KENTUCKY UTILITIES CO

4. Earnings Per Share

(PPL)

Basic EPS is computed by dividing income available to PPL common shareowners by the weighted-average number of common shares outstanding during the applicable period. Diluted EPS is computed by dividing income available to PPL common shareowners by the weighted-average number of common shares outstanding, increased by the number of incremental shares that would be outstanding if potentially dilutive share-based payment awards were converted to common shares as calculated using the Two-Class Method or Treasury Stock Method. The If-Converted Method is applied to the Exchangeable Senior Notes due 2028 and 2030 (Exchangeable Notes) issued in February 2023 and November 2025.

Incremental non-participating securities that have a dilutive impact are detailed in the table below. These securities include forward sales of PPL common stock issued through an ATM Program and the number of shares needed to settle the conversion premium on the 2023 Exchangeable Notes.

The forward sale agreements are dilutive under the Treasury Stock Method to the extent the average stock price of PPL's common shares exceeds the forward sale price prescribed in the agreements. See Note 7 for additional information on the ATM Program.

The 2023 Exchangeable Notes are dilutive under the If-Converted Method as PPL's quarterly average common stock price exceeds the conversion price prescribed in the indenture governing the 2023 Exchangeable Notes. The 2025 Exchangeable Notes are excluded from the diluted EPS calculation as PPL's quarterly average common stock price has not exceeded the conversion price prescribed in the indenture governing the 2025 Exchangeable Notes. See Note 8 in PPL's Form 10-K for the year ended December 31, 2025 for additional information on the 2025 Exchangeable Notes due 2030 and Note 8 in PPL's Form 10-K for the year ended December 31, 2023 for additional information on the 2023 Exchangeable Notes due 2028.

The Purchase Contracts associated with the Corporate Units issued in February 2026 are excluded from the dilutive EPS calculation under the Treasury Stock Method as the average of the volume-weighted average price of PPL's common stock has not exceeded the price prescribed in the agreement governing the Purchase Contracts. See Note 7 for additional information on the Purchase Contracts.

Reconciliations of the amounts of income and shares of PPL common stock (in thousands) for the periods ended March 31 used in the EPS calculation are:

(a) The Treasury Stock Method was applied to non-participating share-based payment awards.

For the periods ended March 31, PPL issued common stock related to the DRIP as follows (in thousands):

For the periods ended March 31, the following shares (in thousands) were excluded from the computations of diluted EPS because the effect would have been antidilutive.