4. Revenue from Contracts with Customers

(All Registrants)

See Note 3 in PPL's 2018 Form 10-K for a discussion of the principal activities from which the Registrants and PPL’s segments generate their revenues.

The following tables reconcile "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the periods ended March 31.



	Three Months
	2019
	PPL			PPL Electric			LKE			LG&E			KU
Operating Revenues (a)	$	2,079		$	645		$	845		$	410		$	450
Revenues derived from:
Alternative revenue programs (b)	(6		)	(4		)	(2		)	(2		)	—
Other (c)	(10		)	(3		)	(4		)	(1		)	(3		)
Revenues from Contracts with Customers	$	2,063		$	638		$	839		$	407		$	447



	Three Months
	2018
	PPL			PPL Electric			LKE			LG&E			KU
Operating Revenues (a)	$	2,126		$	639		$	872		$	419		$	471
Revenues derived from:
Alternative revenue programs (b)	32			2			30			14			16
Other (c)	(16		)	(4		)	(5		)	(1		)	(4		)
Revenues from Contracts with Customers	$	2,142		$	637		$	897		$	432		$	483


(a)	PPL includes $583 million and $615 million for the three months ended March 31, 2019 and 2018 of revenues from external customers reported by the U.K. Regulated segment. PPL Electric and LKE represent revenues from external customers reported by the Pennsylvania Regulated and Kentucky Regulated segments. See Note 3 for additional information.

(b)

Alternative revenue programs for PPL Electric include the over/under-collection of its transmission formula rate. Alternative revenue programs for LKE, LG&E and KU include the over/under collection for the ECR and DSM programs as well as LG&E's over/under collection of its GLT program and KU's over/under collection of its generation formula rate. Over-collections of revenue are shown as positive amounts in the table above; under-collections are shown as negative amounts.


(c)	Represents additional revenues outside the scope of revenues from contracts with customers such as leases and other miscellaneous revenues.

As discussed in Note 2 in PPL's 2018 Form 10-K, PPL's segments are segmented by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the table above.

The following tables show revenues from contracts with customers disaggregated by customer class for the periods ended March 31.



	Three Months
	2019
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	556	$	—	$	—	$	—	$	—
Residential	778		407		371		189		182
Commercial	319		95		224		121		103
Industrial	150		17		133		44		89
Other (b)	114		14		70		33		37
Wholesale - municipal	28		—		28		—		28
Wholesale - other (c)	13		—		13		20		8
Transmission	105		105		—		—		—
Revenues from Contracts with Customers	$	2,063	$	638	$	839	$	407	$	447



	Three Months
	2018
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	584	$	—	$	—	$	—	$	—
Residential	804		408		396		197		199
Commercial	325		98		227		124		103
Industrial	155		13		142		44		98
Other (b)	105		13		68		31		37
Wholesale - municipal	30		—		30		—		30
Wholesale - other (c)	34		—		34		36		16
Transmission	105		105		—		—		—
Revenues from Contracts with Customers	$	2,142	$	637	$	897	$	432	$	483


(a)	Represents customers of WPD.


(b)	Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses.


(c)	Includes wholesale power and transmission revenues. LG&E and KU amounts include intercompany power sales and transmission revenues, which are eliminated upon consolidation at LKE.

PPL Electric's revenues from contracts with customers are further disaggregated by distribution and transmission, which were $533 million and $105 million for the three months ended March 31, 2019 and $532 million and $105 million for the three months ended March 31, 2018.

Contract receivables from customers are primarily included in "Accounts receivable - Customer" and "Unbilled revenues" on the Balance Sheets.

The following table shows the accounts receivable balances that were impaired for the periods ended March 31.



	2019		2018
PPL	$	9	$	10
PPL Electric	6		7
LKE	2		2
LG&E	1		1
KU	1		1

The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.



	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2018	$	42	$	23	$	9	$	5	$	4
Contract liabilities at March 31, 2019	37		14		7		4		3
Revenue recognized during the three months ended March 31, 2019 that was included in the contract liability balance at December 31, 2018	25		11		9		5		4



	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2017	$	29	$	19	$	8	$	4	$	4
Contract liabilities at March 31, 2018	20		11		7		3		4
Revenue recognized during the three months ended March 31, 2018 that was included in the contract liability balance at December 31, 2017	17		8		8		4		4

Contract liabilities result from recording contractual billings in advance for customer attachments to the Registrants' infrastructure and payments received in excess of revenues earned to date. Advanced billings for customer attachments are recognized as revenue ratably over the billing period. Payments received in excess of revenues earned to date are recognized as revenue as services are delivered in subsequent periods.

At March 31, 2019, PPL had $46 million of performance obligations attributable to Corporate and Other that have not been satisfied. Of this amount, PPL expects to recognize approximately $26 million within the next 12 months.