PPL Corp 10-K

ppl-20251231 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _________ to ___________ Commission File Number Registrant; State of Incorporation; Address and Telephone Number IRS Employer Identification No. 1-11459 PPL Corporation (Exact name of Registrant as specified in its charter) Pennsylvania 645 Hamilton Street Allentown, PA 18101 (610) 774-5151 23-2758192 1-905 PPL Electric Utilities Corporation (Exact name of Registrant as specified in its charter) Pennsylvania 827 Hausman Road Allentown, PA 18104-9392 (610) 774-5151 23-0959590 1-2893 Louisville Gas and Electric Company (Exact name of Registrant as specified in its charter) Kentucky 820 West Broadway Louisville, KY 40202 (502) 627-2000 61-0264150 1-3464 Kentucky Utilities Company (Exact name of Registrant as specified in its charter) Kentucky and Virginia One Quality Street Lexington, KY 40507-1462 (502) 627-2000 61-0247570 Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s): Name of each exchange on which registered Common Stock of PPL Corporation PPL New York Stock Exchange Junior Subordinated Notes of PPL Capital Funding, Inc. 2007 Series A due 2067 PPL/67 New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Common Stock of PPL Electric Utilities Corporation Indicate by check mark if the registrants are a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. PPL Corporation Yes ☒ No ☐ PPL Electric Utilities Corporation Yes ☒ No ☐ Louisville Gas and Electric Company Yes ☒ No ☐ Kentucky Utilities Company Yes ☒ No ☐ Indicate by check mark if the registrants are not required to file reports pursuant to Section 13 or Section 15(d) of the Act. PPL Corporation Yes ☐ No ☒ PPL Electric Utilities Corporation Yes ☐ No ☒ Louisville Gas and Electric Company Yes ☐ No ☒ Kentucky Utilities Company Yes ☐ No ☒ Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. PPL Corporation Yes ☒ No ☐ PPL Electric Utilities Corporation Yes ☒ No ☐ Louisville Gas and Electric Company Yes ☒ No ☐ Kentucky Utilities Company Yes ☒ No ☐ Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). PPL Corporation Yes ☒ No ☐ PPL Electric Utilities Corporation Yes ☒ No ☐ Louisville Gas and Electric Company Yes ☒ No ☐ Kentucky Utilities Company Yes ☒ No ☐ Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies or emerging growth companies. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company PPL Corporation ☒ ☐ ☐ ☐ ☐ PPL Electric Utilities Corporation ☐ ☐ ☒ ☐ ☐ Louisville Gas and Electric Company ☐ ☐ ☒ ☐ ☐ Kentucky Utilities Company ☐ ☐ ☒ ☐ ☐ Table of Contents If emerging growth companies, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. PPL Corporation ☐ PPL Electric Utilities Corporation ☐ Louisville Gas and Electric Company ☐ Kentucky Utilities Company ☐ Indicate by check mark whether each registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. PPL Corporation ☒ PPL Electric Utilities Corporation ☐ Louisville Gas and Electric Company ☐ Kentucky Utilities Company ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrants included in the filing reflect the correction of an error to previously issued financial statements. PPL Corporation ☐ PPL Electric Utilities Corporation ☐ Louisville Gas and Electric Company ☐ Kentucky Utilities Company ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrants' executive officers during the relevant recovery period pursuant to §240.10D-1(b). PPL Corporation ☐ PPL Electric Utilities Corporation ☐ Louisville Gas and Electric Company ☐ Kentucky Utilities Company ☐ Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). PPL Corporation Yes ☐ No ☒ PPL Electric Utilities Corporation Yes ☐ No ☒ Louisville Gas and Electric Company Yes ☐ No ☒ Kentucky Utilities Company Yes ☐ No ☒ As of June 30, 2025, PPL Corporation had 739,306,310 shares of its $0.01 par value Common Stock outstanding. The aggregate market value of these common shares (based upon the closing price of these shares on the New York Stock Exchange on that date) held by non-affiliates was $ 25,055,090,846 . As of January 30, 2026, PPL Corporation had 751,306,792 shares of its $0.01 par value Common Stock outstanding. As of January 30, 2026, PPL Corporation held all 66,368,056 outstanding common shares, no par value, of PPL Electric Utilities Corporation. As of January 30, 2026, LG&E and KU Energy LLC held all 21,294,223 outstanding common shares, no par value, of Louisville Gas and Electric Company. As of January 30, 2026, LG&E and KU Energy LLC held all 37,817,878 outstanding common shares, no par value, of Kentucky Utilities Company. PPL Electric Utilities Corporation, Louisville Gas and Electric Company and Kentucky Utilities Company meet the conditions set forth in General Instructions (I)(1)(a) and (b) of Form 10-K and are therefore filing this form with the reduced disclosure format. Table of Contents Documents incorporated by reference: PPL Corporation has incorporated herein by reference certain sections of PPL Corporation's 2026 Notice of Annual Meeting and Proxy Statement, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2025 and which will provide the information required by Part III of this Report. Table of Contents PPL CORPORATION PPL ELECTRIC UTILITIES CORPORATION LOUISVILLE GAS AND ELECTRIC COMPANY KENTUCKY UTILITIES COMPANY FORM 10-K ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 2025 TABLE OF CONTENTS This combined Form 10-K is separately filed by the following Registrants in their individual capacity: PPL Corporation, PPL Electric Utilities Corporation, Louisville Gas and Electric Company and Kentucky Utilities Company. Information contained herein relating to any individual Registrant is filed by such Registrant solely on its own behalf and no Registrant makes any representation as to information relating to any other Registrant, except that information under "Forward-Looking Information" relating to subsidiaries of PPL Corporation is also attributed to PPL Corporation. Unless otherwise specified, references in this Report, individually, to PPL Corporation, PPL Electric Utilities Corporation, Louisville Gas and Electric Company and Kentucky Utilities Company are references to such entities directly or to one or more of their subsidiaries, as the case may be, the financial results of which subsidiaries are consolidated into such Registrants' financial statements in accordance with GAAP. This presentation has been applied where identification of particular subsidiaries is not material to the matter being disclosed, and to conform narrative disclosures to the presentation of financial information on a consolidated basis. Item Page PART I Glossary of Terms and Abbreviations i Forward-Looking Information 1 1. Business 3 1A. Risk Factors 18 1B. Unresolved Staff Comments 26 1C. Cybersecurity 26 2. Properties 28 3. Legal Proceedings 29 4. Mine Safety Disclosures 29 PART II 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 6. Reserved 30 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Overview 31 Business Strategy 31 Financial and Operational Developments 32 Results of Operations 37 PPL Corporation and Subsidiaries - Statement of Income Analysis and Segment Earnings 38 PPL Electric Utilities Corporation and Subsidiaries - Statement of Income Analysis 46 Louisville Gas and Electric Company - Statement of Income Analysis 48 Kentucky Utilities Company - Statement of Income Analysis 49 Table of Contents Item Page Financial Condition 49 Liquidity and Capital Resources 50 Risk Management 58 Related Party Transactions 60 Acquisitions, Developments and Divestitures 60 Environmental Matters 60 Sustainability 61 Cybersecurity 61 Competition 61 New Accounting Guidance 61 Application of Critical Accounting Policies 61 Other Information 65 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Reports of Independent Registered Public Accounting Firms (PCAOB ID No. 34 ) 66 8. Financial Statements and Supplementary Data FINANCIAL STATEMENTS PPL Corporation and Subsidiaries Consolidated Statements of Income for the years ended December 31, 202 5 , 202 4 and 20 23 75 Consolidated Statements of Comprehensive Income for the years ended December 31, 202 5 , 202 4 and 202 3 76 Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 202 3 77 Consolidated Balance Sheets at December 31, 202 5 and 20 2 4 78 Consolidated Statements of Equity for the years ended December 31, 202 5 , 202 4 and 20 23 80 PPL Electric Utilities Corporation and Subsidiaries Consolidated Statements of Income for the years ended December 31, 202 5 , 202 4 and 20 23 82 Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 20 23 83 Consolidated Balance Sheets at December 31, 202 5 and 20 24 84 Consolidated Statements of Equity for the years ended December 31, 2 025 , 202 4 and 20 23 86 Louisville Gas and Electric Company Statements of Income for the years ended December 31, 202 5 , 202 4 and 20 23 88 Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 20 23 89 Balance Sheets at December 31, 202 5 and 202 4 90 Statements of Equity for the years ended December 31, 202 5 , 202 4 and 20 23 92 Kentucky Utilities Company Statements of Income for the years ended December 31, 202 5 , 202 4 and 20 23 94 Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 2 023 95 Balance Sheets at December 31, 202 5 and 20 24 96 Statements of Equity for the years ended December 31, 202 5 , 202 4 and 20 23 98 Table of Contents Item Page COMBINED NOTES TO FINANCIAL STATEMENTS Index to Combined Notes to Consolidated Financial Statements 99 1. Summary of Significant Accounting Policies 99 2. Segment and Related Information 109 3. Revenue from Contracts with Customers 113 4. Preferred Securities 117 5. Earnings Per Share 117 6. Income and Other Taxes 118 7. Utility Rate Regulation 126 8. Financing Activities 139 9. Acquisitions, Development and Divestitures 144 10. Retirement and Postemployment Benefits 145 11. Jointly Owned Facilities 155 12. Commitments and Contingencies 156 13. Related Party Transactions 164 14. Other Income (Expense) - net 165 15. Fair Value Measurements 166 16. Derivative Instruments and Hedging Activities 169 17. Goodwill and Other Intangible Assets 175 18. Asset Retirement Obligations 177 19. Accumulated Other Comprehensive Income (Loss) 178 20. New Accounting Guidance Pending Adoption 179 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 180 9A. Controls and Procedures 180 9B. Other Information 183 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 183 PART III 10. Directors, Executive Officers and Corporate Governance 184 11. Executive Compensation 187 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 187 13. Certain Relationships and Related Transactions, and Director Independence 189 14. Principal Accounting Fees and Services 189 PART IV 15. Exhibits, Financial Statement Schedules 191 Shareowner and Investor Information 192 Exhibit Index 194 Signatures 208 Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certificates of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 PPL Corporation and Subsidiaries Long-term Debt Schedule Table of Contents GLOSSARY OF TERMS AND ABBREVIATIONS PPL Corporation and its subsidiaries CEP Reserves - CEP Reserves, Inc., a cash management subsidiary of PPL that maintains cash reserves for the balance sheet management of PPL and certain subsidiaries. KU - Kentucky Utilities Company, a public utility subsidiary of LKE engaged in the regulated generation, transmission, distribution and sale of electricity, primarily in Kentucky. LG&E - Louisville Gas and Electric Company, a public utility subsidiary of LKE engaged in the regulated generation, transmission, distribution and sale of electricity and the distribution and sale of natural gas in Kentucky. LKE - LG&E and KU Energy LLC, a subsidiary of PPL and the parent of LG&E, KU and other subsidiaries. LKS - LG&E and KU Services Company, a subsidiary of LKE that provides administrative, management and support services primarily to LG&E and KU, as well as to LKE and its other subsidiaries. Narragansett Electric - The Narragansett Electric Company, an entity that serves electric and natural gas customers in Rhode Island. Narragansett Electric is sometimes referred to as Rhode Island Energy or RIE. PPL - PPL Corporation, the ultimate parent holding company of PPL Electric, PPL Energy Funding, PPL Capital Funding, LKE, RIE and other subsidiaries. PPL Capital Funding - PPL Capital Funding, Inc., a financing subsidiary of PPL that provides financing for the operations of PPL and certain subsidiaries. Debt issued by PPL Capital Funding is fully and unconditionally guaranteed as to payment by PPL. PPL Electric - PPL Electric Utilities Corporation, a public utility subsidiary of PPL engaged in the regulated transmission and distribution of electricity in its Pennsylvania service area and that provides electricity supply to its retail customers in this area as a PLR. PPL Energy Holdings - PPL Energy Holdings, LLC, a subsidiary of PPL and the parent holding company of PPL Energy Funding, LKE, PPL Electric, PPL Rhode Island Holdings, PPL Services and other subsidiaries. PPL Rhode Island Holdings - PPL Rhode Island Holdings, LLC, a subsidiary of PPL Energy Holdings formed for the purpose of acquiring Narragansett Electric to which certain interests of PPL Energy Holdings in the Narragansett Stock Purchase Agreement were assigned. PPL Services - PPL Services Corporation, a subsidiary of PPL that provides administrative, management and support services to PPL and its subsidiaries. PPL WPD Limited - Prior to the sale of the U.K. utility business on June 14, 2021, PPL WPD Limited was an indirect parent to WPD. PPL WPD Limited was not included in the sale of the U.K. utility business on June 14, 2021. PPL WPD Limited was dissolved June 17, 2025. RIE - Rhode Island Energy, the name under which Narragansett Electric provides gas and electric services to customers in Rhode Island. i Table of Contents Other terms and abbreviations £ - British pound sterling. 401(h) account(s) - a sub account established within a qualified pension trust to provide for the payment of retiree medical costs. 2024 Form 10-K - Annual Report filed with the SEC on Form 10-K for the year ended December 31, 2024. Act 11 - Act 11 of 2012 that became effective on April 16, 2012. The Pennsylvania legislation authorized the PAPUC to approve two specific ratemaking mechanisms: the use of a fully projected future test year in base rate proceedings and, subject to certain conditions, a DSIC. Act 129 - Act 129 of 2008 that became effective in October 2008. The law amended the Pennsylvania Public Utility Code and created an energy efficiency and conservation program and smart metering technology requirements, adopted new PLR electricity supply procurement rules, provided remedies for market misconduct and changed the Alternative Energy Portfolio Standard (AEPS). AFUDC - allowance for funds used during construction. The cost of equity and debt funds used to finance construction projects of regulated businesses, which is capitalized as part of construction costs. AOCI - accumulated other comprehensive income or loss. ARO - asset retirement obligation. ATM Program - at-the-market stock offering program. Bcf - billion cubic feet. A unit of measure commonly used in quoting volumes of natural gas. CCR(s) - coal combustion residual(s). CCRs include fly ash, bottom ash and sulfur dioxide scrubber wastes. CLC - Corporate Leadership Council - executive management committee that is comprised of the President and Chief Executive Officer, Chief Technology and Innovation Officer, Chief Financial Officer, Chief Human Resources Officer, Chief Legal Officer, Chief Operating Officer-Utilities, Executive Vice President of Engineering, Construction and Generation. Clean Air Act - federal legislation enacted to address certain environmental issues related to air emissions, including acid rain, ozone and toxic air emissions. Clean Water Act - federal legislation enacted to address certain environmental issues relating to water quality including effluent discharges, cooling water intake, and dredge and fill activities. CPCN - Certificate of Public Convenience and Necessity. Authority granted by the KPSC pursuant to Kentucky Revised Statute 278.020 to provide utility service to or for the public or the construction of certain plant, equipment, property or facilities for furnishing of utility service to the public. A CPCN is required for any capital addition, subject to KPSC jurisdiction, in excess of $100 million. Customer Choice Act - the Pennsylvania Electricity Generation Customer Choice and Competition Act, legislation enacted to restructure the state's electric utility industry to create retail access to a competitive market for generation of electricity. DDCP - Directors Deferred Compensation Plan. DER - Distributed Energy Resources. DRIP - PPL Amended and Restated Dividend Reinvestment and Direct Stock Purchase Plan. DSIC - Distribution System Improvement Charge. Authorized under Act 11, which is an alternative ratemaking mechanism providing more-timely cost recovery of qualifying distribution system capital expenditures. ii Table of Contents DSM - Demand Side Management. Pursuant to Kentucky Revised Statute 278.285, the KPSC may determine the reasonableness of DSM programs proposed by any utility under its jurisdiction. DSM programs consist of energy efficiency programs intended to reduce peak demand and delay the investment in additional power plant construction, provide customers with tools and information regarding their energy usage and support energy efficiency. Earnings from Ongoing Operations - a non-GAAP financial measure of earnings adjusted for the impact of special items and used in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" (MD&A). EBPB - Employee Benefit Plan Board. The administrator of PPL's U.S. qualified retirement plans, which is charged with the fiduciary responsibility to oversee and manage those plans and the investments associated with those plans. ECR - Environmental Cost Recovery. Pursuant to Kentucky Revised Statute 278.183, Kentucky electric utilities are entitled to the current recovery of costs of complying with the Clean Air Act, as amended, and those federal, state or local environmental requirements that apply to coal combustion wastes and byproducts from the production of energy from coal. ELG(s) - Effluent Limitation Guidelines, regulations promulgated by the EPA. Environmental Response Fund - Established in RIPUC Docket No. 2930. Created to satisfy remedial and clean-up obligations of RIE arising from the past ownership and/or operation of manufactured gas plants and sites associated with the operation and disposal activities of such gas plants . EPA - Environmental Protection Agency, a U.S. government agency. EPS - earnings per share. FERC - Federal Energy Regulatory Commission, the U.S. federal agency that regulates, among other things, interstate transmission and wholesale sales of electricity, hydroelectric power projects and related matters. FY - fiscal year. GAAP - Generally Accepted Accounting Principles in the U.S. GHG(s) - greenhouse gas(es). GWh - gigawatt-hour, one million kilowatt hours. ICPKE - The PPL Incentive Compensation Plan for Key Employees. The ICPKE provides for incentive compensation to certain employees below the level of senior executive. If-Converted Method - A method applied to calculate diluted EPS for a company with outstanding convertible debt. This method generally adds back the interest charges, net of tax, of the debt to net income and the convertible debt is assumed to have been converted to equity at the beginning of the period, and the resulting common shares are treated as outstanding shares for diluted EPS calculations. IRA - Inflation Reduction Act, a U.S. federal law, which aims to curb inflation by possibly reducing the federal government budget deficit, lowering prescription drug prices, and investing in domestic energy production while promoting clean energy. IRS - Internal Revenue Service, a U.S. government agency. ISO - Independent System Operator. ISR - Infrastructure, safety and reliability. KPSC - Kentucky Public Service Commission, the state agency that has jurisdiction over the regulation of rates and service of utilities in Kentucky. KU 2010 Mortgage Indenture - KU's indenture, dated as of October 1, 2010, to the Bank of New York Mellon, as supplemented. iii Table of Contents kVA - kilovolt ampere. kWh - kilowatt hour, basic unit of electrical energy. LCIDA - Lehigh County Industrial Development Authority. LG&E 2010 Mortgage Indenture - LG&E's indenture, dated as of October 1, 2010, to the Bank of New York Mellon, as supplemented. LRS - Last Resort Service, the role of RIE in providing default electricity supply within its delivery area to all customers who have not elected to receive their electric supply from a non-regulated power producer or any customer who, for any reason, has stopped receiving generation service from a non-regulated power producer. McF - one thousand cubic feet, a unit of measure for natural gas. MMBtu - one million British Thermal Units. Moody's - Moody's Ratings, a division of Moody's Corporation, a credit rating agency. MW - megawatt, one thousand kilowatts. MWac - megawatt, alternating current. The measure of the power output from a solar installation. NAAQS - National Ambient Air Quality Standards periodically adopted pursuant to the Clean Air Act. National Grid USA - National Grid USA is a wholly-owned subsidiary of National Grid plc, a British multinational electricity and gas utility company headquartered in London, England. NERC - North American Electric Reliability Corporation. NGCC - Natural gas combined cycle. NPNS - the normal purchases and normal sales exception as permitted by derivative accounting rules. Derivatives that qualify for this exception may receive accrual accounting treatment. OCI - other comprehensive income or loss. OVEC - Ohio Valley Electric Corporation, located in Piketon, Ohio, an entity in which LG&E owns a 5.63% interest and KU owns a 2.50% interest, which are recorded at cost. OVEC owns and operates two coal-fired power plants, the Kyger Creek plant in Ohio and the Clifty Creek plant in Indiana, with combined capacities of 2,120 MW. PAPUC - Pennsylvania Public Utility Commission, the state agency that regulates certain ratemaking, services, accounting and operations of Pennsylvania utilities. Performance unit - stock-based compensation award that represents a variable number of shares of PPL common stock that a recipient may receive based on PPL's attainment of (i) relative total shareowner return (TSR) as compared to companies in the PHLX Utility Sector Index; (ii) corporate return on equity (ROE); (iii) corporate earnings growth (EG); and (iv) corporate environmental, social and governance (ESG) metrics. PHMSA - Pipeline and Hazardous Materials Safety Administration. PJM - PJM Interconnection, L.L.C., operator of the electricity transmission network and electricity energy market in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PLR - Provider of Last Resort, the role of PPL Electric in providing default electricity supply within its delivery area to retail customers who have not chosen to select an alternative electricity supplier under the Customer Choice Act. PP&E - property, plant and equipment. iv Table of Contents PPA(s ) - power purchase agreement(s). PPL EU Services - PPL EU Services Corporation, a former subsidiary of PPL that, prior to being merged into PPL Services on December 31, 2021, provided administrative, management and support services primarily to PPL Electric. PPL WPD Investments Limited - PPL WPD Investments Limited, which was, prior to the sale of the U.K. utility business on June 14, 2021, a subsidiary of PPL WPD Limited and parent to WPD plc. PPL WPD Investments Limited was included in the sale of the U.K. utility business on June 14, 2021. RAR - Retired Asset Recovery rider, established by KPSC orders in 2021 to provide for recovery of and return on the remaining investment in certain electric generating units upon their retirement over a ten-year period following retirement. Registrant(s) - refers to the Registrants named on the cover of this Report (each a "Registrant" and collectively, the "Registrants"). RIPUC - Rhode Island Public Utilities Commission, a three-member quasi-judicial tribunal with jurisdiction, powers, and duties to implement and enforce the standards of conduct under R.I. Gen. Laws § 39-1-27.6 and to hold investigations and hearings involving the rates, tariffs, tolls, and charges, and the sufficiency and reasonableness of facilities and accommodations of public utilities. Rhode Island Division of Public Utilities and Carriers - the Rhode Island Division of Public Utilities and Carriers, which is headed by an Administrator who is not a Commissioner of the RIPUC, exercises the jurisdiction, supervision, power, and duties not specifically assigned to the RIPUC. RTO - Regional Transmission Operator, an electric power transmission system operator that coordinates, controls and monitors a multi-state electric grid. ROE - Return on equity. Safari - Safari Energy, LLC, which was, prior to the sale of Safari Holdings on November 1, 2022, a subsidiary of Safari Holdings that provided solar energy solutions for commercial customers in the U.S. Safari Holdings - Safari Holdings, LLC, which was, prior to its sale on November 1, 2022, a subsidiary of PPL and parent holding company of Safari. Sarbanes-Oxley - Sarbanes-Oxley Act of 2002, which sets requirements for management's assessment of internal controls for financial reporting. It also requires an independent auditor to make its own assessment. Scrubber - an air pollution control device that can remove particulates and/or gases (primarily sulfur dioxide) from exhaust gases. SEC - the U.S. Securities and Exchange Commission, a U.S. government agency primarily responsible to protect investors and maintain the integrity of the securities markets. SIP - PPL Corporation's Amended and Restated 2012 Stock Incentive Plan. Smart metering technology - technology that can measure, among other things, time of electricity consumption to permit offering rate incentives for usage during lower cost or demand intervals. The use of this technology also has the potential to strengthen network reliability. SOFR - Secured Overnight Financing Rate, a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. S&P - S&P Global Ratings, a credit rating agency. Superfund - federal environmental statute that addresses remediation of contaminated sites; states also have similar statutes. TCJA - Tax Cuts and Jobs Act. Comprehensive U.S. federal tax legislation enacted on December 22, 2017. v Table of Contents Total shareowner return - the change in market value of a share of the company's common stock plus the value of all dividends paid on a share of the common stock during the applicable performance period, divided by the price of the common stock as of the beginning of the performance period. The price used for purposes of this calculation is the average share price for the 20 trading days at the beginning and end of the applicable period. Treasury Stock Method - a method applied to calculate diluted EPS that assumes any proceeds that could be obtained upon exercise of options and warrants (and their equivalents) would be used to purchase common stock at the average market price during the relevant period. U.K. utility business - PPL WPD Investments Limited and its subsidiaries, including, notably, WPD plc and the four distribution network operators, which substantially represented PPL's U.K. Regulated segment. The U.K. utility business was sold on June 14, 2021. VEBA - Voluntary Employee Beneficiary Association, a tax-exempt trust under the Internal Revenue Code Section 501 (c)(9) used by employers to fund and pay eligible medical, life and similar benefits. VSCC - Virginia State Corporation Commission, the state agency that has jurisdiction over the regulation of Virginia corporations, including utilities. WPD - Prior to the sale of the U.K. utility business on June 14, 2021, refers to PPL WPD Investments Limited and its subsidiaries. WPD was included in the sale of the U.K. utility business on June 14, 2021. WPD plc - Western Power Distribution plc, prior to the sale of the U.K utility business, a U.K. indirect subsidiary of PPL WPD Limited. Its principal indirectly owned subsidiaries are WPD (East Midlands), WPD (South Wales), WPD (South West) and WPD (West Midlands). WPD plc was included in the sale of the U.K. utility business on June 14, 2021. vi Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) Table of Contents Forward-looking Information Statements contained in this Annual Report concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact are "forward-looking statements" within the meaning of the federal securities laws. Although the Registrants believe that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. Forward-looking statements are subject to many risks and uncertainties, and actual results may differ materially from the results discussed in forward-looking statements. In addition to the specific factors discussed in "Item 1A. Risk Factors" and in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report, the following are among the important factors that could cause actual results to differ materially and adversely from the forward-looking statements: • weather and other conditions affecting generation, transmission and distribution operations, operating costs and customer energy use; • strategic acquisitions, dispositions, joint-ventures or similar transactions and our ability to consummate these business transactions, integrate the acquired entities or realize expected benefits from them; • the outcome of rate cases or other cost recovery, revenue or regulatory proceedings; • catastrophic events such as epidemic or pandemic health events, wildfires, earthquakes, explosions, floods, droughts, tornadoes, hurricanes and other extreme weather-related events (including events potentially caused or exacerbated by climate change) and their impact on economic conditions, financial markets and supply chains; • capital market conditions, including the availability of capital, credit or insurance, changes in interest rates and certain economic indices, and decisions regarding capital structure; • volatility in or the impact of other changes in financial markets, commodity prices and economic conditions, including inflation; • the direct or indirect effects on PPL or its subsidiaries or business systems of cyber-based intrusion or the threat of cyberattacks; • development, adoption and use of artificial intelligence by us, our customers and our third-party vendors; • the effect of existing trade policies (including tariffs and other trade measures), the establishment of additional trade policies or subsequent changes to trade policies once announced or implemented, on the cost or availability of imported goods; • significant changes in the demand for electricity, including uncertainties related to projected rapid growth in electricity demand driven primarily by data centers and other large load customers and the related requirement for substantial new generation and transmission investment, which may create capital access, revenue recovery and customer affordability risks; • expansion of alternative and distributed sources of electricity generation and storage; • the effectiveness of our risk management programs, including commodity and interest rate hedging; • prolonged or recurring US federal government shutdowns; • defaults by counterparties or suppliers for energy, capacity, coal, natural gas or key commodities, goods or services; • a material decline in the market value of PPL's equity; • significant decreases in the fair value of debt and equity securities and their impact on the value of assets in defined benefit plans, and the related cash funding requirements if the fair value of those assets decline; • interest rates and their effect on pension and retiree medical liabilities, ARO liabilities, interest payable on certain debt securities, and the general economy; • the potential impact of any unrecorded commitments and liabilities of the Registrants and their subsidiaries; • new accounting requirements or new interpretations or applications of existing requirements; • adverse changes in the corporate credit ratings or securities analyst rankings of the Registrants and their securities; • any requirement to record impairment charges pursuant to GAAP with respect to any of our significant investments; • laws or regulations to reduce emissions of GHGs or the physical effects of climate change; • the availability of electricity and natural gas, and any consequences of a perceived or actual inability to serve demand reliably; • continuing ability to access fuel supply for LG&E and KU, as well as the ability to recover fuel costs and environmental expenditures in a timely manner at LG&E and KU and natural gas supply costs at LG&E and RIE; • war, armed conflicts, terrorist attacks, or similar disruptive events, including the ongoing conflicts in Ukraine and the Middle East; • changes in political, regulatory or economic conditions in states or regions where the Registrants or their subsidiaries conduct business; • the ability to obtain necessary governmental permits and approvals; • changes in state or federal tax laws or regulations; • changes in state, federal or foreign legislation or regulatory developments; 1 Table of Contents • the impact of any state, federal or foreign investigations applicable to the Registrants, their subsidiaries or the energy industry; • our ability to attract and retain qualified employees; • the effect of changing expectations and demands of our customers, regulators, investors and stakeholders, including differing views on environmental, social and governance concerns; • the effect of any business or industry restructuring; • the ability to control costs and avoid cost and schedule overruns during the development, construction and operation of significant projects, including generation and battery storage facilities and IT infrastructure; • development of new projects, markets and technologies, including the potential impact of advancing technologies on the electricity demand required by data centers and other large load customers; • collective labor bargaining negotiations and labor costs; • risks related to wildfires, including costs of potential regulatory penalties and other liabilities, and the cost and availability of insurance and damages in excess of insurance liability coverage; and • the outcome of litigation involving the Registrants and their subsidiaries. Any forward-looking statements should be considered in light of these important factors and in conjunction with other documents of the Registrants on file with the SEC. New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for the Registrants to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and the Registrants undertake no obligation to update the information contained in the statement to reflect subsequent developments or information. Investors should note that PPL announces material financial information in SEC filings, press releases and public conference calls. In accordance with SEC guidelines, PPL also uses the Investors section of its website, www.pplweb.com, to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on PPL's website is not part of this document. 2 Table of Contents PART I ITEM 1. BUSINESS General (All Registrants) PPL, headquartered in Allentown, Pennsylvania, is a utility holding company, incorporated in 1994. PPL, through its regulated utility subsidiaries, delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL's principal subsidiaries at December 31, 2025 are shown below (* denotes a Registrant). PPL Corporation* PPL Capital Funding Provides financing for the operations of PPL and certain subsidiaries PPL Electric* Engages in the regulated transmission and distribution of electricity in Pennsylvania LKE A holding company that owns regulated utility operations through its subsidiaries, LG&E and KU RIE Engages in the regulated transmission, distribution and sale of electricity and regulated distribution and sale of natural gas in Rhode Island LG&E* Engages in the regulated generation, transmission, distribution and sale of electricity and regulated distribution and sale of natural gas in Kentucky KU* Engages in the regulated generation, transmission, distribution and sale of electricity, primarily in Kentucky Pennsylvania Regulated Segment Kentucky Regulated Segment Rhode Island Regulated Segment In addition to PPL, the other Registrants included in this filing are as follows. PPL Electric , headquartered in Allentown, Pennsylvania, is a wholly-owned subsidiary of PPL and a regulated public utility that is an electricity transmission and distribution service provider in eastern and central Pennsylvania. PPL Electric is subject to regulation as a public utility by the PAPUC, and certain of its transmission activities are subject to the jurisdiction of the FERC under the Federal Power Act. PPL Electric delivers electricity in its Pennsylvania service area and provides electricity supply to retail customers in that area as a PLR under the Customer Choice Act. PPL Electric was organized in 1920 as Pennsylvania Power & Light Company. LG&E, headquartered in Louisville, Kentucky, is a wholly-owned subsidiary of LKE and a regulated utility engaged in the generation, transmission, distribution and sale of electricity and distribution and sale of natural gas in Kentucky. LG&E is subject to regulation as a public utility by the KPSC, and certain of its transmission activities are subject to the jurisdiction of the FERC under the Federal Power Act. LG&E was incorporated in 1913. 3 Table of Contents KU, headquartered in Lexington, Kentucky, is a wholly-owned subsidiary of LKE and a regulated utility engaged in the generation, transmission, distribution and sale of electricity in Kentucky and Virginia. KU is subject to regulation as a public utility by the KPSC and the VSCC, and certain of its transmission and wholesale power activities are subject to the jurisdiction of the FERC under the Federal Power Act. KU serves its Kentucky customers under the KU name and its Virginia customers under the Old Dominion Power name. KU was incorporated in Kentucky in 1912 and in Virginia in 1991. Segment Information (PPL) PPL is organized into three reportable segments as depicted in the chart above: Kentucky Regulated, which primarily represents the results of LG&E and KU, Pennsylvania Regulated, which primarily represents the results of PPL Electric, and Rhode Island Regulated, which primarily represents the results of RIE. "Corporate and Other" primarily includes corporate level financing costs, certain unallocated corporate costs, and certain non-recoverable costs incurred in conjunction with the acquisition of RIE. A comparison of PPL's Regulated segments is shown below. Kentucky Pennsylvania Rhode Island Regulated Regulated Regulated For the year ended December 31, 2025: Operating Revenues (in billions) $ 3.8 $ 3.1 $ 2.2 Net Income (in millions) $ 674 $ 639 $ 85 Electricity delivered (GWh) 31,368 37,186 7,165 Natural gas delivered (Bcf) 47 — 40 At December 31, 2025: Regulatory Asset Base (in billions) (a) $ 13.6 $ 11.1 $ 4.3 Service area (in square miles) 8,000 10,000 1,200 Customers (in millions) 1.4 1.5 0.8 (a) Represents capitalization for Kentucky Regulated and rate base for Pennsylvania Regulated and Rhode Island Regulated. The amount for Pennsylvania Regulated reflects estimated 2025 year-end rate base for Pennsylvania electric distribution. The amount for Rhode Island Regulated excludes acquisition-related adjustments for non-earning assets. See Note 2 to the Financial Statements for additional financial information by segment. See Note 3 to the Financial Statements for additional revenue information. (PPL Electric, LG&E and KU) PPL Electric has two operating segments, distribution and transmission, which are aggregated into a single reportable segment. Each of LG&E and KU operates as a single operating and reportable segment. Kentucky Regulated Segment (PPL) The Kentucky Regulated segment consists primarily of the regulated electricity generation, transmission and distribution operations conducted by LG&E and KU, as well as LG&E's regulated distribution and sale of natural gas. (PPL, LG&E and KU) LG&E and KU are engaged in the regulated generation, transmission, distribution and sale of electricity in Kentucky and, in KU's case, also Virginia. LG&E also engages in the distribution and sale of natural gas in Kentucky. LG&E provides electric service to approximately 443,000 customers and provides natural gas service to approximately 336,000 customers in Louisville and 16 surrounding counties, covering approximately 700 square miles. KU provides electric service to approximately 553,000 customers in 77 counties in central, southeastern and western Kentucky and approximately 28,000 customers in five counties in southwestern Virginia, covering approximately 4,800 non-contiguous square miles. KU also sells wholesale electricity to two municipalities in Kentucky under load following contracts. 4 Table of Contents Franchises and Licenses LG&E and KU provide electricity delivery service, and LG&E provides natural gas distribution service, in their respective service territories pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by state legislatures, cities or municipalities or other entities. Competition There are currently no other electric public utilities operating within the electric service areas of LG&E and KU. From time to time, bills are introduced into the Kentucky General Assembly which seek to authorize, promote or mandate increased distributed generation, customer choice or other developments. Neither the Kentucky General Assembly nor the KPSC has adopted or approved a plan or timetable for retail electric industry competition in Kentucky. The nature or timing of legislative or regulatory actions, if any, regarding industry restructuring and their impact on LG&E and KU, which may be significant, cannot currently be predicted. Virginia, formerly a deregulated jurisdiction, has enacted legislation that implemented a hybrid model of cost-based regulation. KU's operations in Virginia have been and remain regulated. Alternative energy sources such as electricity, oil, propane and other fuels indirectly impact LG&E's natural gas revenues. Marketers may also compete to sell natural gas to certain large end-users. LG&E's natural gas tariffs include gas price pass-through mechanisms relating to its sale of natural gas as a commodity. Therefore, customer natural gas purchases from alternative suppliers do not generally impact LG&E's profitability. Some large industrial and commercial customers, however, may physically bypass LG&E's facilities and seek delivery service directly from interstate pipelines or other natural gas distribution systems. Power Supply At December 31, 2025, LG&E owned generating capacity of 2,466 MW and KU owned generating capacity of 4,798 MW. See "Item 2. Properties - Kentucky Regulated Segment" for a complete list of generating facilities. The system capacity of LG&E's and KU's owned generation is based upon several factors, including the operating experience and physical condition of the units, and may be revised periodically to reflect changes in circumstances. During 2025, LG&E's and KU's power plants generated the following amounts of electricity: GWh Fuel Source LG&E KU Coal 10,331 14,738 Gas 1,613 4,899 Hydro 220 105 Solar 8 12 Total (a) 12,172 19,754 (a) This generation represents an increase for LG&E of 3% and an increase for KU of 5% from 2024 output. The majority of LG&E's and KU's generated electricity was used to supply their retail customer bases. LG&E and KU jointly dispatch their generation units with the lowest cost generation used to serve their customers. When LG&E has excess generation capacity after serving its own customers and its generation cost is lower than that of KU, KU purchases electricity from LG&E and vice versa. Due to environmental requirements, energy efficiency measures, and the relative cost of replacement resources, as of December 31, 2025, LG&E and KU have retired approximately 1,500 MW of coal-fired generation plants since 2010. LG&E and KU received approval from the KPSC to develop a 4 MW Solar Share facility to service a Solar Share program. The Solar Share program is a voluntary program that allows customers to subscribe capacity in the Solar Share facility. Construction commences, in 500-kilowatt phases, when subscription is complete. Through December 31, 2025, construction of five 500-kilowatt phases was completed. LG&E and KU continue to market the program and are accepting subscriptions for the sixth 500-kilowatt phase. 5 Table of Contents On November 6, 2023, the KPSC issued an order approving LG&E's and KU's December 15, 2022 CPCN requests (i) to construct a 645 MW net summer rating NGCC combustion turbine at LG&E's Mill Creek Generating Station in Jefferson County, Kentucky, (ii) to construct a 120 MWac solar photovoltaic electric generating facility in Mercer County, Kentucky, (iii) to acquire a 120 MWac solar facility to be built by a third-party solar developer in Marion County, Kentucky and (iv) to construct a 125 MW, 4-hour battery energy storage system facility at KU's E.W. Brown Generating Station. The order also authorized LG&E's and KU's entry into four potential solar PPAs, subject to certain conditions, but deferred for future proceedings specific decisions on cost recovery treatment or mechanisms. Agreements related to two of the four potential solar PPAs have been terminated. One PPA agreement was terminated by the developer due to land control issues. The second agreement terminated contractually due to a PPA price increase that was not acceptable to LG&E and KU. Further, the order approved the new, adjusted or expanded energy efficiency programs contained in the requested 2024-2030 DSM plan. The KPSC order included approval of the requested retirements of two existing coal-fired generation units, LG&E's Mill Creek Unit 1 (300 MW) in 2024 , which occurred on December 31, 2024, and Mill Creek Unit 2 (297 MW) in 2027, subject to certain conditions, and three small gas-fired units. LG&E subsequently requested for Mill Creek Unit 2 to remain operational past the 2027 date. The order denied approval of the retirement of KU's E.W. Brown 3 Unit (412 MW) and Ghent Unit 2 (486 MW) in 2028 at this time, citing the need for additional clarity regarding environmental compliance regulations. The new NGCC facility will be jointly owned by LG&E (31%) and KU (69%) and the solar units will be jointly owned by LG&E (37%) and KU (63%), the battery storage unit will be owned by LG&E, and the proposed PPA transactions and DSM programs will be entered into or conducted jointly by LG&E and KU, consistent with LG&E and KU's shared dispatch, cost allocation, tariff or other frameworks. In February 2024, LG&E and KU entered into agreements to begin construction of Mill Creek Unit 5. Total project costs are estimated at approximately $1.0 billion, including AFUDC. Commercial operation of the facility is anticipated to begin in mid-2027. See "2025 CPCN" and "Rate Case Proceedings" in Note 7 to the Financial Statements for additional information on the 2025 application filed with the KPSC regarding certain future plans for new generation and generation-related construction matters. Fuel Supply Coal and natural gas are expected to be the predominant fuels used by LG&E and KU for generation for the foreseeable future. Natural gas used for generation is purchased using contractual arrangements separate from LG&E's natural gas distribution operations. Natural gas and oil are also used for intermediate and peaking capacity and flame stabilization in coal-fired boilers. Fuel inventory is maintained at levels estimated to be necessary to avoid operational disruptions at coal-fired generating units. Reliability of coal deliveries can be affected from time to time by several factors including fluctuations in demand, coal mine production issues, high or low river level events, lock outages and other supplier or transporter operating or financial difficulties. LG&E and KU have entered into coal supply agreements with various suppliers for coal deliveries through 2030 and augment their coal supply agreements with spot market purchases, as needed. For their existing units, LG&E and KU expect, for the foreseeable future, to purchase most of their coal from western Kentucky, southern Indiana, southern Illinois, northern West Virginia and western Pennsylvania. LG&E and KU continue to purchase certain quantities of ultra-low sulfur content coal from Wyoming for blending at Trimble County Unit 2. Coal is delivered to the generating plants primarily by barge and rail. To enhance the reliability of natural gas supply, LG&E and KU have secured firm long-term pipeline transport capacity services with contracts of various durations through 2056 on the interstate pipeline serving Cane Run Unit 7, six simple cycle combustion turbines at the Trimble County site, and the future Mill Creek Unit 5. This pipeline also serves the two simple cycle units at the Paddy's Run site. For the seven simple cycle combustion turbines at the E.W. Brown facility, no firm long-term pipeline transport capacity has been purchased due to the facility's connection to two interstate pipelines and some of the units having dual fuel capability. LG&E and KU have firm contracts for a portion of the natural gas fuel for Cane Run Unit 7 through 2027. The bulk of the natural gas fuel is expected to be purchased on the spot market. 6 Table of Contents (PPL and LG&E) Natural Gas Distribution Supply Four underground natural gas storage fields in service, with a current working natural gas capacity of approximately 11 Bcf, are used to provide natural gas service to LG&E's firm sales customers. Natural gas is stored during the summer season for withdrawal during the following winter heating season. Without this storage capacity, LG&E would need to purchase additional natural gas and pipeline transportation services during winter months when customer demand increases, and the cost of natural gas supply and pipeline transportation services are expected to be higher. At December 31, 2025, LG&E had 9.7 Bcf of natural gas stored underground with a carrying value of $33 million. LG&E has a portfolio of supply arrangements of varying terms that provide competitively priced natural gas designed to meet its firm sales obligations. These natural gas supply arrangements include pricing provisions that are market-responsive. In tandem with pipeline transportation services, these natural gas supplies provide the reliability and flexibility necessary to serve LG&E's natural gas customers. LG&E purchases natural gas supply transportation services from two pipelines. LG&E has a set of contracts with one pipeline that are subject to termination by LG&E between 2028 and 2031. Total winter season capacity under these contracts is 184,900 MMBtu/day and summer season capacity is 60,000 MMBtu/day. LG&E has two additional contracts with this same pipeline. One contract is for pipeline capacity through 2031 for 60,000 MMBtu/day during both the winter and summer seasons. The other contract is for pipeline capacity through 2028 for 30,000 MMBtu/day during the winter season. LG&E has two contracts with a second pipeline with a total capacity of 40,000 MMBtu/day during both the winter and summer seasons that expire in 2030. LG&E expects to purchase natural gas supplies for its gas distribution operations from onshore producing regions in South Texas, East Texas, North Louisiana and Arkansas, as well as gas originating in the Marcellus and Utica production areas. (PPL, LG&E and KU) Transmission LG&E and KU contract with the Tennessee Valley Authority to act as their transmission reliability coordinator and contract with TranServ International, Inc. to act as their independent transmission organization. Rates LG&E is subject to the jurisdiction of the KPSC and the FERC, and KU is subject to the jurisdiction of the KPSC, the VSCC and the FERC. LG&E and KU operate under a FERC-approved open access transmission tariff. Prior to January 1, 2026, LG&E's and KU's Kentucky base rates were calculated based on a return on capitalization (common equity, long-term debt and short-term debt) including adjustments for certain net investments and costs recovered separately through other means. Effective January 1, 2026, pursuant to the KPSC rate case, Kentucky base rates are calculated based on a return on rate base (net utility plant plus certain regulatory assets and working capital less accumulated deferred income taxes and certain regulatory liabilities) and include recovery of applicable operations and maintenance expenses. KU's Virginia base rates are calculated based on a return on rate base (net utility plant plus certain regulatory assets and working capital less accumulated deferred income taxes, certain regulatory liabilities and miscellaneous deductions) and include recovery of applicable operations and maintenance expenses. KU's rates to two municipal customers for wholesale power requirements are calculated based on annual updates to a formula rate that utilizes a return on rate base (net utility plant plus working capital less accumulated deferred income taxes and miscellaneous deductions) and include recovery of applicable operations and maintenance expenses. See "Financial and Operational Developments" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 7 to the Financial Statements for additional information on current rate proceedings, regulatory matters and rate mechanisms. 7 Table of Contents Pennsylvania Regulated Segment (PPL) The Pennsylvania Regulated segment consists of PPL Electric, a regulated public utility engaged in the distribution and transmission of electricity. (PPL and PPL Electric) PPL Electric delivers electricity to approximately 1.5 million customers in a 10,000-square mile territory in 29 counties within eastern and central Pennsylvania. PPL Electric also provides electricity to retail customers in this territory as a PLR under the Customer Choice Act. Franchises and Licenses PPL Electric provides electricity delivery service in its service territory pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by the Pennsylvania state legislature, cities or municipalities or other entities. Competition Pursuant to authorizations from the Commonwealth of Pennsylvania and the PAPUC, PPL Electric operates a regulated distribution monopoly in its service area. Accordingly, PPL Electric does not face competition in its electricity distribution business. Pursuant to the Customer Choice Act, generation of electricity is a competitive business in Pennsylvania, and PPL Electric does not own or operate any generation facilities. The PPL Electric transmission business, operating under a FERC-approved PJM Open Access Transmission Tariff, is subject to competition pursuant to FERC Order 1000 from entities that are not incumbent PJM transmission owners with respect to the construction and ownership of transmission facilities within PJM. Rates and Regulation Transmission PPL Electric's transmission facilities are within PJM, which operates the electricity transmission network and electric energy market in the Mid-Atlantic and Midwest regions of the U.S. PJM serves as a FERC-approved Regional Transmission Operator (RTO) to promote greater participation and competition in the region it serves. In addition to operating the electricity transmission network, PJM also administers regional markets for energy, capacity and ancillary services. A primary objective of any RTO is to separate the operation of, and access to, the transmission grid from market participants that buy or sell electricity in the same markets. Electric utilities continue to own the transmission assets and to receive their share of transmission revenues, but the RTO directs the control and operation of the transmission facilities. Certain types of transmission investments are subject to competitive processes outlined in the PJM tariff. PPL Electric's transmission revenues are billed in accordance with a FERC-approved Open Access Transmission Tariff that utilizes a formula-based rate recovery mechanism. Under this formula, rates are put into effect on January 1st of each year based upon actual expenditures from the most recently filed FERC Form 1, forecasted capital additions, and other data based on PPL Electric's books and records. Rates are compared during the year to the estimated annual expenses and capital additions that will be filed in PPL Electric's annual FERC Form 1, filed under the FERC's Uniform System of Accounts. Under the mechanism, any difference between the revenue requirement in effect and actual expenditures incurred for that year is recorded as a regulatory asset or regulatory liability, and the regulatory asset or regulatory liability is to be recovered from or returned to customers starting one year after the conclusion of the rate year. As a PLR, PPL Electric also purchases transmission services from PJM. See "PLR" below. 8 Table of Contents Distribution PPL Electric's distribution base rates are calculated based on a return on rate base (net utility plant plus a cash working capital allowance less plant-related deferred taxes and other miscellaneous additions and deductions). All regulatory assets and liabilities, except accumulated deferred income taxes, are excluded from the return on rate base. Therefore, no return is earned on the related assets unless specifically provided for by the PAPUC. Currently, PPL Electric's Smart Meter rider and the DSIC are the only riders authorized to earn a return. Certain operating expenses are also included in PPL Electric's distribution base rates including wages and benefits, other operation and maintenance expenses, depreciation and taxes. Pennsylvania's Alternative Energy Portfolio Standard (AEPS) requires electric distribution companies and electricity generation suppliers to obtain from alternative energy resources a portion of the electricity sold to retail customers in Pennsylvania. Under the default service procurement plans approved by the PAPUC, PPL Electric purchases all of the alternative energy generation supply it needs to comply with the AEPS. Act 129 created an energy efficiency and conservation program, a demand side management program, smart metering technology requirements, new PLR generation supply procurement rules, remedies for market misconduct and changes to the existing AEPS. Act 11 authorizes the PAPUC to approve two specific ratemaking mechanisms: the use of a fully projected future test year in base rate proceedings and, subject to certain conditions, the use of a DSIC. Such alternative ratemaking procedures and mechanisms provide opportunity for accelerated cost-recovery and, therefore, are important to PPL Electric as it is in a period of significant capital investment to maintain and enhance the reliability of its delivery system, including the replacement of aging assets. PPL Electric utilized the fully projected future test year mechanism in its 2015 base rate proceeding. PPL has had the ability to utilize the DSIC recovery mechanism since July 2013. See "Financial and Operational Developments" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 7 to the Financial Statements for additional information on current rate proceedings, regulatory matters and rate mechanisms. PLR The Customer Choice Act requires electric distribution companies, including PPL Electric, or an alternative supplier approved by the PAPUC, to act as a PLR of electricity supply for customers who do not choose to shop for supply with a competitive supplier and provides that electricity supply costs will be recovered by the PLR pursuant to PAPUC regulations. In 2025, the following average percentages of PPL Electric's customer load were provided by competitive suppliers: 40% of residential, 81% of small commercial and industrial and 98% of large commercial and industrial customers. PPL Electric's electricity generation costs are established based upon the results of a competitive solicitation process. In November 2024, the PAPUC approved PPL Electric's default service plan for the period of June 1, 2025 through May 31, 2029, which included a total of eight solicitations for electricity supply held semiannually in February and July. Through December 31, 2025, two auctions of the plan were completed. The plan also included solicitations for alternative energy credits held annually in July with the first solicitation in 2025 and the final solicitation in 2029. Through December 31, 2025, one alternative energy credit solicitation has been completed. Pursuant to the plans, PPL Electric contracts for all electricity supply for residential, commercial and industrial customers who elect to take default service from PPL Electric. These solicitations contain a mix of products including 10-year block energy contracts for residential customers, 12- and 24-month fixed-price load-following contracts for residential and small commercial and industrial customers, 12-month real-time pricing contracts for large commercial and industrial customers, and alternative energy credit contracts for residential, commercial and industrial customers. These contracts fulfill PPL Electric's obligation to provide customer electricity supply as a PLR. Numerous alternative suppliers have offered to provide generation supply in PPL Electric's service area. As the cost of generation supply is a pass-through cost for PPL Electric, its financial results are not impacted if its customers purchase electricity supply from these alternative suppliers. Rhode Island Regulated Segment (PPL) The Rhode Island Regulated segment consists primarily of the regulated electricity transmission and distribution operations and regulated distribution and sale of natural gas conducted by RIE. 9 Table of Contents RIE is engaged in the regulated transmission, distribution and sale of electricity and regulated distribution and sale of natural gas in Rhode Island. RIE provides electric service to approximately 515,000 customers and natural gas service to approximately 280,000 customers. RIE's service area covers substantially all of Rhode Island. Franchises and Licenses RIE provides electricity delivery service and natural gas distribution service in its service territory pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by the Rhode Island state legislature, cities or municipalities or other entities. Competition There are currently no other electric or gas public utilities operating within the service area of RIE. Alternative energy sources such as electricity, oil, propane and other fuels indirectly impact RIE's natural gas revenues. Marketers may also compete to sell natural gas to certain large end-users. RIE's natural gas tariffs include gas price pass-through mechanisms relating to its sale of natural gas as a commodity. Therefore, customer natural gas purchases from alternative suppliers do not generally impact RIE's profitability. Some large industrial and commercial customers, however, may physically bypass RIE's facilities and seek delivery service directly from interstate pipelines or other natural gas distribution systems. Rates and Regulation In general, RIE operates subject to the jurisdiction of the FERC, the RIPUC and the Rhode Island Division of Public Utilities and Carriers. Distribution RIE owns and maintains electric and natural gas distribution networks in Rhode Island. Distribution revenues are primarily from the sale of electricity, natural gas, and related services to retail customers. Distribution sales are regulated by the RIPUC, which is responsible for approving the rates and other terms of services as part of the rate making process. Natural gas and electric distribution revenues are derived from the regulated sale and distribution of electricity and natural gas to residential, commercial, and industrial customers within RIE's service territory under the tariff rates. The tariff rates approved by the RIPUC are designed to recover the costs incurred by RIE for products and services provided, along with a return on investment. RIE's distribution base rates are calculated based on a return on rate base (net utility plant plus a cash working capital allowance less plant-related deferred taxes and other miscellaneous additions and deductions). All regulatory assets and liabilities, except accumulated deferred income taxes, are excluded from the return on rate base. Therefore, no return is earned on the related assets unless specifically provided for by the RIPUC. Currently, RIE's ISR and Renewable Energy Growth Program adjustment mechanisms are the only mechanisms authorized to earn a return. Certain operating expenses are also included in RIE's distribution base rates including wages and benefits, other operation and maintenance expenses, depreciation, and taxes. Transmission RIE owns an electric transmission system in Rhode Island. RIE's transmission services are regulated by the FERC and coordinated with ISO – New England. Deferral Mechanisms RIE records revenues in accordance with accounting principles for rate-regulated operations for arrangements between RIE and the applicable regulator. These include various deferral mechanisms such as capital trackers, energy efficiency programs, and other programs that qualify as Alternative Revenue Programs (ARPs). ARPs enable RIE to adjust rates in the future, in response to past activities or completed events. RIE's electric and gas distribution rates both have a revenue decoupling mechanism, which allows for annual adjustments to the RIE's delivery rates, as a result of the reconciliation between allowed revenue and billed revenue. RIE also has other ARPs related to the achievement of certain objectives, demand side management initiatives, and certain other rate making mechanisms. RIE recognizes ARPs with a corresponding offset to a regulatory asset or liability account when the regulatory specified events or conditions have been met, when the amounts are determinable, and are probable of recovery (or payment) through future rate adjustments. 10 Table of Contents LRS RIE is required by the RIPUC and by statute to provide LRS to all customers who have not elected to receive their electric supply from a non-regulated power producer or any customer who, for any reason, has stopped receiving generation service from a non-regulated power producer. The charge for LRS is the sum of the applicable LRS charges in addition to all appropriate Retail Delivery charges as stated in the applicable tariff. The monthly charge for LRS also includes the costs incurred by RIE to comply with the Renewable Energy Standard, established in Rhode Island General Laws Section 39-26-1 and the costs to comply with the RIPUC's Rules Governing Energy Source Disclosure. The charge for LRS includes the administrative costs associated with the procurement of LRS, including an adjustment for uncollectible accounts as approved by the RIPUC. Numerous alternative suppliers have offered to provide generation supply in RIE's service area. As the cost of generation supply is a pass-through cost for RIE, its financial results are not impacted if its customers purchase electricity supply from these alternative suppliers. See "Financial and Operational Developments" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 7 to the Financial Statements for additional information on current rate proceedings, regulatory matters and rate mechanisms. Natural Gas Distribution Supply To meet the projected annual gas supply requirements of approximately 35 Bcf, RIE has a portfolio of gas supply arrangements of varying contractual terms and durations to provide service to its customers. These natural gas supply arrangements include contracts with natural gas producers and marketers that reflect market price signals. RIE also has firm pipeline and underground storage capacity contracts to support the delivery of natural gas supplies to its customers. To manage the winter peak requirements for RIE customers, RIE contracts for liquified natural gas (LNG) service and owns and operates certain LNG storage facilities. The RIE gas supply portfolio includes contracts for firm transportation service with eleven interstate pipeline companies and natural gas storage operators. These contracts have various termination dates with certain contracts being subject to evergreen renewal provisions providing RIE with flexibility in managing its upstream resource portfolio. RIE has purchased and expects to continue to purchase natural gas supplies for its gas distribution operations from onshore producing regions accessed by its pipeline capacity portfolio in South Texas, East Texas, and Louisiana, as well as gas originating in the Marcellus and Utica production areas. RIE expects to purchase certain natural gas supplies that originate in Canada and from regional LNG import terminals. Corporate and Other (PPL) PPL Services provides PPL subsidiaries with administrative, management and support services. The costs of these services are charged directly to the respective recipients for the services provided or indirectly charged to applicable recipients based on an average of the recipients' relative invested capital, operation and maintenance expenses and number of employees or a ratio of overall direct and indirect costs. PPL Capital Funding provides financing for the operations of PPL and certain subsidiaries. PPL's growth in rate-regulated businesses provides the organization with an enhanced corporate level financing alternative, through PPL Capital Funding, that enables PPL to cost effectively support targeted credit profiles across all of PPL's rated companies. As a result, PPL utilizes PPL Capital Funding as a source of capital in financings, in addition to continued direct financing by certain operating subsidiaries. Unlike those of PPL Services, PPL Capital Funding's costs are not generally charged to PPL subsidiaries. Costs are charged directly to PPL. 11 Table of Contents ENVIRONMENTAL MATTERS (All Registrants) The Registrants are subject to certain existing and developing federal, regional, state and local laws and regulations with respect to air and water quality, land use and other environmental matters, and may be subject to different and more stringent laws and regulations enacted in the future. The EPA and other federal agencies with jurisdiction over environmental matters have issued numerous environmental regulations relating to air, water and waste that directly affect the electric power industry. Due to these environmental issues, it may be necessary for the Registrants to modify or cease certain operations or operation of certain facilities to comply with statutes, regulations and other requirements of regulatory bodies or courts. In addition, legal challenges to environmental permits or rules add uncertainty to estimating future costs of complying with such permits and rules. The Registrants are monitoring executive orders and other ongoing actions by the new Presidential administration, but are unable to predict changes in regulations, regulatory guidance, legal interpretations, policy positions, and implementation actions that may result. See "Legal Matters" in Note 12 to the Financial Statements for a discussion of environmental commitments and contingencies. See Note 18 to the Financial Statements for information related to the impacts of CCRs on AROs. LG&E and KU are entitled to recover, through the ECR mechanism, certain costs of complying with the Clean Air Act, as amended, and other federal, state and local environmental requirements applicable to coal combustion wastes and by-products from coal-fired generating facilities upon KPSC review. Costs not covered by the ECR mechanism for LG&E and KU and all such costs for PPL Electric and RIE are subject to rate recovery at the discretion of the companies' respective state regulatory authorities, or the FERC, if applicable. Because PPL Electric and RIE do not own any generating plants, they have less exposure to related environmental compliance costs. The Registrants can provide no assurances as to the ultimate outcome of future proceedings before regulatory authorities. (PPL, LG&E and KU) EPA Deregulatory Initiative On March 12, 2025, the EPA announced a plan to reconsider 31 environmental rules including the Section 111 performance standards and emissions limits for greenhouse gases, the endangerment finding for greenhouse gases, the Good Neighbor Plan, the Mercury and Air Toxics Standards, revisions to the fine particulate matter standard, the ELGs, and the CCRs Rule. Supplementing previous Executive Orders directing various regulatory changes, on April 9, 2025, President Trump issued an Executive Order and Presidential Memorandum directing review of existing rules, repeal of unlawful rules, and initiation of a zero-based budgeting process by which certain rules would automatically expire unless extended. While the current Presidential administration may seek to implement some regulatory changes outside of the rulemaking process, changes to existing rules are generally expected to require formal rulemaking proceedings. Any final EPA actions repealing or revising current rules will likely result in legal challenges. PPL, LG&E, and KU are unable to predict future regulatory changes, if any, that may result from the EPA's deregulatory plan or the outcome of any associated legal challenges. PPL, LG&E, and KU are closely monitoring the ongoing EPA initiative and any related litigation for the impact to our business including planned capital expenditures to comply with the EPA rules. Air NAAQS Applicable regulations require each state to identify areas within its boundaries that fail to meet the NAAQS, (known as nonattainment areas), and develop a state implementation plan to achieve and maintain compliance. States that are found to contribute significantly to another state's nonattainment with ozone standards are required to establish "good neighbor" state implementation plans. In addition, for attainment of ozone and fine particulates standards, certain states, including Kentucky, are subject to a regional EPA program known as the Cross-State Air Pollution Rule (CSAPR). 12 Table of Contents The Clean Air Act has a significant impact on the operation of fossil fuel generation plants. The Clean Air Act requires the EPA periodically to establish and review NAAQS for six pollutants including ozone (contributed to by nitrogen oxide emissions) and particulate matter, which are particularly relevant for fossil fuel generation plants. On February 2, 2024, the D.C. Circuit Court granted the EPA's motion for voluntary remand, without vacatur, of the ozone rule, which was under legal challenge. The EPA will complete a new review to incorporate new studies and updated analyses to determine the adequacy of the existing ozone standard. On March 6, 2024, the EPA finalized revisions to the particulate matter standard that lowers the primary standard for fine particulates. Several states and trade groups challenged the EPA's finalized revisions to the particulate matter standard in the D.C. Circuit Court. In March 2025, the EPA announced that it would reconsider the revised fine particulate standard. On November 25, 2025, the EPA filed a motion in the D.C. Circuit Court to vacate the fine particulate standard. The D.C. Circuit Court has not responded to the motion and environmental groups have filed responses against the motion. Nonattainment designations for counties in which LG&E and KU generation is located, including Jefferson County, Kentucky, could potentially require additional particulate matter and nitrogen oxide reductions from sources including LG&E's Mill Creek Station, and more stringent requirements for new generation. PPL, LG&E, and KU are unable to predict future implementation actions or the outcome of future evaluations by the EPA and the states with respect to the NAAQS standards. In March 2021, the EPA released final revisions to the Cross-State Air Pollution Rule (CSAPR), aimed at ensuring compliance with the 2008 ozone NAAQS and providing for reductions in ozone season nitrogen oxide emissions for 2021 and subsequent years. In March 2023, the EPA released a final Federal Implementation Plan under the Good Neighbor provisions of the Clean Air Act providing for significant additional nitrogen oxide emission reductions for compliance with the revised 2015 ozone NAAQS. The reductions in Kentucky state-wide nitrogen oxide budgets were scheduled to commence in 2023, with the largest reductions planned for 2026. The rules provide for reduced availability of nitrogen oxide allowances that have historically permitted operational flexibility for fossil units and could potentially result in constraints that may require implementation of additional emission controls or accelerate implementation of lower emission generation technologies. In June 2024, the U.S. Supreme Court issued a stay of the Good Neighbor Plan while the D.C. Circuit Court considers legal challenges to the rule. On December 10, 2024, EPA published in the Federal Register a supplement to the record. On December 6, 2024, the U.S. Court of Appeals for the Sixth Circuit vacated and remanded the EPA's disapproval of Kentucky's state implementation plan for the ozone NAAQS. In March 2025, the EPA announced that it would reconsider the Good Neighbor Plan. On January 27, 2026, the EPA released proposed Phase I Good Neighbor Plan revisions providing for approval of certain state implementation plans including that of Kentucky and withdrawing several prior disapprovals and error corrections. PPL, LG&E, and KU are monitoring ongoing legal and regulatory developments. PPL, LG&E, and KU are unable to predict the ultimate outcome of pending litigation or future emission reductions that may be required by future federal rules or state implementation actions. Compliance with the NAAQS, CSAPR, Good Neighbor Plan, and related requirements may require installation of additional pollution controls or other compliance actions, inclusive of retirements, the costs of which PPL, LG&E and KU believe would be subject to rate recovery. 13 Table of Contents Modification of Mercury and Air Toxics Standards In 2012, the EPA issued the Mercury and Air Toxics Standards (MATS) rule requiring reductions in mercury and other hazardous air pollutants from fossil fuel-fired power plants. LG&E and KU installed significant controls to achieve compliance with MATS and other rules. On May 7, 2024, the EPA issued a final rule increasing the stringency of MATS and further reducing emissions of certain hazardous air pollutants to reflect perceived developments in control technologies. Legal challenges to the rule have been filed in the D.C. Circuit Court. PPL, LG&E, and KU have reviewed the final rule and do not expect significant operational changes or additional controls to be required. On June 17, 2025, the EPA proposed in the Federal Register to repeal the 2024 MATS revisions except for the Particulate Matter Continuous Emission Monitoring System testing criteria. Greenhouse Gas Standards On May 9, 2024, the EPA issued a final rule under Section 111 of the Clean Air Act, which establishes performance standards and emissions limits aimed at reducing GHG emissions from certain new, existing, and modified fossil fuel-fired electric generating units (EGUs). In the final rule, the EPA announced it would set performance standards for existing natural gas-fired turbines in a future rule. The standards require phased implementation of carbon mitigation technologies including state-of-the-art efficiency requirements, carbon capture and sequestration, and natural gas co-firing. New natural gas EGUs would be immediately subject to the stricter efficiency standard. Legal challenges to the rule have been filed in the D.C. Circuit Court. PPL, LG&E, and KU are unable to predict the impact of new GHG reduction requirements until completion of a comprehensive review and resolution of related legal and regulatory proceedings. While the impact of new GHG reduction requirements on operations and financial results of operations could potentially be substantial, the cost of complying with such requirements is expected to be subject to rate recovery. On June 17, 2025, the EPA proposed in the Federal Register two options for repeal of the 2024 standard. In the first proposal, the EPA would determine that EGU emissions of greenhouse gases do not pose an endangerment to the health and welfare of the public and repeal the 2024 and 2015 standards for EGUs. Under an alternate proposal, the EPA would repeal the 2024 standards for existing coal, natural-gas and oil-fired steam generating units along with most standards for new combustion turbines. On February 12, 2026, the EPA issued a final reconsideration determination repealing the 2009 endangerment finding for GHG emissions from motor vehicles, which provided support for the regulation of GHG emissions. While the action has no immediate impact on regulation of GHG emissions from electric generating units, the EPA is expected to take additional regulatory actions with respect to that industrial sector. PPL, LG&E, and KU are unable to determine the exact impact on operations until resolution of pending regulatory actions and litigation. Climate Change (All Registrants) In recent years the federal government has undertaken various efforts aimed at addressing climate change, which could have far-reaching impacts on PPL's business operations, products, and services. In 2022, the U.S. Supreme Court ruled that provisions of the EPA's Clean Power Plan, premised on generation shifting from coal-fired plants to lower emitting natural gas-fired plants and renewables, exceeded the authority granted to the EPA under the Clean Air Act. While the EPA contends that the new GHG emissions rule discussed above is consistent with the provisions of the Clean Air Act, it is uncertain how a ruling from the D.C. Circuit Court or, if appealed, the U.S. Supreme Court may affect the new GHG emissions rule and any future EPA rulemaking on GHG emissions. The current Presidential administration has issued various executive orders regarding climate change initiatives and is expected to continue to consider changes in regulations, regulatory guidance, legal interpretations, policy positions and implementation actions, but the Registrants are unable to predict the changes that may ultimately be adopted. These developments are generally preliminary or ongoing in nature and the Registrants cannot predict the final outcome or ultimate impact on operations. PPL has adopted a goal of net-zero carbon emissions by 2050, which PPL expects will include continuing to retire uneconomic generation, deploying newer generation technology and investing in research and innovation that will help to achieve this goal, while maintaining reliable and affordable energy in our service territories. The net-zero goal relates to direct and indirect carbon emissions consistent with Greenhouse Gas Protocol guidance and referenced by the EPA Center for Corporate Climate Leadership. Achievement of our emissions goal may be affected by factors that are outside of our control including potential load growth, especially from large load customers, energy policy and regulations at the state and federal level, technological developments, and the cost of new generation technology. PPL is aware of the various risks associated with climate change, including increased frequency and severity of severe weather. To address these risks, PPL continues to work to advance grid modernization and improve the company's equipment to help mitigate the impacts of extreme weather events and improve reliability. 14 Table of Contents Water/Waste (PPL, LG&E and KU) Clean Water Act Regulations under the federal Clean Water Act dictate permitting and mitigation requirements for facilities and construction projects that impact "Waters of the United States". Many other requirements relate to power plant operations, including the treatment of pollutants in effluents prior to discharge, the temperature of effluent discharges and the location, design and construction of cooling water intake structures at generating facilities, and standards intended to protect aquatic organisms that become trapped at or pulled through cooling water intake structures at generating facilities. These requirements could impose significant costs for LG&E and KU, which are expected to be subject to rate recovery. A proposed rule definition revision was issued in November 2025. A final rule is expected by the end of 2026. Clean Water Act Jurisdiction Environmental groups and others have claimed that discharges to groundwater from leaking CCR impoundments at power plants are subject to Clean Water Act permitting. On April 12, 2019, the EPA released regulatory clarification finding that Clean Water Act jurisdiction does not cover such discharges to groundwater. On January 23, 2020, the EPA announced a final rule modifying the jurisdictional scope of the Clean Water Act. The announced rule revises the definition of the "Waters of the United States," including a revision to exclude groundwater from the definition. In April 2020, the U.S. Supreme Court issued a ruling that Clean Water Act jurisdiction may apply to certain discharges to groundwater that result in the functional equivalent of a direct discharge to navigable waters. In a December 2025 proposed revision to the definition of "Waters of the United States", the EPA clarified groundwater exclusions and a final rule is expected by the end of 2026. PPL, LG&E, and KU are unaware of any unpermitted releases from their facilities that are subject to Clean Water Act jurisdiction, but future regulatory developments and judicial rulings could potentially subject certain releases from CCR impoundments and landfills to additional permitting and remediation requirements, which could impose substantial costs. Any associated costs are expected to be subject to rate recovery. PPL, LG&E and KU are unable to predict the outcome or financial impact of future regulatory proceedings and litigation. Waters of the U.S. PPL, LG&E, and KU are subject to permitting and mitigation requirements for certain construction activities that impact "Waters of the United States." On April 21, 2020, the EPA and U.S. Army Corps of Engineers published a final rule revising the definition of "Waters of the United States" to exclude jurisdiction over certain surface waters. On August 30, 2021, a U.S. District Court in Arizona vacated and remanded the rule. On December 7, 2021, the EPA and U.S. Army Corps of Engineers proposed to repeal the rule and restore the definition of "Waters of the United States" that was in place prior to 2015. On January 18, 2023, the EPA and U.S. Army Corps of Engineers published a final revision to the rule broadening the definition of Waters of the United States and reverting to the pre-2015 regulatory framework. Although the broader definition incorporates additional water bodies, any resulting permitting, construction, and operational expenses are expected to be immaterial and subject to rate recovery. On May 25, 2023, the U.S. Supreme Court issued an opinion in Sackett v. EPA holding that the government's jurisdiction to regulate wetlands under the Clean Water Act extends to wetlands with a continuous surface connection to bodies that are "Waters of the United States." On September 8, 2023, the EPA issued a conforming rule that incorporated the holding of Sackett into federal definitions of waters of the United States; some states and industry groups have challenged the conforming rule as well. By limiting water bodies that fall within the jurisdiction of the Clean Water Act, the U.S. Supreme Court's decision could reduce the number of projects or the scope of project activities subject to federal permitting for wetlands. A proposed rule regarding revision of the definition was issued in December 2025. A final rule is expected by the end of 2026. PPL, LG&E and KU are unable to predict the outcome of current or future litigation or regulatory proceedings, but do not expect a material impact on operations. Superfund and Other Remediation (All Registrants) From time to time, PPL's subsidiaries undertake testing, monitoring or remedial action in response to spills or other releases at various on-site and off-site locations, negotiate with the EPA and state and local agencies regarding actions necessary to comply with applicable requirements, negotiate with property owners and other third parties alleging impacts from PPL's operations and undertake similar actions necessary to resolve environmental matters that arise in the course of normal operations. Based on analyses to date, resolution of these environmental matters is not expected to have a significant adverse impact on the operations of PPL, PPL Electric, LG&E, KU and RIE. 15 Table of Contents Future cleanup or remediation work at sites not yet identified may result in significant additional costs for the Registrants. Insurance policies maintained by LKE may be available to cover certain costs or other obligations related to these matters for LG&E or KU, but the amount of insurance coverage or reimbursement cannot be estimated or assured. See "Legal Matters" in Note 12 to the Financial Statements for additional information. (All Registrants) SEASONALITY The demand for and market prices of electricity and natural gas are affected by weather. As a result, the Registrants' operating results in the future may fluctuate substantially on a seasonal basis, especially when unpredictable weather conditions make such fluctuations more pronounced. The pattern of this fluctuation may change depending on the type and location of the facilities owned. FINANCIAL CONDITION See "Financial Condition" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for this information. CAPITAL EXPENDITURE REQUIREMENTS See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information concerning projected capital expenditure requirements for 2026 through 2028. See "Item 1. Business - Environmental Matters" for additional information concerning the potential impact on capital expenditures from environmental matters. HUMAN CAPITAL PPL, together with its subsidiaries, is committed to fostering an exceptional workplace for employees. PPL pledges to enable the success of its current and future workforce by ensuring a safe and healthy work environment, cultivating a supportive, empowering and collaborative culture, encouraging employee engagement and fostering professional development. Matters related to these priorities and corporate culture are overseen by PPL's senior management, which provides updates to the PPL Board of Directors (the Board). Pursuant to its charter, the People and Compensation Committee of the Board also periodically reviews and assesses the company's strategy for human capital management. PPL's investment in the success of its workforce is embodied in the following areas with dedicated leadership and Board oversight: • Safety and Compliance - PPL is committed to maintaining an ethical and safe workplace culture for employees and contractors. Additional steps to ensure the Board has oversight in these areas include: • Safety - PPL implements programs focused on health and safety, including emergency preparedness, vehicle safety and accident prevention. Employees receive safety training and are encouraged to share, implement, and follow best practices. PPL requires contractor work practices to meet or exceed PPL safety requirements and all applicable safety standards. Senior management receives monthly safety data updates to determine whether additional safety measures should be implemented. The Board reviews the company's safety programs and results several times a year. The Board is also immediately engaged in the event of a fatality. • Compliance - The Corporate Compliance Committee, including senior executives, meets quarterly to discuss metrics and other matters related to the compliance and ethics culture. Among the items discussed are statistics regarding Ethics Helpline reports and employee concerns. This information is also reviewed with the Audit Committee of the Board quarterly and with the Board annually. • Corporate culture - Foster a supportive, empowering and collaborative workplace culture in which employees with various backgrounds can thrive. Senior management reviews workforce metrics, culture related objectives and associated programs semi-annually. The Board also receives periodic updates from senior management on PPL's strategy and initiatives that drive corporate culture. • Employee engagement - Create a workplace that fosters an engaged, high-quality workforce. PPL's operating companies regularly conduct assessments related to employee engagement, safety and culture. Senior management reviews employee engagement efforts with the Board at least annually. • Professional development - Invest in the current and future workforce through training and development, succession planning and creation of a pipeline for internal advancement. Senior management reviews succession planning with the People and Compensation Committee of the Board on an annual basis. 16 Table of Contents • Comprehensive benefits - In addition to challenging careers and competitive salaries, PPL offers competitive benefits programs to attract and retain talent and support employees' well-being. PPL offers competitive vacation time, expanded leave for new parents, retirement programs, and internal and external development opportunities, including tuition reimbursement offerings for undergraduate and certain graduate degrees. Senior management conducts annual benchmarking of employee compensation and benefits. PPL will continue to engage with employees and to assess these priorities as we work to best position individuals and the company for future success. PPL had a turnover rate of 10.83% for the year ended December 31, 2025. Looking forward, PPL will maintain a strong focus on workforce planning to address future talent needs. At December 31, 2025, the Registrants had the following full-time employees and employees represented by labor unions: Total Full-Time Employees Number of Union Employees Percentage of Total Workforce PPL 6,546 2,368 36 % PPL Electric 1,378 902 65 % LG&E 908 578 64 % KU 720 107 15 % (PPL) In May 2025, PPL and the Rhode Island United Steelworkers (USW) Local 12431 reached a five-year tentative agreement that was ratified and effective from June 2, 2025, through June 2, 2030. The agreement currently covers approximately 300 employees. (PPL and LG&E) LG&E's current collective bargaining agreement with IBEW Local 2100, which covers approximately 600 employees, is scheduled to expire October 1, 2026. It is expected that the parties will be engaging in negotiations for a new contract prior to that date. AVAILABLE INFORMATION PPL's Internet website is www.pplweb.com. Under the Investors heading of that website, PPL provides access to SEC filings of the Registrants (including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(d) or 15(d)) free of charge, as soon as reasonably practicable after filing with the SEC. The information contained on, or available through, PPL's Internet website is not, and shall not be deemed to be, incorporated by reference into this report. Additionally, the Registrants' filings are available at the SEC's website (www.sec.gov). 17 Table of Contents ITEM 1A. RISK FACTORS The Registrants face various risks associated with their businesses. Our businesses, financial condition, cash flows or results of operations could be materially adversely affected by any of these risks. In addition, this report also contains forward-looking and other statements about our businesses that are subject to numerous risks and uncertainties. See "Forward-Looking Information," "Item 1. Business," "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 12 to the Financial Statements for additional information concerning the risks described below and for other risks, uncertainties and factors that could affect our businesses and financial results. As used in this Item 1A., the terms "we," "our" and "us" generally refer to PPL and its consolidated subsidiaries taken as a whole, or PPL Electric and its consolidated subsidiaries taken as a whole within the Pennsylvania Regulated segment discussion, LG&E, KU and their consolidated subsidiaries taken as a whole within the Kentucky Regulated segment discussion, and RIE within the Rhode Island Regulated segment discussion. Order of Subsection Presentation A. Risks Related to Registrant Holding Company B. Risks Related to Regulated Utility Operations C. Risks Specific to Kentucky Regulated Segment D. Risks Specific to Pennsylvania Regulated Segment E. Risks Specific to Rhode Island Regulated Segment F. Risks Related to All Segments (PPL) A. Risk Related to Registrant Holding Company PPL is a holding company and its cash flows and ability to meet its obligations with respect to indebtedness and under guarantees, and its ability to pay dividends, largely depends on the financial performance of its respective subsidiaries and, as a result, is effectively subordinated to all existing and future liabilities of those subsidiaries. PPL is a holding company and conducts its operations primarily through subsidiaries. Substantially all of the consolidated assets of PPL are held by its subsidiaries. Accordingly, PPL's cash flows and ability to meet debt and guaranty obligations, as well as PPL's ability to pay dividends, are largely dependent upon the earnings of those subsidiaries and the distribution or other payment of such earnings in the form of dividends, distributions, loans, advances or repayment of loans and advances. The subsidiaries are separate legal entities and have no obligation to pay dividends or distributions to their parents or to make funds available for such a payment. The ability of PPL's subsidiaries to pay dividends or distributions in the future will depend on the subsidiaries' future earnings and cash flows and the needs of their businesses, and may be restricted by their obligations to holders of their outstanding debt and other creditors, as well as any contractual or legal restrictions in effect at such time, including the requirements of state corporate law applicable to payment of dividends and distributions, and regulatory requirements, including restrictions on the ability of PPL Electric, LG&E, KU, and RIE to pay dividends under Section 305(a) of the Federal Power Act. Because PPL is a holding company, its debt and guaranty obligations are structurally subordinated to all existing and future liabilities of its subsidiaries. Although certain agreements to which certain subsidiaries are parties limit their ability to incur additional indebtedness, PPL and its subsidiaries retain the ability to incur substantial additional indebtedness and other liabilities. Therefore, PPL's rights and the rights of its creditors, including rights of debt holders, to participate in the assets of any of its subsidiaries, in the event that such a subsidiary is liquidated or reorganized, will be subject to the prior claims of such subsidiary's creditors. ( All Registrants ) B. Risks Related to Regulated Utility Operations Our regulated utility businesses face many of the same risks, in addition to those risks that are unique to each of the Kentucky Regulated, Pennsylvania Regulated and Rhode Island Regulated segments. Set forth below are risk factors common to the regulated segments, followed by sections identifying separately the risks specific to each of these segments. 18 Table of Contents The business and capital investment plans of PPL depend, in part, on the continued growth and viability of data centers and large load customers in its service territories. PPL is anticipating increases in load demand, creating a business need for new power generating resources and transmission facilities. Much of this demand is driven by interconnecting with and providing power to data centers and large load customers to serve an increasingly digital economy and to support artificial intelligence. The business and capital investment plans of PPL are focused on meeting these current and projected needs. If these increased demands for electricity do not occur as projected or are not sustained as projected, for any reason, it could affect PPL's financial condition. Our profitability is highly dependent on our ability to recover the costs of providing energy and utility services to our customers and earn an adequate return on our capital investments. Regulators may not approve the rates we request and existing rates may be challenged. The rates we charge our utility customers must be approved by one or more federal or state regulatory commissions, including the FERC, KPSC, VSCC, PAPUC and RIPUC. Although rate regulation is generally premised on the recovery of prudently incurred costs and a reasonable rate of return on invested capital, there can be no assurance that regulatory authorities will consider all of our costs to have been prudently incurred or that the regulatory process by which rates are determined will always result in rates that achieve full or timely recovery of our costs or an adequate return on our capital investments. Federal or state agencies, intervenors and other permitted parties may challenge our current or future rate requests, structures or mechanisms, and ultimately reduce, alter or limit the rates we receive. The requests for rate increases and the frequency of rate cases could face resistance from customers and other stakeholders, especially in a rising cost environment. Although our rates are generally regulated based on an analysis of our costs incurred in a base year or on future projected costs, the rates we are allowed to charge may or may not match our costs at any given time. Our regulated utility businesses are subject to substantial capital expenditure requirements over the next several years, which may require rate increase requests to the regulators in the future. If our costs are not adequately recovered through rates, it could have an adverse effect on our business, results of operations, cash flows and financial condition. Our utility businesses are subject to significant and complex governmental regulation. In addition to regulating the rates we charge, various federal and state regulatory authorities regulate many aspects of our utility operations, including: • the terms and conditions of our service and operations; • financial and capital structure matters, and issuance of securities; • siting, construction and operation of facilities; • mandatory reliability and safety standards under the Energy Policy Act of 2005 and other standards of conduct; • accounting, depreciation and cost allocation methodologies; • tax matters; • affiliate transactions; • acquisition, retirement and disposal of utility assets; and • various other matters, including energy efficiency. Such regulations or changes thereto may subject us to higher operating costs or increased capital expenditures and failure to comply could result in sanctions or possible penalties which may not be recoverable from customers. Our regulated businesses undertake significant capital projects and these activities are subject to unforeseen costs, delays or failures, as well as risk of inadequate recovery of resulting costs. The regulated utility businesses are capital intensive and require significant investments in energy generation (in the case of LG&E and KU) and transmission, distribution and other infrastructure projects, including providing service to new data centers and large load customers, constructing projects for environmental compliance and maintaining system reliability. The completion of these projects without delays or cost overruns is subject to risks in many areas, including: • approval, licensing and permitting; • land acquisition and the availability of suitable land; • skilled labor or equipment shortages; • construction problems or delays, including disputes with third-party intervenors; • increases in commodity prices or labor rates; • potential supply chain disruptions or delays; and 19 Table of Contents • contractor performance. PPL is anticipating increases in load demand, creating the need for new power generating resources and transmission facilities. A substantial portion of this demand is driven by the current and projected power needs of data centers to serve an increasingly digital economy and to support artificial intelligence. Extending service to these facilities necessitates significant capital expenditures, which in turn requires sufficient access to sources of capital. These additional capital needs, the increased concentration of business within a single industry based on emerging technologies, and uncertainties regarding the actual capacity required to satisfy the projected new demands of these new industries creates risks for PPL. Ensuring that incremental revenues from these projected new demands cover incremental costs and risks is critical to PPL and its relationship to its existing customers. While contracts with new large load customers typically include provisions for early termination payments, minimum bills, and financial security, these contracts may not fully protect PPL against all risks. Changes in industry practice or advances in the related technologies could reduce the demand for electricity to power data centers or other large load facilities. Additionally, these industries may experience a business downturn, which could cause the loss of current or potential customers or may weaken the financial condition and creditworthiness of existing customers. If anticipated demand growth does not materialize, PPL could experience unrecovered capital investments. Conversely, if demand grows more rapidly than projected, PPL may face challenges in securing adequate generation and transmission capacity and maintaining service reliability. Failure to complete our capital projects on schedule or on budget, or at all, could adversely affect our financial performance, operations and future growth if such expenditures are not granted rate recovery by our regulators. We are or may be subject to costs of remediation of environmental contamination at facilities that are currently owned by us or that are owned or operated by our former subsidiaries. We may be subject to liability for the costs of environmental remediation of property now or formerly owned by us with respect to substances that we may have generated regardless of whether the liabilities arose before, during or after the time we owned or operated the facilities. We also have current or previous ownership interests in sites associated with the production of manufactured gas for which we may be liable for additional costs related to investigation, remediation and monitoring of these sites. Remediation activities associated with our former manufactured gas plant operations are one source of such costs. Citizen groups or others may bring litigation regarding environmental issues including claims of various types, such as property damage, personal injury and citizen challenges to compliance decisions on the enforcement of environmental requirements, which could subject us to penalties, injunctive relief and the cost of litigation. We cannot predict the amount and timing of future expenditures (including the potential or magnitude of fines or penalties) related to such environmental matters, although they could be material. C. Risks Specific to Kentucky Regulated Segment ( PPL, LG&E and KU ) We are subject to financial, operational, regulatory and other risks related to requirements, developments and uncertainties in environmental regulation, including those affecting coal-fired generation facilities. Extensive federal, state and local environmental laws and regulations are applicable to LG&E's and KU's generation supply, including its air emissions, water discharges (ELGs) and the management of hazardous and solid wastes (CCRs), among other business-related activities, and the costs of compliance or alleged non-compliance cannot be predicted and could be material. In addition, our costs may increase significantly if the requirements or scope of environmental laws, regulations or similar rules are expanded or changed as the environmental standards governing LG&E's and KU's businesses, particularly as applicable to coal-fired generation and related activities, continue to be subject to uncertainties due to rulemaking and other regulatory developments, legislative activities and litigation, administrative and permit challenges. In recent years, the federal government has undertaken various efforts aimed at addressing climate change, some of which remain subject to legal challenge, that may affect these costs. The Registrants are unable to predict changes in regulations, regulatory guidance, legal interpretations, policy positions, and implementation actions that may be initiated by the current Presidential administration. Depending on the extent, frequency and timing of such changes, LG&E and KU may face higher risks of unsuccessful implementation of environmental-related business plans, noncompliance with applicable environmental rules, delayed or incomplete rate recovery or increased costs of implementation. Costs may take the form of increased capital expenditures or operating and maintenance expenses, monetary fines, penalties or forfeitures, operational changes, permit limitations or other restrictions. At some of our older generating facilities it may be uneconomic for us to install necessary pollution control equipment, which could cause us to retire those units. Our ability to retire plants we believe are uneconomic is expected to be subject to receipt of regulatory approvals. Market prices for energy and capacity also affect this cost-effectiveness analysis. 20 Table of Contents Many of these environmental law considerations are also applicable to the operations of our key suppliers or customers, such as coal producers, power producers and industrial power users, and may impact the costs of their products and demand for our services. ( PPL and LG&E ) We are subject to regulatory and other risks regarding natural gas supply infrastructure. The PHMSA enforces regulations that govern the design, construction, operation and maintenance of pipeline facilities. Failure to comply with these regulations could result in the assessment of fines or penalties against LG&E. These regulations require, among other things, that pipeline operators take certain measures with respect to pipeline integrity. Depending on the results of integrity tests and other integrity program activities, we could incur significant and unexpected costs to perform remedial activities on our natural gas infrastructure to ensure our continued safe and reliable operation. Recent pipeline incidents in the U.S. have also led to the introduction of proposed rules and possible federal legislative actions which could impose restrictions on LG&E's operations or require more stringent testing to ensure pipeline integrity. Implementation of these regulations could increase our costs to comply with pipeline integrity and safety regulations. D. Risks Specific to Pennsylvania Regulated Segment ( PPL and PPL Electric ) We face competition for transmission projects, which could adversely affect our rate base growth. FERC Order 1000, issued in July 2011, establishes certain procedural and substantive requirements relating to participation, cost allocation and non-incumbent developer aspects of regional and inter-regional electricity transmission planning activities. The PPL Electric transmission business, operating under a FERC-approved PJM Open Access Transmission Tariff, is subject to competition pursuant to FERC Order 1000 from entities that are not incumbent PJM transmission owners with respect to the construction and ownership of transmission facilities within PJM. Increased competition can result in lower rate base growth. We could be subject to higher costs and/or penalties related to Pennsylvania Conservation and Energy Efficiency Programs. PPL Electric is subject to Act 129, which contains requirements for energy efficiency and conservation programs and for the use of smart metering technology, imposes PLR electricity supply procurement rules, provides remedies for market misconduct, and made changes to the existing Alternative Energy Portfolio Standard. The law also requires electric utilities to meet specified goals for reduction in customer electricity usage and peak demand. Utilities not meeting these Act 129 requirements are subject to significant penalties that cannot be recovered in rates. Numerous factors outside of our control could prevent compliance with these requirements and result in penalties to us. E. Risks Specific to the Rhode Island Regulated Segment ( PPL ) We are subject to regulatory and other risks regarding natural gas supply infrastructure in Rhode Island. The PHMSA enforces regulations that govern the design, construction, operation and maintenance of pipeline facilities. Failure to comply with these regulations could result in the assessment of fines or penalties against RIE. These regulations require, among other things, that pipeline operators take certain measures with respect to pipeline integrity. Depending on the results of integrity tests and other integrity program activities, we could incur significant and unexpected costs to perform remedial activities on our natural gas infrastructure to ensure our continued safe and reliable operation. 21 Table of Contents F. Risks Related to All Segments ( All Registrants ) Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships. Numerous functions affecting the efficient operation of our businesses are dependent on the secure and reliable storage, processing and communication of electronic data and the use of sophisticated computer hardware and software systems and network infrastructure. The operation of our transmission and distribution systems, including gas distribution systems, as well as our generation plants, are all reliant on cyber-based, complex and integrated technologies. Systemic issues could arise as a result of upgrades to particular software or human error. In addition, these complex systems are subject to the risk that they could be the target of disruptive actions by terrorists, nation state actors or criminals or otherwise be compromised. Attacks may come through ransomware, software updates or patches, use of opensource software, firmware that hackers can manipulate to include malicious codes for exploitation at a later date, or the compromising of hardware by bad actors, creating serious risks to our security, the security of our customers' information, and potentially to our ability to provide power. Attacks could also target our personnel or contractors through attempts to gain access or credentials that could be used to breach our systems. As a result, operations could be interrupted, property could be damaged and sensitive customer information lost or stolen, causing us to incur significant losses of revenues, other substantial liabilities and damages, costs to replace or repair damaged equipment and damage to our reputation. Threats to our systems and operations continue to emerge as new ways to compromise components of our systems or networks are developed. Additionally, cybersecurity risks also threaten our supply chains, including aspects that are not under our control, such as the incorporation of opensource software in systems or software that we use, that despite our efforts do not meet our current security standards. In addition, under the Energy Policy Act of 2005, users, owners and operators of the bulk power transmission system, including PPL Electric, LG&E, KU and RIE, are subject to mandatory reliability standards promulgated by NERC and enforced by the FERC. As an operator of natural gas distribution systems, LG&E is also subject to mandatory reliability standards of the U.S. Department of Transportation and is also subject to certain security directives related to cybersecurity issued by the Department of Homeland Security (DHS) Transportation Security Administration (TSA) in 2021. The TSA has determined that LG&E is critical, while RIE has not been notified of this distinction and is therefore not currently subject to the security directives. Failure to comply with these standards could result in the imposition of fines or civil penalties, and potential exposure to third party claims for alleged violations of the standards. Artificial Intelligence (AI) is an evolving area of technology that has the potential to affect multiple aspects of our business operations, grid management, critical infrastructure management, customer interactions, cybersecurity posture, and decision support processes. Because AI technologies remain in the early stages of development and industry standards are still emerging, their use, whether by PPL, its subsidiaries or third-party vendors, presents inherent risks. Although we seek contractual protections and conduct due diligence with third-party vendors that incorporate AI technologies into their products or services, we may not have full visibility into, awareness of, or control over, the underlying data, supply chain dependencies, model training practices, performance, security safeguards, or compliance posture of such AI enabled tools. AI algorithms that we or our third-party vendors use may be flawed or may be based on datasets that are biased or insufficient, which may introduce risks involving data quality, data integrity, cybersecurity, adversarial manipulation, intellectual property, regulatory compliance, biased outcomes, or improper handling of sensitive information. These limitations, failures, or inaccurate results generated as a result of our employees', contractors' or vendors' use or misuse of AI technologies could lead to operational interruptions or otherwise adversely affect our business, reputation, or financial results. In addition, the development, testing, and deployment of AI capabilities may require significant computational resources, specialized personnel, and additional investment, resulting in increased costs. We may not be able to recover these costs through our regulatory proceedings. Rapid advances in AI capabilities, as well as the emerging regulatory landscape in the United States and internationally, may also require modifications to our systems, adoption of enhanced governance processes or implementation of new safeguards. Future laws, regulations, Executive Orders, or industry standards relating to AI (which may be conflicting), including those addressing transparency, data usage, cybersecurity, accountability, or risk management, could materially affect how we design, procure, or use AI technologies and could increase compliance costs. In addition, the pace of AI innovation and regulation is unpredictable, and we cannot foresee all potential impacts of AI technologies or future laws and regulations or compliance requirements, and their associated costs and consequences. Any of the risks described above could adversely affect our business operations, reputation, or financial results. Natural disasters or operational accidents may adversely affect the Registrants' operating results. 22 Table of Contents Natural disasters or operational accidents (such as wildfires, earthquakes, hurricanes or natural gas transmission pipeline explosions) could have direct or indirect impacts on the Registrants or key contractors or suppliers. Further, the generation of electricity and the transportation and storage of natural gas involve inherent operating risks that may result in accidents involving serious injury or loss of life, environmental damage or property damage. Such events could affect the Registrants through civil or criminal legal proceedings or changes to policies, laws and regulations the compliance costs of which may have a significant impact on the Registrants' results of operations, financial position and cash flows. Existing insurance policies may not cover all of the potential exposures in connection with such incidents. Any losses not covered by insurance, or any increases in the cost of applicable insurance as a result of such incidents, could have a material adverse effect on the results of operations, financial position and cash flows of the Registrants. We are subject to risks associated with federal and state tax laws and regulations. Changes in tax law as well as the inherent difficulty in quantifying potential tax effects of business decisions could negatively impact our results of operations and cash flows. We are required to make judgments in order to estimate our obligations to taxing authorities. These tax obligations include income, property, gross receipts, franchise, sales and use, employment-related and other taxes. We also estimate our ability to utilize deferred tax assets and tax credits. Dependent upon the revenue needs of the jurisdictions in which our businesses operate, various tax and fee increases may be proposed or considered. We cannot predict changes in tax law or regulation or the effect of any such changes on our businesses. Any such changes could increase tax expense and could have a significant negative impact on our results of operations and cash flows. We continue to evaluate the application of relevant laws, including the TCJA, the IRA and the One Big Beautiful Bill Act. Increases in electricity prices and/or a weak economy can lead to changes in legislative and regulatory policy, including the promotion of energy efficiency, conservation and distributed generation or self-generation, which may adversely affect our business. Energy consumption is significantly impacted by overall levels of economic activity and costs of energy supplies. Economic downturns or periods of high energy supply costs can lead to changes in or the development of legislative and regulatory policy designed to promote reductions in energy consumption and increased energy efficiency, alternative and renewable energy sources, and distributed or self-generation by customers. This focus on conservation, energy efficiency and self-generation may result in a decline in electricity demand, which could adversely affect our business. We could be negatively affected by rising interest rates, downgrades to our credit ratings, adverse credit market conditions or other negative developments in our ability to access capital markets. Our businesses are capital-intensive and, in the ordinary course of business, we are reliant upon adequate long-term and short-term financing to fund our significant capital expenditures, debt service and operating needs. As a result, we are sensitive to developments in interest rates, credit rating considerations, insurance, security or collateral requirements, market liquidity and credit availability and refinancing opportunities necessary or advisable to respond to credit market changes. Changes in these conditions could result in increased costs and decreased availability of credit. In addition, certain sources of debt and equity capital have expressed reservations about investing in companies that rely on fossil fuels. If sources of our capital are reduced, capital costs could increase materially. A downgrade in our credit ratings could negatively affect our ability to access capital and increase the cost of maintaining our credit facilities and any new debt. Credit ratings assigned by Moody's and S&P to our businesses and their financial obligations have a significant impact on the cost of capital incurred by our businesses. A ratings downgrade could increase our short-term borrowing costs and negatively affect our ability to fund liquidity needs and access new long-term debt at acceptable interest rates. See "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Liquidity and Capital Resources - Ratings Triggers" for additional information on the financial impact of a downgrade in our credit ratings. 23 Table of Contents Our operating revenues could fluctuate on a seasonal basis, especially as a result of extreme weather conditions, including storms, or from changes in average temperatures for extended periods, which may be caused or exacerbated by climate change. Our businesses are subject to seasonal demand cycles. For example, in some markets demand for, and market prices of, electricity peak during hot summer months, while in other markets such peaks occur in cold winter months. As a result, our overall operating results may fluctuate substantially on a seasonal basis if weather conditions diverge adversely from seasonal norms. Extreme weather and other significant disruptive events could significantly affect our profitability or operations by causing outages, damaging infrastructure and requiring significant repair costs. Storm outages and damage often directly decrease revenues and increase expenses, due to reduced usage and restoration costs. The effects of climate change may cause, contribute to or magnify fluctuations in our operating results. Our businesses are subject to physical, market and economic risks relating to potential effects of climate change. Climate change may produce changes in weather or other environmental conditions, including temperature or precipitation levels, and thus may impact consumer demand for electricity. In addition, the potential physical effects of climate change, such as increased frequency and severity of storms, floods, and other climatic events, could disrupt our operations and cause us to incur significant costs to prepare for or respond to these effects. Climate change may also contribute to heightened risk or severity of wildfires, which could disrupt our operations and cause us to incur significant costs, though the annual FEMA National Risk Index for wildfires in the jurisdictions in which we provide service is very low to relatively moderate. These or other meteorological changes could lead to increased operating costs, capital expenses or power purchase costs. Greenhouse gas regulation such as the EPA's May 2024 rule governing emissions from certain fossil fuel-fired electric generating units could increase the cost of electricity, and such increases could have a depressive effect on regional economies. Reduced economic and consumer activity in our service areas -- both generally and specific to certain industries and consumers accustomed to previously lower cost power -- could reduce demand for the power we generate, market and deliver. Also, demand for our energy-related services could be similarly lowered by consumers' preferences or market factors favoring energy efficiency, low-carbon power sources or reduced electricity usage. The Registrants' responses to such climate-related risks include compliance with evolving governmental policy, which may affect our financial condition, results of operations or cash flows. We cannot predict the outcome of legal proceedings or investigations related to our businesses in which we are periodically involved. An unfavorable outcome or determination in any of these matters could have a material adverse effect on our financial condition, results of operations or cash flows. We are involved in legal proceedings, claims and litigation and periodically are subject to state and federal investigations arising out of our business operations, the most significant of which are summarized in Item 1. Business and "Regulatory Matters" in Note 7 to the Financial Statements and in "Legal Matters" and "Regulatory Issues" in Note 12 to the Financial Statements. We cannot predict the ultimate outcome of these matters, nor can we reasonably estimate the costs or liabilities that could potentially result from a negative outcome in each case. Significant increases in our operation and maintenance expenses, including health care and pension costs, could adversely affect our future earnings and liquidity. We continually focus on limiting and reducing our operation and maintenance expenses. However, we expect to continue to face increased cost pressures in our operations. Increased costs of materials and labor may result from general inflation, increased regulatory requirements (especially in respect of environmental regulations), the need for higher-cost expertise in the workforce or other factors. In addition, pursuant to collective bargaining agreements, we are contractually committed to provide specified levels of health care and pension benefits to certain current employees and retirees. These benefits give rise to significant expenses. Due to general inflation with respect to such costs, the aging demographics of our workforce and other factors, we have experienced significant health care cost inflation in recent years, and we expect our health care costs, including prescription drug coverage, to continue to increase despite measures that we have taken and expect to take to require employees and retirees to bear a higher portion of the costs of their health care benefits. In addition, we expect to continue to incur significant costs with respect to the defined benefit pension plans for our employees and retirees. The measurement of our expected future health care and pension obligations, costs and liabilities is highly dependent on a variety of assumptions, most of which relate to factors beyond our control. These assumptions include investment returns, interest rates, health care cost trends, inflation rates, benefit improvements, salary increases and the demographics of plan participants. If our assumptions prove to be inaccurate, our future costs and cash contribution requirements to fund these benefits could increase significantly. 24 Table of Contents We may incur liabilities in connection with divestitures. In connection with various divestitures, and certain other transactions, we have indemnified or guaranteed parties against certain liabilities. These indemnities and guarantees relate, among other things, to liabilities which may arise with respect to the period during which we or our subsidiaries operated a divested business, and to certain ongoing contractual relationships and entitlements with respect to which we or our subsidiaries made commitments in connection with a divestiture. See "Guarantees and Other Assurances" in Note 12 to the Financial Statements. We are subject to liability risks relating to our generation, transmission and distribution operations. The conduct of our physical and commercial operations subjects us to many risks, including risks of potential physical injury, property damage or other financial liability, caused to or by employees, customers, contractors, vendors, contractual or financial counterparties and other third parties. Our facilities may not operate as planned, which may increase our expenses and decrease our revenues and have an adverse effect on our financial performance. Operation of power plants, transmission and distribution facilities, information technology systems and other assets and activities subjects us to a variety of risks, including the breakdown or failure of equipment, accidents, security breaches, viruses or outages affecting information technology systems, labor disputes, obsolescence, delivery/transportation problems and disruptions of fuel supply and performance below expected levels. These events may impact our ability to conduct our businesses efficiently and lead to increased costs, expenses or losses. Operation of our delivery systems below our expectations may result in lost revenue and increased expense, including higher maintenance costs, which may not be recoverable from customers. Planned and unplanned outages at our power plants may require us to purchase power at then-current market prices to satisfy our commitments or, in the alternative, pay penalties and damages for failure to satisfy them. Although we maintain insurance coverage for certain of these risks, we do not carry insurance for all of these risks and no assurance can be given that such insurance coverage will be sufficient to compensate us in the event losses occur. We are required to obtain, and to comply with, government permits and approvals. We are required to obtain, and to comply with, numerous permits, approvals, licenses and certificates from governmental agencies. The process of obtaining and renewing necessary permits can be lengthy and complex and sometimes result in the establishment of permit conditions that make the project or activity for which a permit was sought unprofitable or otherwise unattractive. In addition, such permits or approvals may be subject to denial, revocation or modification under certain circumstances. Failure to obtain or comply with the conditions of permits or approvals, or failure to comply with any applicable laws or regulations, may result in delay or temporary suspension of our operations and electricity sales or the curtailment of our power delivery and may subject us to penalties and other sanctions. Although various regulators routinely renew existing licenses, renewal could be denied or jeopardized by various factors, including failure to provide adequate financial assurance for closure; failure to comply with environmental, health and safety laws and regulations or permit conditions; local community, political or other opposition; and executive, legislative or regulatory action. Our cost or inability to obtain and comply with the permits and approvals required for our operations could have a material adverse effect on our operations and cash flows. In addition, new environmental legislation or regulations, if enacted, or changed interpretations of existing laws may elicit claims that historical routine modification activities at our facilities violated applicable laws and regulations. In addition to the possible imposition of fines in such cases, we may be required to undertake significant capital investments in pollution control technology and obtain additional operating permits or approvals, which could have an adverse impact on our business, results of operations, cash flows and financial condition. War, other armed conflicts or terrorist attacks could have a material adverse effect on our business. War, terrorist attacks and unrest have caused and may continue to cause instability in the world's financial and commercial markets. In addition, unrest could lead to acts of terrorism in the United States or elsewhere, and acts of terrorism could be directed against companies such as ours. Armed conflicts and terrorism and their effects on us or our markets may significantly affect our business and results of operations in the future. In addition, we may incur increased costs for security, including additional physical plant security and security personnel or increased capability following a terrorist incident. 25 Table of Contents We are subject to counterparty performance, credit or other risk in the provision of goods or services to us, which could adversely affect our ability to operate our facilities or conduct business activities. We purchase from a variety of suppliers energy, capacity, fuel, natural gas, transmission service and certain commodities used in the physical operation of our businesses, as well as goods or services, including information technology rights and services, used in the administration of our businesses. Delivery of these goods and services is dependent on the continuing operational performance and financial viability of our contractual counterparties and also the markets, infrastructure or third parties they use to provide such goods and services to us. As a result, we are subject to risks of disruptions, curtailments or increased costs in the operation of our businesses if such goods or services are unavailable or become subject to price spikes or if a counterparty fails to perform. Such disruptions could adversely affect our ability to operate our facilities or deliver services and collect revenues, which could result in lower sales and/or higher costs and thereby adversely affect our results of operations. The performance of coal markets and producers may be the subject of increased counterparty risk to LG&E and KU currently due to weaknesses in such markets and suppliers. The coal industry is subject to increasing competitive pressures from natural gas markets, political pressures and new or more stringent environmental regulation, including regulation of combustion byproducts and water inputs or discharges. We are subject to the risk that our workforce and its knowledge base may become depleted in coming years. Our businesses depend upon our ability to employ and retain key officers and other skilled professional and technical employees. We experience attrition due primarily to retiring employees, with the risk that critical knowledge will be lost and that it may be difficult to replace departed personnel, and to attract and retain new personnel, with appropriate skills and experience. ITEM 1B. UNRESOLVED STAFF COMMENTS PPL Corporation, PPL Electric Utilities Corporation, Louisville Gas and Electric Company and Kentucky Utilities Company None. ITEM 1C. CYBERSECURITY (All Registrants) Processes for Identifying, Assessing and Managing Material Risks from Cybersecurity Threats PPL's Chief Security Officer (CSO) is responsible for establishing, implementing and executing PPL's cyber-risk management strategy for PPL and the other Registrants and reports to PPL's Executive Vice President and Chief Technology and Innovation Officer. The CSO has over 30 years of experience leading technology and security organizations, has a degree in computer science, and holds professional certifications in information security, IT auditing, and privacy. He is also a member of nationally and internationally recognized industry and security organizations, including the Information Systems Audit and Control Association, International Association of Privacy Professionals, and the Domestic Security Alliance Council. The CSO has responsibility for and oversees teams comprised of seasoned experts in cyber and IT security who possess appropriate experience to safeguard the company's data, networks and systems, mitigate cyber risks and help prevent and combat cyber threats. Reporting to the CSO are PPL's Chief Technology Security Officer (CTSO) and the VP of Corporate Security. The CTSO has over 25 years of experience, is a certified information security professional, and manages PPL's cyber security operations overseeing the implementation of security strategies and solutions across the Registrants, threat management, access management, cloud security and artificial intelligence. The Registrants manage cybersecurity risks through monitoring, defense and response tools, including independent third-party assessments, internal audit assessments of the program's effectiveness, intelligence reports, cybersecurity threat trends, implementation of governance models, industry collaboration and employee training and awareness. The Registrants are actively engaged in cybersecurity related industry forums, public-private partnerships with law enforcement, cross-industry peer groups, and other efforts to help improve the protection of the U.S. electric grid. The Registrants utilize monitoring tools, including but not limited to, cybersecurity incident and event management, penetration testing, intrusion detection and prevention, vulnerability assessments and anti-virus systems to detect anomalous or suspicious system or network activity. The Registrants may also become aware of a potential cybersecurity event or incident through employee reports, notification by a third-party service provider or business partner with potential impact to the Registrants or their systems, customers or notification by a government agency. The Registrants' subject matter specialists from across the enterprise provide input and expertise into risk governance processes, including cybersecurity, information technology, legal, compliance, operations, and enterprise risk management. 26 Table of Contents In developing their cybersecurity programs, the Registrants are guided by various frameworks including the NIST Cybersecurity Framework, a voluntary framework that consists of standards, guidelines and best practices for managing cybersecurity risk, that is widely used by critical infrastructure industries to help determine and address the highest priority cybersecurity risks. The Registrants conduct regular internal cybersecurity audits and vulnerability assessments and regularly engage with third-party cybersecurity experts for external assessments of their cybersecurity controls, including technical, physical and social aspects, to better comprehend the scope and magnitude of active threats to the industry and nation and their potential impact on our systems. The CSO chairs the Corporate Security Council, consisting of senior executive management, which convenes regularly to and review and oversee cybersecurity risks. PPL and the other Registrants also maintain a process to review the cyber risks that arise from the use of third-party service providers as well as programs and procedures to mitigate such risks internally and to assess the extent to which such providers effectively manage their own cyber risks. PPL has established an Executive Crisis Team comprised of PPL's executive leadership, including the CLC and additional officers as circumstances may warrant, to allow the company to respond quickly to a crisis, including a cyber event. This team governs and manages corporate crisis preparedness across the business lines, operations, and functions. Material or potentially material risks are escalated to the Executive Crisis Team and other appropriate leadership for review and action. Also, the Registrants' workforce undertakes mandatory role-based annual training on identifying, reporting, and escalating cyber and physical security concerns to further assist in the identification of risks as well as the acceptable use of corporate electronic resources. Additionally, all employees and contractors are required to participate in the Registrants' ethical cyber phishing campaign program and complete annual cybersecurity awareness training. In addition to these enterprise-wide initiatives, PPL's Kentucky, Pennsylvania and Rhode Island operations are subject to extensive and rigorous mandatory cybersecurity requirements that are developed and enforced by NERC and approved by FERC to protect grid security and reliability. LG&E is also subject to certain security directives related to cybersecurity issued by the Department of Homeland Security's Transportation Security Administration in 2021. See Note 12 to the Financial Statements for additional information on these directives. The Registrants have been subject to attempted cybersecurity threats and will likely continue to be subject to such attempts in the future. While PPL has not determined that any cybersecurity incidents have materially affected the Registrants, including their business strategy, results of operations or financial condition , there can be no guarantee that the Registrants will not be the subject of future attacks, threats or incidents, the consequences of which may be material. See "Risks Related to All Segments – Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships" in "Item 1A. Risk Factors" for a discussion of cybersecurity risks affecting the Registrants. Oversight of Cybersecurity Risks by the Board of Directors and Management PPL's Board of Directors (the Board) oversees the Registrants' management of cybersecurity risk through various processes identified below. The Board has direct oversight of the Registrants' cybersecurity programs through periodic reports from the CSO, at least twice a year, regarding cybersecurity matters and risks as well as the adequacy and effectiveness of our cybersecurity risk management program. Through these reports, the Board monitors the Registrants' programs, processes and procedures related to cybersecurity. The Board has directed the CEO and CSO to promptly inform the Board in the event of a material or potentially material cybersecurity event. Each member of the Board has access to management, including the CEO and CSO, to ask questions and engage in the company's approach to prevent, detect, assess, and mitigate cybersecurity risk. PPL's Board has several Board members with experience in cybersecurity, including one with a certificate in Cyber-Risk Oversight from the National Association of Corporate Directors. A primary function of the Audit Committee is to assist the Board in the oversight of the identification, assessment and management of risk. Cybersecurity risks are included in PPL's enterprise risk management process and are reported to the Audit Committee of the Board on a quarterly basis or more frequently, as needed. 27 Table of Contents ITEM 2. PROPERTIES Kentucky Regulated Segment (PPL, LG&E and KU) LG&E's and KU's properties consist primarily of regulated generation facilities, electricity transmission and distribution assets and natural gas transmission and distribution assets in Kentucky. The capacity of generation units is based on a number of factors, including the operating experience and physical condition of the units, and may be revised periodically to reflect changed circumstances. The electricity generating capacity at December 31, 2025 was: LG&E KU Primary Fuel/Plant Total MW Capacity Summer % Ownership or Other Interest Ownership or Other Interest in MW % Ownership or Other Interest Ownership or Other Interest in MW Coal Ghent - Units 1- 4 1,919 100.00 1,919 Mill Creek - Units 2- 4 1,165 100.00 1,165 E.W. Brown - Unit 3 412 100.00 412 Trimble County - Unit 1 (a) 493 75.00 370 Trimble County - Unit 2 (a) 732 14.25 104 60.75 445 4,721 1,639 2,776 Natural Gas/Oil E.W. Brown Unit 5 (b) 130 53.00 69 47.00 61 E.W. Brown Units 6 - 7 292 38.00 111 62.00 181 E.W. Brown Units 8 - 11 (b) 484 100.00 484 Trimble County Units 5 - 6 318 29.00 92 71.00 226 Trimble County Units 7 - 10 636 37.00 235 63.00 401 Paddy's Run Unit 12 23 100.00 23 Paddy's Run Unit 13 147 53.00 78 47.00 69 Haefling - Units 1 - 2 24 100.00 24 Cane Run Unit 7 691 22.00 152 78.00 539 2,745 760 1,985 Hydro Ohio Falls - Units 1-8 64 100.00 64 Dix Dam - Units 1-3 32 100.00 32 96 64 32 Solar E.W. Brown Solar (c) 8 39.00 3 61.00 5 Total 7,570 2,466 4,798 (a) Trimble County Unit 1 and Trimble County Unit 2 are jointly owned with Illinois Municipal Electric Agency and Indiana Municipal Power Agency. Each owner is entitled to its proportionate share of the units' total output and funds its proportionate share of capital, fuel and other operating costs. See Note 11 to the Financial Statements for additional information. (b) There is an inlet air cooling system attributable to these units. This inlet air cooling system is not jointly owned; however, it is used to increase production on the units to which it relates, resulting in an additional 12 MW of capacity for LG&E and an additional 86 MW of capacity for KU. (c) This unit is a 10 MW facility and achieves such production. The 8 MW solar facility summer capacity rating is reflective of an average expected output across the peak hours during the summer period based on average weather conditions at the solar facility. 28 Table of Contents For a description of LG&E's and KU's service areas, see "Item 1. Business - General - Segment Information - Kentucky Regulated Segment." At December 31, 2025, LG&E's and KU's electricity transmission and distribution systems and LG&E's natural gas transmission and distribution systems were: LG&E KU Distribution Transmission Distribution Transmission Electricity System Substations (a) 97 79 460 216 Capacity (in millions of kVA) 6 8 8 16 Overhead lines (circuit miles) 3,890 662 14,104 4,064 Underground lines (circuit miles) 2,913 6 2,901 4 Natural Gas System Distribution mains (miles) 4,475 — — — Transmission pipeline (miles) — 230 — — Transmission storage lines (miles) — 83 — — Combustion turbine lines (miles) — 19 — 11 Storage fields — 4 — — Storage field capacity (Bcf) — 11 — — (a) 196 substations (62 at LG&E and 134 at KU) are shared between the distribution and transmission systems. Substantially all of LG&E's and KU's respective real and tangible personal property located in Kentucky and used or to be used in connection with the generation, transmission and distribution of electricity and, in the case of LG&E, the storage and distribution of natural gas, is subject to the lien of either the LG&E 2010 Mortgage Indenture or the KU 2010 Mortgage Indenture. See Note 8 to the Financial Statements for additional information. LG&E and KU continuously reexamine development projects based on market conditions and other factors to determine whether to proceed with the projects, sell, cancel or expand them or pursue other options. See Item 1. Business for a discussion related to LG&E's and KU's Solar Share program and 2022 and 2025 CPCN filings. Pennsylvania Regulated Segment (PPL and PPL Electric) For a description of PPL Electric's service area, see "Item 1. Business - General - Segment Information - Pennsylvania Regulated Segment." PPL Electric has electric transmission and distribution lines in public streets and highways pursuant to franchises and rights-of-way secured from property owners. At December 31, 2025, PPL Electric's transmission system includes 53 substations with a total capacity of 32 million kVA and 5,301 circuit miles in service. PPL Electric's distribution system includes 355 substations with a total capacity of 15 million kVA, 36,660 circuit miles of overhead lines and 9,102 underground circuit miles. All of PPL Electric's facilities are located in Pennsylvania. Substantially all of PPL Electric's distribution properties and certain transmission properties are subject to the lien of the PPL Electric 2001 Mortgage Indenture. See Note 8 to the Financial Statements for additional information. Rhode Island Regulated Segment (PPL) For a description of RIE's service area, see "Item 1. Business - General - Segment Information - Rhode Island Regulated Segment." At December 31, 2025, RIE's electric transmission system includes 45 substations with capacity of 33 kVA or higher, 361 circuit miles of overhead lines and 49 underground circuit miles. RIE's electric distribution system includes 59 substations, 6,600 circuit miles of overhead lines and 1,268 underground circuit miles. RIE also has distribution mains for its natural gas system with mileage of 3,220 miles. All of RIE's facilities are located in Rhode Island. ITEM 3. LEGAL PROCEEDINGS See Notes 6, 7, 9 and 12 to the Financial Statements for information regarding legal, tax and regulatory matters and proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 Table of Contents PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES See "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash" for information regarding certain restrictions on the ability to pay dividends for all Registrants. PPL Corporation Additional information for this item is set forth in the sections entitled "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and "Shareowner and Investor Information" of this report. At January 30, 2026 there were 39,811 common stock shareowners of record. There were no purchases by PPL of its common stock during the fourth quarter of 2025. PPL Electric Utilities Corporation There is no established public trading market for PPL Electric's common stock, as PPL owns 100% of the outstanding common shares. Dividends paid to PPL on those common shares are determined by PPL Electric's Board of Directors. PPL Electric paid common stock dividends to PPL of $401 million in 2025 and $375 million in 2024. Louisville Gas and Electric Company There is no established public trading market for LG&E's common stock, as LKE owns 100% of the outstanding common shares. Dividends paid to LKE on those common shares are determined by LG&E's Board of Directors. LG&E paid common stock dividends to LKE of $200 million in 2025 and $187 million in 2024. Kentucky Utilities Company There is no established public trading market for KU's common stock, as LKE owns 100% of the outstanding common shares. Dividends paid to LKE on those common shares are determined by KU's Board of Directors. KU paid common stock dividends to LKE of $249 million in 2025 and $232 million in 2024. ITEM 6. RESERVED 30 Table of Contents Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations (All Registrants) This "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" is separately filed by PPL, PPL Electric, LG&E and KU. Information contained herein relating to any individual Registrant is filed by such Registrant solely on its own behalf, and no Registrant makes any representation as to information relating to any other Registrant. The specific Registrant to which disclosures are applicable is identified in parenthetical headings in italics above the applicable disclosure or within the applicable disclosure for each Registrant's related activities and disclosures. Within combined disclosures, amounts are disclosed for individual Registrants when significant. The following should be read in conjunction with the Registrants' Consolidated Financial Statements and the accompanying Notes. Capitalized terms and abbreviations are defined in the glossary. Dollars are in millions, except per share data, unless otherwise noted. "Management's Discussion and Analysis of Financial Condition and Results of Operations" includes the following information: • "Overview" provides a description of each Registrant's business strategy and a discussion of important financial and operational developments. • "Results of Operations" for all Registrants includes a "Statement of Income Analysis," which discusses significant changes in principal line items on the Statements of Income, comparing 2025 with 2024. For PPL, "Results of Operations" also includes "Segment Earnings," which provides a detailed analysis of earnings by reportable segment. These discussions include the non-GAAP financial measure "Earnings from Ongoing Operations" and provide an explanation of the non-GAAP financial measure and a reconciliation of the measure to the most comparable GAAP measure. • "Financial Condition - Liquidity and Capital Resources" provides an analysis of the Registrants' liquidity positions and credit profiles. This section also includes a discussion of forecasted sources and uses of cash and rating agency actions. • "Financial Condition - Risk Management" provides an explanation of the Registrants' risk management programs relating to market and credit risk. • "Application of Critical Accounting Policies" provides an overview of the accounting policies that are particularly important to the results of operations and financial condition of the Registrants and that require their management to make significant estimates, assumptions and other judgments of inherently uncertain matters. For comparison of the Registrants' results of operations and cash flows for the years ended December 31, 2024 to December 31, 2023, refer to "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2024 Form 10-K, filed with the SEC on February 13, 2025. Overview For a description of the Registrants and their businesses, see "Item 1. Business." Business Strategy (All Registrants) PPL operates four regulated utilities located in Pennsylvania, Kentucky and Rhode Island. Each of these jurisdictions has distinct regulatory structures and each of the utilities has distinct customer classes. PPL's strategy, which is supported by the other Registrants and subsidiaries, is focused on creating the utilities of the future to drive greater value for our customers and shareowners. Key objectives in support of this strategy include: • Strengthening the reliability and resilience of our electric and gas networks to improve service and protect against current and future weather and storms. • Advancing a cleaner energy future affordably and reliably. This includes expanding and modernizing our generation with natural gas, renewables and battery storage, while supporting research and development of low-carbon solutions. • Driving operational efficiencies to improve customer service and help keep energy affordable. 31 Table of Contents • Utilizing artificial intelligence and other advanced technologies to inform decision making, optimize asset planning and maintenance and better manage supply and demand on the grid. • Empowering customers through expanded digital options and improved service. • Engaging with key stakeholders to strengthen resource adequacy, power economic development, and support the growth and success of the regions we serve. This strategy supports our mission to provide safe, affordable, reliable and sustainable energy to our customers and competitive, long-term returns to shareowners. Financial and Operational Developments Joint Venture Agreement with Blackstone Infrastructure (PPL) PPL and Blackstone Infrastructure have created a joint venture to build, own and operate new electricity generation stations to power data centers in Pennsylvania under long-term energy services agreements (ESAs) to address underlying resource adequacy and affordability concerns in Pennsylvania and PJM more broadly. Construction of new generation stations will require the execution of ESAs with data center developers, including hyperscalers, or the regulated utilities in Pennsylvania. PPL owns 51% of the joint venture interest and Blackstone Infrastructure owns 49%. The joint venture is actively engaged with hyperscalers, landowners, natural gas pipeline companies and turbine manufacturers, and has secured multiple land parcels to enable this new generation build out; however, no ESAs with hyperscalers have been signed as of the filing date of this Form 10-K. Regulatory Requirements ( All Registrants) The Registrants cannot predict the impact that future regulatory requirements may have on their financial condition or results of operations. Rate Case Proceedings (PPL) On November 26, 2025, RIE filed a request with the RIPUC for an increase in electric and natural gas base distribution rates, and approval of certain regulatory and accounting treatments. In its application, RIE seeks to implement a two-year rate plan. In the first year of the rate plan, RIE's proposed base distribution rates for electric and gas combined are designed to collect additional operating revenue of approximately $181 million ($66 million or 18.2% in electricity revenues and $115 million or 36.4% in gas revenues). In the second year of the rate plan, RIE's proposed base distribution rates for electric and gas combined are designed to collect the proposed base distribution rate increases for electric and gas in the first year of the rate plan and additional operating revenues of approximately $49 million ($17 million or 3.6% in electricity revenues and $32 million or 7.4% in gas revenues). The application is based on a historical test year of September 1, 2024 through August 31, 2025 and requested an authorized ROE of 10.75%. Subject to RIPUC approval, new rates are expected to become effective on September 1, 2026. Certain counterparties have intervened in the proceeding. A ruling from the RIPUC is anticipated during the third quarter of 2026. PPL cannot predict the outcome of the proceeding. S ee "Regulatory Matters – Rhode Island Activities – Hold Harmless Implementation Agreement" in Note 7 to the Financial Statements for discussion on an additional rate making initiative to mitigate customer rate impacts. (PPL and PPL Electric) On September 30, 2025, PPL Electric filed a request with the PAPUC for an increase in distribution base rates of approximately $356 million, more than $50 million of which is already included in customer bills through rate recovery mechanisms, and approval of certain regulatory and accounting treatments. The proposed increase in distribution base rates would increase PPL Electric's total annual revenue by approximately 8.6%. The application is based on a fully projected future test year of July 1, 2026 through June 30, 2027 and requested an authorized ROE of 11.3%. Subject to PAPUC approval, new rates are expected to become effective on July 1, 2026. Certain counterparties have intervened in the proceeding. A ruling from the PAPUC is anticipated during the second quarter of 2026. PPL and PPL Electric cannot predict the outcome of the proceeding. 32 Table of Contents (PPL, LG&E and KU) On May 30, 2025, LG&E and KU filed requests with the KPSC for an increase in annual electricity and gas revenues of approximately $391 million ($105 million and $226 million in electricity revenues at LG&E and KU and $60 million in gas revenues at LG&E) and approval of certain regulatory and accounting treatments. The revenue increases would be an increase of 8.3% and 11.5% in electricity revenues at LG&E and KU, and an increase of 14.0% in gas revenues at LG&E. The applications were based on a forecasted test year of January 1, 2026 through December 31, 2026 and requested an authorized ROE of 10.95%. New interim rates became effective on January 1, 2026, subject to refund pursuant to the KPSC's final order. Certain counterparties have intervened in the proceedings. On October 20, 2025, LG&E and KU filed with the KPSC a stipulation and recommendation (the agreement) regarding a proposed resolution of issues with a majority of the intervenors in the proceedings. Under the agreement, the parties proposed that the KPSC should issue orders granting a revised increase in annual electricity and gas revenues of approximately $235 million ($58 million and $132 million in electricity revenues at LG&E and KU and $45 million in gas revenues at LG&E.) The agreement proposed a revised authorized ROE of 9.90%. The agreement proposed a "stay out" commitment from LG&E and KU to refrain from effective base rate increases before August 1, 2028, subject to certain exceptions. In connection with the stay out period, the agreement also proposed the establishment of two new rate adjustment clause mechanisms, a Generation Cost Recovery Adjustment Clause (GCR) and a Sharing Mechanism Adjustment Clause (SM). The proposed GCR mechanism would provide LG&E and KU recovery of and return on investment of covered costs (excluding fuel amounts, which LG&E and KU can recover via an existing rate mechanism) of relevant new generation and energy storage assets authorized in the 2022 and 2025 CPCN proceedings (excluding the Mill Creek Unit 6 NGCC, see "2025 CPCN" for more information regarding the Mill Creek Unit 6 NGCC) as they are placed in service. The proposed SM mechanism would address any base rate revenue deficiency or surplus during the final thirteen months of the stay out period, July 2027 through July 2028, below or above a suggested ROE band of 9.40% to 10.15%. Any such base rate revenue deficiency or surplus would be collected from or returned to customers over a thirteen-month billing period beginning November 2028. Following issuance of the 2025 CPCN Order, LG&E and KU filed supplemental testimony with the KPSC in the rate case proceedings seeking recovery of the Mill Creek Unit 2 stay open costs through a proposed additional rate adjustment clause mechanism. The agreement further proposed that LG&E and KU use regulatory deferral accounting for actual expenses above or below base rate levels for certain expenses including: pension and post-retirement benefits, storm restoration, vegetation management, transmission waivers and credits, and gas line or well activities, with recovery of such deferred asset or liability amounts to be addressed in future rate cases. On February 16, 2026, the KPSC issued orders approving portions of the October 2025 stipulation and recommendation, with modifications. The KPSC orders provide for increases in annual electricity and gas revenues of $233 million ($59 million and $128 million in electricity revenues at LG&E and KU and $46 million in gas revenues at LG&E.) The orders include authorized returns on equity of 9.775% for base rate purposes and 9.675% for capital rate adjustment mechanisms. The KPSC orders approve LG&E's and KU's requests for establishment of certain new rate adjustment mechanisms or tariffs, with modifications: • a temporary Pilot Generation Recovery Adjustment Clause (PGR) to provide recovery of and return on investment of applicable costs of certain new generation and storage assets being built or anticipated to be built by LG&E and KU as authorized in the 2022 CPCN proceeding; • the inclusion in the PGR of recovery of and return on investment of certain costs associated with a potential extension of the operating life of LG&E's Mill Creek Unit 2 beyond its original 2027 retirement date; and • an Extremely High Load Factor Tariff for future applicable customers, such as data centers, which includes requirements such as long-term contracts, minimum revenue payments and collateral security structures that help protect the interests of LG&E, KU and of other ratepayers. 33 Table of Contents The PGR mechanism is similar to the GCR proposed in the stipulation, but restructured by the KPSC to be a pilot adjustment mechanism with a term until the earlier of ten months following the submission of LG&E's and KU's next base rate proceeding or the effective date of new rates in such proceeding, with the expectation that the mechanism would be reviewed in such proceeding. The pilot mechanism will apply to the planned Mill Creek Unit 5, Brown Battery Energy Storage System, Mercer County Solar and Marion County Solar generation-related projects. The KPSC also included Mill Creek Unit 2's potential stay-open costs in the PGR in lieu of approving the stipulation's request for a stand-alone adjustment mechanism for such costs. Finally, the KPSC excluded from coverage under the PGR costs related to Mill Creek Unit 6 and Brown Unit 12 planned new generation assets due to their anticipated in-service dates falling outside of the estimated pilot mechanism's duration, but without prejudice to LG&E and KU seeking recovery of such costs in future proceedings. The KPSC orders also approved, approved with modifications, or denied in some cases, other requested accounting and rate matters relating to regulatory assets or liabilities, depreciation rates, and other areas. The rate changes have a retroactive effective date as of January 1, 2026. Consistent with authorized rate case procedures, LG&E and KU will refund to customers amounts billed in excess of the final approved rates within sixty days. The KPSC orders did not approve the SM adjustment clause that had been requested in the stipulation and made no modifications to the stay out offer by LG&E and KU to refrain from effective base rate increases prior to August 2028. LG&E and KU and all intervenors have rights to request rehearing or appeal of the orders of the KPSC and because the KPSC orders modified or denied terms of the proposed stipulation, LG&E and KU and all stipulating parties have the right to withdraw from the stipulation. LG&E and KU continue to evaluate the details contained in the orders and related matters as they consider next steps. PPL, LG&E and KU cannot predict the outcome of this matter. In addition, pursuant to prior orders of the KPSC, the LG&E and KU rate case application included an assessment of a potential legal merger of LG&E and KU and concluded a legal merger may be appropriate. On December 30, 2025, LG&E filed a joint update with KU in the rate case proceedings stating that it expects to file necessary applications for merger approval in mid-2026 with the KPSC. Ultimately, formal approval for a merger would be required from the KPSC, VSCC and FERC via subsequent regulatory applications. (PPL, LG&E and KU) Environmental Considerations for Coal-Fired Generation The businesses of LG&E and KU are subject to extensive federal, state and local environmental laws, rules and regulations, including those pertaining to CCRs, GHG, and ELGs. See Notes 7 , 12 and 18 to the Financial Statements for a discussion of these significant environmental matters. These and other environmental requirements led PPL, LG&E and KU to retire approximately 1,500 MW of coal-fired generating plants in Kentucky since 2010 . As part of the long-term generation planning process, LG&E and KU evaluate a range of factors including the impact of potential stricter environmental regulations, fuel price scenarios, the cost of replacement generation, continued operations and major maintenance costs and the risk of major equipment failures in determining when to retire generation assets. As a result of environmental requirements and aging infrastructure, LG&E has sought and obtained approval to retire two older coal-fired units at the Mill Creek Plant. Mill Creek Unit 1, with 300 MW of capacity, was retired in 2024. Mill Creek Unit 2, with 297 MW of capacity, was approved to be retired in 2027, subject to certain conditions. On October 28, 2025, in LG&E and KU ' s 2025 CPCN proceeding, the KPSC declined to rule on a request to extend the operation of Mill Creek Unit 2. The KPSC indicated that a request for a new retirement approval proceeding may be required should LG&E elect to operate Mill Creek Unit 2 beyond its existing approved retirement date and seek to later retire the unit. See " Rate Case Proceedings " in Note 7 to the Financial Statements for additional information. On October 4, 2024, LG&E submitted an application related to the retirement of Mill Creek Unit 1, which occurred on December 31, 2024, requesting recovery of associated costs under the RAR. On February 24, 2025, the KPSC issued an order approving LG&E's cost recovery for Mill Creek Unit 1 under the RAR of $125 million and related amounts were included in bills beginning in May 2025. See Note 7 to the Financial Statements for additional information on the Mill Creek Unit 1 RAR. 34 Table of Contents 2025 CPCN On February 28, 2025, LG&E and KU filed an application with the KPSC regarding certain future plans for new generation and generation-related construction matters. The proposals included in the application were intended to serve anticipated load growth, including from potential data center demand in LG&E's or KU's service territory. The proposals did not include retirements of coal or other fossil-fueled plants, which would require additional KPSC approval procedures under Kentucky legislation enacted in 2023 and 2024. LG&E and KU submitted a joint application to the KPSC for approval of certain certificates of public convenience and necessity, site compatibility certificates, and accounting treatment, where applicable, relating to a number of generation-related plans or projects that generally are expected to become operational or established within the next six years. The aggregate projected capital expenditures associated with these proposals were expected to be $3.7 billion. The application included proposals to build: • a 645 MW NGCC generation unit at KU's E.W. Brown station (Brown Unit 12), • a 645 MW NGCC generation unit at LG&E's Mill Creek station (Mill Creek Unit 6), • a four-hour 400 MW (1600 MWh total) battery energy storage system (BESS) at LG&E's Cane Run station, and • a selective catalytic reduction (SCR) environmental facility at KU's Ghent station Unit 2 (Ghent Unit 2). The new NGCC units are anticipated to be wholly owned by LG&E and the BESS unit jointly owned by LG&E (32%) and KU (68%), with actual project costs allocated consistent with LG&E's and KU's ultimate ownership shares and existing shared dispatch, cost allocation, tariff or other frameworks. The proposed Mill Creek Unit 6 NGCC is in addition to a new NGCC unit currently under construction at that location (Mill Creek Unit 5). The filing also noted projected in service dates for the projects, including the Brown Unit 12 NGCC in 2030, the Mill Creek Unit 6 NGCC in 2031, the Cane Run BESS in 2028 and the Ghent Unit 2 SCR in 2028. On July 29, 2025, LG&E and KU filed with the KPSC a stipulation and recommendation regarding a proposed resolution of issues with several of the intervenors in the CPCN proceeding (stipulation). The stipulation recommended to the KPSC the approval of the large majority of LG&E's and KU's requested generation-related projects and associated accounting matters, subject to certain changes. Under the stipulation, the parties agreed the KPSC should issue an order granting a CPCN for the proposed: (a) Brown Unit 12 NGCC; (b) Mill Creek Unit 6 NGCC; and (c) Ghent Unit 2 SCR. In addition, the proposal to build the $775 million Cane Run BESS would be withdrawn without prejudice, the relevant costs regarding the proposed $1.4 billion Mill Creek Unit 6 NGCC would be recovered through a new rate adjustment clause mechanism, the retirement date for the existing Mill Creek Unit 2 coal unit would be extended from 2027 to the operational date of the proposed Mill Creek Unit 6 NGCC or afterwards, subject to relevant future economic analysis, regulatory or environmental authorizations, and the relevant costs to continue to operate the Mill Creek Unit 2 coal unit would be recovered through a new rate adjustment clause mechanism. The stipulation also contained provisions relating to regulatory asset accounting, proposed data center tariffs, future renewable power requests-for-proposals and other matters. LG&E and KU would retain the right to seek approval of the potentially withdrawn Cane Run BESS or similar substitute project in future regulatory proceedings. On October 28, 2025, the KPSC issued an order approving much of LG&E's and KU's July 2025 stipulation, with certain modifications. The order granted the requested CPCNs and site-related permits to construct the proposed Brown Unit 12 NGCC, Mill Creek Unit 6 NGCC, and Ghent Unit 2 SCR. The order authorized inclusion of relevant costs of the Ghent Unit 2 SCR in KU's existing environmental cost recovery rate mechanism. The order established a separate monitoring case to receive and consider information during the construction of Mill Creek Unit 6 NGCC. The order approved requests regarding regulatory asset deferral accounting treatment for certain AFUDC related amounts and noted the KPSC's expectation that the stipulating parties would follow through with their commitments regarding tariffs and power supply contracts related to potential future data center or high load customers in LG&E's and KU's pending rate proceedings. The order also approved other elements of the stipulation or the originally-filed application, with minor modifications. 35 Table of Contents The KPSC decided not to approve LG&E's and KU's proposed new rate adjustment cost recovery mechanisms for certain costs associated with Mill Creek Unit 6 NGCC and costs associated with operating the Mill Creek Unit 2 coal plant beyond its original retirement date in 2027. However, the denials were without prejudice to resubmission and the KPSC encouraged the parties to provide additional evidence on such matters in separate proceedings. LG&E and KU provided such evidence addressing recovery of the Mill Creek Unit 2 stay open costs in their pending rate case proceedings. Recovery of Mill Creek Unit 6 costs will be addressed in a future proceeding. The KPSC declined to rule on the matter related to the retirement date of Mill Creek Unit 2 coal plant. The KPSC indicated that a request for a new retirement approval proceeding may be required should LG&E elect to operate Mill Creek Unit 2 beyond its existing approved retirement date and seek to later retire the unit. In light of the conditional withdrawal in the stipulation, the order did not include a CPCN for the Cane Run BESS. LG&E and KU retain the right to seek approval of the Cane Run BESS project or similar substitute projects at any time in future regulatory proceedings. FERC Transmission Rate Filing In 2018, LG&E and KU applied to the FERC requesting elimination of certain on-going waivers and credits to a sub-set of transmission customers relating to the 1998 merger of LG&E's and KU's parent entities and the 2006 withdrawal of LG&E and KU from the Midcontinent Independent System Operator, Inc. (MISO), a regional transmission operator and energy market. The application sought termination of LG&E's and KU's commitment to provide certain Kentucky municipalities mitigation for certain horizontal market power concerns arising out of the 1998 LG&E and KU merger and 2006 MISO withdrawal. The amounts at issue are generally waivers or credits granted to a limited number of Kentucky municipalities for either certain LG&E and KU or MISO transmission charges incurred for transmission service received. In 2019, the FERC granted LG&E's and KU's request to remove the ongoing credits, conditioned upon the implementation by LG&E and KU of a transition mechanism for certain existing power supply arrangements, which was subsequently filed, modified, and approved by the FERC in 2020 and 2021. In 2020, LG&E and KU and other parties filed appeals with the U.S. Court of Appeals - D.C. Circuit (D.C. Circuit Court of Appeals) regarding the FERC's orders on the elimination of the mitigation and required transition mechanism. In August 2022, the D.C. Circuit Court of Appeals issued an order remanding the proceedings back to the FERC. On May 18, 2023, the FERC issued an order on remand reversing its 2019 decision and requiring LG&E and KU to refund credits previously withheld, including under such transition mechanism. LG&E and KU filed a petition for review of the FERC's May 18, 2023 order with the D.C. Circuit Court of Appeals and provided refunds in accordance with the FERC order on December 1, 2023. The FERC issued an order on LG&E's and KU's compliance filing on November 16, 2023, and LG&E and KU filed a petition for review of this November 16, 2023 order on February 14, 2024. The FERC issued the substantive order on rehearing on March 21, 2024, reaffirming its prior decision. On August 8, 2025, the D.C. Circuit Court of Appeals issued a procedural ruling vacating the FERC's prior orders and remanded the matter back to the FERC for further proceedings. LG&E and KU cannot predict the ultimate outcome of the proceedings or any other post decision process but do not expect the annual impact to have a material effect on their operations or financial condition. LG&E and KU currently receive recovery of certain waivers and credits primarily through existing base rate levels. (PPL) Hold Harmless Implementation Agreement As a condition of its approval of the acquisition of RIE in May 2022, the Rhode Island Division of Public Utilities and Carriers required PPL to hold harmless Rhode Island customers from the impact of future rate increases resulting from changes in Accumulated Deferred Income Taxes as a result of the Acquisition (the Hold Harmless Commitment). On June 13, 2025, an agreement was entered into by and among RIE, PPL, PPL Rhode Island Holdings and the Rhode Island Division of Public Utilities and Carriers Advocacy Section (the Hold Harmless Implementation Agreement) to satisfy the Hold Harmless Commitment by providing approximately $155 million in miscellaneous bill credits issued to customers, with approximately $74 million to be issued in the first quarter of 2026 and approximately $81 million to be issued in the first quarter of 2027. The bill credits would be recorded as a reduction to revenue in the periods in which the credits are applied to customers' bills. On September 10, 2025, the Rhode Island Division of Public Utilities and Carriers issued an order confirming that RIE's provision of proposed miscellaneous bill credits as set forth in the Hold Harmless Implementation Agreement would satisfy the Hold Harmless Commitment. Also on September 10, 2025, the RIPUC opened a docket to evaluate the miscellaneous bill credit proposal set forth in the Hold Harmless Implementation Agreement, including the underlying rate accounting, and required RIE to file a tariff advice with the RIPUC, which RIE filed on October 2, 2025. After responding to discovery in that proceeding and before the evidentiary hearing was held or convened, RIE filed a notice of withdrawal of its tariff advice filing noting that it would hold in abeyance a comprehensive satisfaction of the Hold Harmless Commitment at this time. As a result of RIE's filing the notice of withdrawal, the Commission cancelled the evidentiary hearing. The docket remains open, but there has been no further activity since RIE's withdrawal of the tariff advice and the RIPUC's cancellation of the evidentiary hearing. PPL cannot predict whether there will be any further proceedings on the docket or the outcome of any further proceedings that may occur. 36 Table of Contents Winter Bill Volatility Docket At an Open Meeting on November 24, 2025, the RIPUC approved several measures to help mitigate winter bill increases for electric customers. First, the RIPUC approved miscellaneous bill credits for all residential electric customers of $23.54 per month for January, February, and March 2026. Second, the RIPUC paused the Storm Fund Replenishment Factor for usage on and after January 1, 2026, subject to further review through the 2026 Annual Retail Rate Filing. Third, the RIPUC paused the electric Energy Efficiency Charge for usage beginning January 1, 2026 through March 31, 2026. To offset the costs of the miscellaneous bill credits, the RIPUC directed RIE to apply the December 31, 2025 electric Energy Efficiency fund balance, net of any earned incentives, and directed RIE to transfer $11 million from the storm fund balance. The RIPUC approved future cost recovery for RIE of any unfunded balance of the miscellaneous bill credits through future identified offsets and/or a reconciling recovery mechanism to be determined in conjunction with the 2026 electric retail rate filing to allow recovery by December 31, 2026. Any remaining unfunded balance shall accrue at RIE's weighted average cost of capital. FY 2027 Gas ISR Plan On December 22, 2025, RIE filed its FY 2027 Gas ISR Plan with the RIPUC with a budget of $184 million that primarily included $166 million of capital investment spend and $17 million for spending on curb-to-curb paving. A decision from the RIPUC on the Plan is expected by March 31, 2026. RIE cannot predict the outcome of this matter. FY 2027 Electric ISR Plan On December 22, 2025, RIE filed its FY 2027 Electric ISR Plan with the RIPUC with a budget that primarily included $154 million of capital investment spend (including $18 million for Advanced Metering Functionality) and $13 million of vegetation operation and maintenance spend. A decision from the RIPUC is expected by March 31, 2026. RIE cannot predict the outcome of this matter. DSIC Petition (PPL and PPL Electric) On April 26, 2024, PPL Electric filed a Petition with the PAPUC requesting that the PAPUC waive PPL Electric's DSIC cap of 5% of billed revenues and increase the maximum allowable DSIC to 9% for bills rendered on or after January 1, 2025. On February 28, 2025, the PAPUC issued its written order permitting PPL Electric to increase its DSIC cap from 5% to 7.5% for bills rendered on or after March 13, 2025 until the effective date of rates established in PPL Electric's next base rate case or the end of the PPL Electric's 2023-2027 Long-term Infrastructure Improvement Plan, whichever occurs first, at which time it will return to 5%. Results of Operations (PPL) The "Statement of Income Analysis" discussion below describes significant changes in principal line items on the Statements of Income, comparing 2025 with 2024. The "Segment Earnings" discussions provide a review of results by reportable segment. These discussions include the non-GAAP financial measure "Earnings from Ongoing Operations" and provide an explanation of the non-GAAP financial measure and a reconciliation of the measure to the most comparable GAAP measure. (PPL Electric, LG&E and KU) A "Statement of Income Analysis" is presented separately for PPL Electric, LG&E and KU. The "Statement of Income Analysis" discussion below describes significant changes in principal line items on the Statements of Income, comparing 2025 with 2024. The results of operations section for PPL Electric, LG&E and KU is presented in a reduced disclosure format in accordance with General Instructions (I)(2)(a) of Form 10-K. 37 Table of Contents PPL: Statement of Income Analysis and Segment Earnings Statement of Income Analysis Net income for the years ended December 31 includes the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues $ 9,042 $ 8,462 $ 580 Operating Expenses Operation Fuel 855 783 72 Energy purchases 1,892 1,679 213 Other operation and maintenance 2,431 2,607 (176) Depreciation 1,312 1,279 33 Taxes, other than income 423 374 49 Total Operating Expenses 6,913 6,722 191 Operating Income 2,129 1,740 389 Other Income (Expense) - net 151 114 37 Interest Expense 808 738 70 Income Before Income Taxes 1,472 1,116 356 Income Taxes 291 228 63 Net Income $ 1,181 $ 888 $ 293 Operating Revenues The increase (decrease) in operating revenues was due to: 2025 vs. 2024 PPL Electric distribution volumes (a) $ 34 PPL Electric PLR (b) 174 PPL Electric transmission formula rate (c) 45 LG&E volumes (d) 15 LG&E fuel and other energy purchases (e) 67 LG&E off-system sales (f) 11 KU volumes (d) 34 KU fuel and other energy purchases (g) 31 KU off-system sales (f) 18 RIE energy purchases and other recoveries (h) 140 RIE capital investment 20 Other (9) Total $ 580 (a) The increase was primarily due to weather and higher other usage in 2025. (b) The increase was primarily due to higher energy prices, more PLR customers and higher customer volumes due to weather and other higher usage. (c) The increase was primarily due to returns on additional transmission capital investments and return of depreciation expense. (d) The increases were primarily due to weather. (e) The increase was primarily due to higher recoveries of fuel expenses and energy purchases. (f) The increases were primarily due to higher volumes. (g) The increase was primarily due to higher recoveries of fuel expenses. (h) The increase was primarily due to higher recoveries of energy purchases primarily due to net metering credits, transmission expenses and gross earnings taxes Fuel Fuel expense increased $72 million in 2025 compared with 2024, primarily due to a $40 million increase in commodity costs and a $32 million increase in volumes due to weather. 38 Table of Contents Energy Purchases The increase (decrease) in energy purchases was due to: 2025 vs. 2024 PPL Electric PLR volumes $ 57 PPL Electric PLR prices 92 LG&E commodity costs 14 LG&E volumes 23 RIE net metering 19 Other 8 Total $ 213 Other Operation and Maintenance The increase (decrease) in other operation and maintenance was due to: 2025 vs. 2024 PPL Electric DER projects impairment (a) $ (21) PPL Electric vegetation management expenses (14) PPL Electric bad debt expenses (21) PPL Electric storm expenses (13) RIE gas maintenance expenses 25 RIE transmission expenses 62 RIE integration related expenses (b) (57) RIE customer service expenses 27 RIE pension alignment (c) 22 IT costs (d) 76 Transition costs associated with RIE (e) (236) Other (26) Total $ (176) (a) 2024 impairment of DER project costs associated with a pilot solar program for which PPL will not seek regulatory recovery. (b) Certain transition services agreement costs in 2024 for IT systems that will not be part of PPL's ongoing operations. (c) The increase is primarily due to a reclassification of the pension adjustment mechanism to align with PPL's accounting for other revenue related recovery items. (d) Primarily costs associated with PPL's restructuring and rebuilding of its IT infrastructure, organization and systems. (e) See Note 9 to the Financial Statements for additional information. Interest Expense The increase (decrease) in interest expense was due to: 2025 vs. 2024 Long-term debt (a) $ 47 Short-term debt 13 Other 10 Total $ 70 (a) The increase was primarily due to increased borrowings, partially offset by debt extinguishment gains resulting from affiliated debt repurchases. See Note 8 to the Financial Statements for additional information. 39 Table of Contents Income Taxes The increase (decrease) in income taxes was due to: 2025 vs. 2024 Federal tax on change in pre-tax income $ 75 State income taxes 8 Income tax credits (8) Amortization of (excess)/deficient deferred taxes (5) AFUDC Equity (10) Other 3 Total $ 63 See Note 6 to the Financial Statements for additional information on income taxes. Segment Earnings PPL's Net Income (Loss) by reportable segments was as follows: Change 2025 2024 2025 vs. 2024 Kentucky Regulated $ 674 $ 620 $ 54 Pennsylvania Regulated 639 574 65 Rhode Island Regulated 85 109 (24) Corporate and Other (a) (217) (415) 198 Net Income (Loss) $ 1,181 $ 888 $ 293 (a) Primarily represents financing and certain other costs incurred at the corporate level that have not been allocated or assigned to the segments, which are presented to reconcile segment information to PPL's consolidated results. Earnings from Ongoing Operations Management utilizes "Earnings from Ongoing Operations" as a non-GAAP financial measure that should not be considered as an alternative to net income, an indicator of operating performance determined in accordance with GAAP. PPL believes that Earnings from Ongoing Operations is useful and meaningful to investors because it provides management's view of PPL's earnings performance as another criterion in making investment decisions. In addition, PPL's management uses Earnings from Ongoing Operations in measuring achievement of certain corporate performance goals, including targets for certain executive incentive compensation. Other companies may use different measures to present financial performance. Earnings from Ongoing Operations is adjusted for the impact of special items. Special items are presented in the financial tables on an after-tax basis with the related income taxes on special items separately disclosed. Income taxes on special items, when applicable, are calculated based on the statutory tax rate of the entity where the activity is recorded. Special items may include items such as: • Gains and losses on sales of assets not in the ordinary course of business. • Impairment charges. • Significant workforce reduction and other restructuring effects. • Acquisition and divestiture-related adjustments. • Other charges or credits that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations. 40 Table of Contents PPL's Earnings from Ongoing Operations by reportable segment were as follows: Change 2025 2024 2025 vs. 2024 Kentucky Regulated $ 693 $ 624 $ 69 Pennsylvania Regulated 640 607 33 Rhode Island Regulated 142 155 (13) Corporate and Other (131) (136) 5 Earnings from Ongoing Operations $ 1,344 $ 1,250 $ 94 See "Reconciliation of Earnings from Ongoing Operations" below for a reconciliation of this non-GAAP financial measure to Net Income. Kentucky Regulated Segment The Kentucky Regulated segment consists primarily of LG&E's and KU's regulated electricity generation, transmission and distribution operations, as well as LG&E's regulated distribution and sale of natural gas. Net Income and Earnings from Ongoing Operations include the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues $ 3,760 $ 3,562 $ 198 Fuel 855 783 72 Energy purchases 214 176 38 Other operation and maintenance 818 803 15 Depreciation 717 710 7 Taxes, other than income 102 99 3 Total Operating Expenses 2,706 2,571 135 Other Income (Expense) - net 53 29 24 Interest Expense 264 240 24 Income Taxes 169 160 9 Net Income 674 620 54 Less: Special Items (19) (4) (15) Earnings from Ongoing Operations $ 693 $ 624 $ 69 The following after-tax gains (losses), which management considers special items, impacted the Kentucky Regulated segment's results and are excluded from Earnings from Ongoing Operations: Income Statement Line Item 2025 2024 FERC transmission credit refund, net of tax of $0 (a) Operating Revenues $ — $ 1 ECR beneficial reuse transition adjustment, net of tax of $2 (b) Operating Revenues — (4) Strategic corporate initiatives, net of tax of $0 (c) Other operation and maintenance — (1) IT transformation, net of tax of $5 (d) Other operation and maintenance (16) — Office relocation and related costs, net of tax of $1 (e) Other operation and maintenance (3) — Total $ (19) $ (4) (a) Prior period impact related to a FERC refund order. (b) Prior period impact for an ECR mechanism revenue adjustment related to a KPSC order. (c) Costs incurred related to PPL's corporate centralization efforts. (d) Costs associated with PPL's restructuring and rebuilding of its IT infrastructure, organization and systems. (e) Certain costs related to the relocation of corporate offices. 41 Table of Contents The changes in the components of the Kentucky Regulated segment's results between these periods were due to the factors set forth below, which exclude the items that management considers special. 2025 vs. 2024 Operating Revenues $ 194 Fuel (72) Energy purchases (38) Other operation and maintenance 9 Depreciation (7) Taxes, other than income (3) Other Income (Expense) - net 24 Interest Expense (24) Income Taxes (14) Earnings from Ongoing Operations 69 Special Items, after-tax (15) Net Income $ 54 • Higher operating revenues in 2025 compared to 2024 primarily due to a $98 million increase in recoveries of fuel and energy purchases, a $50 million increase in sales volumes due to weather and a $29 million increase in off-system sales. • Higher fuel expense in 2025 compared to 2024 primarily due to a $40 million increase in commodity costs and a $32 million increase in volumes due to weather. • Higher energy purchases in 2025 compared to 2024 primarily due to a $24 million increase in volumes primarily due to weather and a $14 million increase in commodity costs. Pennsylvania Regulated Segment The Pennsylvania Regulated segment includes the regulated electricity transmission and distribution operations of PPL Electric. Net Income and Earnings from Ongoing Operations include the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues $ 3,113 $ 2,876 $ 237 Energy purchases 876 721 155 Other operation and maintenance 630 705 (75) Depreciation 413 401 12 Taxes, other than income 151 131 20 Total Operating Expenses 2,070 1,958 112 Other Income (Expense) - net 48 45 3 Interest Income from Affiliate 9 33 (24) Interest Expense 257 246 11 Income Taxes 204 176 28 Net Income 639 574 65 Less: Special Items (1) (33) 32 Earnings from Ongoing Operations $ 640 $ 607 $ 33 42 Table of Contents The following after-tax gains (losses), which management considers special items, impacted the Pennsylvania Regulated segment's results and are excluded from Earnings from Ongoing Operations: Income Statement Line Item 2025 2024 PPL Electric billing issue, net of tax of $5 (a) Other operation and maintenance $ — $ (13) Strategic corporate initiatives, net of tax of $2 (b) Other operation and maintenance — (5) DER projects impairment, net of tax of $6 (c) Other operation and maintenance — (15) Office relocation and related costs, net of tax of $0 (d) Other operation and maintenance (2) — Office relocation and related costs (e) Income Taxes 5 — IT transformation, net of tax of $1 (f) Other operation and maintenance (4) — Total $ (1) $ (33) (a) Certain expenses related to billing issues. (b) Costs incurred related to PPL's corporate centralization efforts. (c) Impairment of DER project costs associated with a pilot solar program for which PPL will not seek regulatory recovery. (d) Certain costs related to the relocation of corporate offices. (e) Tax benefit related to the sale of a corporate office. (f) Costs associated with PPL's restructuring and rebuilding of its IT infrastructure, organization and systems. The changes in the components of the Pennsylvania Regulated segment's results between these periods are due to the factors set forth below, which exclude the items that management considers special. 2025 vs. 2024 Operating Revenues $ 237 Energy purchases (155) Other operation and maintenance 36 Depreciation (12) Taxes, other than income (20) Other Income (Expense) - net 3 Interest Income from Affiliate (24) Interest Expense (11) Income Taxes (21) Earnings from Ongoing Operations 33 Special Items, after-tax 32 Net Income $ 65 • Higher operating revenues in 2025 compared to 2024 primarily due to a $174 million increase in PLR, a $45 million increase in transmission formula rate revenue and a $34 million increase in distribution volumes. • Higher energy purchases in 2025 compared to 2024 primarily due to a $92 million increase in PLR prices and a $57 million increase in PLR volumes. • Lower other operation and maintenance expense in 2025 compared to 2024 primarily due to a $14 million decrease in vegetation management expenses and a $13 million decrease in storm expenses. Rhode Island Regulated Segment The Rhode Island Regulated segment consists primarily of the regulated electricity transmission and distribution operations and regulated distribution and sale of natural gas conducted by RIE. 43 Table of Contents Net Income and Earnings from Ongoing Operations include the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues $ 2,168 $ 2,024 $ 144 Energy purchases 802 782 20 Other operation and maintenance 851 731 120 Depreciation 177 165 12 Taxes, other than income 170 144 26 Total Operating Expenses 2,000 1,822 178 Other Income (Expense) - net 33 20 13 Interest Income from Affiliate 3 4 (1) Interest Expense 111 95 16 Income Taxes 8 22 (14) Net Income 85 109 (24) Less: Special Items (57) (46) (11) Earnings from Ongoing Operations $ 142 $ 155 $ (13) The following after-tax gains (losses), which management considers special items, impacted the Rhode Island Regulated segment's results and are excluded from Earnings from Ongoing Operations: Income Statement Line Item 2025 2024 Acquisition integration, net of tax of $1 (a) Operating Revenues $ (4) $ — Post TSA adjustments, net of tax of $3 (b) Operating Revenues (12) — Acquisition integration, net of tax of $0, $13 (a) Other operation and maintenance (1) (45) IT transformation, net of tax of $2 (c) Other operation and maintenance (8) — Post TSA adjustments, net of tax of $1 (b) Other operation and maintenance (4) — Customer system integration impacts, net of tax of $4 (d) Other operation and maintenance (15) — Acquisition integration, net of tax of ($2), $0 (a) Other Income (Expense) - net 7 (1) Energy efficiency programs settlement, net of tax of $2 (e) Other Income (Expense) - net (6) — Post TSA adjustments, net of tax of $2 (b) Other Income (Expense) - net (9) — Post TSA adjustments, net of tax of $1 (b) Interest Expense (5) — Total $ (57) $ (46) (a) 2025 primarily includes a final transition services agreement settlement and certain other acquisition related items. 2024 primarily includes certain transition services agreement costs for IT systems that will not be part of PPL's ongoing operations. (b) Adjustments related to account reconciliations and process alignment subsequent to the end of the transition services agreement associated with the acquisition of RIE. (c) Costs associated with PPL's restructuring and rebuilding of its IT infrastructure, organization and systems. (d) Certain collection process costs incurred due to the timing and implementation of the customer system integration. (e) See Note 12 to the Financial Statements for additional information. The changes in the components of the Rhode Island Regulated segment's results between these periods are due to the factors set forth below, which exclude the items that management considers special. 2025 vs. 2024 Operating Revenues $ 165 Energy purchases (20) Other operation and maintenance (142) Depreciation (12) Taxes, other than income (26) Other Income (Expense) - net 23 Interest Income from Affiliate (1) Interest Expense (10) Income Taxes 10 Earnings from Ongoing Operations (13) Special Items, after-tax (11) Net Income $ (24) 44 Table of Contents • Higher operating revenues in 2025 compared to 2024 primarily due to a $140 million increase primarily from recovery of transmission expenses, gross earnings taxes and net metering credits and a $20 million increase related to capital investments. • Higher energy purchases in 2025 compared to 2024 primarily due to an increase in net metering. • Higher other operation and maintenance expense in 2025 compared to 2024 primarily due to a $62 million increase in transmission expenses, a $30 million increase in IT costs, a $27 million increase in customer service costs, a $25 million increase in gas maintenance expenses and a $22 million increase due to a reclassification of the pension adjustment mechanism to align with PPL's accounting for other revenue related recovery items, partially offset by a $22 million decrease in bad debt expenses. • Higher depreciation in 2025 compared to 2024 primarily due to an increase in PP&E additions, net of retirements. • Higher taxes, other than income in 2025 compared to 2024 primarily due to an increase in gross earnings taxes. • Higher other income (expense) - net in 2025 compared to 2024 primarily due to a reclassification of the pension adjustment mechanism to align with PPL's accounting for other revenue related recovery items. • Higher interest expense in 2025 compared to 2024 primarily due to increased borrowings. • Lower income taxes in 2025 compared to 2024 primarily due to $5 million of lower pre-tax income and a $4 million deferred tax adjustment. Reconciliation of Earnings from Ongoing Operations The following tables contain after-tax gains (losses), in total, which management considers special items, that are excluded from Earnings from Ongoing Operations, and a reconciliation to PPL's "Net Income" for the years ended December 31. 2025 KY Regulated PA Regulated RI Regulated Corporate and Other Total Net Income (Loss) $ 674 $ 639 $ 85 $ (217) $ 1,181 Less: Special Items (expense) benefit: Talen litigation costs, net of tax of ($1) (a) — — — 3 3 Acquisition integration, net of tax of $0, $15 (b) — — 2 (56) (54) IT transformation, net of tax of $5, $1, $2, $9 (c) (16) (4) (8) (33) (61) Energy efficiency programs settlement, net of tax of $2 (d) — — (6) — (6) Office relocation and related costs, net of tax of $1, $5 (e) (3) 3 — — — Post TSA adjustments, net of tax of $8 (f) — — (30) — (30) Customer system integration impacts, net of tax of $4 (g) — — (15) — (15) Total Special Items (19) (1) (57) (86) (163) Earnings from Ongoing Operations $ 693 $ 640 $ 142 $ (131) $ 1,344 (a) PPL incurred legal expenses and received insurance reimbursement related to litigation associated with its former affiliate, Talen Montana, LLC and certain affiliated entities. (b) Rhode Island Regulated primarily includes a final transition services agreement settlement and certain other acquisition related items. Corporate and Other primarily includes integration and related costs associated with the acquisition of RIE. (c) Costs associated with PPL's restructuring and rebuilding of its IT infrastructure, organization and systems. (d) See Note 12 to the Financial Statements for additional information. (e) Certain costs and tax benefits related to the relocation of corporate offices. (f) Adjustments related to account reconciliations and process alignment subsequent to the end of the transition services agreement associated with the acquisition of RIE. (g) Certain collection process costs incurred due to the timing and implementation of the customer system integration. 45 Table of Contents 2024 KY Regulated PA Regulated RI Regulated Corporate and Other Total Net Income (Loss) $ 620 $ 574 $ 109 $ (415) $ 888 Less: Special Items (expense) benefit: Talen litigation costs, net of tax of $1 (a) — — — (2) (2) Strategic corporate initiatives, net of tax of $0, $2, $2 (b) (1) (5) — (5) (11) Acquisition integration, net of tax of $13, $66 (c) — — (46) (250) (296) PPL Electric billing issue, net of tax of $5 (d) — (13) — — (13) FERC transmission credit refund, net of tax of $0 (e) 1 — — — 1 ECR beneficial reuse transition adjustment, net of tax of $2 (f) (4) — — — (4) DER projects impairment, net of tax of $6 (g) — (15) — — (15) IT transformation, net of tax of $5 (h) — — — (22) (22) Total Special Items (4) (33) (46) (279) (362) Earnings from Ongoing Operations $ 624 $ 607 $ 155 $ (136) $ 1,250 (a) PPL incurred legal expenses related to litigation associated with its former affiliate, Talen Montana, LLC and certain affiliated entities. (b) Represents costs primarily related to PPL's centralization and other strategic efforts. (c) Rhode Island Regulated primarily includes certain transition services agreement costs for IT systems that will not be part of PPL's ongoing operations. Corporate and Other primarily includes integration and related costs associated with the acquisition of RIE. (d) Certain expenses related to billing issues. (e) Prior period impact related to a FERC refund order. (f) Prior period impact for an ECR mechanism revenue adjustment related to a KPSC order. (g) Impairment of DER project costs associated with a pilot solar program for which PPL will not seek regulatory recovery. (h) Costs associated with PPL's restructuring and rebuilding of its IT infrastructure, organization and systems. PPL Electric: Statement of Income Analysis Net income for the years ended December 31 includes the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues $ 3,113 $ 2,876 $ 237 Operating Expenses Operation Energy purchases 876 721 155 Other operation and maintenance 630 705 (75) Depreciation 413 401 12 Taxes, other than income 151 131 20 Total Operating Expenses 2,070 1,958 112 Operating Income 1,043 918 125 Other Income (Expense) - net 48 45 3 Interest Income from Affiliate 9 33 (24) Interest Expense 257 246 11 Income Before Income Taxes 843 750 93 Income Taxes 204 176 28 Net Income $ 639 $ 574 $ 65 46 Table of Contents Operating Revenues The increase (decrease) in operating revenues was due to: 2025 vs. 2024 Distribution price (a) $ (14) Distribution volume (b) 34 PLR (c) 174 Transmission formula rate (d) 45 Other (2) Total $ 237 (a) The decrease was primarily due to reconcilable cost recovery mechanisms approved by the PAPUC. (b) The increase was primarily due to weather and higher other usage in 2025. (c) The increase was primarily the result of higher energy prices, more PLR customers and higher customer volumes due to weather and other higher usage. (d) The increase was primarily due to returns on additional transmission capital investments and return of depreciation expense. Energy Purchases Energy purchases increased $155 million in 2025 compared with 2024, primarily due to higher PLR prices of $92 million and higher PLR volumes of $57 million. Other Operation and Maintenance The increase (decrease) in other operation and maintenance was due to: 2025 vs. 2024 Vegetation management expenses $ (14) Bad debts (21) DER projects impairment (a) (21) Storm expenses (13) Other (6) Total $ (75) (a) 2024 impairment of DER project costs associated with a pilot solar program for which PPL will not seek regulatory recovery. 47 Table of Contents LG&E: Statement of Income Analysis Net income for the years ended December 31 includes the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues Retail and wholesale $ 1,718 $ 1,617 $ 101 Electric revenue from affiliate 30 31 (1) Total Operating Revenues 1,748 1,648 100 Operating Expenses Operation Fuel 338 308 30 Energy purchases 187 151 36 Energy purchases from affiliate 22 20 2 Other operation and maintenance 364 349 15 Depreciation 307 305 2 Taxes, other than income 51 49 2 Total Operating Expenses 1,269 1,182 87 Operating Income 479 466 13 Other Income (Expense) - net 24 12 12 Interest Income from Affiliate — 1 (1) Interest Expense 116 105 11 Income Before Income Taxes 387 374 13 Income Taxes 78 77 1 Net Income $ 309 $ 297 $ 12 Operating Revenues The increase (decrease) in operating revenues was due to: 2025 vs. 2024 Fuel and other energy purchases (a) $ 60 Volumes (b) 15 Off-system sales (c) 17 Other 8 Total $ 100 (a) The increase was primarily due to higher recoveries of fuel expenses and energy purchases. (b) The increase was primarily due to weather. (c) The increase was primarily due to higher volumes. Fuel Fuel expense increased $30 million in 2025 compared with 2024, primarily due to an increase in commodity costs. Energy Purchases Energy purchases increased $36 million in 2025 compared with 2024, primarily due to a $23 million increase in volumes primarily due to weather and a $14 million increase in commodity costs. 48 Table of Contents KU: Statement of Income Analysis Net income for the years ended December 31 includes the following results: Change 2025 2024 2025 vs. 2024 Operating Revenues Retail and wholesale $ 2,042 $ 1,944 $ 98 Electric revenue from affiliate 22 20 2 Total Operating Revenues 2,064 1,964 100 Operating Expenses Operation Fuel 517 476 41 Energy purchases 26 25 1 Energy purchases from affiliate 30 31 (1) Other operation and maintenance 416 413 3 Depreciation 408 403 5 Taxes, other than income 51 49 2 Total Operating Expenses 1,448 1,397 51 Operating Income 616 567 49 Other Income (Expense) - net 29 15 14 Interest Expense 148 137 11 Income Before Income Taxes 497 445 52 Income Taxes 99 89 10 Net Income $ 398 $ 356 $ 42 Operating Revenues The increase (decrease) in operating revenues was due to: 2025 vs. 2024 Fuel and other energy purchases (a) $ 30 Volumes (b) 34 Off-system sales (c) 19 Other 17 Total $ 100 (a) The increase was primarily due to higher recoveries of fuel expenses. (b) The increase was primarily due to weather. (c) The increase was primarily due to higher volumes. Fuel Fuel expense increased $41 million in 2025 compared with 2024, primarily due to a $24 million increase in volumes due to weather and an $18 million increase in commodity costs. Financial Condition The remainder of this Item 7 in this Form 10-K is presented on a combined basis, providing information, as applicable, for all Registrants. 49 Table of Contents Liquidity and Capital Resources (All Registrants) The Registrants' cash flows from operations and access to cost-effective bank and capital markets are subject to risks and uncertainties. See "Item 1A. Risk Factors" for a discussion of risks and uncertainties that could affect the Registrants' cash flows. The Registrants had the following at: PPL PPL Electric LG&E KU December 31, 2025 Cash and cash equivalents $ 1,071 $ 30 $ 162 $ 10 Short-term debt 456 — — — Long-term debt due within one year 904 — 90 164 Notes payable with affiliates — — 36 December 31, 2024 Cash and cash equivalents $ 306 $ 24 $ 8 $ 13 Short-term debt 303 — 25 140 Long-term debt due within one year 551 — 300 250 Notes payable with affiliates — 43 73 (All Registrants) Net cash provided by (used in) operating, investing and financing activities for the years ended December 31 and the changes between periods were as follows: PPL PPL Electric LG&E KU 2025 Operating activities $ 2,629 $ 1,050 $ 599 $ 798 Investing activities (4,004) (1,503) (803) (986) Financing activities 2,122 459 349 176 2024 Operating activities $ 2,340 $ 1,042 $ 554 $ 723 Investing activities (2,818) (1,455) (444) (643) Financing activities 435 386 (130) (89) 2025 vs. 2024 Change Operating activities $ 289 $ 8 $ 45 $ 75 Investing activities (1,186) (48) (359) (343) Financing activities 1,687 73 479 265 50 Table of Contents Operating Activities The components of the change in cash provided by (used in) operating activities were as follows: PPL PPL Electric LG&E KU 2025 vs. 2024 Change - Cash Provided (Used): Net income $ 293 $ 65 $ 12 $ 42 Non-cash components 17 (107) (9) 16 Working capital 13 77 33 7 Other operating activities (34) (27) 9 10 Total $ 289 $ 8 $ 45 $ 75 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 2025 increased $289 million compared with 2024. • Net income increased $293 million between the periods and included an increase in non-cash components of $17 million. • The $13 million increase in cash from changes in working capital was primarily due to an increase in regulatory liabilities, taxes payable and other current liabilities and a decrease in prepayments, partially offset by an increase in accounts receivable. • The $34 million decrease in cash from other operating activities was primarily due to an increase in other noncurrent assets, partially offset by an increase in other noncurrent liabilities. (PPL Electric) PPL Electric's cash provided by operating activities in 2025 increased $8 million compared with 2024. • Net income increased $65 million between the periods and included a decrease in non-cash components of $107 million, primarily due to a decrease in deferred income taxes and investment tax credits. • The $77 million increase in cash from changes in working capital was primarily due to an increase in regulatory liabilities and taxes payable and a decrease in prepayments, partially offset by an increase in accounts receivable. • The $27 million decrease in cash from other operating activities was primarily due to an increase in other noncurrent assets. (LG&E) LG&E's cash provided by operating activities in 2025 increased $45 million compared with 2024. • Net income increased $12 million between the periods and included a decrease in non-cash components of $9 million. • The $33 million increase in cash from changes in working capital was primarily due to an increase in taxes payable and a decrease in accounts receivable. • The $9 million increase in cash from other operating activities was primarily due to an increase in other noncurrent liabilities, partially offset by an increase in other noncurrent assets. (KU) KU's cash provided by operating activities in 2025 increased $75 million compared with 2024. • Net income increased $42 million between the periods and included an increase in non-cash components of $16 million. 51 Table of Contents • The $7 million increase in cash from changes in working capital was primarily due to an increase in accounts payable and taxes payable, partially offset by a decrease in regulatory liabilities. • The $10 million increase in cash from other operating activities was primarily due to an increase in other noncurrent assets. Investing Activities (All Registrants) The components of the change in cash provided by (used in) investing activities were as follows: PPL PPL Electric LG&E KU 2025 vs. 2024 Change - Cash Provided (Used): Expenditures for PP&E $ (1,225) $ (379) $ (323) $ (340) Notes receivable from affiliate — 301 (36) — Other investing activities 39 30 — (3) Total $ (1,186) $ (48) $ (359) $ (343) For PPL, the increase in expenditures for PP&E was primarily due to an increase in project expenditures at PPL Electric, LG&E, KU and RIE. 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 Mill Creek Units 5 and 6, the E.W. Brown battery storage project and the Bullitt County system reinforcement project. The increase in expenditures at KU was primarily due to Mill Creek Unit 5. See "Forecasted Uses of Cash" for detail regarding projected capital expenditures for the years 2026 through 2028. For PPL Electric, the changes in "Notes receivable from affiliate" activity resulted from payments received in 2025 on the short-term note between affiliates, issued in 2024 to support general corporate purposes. See Note 13 to the Financial Statements for further discussion of intercompany borrowings. Financing Activities (All Registrants) The components of the change in cash provided by (used in) financing activities were as follows: PPL PPL Electric LG&E KU 2025 vs. 2024 Change - Cash Provided (Used): Long-term debt issuance/retirement, net $ 535 $ (153) $ 400 $ 450 Dividends (47) (26) (13) (17) Issuance of treasury stock 399 — — — Capital contributions/distributions, net — (258) 237 138 Changes in net short-term debt 842 509 (50) (187) Note payable with affiliate — — (86) (110) Other financing activities (42) 1 (9) (9) Total $ 1,687 $ 73 $ 479 $ 265 (All Registrants) See Note 8 to the Financial Statements for information on 2025 activity. 52 Table of Contents See "Long-term Debt and Equity Securities" below for additional information on current year activity. See "Forecasted Sources of Cash" for a discussion of the Registrants' plans to issue debt and equity securities, as well as a discussion of credit facility capacity available to the Registrants. Also see "Forecasted Uses of Cash" for a discussion of PPL's plans to pay dividends on common securities in the future, as well as the Registrants' maturities of long-term debt. Long-term Debt and Equity Securities Long-term debt and equity securities activity for 2025 included: Debt Stock Issuances (a) Retirements Issuances (b) Repurchases Cash Flow Impact: PPL (c) $ 3,045 $ 616 $ 401 $ — PPL Electric 496 — — — LG&E 700 300 — — KU 700 250 — — (a) Issuances are net of pricing discounts, where applicable, and exclude the impact of debt issuance costs. (b) Primarily includes issuances of treasury stock. (c) Retirements include $65 million related to repurchased affiliate debt. See Note 8 to the Financial Statements for additional information. See Note 8 to the Financial Statements for additional long-term debt information. Forecasted Sources of Cash (All Registrants) The Registrants expect to continue to have adequate liquidity available from operating cash flows, cash and cash equivalents, credit facilities, commercial paper issuances and debt, hybrid, and equity issuances to meet their requirements with respect to their contractual obligations and anticipated capital expenditures. Equity capital for PPL can be provided from any combination of issuances from at the market stock plans, private placements, or public offerings. Additionally, subject to market conditions, the Registrants and their subsidiaries may access the capital markets, and PPL Electric, LG&E and KU anticipate receiving equity contributions from their parent or member in 2026, which are expected to be used to fund capital expenditures and for other general corporate purposes. PPL Electric, LG&E and KU plan to obtain the funds to meet their future capital needs from sources similar to those they used in the past, which were primarily from operating cash flows, external securities issuances, borrowings from financial institutions, and equity contributions from PPL. Operating cash flows provide a substantial portion of these subsidiary Registrants' cash needs. The amount, type, and timing of any financings in 2026, as well as in subsequent years, will be contingent on investment opportunities and the Registrants' capital requirements and will depend upon prevailing market conditions, regulatory approvals as applicable for the subsidiary Registrants, and other factors. 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 December 31, 2025, the total committed borrowing capacity under credit facilities and the borrowings under these facilities were: 53 Table of Contents External Committed Capacity Borrowed Letters of Credit and Commercial Paper Issued (d) Unused Capacity PPL Capital Funding Credit Facilities (a) $ 1,600 $ — $ 456 $ 1,144 PPL Electric Credit Facilities 750 — 6 744 LG&E Credit Facilities 600 — — 600 KU Credit Facilities 600 — — 600 Total Credit Facilities (b)(c) $ 3,550 $ — $ 462 $ 3,088 (a) 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 December 31, 2025, PPL Capital Funding had $355 million of commercial paper outstanding and RIE had $101 million of commercial paper outstanding. See Note 8 to the Financial Statements for additional information. (b) The syndicated credit facilities and PPL Capital Funding's bilateral facility, each contain a financial covenant requiring debt to total capitalization not to exceed 70% for PPL Capital Funding, RIE, PPL Electric, LG&E and KU, as calculated in accordance with the facility, and other customary covenants. 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%. (c) Each company pays customary fees under its respective syndicated credit facility. Borrowings generally bear interest at applicable SOFR, plus an applicable margin. (d) Commercial paper issued reflects the undiscounted face value of the issuance. In addition to the financial covenants noted in the table above, the credit agreements governing the above credit facilities contain various other covenants. Failure to comply with the covenants after applicable grace periods could result in acceleration of repayment of borrowings and/or termination of the agreements. The Registrants monitor compliance with the covenants on a regular basis. At December 31, 2025, the Registrants were in compliance with these covenants. As of December 31, 2025, the Registrants believe that these covenants and other borrowing conditions will not limit access to these funding sources. See Note 8 to the Financial Statements for further discussion of the Registrants' credit facilities. Intercompany (LG&E and KU) Committed Capacity Borrowed Commercial Paper Issued Unused Capacity LG&E Money Pool (a) $ 750 $ — $ — $ 750 KU Money Pool (a) 650 36 — 614 (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 capacity limit, at an interest rate based on the lower of a market index of commercial paper issues and two additional rate options based on the lower of a market index of commercial paper issues and two additional rate options based on SOFR. See Note 13 to the Financial Statements for further discussion of intercompany credit facilities. Commercial Paper (All Registrants) The Registrants, 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 facilities. The following commercial paper programs were in place at: December 31, 2025 Capacity Commercial Paper Issuances (b) Unused Capacity PPL Capital Funding (a) $ 1,600 $ 355 $ 1,245 Rhode Island Energy (a) 400 101 299 PPL Electric 750 — 750 LG&E 600 — 600 KU 600 — 600 Total PPL $ 3,950 $ 456 $ 3,494 54 Table of Contents (a) Issuances under the PPL Capital Funding and RIE commercial paper programs are supported by the PPL Capital Funding syndicated credit facility, which at December 31, 2025, had a total capacity of $1.5 billion, with a $400 million borrowing sublimit for RIE and a $1.1 billion sublimit for PPL Capital Funding. The sublimits of each borrower may be decreased or increased at the borrowers' option up to a prescribed amount such that all borrowings under the syndicated credit facility cannot exceed the size of the credit facility of $1.5 billion. PPL Capital Funding's Commercial paper program is also backed by a separate bilateral credit facility for $100 million. (b) Commercial paper issued reflects the undiscounted face value of the issuance. Forecasted Uses of Cash (All Registrants) In addition to expenditures required for normal operating activities, such as purchased power, payroll, fuel and taxes, the Registrants currently expect to incur future cash outflows for capital expenditures, various contractual obligations, payment of dividends on its common stock, and possibly the purchase or redemption of a portion of debt securities. Capital Expenditures The table below shows the Registrants' current capital expenditure projections for the years 2026 through 2028. Expenditures for the regulated utilities are expected to be recovered through rates, pending regulatory approval. Projected Total 2026 (a) 2027 2028 PPL Generating facilities $ 4,200 $ 1,100 $ 1,500 $ 1,600 Electric distribution facilities 5,575 1,775 1,950 1,850 Gas distribution facilities 1,225 375 400 450 Transmission facilities 5,875 1,625 2,025 2,225 Other 475 250 150 75 Total Capital Expenditures $ 17,350 $ 5,125 $ 6,025 $ 6,200 PPL Electric Electric distribution facilities $ 2,850 $ 1,000 $ 950 $ 900 Transmission facilities 3,350 975 1,125 1,250 Total Capital Expenditures $ 6,200 $ 1,975 $ 2,075 $ 2,150 LG&E Generating facilities $ 2,500 $ 600 $ 850 $ 1,050 Electric distribution facilities 825 200 325 300 Gas distribution facilities 450 125 150 175 Transmission facilities 450 125 175 150 Other 250 125 75 50 Total Capital Expenditures $ 4,475 $ 1,175 $ 1,575 $ 1,725 KU Generating facilities $ 1,700 $ 500 $ 650 $ 550 Electric distribution facilities 1,075 275 400 400 Transmission facilities 1,350 300 475 575 Other 225 125 75 25 Total Capital Expenditures $ 4,350 $ 1,200 $ 1,600 $ 1,550 (a) The 2026 total excludes amounts included in accounts payable as of December 31, 2025. Capital expenditure plans are revised periodically to reflect changes in operational, market and regulatory conditions. 55 Table of Contents Contractual Obligations The Registrants have assumed various financial obligations and commitments in the ordinary course of conducting business. At December 31, 2025, estimated contractual cash obligations were as follows: Total 2026 2027-2028 2028-2029 After 2030 PPL Long-term Debt (a) $ 19,089 $ 904 $ 1,778 $ 2,297 $ 14,110 Interest on Long-term Debt (b) 13,775 836 1,611 1,516 9,812 Operating Leases 109 20 35 19 35 Purchase Obligations (c) 5,476 1,940 1,845 1,002 689 Total Contractual Cash Obligations $ 38,449 $ 3,700 $ 5,269 $ 4,834 $ 24,646 PPL Electric Long-term Debt (a) $ 5,799 $ — $ 108 $ 116 $ 5,575 Interest on Long-term Debt (b) 4,965 274 543 538 3,610 Unconditional Power Purchase Obligations 739 63 144 143 389 Total Contractual Cash Obligations $ 11,503 $ 337 $ 795 $ 797 $ 9,574 LG&E Long-term Debt (a) $ 2,889 $ 90 $ 260 $ — $ 2,539 Interest on Long-term Debt (b) 2,508 131 253 249 1,875 Operating Leases 19 6 9 4 — Coal and Natural Gas Purchase Obligations (d) 856 314 357 162 23 Unconditional Power Purchase Obligations (e) 299 19 48 48 184 Construction Obligations (f) 369 319 48 2 — Other Obligations 72 45 22 5 — Total Contractual Cash Obligations $ 7,012 $ 924 $ 997 $ 470 $ 4,621 KU Long-term Debt (a) $ 3,539 $ 164 $ 60 $ — $ 3,315 Interest on Long-term Debt (b) 3,096 163 315 314 2,304 Operating Leases 30 10 13 5 2 Coal and Natural Gas Purchase Obligations (d) 1,088 372 536 180 — Unconditional Power Purchase Obligations (e) 133 8 21 21 83 Construction Obligations (f) 356 288 62 6 — Other Obligations 49 19 18 12 — Total Contractual Cash Obligations $ 8,291 $ 1,024 $ 1,025 $ 538 $ 5,704 (a) Reflects principal maturities based on stated maturity, sinking fund payments, or earlier put dates. See Note 8 to the Financial Statements for a discussion of variable-rate remarketable bonds issued on behalf of LG&E and KU. The Registrants do not have any significant finance lease obligations. For PPL, reduced by $84 million of repurchased affiliate bonds as of December 31, 2025. See Note 8 to the Financial Statements for more information. (b) Assumes interest payments through stated maturity or earlier put dates. The payments herein are subject to change, as payments for debt that is or becomes variable-rate debt have been estimated. (c) The amounts include agreements to purchase goods or services that are enforceable and legally binding and specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Primarily includes, as applicable, the purchase obligations of electricity, coal, natural gas and limestone, as well as certain construction expenditures, which are also included in the Capital Expenditures discussion above. (d) Represents contracts to purchase coal, natural gas and natural gas transportation. See Note 12 to the Financial Statements for additional information. (e) Represents future minimum payments under OVEC power purchase agreements through June 2040. See Note 12 to the Financial Statements for additional information. (f) Represents construction commitments, which are also reflected in the Capital Expenditures table presented above. 56 Table of Contents Dividends/Distributions (PPL) PPL views dividends as an integral component of shareowner return and expects to continue to pay dividends in amounts intended to maintain a capitalization structure that supports investment grade credit ratings. In November 2025, PPL declared its quarterly common stock dividend, payable January 2, 2026, at 27.25 cents per share (equivalent to $1.09 per annum). On February 20, 2026, PPL announced a quarterly common stock dividend of 28.50 cents per share, payable April 1, 2026, to shareowners of record as of March 10, 2026. Future dividends will be declared at the discretion of the Board of Directors and will depend upon future earnings, cash flows, financial and legal requirements and other factors. Subject to certain exceptions, PPL may not declare or pay any cash dividend or distribution on its capital stock during any period in which PPL Capital Funding defers interest payments on its 2007 Series A Junior Subordinated Notes due 2067. At December 31, 2025, no interest payments were deferred. (PPL Electric, LG&E and KU) From time to time, as determined by their respective Board of Directors, the Registrants pay dividends, distributions or return capital, as applicable, to their respective shareholders or members. Certain of the credit facilities of PPL Electric, LG&E and KU include minimum debt covenant ratios that could effectively restrict the payment of dividends or distributions. (All Registrants) See Note 8 to the Financial Statements for these and other restrictions related to distributions on capital interests for the Registrants and their subsidiaries. Purchase or Redemption of Debt Securities The Registrants will continue to evaluate outstanding debt securities and may decide to purchase or redeem these securities in open market or privately negotiated transactions, in exchange transactions or otherwise, depending upon prevailing market conditions, available cash and other factors, and may be commenced or suspended at any time. The amounts involved may be material. 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. The following table sets forth the Registrants' and their subsidiaries' credit ratings for outstanding debt securities or commercial paper programs as of December 31, 2025. 57 Table of Contents Senior Unsecured Senior Secured Commercial Paper Issuer Moody's S&P Moody's S&P Moody's S&P PPL PPL Capital Funding Baa1 BBB+ P-2 A-2 Rhode Island Energy A3 A- P-2 A-2 PPL and PPL Electric PPL Electric A1 A+ P-2 A-1 PPL, LG&E and KU LG&E A1 A P-2 A-2 KU A1 A P-2 A-2 Since June 2023, the rating agencies have not taken rating actions related to the Registrants and their subsidiaries. Ratings Triggers (PPL, LG&E and KU) 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 16 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 December 31, 2025. Guarantees for Subsidiaries (PPL) PPL guarantees certain consolidated affiliate financing arrangements. Some of the guarantees contain financial and other covenants that, if not met, would limit or restrict the consolidated affiliates' access to funds under these financing arrangements, accelerate maturity of such arrangements or limit the consolidated affiliates' ability to enter into certain transactions. At this time, PPL believes that these covenants will not limit access to relevant funding sources. See Note 12 to the Financial Statements for additional information about guarantees. Other Contingent Obligations (All Registrants) The Registrants have entered into certain agreements that may contingently require payment to a guaranteed or indemnified party. See Note 12 to the Financial Statements for a discussion of these agreements. Risk Management Market Risk (All Registrants) See Notes 1, 15 and 16 to the Financial Statements for information about the Registrants' risk management objectives, valuation techniques and accounting designations. The forward-looking information presented below provides estimates of what may occur in the future, assuming certain adverse market conditions and model assumptions. Actual future results may differ materially from those presented. These are not precise indicators of expected future losses, but are rather only indicators of possible losses under normal market conditions at a given confidence level. 58 Table of Contents Interest Rate Risk PPL and its subsidiaries issue debt to finance their operations, which exposes them to interest rate risk. A variety of financial derivative instruments are utilized to adjust the mix of fixed and floating interest rates in their debt portfolios, adjust the duration of the debt portfolios and lock in benchmark interest rates in anticipation of future financing, when appropriate. Risk limits under PPL's risk management program are designed to balance risk exposure to volatility in interest expense and changes in the fair value of the debt portfolio due to changes in benchmark interest rates. In addition, the interest rate risk of certain subsidiaries is potentially mitigated as a result of the existing regulatory framework or the timing of rate cases. The following interest rate hedges were outstanding at December 31: 2025 2024 Exposure Hedged Fair Value, Net - Asset (Liability) (a) Effect of a 10% Adverse Movement in Rates (b) Maturities Ranging Through Exposure Hedged Fair Value, Net - Asset (Liability) (a) Effect of a 10% Adverse Movement in Rates (b) PPL and LG&E Cash flow hedges Interest rate derivatives $ 20 $ — $ (1) 2026 $ — $ — $ — Economic hedges Interest rate derivatives (c) $ 64 $ (5) $ (1) 2033 $ 64 $ (3) $ (1) (a) Includes accrued interest, if applicable. (b) Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability. Sensitivities represent a 10% adverse movement in interest rates. (c) Realized changes in the fair value of such economic hedges are recoverable through regulated rates and any subsequent changes in the fair value of these derivatives are included in regulatory assets or regulatory liabilities. The Registrants are exposed to a potential increase in interest expense and to changes in the fair value of their debt portfolios. The estimated impact of a 10% adverse movement in interest rates on interest expense at December 31, 2025 and 2024 was insignificant for PPL, PPL Electric, LG&E, and KU. The estimated impact of a 10% adverse movement in interest rates on the fair value of debt at December 31 is shown below. 10% Adverse Movement in Rates on Fair Value of Debt 2025 2024 PPL $ 720 $ 622 PPL Electric 284 262 LG&E 135 89 KU 175 131 Commodity Price Risk PPL is exposed to commodity price risk through its subsidiaries primarily from the purchases of electricity, natural gas and fuel but has cost recovery mechanisms to mitigate that risk. See Note 16 to the Financial Statements for further discussion of these risks. Volumetric Risk Volumetric risk is the risk related to the changes in volume of retail sales due to weather, economic conditions or other factors. PPL is exposed to volumetric risk through its subsidiaries as described below. • PPL Electric, LG&E and KU are exposed to volumetric risk on retail sales, mainly due to weather and other economic conditions for which there is limited mitigation between rate cases. • RIE is not materially exposed to volumetric risk. RIE's electric and gas distribution rates both have a revenue decoupling mechanism, which allows for annual adjustments to RIE's delivery rates. 59 Table of Contents Defined Benefit Plans - Equity Securities Price Risk See "Application of Critical Accounting Policies - Defined Benefits" for additional information regarding the effect of equity securities price risk on plan assets. Credit Risk (All Registrants) Credit risk is the potential loss that may be incurred due to a counterparty's non-performance. PPL is exposed to credit risk from "in-the-money" transactions with counterparties as well as additional credit risk through certain of its subsidiaries, as discussed below. In the event a supplier of PPL, PPL Electric, LG&E or KU defaults on its contractual obligation, those Registrants would be required to seek replacement power or replacement fuel in the market. In general, subject to regulatory review or other processes, appropriate incremental costs incurred by these entities would be recoverable from customers through applicable rate mechanisms, thereby mitigating the financial risk for these entities. PPL and its subsidiaries have credit policies in place to manage credit risk, including the use of an established credit approval process, daily monitoring of counterparty positions and the use of master netting agreements or provisions. These agreements generally include credit mitigation provisions, such as margin, prepayment or collateral requirements. PPL and its subsidiaries may request additional credit assurance, in certain circumstances, if the counterparties' credit ratings fall below investment grade, their tangible net worth falls below specified percentages or their exposures exceed an established credit limit. (All Registrants) Related Party Transactions The Registrants are not aware of any material ownership interests or operating responsibility by senior management in outside partnerships, including leasing transactions with variable interest entities, or other entities doing business with the Registrants. See Note 13 to the Financial Statements for additional information on related party transactions for PPL Electric, LG&E and KU. Acquisitions, Development and Divestitures The Registrants from time to time evaluate opportunities for potential acquisitions, divestitures, and development projects. See Note 9 to the Financial Statements for additional information on acquisition, development and divestiture activity. Development projects are reexamined based on market conditions and other factors to determine whether to proceed with, modify or terminate the projects. Any resulting transactions may impact future financial results. Environmental Matters Extensive federal, state and local environmental laws and regulations are applicable to the Registrants' air emissions, water discharges and the management of hazardous and solid waste, as well as other aspects of the Registrants' businesses. The costs of compliance or alleged non-compliance cannot be predicted with certainty but could be significant. In addition, costs may increase significantly if the requirements or scope of environmental laws or regulations, or similar rules, are expanded or changed. Costs may take the form of increased capital expenditures or operating and maintenance expenses, monetary fines, penalties or other restrictions. Many of these environmental law considerations are also applicable to the operations of key suppliers, or customers, such as coal producers and industrial power users, and may impact the costs for their products or their demand for the Registrants' services. Increased capital and operating costs are expected to be subject to rate recovery. The Registrants can provide no assurances as to the ultimate outcome of future environmental or rate proceedings before regulatory authorities. See "Legal Matters" in Note 12 to the Financial Statements for a discussion of the more significant environmental claims. See Note 18 to the Financial Statements for information related to the impacts of CCRs on AROs. See "Item 1. Business - Environmental Matters" for additional information. 60 Table of Contents Sustainability The Governance, Nominating and Sustainability Committee of PPL's Board of Directors has oversight of the company's practices and positions to further its sustainability strategy and corporate governance, including specific environmental and corporate social responsibility initiatives. Management considers several factors as part of the company's sustainability approach, including ongoing engagement with constituents such as shareholders and regulators on topics related to sustainability and other matters. To the extent sustainability issues have or may have a material impact on the Registrants' financial condition or results of operation, PPL discloses such matters in accordance with applicable securities law and SEC regulations. In addition to disclosure required by applicable securities laws and SEC regulations, PPL provides additional disclosures on sustainability topics that it considers relevant to investors and stakeholders, which are available on the corporate website at https://www.pplweb.com/sustainability/reports-disclosures/. Primarily, PPL continues each spring to publish its annual sustainability report including data related to carbon emissions. PPL also participates in efforts by the Edison Electric Institute and American Gas Association to provide the appropriate subset of sustainability information that can be applied consistently across the electric and gas utility industries. Finally, PPL consults widely used reporting frameworks for discrete sustainability topics, including corporate political contributions and climate-related issues and maps its disclosure to various reporting frameworks such as Global Reporting Initiative (GRI) Standards and to the CDP Climate and Water Questionnaires. Cybersecurity See "Item 1A. Risk Factors" and "Item 1C. Cybersecurity" for a discussion of cybersecurity risks affecting the Registrants and the related strategies for managing these risks. Competition See "Competition" under each of PPL's reportable segments in "Item 1. Business - General - Segment Information" and "Item 1A. Risk Factors" for a discussion of competitive factors affecting the Registrants. New Accounting Guidance See Note 1 and Note 20 to the Financial Statements for a discussion of significant new accounting guidance adopted and pending adoption as of December 31, 2025. Application of Critical Accounting Policies Financial condition and results of operations are impacted by the methods, assumptions and estimates used in the application of critical accounting policies. The following accounting policies are particularly important to an understanding of the reported financial condition or results of operations and require management to make estimates or other judgments of matters that are inherently uncertain. Changes in the estimates or other judgments included within these accounting policies could result in a significant change to the information presented in the Financial Statements (these accounting policies are also discussed in Note 1 to the Financial Statements). Senior management has reviewed with PPL's Audit Committee these critical accounting policies, the following disclosures regarding their application, and the estimates and assumptions regarding them. Defined Benefits (All Registrants) Certain of the Registrants and/or their subsidiaries sponsor or participate in certain qualified funded and non-qualified unfunded defined benefit pension plans and both funded and unfunded other postretirement benefit plans. See Notes 1, 7 and 10 to the Financial Statements for additional information about the plans and the accounting for defined benefits. A summary of plan sponsors by Registrant and whether a Registrant or its subsidiaries sponsor (S) or participate in and receives allocations (P) from those plans is shown in the table below. Plan Sponsor PPL PPL Electric LG&E KU PPL Services S P LKE P P 61 Table of Contents Management makes certain assumptions regarding the valuation of benefit obligations and the performance of plan assets. As such, annual net periodic defined benefit costs are recorded in current earnings or regulatory assets and liabilities based on estimated results. Any differences between actual and estimated results are recorded in AOCI or, in the case of PPL Electric, LG&E and KU, regulatory assets and liabilities for amounts that are expected to be recovered through regulated customer rates. These amounts in AOCI or regulatory assets and liabilities are amortized to income over future periods. The significant assumptions are: • Discount Rate - In selecting the discount rates for defined benefit plans, the plan sponsors start with a cash flow analysis of the expected benefit payment stream for their plans. The plan-specific cash flows are matched against the coupons and expected maturity values of Aa-rated non-callable (or callable with make-whole provisions) bonds that could be purchased for a hypothetical settlement portfolio. The plan sponsors then use the single discount rate derived from matching the discounted benefit payment stream to the market value of the selected bond portfolio. • Expected Return on Plan Assets - The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption. • Rate of Compensation Increase - Management projects employees' annual pay increases, which are used to project employees' pension benefits at retirement. In selecting a rate of compensation increase, plan sponsors consider past experience, the potential impact of movements in inflation rates and expectations of ongoing compensation practices. See Note 10 to the Financial Statements for details of the assumptions selected for pension and other postretirement benefits. A variance in the assumptions could significantly impact accrued defined benefit liabilities or assets, reported annual net periodic defined benefit costs and AOCI or regulatory assets and liabilities. The following tables reflect changes in certain assumptions based on the Registrants' primary qualified defined benefit pension and other postretirement benefit plans. The inverse of this change would have the opposite impact on accrued defined benefit liabilities or assets, reported annual net periodic defined benefit costs and AOCI or regulatory assets and liabilities. The sensitivities below reflect an evaluation of the change based solely on a change in that assumption. Increase (Decrease) Actuarial assumption Discount Rate (0.25 %) Expected Return on Plan Assets (0.25 %) Rate of Compensation Increase 0.25 % 62 Table of Contents Increase (Decrease) (Increase) Decrease (Increase) Decrease Increase (Decrease) Increase (Decrease) Actuarial assumption Defined Benefit Asset Defined Benefit Liabilities AOCI (pre-tax) Net Regulatory Assets Defined Benefit Costs PPL Discount rates $ (17) $ (73) $ 26 $ 64 $ 4 Expected return on plan assets n/a n/a n/a n/a 10 Rate of compensation increase (2) (6) 2 6 1 PPL Electric Discount rates — (31) — 31 1 Expected return on plan assets n/a n/a — n/a 3 Rate of compensation increase — (2) — 2 — LG&E Discount rates (7) 1 n/a 8 1 Expected return on plan assets n/a n/a n/a n/a 1 Rate of compensation increase (1) — n/a 1 — KU Discount rates (6) 1 n/a 7 1 Expected return on plan assets n/a n/a n/a n/a 1 Rate of compensation increase (1) — n/a 1 — Income Taxes (All Registrants) Significant management judgment is required in developing the Registrants' provision for income taxes, primarily due to valuation allowances on deferred tax assets. The need for valuation allowances to reduce deferred tax assets requires significant management judgment. Valuation allowances are initially recorded and reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred tax asset. Management considers numerous factors in assessing the expected realization of a deferred tax asset, including the reversal of temporary differences, future taxable income and ongoing prudent and feasible tax planning strategies. Any tax planning strategy considered in this assessment must meet the recognition and measurement criteria for the valuation of a deferred tax asset. When evaluating the need for valuation allowances, the uncertainty posed by potential or expected legislative change on such factors is also considered by management. The amount of deferred tax assets ultimately realized may differ materially from the estimates utilized in the computation of valuation allowances and may materially impact the financial statements in the future. See Note 6 to the Financial Statements for income tax disclosures. Regulatory Assets and Liabilities (All Registrants) PPL Electric, LG&E, KU and RIE are subject to cost-based rate regulation. As a result, the effects of regulatory actions are required to be reflected in the financial statements. Assets and liabilities that result from the regulated ratemaking process may not be recorded under GAAP for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in regulated customer rates. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates. In certain cases, regulatory liabilities are recorded based on an understanding or agreement with the regulator that rates have been set to recover costs that are expected to be incurred in the future, and the regulated entity is accountable for any amounts charged pursuant to such rates and not yet expended for the intended purpose. 63 Table of Contents Management continually assesses whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory and political environments, the ability to recover costs through regulated rates, recent rate orders to the Registrants and other regulated entities, and the status of any pending or potential deregulation legislation. Based on this continual assessment, management believes the existing regulatory assets are probable of recovery. This assessment reflects the current political and regulatory climate at the state and federal levels and is subject to change in the future. If future recovery of costs ceases to be probable, the regulatory asset would be written-off. There were no material write-offs of regulatory assets for the year ended December 31, 2025. Additionally, the regulatory agencies can provide flexibility in the manner and timing of recovery of regulatory assets. See Note 7 to the Financial Statements for regulatory assets and regulatory liabilities recorded at December 31, 2025 and 2024, as well as additional information on those regulatory assets and liabilities. All regulatory assets are either currently being recovered under specific rate orders, represent amounts that are expected to be recovered in future rates or benefit future periods based upon established regulatory practices. Price Risk Management (PPL) See "Financial Condition - Risk Management" above. Goodwill Impairment (PPL, LG&E and KU) Goodwill is tested for impairment at the reporting unit level. The reporting units of PPL include the Kentucky Regulated reporting unit, the Pennsylvania Regulated reporting unit, and the Rhode Island Regulated reporting unit. LG&E and KU are each single reporting units. A goodwill impairment test is performed annually or more frequently if events or changes in circumstances indicate that the carrying amount of the reporting unit may be greater than the reporting unit's fair value. The fair value of a reporting unit is compared with the carrying value and an impairment charge is recognized if the carrying amount exceeds the fair value of the reporting unit. PPL, for its reporting units, and individually, LG&E and KU, may elect either to initially make a qualitative evaluation about the likelihood of an impairment of goodwill or to bypass the qualitative evaluation and test goodwill for impairment using a quantitative test. As of October 1, 2025, PPL, for its reporting units, and individually, LG&E and KU, elected to perform the qualitative step zero evaluation of goodwill. These evaluations considered the excess of fair value over the carrying value of each reporting unit that was calculated during step one of the quantitative impairment tests performed in the fourth quarter of 2022, and the relevant events and circumstances that occurred since those tests were performed including: • current year financial performance versus the prior year, • changes in planned capital expenditures, • the consistency of forecasted free cash flows, • earnings quality and sustainability, • changes in market participant discount rates, • changes in long-term growth rates, • changes in PPL's market capitalization, and • the overall economic and regulatory environments in which these regulated entities operate. Based on these evaluations, management concluded it was not more likely than not that the fair value of these reporting units was less than their carrying value. As such, the step one quantitative impairment test was not performed and no impairment was recognized. See "Long-Lived and Intangible Assets - Asset Impairment (Excluding Investments)" in Note 1 to the Financial Statements for further discussion of goodwill impairment tests. See Note 17 to the Financial Statements for information on goodwill balances by reportable segment at December 31, 2025. 64 Table of Contents Asset Retirement Obligations (LG&E and KU) ARO liabilities are required to be recognized for legal obligations associated with the retirement of long-lived assets. Initial obligations are measured at estimated fair value. An ARO must be recognized when incurred if the fair value of the ARO can be reasonably estimated. An equivalent amount is recorded as an increase in the value of the capitalized asset and amortized to expense, regulatory assets or regulatory liabilities over the asset's useful life. In determining AROs, management must make significant judgments and estimates to calculate fair value. Fair value is developed using an expected present value technique based on assumptions of market participants that consider estimated retirement costs in current period dollars, inflated to the anticipated retirement date and discounted back to the date the ARO was incurred. Changes in assumptions and estimates included within the calculations of the fair value of AROs could result in significantly different results than those identified and recorded in the financial statements. Estimated ARO costs and settlement dates, which affect the carrying value of the ARO and the related capitalized asset, are reviewed periodically to ensure that any material changes are incorporated into the ARO estimate. Any change to the capitalized asset is generally amortized over the remaining life of the associated long-lived asset. See "Long-Lived and Intangible Assets - Asset Retirement Obligations" in Note 1, Note 7 and Note 18 to the Financial Statements for additional information on AROs. At December 31, 2025, the total recorded balances and information on the most significant recorded AROs were as follows. Most Significant AROs Total ARO Recorded Amount Recorded % of Total Description LG&E $ 75 $ 52 69 Ponds, landfills and natural gas mains KU 57 27 47 Ponds and landfills The most significant assumptions surrounding AROs are the forecasted retirement costs (including settlement dates and the timing of cash flows), discount and inflation rates. At December 31, 2025, a 10% increase to retirement cost would increase these ARO liabilities by $6 million at LG&E and $7 million at KU. A 0.25% decrease in the discount rate would increase these ARO liabilities by $4 million at LG&E and $1 million at KU and a 0.25% increase in the inflation rate would increase these ARO liabilities by $4 million at LG&E and $1 million at KU. There would be no significant change to the annual depreciation expense of the ARO asset or the annual accretion expense of the ARO liability as a result of these changes in assumptions. Revenue Recognition - Unbilled Revenues (PPL, LG&E and KU) For RIE, LG&E and KU, revenues related to the sale of energy are recorded when service is rendered or when energy is delivered to customers. Because customers are billed on cycles which vary based on the timing of actual meter reads taken throughout the month, estimates are recorded for unbilled revenues at the end of each reporting period. Such unbilled revenue amounts reflect estimates of deliveries to customers since the date of the last reading of their meters. The unbilled revenue estimates reflect consideration of factors including daily load models, estimated usage for each customer class, the effect of current and different rate schedules, the meter read schedule, the billing schedule, actual weather data, and, where applicable, the impact of weather normalization or other regulatory provisions of rate structures. Other Information (All Registrants) PPL's Audit Committee has approved the independent auditor to provide audit and audit-related services, tax services and other services permitted by Sarbanes-Oxley and SEC rules. The audit and audit-related services include services in connection with statutory and regulatory filings, reviews of offering documents and registration statements, and internal control reviews. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK PPL Corporation, PPL Electric Utilities Corporation, Louisville Gas and Electric Company and Kentucky Utilities Company Reference is made to "Risk Management" for the Registrants in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations." 65 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareowners and the Board of Directors of PPL Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PPL Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2026 expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Regulatory Assets and Regulatory Liabilities – Impact of Rate-Regulation on Regulatory Assets and Regulatory Liabilities and Related Disclosures – Refer to Notes 1 and 7 to the financial statements Critical Audit Matter Description As discussed in Note 1 to the financial statements, the Company owns and operates four cost-based rate-regulated utilities for which rates are set by regulators to enable the regulated utility to recover the costs of providing electric or gas service, as applicable, and to provide a reasonable return to shareholders. As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. 66 Table of Contents Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates. The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates. The accounting for regulatory assets and regulatory liabilities is based on specific ratemaking decisions or precedent for each transaction or event. While the Company has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulators will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions. We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and regulatory liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders. Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management's internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and regulatory liabilities. We tested the effectiveness of management's internal controls over the recognition of amounts as regulatory assets or regulatory liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for the Company and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated the Company's disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Morristown, New Jersey February 20, 2026 We have served as the Company's auditor since 2015. 67 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareowner and the Board of Directors of PPL Electric Utilities Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PPL Electric Utilities Corporation and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Regulatory Assets and Regulatory Liabilities – Impact of Rate-Regulation on Regulatory Assets and Regulatory Liabilities and Related Disclosures – Refer to Notes 1 and 7 to the financial statements Critical Audit Matter Description As discussed in Note 1 to the financial statements, PPL Electric Utilities Company (PPL Electric) is a cost-based rate-regulated utility for which rates are set by regulators to enable the regulated utility to recover the costs of providing electric service and to provide a reasonable return to shareholders. As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. 68 Table of Contents Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates. The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates. The accounting for regulatory assets and regulatory liabilities is based on specific ratemaking decisions or precedent for each transaction or event. While PPL Electric has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulators will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions. We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and regulatory liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders. Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management's internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and regulatory liabilities. We tested the effectiveness of management's internal controls over the recognition of amounts as regulatory assets or regulatory liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for PPL Electric and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated PPL Electric's disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Morristown, New Jersey February 20, 2026 We have served as the Company's auditor since 2015. 69 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of Louisville Gas and Electric Company Opinion on the Financial Statements We have audited the accompanying balance sheets of Louisville Gas and Electric Company (the "Company") as of December 31, 2025 and 2024, the related statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Regulatory Assets and Regulatory Liabilities – Impact of Rate-Regulation on Regulatory Assets and Regulatory Liabilities and Related Disclosures – Refer to Notes 1 and 7 to the financial statements Critical Audit Matter Description As discussed in Note 1 to the financial statements, Louisville Gas and Electric Company (LG&E) is a cost-based rate-regulated utility for which rates are set by regulators to enable the regulated utility to recover the costs of providing electric or gas service, as applicable, and to provide a reasonable return to shareholders. As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates. The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates. The accounting for regulatory assets and regulatory liabilities is based on specific ratemaking decisions or precedent for each transaction or event. While LG&E has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulators will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions. 70 Table of Contents We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and regulatory liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders. Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management's internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and regulatory liabilities. We tested the effectiveness of management's internal controls over the recognition of amounts as regulatory assets or regulatory liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for LG&E and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated LG&E's disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Louisville, Kentucky February 20, 2026 We have served as the Company's auditor since 2015. 71 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of Kentucky Utilities Company Opinion on the Financial Statements We have audited the accompanying balance sheets of Kentucky Utilities Company (the "Company") as of December 31, 2025 and 2024, the related statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Regulatory Assets and Regulatory Liabilities – Impact of Rate-Regulation on Regulatory Assets and Regulatory Liabilities and Related Disclosures – Refer to Notes 1 and 7 to the financial statements Critical Audit Matter Description As discussed in Note 1 to the financial statements, Kentucky Utilities Company (KU) is a cost-based rate-regulated utility for which rates are set by regulators to enable the regulated utility to recover the costs of providing electric service and to provide a reasonable return to shareholders. As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates. The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates. The accounting for regulatory assets and regulatory liabilities is based on specific ratemaking decisions or precedent for each transaction or event. While KU has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulators will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions. 72 Table of Contents We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and regulatory liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders. Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management's internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and regulatory liabilities. We tested the effectiveness of management's internal controls over the recognition of amounts as regulatory assets or regulatory liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for KU and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated KU's disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Louisville, Kentucky February 20, 2026 We have served as the Company's auditor since 2015. 73 Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) 74 Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, PPL Corporation and Subsidiaries (Millions of Dollars, except share data) 2025 2024 2023 Operating Revenues $ 9,042 $ 8,462 $ 8,312 Operating Expenses Operation Fuel 855 783 733 Energy purchases 1,892 1,679 1,841 Other operation and maintenance 2,431 2,607 2,462 Depreciation 1,312 1,279 1,254 Taxes, other than income 423 374 392 Total Operating Expenses 6,913 6,722 6,682 Operating Income 2,129 1,740 1,630 Other Income (Expense) - net (Note 14) 151 114 ( 40 ) Interest Expense 808 738 666 Income Before Income Taxes 1,472 1,116 924 Income Taxes 291 228 184 Net Income $ 1,181 $ 888 $ 740 Earnings Per Share of Common Stock: Net Income Available to PPL Common Shareowners: Basic $ 1.60 $ 1.20 $ 1.00 Diluted $ 1.59 $ 1.20 $ 1.00 Weighted-Average Shares of Common Stock Outstanding (in thousands) Basic 739,406 737,756 737,036 Diluted 743,348 739,853 738,166 The accompanying Notes to Financial Statements are an integral part of the financial statements. 75 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, PPL Corporation and Subsidiaries (Millions of Dollars) 2025 2024 2023 Net income $ 1,181 $ 888 $ 740 Other comprehensive income (loss): Amounts arising during the period - gains (losses), net of tax (expense) benefit: Qualifying derivatives, net of tax of ($ 1 ), $ 0 , $ 0 1 — — Equity investees' other comprehensive income (loss), net tax of $ 0 , $ 0 , $ 0 ( 1 ) 1 1 Defined benefit plans: Net actuarial gain (loss), net of tax of $ 7 , $ 8 , $ 15 ( 20 ) ( 22 ) ( 41 ) Reclassifications to net income - (gains) losses, net of tax expense (benefit): Qualifying derivatives, net of tax of ($ 1 ), $ 0 , $ 0 2 3 3 Defined benefit plans: Prior service costs, net of tax of $ 0 , $ 0 , ($ 1 ) 1 1 1 Net actuarial (gain) loss, net of tax of $ 1 , $ 0 , $ 0 ( 1 ) ( 4 ) ( 3 ) Total other comprehensive income (loss) ( 18 ) ( 21 ) ( 39 ) Comprehensive income $ 1,163 $ 867 $ 701 The accompanying Notes to Financial Statements are an integral part of the financial statements. 76 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, PPL Corporation and Subsidiaries (Millions of Dollars) 2025 2024 2023 Cash Flows from Operating Activities Net income $ 1,181 $ 888 $ 740 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 1,312 1,279 1,254 Amortization 104 78 81 Defined benefit plans - income ( 57 ) ( 72 ) ( 73 ) Deferred income taxes and investment tax credits 192 196 322 Stock compensation expense 49 46 33 Equity component of AFUDC ( 81 ) ( 47 ) ( 30 ) Other 8 30 1 Change in current assets and current liabilities Accounts receivable ( 207 ) 254 ( 170 ) Accounts payable ( 12 ) ( 41 ) ( 72 ) Unbilled revenues ( 73 ) ( 57 ) 128 Fuel, materials and supplies ( 28 ) ( 2 ) ( 60 ) Prepayments 43 ( 34 ) 1 Taxes payable 87 ( 27 ) 6 Regulatory assets and liabilities, net 162 ( 68 ) ( 37 ) Accrued interest 38 33 27 Other ( 4 ) ( 65 ) 38 Other operating activities Defined benefit plans - funding ( 12 ) ( 10 ) ( 13 ) Proceeds from transfer of excess benefit plan funds — 13 — Other assets ( 138 ) ( 96 ) ( 69 ) Other liabilities 65 42 ( 349 ) Net cash provided by operating activities 2,629 2,340 1,758 Cash Flows from Investing Activities Expenditures for property, plant and equipment ( 4,030 ) ( 2,805 ) ( 2,390 ) Other investing activities 26 ( 13 ) 7 Net cash used in investing activities ( 4,004 ) ( 2,818 ) ( 2,383 ) Cash Flows from Financing Activities Issuance of long-term debt 3,045 1,894 3,252 Retirement of long-term debt ( 616 ) — ( 1,854 ) Payment of common stock dividends ( 794 ) ( 747 ) ( 704 ) Issuance of treasury stock 401 2 5 Net increase (decrease) in short-term debt 153 ( 689 ) 7 Debt issuance costs ( 41 ) ( 19 ) ( 46 ) Other financing activities ( 26 ) ( 6 ) ( 10 ) Net cash provided by financing activities 2,122 435 650 Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 747 ( 43 ) 25 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 339 382 357 Cash, Cash Equivalents and Restricted Cash at End of Period $ 1,086 $ 339 $ 382 Supplemental Disclosures of Cash Flow Information Cash paid (received) during the period for: Interest - net of amount capitalized $ 745 $ 670 $ 604 Income taxes - net $ 93 $ ( 123 ) $ 281 Significant non-cash transactions: Accrued expenditures for property, plant and equipment at December 31, $ 630 $ 358 $ 220 The accompanying Notes to Financial Statements are an integral part of the financial statements. 77 Table of Contents CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, PPL Corporation and Subsidiaries (Millions of Dollars, shares in thousands) 2025 2024 Assets Current Assets Cash and cash equivalents $ 1,071 $ 306 Accounts receivable (less reserve: 2025, $ 133 ; 2024, $ 147 ) Customer 1,108 961 Other 117 76 Unbilled revenues (less reserve: 2025, $ 6 ; 2024, $ 6 ) 558 485 Fuel, materials and supplies 551 511 Prepayments 106 136 Regulatory assets 308 320 Other current assets 112 85 Total Current Assets 3,931 2,880 Property, Plant and Equipment Regulated utility plant 42,953 40,391 Less: accumulated depreciation - regulated utility plant 10,303 9,682 Regulated utility plant, net 32,650 30,709 Non-regulated property, plant and equipment 71 79 Less: accumulated depreciation - non-regulated property, plant and equipment 26 29 Non-regulated property, plant and equipment, net 45 50 Construction work in progress 3,437 2,390 Property, Plant and Equipment, net 36,132 33,149 Other Noncurrent Assets Regulatory assets 2,092 2,060 Goodwill 2,247 2,247 Other intangibles 327 314 Other noncurrent assets (less reserve for accounts receivable: 2025, $ 1 ; 2024, $ 1 ) 515 419 Total Other Noncurrent Assets 5,181 5,040 Total Assets $ 45,244 $ 41,069 The accompanying Notes to Financial Statements are an integral part of the financial statements. 78 Table of Contents CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, PPL Corporation and Subsidiaries (Millions of Dollars, shares in thousands) 2025 2024 Liabilities and Equity Current Liabilities Short-term debt $ 456 $ 303 Long-term debt due within one year 904 551 Accounts payable 1,559 1,196 Taxes 190 103 Interest 195 157 Dividends 198 186 Regulatory liabilities 376 223 Other current liabilities 668 614 Total Current Liabilities 4,546 3,333 Long-term Debt 17,990 15,952 Deferred Credits and Other Noncurrent Liabilities Deferred income taxes 3,506 3,356 Investment tax credits 109 111 Accrued pension obligations 281 317 Asset retirement obligations 133 136 Regulatory liabilities 3,318 3,335 Other deferred credits and noncurrent liabilities 480 452 Total Deferred Credits and Other Noncurrent Liabilities 7,827 7,707 Commitments and Contingent Liabilities (Notes 7 and 12) Equity Common stock - $ 0.01 par value (a) 8 8 Additional paid-in capital 12,443 12,346 Treasury stock ( 575 ) ( 928 ) Earnings reinvested 3,207 2,835 Accumulated other comprehensive loss ( 202 ) ( 184 ) Total Equity 14,881 14,077 Total Liabilities and Equity $ 45,244 $ 41,069 (a) 1,560,000 shares authorized; 770,978 shares issued and 751,041 shares outstanding at December 31, 2025. 1,560,000 shares authorized; 770,215 shares issued and 738,033 shares outstanding at December 31, 2024. The accompanying Notes to Financial Statements are an integral part of the financial statements. 79 Table of Contents CONSOLIDATED STATEMENTS OF EQUITY PPL Corporation and Subsidiaries (Millions of Dollars) Common stock shares outstanding (a) Common stock Additional paid-in capital Treasury Stock Earnings reinvested Accumulated other comprehensive loss Noncontrolling interest Total December 31, 2022 736,487 $ 8 $ 12,317 $ ( 967 ) $ 2,681 $ ( 124 ) $ 3 $ 13,918 Treasury stock issued 643 4 19 23 Stock-based compensation 5 5 Net income 740 740 Dividends and dividend equivalents (b) ( 711 ) ( 711 ) Preferred stock ( 3 ) ( 3 ) Other comprehensive income (loss) ( 39 ) ( 39 ) December 31, 2023 737,130 $ 8 $ 12,326 $ ( 948 ) $ 2,710 $ ( 163 ) $ — $ 13,933 Common stock issued 202 — Treasury stock issued 701 7 20 27 Stock-based compensation 13 13 Net income 888 888 Dividends and dividend equivalents (b) ( 763 ) ( 763 ) Other comprehensive income (loss) ( 21 ) ( 21 ) December 31, 2024 738,033 $ 8 $ 12,346 $ ( 928 ) $ 2,835 $ ( 184 ) $ — $ 14,077 Common stock issued 763 26 26 Treasury stock issued 12,245 67 353 420 Stock-based compensation 4 4 Net income 1,181 1,181 Dividends and dividend equivalents (b) ( 809 ) ( 809 ) Other comprehensive income (loss) ( 18 ) ( 18 ) December 31, 2025 751,041 $ 8 $ 12,443 $ ( 575 ) $ 3,207 $ ( 202 ) $ — $ 14,881 (a) Shares in thousands. Each share entitles the holder to one vote on any question presented at any shareowners' meeting. (b) Dividends declared per share of common stock at December 31, 2025, 2024 and 2023 were: $ 1.09 , $ 1.03 and $ 0.96 . The accompanying Notes to Financial Statements are an integral part of the financial statements. 80 Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) 81 Table of Contents CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, PPL Electric Utilities Corporation and Subsidiaries (Millions of Dollars) 2025 2024 2023 Operating Revenues $ 3,113 $ 2,876 $ 3,008 Operating Expenses Operation Energy purchases 876 721 992 Other operation and maintenance 630 705 605 Depreciation 413 401 397 Taxes, other than income 151 131 143 Total Operating Expenses 2,070 1,958 2,137 Operating Income 1,043 918 871 Other Income (Expense) - net (Note 14) 48 45 39 Interest Income from Affiliate 9 33 — Interest Expense 257 246 223 Income Before Income Taxes 843 750 687 Income Taxes 204 176 168 Net Income (a) $ 639 $ 574 $ 519 (a) Net income equals comprehensive income. The accompanying Notes to Financial Statements are an integral part of the financial statements. 82 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, PPL Electric Utilities Corporation and Subsidiaries (Millions of Dollars) 2025 2024 2023 Cash Flows from Operating Activities Net income $ 639 $ 574 $ 519 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 413 401 397 Amortization 48 45 41 Defined benefit plans - income ( 29 ) ( 39 ) ( 42 ) Deferred income taxes and investment tax credits 24 129 46 Equity component of AFUDC ( 30 ) ( 23 ) ( 16 ) Other 4 24 ( 8 ) Change in current assets and current liabilities Accounts receivable ( 142 ) 89 ( 78 ) Accounts payable 99 64 13 Unbilled revenues ( 50 ) ( 10 ) 75 Materials and supplies ( 40 ) 6 ( 30 ) Prepayments 49 ( 32 ) 2 Regulatory assets and liabilities, net 67 ( 101 ) ( 38 ) Taxes payable 45 ( 49 ) 15 Accrued interest 11 12 8 Other ( 8 ) ( 25 ) 9 Other operating activities Defined benefit plans - funding — — ( 5 ) Other assets ( 50 ) ( 32 ) 3 Other liabilities — 9 1 Net cash provided by operating activities 1,050 1,042 912 Cash Flows from Investing Activities Expenditures for property, plant and equipment ( 1,608 ) ( 1,229 ) ( 956 ) Expenditures for intangible assets ( 12 ) ( 9 ) ( 6 ) Net (increase) decrease in notes receivable from affiliate 79 ( 222 ) — Other investing activities 38 5 4 Net cash used in investing activities ( 1,503 ) ( 1,455 ) ( 958 ) Cash Flows from Financing Activities Issuance of long-term debt 496 649 1,329 Retirement of long-term debt — — ( 1,240 ) Contributions from parent 540 688 206 Payment of common stock dividends to parent ( 401 ) ( 375 ) ( 323 ) Return of capital to parent ( 170 ) ( 60 ) ( 250 ) Net increase (decrease) in short-term debt — ( 509 ) 364 Debt issuance costs ( 6 ) ( 7 ) ( 14 ) Net cash provided by financing activities 459 386 72 Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 6 ( 27 ) 26 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 24 51 25 Cash, Cash Equivalents and Restricted Cash at End of Period $ 30 $ 24 $ 51 Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest - net of amount capitalized $ 236 $ 224 $ 205 Income taxes - net $ 129 $ 83 $ 92 Significant non-cash transactions: Accrued expenditures for property, plant and equipment at December 31, $ 213 $ 173 $ 122 The accompanying Notes to Financial Statements are an integral part of the financial statements. 83 Table of Contents CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, PPL Electric Utilities Corporation and Subsidiaries (Millions of Dollars, shares in thousands) 2025 2024 Assets Current Assets Cash and cash equivalents $ 30 $ 24 Accounts receivable (less reserve: 2025, $ 34 ; 2024, $ 37 ) Customer 450 353 Other 29 8 Accounts receivable from affiliates 7 10 Notes receivable from affiliate 143 222 Unbilled revenues (less reserve: 2025, $ 4 ; 2024, $ 3 ) 209 159 Materials and supplies 151 104 Prepayments 38 74 Regulatory assets 112 133 Other current assets 46 30 Total Current Assets 1,215 1,117 Property, Plant and Equipment Regulated utility plant 17,476 16,469 Less: accumulated depreciation - regulated utility plant 4,124 4,052 Regulated utility plant, net 13,352 12,417 Construction work in progress 1,216 898 Property, Plant and Equipment, net 14,568 13,315 Other Noncurrent Assets Regulatory assets 725 673 Intangibles 282 274 Other noncurrent assets (less reserve for accounts receivable: 2025, $ 1 ; 2024, $ 1 ) 96 96 Total Other Noncurrent Assets 1,103 1,043 Total Assets $ 16,886 $ 15,475 The accompanying Notes to Financial Statements are an integral part of the financial statements. 84 Table of Contents CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, PPL Electric Utilities Corporation and Subsidiaries (Millions of Dollars, shares in thousands) 2025 2024 Liabilities and Equity Current Liabilities Accounts payable $ 690 $ 565 Accounts payable to affiliates 54 44 Taxes 47 2 Interest 66 55 Customer deposits 92 25 Regulatory liabilities 103 57 Other current liabilities 58 58 Total Current Liabilities 1,110 806 Long-term Debt 5,707 5,214 Deferred Credits and Other Noncurrent Liabilities Deferred income taxes 1,781 1,726 Regulatory liabilities 828 839 Other deferred credits and noncurrent liabilities 122 160 Total Deferred Credits and Other Noncurrent Liabilities 2,731 2,725 Commitments and Contingent Liabilities (Notes 7 and 12) Equity Common stock - no par value (a) 364 364 Additional paid-in capital 5,038 4,668 Earnings reinvested 1,936 1,698 Total Equity 7,338 6,730 Total Liabilities and Equity $ 16,886 $ 15,475 (a) 170,000 shares authorized; 66,368 shares issued and outstanding at December 31, 2025 and December 31, 2024 . The accompanying Notes to Financial Statements are an integral part of the financial statements. 85 Table of Contents CONSOLIDATED STATEMENTS OF EQUITY PPL Electric Utilities Corporation and Subsidiaries (Millions of Dollars) Common stock shares outstanding (a) Common stock Additional paid-in capital Earnings reinvested Total December 31, 2022 66,368 $ 364 $ 4,084 $ 1,303 $ 5,751 Net income 519 519 Capital contributions from parent 206 206 Return of capital to parent ( 250 ) ( 250 ) Dividends declared ( 323 ) ( 323 ) December 31, 2023 66,368 $ 364 $ 4,040 $ 1,499 $ 5,903 Net income 574 574 Capital contributions from parent 688 688 Return of capital to parent ( 60 ) ( 60 ) Dividends declared ( 375 ) ( 375 ) December 31, 2024 66,368 $ 364 $ 4,668 $ 1,698 $ 6,730 Net income 639 639 Capital contributions from parent 540 540 Return of capital to parent ( 170 ) ( 170 ) Dividends declared ( 401 ) ( 401 ) December 31, 2025 66,368 $ 364 $ 5,038 $ 1,936 $ 7,338 (a) Shares in thousands. All common shares of PPL Electric stock are owned by PPL. The accompanying Notes to Financial Statements are an integral part of the financial statements. 86 Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) 87 Table of Contents STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, Louisville Gas and Electric Company (Millions of Dollars) 2025 2024 2023 Operating Revenues Retail and wholesale $ 1,718 $ 1,617 $ 1,580 Electric revenue from affiliate 30 31 33 Total Operating Revenues 1,748 1,648 1,613 Operating Expenses Operation Fuel 338 308 286 Energy purchases 187 151 168 Energy purchases from affiliate 22 20 12 Other operation and maintenance 364 349 364 Depreciation 307 305 302 Taxes, other than income 51 49 48 Total Operating Expenses 1,269 1,182 1,180 Operating Income 479 466 433 Other Income (Expense) - net (Note 14) 24 12 3 Interest Income from Affiliate — 1 1 Interest Expense 116 105 102 Income Before Income Taxes 387 374 335 Income Taxes 78 77 69 Net Income (a) $ 309 $ 297 $ 266 (a) Net income equals comprehensive income. The accompanying Notes to Financial Statements are an integral part of the financial statements. 88 Table of Contents STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, Louisville Gas and Electric Company (Millions of Dollars) 2025 2024 2023 Cash Flows from Operating Activities Net income $ 309 $ 297 $ 266 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation 307 305 302 Amortization 24 16 14 Equity component of AFUDC ( 16 ) ( 8 ) ( 3 ) Deferred income taxes and investment tax credits ( 9 ) 6 ( 14 ) Other 6 2 ( 4 ) Change in current assets and current liabilities Accounts receivable ( 10 ) ( 25 ) 40 Accounts receivable from affiliates ( 6 ) ( 11 ) 7 Accounts payable 14 12 ( 40 ) Accounts payable to affiliates 6 15 ( 8 ) Unbilled revenues ( 10 ) 1 24 Fuel, materials and supplies ( 2 ) ( 13 ) 24 Regulatory assets and liabilities, net ( 12 ) ( 3 ) 25 Taxes payable 20 ( 1 ) — Accrued interest 13 — 5 Other ( 5 ) — 1 Other operating activities Expenditures for asset retirement obligations ( 9 ) ( 11 ) ( 11 ) Other assets ( 43 ) ( 27 ) ( 21 ) Other liabilities 22 ( 1 ) 2 Net cash provided by operating activities 599 554 609 Cash Flows from Investing Activities Expenditures for property, plant and equipment ( 767 ) ( 444 ) ( 378 ) Notes receivable from affiliates ( 36 ) — — Net cash used in investing activities ( 803 ) ( 444 ) ( 378 ) Cash Flows from Financing Activities Net increase (decrease) in notes payable with affiliates ( 43 ) 43 — Issuance of long-term debt 700 — 464 Retirement of long-term debt ( 300 ) — ( 300 ) Payment of common stock dividends to parent ( 200 ) ( 187 ) ( 166 ) Contributions from parent 281 65 67 Return of capital to parent ( 55 ) ( 76 ) ( 161 ) Debt issuance costs ( 9 ) — ( 5 ) Net increase (decrease) in short-term debt ( 25 ) 25 ( 179 ) Net cash provided by (used in) financing activities 349 ( 130 ) ( 280 ) Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 145 ( 20 ) ( 49 ) Cash, Cash Equivalents and Restricted Cash at Beginning of Period 24 44 93 Cash, Cash Equivalents and Restricted Cash at End of Period $ 169 $ 24 $ 44 Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest - net of amount capitalized $ 103 $ 101 $ 93 Income taxes - net $ 81 $ 73 $ 84 Significant non-cash transactions: Accrued expenditures for property, plant and equipment at December 31, $ 142 $ 64 $ 30 The accompanying Notes to Financial Statements are an integral part of the financial statements. 89 Table of Contents BALANCE SHEETS AT DECEMBER 31, Louisville Gas and Electric Company (Millions of Dollars, shares in thousands) 2025 2024 Assets Current Assets Cash and cash equivalents $ 162 $ 8 Accounts receivable (less reserve: 2025, $ 5 ; 2024, $ 3 ) Customer 154 134 Other 26 23 Unbilled revenues (less reserve: 2025, $ 0 ; 2024, $ 0 ) 97 87 Accounts receivable from affiliates 46 40 Notes receivable from affiliates 36 — Fuel, materials and supplies 160 157 Prepayments 11 9 Regulatory assets 19 8 Other current assets 2 2 Total Current Assets 713 468 Property, Plant and Equipment Regulated utility plant 8,270 7,748 Less: accumulated depreciation - regulated utility plant 1,842 1,643 Regulated utility plant, net 6,428 6,105 Construction work in progress 689 443 Property, Plant and Equipment, net 7,117 6,548 Other Noncurrent Assets Regulatory assets 482 491 Goodwill 389 389 Other intangibles 11 12 Other noncurrent assets 106 84 Total Other Noncurrent Assets 988 976 Total Assets $ 8,818 $ 7,992 The accompanying Notes to Financial Statements are an integral part of the financial statements. 90 Table of Contents BALANCE SHEETS AT DECEMBER 31, Louisville Gas and Electric Company (Millions of Dollars, shares in thousands) 2025 2024 Liabilities and Equity Current Liabilities Short-term debt $ — $ 25 Notes payable with affiliates — 43 Long-term debt due within one year 90 300 Accounts payable 262 158 Accounts payable to affiliates 73 64 Customer deposits 37 36 Taxes 60 40 Regulatory liabilities 13 14 Interest 34 21 Asset retirement obligations 2 11 Other current liabilities 54 50 Total Current Liabilities 625 762 Long-term Debt 2,775 2,171 Deferred Credits and Other Noncurrent Liabilities Deferred income taxes 819 803 Investment tax credits 29 30 Price risk management liabilities 4 3 Asset retirement obligations 73 73 Regulatory liabilities 809 815 Other deferred credits and noncurrent liabilities 78 64 Total Deferred Credits and Other Noncurrent Liabilities 1,812 1,788 Commitments and Contingent Liabilities (Notes 7 and 12) Equity Common stock - no par value (a) 424 424 Additional paid-in capital 2,208 1,982 Earnings reinvested 974 865 Total Equity 3,606 3,271 Total Liabilities and Equity $ 8,818 $ 7,992 (a) 75,000 shares authorized; 21,294 shares issued and outstanding at December 31, 2025 and December 31, 2024. The accompanying Notes to Financial Statements are an integral part of the financial statements. 91 Table of Contents STATEMENTS OF EQUITY Louisville Gas and Electric Company (Millions of Dollars) Common stock shares outstanding (a) Common stock Additional paid-in capital Earnings reinvested Total December 31, 2022 21,294 $ 424 $ 2,087 $ 655 $ 3,166 Net income 266 266 Capital contributions from parent 67 67 Return of capital to parent ( 161 ) ( 161 ) Cash dividends declared ( 166 ) ( 166 ) December 31, 2023 21,294 $ 424 $ 1,993 $ 755 $ 3,172 Net income 297 297 Capital contributions from parent 65 65 Return of capital to parent ( 76 ) ( 76 ) Cash dividends declared ( 187 ) ( 187 ) December 31, 2024 21,294 $ 424 $ 1,982 $ 865 $ 3,271 Net income 309 309 Capital contributions from parent 281 281 Return of capital to parent ( 55 ) ( 55 ) Cash dividends declared ( 200 ) ( 200 ) December 31, 2025 21,294 $ 424 $ 2,208 $ 974 $ 3,606 (a) Shares in thousands. All common shares of LG&E stock are owned by LKE. The accompanying Notes to Financial Statements are an integral part of the financial statements. 92 Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) 93 Table of Contents STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, Kentucky Utilities Company (Millions of Dollars) 2025 2024 2023 Operating Revenues Retail and wholesale $ 2,042 $ 1,944 $ 1,872 Electric revenue from affiliate 22 20 12 Total Operating Revenues 2,064 1,964 1,884 Operating Expenses Operation Fuel 517 476 447 Energy purchases 26 25 24 Energy purchases from affiliate 30 31 33 Other operation and maintenance 416 413 427 Depreciation 408 403 392 Taxes, other than income 51 49 45 Total Operating Expenses 1,448 1,397 1,368 Operating Income 616 567 516 Other Income (Expense) - net (Note 14) 29 15 8 Interest Expense 148 137 134 Interest Expense from Affiliate — — 1 Income Before Income Taxes 497 445 389 Income Taxes 99 89 77 Net Income (a) $ 398 $ 356 $ 312 (a) Net income equals comprehensive income. The accompanying Notes to Financial Statements are an integral part of the financial statements. 94 Table of Contents STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, Kentucky Utilities Company (Millions of Dollars) 2025 2024 2023 Cash Flows from Operating Activities Net income $ 398 $ 356 $ 312 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation 408 403 392 Amortization 21 21 20 Defined benefit plans - income ( 3 ) ( 5 ) ( 5 ) Equity component of AFUDC ( 21 ) ( 9 ) ( 3 ) Deferred income taxes and investment tax credits — ( 15 ) ( 10 ) Other 11 5 1 Change in current assets and current liabilities Accounts receivable ( 2 ) ( 21 ) 16 Accounts payable 1 ( 23 ) ( 26 ) Accounts payable to affiliates 7 29 ( 24 ) Unbilled revenues ( 4 ) ( 5 ) 17 Fuel, materials and supplies ( 8 ) 14 ( 17 ) Regulatory assets and liabilities, net ( 6 ) 23 25 Taxes payable 26 5 5 Accrued interest 14 — 5 Other ( 4 ) ( 5 ) ( 4 ) Other operating activities Expenditures for asset retirement obligations ( 11 ) ( 10 ) ( 28 ) Other assets ( 21 ) ( 41 ) ( 25 ) Other liabilities ( 8 ) 1 ( 4 ) Net cash provided by operating activities 798 723 647 Cash Flows from Investing Activities Expenditures for property, plant and equipment ( 983 ) ( 643 ) ( 572 ) Other investing activities ( 3 ) — 6 Net cash used in investing activities ( 986 ) ( 643 ) ( 566 ) Cash Flows from Financing Activities Net increase (decrease) in notes payable with affiliates ( 37 ) 73 — Issuance of long-term debt 700 — 459 Retirement of long-term debt ( 250 ) — ( 313 ) Payment of common stock dividends to parent ( 249 ) ( 232 ) ( 190 ) Contributions from parent 198 126 76 Return of capital to parent ( 37 ) ( 103 ) ( 84 ) Debt issuance costs ( 9 ) — ( 4 ) Net increase (decrease) in short-term debt ( 140 ) 47 ( 8 ) Net cash provided by (used in) financing activities 176 ( 89 ) ( 64 ) Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ( 12 ) ( 9 ) 17 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 29 38 21 Cash, Cash Equivalents and Restricted Cash at End of Period $ 17 $ 29 $ 38 Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest - net of amount capitalized $ 138 $ 135 $ 125 Income taxes - net $ 94 $ 102 $ 78 Significant non-cash transactions: Accrued expenditures for property, plant and equipment at December 31, $ 101 $ 74 $ 38 The accompanying Notes to Financial Statements are an integral part of the financial statements. 95 Table of Contents BALANCE SHEETS AT DECEMBER 31, Kentucky Utilities Company (Millions of Dollars, shares in thousands) 2025 2024 Assets Current Assets Cash and cash equivalents $ 10 $ 13 Accounts receivable (less reserve: 2025, $ 4 ; 2024, $ 2 ) Customer 171 160 Other 26 22 Unbilled revenues (less reserve: 2025, $ 0 ; 2024, $ 0 ) 106 102 Fuel, materials and supplies 183 173 Prepayments 12 11 Regulatory assets 1 1 Other current assets 16 9 Total Current Assets 525 491 Property, Plant and Equipment Regulated utility plant 10,929 10,419 Less: accumulated depreciation - regulated utility plant 2,934 2,652 Regulated utility plant, net 7,995 7,767 Construction work in progress 952 567 Property, Plant and Equipment, net 8,947 8,334 Other Noncurrent Assets Regulatory assets 467 458 Goodwill 607 607 Other intangibles 34 28 Other noncurrent assets 178 155 Total Other Noncurrent Assets 1,286 1,248 Total Assets $ 10,758 $ 10,073 The accompanying Notes to Financial Statements are an integral part of the financial statements. 96 Table of Contents BALANCE SHEETS AT DECEMBER 31, Kentucky Utilities Company (Millions of Dollars, shares in thousands) 2025 2024 Liabilities and Equity Current Liabilities Short-term debt $ — $ 140 Notes payable with affiliates 36 73 Long-term debt due within one year 164 250 Accounts payable 137 96 Accounts payable to affiliates 106 100 Customer deposits 41 39 Taxes 63 37 Regulatory liabilities 16 22 Interest 38 24 Asset retirement obligations 6 10 Other current liabilities 69 58 Total Current Liabilities 676 849 Long-term Debt 3,346 2,816 Deferred Credits and Other Noncurrent Liabilities Deferred income taxes 956 924 Investment tax credits 79 81 Asset retirement obligations 51 54 Regulatory liabilities 997 1,009 Other deferred credits and noncurrent liabilities 44 41 Total Deferred Credits and Other Noncurrent Liabilities 2,127 2,109 Commitments and Contingent Liabilities (Notes 7 and 12) Equity Common stock - no par value (a) 308 308 Additional paid-in capital 3,217 3,056 Earnings reinvested 1,084 935 Total Equity 4,609 4,299 Total Liabilities and Equity $ 10,758 $ 10,073 (a) 80,000 shares authorized; 37,818 shares issued and outstanding at December 31, 2025 and December 31, 2024. The accompanying Notes to Financial Statements are an integral part of the financial statements. 97 Table of Contents STATEMENTS OF EQUITY Kentucky Utilities Company (Millions of Dollars) Common stock shares outstanding (a) Common stock Additional paid-in capital Earnings reinvested Total December 31, 2022 37,818 $ 308 $ 3,041 $ 689 $ 4,038 Net income 312 312 Capital contributions from parent 76 76 Return of capital to parent ( 84 ) ( 84 ) Cash dividends declared ( 190 ) ( 190 ) December 31, 2023 37,818 $ 308 $ 3,033 $ 811 $ 4,152 Net income 356 356 Capital contributions from parent 126 126 Return of capital to parent ( 103 ) ( 103 ) Cash dividends declared ( 232 ) ( 232 ) December 31, 2024 37,818 $ 308 $ 3,056 $ 935 $ 4,299 Net income 398 398 Capital contributions from parent 198 198 Return of capital to parent ( 37 ) ( 37 ) Cash dividends declared ( 249 ) ( 249 ) December 31, 2025 37,818 $ 308 $ 3,217 $ 1,084 $ 4,609 (a) Shares in thousands. All common shares of KU stock are owned by LKE. The accompanying Notes to Financial Statements are an integral part of the financial statements. 98 Table of Contents COMBINED NOTES TO FINANCIAL STATEMENTS Index to Combined Notes to Consolidated Financial Statements The notes to the consolidated financial statements that follow are a combined presentation. The following list indicates the Registrants to which the footnotes apply: Registrant PPL PPL Electric LG&E KU 1. Summary of Significant Accounting Policies x x x x 2. Segment and Related Information x x x x 3. Revenue from Contracts with Customers x x x x 4. Preferred Securities x x x x 5. Earnings Per Share x 6. Income and Other Taxes x x x x 7. Utility Rate Regulation x x x x 8. Financing Activities x x x x 9. Acquisitions, Development and Divestitures x x x 10. Retirement and Postemployment Benefits x x x x 11. Jointly Owned Facilities x x x 12. Commitments and Contingencies x x x x 13. Related Party Transactions x x x 14. Other Income (Expense) - net x x x x 15. Fair Value Measurements x x x x 16. Derivative Instruments and Hedging Activities x x x x 17. Goodwill and Other Intangible Assets x x x x 18. Asset Retirement Obligations x x x x 19. Accumulated Other Comprehensive Income (Loss) x 20. New Accounting Guidance Pending Adoption x x x x 1. Summary of Significant Accounting Policies (All Registrants) General Capitalized terms and abbreviations appearing in the combined notes to financial statements are defined in the glossary. Dollars are in millions, except per share data, unless otherwise noted. The specific Registrant to which disclosures are applicable is identified in parenthetical headings in italics above the applicable disclosure or within the applicable disclosure for each Registrants' related activities and disclosures. Within combined disclosures, amounts are disclosed for any Registrant when significant. Business and Consolidation (PPL) PPL is a utility holding company that, through its regulated subsidiaries, is primarily engaged in: 1) the generation, transmission, distribution and sale of electricity and the distribution and sale of natural gas, primarily in Kentucky; 2) the transmission, distribution and sale of electricity in Pennsylvania; and 3) the transmission, distribution and sale of electricity and the distribution and sale of natural gas in Rhode Island. Headquartered in Allentown, PA, PPL's principal subsidiaries are LG&E, KU, RIE and PPL Electric. PPL's corporate level financing subsidiary is PPL Capital Funding. 99 Table of Contents (PPL and PPL Electric) PPL Electric's principal business is the transmission and distribution of electricity to serve retail customers in its franchised territory in eastern and central Pennsylvania and the regulated supply of electricity to retail customers in that territory as a PLR. (PPL, LG&E and KU) LG&E and KU are engaged in the generation, transmission, distribution and sale of electricity. LG&E also engages in the distribution and sale of natural gas. LG&E and KU maintain their separate identities and serve customers in Kentucky under their respective names. KU also serves customers in Virginia under the Old Dominion Power name. (All Registrants) The financial statements of the Registrants include each company's own accounts as well as the accounts of all entities in which the company has a controlling financial interest. Entities for which a controlling financial interest is not demonstrated through voting interests are evaluated based on accounting guidance for Variable Interest Entities (VIEs). The Registrants consolidate a VIE when they are determined to have a controlling interest in the VIE and, as a result, are the primary beneficiary of the entity. Amounts consolidated under the VIE guidance are not material to the Registrants. All significant intercompany transactions have been eliminated. The financial statements of PPL, LG&E and KU include their share of any undivided interests in jointly owned facilities, as well as their share of the related operating costs of those facilities. See Note 11 for additional information. Regulation (All Registrants) PPL Electric, RIE, LG&E and KU are cost-based rate-regulated utilities for which rates are set by regulators to enable PPL Electric, RIE, LG&E and KU to recover the costs of providing electric or gas service, as applicable, and to provide a reasonable return to shareholders. Base rates are generally established based on a future test period. As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by GAAP and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates. The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates. In certain cases, regulatory liabilities are recorded based on an understanding or agreement with the regulator that rates have been set to recover expected future costs, and the regulated entity is accountable for any amounts charged pursuant to such rates and not yet expended for the intended purpose. The accounting for regulatory assets and regulatory liabilities is based on specific ratemaking decisions or precedent for each transaction or event as prescribed by the FERC or the applicable state regulatory commissions. See Note 7 for additional details regarding regulatory matters. Accounting Records The system of accounts for regulated entities is maintained in accordance with the Uniform System of Accounts prescribed by the FERC and adopted by the applicable state regulatory commissions. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Loss Accruals Potential losses are accrued when (1) information is available that indicates it is "probable" that a loss has been incurred, given the likelihood of uncertain future events and (2) the amount of loss can be reasonably estimated. Accounting guidance defines "probable" as cases in which "the future event or events are likely to occur." 100 Table of Contents The Registrants continuously assess potential loss contingencies for environmental remediation, litigation claims, regulatory penalties and other events. Loss accruals for environmental remediation are discounted when appropriate. The accrual of contingencies that might result in gains is not recorded, unless realization is assured. Earnings Per Share (PPL) EPS is computed using the two-class method, which is an earnings allocation method for computing EPS that treats a participating security as having rights to earnings that would otherwise have been available to common shareowners. Share-based payment awards that provide recipients a non-forfeitable right to dividends or dividend equivalents are considered participating securities. The if-converted method, which assumes the securities were converted to common stock at the start of the period (or issuance), is used to determine the dilutive effects of convertible securities. Price Risk Management (All Registrants) Interest rate contracts are used to hedge exposure to changes in the fair value of debt instruments and to hedge exposure to variability in expected cash flows associated with existing floating-rate debt instruments or forecasted fixed-rate issuances of debt. Derivative instruments pursuant to regulator approved plans to manage commodity price risk associated with natural gas purchases to reduce fluctuations in natural gas prices and costs associated with these derivatives instruments are generally recoverable through approved cost recovery mechanism. Similar derivatives may receive different accounting treatment, depending on management's intended use and documentation. Certain contracts may not meet the definition of a derivative because they lack a notional amount or a net settlement provision. In cases where there is no net settlement provision, markets are periodically assessed to determine whether market mechanisms have evolved to facilitate net settlement. Certain derivative contracts may be excluded from the requirements of derivative accounting treatment because NPNS has been elected. These contracts are accounted for using accrual accounting. Contracts that have been classified as derivative contracts are reflected on the balance sheets at fair value. Cash inflows and outflows related to derivative instruments are included as a component of operating, investing or financing activities on the Statements of Cash Flows, depending on the classification of the hedged items. PPL and its subsidiaries have elected not to offset net derivative positions against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. Derivative transactions may be marked to fair value through regulatory assets/liabilities at PPL Electric, RIE, LG&E and KU, if approved by the appropriate regulatory body. These transactions generally include the effect of interest rate swaps or commodity gas contracts that are included in customer rates. See Notes 15 and 16 for additional information on derivatives. (PPL and PPL Electric) To meet their obligations as last resort providers of electricity supply to their customers, PPL Electric and RIE have entered into certain contracts that meet the definition of a derivative. However, NPNS has been elected for these contracts. Revenue (All Registrants) Operating revenues are primarily recorded based on energy deliveries through the end of each calendar month. Unbilled retail revenues result because customers' bills are rendered throughout the month, rather than at the end of the month. For RIE, LG&E and KU, unbilled revenues for a month are calculated by multiplying an estimate of unbilled kWh or Mcf by the estimated average price per kWh or Mcf. Any difference between estimated and actual revenues is adjusted the following month when the previous unbilled estimate is reversed and actual billings occur. For PPL Electric, unbilled revenues for a month are calculated by multiplying the actual unbilled volumes by the applicable tariff price. 101 Table of Contents PPL Electric's, RIE's, LG&E's and KU's base rates are determined based on cost of service. Some regulators have also authorized the use of additional alternative revenue programs, which enable PPL Electric, RIE, LG&E and KU to adjust future rates based on past activities or completed events. Revenues from alternative revenue programs are recognized when the specific events permitting future billings have occurred. Revenues from alternative revenue programs are required to be presented separately from revenues from contracts with customers. These amounts are, however, presented as revenues from contracts with customers, with an offsetting adjustment to alternative revenue program revenue, when they are billed to customers in future periods. See Note 3 for additional information. Financing and Other Receivables (All Registrants) Accounts receivable are reported on the Balance Sheets at the gross outstanding amount adjusted for an allowance for doubtful accounts. Financing receivables include accounts receivable, with the exception of those items within accounts receivable that are not subject to the current expected credit loss model. Financing receivable collectability is evaluated using a current expected credit loss model, consisting of a combination of factors, including past due status based on contractual terms, trends in write-offs and the age of the receivable. Specific events, such as bankruptcies, are also considered when applicable. The Registrants also evaluate the impact of observable external factors on the collectability of the financing receivables to determine if adjustments to the allowance for doubtful accounts should be made based on current conditions or reasonable and supportable forecasts. Adjustments to the allowance for doubtful accounts are made based on the results of these analyses. Accounts receivable are written off in the period in which the receivable is deemed uncollectible. PPL Electric, RIE, LG&E and KU have identified one class of financing receivables, "accounts receivable - customer", which includes financing receivables for all billed and unbilled sales with customers. All other financing receivables are classified as other. The changes in the allowance for doubtful accounts are included in the following table. Amounts relate to financing receivables, except as noted. Additions Balance at Beginning of Period Charged to Income Deductions (a) Balance at End of Period PPL 2025 $ 154 $ 84 $ 98 $ 140 (b) 2024 130 109 85 154 (b) 2023 95 87 52 130 (b) PPL Electric 2025 $ 41 $ 33 $ 35 $ 39 (c) 2024 50 56 65 41 (c) 2023 33 52 35 50 (c) LG&E 2025 $ 3 $ 4 $ 2 $ 5 2024 6 4 7 3 2023 4 4 2 6 KU 2025 $ 2 $ 5 $ 3 $ 4 2024 2 4 4 2 2023 3 3 4 2 (a) Primarily related to uncollectible accounts written off. (b) Includes $ 43 million, $ 39 million and $ 41 million related to other accounts receivable at December 31, 2025, 2024 and 2023. (c) Includes $ 2 million, $ 2 million and $ 3 million related to other accounts receivable at December 31, 2025, 2024 and 2023. 102 Table of Contents Cash (All Registrants) Cash Equivalents All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. (PPL, LG&E and KU) Restricted Cash and Cash Equivalents Bank deposits and other cash equivalents that are restricted by agreement or that have been clearly designated for a specific purpose are classified as restricted cash and cash equivalents. On the Balance Sheets, the current portion of restricted cash and cash equivalents is included in "Other current assets," while the noncurrent portion is included in "Other noncurrent assets." See Note 15 for a reconciliation of Cash, Cash Equivalents and Restricted Cash reported within the Balance Sheets to the amounts shown on the Statements of Cash Flows. (All Registrants) Fair Value Measurements The Registrants value certain financial and non-financial assets and liabilities at fair value. Generally, the most significant fair value measurements relate to price risk management assets and liabilities, investments in securities in defined benefit plans, and cash and cash equivalents. PPL and its subsidiaries use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models) and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. The Registrants classify fair value measurements within one of three levels in the fair value hierarchy. The level assigned to a fair value measurement is based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows: • Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 - inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for substantially the full term of the asset or liability. • Level 3 - unobservable inputs that management believes are predicated on the assumptions market participants would use to measure the asset or liability at fair value. Assessing the significance of a particular input requires judgment that considers factors specific to the asset or liability. As such, the Registrants' assessment of the significance of a particular input may affect how the assets and liabilities are classified within the fair value hierarchy. 103 Table of Contents Investments Generally, the original maturity date of an investment and management's intent and ability to sell an investment prior to its original maturity determine the classification of investments as either short-term or long-term. Investments that would otherwise be classified as short-term, but are restricted as to withdrawal or use for other than current operations or are clearly designated for expenditure in the acquisition or construction of noncurrent assets or for the liquidation of long-term debts, are classified as long-term. Investments in entities in which a company has the ability to exercise significant influence but does not have a controlling financial interest are accounted for under the equity method. All other investments are carried at cost or fair value. These investments are included in "Other noncurrent assets" on the Balance Sheets. Earnings from these investments are recorded in "Other Income (Expense) - net" on the Statements of Income. Short-term investments generally include certain deposits as well as securities that are considered highly liquid or provide for periodic reset of interest rates. Investments with original maturities greater than three months and less than a year, as well as investments with original maturities of greater than a year that management has the ability and intent to sell within a year, are included in "Other current assets" on the Balance Sheets. Long-Lived and Intangible Assets Property, Plant and Equipment PP&E is recorded at original cost, unless impaired. If impaired, the asset is written down to fair value at that time, which becomes the new cost basis of the asset. PP&E acquired in business combinations is recorded at fair value at the time of acquisition. Original cost for constructed assets includes material, labor, contractor costs, certain overheads and financing costs, where applicable. Included in PP&E are capitalized costs of software projects that were developed or obtained for internal use. The cost of repairs and minor replacements are charged to expense as incurred. The Registrants record costs associated with planned major maintenance projects in the period in which work is performed and costs are incurred. AFUDC is capitalized at PPL Electric and RIE as part of the construction costs for cost-based rate-regulated projects for which a return on such costs is recovered after the project is placed in service. AFUDC is capitalized at LG&E and KU for certain projects as part of the construction cost of approved projects. LG&E and KU are generally provided a return on construction work in progress for other projects. The debt component of AFUDC is credited to "Interest Expense" and the equity component is credited to "Other Income (Expense) - net" on the Statements of Income. The Registrants capitalize interest costs as part of construction costs. Capitalized interest, including the debt component of AFUDC, for the years ended December 31 is as follows: 2025 2024 2023 PPL $ 32 $ 20 $ 12 PPL Electric 13 9 7 LG&E 6 3 1 KU 8 4 1 Depreciation Depreciation is recorded over the estimated useful lives of property using various methods including the straight-line, composite and group methods. When a component of PP&E that was depreciated under the composite or group method is retired, the original cost is charged to accumulated depreciation. When all or a significant portion of an operating unit that was depreciated under the composite or group method is retired or sold, the property and the related accumulated depreciation account is reduced and any gain or loss is included in income, unless otherwise required by regulators. RIE, LG&E and KU accrue costs of removal net of estimated salvage value through depreciation, which is included in the calculation of customer rates over the assets' depreciable lives in accordance with regulatory practices. Cost of removal amounts accrued through depreciation rates are accumulated as a regulatory liability until the removal costs are incurred. For LG&E and KU, all ARO depreciation expenses are reclassified to a regulatory asset or regulatory liability. See "Asset Retirement Obligations" below and Note 7 for additional information. PPL Electric records net costs of removal when incurred as a regulatory asset. The regulatory asset is subsequently amortized through depreciation over a five-year period, which is recoverable in customer rates in accordance with regulatory practices. 104 Table of Contents Following are the weighted-average annual rates of depreciation, for regulated utility plant, for the years ended December 31: 2025 2024 2023 PPL 3.06 % 3.20 % 3.26 % PPL Electric 2.46 % 2.52 % 2.62 % LG&E 3.69 % 4.02 % 4.00 % KU 3.68 % 3.86 % 3.95 % Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price paid over the fair value of the identifiable net assets acquired in a business combination. Other acquired intangible assets are initially measured based on their fair value. Intangibles that have finite useful lives are amortized over their useful lives based upon the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. Costs incurred to obtain, renew or extend terms of an intangible asset are capitalized. When determining the useful life of an intangible asset, including intangible assets that are renewed or extended, PPL and its subsidiaries consider: • the expected use of the asset; • the expected useful life of other assets to which the useful life of the intangible asset may relate; • legal, regulatory, or contractual provisions that may limit the useful life; • the company's historical experience as evidence of its ability to support renewal or extension; • the effects of obsolescence, demand, competition, and other economic factors; and, • the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Asset Impairment (Excluding Investments) The Registrants review long-lived assets that are subject to depreciation or amortization, including finite-lived intangibles, for impairment when events or circumstances indicate carrying amounts may not be recoverable. A long-lived asset classified as held and used is impaired when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If impaired, the asset's carrying value is written down to its fair value. A long-lived asset classified as held for sale is impaired when the carrying amount of the asset (disposal group) exceeds its fair value less cost to sell. If impaired, the asset's (disposal group's) carrying value is written down to its fair value less cost to sell. PPL, LG&E and KU review goodwill for impairment at the reporting unit level annually or more frequently when events or circumstances indicate that the carrying amount of a reporting unit may be greater than the reporting unit's fair value. Additionally, goodwill must be tested for impairment in circumstances when a portion of goodwill has been allocated to a business to be disposed. PPL's, LG&E's and KU's reporting units are primarily at the operating segment level. PPL, for its reporting units, and individually, LG&E and KU, may elect either to initially make a qualitative evaluation about the likelihood of an impairment of goodwill or to bypass the qualitative evaluation and test goodwill for impairment using a quantitative test. If the qualitative evaluation (referred to as step zero) is elected and the assessment results in a determination that it is not more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is not necessary. However, the quantitative impairment test is required if management concludes it is more likely than not that the fair value of a reporting unit is less than the carrying amount based on the step zero assessment. If the carrying amount of the reporting unit, including goodwill, exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As of October 1, 2025, PPL, for its reporting units, and individually, LG&E and KU, elected to perform the qualitative step zero evaluation of goodwill. These evaluations considered the excess of fair value over the carrying value of each reporting unit that was calculated during step one of the quantitative impairment tests performed in the fourth quarter of 2022, and the relevant events and circumstances that occurred since those tests were performed including: • current year financial performance versus the prior year, 105 Table of Contents • changes in planned capital expenditures, • the consistency of forecasted free cash flows, • earnings quality and sustainability, • changes in market participant discount rates, • changes in long-term growth rates, • changes in PPL's market capitalization, and • the overall economic and regulatory environments in which these regulated entities operate. Based on these evaluations, management concluded it was not more likely than not that the fair value of these reporting units was less than their carrying value. As such, the step one quantitative impairment test was not performed and no impairment was recognized. ( PPL, LG&E and KU ) Asset Retirement Obligations PPL and its subsidiaries record liabilities to reflect various legal obligations associated with the retirement of long-lived assets. Initially, this obligation is measured at fair value and offset with an increase in the value of the capitalized asset, which is depreciated over the asset's useful life. Until the obligation is settled, the liability is increased through the recognition of accretion expense classified within "Other operation and maintenance" on the Statements of Income to reflect changes in the obligation due to the passage of time. For LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset or regulatory liability. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. For other AROs, deferred accretion and depreciation expense is recovered through cost of removal. Estimated ARO costs and settlement dates, which affect the carrying value of the ARO and the related capitalized asset, are reviewed periodically to ensure that any material changes are incorporated into the latest estimate of the ARO. Any change to the capitalized asset, positive or negative, is generally amortized over the remaining life of the associated long-lived asset. See Note 7 and Note 18 for additional information on AROs. Compensation and Benefits Defined Benefits (All Registrants) Certain PPL subsidiaries sponsor various defined benefit pension and other postretirement plans. An asset or liability is recorded to recognize the funded status of all defined benefit plans with an offsetting entry to AOCI or, for PPL Electric, LG&E, KU and RIE, to regulatory assets or liabilities. Consequently, the funded status of all defined benefit plans is fully recognized on the Balance Sheets. The expected return on plan assets is determined based on a market-related value of plan assets, which is calculated by rolling forward the prior year market-related value with contributions, disbursements and long-term expected return on investments. One-fifth of the difference between the actual value and the expected value is added (or subtracted if negative) to the expected value to determine the new market-related value. PPL and its subsidiaries, excluding RIE, use an accelerated amortization method for the recognition of gains and losses for its defined benefit pension plans. Under the accelerated method, actuarial gains and losses in excess of 30 % of the plan's projected benefit obligation are amortized on a straight-line basis over one-half of the required amortization period. Actuarial gains and losses in excess of 10 % of the greater of the plan's projected benefit obligation or the market-related value of plan assets and less than 30 % of the plan's projected benefit obligation are amortized on a straight-line basis over the full required amortization period. RIE uses the standard amortization method under GAAP for recognition of gains and losses for its defined benefit pension plan. See Note 7 for a discussion of the regulatory treatment of defined benefit costs and Note 10 for a discussion of defined benefits. 106 Table of Contents Stock-Based Compensation (PPL) PPL has several stock-based compensation plans for purposes of granting stock options, restricted stock, restricted stock units and performance units to certain employees as well as stock units and restricted stock units to directors. PPL grants most stock-based compensation awards in the first quarter of each year. PPL recognizes compensation expense for stock-based compensation awards based on the fair value method. Forfeitures of awards are recognized when they occur. All awards are recorded as equity or a liability on the Balance Sheets. Stock-based compensation expense is primarily included in "Other operation and maintenance" on the Statements of Income. Taxes Income Taxes (All Registrants) PPL and its subsidiaries file a consolidated U.S. federal income tax return. Significant management judgment is required in developing the Registrants' provision for income taxes, primarily due to the uncertainty related to tax positions taken or expected to be taken on tax returns and valuation allowances on deferred tax assets. The Registrants use a two-step process to evaluate uncertain tax positions. The first step requires an entity to determine whether, based on the technical merits supporting a particular tax position, it is more likely than not (greater than a 50% chance) that the tax position will be sustained. This determination assumes that the relevant taxing authority will examine the tax position and is aware of all the relevant facts surrounding the tax position. The second step requires an entity to recognize in its financial statements the amount of the benefit of a tax position that meets the more-likely-than-not recognition criterion. The benefit recognized is measured at the largest amount of benefit that has a likelihood of realization upon settlement that exceeds 50 %. Unrecognized tax benefits are classified as current to the extent management expects to settle the uncertain tax position by payment or receipt of cash within one year of the reporting date. The amounts ultimately paid upon resolution of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements of the Registrants in future periods. At December 31, 2025, no significant changes in unrecognized tax benefits were projected over the next 12 months. Deferred income taxes reflect the net future tax effects of temporary differences between the carrying amounts of assets and liabilities for accounting purposes and their basis for income tax purposes, as well as the tax effects of net operating losses and tax credit carryforwards. The Registrants record valuation allowances to reduce deferred income tax assets to the amounts that are more-likely-than-not to be realized. The need for valuation allowances requires significant management judgment. If the Registrants determine that they are able to realize deferred tax assets in the future in excess of recorded net deferred tax assets, adjustments to the valuation allowances increase income by reducing tax expense in the period that such determination is made. Likewise, if the Registrants determine that they are not able to realize all or part of net deferred tax assets in the future, adjustments to the valuation allowances would decrease income by increasing tax expense in the period that such determination is made. The amount of deferred tax assets ultimately realized may differ materially from the estimates utilized in the computation of valuation allowances and may materially impact the financial statements in the future . The Registrants defer investment tax credits when the credits are generated and amortize the deferred amounts over the average lives of the related assets. With respect to acquired renewable tax credits, pursuant to the IRA, any benefit is recognized in the period the credits can be utilized. The Registrants recognize tax-related interest and penalties in "Income Taxes" on their Statements of Income. The Registrants use the portfolio approach method of accounting for deferred taxes related to pre-tax OCI transactions. The portfolio approach involves a strict period-by-period cumulative incremental allocation of income taxes to the change in income and losses reflected in OCI. Under this approach, the net cumulative tax effect is ignored. The net change in unrealized gains and losses recorded in AOCI under this approach would be eliminated only on the date the investment portfolio is classified as held for sale or is liquidated. See Note 6 for income tax disclosures. 107 Table of Contents The provision for the Registrants' deferred income taxes related to regulatory assets and liabilities is based upon the ratemaking principles reflected in rates established by relevant regulators. The difference in the provision for deferred income taxes for regulatory assets and liabilities and the amount that otherwise would be recorded under GAAP is deferred and included on the Balance Sheets in noncurrent "Regulatory assets" or "Regulatory liabilities." (PPL Electric, LG&E and KU) The income tax provision for PPL Electric, LG&E and KU is calculated in accordance with an intercompany tax sharing agreement, which provides that taxable income be calculated as if PPL Electric, LG&E, KU and any subsidiaries each filed a separate return. Tax benefits are not shared between companies. The entity that generates a tax benefit is the entity that is entitled to the tax benefit. The effect of PPL filing a consolidated tax return is taken into account in the settlement of current taxes and the recognition of deferred taxes. At December 31, the following intercompany tax payables were recorded: 2025 2024 PPL Electric $ ( 27 ) $ ( 2 ) LG&E ( 7 ) ( 2 ) KU ( 10 ) ( 5 ) Taxes, Other Than Income (All Registrants) The Registrants present sales taxes in "Other current liabilities" on the Balance Sheets. These taxes are not reflected on the Statements of Income. See Note 6 for details of taxes included in "Taxes, other than income" on the Statements of Income. Other (All Registrants) Fuel, Materials and Supplies Fuel, natural gas stored underground and materials and supplies are valued using the average cost method. Fuel costs for electricity generation are charged to expense as used. For RIE, natural gas supply costs are charged to expense when delivered to customers. For LG&E, natural gas supply costs are charged to expense as delivered to the distribution system. See Note 7 for further discussion of the gas supply clause. "Fuel, materials and supplies" on the Balance Sheets consisted of the following at December 31: 2025 PPL PPL Electric LG&E KU Fuel $ 157 $ — $ 58 $ 99 Natural gas stored underground 50 — 33 — Materials and supplies 344 151 69 84 Total $ 551 $ 151 $ 160 $ 183 2024 PPL PPL Electric LG&E KU Fuel $ 153 $ — $ 64 $ 89 Natural gas stored underground 49 — 29 — Materials and supplies 309 104 64 84 Total $ 511 $ 104 $ 157 $ 173 108 Table of Contents (PPL and PPL Electric) Renewable Energy Standard Obligation Purchased Renewable Energy Certificates (RECs) are stated at cost and are used to measure compliance with state renewable energy standards. RECs support new renewable generation standards and are held primarily to be utilized in fulfillment of RIE's and PPL Electric's compliance obligations. (All Registrants) Guarantees Generally, the initial measurement of a guarantee liability is the fair value of the guarantee at its inception. However, there are certain guarantees excluded from the scope of accounting guidance and other guarantees that are not subject to the initial recognition and measurement provisions of accounting guidance that only require disclosure. See Note 12 for further discussion of guarantees. New Accounting Guidance Adopted (All Registrants) Improvements to Income Tax Disclosures Effective December 31, 2025, the Registrants retrospectively adopted accounting guidance to improve income tax disclosures. The guidance requires enhanced disclosures about disaggregated rate reconciliation in eight specific categories, presented in both percentages and currency amounts. Further disaggregation by jurisdiction or nature of the item, or both, is required if over a 5% threshold. The utility industry has specific tax rate impacts due to federal and state rate-making requirements, which frequently exceed the 5% threshold. Accordingly, a ninth category is used to disaggregate the utility rate-making tax adjustments. The guidance also requires disclosure of the amount of income taxes paid disaggregated by federal, state, and foreign. See Note 6 for additional information. 2. Segment and Related Information (PPL) PPL is organized into three segments, broken down by geographic location: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The Kentucky Regulated segment consists primarily of the regulated electricity generation, transmission and distribution operations conducted by LG&E and KU, as well as LG&E's regulated distribution and sale of natural gas. The Pennsylvania Regulated segment includes the regulated electricity transmission and distribution operations of PPL Electric. The Rhode Island Regulated segment includes the regulated electricity transmission and distribution and natural gas distribution operations of RIE. "Corporate and Other" primarily includes corporate level financing costs, certain unallocated corporate costs, and certain non-recoverable costs incurred in conjunction with the acquisition of RIE. "Corporate and Other" is presented to reconcile segment information to PPL's consolidated results and is not a reportable segment. PPL's Chief Operating Decision Maker (CODM) is the CLC. The CLC uses financial metrics including segment net income, earnings from ongoing operations, earnings per share and return on equity, as well as various operational metrics to assess segment performance and make investment and resource decisions. Segment net income is the measure of segment profit or loss that most closely aligns with GAAP and is being presented for disclosure purposes. 109 Table of Contents The tables below provide information about PPL's segments and include a reconciliation of segment net income to consolidated net income for the year ended December 31, 2025: Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Operating Revenues from external customers (a) $ 3,760 $ 3,113 $ 2,168 $ 9,041 Reconciliation of revenue Corporate and other revenues 1 Total consolidated revenues $ 9,042 Less: Fuel 855 — — 855 Energy Purchases 214 876 802 1,892 Operation and maintenance 818 630 851 2,299 Depreciation 717 413 177 1,307 Taxes, other than income 102 151 170 423 Other (income) expense - net ( 53 ) ( 48 ) ( 33 ) ( 134 ) Interest (income) from affiliate — ( 9 ) ( 3 ) ( 12 ) Interest expense 264 257 111 632 Income taxes 169 204 8 381 Segment net income $ 674 $ 639 $ 85 $ 1,398 Reconciliation of segment profit or loss to consolidated net income Corporate and other net loss ( 217 ) Net Income $ 1,181 (a) See Note 1 and Note 3 for additional information on Operating Revenues. Other information for the segments and reconciliation to PPL's Consolidated results for the year ended December 31, 2025 are as follows: Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Segments Corporate and Other Consolidated Total Other Segment Disclosures Amortization (a) $ 43 $ 48 $ 1 $ 92 $ 12 $ 104 Deferred income taxes and investment tax credits (b) ( 9 ) 24 28 43 149 192 Expenditures for long lived assets 1,752 1,620 668 4,040 2 4,042 (a) Represents non-cash expense items that include amortization of operating lease right-of-use assets, regulatory assets and liabilities, debt discounts and premiums and debt issuance costs. (b) Represents a non-cash expense item that is also included in "Income Taxes." The tables below provide information about PPL's segments and include a reconciliation of segment net income to consolidated net income for the year ended December 31, 2024: Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Operating Revenues from external customers (a) $ 3,562 $ 2,876 $ 2,024 $ 8,462 Reconciliation of revenue Corporate and other revenues — Total consolidated revenues $ 8,462 110 Table of Contents Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Less: Fuel 783 — — 783 Energy Purchases 176 721 782 1,679 Operation and maintenance 803 705 731 2,239 Depreciation 710 401 165 1,276 Taxes, other than income 99 131 144 374 Other (income) expense - net ( 29 ) ( 45 ) ( 20 ) ( 94 ) Interest (income) from affiliate — ( 33 ) ( 4 ) ( 37 ) Interest expense 240 246 95 581 Income taxes 160 176 22 358 Segment net income $ 620 $ 574 $ 109 $ 1,303 Reconciliation of segment profit or loss to consolidated net income Corporate and other net loss ( 415 ) Net Income $ 888 (a) See Note 1 and Note 3 for additional information on Operating Revenues. Other information for the segments and reconciliation to PPL's Consolidated results for the year ended December 31, 2024 are as follows: Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Segments Corporate and Other Consolidated Total Other Segment Disclosures Amortization (a) $ 24 $ 45 $ 1 $ 70 $ 8 $ 78 Deferred income taxes and investment tax credits (b) 2 129 38 169 27 196 Expenditures for long lived assets 1,088 1,229 495 2,812 ( 7 ) 2,805 (a) Represents non-cash expense items that include amortization of operating lease right-of-use assets, regulatory assets and liabilities, debt discounts and premiums and debt issuance costs. (b) Represents a non-cash expense item that is also included in "Income Taxes." The tables below provide information about PPL's segments and include a reconciliation of segment net income to consolidated net income for the year ended December 31, 2023: Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Operating Revenues from external customers (a) $ 3,452 $ 3,008 $ 1,851 $ 8,311 Reconciliation of revenue Corporate and other revenues 1 Total consolidated revenues $ 8,312 Less: Fuel 733 — — 733 Energy Purchases 192 992 658 1,842 Operation and maintenance 826 605 705 2,136 Depreciation 696 397 156 1,249 Taxes, other than income 93 143 156 392 Other (income) expense - net ( 12 ) ( 39 ) ( 19 ) ( 70 ) Interest expense 235 223 83 541 Income taxes 137 168 16 321 Segment net income $ 552 $ 519 $ 96 $ 1,167 Reconciliation of segment profit or loss to consolidated net income Corporate and other net loss ( 427 ) Net Income $ 740 (a) See Note 1 and Note 3 for additional information on Operating Revenues. 111 Table of Contents Other information for the segments and reconciliation to PPL's Consolidated results for the year ended December 31, 2023 are as follows: Kentucky Regulated Pennsylvania Regulated Rhode Island Regulated Total Segments Corporate and Other Consolidated Total Other Segment Disclosures Amortization (a) $ 33 $ 41 $ 1 $ 75 $ 6 $ 81 Deferred income taxes and investment tax credits (b) ( 17 ) 46 48 77 245 322 Expenditures for long lived assets 950 956 454 2,360 30 2,390 (a) Represents non-cash expense items that include amortization of operating lease right-of-use assets, regulatory assets and liabilities, debt discounts and premiums and debt issuance costs. (b) Represents a non-cash expense item that is also included in "Income Taxes." The following provides Balance Sheet data for the segments and reconciliation to PPL's consolidated results as of: As of December 31, 2025 2024 Total Assets Kentucky Regulated $ 19,060 $ 17,626 Pennsylvania Regulated 16,886 15,475 Rhode Island Regulated 7,510 7,055 Corporate and Other (a) 1,788 913 Total $ 45,244 $ 41,069 (a) Primarily consists of unallocated items, including cash, PP&E, goodwill, and the elimination of inter-segment transactions. (PPL Electric) PPL Electric has two operating segments, distribution and transmission, which are aggregated into a single reportable segment. PPL Electric's CODM is the President of PPL Electric. The President uses financial metrics including segment net income, earnings from ongoing operations, earnings per share and return on equity, as well as various operational metrics to assess segment performance and make investment and resource decisions. The significant segment expenses of and measure of profit and loss for PPL Electric regularly provided to the President are included on the face of PPL Electric's Statements of Income. The measure of segment assets is reported on PPL Electric's Balance Sheets as total consolidated assets. The measures of significant non-cash segment expenses as well as expenditures for long lived assets are reported on PPL Electric's Statements of Cash Flows. (LG&E and KU) Each of LG&E and KU operates as a single operating and reportable segment, and the CODM for each of LG&E and KU is its President. The President manages LG&E and KU as a single consolidated entity. Financial metrics including net income, earnings from ongoing operations, earnings per share and return on equity, as well as various operational metrics are used to assess segment performance and make investment and resource decisions. The significant segment expenses of and measure of profit and loss for each of LG&E and KU regularly provided to its President are included on the face of the Statements of Income of LG&E and KU. The measures of segment assets are reported on the Balance Sheets of LG&E and KU as total assets. The measures of significant non-cash segment expenses as well as expenditures for long lived assets are reported on the Statements of Cash Flows of LG&E and KU. 112 Table of Contents 3. Revenue from Contracts with Customers (All Registrants) The following is a description of the principal activities from which the Registrants and PPL's segments generate their revenues. (PPL and PPL Electric) Pennsylvania Regulated Segment Revenue The Pennsylvania Regulated segment generates substantially all of its revenues from contracts with customers from PPL Electric's tariff-based distribution and transmission of electricity. Distribution Revenue PPL Electric provides distribution services to residential, commercial, industrial, municipal and governmental end users of energy. PPL Electric satisfies its performance obligation to its distribution customers and revenue is recognized over time as electricity is delivered and simultaneously consumed by the customer. The amount of revenue recognized is the volume of electricity delivered during the period multiplied by the price per tariff, plus a monthly fixed charge and include unbilled amounts, which represent the amounts due from customers as a result of customer's bills being rendered throughout the month, rather than at the end of the month. This method of recognition fairly presents PPL Electric's transfer of electric service to the customer as the calculation is based on volumes delivered, and the price per tariff and the monthly fixed charge are set by the PAPUC. Customers are typically billed monthly and outstanding amounts are normally due within 21 days of the date of the bill. Distribution customers are "at will" customers of PPL Electric with no term contract and no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with PPL Electric's retail account contracts. Certain customers have the option to obtain electricity from other suppliers where PPL Electric facilitates the delivery. In those circumstances, revenue is only recognized for providing delivery of the commodity to the customer. Transmission Revenue PPL Electric generates transmission revenues from a FERC-approved PJM Open Access Transmission Tariff. An annual revenue requirement for PPL Electric to provide transmission services is calculated using a formula-based rate. This revenue requirement is converted into a daily rate (dollars per day). PPL Electric satisfies its performance obligation to provide transmission services and revenue is recognized over time as transmission services are provided and consumed. This method of recognition fairly presents PPL Electric's transfer of transmission services as the daily rate is set by a FERC approved formula-based rate. PJM remits payment on a weekly basis. PPL Electric's agreement to provide transmission services contains no minimum purchase commitment. The performance obligation is limited to the service requested and received to date. Accordingly, PPL Electric has no unsatisfied performance obligations. (PPL) Rhode Island Regulated Segment Revenues The Rhode Island Regulated segment generates substantially all of its revenues from contracts with customers from RIE's regulated tariff-based transmission and distribution of electricity and regulated tariff-based distribution of natural gas. Distribution Revenue Distribution revenues are primarily from the sale of electricity, natural gas, and related services to retail customers. Distribution sales are regulated by the RIPUC, which is responsible for approving the rates and other terms of services as part of the rate making process. Natural gas and electric distribution revenues are derived from the regulated sale and distribution of electricity and natural gas to residential, commercial, and industrial customers within RIE's service territory under the tariff rates. The performance obligation related to distribution sales is to provide electricity and natural gas to customers on demand. 113 Table of Contents The performance obligation is satisfied over time because the customer simultaneously receives and consumes the electricity or natural gas as services are provided. RIE records revenues related to the distribution sales based upon the approved tariff rate and the volume delivered to the customers, which corresponds with the amount RIE has the right to invoice. Customers are typically billed monthly and outstanding amounts are normally due within 21 days of date of the bill. Distribution revenue also includes estimated unbilled amounts, which represent the estimated amounts due from retail customers as a result of customer's bills being rendered throughout the month, rather than at the end of the month. Unbilled revenues are determined based on estimated unbilled sales volumes and then applying tariff rates to those volumes. Any difference between estimated and actual revenues is adjusted the following month when the previous unbilled estimate is reversed and actual billings occur. This method of recognition fairly presents RIE's transfer of electricity and natural gas to the customer as the amount recognized is based on actual and estimated volumes delivered and the tariff rate per unit of energy and any applicable fixed charges or regulatory mechanisms as approved by the respective regulatory body. Distribution customers are "at will" customers of RIE with no term contract and no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with RIE's retail account contracts. Certain customers have the option to obtain electricity or natural gas from other suppliers where RIE facilitates the delivery. In those circumstances, revenue is only recognized for providing delivery of the commodity to the customer. Transmission Revenue RIE's transmission services are regulated by the FERC and coordinated with ISO – New England (ISO-NE). As of January 1, 2023, RIE is a transmission operator. These revenues arise under tariff/rate agreements and are collected primarily from RIE's distribution customers. The revenue is recognized over time as transmission services are provided and consumed. This method of recognition fairly presents RIE's transfer of transmission services as the daily rate is set by a FERC-approved formula-based rate. RIE's agreement to provide transmission services contains no minimum purchase commitment. The performance obligation is limited to the service requested and received to date. Accordingly, RIE has no unsatisfied performance obligations. (PPL, LG&E and KU) Kentucky Regulated Segment Revenue The Kentucky Regulated Segment generates substantially all of its revenues from contracts with customers from LG&E's and KU's regulated tariff-based sales of electricity and LG&E's regulated tariff-based sales of natural gas. LG&E and KU are engaged in the generation, transmission, distribution and sale of electricity in Kentucky and, in KU's case, Virginia. LG&E also engages in the distribution and sale of natural gas in Kentucky. Revenue from these activities is generated from tariffs approved by applicable regulatory authorities including the FERC, KPSC and VSCC. LG&E and KU satisfy their performance obligations upon LG&E's and KU's delivery of electricity and LG&E's delivery of natural gas to customers. This revenue is recognized over time as the customer simultaneously receives and consumes the benefits provided by LG&E and KU. The amount of revenue recognized is the billed volume of electricity or natural gas delivered multiplied by a tariff rate per-unit of energy, plus any applicable fixed charges or additional regulatory mechanisms. Customers are billed monthly and outstanding amounts are typically due within 22 days of the date of the bill. Additionally, unbilled revenues are recognized as a result of customers' bills being rendered throughout the month, rather than at the end of the month. Unbilled revenues for a month are calculated by multiplying an estimate of unbilled kWh or Mcf delivered but not yet billed by the estimated average cents per kWh or Mcf. Any difference between estimated and actual revenues is adjusted the following month when the previous unbilled estimate is reversed and actual billings occur. This method of recognition fairly presents LG&E's and KU's transfer of electricity and LG&E's transfer of natural gas to the customer as the amount recognized is based on actual and estimated volumes delivered and the tariff rate per-unit of energy and any applicable fixed charges or regulatory mechanisms as set by the respective regulatory body. LG&E's and KU's customers generally have no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with these customers. 114 Table of Contents (All Registrants) The following table reconciles "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the years ended December 31: 2025 PPL PPL Electric LG&E KU Operating Revenues (a)(b) $ 9,042 $ 3,113 $ 1,748 $ 2,064 Revenues derived from: Alternative revenue programs (c) 153 21 ( 2 ) — Other (d) ( 25 ) ( 17 ) ( 4 ) ( 4 ) Revenues from Contracts with Customers $ 9,170 $ 3,117 $ 1,742 $ 2,060 2024 PPL PPL Electric LG&E KU Operating Revenues (a)(b) $ 8,462 $ 2,876 $ 1,648 $ 1,964 Revenues derived from: Alternative revenue programs (c) 5 ( 19 ) 13 16 Other (d) ( 23 ) ( 15 ) ( 4 ) ( 4 ) Revenues from Contracts with Customers $ 8,444 $ 2,842 $ 1,657 $ 1,976 2023 PPL PPL Electric LG&E KU Operating Revenues (a)(b) $ 8,312 $ 3,008 $ 1,613 $ 1,884 Revenues derived from: Alternative revenue programs (c) 1 5 ( 1 ) ( 5 ) Other (d) ( 23 ) ( 15 ) ( 4 ) ( 4 ) Revenues from Contracts with Customers $ 8,290 $ 2,998 $ 1,608 $ 1,875 (a) PPL includes $ 2,168 million, $ 2,024 million and $ 1,851 million for the twelve months ended December 31, 2025, 2024, and 2023 of revenues from external customers reported by the Rhode Island Regulated segment. PPL Electric represents revenues from external customers reported by the Pennsylvania Regulated segment and LG&E and KU, net of intercompany power sales and transmission revenues, represent revenues from external customers reported by the Kentucky Regulated segment. See Note 2 for additional information. (b) PPL's transition services agreement associated with the RIE acquisition ended in the third quarter of 2024. In conjunction with the completion of the agreement, PPL conformed the presentation of RIE's and the Rhode Island Regulated segment's net metering charges with the presentation of the other segments, resulting in an increase in "Operating Revenues" and a corresponding increase in "Energy purchases" beginning on January 1, 2024. For the year ended December 31, 2023, $ 146 million of net metering was presented as a reduction of "Operating Revenues" on PPL's Statement of Income. (c) This line item shows the over/under collection of rate mechanisms deemed alternative revenue programs with over-collections of revenue shown as positive amounts and under collections as negative amounts. (d) Represents additional revenues outside the scope of revenues from contracts with customers such as leases and other miscellaneous revenues. The following table shows revenues from contracts with customers disaggregated by customer class for the years ended December 31: Residential Commercial Industrial Other (a) Wholesale - municipality Wholesale - other (b) Transmission Revenues from Contracts with Customers PPL 2025 PA Regulated $ 1,656 $ 448 $ 56 $ 54 $ — $ — $ 903 $ 3,117 RI Regulated (c) 1,249 671 83 86 — — 213 2,302 KY Regulated 1,616 1,063 627 309 25 111 — 3,751 Total PPL $ 4,521 $ 2,182 $ 766 $ 449 $ 25 $ 111 $ 1,116 $ 9,170 115 Table of Contents Residential Commercial Industrial Other (a) Wholesale - municipality Wholesale - other (b) Transmission Revenues from Contracts with Customers 2024 PA Regulated $ 1,502 $ 418 $ 47 $ 57 $ — $ — $ 818 $ 2,842 RI Regulated (c) 1,150 593 91 10 — — 176 2,020 KY Regulated 1,510 1,028 635 323 23 63 — 3,582 Total PPL $ 4,162 $ 2,039 $ 773 $ 390 $ 23 $ 63 $ 994 $ 8,444 2023 PA Regulated $ 1,649 $ 444 $ 55 $ 54 $ — $ — $ 796 $ 2,998 RI Regulated 640 228 20 793 — — 170 1,851 KY Regulated 1,458 1,001 637 272 22 50 — 3,440 Corp and Other — — — 1 — — — 1 Total PPL $ 3,747 $ 1,673 $ 712 $ 1,120 $ 22 $ 50 $ 966 $ 8,290 PPL Electric 2025 $ 1,656 $ 448 $ 56 $ 54 $ — $ — $ 903 $ 3,117 2024 $ 1,502 $ 418 $ 47 $ 57 $ — $ — $ 818 $ 2,842 2023 $ 1,649 $ 444 $ 55 $ 54 $ — $ — $ 796 $ 2,998 LG&E 2025 $ 809 $ 540 $ 187 $ 139 $ — $ 67 $ — $ 1,742 2024 $ 754 $ 518 $ 188 $ 147 $ — $ 50 $ — $ 1,657 2023 $ 751 $ 517 $ 189 $ 104 $ — $ 47 $ — $ 1,608 KU 2025 $ 807 $ 523 $ 440 $ 169 $ 25 $ 96 $ — $ 2,060 2024 $ 756 $ 510 $ 447 $ 176 $ 23 $ 64 $ — $ 1,976 2023 $ 707 $ 484 $ 448 $ 168 $ 22 $ 46 $ — $ 1,875 (a) Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses. For the years ended December 31, 2023, the Rhode Island Regulated segment primarily includes open access tariff revenues, which are calculated on combined customer classes. (b) Includes wholesale power and transmission revenues. LG&E and KU am