Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

Reconciliations of income tax expense (benefit) for the period ended March 31 are as follows.

(PPL)
	Three Months
	2020			2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	146		$	124
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	13			13
Valuation allowance adjustments	6			7
Impact of lower U.K. income tax rates	(11		)	(8		)
Amortization of excess deferred federal and state income taxes	(11		)	(11		)
Other	(3		)	1
Total increase (decrease)	(6		)	2
Total income tax expense (benefit)	$	140		$	126

(PPL Electric)
	Three Months
	2020			2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	33		$	34
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	13			13
Amortization of excess deferred income taxes	(3		)	(4		)
Other	(2		)	(1		)
Total increase (decrease)	8			8
Total income tax expense (benefit)	$	41		$	42

(LKE)
	Three Months
	2020			2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	35		$	33
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	7			6
Amortization of excess deferred federal and state income taxes	(7		)	(6		)
Other	(1		)	(1		)
Total increase (decrease)	(1		)	(1		)
Total income tax expense (benefit)	$	34		$	32

(LG&E)
	Three Months
	2020			2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	19		$	17
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	4			3
Amortization of excess deferred federal and state income taxes	(3		)	(3		)
Other	(1		)	—
Total increase (decrease)	—			—
Total income tax expense (benefit)	$	19		$	17

(KU)
	Three Months
	2020			2019
Federal income tax on Income Before Income Taxes at statutory tax rate - 21%	$	21		$	22
Increase (decrease) due to:
State income taxes, net of federal income tax benefit	4			4
Amortization of excess deferred federal and state income taxes	(4		)	(3		)
Other	(1		)	(1		)
Total increase (decrease)	(1		)	—
Total income tax expense (benefit)	$	20		$	22

Other

2020 TCJA Regulatory Update (All Registrants)

The IRS issued proposed regulations for certain provisions of the TCJA in 2018, including rules relating to limitations on interest deductibility. These proposed regulations were issued in November 2018 and should not apply to the Registrants until the year in which the regulations are issued in final form, which is expected to be in 2020. It is uncertain what form the final regulations will take and, therefore, the Registrants cannot predict what impact the final regulations will have on the tax deductibility of interest expense. However, if the proposed regulations were issued as final in their current form, the Registrants could have a limitation on a portion of their interest expense deduction for tax purposes and such limitation could be significant. PPL expressed its views on these proposed regulations in a comment letter addressed to the IRS on February 26, 2019.