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

12 Months Ended

Dec. 31, 2019

LG&E and KU Energy LLC 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)

	2019			2018			2017
Other Income (Expense) - net
Equity in Earnings of Subsidiaries	$	477		$	470		$	397
Interest Income with Affiliate	28			25			14
Total	505			495			411
Interest Expense	30			29			30
Interest Expense with Affiliate	32			28			20
Income Before Income Taxes	443			438			361
Income Tax Expense (Benefit)	(25		)	(7		)	45
Net Income	$	468		$	445		$	316
Total other comprehensive income (loss)	(4		)	17			(18		)
Comprehensive Income Attributable to Member	$	464		$	462		$	298

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)

	2019			2018			2017
Cash Flows from Operating Activities
Net cash provided by (used in) operating activities	$	368		$	346		$	401
Cash Flows from Investing Activities
Capital contributions to affiliated subsidiaries	(93		)	(128		)	(30		)
Net decrease (increase) in notes receivable from affiliates	(44		)	(26		)	(28		)
Net cash provided by (used in) investing activities	(137		)	(154		)	(58		)
Cash Flows from Financing Activities
Net increase (decrease) in notes payable with affiliates	14			110			58
Contribution from member	63			—			—
Distribution to member	(308		)	(302		)	(402		)
Net cash provided by (used in) financing activities	(231		)	(192		)	(344		)
Net Increase (Decrease) in Cash and Cash Equivalents	—			—			(1		)
Cash and Cash Equivalents at Beginning of Period	—			—			1
Cash and Cash Equivalents at End of Period	$	—		$	—		$	—
Supplemental disclosures of cash flow information:
Cash Dividends Received from Subsidiaries	$	411		$	402		$	418

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)

	2019		2018
Assets
Current Assets
Accounts receivable from affiliates	$	3	$	—
Income taxes receivable	3		—
Notes receivable from affiliates	1,105		1,061
Total Current Assets	1,111		1,061
Investments
Affiliated companies at equity	5,577		5,422
Other Noncurrent Assets
Deferred income taxes	314		299
Total Assets	$	7,002	$	6,782
Liabilities and Equity
Current Liabilities
Notes payable to affiliates	$	150	$	177
Long-term debt due within one year	475		—
Accounts payable to affiliates	489		487
Taxes	—		11
Other current liabilities	6		6
Total Current Liabilities	1,120		681
Long-term Debt
Long-term debt	249		723
Notes payable to affiliates	691		650
Total Long-term Debt	940		1,373
Deferred Credits and Other Noncurrent Liabilities	—		5
Equity	4,942		4,723
Total Liabilities and Equity	$	7,002	$	6,782

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. LKE uses the equity method to account for its investments in entities in which it has a controlling financial interest. LKE's 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 distributions to its member and to meet its other cash requirements. See Note 8 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.

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 covering the due and punctual payment, performance and discharge by each party of its respective obligations. The most comprehensive of these guarantees is the LKE guarantee covering operational, regulatory and environmental commitments and indemnifications made by WKE under a 2009 Transaction Termination Agreement. This guarantee has a term of 12 years ending July 2021, and a maximum exposure of $200 million, exclusive of certain items such as government fines and penalties that may exceed the maximum.

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 various indemnification scenarios, but does not expect such outcomes to result in significant losses above the amounts recorded.

3. Long-Term Debt

See Note 8 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. Also see Note 8 to LKE's consolidated financial statements for the terms of LKE's $650 million in notes payable to a PPL affiliate. These notes range in maturity through 2028.