(PPL)

WPD has recorded conditional AROs required by U.K. law related to treated wood poles, gas-filled switchgear and fluid-filled cables.

(PPL and PPL Electric)

PPL Electric has identified legal retirement obligations for the retirement of certain transmission assets that could not be reasonably estimated due to indeterminable settlement dates. These assets are located on rights-of-way that allow the grantor to require PPL Electric to relocate or remove the assets. Since this option is at the discretion of the grantor of the right-of-way, PPL Electric is unable to determine when these events may occur.

(PPL, LKE, LG&E and KU)

LKE, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 13 for information on the CCR rule. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. LG&E also has AROs related to natural gas mains and wells. LG&E's and KU's transmission and distribution lines largely operate under perpetual property easement agreements, which do not generally require restoration upon removal of the property. Therefore, no material AROs are recorded for transmission and distribution assets. As described in Notes 1 and 7, for LKE, LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset. For other AROs, at the time of retirement, the related ARO regulatory asset is offset against the associated cost of removal regulatory liability, PP&E and ARO liability.

The changes in the carrying amounts of AROs were as follows:



	PPL						LKE						LG&E						KU
	2018			2017			2018			2017			2018			2017			2018			2017
ARO at beginning of period	$	397		$	488		$	356		$	433		$	121		$	145		$	235		$	288
Accretion	20			21			18			20			6			7			12			13
Obligations incurred	8			—			8			—			—			—			8			—
Changes in estimated timing or cost	(3		)	(73		)	(14		)	(54		)	(2		)	(8		)	(12		)	(46		)
Effect of foreign currency exchange rates	(3		)	4			—			—			—			—			—			—
Obligations settled	(72		)	(43		)	(72		)	(43		)	(22		)	(23		)	(50		)	(20		)
ARO at end of period	$	347		$	397		$	296		$	356		$	103		$	121		$	193		$	235