Financing Activities

3 Months Ended

Mar. 31, 2016

7. Financing Activities

Credit Arrangements and Short-term Debt

(All Registrants)

The Registrants maintain credit facilities to enhance liquidity, provide credit support and provide a backstop to commercial paper programs. For reporting purposes, on a consolidated basis, the credit facilities and commercial paper programs of PPL Electric, LKE, LG&E and KU also apply to PPL and the credit facilities and commercial paper programs of LG&E and KU also apply to LKE. The amounts borrowed below are recorded as "Short-term debt" on the Balance Sheets. The following credit facilities were in place at:

				March 31, 2016										December 31, 2015
										Letters of						Letters of
										Credit						Credit
										and						and
										Commercial						Commercial
				Expiration						Paper		Unused				Paper
				Date		Capacity		Borrowed		Issued		Capacity		Borrowed		Issued
PPL
U.K.
	WPD plc
		Syndicated Credit Facility			Jan. 2021	£	210	£	144			£	72	£	133
	WPD (South West)
		Syndicated Credit Facility			July 2020		245						245
	WPD (East Midlands)
		Syndicated Credit Facility			July 2020		300		37				263
	WPD (West Midlands)
		Syndicated Credit Facility			July 2020		300						300
	Uncommitted Credit Facilities						40			£	4		36			£	4
			Total U.K. Credit Facilities (a)			£	1,095	£	181	£	4	£	916	£	133	£	4

U.S.
	PPL Capital Funding
		Syndicated Credit Facility			Jan. 2021	$	700			$	700					$	151
		Syndicated Credit Facility			Nov. 2018		300				73	$	227				300
		Bilateral Credit Facility			Mar. 2017		150				17		133				20
			Total PPL Capital Funding Credit Facilities			$	1,150			$	790	$	360			$	471

PPL Electric
	Syndicated Credit Facility				Jan. 2021	$	400			$	126	$	274			$	1

LKE
	Syndicated Credit Facility (b)				Oct. 2018	$	75					$	75	$	75

LG&E
	Syndicated Credit Facility				Dec. 2020	$	500			$	82	$	418			$	142

KU
	Syndicated Credit Facility				Dec. 2020	$	400			$	34	$	366			$	48
	Letter of Credit Facility				Oct. 2017		198				198						198
			Total KU Credit Facilities			$	598			$	232	$	366			$	246

(a) WPD plc's amounts borrowed at March 31, 2016 and December 31, 2015 were USD-denominated borrowings of $200 million for both periods, which bore interest at 1.26% and 1.83%. The unused capacity reflects the amount borrowed in GBP of £138 million as of the date borrowed. WPD (East Midlands) amount borrowed at March 31, 2016 was a GBP-denominated borrowing which equated to $51 million and bore interest at 0.91%. At March 31, 2016, the unused capacity under the U.K. credit facilities was approximately $1.3 billion.

(b) LKE’s interest rate on outstanding borrowings at December 31, 2015 was 1.68%.

PPL, PPL Electric, LG&E and KU maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs, as necessary. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's Syndicated Credit Facility. The following commercial paper programs were in place at:

		March 31, 2016								December 31, 2015
		Weighted -				Commercial				Weighted -		Commercial
		Average				Paper		Unused		Average		Paper
		Interest Rate		Capacity		Issuances		Capacity		Interest Rate		Issuances

PPL Capital Funding			0.85%	$	1,000	$	773	$	227		0.78%	$	451
PPL Electric			0.72%		400		125		275
LG&E			0.79%		350		82		268		0.71%		142
KU			0.64%		350		34		316		0.72%		48
	Total			$	2,100	$	1,014	$	1,086			$	641

(LKE)

See Note 11 for discussion of intercompany borrowings.

Long-term Debt

(PPL and PPL Electric)

In March 2016, the LCIDA issued $116 million of Pollution Control Revenue Refunding Bonds, Series 2016A due 2029 and $108 million of Pollution Control Revenue Refunding Bonds, Series 2016B due 2027 on behalf of PPL Electric. The bonds were issued bearing interest at an initial term rate of 0.90% through their mandatory purchase dates of September 1, 2017 and August 15, 2017. The proceeds of the bonds were used to redeem $116 million of 4.70% Pollution Control Revenue Refunding Bonds, 2005 Series A due 2029 and $108 million of 4.75% Pollution Control Revenue Refunding Bonds, 2005 Series B due 2027 previously issued by the LCIDA on behalf of PPL Electric.

In connection with the issuance of each of these new series of LCIDA bonds, PPL Electric entered into a loan agreement with the LCIDA pursuant to which the LCIDA has loaned to PPL Electric the proceeds of the LCIDA bonds on payment terms that correspond to the LCIDA bonds. In order to secure its obligations under the loan agreement, PPL Electric issued $224 million of First Mortgage Bonds under its 2001 Mortgage Indenture, which also have payment terms that correspond to the LCIDA bonds.

(PPL)

ATM Program

In February 2015, PPL filed a registration statement with the SEC and entered into two separate equity distribution agreements, pursuant to which PPL may sell, from time to time, up to an aggregate of $500 million of its common stock. For the periods ended March 31, 2016 and 2015, PPL did not issue any shares under the agreements.

Distributions

In February 2016, PPL declared a quarterly common stock dividend, payable April 1, 2016, of 38 cents per share (equivalent to $1.52 per annum). Future dividends, declared at the discretion of the Board of Directors, will depend upon future earnings, cash flows, financial and legal requirements and other factors.