KENTUCKY UTILITIES CO

The Registrants had the following at:

Net cash provided by (used in) operating, investing and financing activities for the three month periods ended March 31, and the changes between periods, were as follows.

Operating Activities

The components of the change in cash provided by (used in) operating activities for the three months ended March 31, 2026 compared with 2025 were as follows.

A majority of the Registrants' operating cash flows are provided by their electric and natural gas utilities, which are significantly influenced by factors such as weather, regulatory mechanisms, economic conditions, changes in working capital and operating costs.

(PPL)

PPL's cash provided by operating activities in 2026 increased $44 million compared with 2025.

•Net income increased $38 million between the periods and included an increase in non-cash components of $81 million. The increase in non-cash components was primarily due to an increase in deferred income taxes and investment tax credits.

•The $48 million decrease in cash from changes in working capital was primarily due to an increase in current regulatory assets and a decrease in taxes payable, partially offset by a decrease in accounts receivable and an increase in accounts payable.

•The $27 million decrease in cash from other operating activities was primarily due to an increase in other noncurrent assets and a decrease in other noncurrent liabilities.

PPL Electric's cash provided by operating activities in 2026 decreased $77 million compared with 2025.

•Net income was flat between the periods and included an increase in non-cash components of $30 million. The increase in non-cash components was primarily due to an increase in deferred income taxes and investment tax credits.

•The $101 million decrease in cash from changes in working capital was primarily due to a decrease in accounts payable and taxes payable and an increase in accounts receivable, partially offset by a decrease in unbilled revenues.

(LG&E)

LG&E's cash provided by operating activities in 2026 decreased $26 million compared with 2025.

•Net income increased $27 million between the periods.

•The $82 million decrease in cash from changes in working capital was primarily due to a decrease in accounts payable and taxes payable and an increase in current regulatory assets.

•The $32 million increase in cash from other operating activities was primarily due to a decrease in other noncurrent assets and an increase in other noncurrent liabilities.

(KU)

KU's cash provided by operating activities in 2026 decreased $14 million compared with 2025.

•Net income increased $19 million between the periods.

•The $16 million decrease in cash from changes in working capital was primarily due to a decrease in taxes payable and accrued interest and an increase in unbilled revenues, partially offset by an increase in accounts payable.

•The $10 million decrease in cash from other operating activities was primarily due to an increase in other noncurrent assets and a decrease in other noncurrent liabilities.

Investing Activities

The components of the change in cash provided by (used in) investing activities for the three months ended March 31, 2026 compared with 2025 were as follows.

For PPL, the increase in expenditures for PP&E was due to an increase in project expenditures at PPL Electric, RIE, LG&E and KU. The increase in expenditures at PPL Electric was primarily due to increases in transmission and distribution projects. The increase in expenditures at LG&E was primarily due to the E.W. Brown battery storage project and Mill Creek Unit 5. The increase in expenditures at KU was primarily due to Mill Creek Unit 5.

For PPL Electric, the change in "Notes receivable from affiliate" is due to fewer payments received from affiliates. For LG&E, the change is due to additional lending to an affiliate. See Note 10 to the Financial Statements for further discussion of intercompany borrowings.

Financing Activities

PPL regularly analyzes and evaluates its capital structure and may explore potential transactions, including debt or equity purchases and/or exchanges from time to time through redemptions, open market purchases, private transactions, or otherwise, or seek to raise additional debt or equity capital, depending on market conditions.

The components of the change in cash provided by (used in) financing activities for the three months ended March 31, 2026 compared with 2025 were as follows.

See Note 7 to the Financial Statements in this Form 10-Q for information on 2026 short-term and long-term debt activity, equity transactions and PPL dividends. See Note 8 to the Financial Statements in the Registrants' 2025 Form 10-K for information on 2025 activity.

Credit Facilities

The Registrants maintain credit facilities to enhance liquidity, provide credit support and provide a backstop to commercial paper programs. Amounts borrowed under these credit facilities are reflected in "Short-term debt" on the Balance Sheets. At March 31, 2026, the total committed borrowing capacity under credit facilities and the borrowings under these facilities were:

External

(b)Includes a $1.5 billion syndicated credit facility with a $400 million borrowing sublimit for RIE and a $1.1 billion sublimit for PPL Capital Funding. RIE's borrowing sublimit is adjustable, at the borrowers' option, from $0 to $600 million, with the remaining balance of the $1.5 billion available under the facility allocated to PPL Capital Funding. At March 31, 2026, PPL Capital Funding and RIE had no commercial paper outstanding. RIE's obligations under the facility are not guaranteed by PPL.

(c)The commitments under the credit facilities are provided by a diverse bank group, with no one bank and its affiliates providing an aggregate commitment of more than the following percentages of the total committed capacity: PPL - 8%, PPL Electric - 7%, LG&E - 7% and KU - 7%.

See Note 7 to the Financial Statements for further discussion of the Registrants' credit facilities.

Intercompany (LG&E and KU)

(a)LG&E and KU participate in an intercompany money pool agreement whereby LKE and/or KU make available to LG&E, and LKE and/or LG&E make available to KU funds up to the difference between LG&E's and KU's FERC borrowing limit and LG&E's and KU's commercial paper issued, at an interest rate based on the lower of a market index of commercial paper issues and two additional rate options based on SOFR.

See Note 10 to the Financial Statements for further discussion of intercompany credit facilities.

Commercial Paper (All Registrants)

The Registrants, and PPL Capital Funding and RIE, 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 credit facility, with PPL Capital Funding and RIE's issuances supported by PPL Capital Funding's syndicated credit facility. The following commercial paper programs were in place at March 31, 2026:

(b)Issuances under the PPL Capital Funding and RIE commercial paper programs are supported by the PPL Capital Funding syndicated credit facility, which has a total capacity of $1.5 billion, currently with a $400 million borrowing sublimit for RIE and a $1.1 billion sublimit for PPL Capital Funding. PPL Capital Funding's Commercial paper program is also backed by a separate bilateral credit facility for $100 million.

Long-term Debt and Equity Security Activities

See Note 7 to the Financial Statements for information regarding the Registrants' long-term debt activities.

Corporate Units(PPL)

In February 2026, PPL issued 23 million equity units (the Equity Units), initially in the form of corporate units (the Corporate Units), for total gross proceeds of $1.15 billion. The issuance included the underwriters' full exercise of their option to purchase up to an additional 3 million Corporate Units to cover over‑allotments. PPL received proceeds of approximately $1.13 billion, net of underwriting discounts and commissions. Proceeds were used to repay short-term debt and for general corporate purposes.

Each Corporate Unit has a stated amount of $50 and is comprised of (i) a purchase contract (each, a Purchase Contract) obligating the holder to purchase no later than February 15, 2029 (the Purchase Contract Settlement Date), a certain number of shares of PPL's common stock (Common Stock), for $50 in cash and (ii) a 1/40 undivided beneficial ownership interest in (a) $1,000 principal amount of PPL Capital Funding's 4.02% Remarketable Senior Notes due 2034 and (b) $1,000 principal amount of PPL Capital Funding's 4.02% Remarketable Senior Notes due 2039 (together the RSNs). The Corporate Units carry an annual distribution rate of 7.00% of the stated amount, which is comprised of a quarterly interest payment on the RSNs of 4.02% per year and a quarterly contract adjustment payment of 2.98% per year.

The holder's ownership interests in the RSNs are pledged to PPL to secure the holder's obligations under the related Purchase Contract. PPL expects that the RSNs will be remarketed prior to the Purchase Contract Settlement Date. Following a successful remarketing, the interest rates on the RSNs will reset to market rates at that time, interest will be payable on a semi-annual basis and PPL Capital Funding will cease to have the ability to redeem the RSNs at its option. If the remarketing is unsuccessful, the holders will have the right to put the RSNs to PPL Capital Funding at par.

The RSNs are unsecured and unsubordinated obligations of PPL Capital Funding and are fully and unconditionally guaranteed by PPL.

The number of shares to be delivered under the Purchase Contracts will be determined based on the applicable market value of PPL's Common Stock, which is the average of the volume-weighted average price on each trading day during the 20 consecutive scheduled trading day period ending on, and including, the third scheduled trading day prior to the Purchase Contract Settlement Date, subject to anti‑dilution adjustments, as follows:

•If the applicable market value is greater than or equal to $46.58, the holder will receive 1.0735 shares (a minimum of 24.7 million shares).

•If the applicable market value is greater than $37.26 but less than $46.58, the holder will receive a number of shares equal to $50 divided by the applicable market value.

•If the applicable market value is less than or equal to $37.26, the holder will receive 1.3419 shares (a maximum of 30.9 million shares).

Each Purchase Contract requires PPL to make quarterly contract adjustment payments at a rate of 2.98% per year on the $50 stated amount of the Equity Unit. PPL has the option to defer these contract adjustment payments until the Purchase Contract Settlement Date. Deferred contract adjustment payments will accrue additional contract adjustment payments at the rate of 7.00% per year until paid. Until any deferred contract adjustment payments have been paid, PPL may not (1) declare or pay any dividends or distributions on, or redeem, purchase or acquire or make a liquidation payment with respect to, any of its capital stock, (2) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of our debt securities that rank on parity with, or junior to, the contract adjustment payments, or (3) make any guarantee payments under any guarantee by PPL of securities of any of our subsidiaries if the guarantee ranks on parity with, or junior to, the contract adjustment payments.

The proceeds from the sale of the Equity Units were allocated to the RSNs and the Purchase Contracts, including the obligation to make contract adjustment payments, based on the underlying fair value of each instrument at the time of issuance. As a result, the RSNs were recorded at $1.15 billion, which approximated fair value, as long-term debt. At the time of issuance, the present value of the contract adjustment payments of $95 million was recorded to other long-term liabilities, representing the fair value of the obligation to make contract adjustment payments, with an offsetting reduction to capital in excess of par value for the issuance of the Purchase Contracts. The contract adjustment payment liability is being accreted through interest expense over the three-year term of the Purchase Contracts. The initial valuation of the contract adjustment payments is considered a non-cash transaction that is excluded from the Statement of Cash Flows. To settle the Purchase Contracts, PPL will be required to issue a maximum of approximately 30.9 million shares of Common Stock under the standard provisions of the Purchase Contracts and 42.9 million shares of common stock that could be issued under make-whole provisions in the event of early settlement upon a fundamental change. See Note 4 for EPS considerations related to the Purchase Contracts.

ATM Program

In February 2025, PPL entered into an equity distribution agreement, pursuant to which PPL may sell, from time to time, up to an aggregate of $2 billion of its common stock through an ATM Program, which may utilize an optional forward sales component. Each forward contract under the agreement must be settled within 24 months. The compensation paid to the selling agents by PPL may be up to 2% of the gross offering proceeds of the shares. At March 31, 2026, PPL had outstanding forward contracts to sell approximately 27.4 million shares of its common stock at a blended initial forward price of approximately $35.90 per share. The forward sale price may be adjusted based on changes in daily interest rates, for certain stock loan fees as determined by a third-party agent, and will be subject to predetermined reductions based on expected dividends. Each outstanding forward contract must be settled on or before dates ranging from December 30, 2026 to August 11, 2027. PPL may elect, at its discretion, to physically settle, net share settle or net cash settle the forward contracts. At March 31, 2026, PPL could have settled the outstanding forward sale contracts with physical delivery of approximately 27.4 million shares of common stock for proceeds of approximately $980 million. The forward contracts under the ATM program are classified as equity transactions.

Common Stock Dividends

In February 2026, PPL declared a quarterly common stock dividend, payable April 1, 2026, of 28.50 cents per share. 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.

Rating Agency Actions

Moody's and S&P periodically review the credit ratings of the debt of the Registrants and their subsidiaries. Based on their respective independent reviews, the rating agencies may make certain ratings revisions or ratings affirmations.

A credit rating reflects an assessment by the rating agency of the creditworthiness associated with an issuer and particular securities that it issues. The credit ratings of the Registrants and their subsidiaries are based on information provided by the Registrants and other sources. The ratings of Moody's and S&P are not a recommendation to buy, sell or hold any securities of the Registrants or their subsidiaries. Such ratings may be subject to revisions or withdrawal by the agencies at any time and should be evaluated independently of each other and any other rating that may be assigned to the securities.

The credit ratings of the Registrants and their subsidiaries affect their liquidity, access to capital markets and cost of borrowing under their credit facilities. A downgrade in the Registrants' or their subsidiaries' credit ratings could result in higher borrowing costs and reduced access to capital markets. The Registrants and their subsidiaries have no credit rating triggers that would result in the reduction of access to capital markets or the acceleration of maturity dates of outstanding debt.

Since June 2023, the rating agencies have taken no ratings actions related to the Registrants and their subsidiaries.

Ratings Triggers

Various derivative and non-derivative contracts, including contracts for the sale and purchase of electricity and fuel, commodity transportation and storage, and interest rate instruments, contain provisions that require the posting of additional collateral or permit the counterparty to terminate the contract, if PPL's, LG&E's or KU's or their subsidiaries' credit rating, as applicable, were to fall below investment grade. See Note 13 to the Financial Statements for a discussion of "Credit Risk-Related Contingent Features," including a discussion of the potential additional collateral requirements for derivative contracts in a net liability position at March 31, 2026.

For additional information on the Registrants' liquidity and capital resources, see "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Registrants' 2025 Form 10-K.