PPL : 2O21 ANNUAL REPORT

ENERGY FORWARD

PPL CORPORATION 2O21 ANNUAL REPORT

PPL CORPORATION AT A GLANCE

As of Dec. 31, 2021.

*Net summer capacity - LG&E - KU ownership or other interest.

PPL Strategic Repositioning

Over the past year, PPL has taken significant steps to strategically reposition itself as a U.S.-based energy company, with a clear focus on simplifying PPL's business mix, strengthening its credit metrics, enhancing long-term earnings growth and predictability, improving long-term value for customers and shareowners, and providing the company with greater financial flexibility to invest in sustainable energy solutions.

In March 2021, PPL announced agreements to sell its U.K. utility business, Western Power Distribution (WPD), and to acquire Rhode Island's primary electric and gas utility, The Narragansett Electric Company. PPL completed the sale of WPD in June 2021, achieving exceptional value of nearly $11 billion. The company has also received all necessary regulatory approvals to acquire Narragansett Electric for $3.8 billion. As of the publication of this report, PPL continued to work diligently through state appeals processes, focused on closing as soon as circumstances permit.

MAJOR

BUSINESS

SEGMENTS*

KEY INFORMATION

Kentucky Regulated

PPL's Kentucky segment consists primarily of the regulated electricity and natural gas operations of Louisville Gas and Electric Company and Kentucky Utilities Company, which serve 1.3 million customers in Kentucky and Virginia and operate about 7,500 megawatts of regulated generating capacity.

Pennsylvania Regulated

PPL's Pennsylvania segment consists of the regulated electricity delivery operations of PPL Electric Utilities Corporation, which serves approximately 1.4 million customers in eastern and central Pennsylvania.

*PPL's principal subsidiaries as of Dec. 31, 2021.

MESSAGE TO OUR SHAREOWNERS*

DEAR SHAREOWNERS,

2021 was a pivotal year for PPL.

We took bold steps to transform our company for long-term growth and success, to address challenges that have impacted PPL from a shareowner return perspective and to improve total shareowner return while building on our core strengths. At the same time, we leaned forward on our clean energy strategy, committed to a net-zero future, and delivered outstanding results for our customers and communities. The end result is a new, U.S.-focused PPL - stronger, more agile and better positioned to drive sustainable value for all stakeholders.

This year's letter highlights our 2021 transition and the progress we've made as we focus on creating the utilities of the future today - customer-first, people-driven and technology-enabled to drivean affordable, reliable clean energy transition.

REPOSITIONING PPL FOR FUTURE SUCCESS.

Over the past year, we took significant steps to strategically reposition PPL for future success. Our goals at the outset of our strategic pivot were clear:

• • Simplify our business mix.

• • Narrow our focus to high-performing, U.S. rate-regulated utilities.

• • Strengthen our balance sheet.

• • Enhance long-term earnings growth and predictability.

• • Improve long-term value for our customers and shareowners.

To achieve these objectives, we announced agreements in March 2021 to sell our U.K. utility business, Western Power Distribution (WPD), to National Grid plc for £7.8 billion and, in a separate transaction, to acquire National Grid's Rhode Island utility business, The Narragansett Electric Company (Narragansett Electric), for $3.8 billion. We closed on the WPD sale in June, achieving exceptional value of nearly $11 billion. In addition, we've received all of the necessary regulatory approvals to acquire Narragansett Electric and are now working diligently through state appeals processes. We will close as soon as circumstances permit.

Throughout 2021, we also took steps to strategically allocate the WPD sale proceeds to support PPL's future growth prospects and long-term shareowner value. This included reducing PPL's outstanding debt by $3.5 billion; identifying over $1 billion of additional capital investments in our U.S. utilities; and returning $1.4 billion to shareowners via share repurchases and additional dividends.

The result of our strategic repositioning will be a new PPL that is built for the future, with a plan that delivers competitive long-term earnings per share and dividend growth, significant investment opportunities to drive a clean energy future, and a balance sheet capable of fueling growth for the foreseeable future with no equity needs. In summary, we're setting up PPL to deliver premier growth while continuing to provide highly reliable service, award-winning customer satisfaction and industry-leading grid innovation.

Vincent Sorgi

President and Chief Executive Officer

Craig A. Rogerson Independent Chair of the Board

DELIVERING ESSENTIAL ENERGY AND EXCEPTIONAL SERVICE.

At PPL, we view operational excellence as a competitive advantage, and a key pillar of our corporate strategy is to achieve industry-leading performance in safety, reliability, customer satisfaction and operational efficiency.

As we advanced this strategic objective in 2021, we delivered strong results. We maintained transmission and distribution reliability, as well as generation availability, that was among the best in the industry despite some of the worst storm seasons experienced in our service territories. We responded quickly and effectively to that severe weather, including devastating tornadoes in Kentucky and the remnants of Hurricane Ida in Pennsylvania.

We maintained affordable energy rates below regional averages, improved safety performance enterprise-wide, and executed more than $2 billion in infrastructure improvements in our U.S. operations to build smarter, more dynamic and more resilient energy networks. In the process, we again achieved award-winning customer satisfaction. Both PPL Electric Utilities and Kentucky Utilities ranked highest in their respective regions and segments for residential and business customer satisfaction. Both were named most-trusted utility brands by Escalent following an independent survey of customers at the nation's 140 largest utilities.

Moving forward, we have no intention of resting on our laurels. Our goal, as always, is to deploy advanced technologies to drive continuous improvement in system resiliency, reliability and efficiency.

COMMITTING TO NET-ZERO AND

DRIVING A RESPONSIBLE CLEAN ENERGY TRANSITION.

A key component of repositioning PPL for the future is moving forward on our broad-based clean energy strategy, which centers on decarbonizing our generation, positioning the grid as an enabler of clean energy resources, driving digital innovation, investing in research and development to enable new clean energy technologies, and decarbonizing our non-generation operations.

*Letter dated as of April 4, 2022.

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In pursuit of this strategy in 2021, we:

• • Set a new goal to achieve net-zero carbon emissions by 2050.

• • Accelerated our interim emissions reduction targets to 70% by 2035 and 80% by 2040.

• • Announced more than $50 million in new investments to drive clean energy research and development.

• • Launched a partnership to study carbon capture at natural gas combined-cycle power plants.

• • Reached agreements to provide an additional 125 MW of solar power to Kentucky customers.

• • Joined a national coalition to support greater adoption of electric vehicles.

• • Linked executive compensation to climate-related goals.

Beyond these efforts, we published our latest climate assessment report in November. The report highlighted the risks and opportunities associated with climate change; evaluated potential future emissions under multiple scenarios, including one consistent with the U.S. commitments to the Paris Agreement; and outlined our strategy to enable a responsible clean energy transition. In October, we also completed our triennial Kentucky Integrated Resource Plan, which projected a significant increase in renewable energy additions in the 15-year planning horizon compared to our prior plan.

As we work toward our clean energy goals, we're proud of the progress we've made - reducing our emissions nearly 60% since 2010 - and we're pleased with the momentum we generated in 2021. However, we recognize it will take continued dedication, ideas and innovation to reach our net-zero goals, and that's our focus.

We continue to economically transition our Kentucky coal-fired generation and are committing not to burn unabated coal by 2050. We're transitioning the Kentucky fleet to cleaner energy sources, with expected retirements of at least 2,000 MW of coal-fired power plants by 2035, including at least 1,000 MW by 2028. We are reviewing our generation plans for opportunities to further advance fleet decarbonization while maintaining reliability and affordability. In addition, we're creating advanced, clean-energy-enabling grids. Working together with our industry, our customers and other stakeholders, we're optimistic that we will achieve a net-zero future.

PARTNERING TO BUILD STRONGER COMMUNITIES IN THE AREAS WE SERVE.

At PPL, our mission includes providing safe, affordable, reliable and sustainable energy to our customers, but the impact we make extends beyond the energy we provide.

In 2021, our companies and foundations contributed more than $12 million to improve education; foster diversity, equity and inclusion (DEI); promote sustainable communities; and support programs that strengthen the communities we serve. Together with our employees and retirees, we raised more than $7 million to support United Way and partner agencies in the work they do to improve lives.

When tornadoes damaged Kentucky homes, businesses and power lines, we responded swiftly, deploying more than 600 employees and contractors to restore power as quickly and safely as possible and providing immediate financial support to assist families and businesses.

And throughout the year, we worked to lead by example on DEI. This included strengthening diversity within our leadership ranks, our overall workforce and our board; expanding support for social justice and equity initiatives; enhancing supplier diversity; and creating new opportunities through business resource groups for employees of all backgrounds and experi-ences to collaborate, share perspectives and contribute to PPL's success. As a result of our strong commitment to DEI, we were named a best place to work for LGBTQ equality and disability inclusion and a top utility for workforce diversity.

MOVING FORWARD WITH CONFIDENCE.

DRIVING SUSTAINABLE VALUE FOR ALL STAKEHOLDERS.

As we set our sights on continued growth and execution, we are focused on economically and sustainably transitioning to cleaner energy sources. As we've done for years, we continue to invest in advanced grid automation. Our past investments have supported our strong reliability performance and efficiency, and we believe the best is yet to come. In addition, we're using data analytics to prevent outages while operating more efficiently. And we're continuing to incorporate advanced technology to enable widespread connection of renewable energy while preserving power quality and reliability.

This has been our playbook over the past decade in Pennsylvania. It has resulted in significantly improved customer satisfaction, 27% fewer outages per customer, and one of the nation's smartest and most advanced energy networks - all while keeping operating and maintenance costs flat.

We believe this proven operating model differentiates PPL and is the key to delivering an affordable clean energy transition. Our strategy is to replicate this success across our portfolio, including in Rhode Island upon completion of the Narragansett Electric acquisition. We believe we are uniquely qualified to help Rhode Island achieve its ambitious clean energy goals, which include 100% renewable energy by 2030 and net-zero economy-wide carbon emissions by 2050.

In summary, we're proud of what our team of talented employees accomplished in 2021 as we laid a foundation for growth and success and returned $2.3 billion to shareowners through dividends and share purchases. We're excited about the opportunity we have to shape our energy future and drive long-term value for all stakeholders. And we're thankful for your investment in PPL and for the trust you've placed in us.

Sincerely,

Vincent Sorgi President and

Chief Executive Officer

Craig A. Rogerson Independent Chair of the Board

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FINANCIAL & OPERATING HIGHLIGHTS

2021 FINANCIAL HIGHLIGHTS

For the years ended December 31

FINANCIAL	2021	2020
Operating revenues (millions)	$5,783	$5,474
Net income (millions)	$(1,480)	$1,469
Earnings from ongoing operations (millions) (a)(b)	$806	$774
Total assets (millions)	$33,223	$48,116
Earnings per share - Diluted	$(1.93)	$1.91
Earnings from ongoing operations per share - Diluted (a)(b)	$1.05	$1.00
Dividends declared per share	$1.66	$1.66
Book value per share (c)	$18.67	$17.39
Market price per share	$30.06	$28.20
Market price/book value ratio	161%	162%
Dividend yield	5.5%	5.9%
OPERATING - ELECTRICITY SALES (GWh)
Retail delivered	66,434	64,482
Wholesale supplied (d)	888	542

• (a) 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, which we sometimes refer to as Net Income 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. See "Reconciliation of Net Income to Earnings from Ongoing Operations" on page 26 (millions of dollars) and page IV (per share) of this report.

• (b) Earnings from ongoing operations for 2020 have been adjusted primarily for earnings that were previously included in the U.K. Regulated segment.

• (c) Based on 735,112 and 768,907 shares of common stock outstanding (in thousands) at December 31, 2021, and December 31, 2020.

• (d) Represents FERC-regulated municipal and unregulated off-system sales.

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