beginning of period	425,656		$	26.08
Exercised	(363,760	)	26.12
Outstanding and exercisable at end of period	61,896		25.81		5.5	$	1

For 2016, 2015 and 2014, PPL received $52 million, $97 million and $67 million in cash from stock options exercised. The related income tax benefits realized were not significant.

The total intrinsic value of stock options exercised for 2016, 2015 and 2014 were $18 million, $21 million and $13 million.

Compensation Expense

Compensation expense for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards, which for PPL Electric and LKE includes an allocation of PPL Services' expense, was:

	2016		2015		2014
PPL	$	27	$	33	$	30
PPL Electric	16		14		12
LKE	7		8		8

See Note 8 for details of the costs recognized in discontinued operations related to the accelerated vesting of awards for former PPL Energy Supply employees.

The income tax benefit related to above compensation expense was as follows:

	2016		2015		2014
PPL	$	12	$	14	$	12
PPL Electric	7		6		5
LKE	3		3		3

At December 31, 2016, unrecognized compensation expense related to nonvested restricted stock, restricted stock units, and performance units was:

	Unrecognized Compensation Expense		Weighted- Average Period for Recognition
PPL	$	8	1.8
PPL Electric	1		1.8
LKE	1		1.6

PPL Electric Utilities Corp [Member]

Stock-Based Compensation [Line Items]

Stock-Based Compensation

10. Stock-Based Compensation

(PPL, PPL Electric and LKE)

Under the ICP, SIP and the ICPKE (together, the Plans), restricted shares of PPL common stock, restricted stock units, performance units and stock options may be granted to officers and other key employees of PPL, PPL Electric, LKE and other affiliated companies. Awards under the Plans are made by the Compensation, Governance and Nominating Committee (CGNC) of the PPL Board of Directors, in the case of the ICP and SIP, and by the PPL Corporate Leadership Council (CLC), in the case of the ICPKE.

The following table details the award limits under each of the Plans.

	Total Plan	Annual Grant Limit Total As % of Outstanding		Annual Grant	Annual Grant Limit For Individual Participants - Performance Based Awards
	Award Limit	PPL Common Stock On First Day of		Limit Options	For awards denominated in	For awards denominated in
Plan	(Shares)	Each Calendar Year		(Shares)	shares (Shares)	cash (in dollars)
SIP	10,000,000			2,000,000	750,000	$	15,000,000
ICPKE	14,199,796	2	%	3,000,000

Any portion of these awards that has not been granted may be carried over and used in any subsequent year. If any award lapses, is forfeited or the rights of the participant terminate, the shares of PPL common stock underlying such an award are again available for grant. Shares delivered under the Plans may be in the form of authorized and unissued PPL common stock, common stock held in treasury by PPL or PPL common stock purchased on the open market (including private purchases) in accordance with applicable securities laws.

Restricted Stock and Restricted Stock Units

Restricted shares of PPL common stock are outstanding shares with full voting and dividend rights. Restricted stock awards are granted as a retention award for select key executives and vest when the recipient reaches a certain age or meets service or other criteria set forth in the executive's restricted stock award agreement.

The Plans allow for the grant of restricted stock units. Restricted stock units are awards based on the fair value of PPL common stock on the date of grant. Actual PPL common shares will be issued upon completion of a restriction period, generally three years.

Under the SIP, each restricted stock unit entitles the executive to accrue additional restricted stock units equal to the amount of quarterly dividends paid on PPL stock. These additional restricted stock units are deferred and payable in shares of PPL common stock at the end of the restriction period. Dividend equivalents on restricted stock unit awards granted under the ICP and the ICPKE are currently paid in cash when dividends are declared by PPL.

The fair value of restricted stock and restricted stock units granted is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value of restricted stock and restricted stock units granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. Recipients of restricted stock units granted under the ICPKE may also be granted the right to receive dividend equivalents through the end of the restriction period or until the award is forfeited. Restricted stock and restricted stock units are subject to forfeiture or accelerated payout under the plan provisions for termination, retirement, disability and death of employees. Restrictions lapse on restricted stock and restricted stock units fully, in certain situations, as defined by each of the Plans.

The weighted-average grant date fair value of restricted stock and restricted stock units granted was:

	2016		2015		2014
PPL	$	33.84	$	34.50	$	31.50
PPL Electric	34.32		34.41		31.81
LKE	33.73		34.89		30.98

Restricted stock and restricted stock unit activity for 2016 was:

	Restricted Shares/Units		Weighted- Average Grant Date Fair Value Per Share
PPL
Nonvested, beginning of period	1,679,475		$	29.65
Granted	536,208		33.84
Vested	(869,932	)	29.30
Forfeited	(8,726	)	32.59
Nonvested, end of period (a)	1,337,025		31.57
PPL Electric
Nonvested, beginning of period	221,085		$	29.48
Transfer between registrants	(10,405	)	30.98
Granted	70,486		34.32
Vested	(73,488	)	28.91
Forfeited	(3,108	)	32.81
Nonvested, end of period	204,570		31.27
LKE
Nonvested, beginning of period	318,963		$	29.65
Transfer between registrants	(24,993	)	30.52
Granted	86,987		33.73
Vested	(137,676	)	28.76
Nonvested, end of period	243,281		31.53

(a) Excludes 862,337 restricted stock units for which restrictions lapsed for former PPL Energy Supply employees as a result of the spinoff, but for which distribution will not occur until the end of the original restriction period of the awards.

Substantially all restricted stock and restricted stock unit awards are expected to vest.

The total fair value of restricted stock and restricted stock units vesting for the years ended December 31 was:

	2016		2015		2014
PPL	$	30	$	28	$	11
PPL Electric	3		4		2
LKE	5		4		—

Performance Units

Performance units are intended to encourage and reward future corporate performance. Performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable performance goal. Performance is determined based on total shareowner return during a three-year performance period. At the end of the period, payout is determined by comparing PPL's performance to the total shareowner return of the companies included in the Philadelphia Stock Exchange Utility Index. Awards are payable on a graduated basis based on thresholds that measure PPL's performance relative to peers that comprise the applicable index on which each years' awards are measured. Awards can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, performance units are subject to forfeiture upon termination of employment except for retirement, disability or death of an employee. For performance units granted prior to 2014, the performance units are eligible for pro-rata vesting at the end of the performance period for retirement, disability or death of an employee.

Beginning in 2014, the fair value of performance units granted to retirement-eligible employees is recognized as compensation expense on a straight-line basis over a one-year period, the minimum vesting period required for an employee to be entitled to payout of the awards with no proration. For employees who are not retirement-eligible, compensation expense is recognized over the shorter of the three-year performance period or the period until the employee is retirement-eligible, with a minimum vesting and recognition period of one-year. If an employee retires before the one-year vesting period, the performance units are forfeited. The fair value of performance units granted in 2013 and prior years was recognized as compensation expense on a straight-line basis over the three-year performance period. Performance units vest on a pro rata basis, in certain situations, as defined by each of the Plans.

The fair value of each performance unit granted was estimated using a Monte Carlo pricing model that considers stock beta, a risk-free interest rate, expected stock volatility and expected life. The stock beta was calculated comparing the risk of the individual securities to the average risk of the companies in the index group. The risk-free interest rate reflects the yield on a U.S. Treasury bond commensurate with the expected life of the performance unit. Volatility over the expected term of the performance unit is calculated using daily stock price observations for PPL and all companies in the index group and is evaluated with consideration given to prior periods that may need to be excluded based on events not likely to recur that had impacted PPL and the companies in the index group. PPL uses a mix of historic and implied volatility to value awards.

The weighted-average assumptions used in the model were:

	2016		2015		2014
Expected stock volatility	19.60	%	15.90	%	15.80	%
Expected life	3 years		3 years		3 years

The weighted-average grant date fair value of performance units granted was:

	2016		2015		2014
PPL	$	35.74	$	36.76	$	34.55
PPL Electric	35.68		37.93		34.43
LKE	35.28		37.10		34.12

Performance unit activity for 2016 was:

	Performance Units		Weighted- Average Grant Date Fair Value Per Share
PPL
Nonvested, beginning of period	993,540		$	33.09
Granted	471,401		35.74
Vested	(375,668	)	31.96
Forfeited	(18,737	)	33.22
Nonvested, end of period (a)	1,070,536		34.65

	Performance Units		Weighted- Average Grant Date Fair Value Per Share
PPL Electric
Nonvested, beginning of period	67,671		$	33.05
Granted	35,694		35.68
Vested	(23,880	)	31.89
Forfeited	(2,759	)	31.74
Nonvested, end of period	76,726		34.68
LKE
Nonvested, beginning of period	193,164		$	32.96
Transfer between registrants	(4,432	)	35.07
Granted	84,298		35.28
Vested	(70,048	)	31.74
Forfeited	(11,381	)	33.61
Nonvested, end of period	191,601		34.34

(a) Excludes 230,196 performance units for which the service vesting requirement was waived for former PPL Energy Supply employees as a result of the spinoff, but for which the ultimate number of shares to be distributed will depend on the actual attainment of the performance goals at the end of the specified performance periods.

The total fair value of performance units vesting for the year ended December 31, 2016, 2015 and 2014 was $12 million, $6 million and $5 million for PPL and insignificant for PPL Electric and LKE.

Stock Options

PPL's CGNC eliminated the use of stock options and changed its long-term incentive mix to 60% performance units and 40% performance-contingent restricted stock units, resulting in 100% performance-based long-term incentive mix for equity awards granted beginning in January 2014.

Under the Plans, stock options had been granted with an option exercise price per share not less than the fair value of PPL's common stock on the date of grant. Options outstanding at December 31, 2016, are fully vested. All options expire no later than ten years from the grant date. The options become exercisable immediately in certain situations, as defined by each of the Plans.

Stock option activity for 2016 was:

	Number of Options		Weighted Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Total Intrinsic Value
PPL
Outstanding at beginning of period	6,385,149		$	28.54
Exercised	(1,903,989	)	27.51
Outstanding and exercisable at end of period	4,481,160		28.98		4.4	$	29
PPL Electric
Outstanding at beginning of period	313,433		$	27.79
Exercised	(72,494	)	28.84
Outstanding and exercisable at end of period	240,939		27.48		4.5	$	2
LKE
Outstanding at beginning of period	425,656		$	26.08
Exercised	(363,760	)	26.12
Outstanding and exercisable at end of period	61,896		25.81		5.5	$	1

For 2016, 2015 and 2014, PPL received $52 million, $97 million and $67 million in cash from stock options exercised. The related income tax benefits realized were not significant.

The total intrinsic value of stock options exercised for 2016, 2015 and 2014 were $18 million, $21 million and $13 million.

Compensation Expense

Compensation expense for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards, which for PPL Electric and LKE includes an allocation of PPL Services' expense, was:

	2016		2015		2014
PPL	$	27	$	33	$	30
PPL Electric	16		14		12
LKE	7		8		8

See Note 8 for details of the costs recognized in discontinued operations related to the accelerated vesting of awards for former PPL Energy Supply employees.

The income tax benefit related to above compensation expense was as follows:

	2016		2015		2014
PPL	$	12	$	14	$	12
PPL Electric	7		6		5
LKE	3		3		3

At December 31, 2016, unrecognized compensation expense related to nonvested restricted stock, restricted stock units, and performance units was:

	Unrecognized Compensation Expense		Weighted- Average Period for Recognition
PPL	$	8	1.8
PPL Electric	1		1.8
LKE	1		1.6

LG And E And KU Energy LLC [Member]

Stock-Based Compensation [Line Items]

Stock-Based Compensation

10. Stock-Based Compensation

(PPL, PPL Electric and LKE)

Under the ICP, SIP and the ICPKE (together, the Plans), restricted shares of PPL common stock, restricted stock units, performance units and stock options may be granted to officers and other key employees of PPL, PPL Electric, LKE and other affiliated companies. Awards under the Plans are made by the Compensation, Governance and Nominating Committee (CGNC) of the PPL Board of Directors, in the case of the ICP and SIP, and by the PPL Corporate Leadership Council (CLC), in the case of the ICPKE.

The following table details the award limits under each of the Plans.

	Total Plan	Annual Grant Limit Total As % of Outstanding		Annual Grant	Annual Grant Limit For Individual Participants - Performance Based Awards
	Award Limit	PPL Common Stock On First Day of		Limit Options	For awards denominated in	For awards denominated in
Plan	(Shares)	Each Calendar Year		(Shares)	shares (Shares)	cash (in dollars)
SIP	10,000,000			2,000,000	750,000	$	15,000,000
ICPKE	14,199,796	2	%	3,000,000

Any portion of these awards that has not been granted may be carried over and used in any subsequent year. If any award lapses, is forfeited or the rights of the participant terminate, the shares of PPL common stock underlying such an award are again available for grant. Shares delivered under the Plans may be in the form of authorized and unissued PPL common stock, common stock held in treasury by PPL or PPL common stock purchased on the open market (including private purchases) in accordance with applicable securities laws.

Restricted Stock and Restricted Stock Units

Restricted shares of PPL common stock are outstanding shares with full voting and dividend rights. Restricted stock awards are granted as a retention award for select key executives and vest when the recipient reaches a certain age or meets service or other criteria set forth in the executive's restricted stock award agreement.

The Plans allow for the grant of restricted stock units. Restricted stock units are awards based on the fair value of PPL common stock on the date of grant. Actual PPL common shares will be issued upon completion of a restriction period, generally three years.

Under the SIP, each restricted stock unit entitles the executive to accrue additional restricted stock units equal to the amount of quarterly dividends paid on PPL stock. These additional restricted stock units are deferred and payable in shares of PPL common stock at the end of the restriction period. Dividend equivalents on restricted stock unit awards granted under the ICP and the ICPKE are currently paid in cash when dividends are declared by PPL.

The fair value of restricted stock and restricted stock units granted is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value of restricted stock and restricted stock units granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. Recipients of restricted stock units granted under the ICPKE may also be granted the right to receive dividend equivalents through the end of the restriction period or until the award is forfeited. Restricted stock and restricted stock units are subject to forfeiture or accelerated payout under the plan provisions for termination, retirement, disability and death of employees. Restrictions lapse on restricted stock and restricted stock units fully, in certain situations, as defined by each of the Plans.

The weighted-average grant date fair value of restricted stock and restricted stock units granted was:

	2016		2015		2014
PPL	$	33.84	$	34.50	$	31.50
PPL Electric	34.32		34.41		31.81
LKE	33.73		34.89		30.98

Restricted stock and restricted stock unit activity for 2016 was:

	Restricted Shares/Units		Weighted- Average Grant Date Fair Value Per Share
PPL
Nonvested, beginning of period	1,679,475		$	29.65
Granted	536,208		33.84
Vested	(869,932	)	29.30
Forfeited	(8,726	)	32.59
Nonvested, end of period (a)	1,337,025		31.57
PPL Electric
Nonvested, beginning of period	221,085		$	29.48
Transfer between registrants	(10,405	)	30.98
Granted	70,486		34.32
Vested	(73,488	)	28.91
Forfeited	(3,108	)	32.81
Nonvested, end of period	204,570		31.27
LKE
Nonvested, beginning of period	318,963		$	29.65
Transfer between registrants	(24,993	)	30.52
Granted	86,987		33.73
Vested	(137,676	)	28.76
Nonvested, end of period	243,281		31.53

(a) Excludes 862,337 restricted stock units for which restrictions lapsed for former PPL Energy Supply employees as a result of the spinoff, but for which distribution will not occur until the end of the original restriction period of the awards.

Substantially all restricted stock and restricted stock unit awards are expected to vest.

The total fair value of restricted stock and restricted stock units vesting for the years ended December 31 was:

	2016		2015		2014
PPL	$	30	$	28	$	11
PPL Electric	3		4		2
LKE	5		4		—

Performance Units

Performance units are intended to encourage and reward future corporate performance. Performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable performance goal. Performance is determined based on total shareowner return during a three-year performance period. At the end of the period, payout is determined by comparing PPL's performance to the total shareowner return of the companies included in the Philadelphia Stock Exchange Utility Index. Awards are payable on a graduated basis based on thresholds that measure PPL's performance relative to peers that comprise the applicable index on which each years' awards are measured. Awards can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, performance units are subject to forfeiture upon termination of employment except for retirement, disability or death of an employee. For performance units granted prior to 2014, the performance units are eligible for pro-rata vesting at the end of the performance period for retirement, disability or death of an employee.

Beginning in 2014, the fair value of performance units granted to retirement-eligible employees is recognized as compensation expense on a straight-line basis over a one-year period, the minimum vesting period required for an employee to be entitled to payout of the awards with no proration. For employees who are not retirement-eligible, compensation expense is recognized over the shorter of the three-year performance period or the period until the employee is retirement-eligible, with a minimum vesting and recognition period of one-year. If an employee retires before the one-year vesting period, the performance units are forfeited. The fair value of performance units granted in 2013 and prior years was recognized as compensation expense on a straight-line basis over the three-year performance period. Performance units vest on a pro rata basis, in certain situations, as defined by each of the Plans.

The fair value of each performance unit granted was estimated using a Monte Carlo pricing model that considers stock beta, a risk-free interest rate, expected stock volatility and expected life. The stock beta was calculated comparing the risk of the individual securities to the average risk of the companies in the index group. The risk-free interest rate reflects the yield on a U.S. Treasury bond commensurate with the expected life of the performance unit. Volatility over the expected term of the performance unit is calculated using daily stock price observations for PPL and all companies in the index group and is evaluated with consideration given to prior periods that may need to be excluded based on events not likely to recur that had impacted PPL and the companies in the index group. PPL uses a mix of historic and implied volatility to value awards.

The weighted-average assumptions used in the model were:

	2016		2015		2014
Expected stock volatility	19.60	%	15.90	%	15.80	%
Expected life	3 years		3 years		3 years

The weighted-average grant date fair value of performance units granted was:

	2016		2015		2014
PPL	$	35.74	$	36.76	$	34.55
PPL Electric	35.68		37.93		34.43
LKE	35.28		37.10		34.12

Performance unit activity for 2016 was:

	Performance Units		Weighted- Average Grant Date Fair Value Per Share
PPL
Nonvested, beginning of period	993,540		$	33.09
Granted	471,401		35.74
Vested	(375,668	)	31.96
Forfeited	(18,737	)	33.22
Nonvested, end of period (a)	1,070,536		34.65

	Performance Units		Weighted- Average Grant Date Fair Value Per Share
PPL Electric
Nonvested, beginning of period	67,671		$	33.05
Granted	35,694		35.68
Vested	(23,880	)	31.89
Forfeited	(2,759	)	31.74
Nonvested, end of period	76,726		34.68
LKE
Nonvested, beginning of period	193,164		$	32.96
Transfer between registrants	(4,432	)	35.07
Granted	84,298		35.28
Vested	(70,048	)	31.74
Forfeited	(11,381	)	33.61
Nonvested, end of period	191,601		34.34

(a) Excludes 230,196 performance units for which the service vesting requirement was waived for former PPL Energy Supply employees as a result of the spinoff, but for which the ultimate number of shares to be distributed will depend on the actual attainment of the performance goals at the end of the specified performance periods.

The total fair value of performance units vesting for the year ended December 31, 2016, 2015 and 2014 was $12 million, $6 million and $5 million for PPL and insignificant for PPL Electric and LKE.

Stock Options

PPL's CGNC eliminated the use of stock options and changed its long-term incentive mix to 60% performance units and 40% performance-contingent restricted stock units, resulting in 100% performance-based long-term incentive mix for equity awards granted beginning in January 2014.

Under the Plans, stock options had been granted with an option exercise price per share not less than the fair value of PPL's common stock on the date of grant. Options outstanding at December 31, 2016, are fully vested. All options expire no later than ten years from the grant date. The options become exercisable immediately in certain situations, as defined by each of the Plans.

Stock option activity for 2016 was:

	Number of Options		Weighted Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Total Intrinsic Value
PPL
Outstanding at beginning of period	6,385,149		$	28.54
Exercised	(1,903,989	)	27.51
Outstanding and exercisable at end of period	4,481,160		28.98		4.4	$	29
PPL Electric
Outstanding at beginning of period	313,433		$	27.79
Exercised	(72,494	)	28.84
Outstanding and exercisable at end of period	240,939		27.48		4.5	$	2
LKE
Outstanding at beginning of period	425,656		$	26.08
Exercised	(363,760	)	26.12
Outstanding and exercisable at end of period	61,896		25.81		5.5	$	1

For 2016, 2015 and 2014, PPL received $52 million, $97 million and $67 million in cash from stock options exercised. The related income tax benefits realized were not significant.

The total intrinsic value of stock options exercised for 2016, 2015 and 2014 were $18 million, $21 million and $13 million.

Compensation Expense

Compensation expense for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards, which for PPL Electric and LKE includes an allocation of PPL Services' expense, was:

	2016		2015		2014
PPL	$	27	$	33	$	30
PPL Electric	16		14		12
LKE	7		8		8

See Note 8 for details of the costs recognized in discontinued operations related to the accelerated vesting of awards for former PPL Energy Supply employees.

The income tax benefit related to above compensation expense was as follows:

	2016		2015		2014
PPL	$	12	$	14	$	12
PPL Electric	7		6		5
LKE	3		3		3

At December 31, 2016, unrecognized compensation expense related to nonvested restricted stock, restricted stock units, and performance units was:

	Unrecognized Compensation Expense		Weighted- Average Period for Recognition
PPL	$	8	1.8
PPL Electric	1		1.8
LKE	1		1.6