[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ended March 31, 2009
|
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)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
|
23-2758192
|
|
1-32944
|
PPL
Energy Supply, LLC
(Exact
name of Registrant as specified in its charter)
(Delaware)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
|
23-3074920
|
|
1-905
|
PPL
Electric Utilities Corporation
(Exact
name of Registrant as specified in its charter)
(Pennsylvania)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
|
23-0959590
|
|
PPL
Corporation
|
Yes
X
|
No
|
||
PPL
Energy Supply, LLC
|
Yes
X
|
No
|
||
PPL
Electric Utilities Corporation
|
Yes
X
|
No
|
PPL
Corporation
|
Yes
|
No
|
||
PPL
Energy Supply, LLC
|
Yes
|
No
|
||
PPL
Electric Utilities Corporation
|
Yes
|
No
|
Large
accelerated filer
|
Accelerated
filer
|
Non-accelerated
filer
|
Smaller
reporting
company
|
||
PPL
Corporation
|
[ X
]
|
[ ]
|
[ ]
|
[ ]
|
|
PPL
Energy Supply, LLC
|
[ ]
|
[ ]
|
[ X
]
|
[ ]
|
|
PPL
Electric Utilities Corporation
|
[ ]
|
[ ]
|
[ X
]
|
[ ]
|
PPL
Corporation
|
Yes
|
No
X
|
||
PPL
Energy Supply, LLC
|
Yes
|
No
X
|
||
PPL
Electric Utilities Corporation
|
Yes
|
No
X
|
PPL
Corporation
|
Common
stock, $.01 par value, 376,049,177 shares outstanding at April 24,
2009.
|
|
PPL
Energy Supply, LLC
|
PPL
Corporation indirectly holds all of the membership interests in PPL Energy
Supply, LLC.
|
|
PPL
Electric Utilities Corporation
|
Common
stock, no par value, 66,368,056 shares outstanding and all held by PPL
Corporation at April 24, 2009.
|
Page
|
||||||
i
|
||||||
1
|
||||||
PART
I. FINANCIAL INFORMATION
|
||||||
Item
1. Financial Statements
|
||||||
PPL
Corporation and Subsidiaries
|
||||||
2
|
||||||
3
|
||||||
4
|
||||||
6
|
||||||
PPL
Energy Supply, LLC and Subsidiaries
|
||||||
8
|
||||||
9
|
||||||
10
|
||||||
12
|
||||||
PPL
Electric Utilities Corporation and Subsidiaries
|
||||||
14
|
||||||
15
|
||||||
16
|
||||||
18
|
||||||
Item
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
|
||||||
59
|
||||||
71
|
||||||
82
|
||||||
87
|
||||||
87
|
||||||
87
|
||||||
PART
II. OTHER INFORMATION
|
||||||
88
|
||||||
88
|
||||||
88
|
||||||
89
|
||||||
90
|
||||||
COMPUTATION
OF RATIO OF EARNINGS TO FIXED CHARGES
|
||||||
91
|
||||||
92
|
||||||
93
|
||||||
CERTIFICATES
OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER
PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
|
||||||
94
|
||||||
96
|
||||||
98
|
||||||
CERTIFICATES
OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER
PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
|
||||||
100
|
||||||
102
|
||||||
104
|
·
|
fuel
supply availability;
|
·
|
weather
conditions affecting generation, customer energy use and operating
costs;
|
·
|
operation,
availability and operating costs of existing generation
facilities;
|
·
|
transmission
and distribution system conditions and operating costs;
|
·
|
collective
labor bargaining negotiations;
|
·
|
the
outcome of litigation against PPL and its subsidiaries;
|
·
|
potential
effects of threatened or actual terrorism, war or other
hostilities;
|
·
|
the
commitments and liabilities of PPL and its
subsidiaries;
|
·
|
market
demand and prices for energy, capacity, emission allowances and delivered
fuel;
|
·
|
competition
in retail and wholesale power markets;
|
·
|
liquidity
of wholesale power markets;
|
·
|
defaults
by counterparties under energy, fuel or other power product
contracts;
|
·
|
market
prices of commodity inputs for ongoing capital
expenditures;
|
·
|
capital
market conditions, including the availability of capital or credit,
changes in interest rates, and decisions regarding capital
structure;
|
·
|
stock
price performance of PPL;
|
·
|
the
fair value of debt and equity securities and the impact on defined benefit
costs and resultant cash funding requirements for defined benefit
plans;
|
·
|
interest
rates and their affect on pension, retiree medical and nuclear
decommissioning liabilities;
|
·
|
the
impact of the current financial and economic downturn;
|
·
|
the
profitability and liquidity, including access to capital markets and
credit facilities, of PPL and its subsidiaries;
|
·
|
new
accounting requirements or new interpretations or applications of existing
requirements;
|
·
|
securities
and credit ratings;
|
·
|
foreign
currency exchange rates;
|
·
|
current
and future environmental conditions and requirements and the related costs
of compliance, including environmental capital expenditures, emission
allowance costs and other expenses;
|
·
|
political,
regulatory or economic conditions in states, regions or countries where
PPL or its subsidiaries conduct business;
|
·
|
receipt
of necessary governmental permits, approvals and rate
relief;
|
·
|
new
state, federal or foreign legislation, including new tax
legislation;
|
·
|
state,
federal and foreign regulatory developments;
|
·
|
the
impact of any state, federal or foreign investigations applicable to PPL
and its subsidiaries and the energy industry;
|
·
|
the
effect of any business or industry restructuring;
|
·
|
development
of new projects, markets and technologies;
|
·
|
performance
of new ventures; and
|
·
|
asset
acquisitions and dispositions.
|
Item 1. Financial
Statements
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||
PPL
Corporation and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars, except share data)
|
||||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
Revenues
|
||||||||
Utility
|
$
|
1,065
|
$
|
1,120
|
||||
Unregulated
retail electric and gas
|
42
|
34
|
||||||
Wholesale
energy marketing
|
||||||||
Realized
|
813
|
438
|
||||||
Unrealized
economic activity (Note 14)
|
352
|
(180
|
)
|
|||||
Net
energy trading margins
|
(12
|
)
|
(2
|
)
|
||||
Energy-related
businesses
|
99
|
116
|
||||||
Total
|
2,359
|
1,526
|
||||||
Operating
Expenses
|
||||||||
Operation
|
||||||||
Fuel
|
258
|
240
|
||||||
Energy
purchases
|
||||||||
Realized
|
684
|
317
|
||||||
Unrealized
economic activity (Note 14)
|
269
|
(259
|
)
|
|||||
Other
operation and maintenance
|
373
|
377
|
||||||
Amortization
of recoverable transition costs
|
84
|
76
|
||||||
Depreciation
|
110
|
112
|
||||||
Taxes,
other than income
|
73
|
75
|
||||||
Energy-related
businesses
|
91
|
108
|
||||||
Total
|
1,942
|
1,046
|
||||||
Operating
Income
|
417
|
480
|
||||||
Other
Income - net
|
19
|
8
|
||||||
Interest
Expense
|
89
|
108
|
||||||
Income
from Continuing Operations Before Income Taxes
|
347
|
380
|
||||||
Income
Taxes
|
101
|
129
|
||||||
Income
from Continuing Operations After Income Taxes
|
246
|
251
|
||||||
Income
from Discontinued Operations (net of income taxes)
|
14
|
|||||||
Net
Income
|
246
|
265
|
||||||
Net
Income Attributable to Noncontrolling Interests
|
5
|
5
|
||||||
Net
Income Attributable to PPL Corporation
|
$
|
241
|
$
|
260
|
||||
Amounts
Attributable to PPL Corporation:
|
||||||||
Income
from Continuing Operations After Income Taxes
|
$
|
241
|
$
|
246
|
||||
Income
from Discontinued Operations (net of income taxes)
|
14
|
|||||||
Net
Income
|
$
|
241
|
$
|
260
|
||||
Earnings
Per Share of Common Stock:
|
||||||||
Income
from Continuing Operations After Income Taxes Available to PPL
Corporation Common Shareowners:
|
||||||||
Basic
|
$
|
0.64
|
$
|
0.65
|
||||
Diluted
|
$
|
0.64
|
$
|
0.65
|
||||
Net
Income Available to PPL Corporation Common Shareowners:
|
||||||||
Basic
|
$
|
0.64
|
$
|
0.69
|
||||
Diluted
|
$
|
0.64
|
$
|
0.69
|
||||
Dividends
Declared Per Share of Common Stock
|
$
|
0.345
|
$
|
0.335
|
||||
Weighted-Average Shares of
Common Stock Outstanding (in thousands)
|
||||||||
Basic
|
375,112
|
372,782
|
||||||
Diluted
|
375,409
|
375,002
|
||||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Corporation and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
Flows from Operating Activities
|
||||||||
Net
income
|
$
|
246
|
$
|
265
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
Depreciation
|
110
|
112
|
||||||
Amortization
of recoverable transition costs and other
|
93
|
94
|
||||||
Unrealized
gains on derivatives and other hedging activities
|
(103
|
)
|
(63
|
)
|
||||
Deferred
income taxes and investment tax credits
|
(12
|
)
|
(38
|
)
|
||||
Gains
related to the extinguishment of notes
|
(29
|
)
|
||||||
Impairment
of assets
|
51
|
3
|
||||||
Other
|
16
|
31
|
||||||
Change
in current assets and current liabilities
|
||||||||
Accounts
receivable
|
(9
|
)
|
61
|
|||||
Accounts
payable
|
(99
|
)
|
(52
|
)
|
||||
Fuel,
materials and supplies
|
(12
|
)
|
28
|
|||||
Prepayments
|
(107
|
)
|
(107
|
)
|
||||
Taxes
|
51
|
137
|
||||||
Counterparty
collateral deposits
|
137
|
33
|
||||||
Other
|
(35
|
)
|
(61
|
)
|
||||
Other
operating activities
|
||||||||
Other
assets
|
(6
|
)
|
11
|
|||||
Other
liabilities
|
18
|
(30
|
)
|
|||||
Net
cash provided by operating activities
|
310
|
424
|
||||||
Cash
Flows from Investing Activities
|
||||||||
Expenditures
for property, plant and equipment
|
(270
|
)
|
(315
|
)
|
||||
Expenditures
for intangible assets
|
(30
|
)
|
(38
|
)
|
||||
Proceeds
from the sale of intangible assets
|
4
|
1
|
||||||
Purchases
of nuclear plant decommissioning trust investments
|
(94
|
)
|
(47
|
)
|
||||
Proceeds
from the sale of nuclear plant decommissioning trust
investments
|
87
|
40
|
||||||
Purchases
of other investments
|
(50
|
)
|
||||||
Proceeds
from the sale of other investments
|
25
|
|||||||
Net
decrease (increase) in restricted cash and cash
equivalents
|
156
|
(78
|
)
|
|||||
Other
investing activities
|
(3
|
)
|
||||||
Net
cash used in investing activities
|
(150
|
)
|
(462
|
)
|
||||
Cash
Flows from Financing Activities
|
||||||||
Issuance
of long-term debt
|
399
|
|||||||
Retirement
of long-term debt
|
(421
|
)
|
(91
|
)
|
||||
Issuance
of common stock
|
16
|
4
|
||||||
Repurchase
of common stock due to the repurchase program
|
(38
|
)
|
||||||
Payment
of common stock dividends
|
(126
|
)
|
(113
|
)
|
||||
Net
decrease in short-term debt
|
(90
|
)
|
(50
|
)
|
||||
Other
financing activities
|
(8
|
)
|
(3
|
)
|
||||
Net
cash (used in) provided by financing activities
|
(629
|
)
|
108
|
|||||
Effect
of Exchange Rates on Cash and Cash Equivalents
|
(2
|
)
|
||||||
Net
(Decrease) Increase in Cash and Cash Equivalents
|
(469
|
)
|
68
|
|||||
Cash
and Cash Equivalents at Beginning of Period
|
1,100
|
430
|
||||||
Cash
and Cash Equivalents included in Assets Held for Sale
|
(3
|
)
|
||||||
Cash
and Cash Equivalents at End of Period
|
$
|
631
|
$
|
495
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Corporation and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
March 31,
2009
|
December
31,
2008
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$
|
631
|
$
|
1,100
|
||||
Short-term
investments
|
150
|
150
|
||||||
Restricted
cash and cash equivalents
|
164
|
320
|
||||||
Accounts
receivable (less reserve: 2009, $35; 2008, $36)
|
||||||||
Customer
|
488
|
456
|
||||||
Other
|
50
|
77
|
||||||
Unbilled
revenues
|
564
|
599
|
||||||
Fuel,
materials and supplies
|
349
|
337
|
||||||
Prepayments
|
189
|
84
|
||||||
Price
risk management assets
|
1,818
|
1,224
|
||||||
Other
intangibles
|
29
|
17
|
||||||
Other
|
19
|
19
|
||||||
Total
Current Assets
|
4,451
|
4,383
|
||||||
Investments
|
||||||||
Investment
in unconsolidated affiliates - at equity
|
48
|
47
|
||||||
Nuclear
plant decommissioning trust funds
|
425
|
446
|
||||||
Other
|
25
|
29
|
||||||
Total
Investments
|
498
|
522
|
||||||
Property,
Plant and Equipment
|
||||||||
Electric
plant in service
|
||||||||
Transmission
and distribution
|
7,867
|
8,046
|
||||||
Generation
|
9,660
|
9,588
|
||||||
General
|
843
|
840
|
||||||
18,370
|
18,474
|
|||||||
Construction
work in progress
|
1,190
|
1,131
|
||||||
Nuclear
fuel
|
443
|
428
|
||||||
Electric
plant
|
20,003
|
20,033
|
||||||
Gas
and oil plant
|
68
|
68
|
||||||
Other
property
|
149
|
156
|
||||||
20,220
|
20,257
|
|||||||
Less: accumulated
depreciation
|
7,938
|
7,882
|
||||||
Total
Property, Plant and Equipment
|
12,282
|
12,375
|
||||||
Regulatory
and Other Noncurrent Assets
|
||||||||
Regulatory
assets
|
649
|
737
|
||||||
Goodwill
|
715
|
763
|
||||||
Other
intangibles
|
606
|
637
|
||||||
Price
risk management assets
|
1,986
|
1,392
|
||||||
Other
|
603
|
596
|
||||||
Total
Regulatory and Other Noncurrent Assets
|
4,559
|
4,125
|
||||||
Total
Assets
|
$
|
21,790
|
$
|
21,405
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||||
PPL
Corporation and Subsidiaries
|
||||||||||
(Unaudited)
|
||||||||||
(Millions
of Dollars)
|
||||||||||
March 31,
2009
|
December
31,
2008
|
|||||||||
Liabilities
and Equity
|
||||||||||
Current
Liabilities
|
||||||||||
Short-term
debt
|
$
|
581
|
$
|
679
|
||||||
Long-term
debt
|
495
|
696
|
||||||||
Accounts
payable
|
663
|
766
|
||||||||
Above
market NUG contracts
|
19
|
25
|
||||||||
Taxes
|
127
|
77
|
||||||||
Interest
|
129
|
130
|
||||||||
Dividends
|
134
|
131
|
||||||||
Price
risk management liabilities
|
1,777
|
1,324
|
||||||||
Other
|
685
|
474
|
||||||||
Total
Current Liabilities
|
4,610
|
4,302
|
||||||||
Long-term
Debt
|
6,781
|
7,142
|
||||||||
Deferred
Credits and Other Noncurrent Liabilities
|
||||||||||
Deferred
income taxes and investment tax credits
|
1,744
|
1,764
|
||||||||
Price
risk management liabilities
|
1,190
|
836
|
||||||||
Accrued
pension obligations
|
860
|
899
|
||||||||
Asset
retirement obligations
|
392
|
389
|
||||||||
Other
|
657
|
677
|
||||||||
Total
Deferred Credits and Other Noncurrent Liabilities
|
4,843
|
4,565
|
||||||||
Commitments
and Contingent Liabilities (Note 10)
|
||||||||||
Equity
|
||||||||||
PPL
Corporation Shareowners' Common Equity
|
||||||||||
Common
stock - $0.01 par value (a)
|
4
|
4
|
||||||||
Capital
in excess of par value
|
2,228
|
2,196
|
||||||||
Earnings
reinvested
|
3,973
|
3,862
|
||||||||
Accumulated
other comprehensive loss
|
(968
|
)
|
(985
|
)
|
||||||
Total
PPL Corporation Shareowners' Common Equity
|
5,237
|
5,077
|
||||||||
Noncontrolling
Interests
|
319
|
319
|
||||||||
Total
Equity
|
5,556
|
5,396
|
||||||||
Total
Liabilities and Equity
|
$
|
21,790
|
$
|
21,405
|
||||||
(a)
|
780
million shares authorized; 376 million and 375 million shares issued and
outstanding at March 31, 2009 and December 31,
2008.
|
|||||||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Corporation and Subsidiaries
|
||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||
(Millions
of Dollars, shares in thousands)
|
||||||||||||||||||||||||||
PPL
Corporation Shareowners
|
||||||||||||||||||||||||||
Common
stock shares outstanding
|
Common
stock
|
Capital
in excess of par value
|
Earnings
reinvested
|
Accumulated
other comprehensive loss
|
Non-controlling
interests
|
Total
|
||||||||||||||||||||
December
31, 2008 (a)
|
374,581
|
$
|
4
|
$
|
2,196
|
$
|
3,862
|
$
|
(985
|
)
|
$
|
319
|
$
|
5,396
|
||||||||||||
Common
stock issued (b)
|
1,050
|
34
|
34
|
|||||||||||||||||||||||
Common
stock repurchased
|
(34
|
)
|
(1
|
)
|
(1
|
)
|
||||||||||||||||||||
Stock-based
compensation
|
(1
|
) |
(1
|
) | ||||||||||||||||||||||
Net
income
|
241
|
5
|
246
|
|||||||||||||||||||||||
Dividends,
dividend equivalents and distributions (c)
|
(130
|
)
|
(5
|
)
|
(135
|
)
|
||||||||||||||||||||
Other
comprehensive income (d)
|
17
|
17
|
||||||||||||||||||||||||
March
31, 2009
|
375,597
|
$
|
4
|
$
|
2,228
|
$
|
3,973
|
$
|
(968
|
)
|
$
|
319
|
$
|
5,556
|
||||||||||||
December
31, 2007 (a)
|
373,271
|
$
|
4
|
$
|
2,185
|
$
|
3,435
|
$
|
(68
|
)
|
$
|
320
|
$
|
5,876
|
||||||||||||
Common
stock issued (b)
|
534
|
7
|
7
|
|||||||||||||||||||||||
Common
stock repurchased
|
(824
|
)
|
(39
|
)
|
(39
|
)
|
||||||||||||||||||||
Stock-based
compensation
|
17
|
17
|
||||||||||||||||||||||||
Net
income
|
260
|
5
|
265
|
|||||||||||||||||||||||
Dividends,
dividend equivalents and distributions (c)
|
(125
|
)
|
(5
|
)
|
(130
|
)
|
||||||||||||||||||||
Other
comprehensive loss (d)
|
(92
|
)
|
(92
|
)
|
||||||||||||||||||||||
March
31, 2008
|
372,981
|
$
|
4
|
$
|
2,170
|
$
|
3,570
|
$
|
(160
|
)
|
$
|
320
|
$
|
5,904
|
(a)
|
"Capital
in excess of par value" and "Earnings reinvested" have been adjusted by
$13 million in accordance with FSP ABP 14-1. See Note 2 for
additional information.
|
|||||||||
(b)
|
The
three months ended March 31, 2009, includes common stock shares issued
through the ICP, ICPKE, DRIP, ESOP, and directors retirement
plan. The three months ended March 31, 2008, includes common
stock shares issued through the ICP, ICPKE, directors retirement plan, and
the 2-5/8% Convertible Senior Notes. "Capital in excess of par
value" for the three months ended March 31, 2009, includes $7 million for
a company contribution to the ESOP.
|
|||||||||
(c)
|
"Earnings
reinvested" includes dividends and dividend equivalents on PPL Corporation
common stock and restricted stock units. "Noncontrolling
interests" includes dividends and distributions to noncontrolling
interests.
|
|||||||||
Three
Months Ended
|
||||||||||
March
31,
|
||||||||||
2009
|
2008
|
|||||||||
(d)
|
Net
income (e)
|
$
|
246
|
$
|
265
|
|||||
Other
comprehensive income (loss), net of tax expense (benefit):
|
||||||||||
Foreign
currency translation adjustments, net of tax of $0, $1
|
(92
|
)
|
(59
|
)
|
||||||
Net
unrealized loss on available-for-sale securities, net of tax of $(6),
$(15)
|
(6
|
)
|
(14
|
)
|
||||||
Net
unrealized gain (loss) on qualifying derivatives, net of tax of $123,
$(33)
|
182
|
(43
|
)
|
|||||||
Reclassifications
to net income:
|
||||||||||
Available-for-sale
securities, net of tax of $1, $1
|
1
|
1
|
||||||||
Qualifying
derivatives, net of tax of $(43), $14
|
(73
|
)
|
17
|
|||||||
Defined
benefit plans, net of tax of $3, $4
|
5
|
6
|
||||||||
Total
other comprehensive income (loss) attributable to PPL
Corporation
|
17
|
(92
|
)
|
|||||||
Comprehensive
income
|
263
|
173
|
||||||||
Comprehensive
income attributable to noncontrolling interests
|
5
|
5
|
||||||||
Comprehensive
income attributable to PPL Corporation
|
$
|
258
|
$
|
168
|
||||||
(e)
|
2009
and 2008 includes $5 million of net income attributable to noncontrolling
interests.
|
|||||||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Energy Supply, LLC and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
Revenues
|
||||||||
Wholesale
energy marketing
|
||||||||
Realized
|
$
|
813
|
$
|
438
|
||||
Unrealized
economic activity (Note 14)
|
352
|
(180
|
)
|
|||||
Wholesale
energy marketing to affiliate
|
497
|
489
|
||||||
Utility
|
176
|
241
|
||||||
Unregulated
retail electric and gas
|
42
|
34
|
||||||
Net
energy trading margins
|
(12
|
)
|
(2
|
)
|
||||
Energy-related
businesses
|
96
|
114
|
||||||
Total
|
1,964
|
1,134
|
||||||
Operating
Expenses
|
||||||||
Operation
|
||||||||
Fuel
|
258
|
240
|
||||||
Energy
purchases
|
||||||||
Realized
|
652
|
276
|
||||||
Unrealized
economic activity (Note 14)
|
269
|
(259
|
)
|
|||||
Energy
purchases from affiliate
|
20
|
28
|
||||||
Other
operation and maintenance
|
282
|
283
|
||||||
Depreciation
|
74
|
77
|
||||||
Taxes,
other than income
|
20
|
19
|
||||||
Energy-related
businesses
|
89
|
106
|
||||||
Total
|
1,664
|
770
|
||||||
Operating
Income
|
300
|
364
|
||||||
Other
Income - net
|
13
|
6
|
||||||
Interest
Income from Affiliates
|
1
|
5
|
||||||
Interest
Expense
|
56
|
71
|
||||||
Income
from Continuing Operations Before Income Taxes
|
258
|
304
|
||||||
Income
Taxes
|
67
|
105
|
||||||
Income
from Continuing Operations After Income Taxes
|
191
|
199
|
||||||
Income
from Discontinued Operations (net of income taxes)
|
5
|
|||||||
Net
Income Attributable to PPL Energy Supply
|
$
|
191
|
$
|
204
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Energy Supply, LLC and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
Flows from Operating Activities
|
||||||||
Net
income
|
$
|
191
|
$
|
204
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
Depreciation
|
74
|
77
|
||||||
Unrealized
gains on derivatives and other hedging activities
|
(103
|
)
|
(66
|
)
|
||||
Deferred
income taxes and investment tax credits
|
44
|
11
|
||||||
Gains
related to the extinguishment of notes
|
(25
|
)
|
||||||
Impairment
of assets
|
47
|
3
|
||||||
Other
|
(2
|
)
|
35
|
|||||
Change
in current assets and current liabilities
|
||||||||
Accounts
receivable
|
45
|
100
|
||||||
Accounts
payable
|
(95
|
)
|
(57
|
)
|
||||
Fuel,
materials and supplies
|
(12
|
)
|
10
|
|||||
Taxes
|
4
|
135
|
||||||
Counterparty
collateral deposits
|
125
|
33
|
||||||
Other
|
(49
|
)
|
(13
|
)
|
||||
Other
operating activities
|
||||||||
Other
assets
|
(4
|
)
|
5
|
|||||
Other
liabilities
|
5
|
(26
|
)
|
|||||
Net
cash provided by operating activities
|
245
|
451
|
||||||
Cash
Flows from Investing Activities
|
||||||||
Expenditures
for property, plant and equipment
|
(205
|
)
|
(255
|
)
|
||||
Expenditures
for intangible assets
|
(28
|
)
|
(34
|
)
|
||||
Proceeds
from the sale of intangible assets
|
4
|
1
|
||||||
Purchases
of nuclear plant decommissioning trust investments
|
(94
|
)
|
(47
|
)
|
||||
Proceeds
from the sale of nuclear plant decommissioning trust
investments
|
87
|
40
|
||||||
Purchases
of other investments
|
(47
|
)
|
||||||
Proceeds
from the sale of other investments
|
22
|
|||||||
Net
decrease (increase) in restricted cash and cash
equivalents
|
159
|
(82
|
)
|
|||||
Other
investing activities
|
(1
|
)
|
||||||
Net
cash used in investing activities
|
(77
|
)
|
(403
|
)
|
||||
Cash
Flows from Financing Activities
|
||||||||
Issuance
of long-term debt
|
399
|
|||||||
Retirement
of long-term debt
|
(220
|
)
|
(9
|
)
|
||||
Distributions
to Member
|
(296
|
)
|
(492
|
)
|
||||
Net
increase (decrease) in short-term debt
|
5
|
(50
|
)
|
|||||
Other
financing activities
|
(2
|
)
|
(3
|
)
|
||||
Net
cash used in financing activities
|
(513
|
)
|
(155
|
)
|
||||
Effect
of Exchange Rates on Cash and Cash Equivalents
|
(2
|
)
|
||||||
Net
Decrease in Cash and Cash Equivalents
|
(345
|
)
|
(109
|
)
|
||||
Cash
and Cash Equivalents at Beginning of Period
|
464
|
355
|
||||||
Cash
and Cash Equivalents at End of Period
|
$
|
119
|
$
|
246
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Energy Supply, LLC and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
March 31,
2009
|
December
31,
2008
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$
|
119
|
$
|
464
|
||||
Short-term
investments
|
150
|
150
|
||||||
Restricted
cash and cash equivalents
|
157
|
315
|
||||||
Accounts
receivable (less reserve: 2009, $21; 2008, $21)
|
||||||||
Customer
|
194
|
220
|
||||||
Other
|
46
|
66
|
||||||
Unbilled
revenues
|
411
|
408
|
||||||
Accounts
receivable from affiliates
|
156
|
159
|
||||||
Collateral
on PLR energy supply to affiliate
|
300
|
300
|
||||||
Fuel,
materials and supplies
|
313
|
301
|
||||||
Prepayments
|
43
|
71
|
||||||
Price
risk management assets
|
1,805
|
1,221
|
||||||
Other
intangibles
|
29
|
17
|
||||||
Other
|
7
|
6
|
||||||
Total
Current Assets
|
3,730
|
3,698
|
||||||
Investments
|
||||||||
Investment
in unconsolidated affiliates - at equity
|
48
|
47
|
||||||
Nuclear
plant decommissioning trust funds
|
425
|
446
|
||||||
Other
|
19
|
21
|
||||||
Total
Investments
|
492
|
514
|
||||||
Property,
Plant and Equipment
|
||||||||
Electric
plant in service
|
||||||||
Transmission
and distribution
|
3,333
|
3,540
|
||||||
Generation
|
9,660
|
9,588
|
||||||
General
|
261
|
286
|
||||||
13,254
|
13,414
|
|||||||
Construction
work in progress
|
1,099
|
1,031
|
||||||
Nuclear
fuel
|
443
|
428
|
||||||
Electric
plant
|
14,796
|
14,873
|
||||||
Gas
and oil plant
|
68
|
68
|
||||||
Other
property
|
147
|
154
|
||||||
15,011
|
15,095
|
|||||||
Less: accumulated
depreciation
|
5,967
|
5,935
|
||||||
Total
Property, Plant and Equipment
|
9,044
|
9,160
|
||||||
Other
Noncurrent Assets
|
||||||||
Goodwill
|
715
|
763
|
||||||
Other
intangibles
|
474
|
507
|
||||||
Price
risk management assets
|
1,943
|
1,346
|
||||||
Other
|
483
|
481
|
||||||
Total
Other Noncurrent Assets
|
3,615
|
3,097
|
||||||
Total
Assets
|
$
|
16,881
|
$
|
16,469
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
PPL
Energy Supply, LLC and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
March 31,
2009
|
December
31,
2008
|
|||||||
Liabilities
and Equity
|
||||||||
Current
Liabilities
|
||||||||
Short-term
debt
|
$
|
581
|
$
|
584
|
||||
Accounts
payable
|
600
|
684
|
||||||
Accounts
payable to affiliates
|
56
|
62
|
||||||
Above
market NUG contracts
|
19
|
25
|
||||||
Taxes
|
34
|
31
|
||||||
Interest
|
100
|
88
|
||||||
Deferred
revenue on PLR energy supply to affiliate
|
9
|
12
|
||||||
Price
risk management liabilities
|
1,776
|
1,313
|
||||||
Other
|
548
|
357
|
||||||
Total
Current Liabilities
|
3,723
|
3,156
|
||||||
Long-term
Debt
|
4,840
|
5,196
|
||||||
Deferred
Credits and Other Noncurrent Liabilities
|
||||||||
Deferred
income taxes and investment tax credits
|
1,140
|
1,110
|
||||||
Price
risk management liabilities
|
1,190
|
836
|
||||||
Accrued
pension obligations
|
504
|
556
|
||||||
Asset
retirement obligations
|
392
|
389
|
||||||
Other
|
378
|
414
|
||||||
Total
Deferred Credits and Other Noncurrent Liabilities
|
3,604
|
3,305
|
||||||
Commitments
and Contingent Liabilities (Note 10)
|
||||||||
Equity
|
||||||||
Member's
equity
|
4,696
|
4,794
|
||||||
Noncontrolling
interests
|
18
|
18
|
||||||
Total
Equity
|
4,714
|
4,812
|
||||||
Total
Liabilities and Equity
|
$
|
16,881
|
$
|
16,469
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Energy Supply, LLC and Subsidiaries
|
||||||||||||
(Unaudited)
|
||||||||||||
(Millions
of Dollars)
|
||||||||||||
Member's
equity
|
Non-controlling
interests
|
Total
|
||||||||||
December
31, 2008
|
$
|
4,794
|
$
|
18
|
$
|
4,812
|
||||||
Net
income
|
191
|
191
|
||||||||||
Other
comprehensive income (a)
|
7
|
7
|
||||||||||
Distributions
to member
|
(296
|
)
|
(296
|
)
|
||||||||
March
31, 2009
|
$
|
4,696
|
$
|
18
|
$
|
4,714
|
||||||
December
31, 2007
|
$
|
5,205
|
$
|
19
|
$
|
5,224
|
||||||
Net
income
|
204
|
204
|
||||||||||
Other
comprehensive loss (a)
|
(87
|
)
|
(87
|
)
|
||||||||
Distributions
to member
|
(492
|
)
|
(492
|
)
|
||||||||
March
31, 2008
|
$
|
4,830
|
$
|
19
|
$
|
4,849
|
Three
Months Ended
|
||||||||||
March
31,
|
||||||||||
2009
|
2008
|
|||||||||
(a)
|
Net
income
|
$
|
191
|
$
|
204
|
|||||
Other
comprehensive income (loss), net of tax expense (benefit):
|
||||||||||
Foreign
currency translation adjustments, net of tax of $0, $1
|
(92
|
)
|
(59
|
)
|
||||||
Net
unrealized loss on available-for-sale securities, net of tax of $(6),
$(15)
|
(6
|
)
|
(14
|
)
|
||||||
Net
unrealized gain (loss) on qualifying derivatives, net of tax of $115,
$(31)
|
171
|
(41
|
)
|
|||||||
Reclassifications
to net income:
|
||||||||||
Available-for-sale
securities, net of tax of $1, $1
|
1
|
1
|
||||||||
Qualifying
derivatives, net of tax of $(43), $15
|
(71
|
)
|
20
|
|||||||
Defined
benefit plans, net of tax of $3, $3
|
4
|
6
|
||||||||
Total
other comprehensive income (loss) attributable to PPL Energy
Supply
|
7
|
(87
|
)
|
|||||||
Comprehensive
income attributable to PPL Energy Supply
|
$
|
198
|
$
|
117
|
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Electric Utilities Corporation and Subsidiaries
|
||||||||||
(Unaudited)
|
||||||||||
(Millions
of Dollars)
|
||||||||||
Three
Months Ended March 31,
|
||||||||||
2009
|
2008
|
|||||||||
Operating
Revenues
|
||||||||||
Retail
electric
|
$
|
890
|
$
|
880
|
||||||
Wholesale
electric to affiliate
|
20
|
28
|
||||||||
Total
|
910
|
908
|
||||||||
Operating
Expenses
|
||||||||||
Operation
|
||||||||||
Energy
purchases
|
32
|
41
|
||||||||
Energy
purchases from affiliate
|
497
|
489
|
||||||||
Other
operation and maintenance
|
106
|
103
|
||||||||
Amortization
of recoverable transition costs
|
84
|
76
|
||||||||
Depreciation
|
33
|
32
|
||||||||
Taxes,
other than income
|
52
|
56
|
||||||||
Total
|
804
|
797
|
||||||||
Operating
Income
|
106
|
111
|
||||||||
Other
Income - net
|
2
|
2
|
||||||||
Interest
Income from Affiliate
|
2
|
3
|
||||||||
Interest
Expense
|
28
|
26
|
||||||||
Interest
Expense with Affiliate
|
1
|
3
|
||||||||
Income
Before Income Taxes
|
81
|
87
|
||||||||
Income
Taxes
|
27
|
31
|
||||||||
Net
Income (a)
|
54
|
56
|
||||||||
Dividends
on Preferred Securities
|
5
|
5
|
||||||||
Net
Income Available to PPL Corporation
|
$
|
49
|
$
|
51
|
||||||
(a)
|
Comprehensive
income approximates net income.
|
|||||||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Electric Utilities Corporation and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
Flows from Operating Activities
|
||||||||
Net
income
|
$
|
54
|
$
|
56
|
||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities
|
||||||||
Depreciation
|
33
|
32
|
||||||
Amortization
of recoverable transition costs and other
|
89
|
82
|
||||||
Deferred
income taxes and investment tax credits
|
(50
|
)
|
(15
|
)
|
||||
Other
|
13
|
4
|
||||||
Change
in current assets and current liabilities
|
||||||||
Accounts
receivable
|
(56
|
)
|
(68
|
)
|
||||
Accounts
payable
|
(10
|
)
|
(38
|
)
|
||||
Prepayments
|
(131
|
)
|
(115
|
)
|
||||
Unbilled
revenue
|
38
|
21
|
||||||
Accrued
taxes
|
40
|
12
|
||||||
Other
|
20
|
(13
|
)
|
|||||
Other
operating activities
|
||||||||
Other
assets
|
3
|
(1
|
)
|
|||||
Other
liabilities
|
5
|
20
|
||||||
Net
cash provided by (used in) operating activities
|
48
|
(23
|
)
|
|||||
Cash
Flows from Investing Activities
|
||||||||
Expenditures
for property, plant and equipment
|
(61
|
)
|
(54
|
)
|
||||
Net
decrease in note receivable from affiliate
|
277
|
|||||||
Net
increase in restricted cash and cash equivalents
|
(1
|
)
|
||||||
Other
investing activities
|
(3
|
)
|
||||||
Net
cash (used in) provided by investing activities
|
(61
|
)
|
219
|
|||||
Cash
Flows from Financing Activities
|
||||||||
Retirement
of long-term debt
|
(82
|
)
|
||||||
Payment
of common dividends to PPL
|
(25
|
)
|
(18
|
)
|
||||
Net
decrease in short-term debt
|
(95
|
)
|
||||||
Payment
of dividends on preferred securities
|
(5
|
)
|
(5
|
)
|
||||
Net
cash used in financing activities
|
(125
|
)
|
(105
|
)
|
||||
Net
(Decrease) Increase in Cash and Cash Equivalents
|
(138)
|
91
|
||||||
Cash
and Cash Equivalents at Beginning of Period
|
483
|
33
|
||||||
Cash
and Cash Equivalents at End of Period
|
$
|
345
|
$
|
124
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
PPL
Electric Utilities Corporation and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
March 31,
2009
|
December
31,
2008
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$
|
345
|
$
|
483
|
||||
Restricted
cash and cash equivalents
|
1
|
1
|
||||||
Accounts
receivable (less reserve: 2009, $14; 2008, $14)
|
||||||||
Customer
|
292
|
233
|
||||||
Other
|
4
|
11
|
||||||
Unbilled
revenues
|
152
|
190
|
||||||
Accounts
receivable from affiliates
|
12
|
8
|
||||||
Note
receivable from affiliate
|
300
|
300
|
||||||
Prepayments
|
138
|
7
|
||||||
Prepayment
on PLR energy supply from affiliate
|
9
|
12
|
||||||
Other
|
53
|
50
|
||||||
Total
Current Assets
|
1,306
|
1,295
|
||||||
Property,
Plant and Equipment
|
||||||||
Electric
plant in service
|
||||||||
Transmission
and distribution
|
4,534
|
4,506
|
||||||
General
|
511
|
489
|
||||||
5,045
|
4,995
|
|||||||
Construction
work in progress
|
77
|
79
|
||||||
Electric
plant
|
5,122
|
5,074
|
||||||
Other
property
|
2
|
2
|
||||||
5,124
|
5,076
|
|||||||
Less: accumulated
depreciation
|
1,946
|
1,924
|
||||||
Total
Property, Plant and Equipment
|
3,178
|
3,152
|
||||||
Regulatory
and Other Noncurrent Assets
|
||||||||
Recoverable
transition costs
|
197
|
281
|
||||||
Intangibles
|
132
|
130
|
||||||
Taxes
recoverable through future rates
|
251
|
250
|
||||||
Recoverable
costs of defined benefit plans
|
189
|
192
|
||||||
Other
|
114
|
116
|
||||||
Total
Regulatory and Other Noncurrent Assets
|
883
|
969
|
||||||
Total
Assets
|
$
|
5,367
|
$
|
5,416
|
||||
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
PPL
Electric Utilities Corporation and Subsidiaries
|
||||||||
(Unaudited)
|
||||||||
(Millions
of Dollars)
|
||||||||
March 31,
2009
|
December
31,
2008
|
|||||||
Liabilities
and Equity
|
||||||||
Current
Liabilities
|
||||||||
Short-term
debt
|
$
|
95
|
||||||
Long-term
debt
|
$
|
495
|
495
|
|||||
Accounts
payable
|
44
|
57
|
||||||
Accounts
payable to affiliates
|
192
|
186
|
||||||
Taxes
|
105
|
65
|
||||||
Collateral
on PLR energy supply from affiliate
|
300
|
300
|
||||||
Other
|
145
|
124
|
||||||
Total
Current Liabilities
|
1,281
|
1,322
|
||||||
Long-term
Debt
|
1,274
|
1,274
|
||||||
Deferred
Credits and Other Noncurrent Liabilities
|
||||||||
Deferred
income taxes and investment tax credits
|
721
|
767
|
||||||
Accrued
pension obligations
|
214
|
209
|
||||||
Other
|
207
|
198
|
||||||
Total
Deferred Credits and Other Noncurrent Liabilities
|
1,142
|
1,174
|
||||||
Commitments
and Contingent Liabilities (Note 10)
|
||||||||
Shareowners'
Equity
|
||||||||
Preferred
securities
|
301
|
301
|
||||||
Common
stock - no par value (a)
|
364
|
364
|
||||||
Additional
paid-in capital
|
424
|
424
|
||||||
Earnings
reinvested
|
581
|
557
|
||||||
Total
Shareowners' Equity
|
1,670
|
1,646
|
||||||
Total
Liabilities and Equity
|
$
|
5,367
|
$
|
5,416
|
(a)
|
170
million shares authorized; 66 million shares issued and outstanding at
March 31, 2009 and December 31, 2008.
|
|
The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of the financial
statements.
|
Three
Months Ended March 31,
|
||||||||||||||||
PPL
|
PPL
Energy Supply
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Income
Statement Data
|
||||||||||||||||
Revenues
from external customers
|
||||||||||||||||
Supply
(a)
|
$
|
1,286
|
$
|
396
|
$
|
1,781
|
$
|
884
|
||||||||
International
Delivery
|
183
|
250
|
183
|
250
|
||||||||||||
Pennsylvania
Delivery
|
890
|
880
|
||||||||||||||
$
|
2,359
|
$
|
1,526
|
$
|
1,964
|
$
|
1,134
|
|||||||||
Intersegment
revenues
|
||||||||||||||||
Supply
|
$
|
497
|
$
|
489
|
||||||||||||
Pennsylvania
Delivery
|
20
|
28
|
||||||||||||||
Net
Income Attributable to PPL/PPL Energy Supply
|
||||||||||||||||
Supply
|
$
|
105
|
$
|
102
|
$
|
104
|
$
|
106
|
||||||||
International
Delivery (b)
|
87
|
98
|
87
|
98
|
||||||||||||
Pennsylvania
Delivery (c)
|
49
|
60
|
||||||||||||||
$
|
241
|
$
|
260
|
$
|
191
|
$
|
204
|
PPL
|
PPL
Energy Supply
|
|||||||||||||||
March 31, 2009
|
December
31, 2008
|
March 31, 2009
|
December
31, 2008
|
|||||||||||||
Balance
Sheet Data
|
||||||||||||||||
Total
assets
|
||||||||||||||||
Supply
|
$
|
12,485
|
$
|
11,790
|
$
|
12,943
|
$
|
12,270
|
||||||||
International
Delivery
|
3,938
|
4,199
|
3,938
|
4,199
|
||||||||||||
Pennsylvania
Delivery
|
5,367
|
5,416
|
||||||||||||||
$
|
21,790
|
$
|
21,405
|
$
|
16,881
|
$
|
16,469
|
(a)
|
Includes
unrealized gains and losses from economic activity. See Note 14
for additional information.
|
|
(b)
|
2008
includes the results of Discontinued Operations of the Latin American
businesses. See Note 8 for additional
information.
|
|
(c)
|
2008
includes the results of Discontinued Operations of PPL's natural gas
distribution and propane businesses. See Note 8 for additional
information.
|
Three
Months Ended
March 31,
|
||||||||
2009
|
2008
|
|||||||
Income
(Numerator)
|
||||||||
Income
from continuing operations after income taxes attributable to
PPL
|
$
|
241
|
$
|
246
|
||||
Less
amounts allocated to participating securities
|
1
|
1
|
||||||
Income
from continuing operations after income taxes available to PPL common
shareowners
|
$
|
240
|
$
|
245
|
||||
Income
from discontinued operations (net of income taxes) available to PPL common
shareowners
|
$
|
14
|
||||||
Net
income attributable to PPL
|
$
|
241
|
$
|
260
|
||||
Less
amounts allocated to participating securities
|
1
|
1
|
||||||
Net
income available to PPL common shareowners
|
$
|
240
|
$
|
259
|
||||
Shares
of Common Stock (Denominator)
|
||||||||
Weighted-average
shares - Basic EPS
|
375,112
|
372,782
|
||||||
Add incremental
non-participating securities:
|
||||||||
Stock
options and performance units
|
297
|
1,136
|
||||||
Convertible
Senior Notes
|
1,084
|
|||||||
Weighted-average
shares - Diluted EPS
|
375,409
|
375,002
|
||||||
Basic
EPS
|
||||||||
Available
to PPL common shareowners:
|
||||||||
Income
from continuing operations after income taxes
|
$
|
0.64
|
$
|
0.65
|
||||
Income
from discontinued operations (net of income taxes)
|
0.04
|
|||||||
Net
Income
|
$
|
0.64
|
$
|
0.69
|
||||
Diluted
EPS
|
||||||||
Available
to PPL common shareowners:
|
||||||||
Income
from continuing operations after income taxes
|
$
|
0.64
|
$
|
0.65
|
||||
Income
from discontinued operations (net of income taxes)
|
0.04
|
|||||||
Net
Income
|
$
|
0.64
|
$
|
0.69
|
5.
|
Three
Months Ended March 31,
|
||||||||
PPL
|
2009
|
2008
|
||||||
Reconciliation
of Income Tax Expense
|
||||||||
Federal
income tax on Income from Continuing Operations Before Income Taxes at
statutory tax rate - 35%
|
$
|
121
|
$
|
133
|
||||
Increase
(decrease) due to:
|
||||||||
State
income taxes (a)
|
8
|
9
|
||||||
Amortization
of investment tax credits
|
(2
|
)
|
(3
|
)
|
||||
Federal
income tax credits (b)
|
13
|
|||||||
Difference
related to income recognition of foreign affiliates (net of foreign income
taxes)
|
(11
|
)
|
(8
|
)
|
||||
Change
in foreign tax reserves (a)
|
(14
|
)
|
(12
|
)
|
||||
Change
in federal tax reserves (a)
|
10
|
3
|
||||||
Stranded
cost securitization (a)
|
(1
|
)
|
(1
|
)
|
||||
Other
|
(10
|
)
|
(5
|
)
|
||||
(20
|
)
|
(4
|
)
|
|||||
Total
income tax expense from continuing operations
|
$
|
101
|
$
|
129
|
||||
Effective
income tax rate
|
29.1%
|
33.9%
|
(a)
|
For
the three months ended March 31, 2009, PPL recorded a $6 million benefit
related to federal, state and foreign income tax reserves, which consisted
of a $14 million benefit reflected in "Change in foreign tax reserves," a
$1 million benefit reflected in "State income taxes" and a $1 million
benefit reflected in "Stranded cost securitization," offset by a $10
million expense reflected in "Change in federal tax
reserves."
|
|
For
the three months ended March 31, 2008, PPL recorded a $10 million benefit
related to federal, state and foreign income tax reserves, which consisted
of a $12 million benefit reflected in "Change in foreign tax reserves" and
a $1 million benefit reflected in "Stranded cost securitization," offset
by a $3 million expense reflected in "Change in federal tax
reserves."
|
||
(b)
|
In
March 2008, PPL Energy Supply recorded a $13 million expense to adjust the
amount of synthetic fuel tax credits recorded during 2007. See
Note 10 for additional information.
|
Three
Months Ended March 31,
|
||||||||
PPL Energy
Supply
|
2009
|
2008
|
||||||
Reconciliation
of Income Tax Expense
|
||||||||
Federal
income tax on Income from Continuing Operations Before Income Taxes at
statutory tax rate - 35%
|
$
|
90
|
$
|
106
|
||||
Increase
(decrease) due to:
|
||||||||
State
income taxes (a)
|
7
|
7
|
||||||
Amortization
of investment tax credits
|
(2
|
)
|
(2
|
)
|
||||
Federal
income tax credits (b)
|
13
|
|||||||
Difference
related to income recognition of foreign affiliates (net of foreign income
taxes)
|
(11
|
)
|
(8
|
)
|
||||
Change
in foreign tax reserves (a)
|
(14
|
)
|
(12
|
)
|
||||
Other
(a)
|
(3
|
)
|
1
|
|||||
(23
|
)
|
(1
|
)
|
|||||
Total
income tax expense from continuing operations
|
$
|
67
|
$
|
105
|
||||
Effective
income tax rate
|
26.0%
|
34.5%
|
(a)
|
For
the three months ended March 31, 2009, PPL Energy Supply recorded an $11
million benefit related to federal, state and foreign income tax reserves,
which consisted of a $14 million benefit reflected in "Change in foreign
tax reserves," offset by a $3 million expense reflected in
"Other."
|
|
For
the three months ended March 31, 2008, PPL Energy Supply recorded a $9
million benefit related to federal, state and foreign income tax reserves,
which consisted of a $12 million benefit reflected in "Change in foreign
tax reserves" and a $1 million benefit reflected in "State income taxes,"
offset by a $4 million expense reflected in "Other."
|
||
(b)
|
In
March 2008, PPL Energy Supply recorded a $13 million expense to adjust the
amount of synthetic fuel tax credits recorded during 2007. See
Note 10 for additional information.
|
Three
Months Ended March 31,
|
||||||||
PPL
Electric
|
2009
|
2008
|
||||||
Reconciliation
of Income Tax Expense
|
||||||||
Federal
income tax on Income Before Income Taxes at statutory tax rate -
35%
|
$
|
28
|
$
|
30
|
||||
Increase
(decrease) due to:
|
||||||||
State
income taxes
|
3
|
4
|
||||||
Amortization
of investment tax credits
|
(1
|
)
|
(1
|
)
|
||||
Stranded
cost securitization (a)
|
(1
|
)
|
(1
|
)
|
||||
Other
(a)
|
(2
|
)
|
(1
|
)
|
||||
(1
|
)
|
1
|
||||||
Total
income tax expense
|
$
|
27
|
$
|
31
|
||||
Effective
income tax rate
|
33.3%
|
35.6%
|
(a)
|
For
the three months ended March 31, 2009, PPL Electric recorded a $2 million
benefit related to federal and state income tax reserves, which consisted
of a $1 million benefit reflected in "Stranded cost securitization" and a
$1 million benefit reflected in "Other."
|
|
For
the three months ended March 31, 2008, PPL Electric recorded a $1 million
benefit related to federal and state income tax reserves reflected in
"Stranded cost securitization."
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
PPL
|
||||||||
Beginning
of period (a)
|
$
|
202
|
$
|
204
|
||||
Additions
based on tax positions of prior years
|
14
|
17
|
||||||
Reduction
based on tax positions of prior years
|
(10
|
)
|
||||||
Additions
based on tax positions related to the current year
|
3
|
5
|
||||||
Settlements
|
(26
|
)
|
(12
|
)
|
||||
Lapse
of applicable statutes of limitations
|
(2
|
)
|
(2
|
)
|
||||
Effects
of foreign currency translation
|
(4
|
)
|
(2
|
)
|
||||
End
of period
|
$
|
187
|
$
|
200
|
||||
PPL Energy
Supply
|
||||||||
Beginning
of period (a)
|
$
|
119
|
$
|
130
|
||||
Additions
based on tax positions of prior years
|
2
|
|||||||
Reduction
based on tax positions of prior years
|
(7
|
)
|
||||||
Additions
based on tax positions related to the current year
|
3
|
2
|
||||||
Settlements
|
(26
|
)
|
(12
|
)
|
||||
Effects
of foreign currency translation
|
(4
|
)
|
(2
|
)
|
||||
End
of period
|
$
|
94
|
$
|
111
|
||||
PPL Electric
|
||||||||
Beginning
of period
|
$
|
77
|
$
|
68
|
||||
Additions
based on tax positions of prior years
|
7
|
17
|
||||||
Reduction
based on tax positions of prior years
|
(3
|
)
|
||||||
Additions
based on tax positions related to the current year
|
3
|
|||||||
Lapse
of applicable statutes of limitations
|
(2
|
)
|
(2
|
)
|
||||
End
of period
|
$
|
82
|
$
|
83
|
(a)
|
The
2008 beginning period balance includes a $15 million adjustment to exclude
recognized uncertain tax positions from unrecognized tax
benefits.
|
PPL
|
PPL
Energy Supply
|
PPL
Electric
|
||||||||||
Total
unrecognized tax benefits
|
$
|
187
|
$
|
94
|
$
|
82
|
||||||
Unrecognized
tax benefits associated with taxable or deductible temporary
differences
|
(27
|
)
|
10
|
(37
|
)
|
|||||||
Total
indirect effect of unrecognized tax benefits on other tax
jurisdictions
|
(41
|
)
|
(13
|
)
|
(25
|
)
|
||||||
Total
unrecognized tax benefits and related indirect effects that if recognized
would decrease the effective tax rate
|
$
|
119
|
$
|
91
|
$
|
20
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
PPL
|
$
|
4
|
$
|
(1
|
)
|
|||
PPL
Energy Supply
|
2
|
(3
|
)
|
|||||
PPL
Electric
|
(1
|
)
|
2
|
Expiration
Date
|
Capacity
|
Borrowed
|
Letters
of Credit Issued
|
Unused
Capacity
|
|||||||||||||||
PPL
Energy Supply Domestic Credit Facilities
|
|||||||||||||||||||
364-day
Syndicated Credit Facility (a)
|
Sept-09
|
$
|
385
|
$
|
385
|
||||||||||||||
364-day
Bilateral Credit Facility (b)
|
Mar-10
|
200
|
n/a
|
$
|
177
|
23
|
|||||||||||||
5-year
Structured Credit Facility (c)
|
Mar-11
|
300
|
n/a
|
259
|
41
|
||||||||||||||
5-year
Syndicated Credit Facility (d)
|
June-12
|
3,225
|
$
|
285
|
385
|
2,555
|
|||||||||||||
Total
PPL Energy Supply Domestic Credit Facilities
|
$
|
4,110
|
$
|
285
|
$
|
821
|
$
|
3,004
|
|||||||||||
WPD
Credit Facilities
|
|||||||||||||||||||
WPDH
Limited 5-year Syndicated Credit Facility (e)
|
Jan-13
|
£
|
150
|
£
|
145
|
n/a
|
£
|
5
|
|||||||||||
WPD
(South West) 5-year Syndicated Credit Facility (f)
|
Oct-09
|
150
|
57
|
n/a
|
93
|
||||||||||||||
WPD
(South West) Uncommitted Credit Facilities (g)
|
65
|
4
|
n/a
|
61
|
|||||||||||||||
WPD
(South West) Letter of Credit Facility
|
Mar-10
|
4
|
n/a
|
£
|
4
|
|
|||||||||||||
Total
WPD Credit Facilities (h)
|
£
|
369
|
£
|
206
|
£
|
4
|
£
|
159
|
(a)
|
Under
this facility, PPL Energy Supply has the ability to make cash borrowings
and to cause the lenders to issue letters of credit. Borrowings
generally bear interest at LIBOR-based rates plus a spread, depending upon
the company's public debt rating.
|
|
(b)
|
In
March 2009, PPL Energy Supply's 364-day bilateral credit facility was
amended. The amendment included extending the expiration date
from March 2009 to March 2010 and reducing the capacity from $300 million
to $200 million. Under this facility, PPL Energy Supply can
cause the bank to issue letters of credit but cannot make cash
borrowings.
|
|
(c)
|
Under
this facility, PPL Energy Supply has the ability to cause the lenders to
issue letters of credit but cannot make cash borrowings. PPL
Energy Supply's obligations under this facility are supported by a $300
million letter of credit issued on PPL Energy Supply's behalf under a
separate, but related, $300 million five-year credit agreement, also
expiring in March 2011.
|
|
(d)
|
Under
this facility, PPL Energy Supply has the ability to make cash borrowings
and to cause the lenders to issue letters of credit. Borrowings
generally bear interest at LIBOR-based rates plus a spread, depending upon
the company's public debt rating. The borrowing outstanding at
March 31, 2009, bears interest at 2.14%.
|
|
(e)
|
Borrowings
under this facility bear interest at LIBOR-based rates plus a spread,
depending on the company's public debt rating. The cash
borrowings outstanding at March 31, 2009, were comprised of a
USD-denominated borrowing of $181 million, which equated to £125 million
at the time of borrowing and bears interest at approximately 2.43%, and a
GBP-denominated borrowing of £20 million, which bears interest at
approximately 2.08%.
|
|
(f)
|
Borrowings
under this facility bear interest at LIBOR-based rates plus a spread,
depending on the company's public debt rating. The
weighted-average interest rate on the borrowings outstanding at March 31,
2009, was 1.88%.
|
|
(g)
|
The
weighted-average interest rate on the borrowings outstanding under these
facilities at March 31, 2009, was 1.60%.
|
|
(h)
|
At
March 31, 2009, the available capacity of the WPD credit facilities was
approximately $228 million.
|
Expiration
Date
|
Capacity
|
Borrowed
|
Letters
of Credit Issued
|
Unused
Capacity
|
|||||||||||||||
5-year
Syndicated Credit Facility (a)
|
May-12
|
$
|
190
|
$
|
1
|
$
|
189
|
||||||||||||
Asset-backed
Credit Facility (b)
|
Jul-09
|
150
|
n/a
|
150
|
|||||||||||||||
Total
PPL Electric Credit Facilities
|
$
|
340
|
$
|
1
|
$
|
339
|
(a)
|
Under
this facility, PPL Electric has the ability to make cash borrowings and to
cause the lenders to issue letters of credit. Borrowings
generally bear interest at LIBOR-based rates plus a spread, depending upon
the company's public debt rating.
|
|
(b)
|
PPL
Electric participates in an asset-backed commercial paper program through
which PPL Electric obtains financing by selling and contributing its
eligible accounts receivable and unbilled revenue to a special purpose,
wholly-owned subsidiary on an ongoing basis. The subsidiary has
pledged these assets to secure loans from a commercial paper conduit
sponsored by a financial institution. The subsidiary's
borrowing costs under the credit facility vary based on the commercial
paper conduit's actual cost to issue commercial paper that supports the
debt.
|
|
At
March 31, 2009 and December 31, 2008, $179 million and $76 million of
accounts receivable and $150 million and $170 million of unbilled revenue
were pledged by the subsidiary under the credit agreement related to PPL
Electric's and the subsidiary's participation in the asset-backed
commercial paper program. Based on the accounts receivable and
unbilled revenue pledged, $150 million was available for borrowing at
March 31, 2009. PPL Electric's sale to its subsidiary of the accounts
receivable and unbilled revenue is an absolute sale of the assets, and PPL
Electric does not retain an interest in these assets. However,
for financial reporting purposes, the subsidiary's financial results are
consolidated in PPL Electric's financial statements. PPL
Electric performs certain record keeping and cash collection functions
with respect to the assets in return for a servicing fee from the
subsidiary.
|
Three
Months Ended March 31, 2008
|
|||||
Operating
revenues
|
$
|
94
|
|||
Operating
expenses
|
76
|
||||
Operating
income
|
18
|
||||
Interest
expense (a)
|
2
|
||||
Income
before income taxes
|
16
|
||||
Income
tax expense
|
7
|
||||
Income
from Discontinued Operations
|
$
|
9
|
(a)
|
Includes
$1 million of interest expense allocated pursuant to EITF
87-24. The allocation is based upon debt attributable to
PPL's natural gas distribution and propane
businesses.
|
Three
Months Ended March 31, 2008
|
|||||
Operating
expenses
|
$
|
2
|
|||
Operating
loss
|
(2
|
)
|
|||
Other
income - net
|
(1
|
)
|
|||
Loss
before income taxes
|
(3
|
)
|
|||
Income
tax benefit (a)
|
(8
|
)
|
|||
Income
from Discontinued Operations
|
$
|
5
|
(a)
|
Includes
$6 million from the recognition of a previously unrecognized tax benefit
associated with a prior period tax
position.
|
Three
Months Ended March 31,
|
||||||||||||||||||||||||
Pension
Benefits
|
Other
Postretirement Benefits
|
|||||||||||||||||||||||
Domestic
|
WPD
|
|||||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||
PPL
|
||||||||||||||||||||||||
Service
cost
|
$
|
15
|
$
|
15
|
$
|
2
|
$
|
4
|
$
|
1
|
$
|
2
|
||||||||||||
Interest
cost
|
36
|
35
|
37
|
49
|
7
|
8
|
||||||||||||||||||
Expected
return on plan assets
|
(42
|
)
|
(45
|
)
|
(45
|
)
|
(60
|
)
|
(4
|
)
|
(5
|
)
|
||||||||||||
Amortization
of:
|
||||||||||||||||||||||||
Transition
(asset) obligation
|
(1
|
)
|
(1
|
)
|
2
|
2
|
||||||||||||||||||
Prior
service cost
|
5
|
5
|
1
|
1
|
2
|
3
|
||||||||||||||||||
Actuarial
loss (gain)
|
1
|
(2
|
)
|
1
|
5
|
1
|
1
|
|||||||||||||||||
Net
periodic defined benefit costs (credits) prior to special termination
benefits
|
14
|
7
|
(4
|
)
|
(1
|
)
|
9
|
11
|
||||||||||||||||
Special
termination benefits (a)
|
9
|
|||||||||||||||||||||||
Net
periodic defined benefit costs (credits)
|
$
|
23
|
$
|
7
|
$
|
(4
|
)
|
$
|
(1
|
)
|
$
|
9
|
$
|
11
|
||||||||||
PPL Energy
Supply
|
||||||||||||||||||||||||
Service
cost
|
$
|
1
|
$
|
1
|
$
|
2
|
$
|
4
|
||||||||||||||||
Interest
cost
|
2
|
2
|
37
|
49
|
||||||||||||||||||||
Expected
return on plan assets
|
(2
|
)
|
(2
|
)
|
(45
|
)
|
(60
|
)
|
||||||||||||||||
Amortization
of:
|
||||||||||||||||||||||||
Prior
service cost
|
1
|
1
|
||||||||||||||||||||||
Actuarial
loss
|
1
|
1
|
5
|
|||||||||||||||||||||
Net
periodic defined benefit costs (credits)
|
$
|
2
|
$
|
1
|
$
|
(4
|
)
|
$
|
(1
|
)
|
(a)
|
Relates
to the 2009 workforce reduction. See Note 6 for additional
information.
|
Residential
|
Small
Commercial and
Small Industrial |
||||||||||
July
2007
|
$
|
101.77
|
$
|
105.11
|
|||||||
October
2007
|
105.08
|
105.75
|
|||||||||
March
2008
|
108.80
|
108.76
|
|||||||||
October
2008
|
112.51
|
111.94
|
|||||||||
April
2009
|
86.74
|
87.59
|
|||||||||
Average
|
102.98
|
103.84
|
Recorded
Liability at
|
||||||||||||
March 31,
2009
|
December
31, 2008
|
Exposure at
March 31, 2009 (a)
|
Expiration
Date
|
|||||||||
PPL
|
||||||||||||
Indemnifications
for sale of PPL Gas Utilities
|
$
|
300
|
(b)
|
|||||||||
PPL
Energy Supply
(c)
|
||||||||||||
Letters
of credit issued on behalf of affiliates
|
10
|
(d)
|
2009
to 2011
|
|||||||||
Retroactive
premiums under nuclear insurance programs
|
38
|
(e)
|
||||||||||
Nuclear
claims under The Price-Anderson Act Amendments under The Energy Policy Act
of 2005
|
235
|
(f)
|
||||||||||
Indemnifications
for entities in liquidation and sales of assets
|
$
|
1
|
$
|
1
|
8
|
(g)
|
2010
to 2012
|
|||||
Indemnification
to operators of jointly-owned facilities
|
6
|
(h)
|
||||||||||
WPD
guarantee of pension and other obligations of unconsolidated
entities
|
2
|
2
|
28
|
(i)
|
2017
|
|||||||
Tax
indemnification related to unconsolidated WPD affiliates
|
7
|
(j)
|
2012
|
|||||||||
Guarantee
of a portion of an unconsolidated entity's debt
|
1
|
1
|
22
|
(k)
|
2018
|
(a)
|
Represents
the estimated maximum potential amount of future payments that could be
required to be made under the guarantee.
|
|
(b)
|
PPL
has provided indemnification to the purchaser of PPL Gas Utilities and
Penn Fuel Propane, LLC for damages arising out of any breach of the
representations, warranties and covenants under the related transaction
agreement and for damages arising out of certain other matters, including
certain pre-closing unknown environmental liabilities relating to former
manufactured gas plant properties or off-site disposal sites, if any,
outside of Pennsylvania. The indemnification provisions for
most representations and warranties, including tax and environmental
matters, are capped at 15% of the purchase price ($45.0 million), in the
aggregate, and are triggered (i) only if the individual claim exceeds
$50,000, and (ii) only if, and only to the extent that, in the aggregate,
total claims exceed 1.5% of the purchase price ($4.5
million). The indemnification provisions for most
representations and warranties survive for a period of one year after the
closing. Certain representations and warranties, including
those having to do with transaction authorization and title, survive
indefinitely, are capped at the purchase price and are not subject to the
above threshold or deductible. The indemnification provision
for the tax matters representations survives for the duration of the
applicable statute of limitations, and the indemnification provision for
the environmental matters representations survives for a period of three
years after the transaction closing. The indemnification
relating to unknown environmental liabilities for manufactured gas plants
and disposal sites outside of Pennsylvania could survive more than three
years, but only with respect to applicable property or sites identified by
the purchaser prior to the third anniversary of the transaction
closing. The indemnification for covenants survives until the
applicable covenant is performed and is not subject to any
cap.
|
|
(c)
|
Other
than the letters of credit, all guarantees of PPL Energy Supply and PPL
Electric also apply to PPL on a consolidated basis.
|
|
(d)
|
Standby
letter of credit arrangements under PPL Energy Supply's $300 million
five-year credit facility for the purposes of protecting various third
parties against nonperformance by PPL. This is not a guarantee
by PPL on a consolidated basis.
|
|
(e)
|
PPL
Susquehanna is contingently obligated to pay this amount related to
potential retroactive premiums that could be assessed under its nuclear
insurance programs. See "Nuclear Insurance" for additional
information.
|
|
(f)
|
This
is the maximum amount PPL Susquehanna could be assessed for each incident
at any of the nuclear reactors covered by this Act. See
"Nuclear Insurance" for additional information.
|
|
(g)
|
PPL
Energy Supply's maximum exposure with respect to certain indemnifications
and the expiration of the indemnifications cannot be estimated because, in
the case of certain indemnification provisions, the maximum potential
liability is not capped by the transaction documents and the expiration
date is based on the applicable statute of limitations. The
exposure noted is only for those cases in which the agreements provide for
a specific limit on the amount of the indemnification.
|
|
In
connection with the liquidation of wholly-owned subsidiaries that have
been deconsolidated upon turning the entities over to the liquidators,
certain affiliates of PPL Global have agreed to indemnify the liquidators,
directors and/or the entities themselves for any liabilities or expenses
arising during the liquidation process, including liabilities and expenses
of the entities placed into liquidation. In some cases, the
indemnifications are limited to a maximum amount that is based on
distributions made from the subsidiary to its parent either prior or
subsequent to being placed into liquidation. In other cases,
the maximum amount of the indemnifications is not explicitly stated in the
agreements. The indemnifications generally expire two to seven
years subsequent to the date of dissolution of the
entities. The exposure noted only includes those cases in which
the agreements provide for a specific limit on the amount of the
indemnification, and the expiration date was based on an estimate of the
dissolution date of the entities. In 2009, $212 million of
previously disclosed exposure expired.
|
||
In
addition to the $8 million exposure disclosed above, PPL Energy Supply has
provided indemnification to the purchaser of a generating facility for
losses arising out of any breach of the representations, warranties and
covenants under the related transaction documents and for losses arising
with respect to liabilities not specifically assumed by the purchaser,
including certain pre-closing environmental and tort
liabilities. The indemnification other than for pre-closing
environmental and tort liabilities is triggered only if the purchaser's
losses reach $1 million in the aggregate, capped at 50% of the purchase
price (or $95 million), and either expired in May 2007 or will expire
pursuant to applicable statutes of limitations. The
indemnification provision for unknown environmental and tort liabilities
related to periods prior to PPL Energy Supply's ownership of the real
property on which the facility is located is capped at $4 million in the
aggregate and survives for a maximum period of five years after the
transaction closing.
|
||
(h)
|
In
December 2007, a subsidiary of PPL Energy Supply executed revised owners
agreements for two jointly-owned facilities, the Keystone and Conemaugh
generating stations. The agreements require that in the event
of any default by an owner, the other owners fund contributions for the
operation of the generating stations, based upon their ownership
percentages. The maximum obligation among all owners, for each
station, is currently $20 million. The non-defaulting owners,
who make up the defaulting owner's obligations, are entitled to the
generation entitlement of the defaulting owner, based upon their ownership
percentage. The agreements do not have an expiration
date.
|
|
(i)
|
As
a result of the privatization of the utility industry in the U.K., certain
electric associations' roles and responsibilities were discontinued or
modified. As a result, certain obligations, primarily
pension-related, associated with these organizations have been guaranteed
by the participating members. Costs are allocated to the
members based on predetermined percentages as outlined in specific
agreements. However, if a member becomes insolvent, costs can
be reallocated to and are guaranteed by the remaining
members. At March 31, 2009, WPD has recorded an estimated
discounted liability based on its current allocated percentage of the
total expected costs for which the expected payment/performance is
probable. Neither the expiration date nor the maximum amount of
potential payments for certain obligations is explicitly stated in the
related agreements. Therefore, they have been estimated based
on the types of obligations.
|
|
(j)
|
Two
WPD unconsolidated affiliates were refinanced during
2005. Under the terms of the refinancing, WPD has indemnified
the lender against certain tax and other liabilities.
|
|
(k)
|
Reflects
principal payments
only.
|
Three
Months Ended March 31,
|
||||||||
2009
(a)
|
2008
|
|||||||
PPL
Energy Supply
|
$
|
55
|
$
|
51
|
||||
PPL
Electric
|
32
|
27
|
(a)
|
Excludes
allocated costs associated with the February 2009 workforce
reduction. See Note 6 for additional
information.
|
Three
Months Ended March 31,
|
||||||||
PPL
|
2009
|
2008
|
||||||
Other
Income
|
||||||||
Gains
related to the extinguishment of notes (Note 7)
|
$
|
29
|
||||||
Interest
income
|
7
|
$
|
10
|
|||||
Hyder
liquidation distributions
|
2
|
|||||||
Earnings
on securities in the nuclear plant decommissioning trust
funds (a)
|
(16
|
)
|
(1
|
)
|
||||
Miscellaneous
- Domestic
|
3
|
1
|
||||||
Total
|
23
|
12
|
||||||
Other
Deductions
|
||||||||
Miscellaneous
- Domestic
|
4
|
3
|
||||||
Miscellaneous
- International
|
1
|
|||||||
Other
Income - net
|
$
|
19
|
$
|
8
|
||||
PPL Energy
Supply
|
||||||||
Other
Income
|
||||||||
Gains
related to the extinguishment of notes (Note 7)
|
$
|
25
|
||||||
Interest
income
|
4
|
$
|
7
|
|||||
Hyder
liquidation distributions
|
2
|
|||||||
Earnings
on securities in the nuclear plant decommissioning trust
funds (a)
|
(16
|
)
|
(1
|
)
|
||||
Miscellaneous
- Domestic
|
3
|
1
|
||||||
Total
|
16
|
9
|
||||||
Other
Deductions
|
||||||||
Miscellaneous
- Domestic
|
3
|
2
|
||||||
Miscellaneous
- International
|
1
|
|||||||
Other
Income - net
|
$
|
13
|
$
|
6
|
||||
PPL
Electric
|
||||||||
Other
Income
|
||||||||
Interest
income
|
$
|
2
|
$
|
2
|
||||
Other
Income - net
|
$
|
2
|
$
|
2
|
(a)
|
The
three months ended March 31, 2009 and 2008, include charges of $17 million
and $3 million for other-than-temporary impairments of securities held in
the trust funds, which were recorded in the Supply
segment.
|
March 31,
2009
|
December
31, 2008
|
|||||||||||||||||||||||||||||||
Fair
Value Measurements Using
|
Fair
Value Measurements Using
|
|||||||||||||||||||||||||||||||
Total
|
Level
1
|
Level
2
|
Level
3
|
Total
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||||||||||||||
PPL
|
||||||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
631
|
$
|
631
|
$
|
1,100
|
$
|
1,100
|
||||||||||||||||||||||||
Short-term
investments
|
150
|
150
|
150
|
150
|
||||||||||||||||||||||||||||
Restricted
cash and cash equivalents
|
190
|
190
|
347
|
347
|
||||||||||||||||||||||||||||
Price
risk management assets:
|
||||||||||||||||||||||||||||||||
Energy
commodities
|
3,640
|
14
|
$
|
3,456
|
$
|
170
|
2,460
|
19
|
$
|
2,143
|
$
|
298
|
||||||||||||||||||||
Interest
rate/foreign exchange
|
164
|
119
|
45
|
156
|
152
|
4
|
||||||||||||||||||||||||||
3,804
|
14
|
3,575
|
215
|
2,616
|
19
|
2,295
|
302
|
|||||||||||||||||||||||||
Nuclear
plant decommissioning trust funds:
|
||||||||||||||||||||||||||||||||
Cash
and cash equivalents
|
6
|
6
|
7
|
7
|
||||||||||||||||||||||||||||
Equity
securities
|
179
|
179
|
166
|
166
|
||||||||||||||||||||||||||||
Commingled
equity index funds
|
76
|
76
|
85
|
85
|
||||||||||||||||||||||||||||
Debt
securities:
|
||||||||||||||||||||||||||||||||
U.S.
Treasury
|
59
|
59
|
77
|
77
|
||||||||||||||||||||||||||||
Municipality
|
63
|
63
|
61
|
61
|
||||||||||||||||||||||||||||
Corporate
|
28
|
28
|
33
|
33
|
||||||||||||||||||||||||||||
Other
|
14
|
14
|
17
|
17
|
||||||||||||||||||||||||||||
425
|
244
|
181
|
446
|
250
|
196
|
|||||||||||||||||||||||||||
Auction
rate securities
|
22
|
22
|
24
|
24
|
||||||||||||||||||||||||||||
$
|
5,222
|
$
|
1,229
|
$
|
3,756
|
$
|
237
|
$
|
4,683
|
$
|
1,866
|
$
|
2,491
|
$
|
326
|
|||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||||||
Price
risk management liabilities:
|
||||||||||||||||||||||||||||||||
Energy
commodities
|
$
|
2,949
|
$
|
8
|
$
|
2,887
|
$
|
54
|
$
|
2,133
|
$
|
15
|
$
|
2,008
|
$
|
110
|
||||||||||||||||
Interest
rate/foreign exchange
|
18
|
18
|
27
|
27
|
||||||||||||||||||||||||||||
$
|
2,967
|
$
|
8
|
$
|
2,905
|
$
|
54
|
$
|
2,160
|
$
|
15
|
$
|
2,035
|
$
|
110
|
|||||||||||||||||
PPL Energy
Supply
|
||||||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
119
|
$
|
119
|
$
|
464
|
$
|
464
|
||||||||||||||||||||||||
Short-term
investments
|
150
|
150
|
150
|
150
|
||||||||||||||||||||||||||||
Restricted
cash and cash equivalents
|
169
|
169
|
328
|
328
|
||||||||||||||||||||||||||||
Price
risk management assets:
|
||||||||||||||||||||||||||||||||
Energy
commodities
|
3,640
|
14
|
$
|
3,456
|
$
|
170
|
2,460
|
19
|
$
|
2,143
|
$
|
298
|
||||||||||||||||||||
Interest
rate/foreign exchange
|
108
|
63
|
45
|
107
|
103
|
4
|
||||||||||||||||||||||||||
3,748
|
14
|
3,519
|
215
|
2,567
|
19
|
2,246
|
302
|
|||||||||||||||||||||||||
Nuclear
plant decommissioning trust funds:
|
||||||||||||||||||||||||||||||||
Cash
and cash equivalents
|
6
|
6
|
7
|
7
|
||||||||||||||||||||||||||||
Equity
securities
|
179
|
179
|
166
|
166
|
||||||||||||||||||||||||||||
Commingled
equity index funds
|
76
|
76
|
85
|
85
|
||||||||||||||||||||||||||||
Debt
securities:
|
||||||||||||||||||||||||||||||||
U.S.
Treasury
|
59
|
59
|
77
|
77
|
||||||||||||||||||||||||||||
Municipality
|
63
|
63
|
61
|
61
|
||||||||||||||||||||||||||||
Corporate
|
28
|
28
|
33
|
33
|
||||||||||||||||||||||||||||
Other
|
14
|
14
|
17
|
17
|
||||||||||||||||||||||||||||
425
|
244
|
181
|
446
|
250
|
196
|
|||||||||||||||||||||||||||
Auction
rate securities
|
17
|
17
|
19
|
19
|
||||||||||||||||||||||||||||
$
|
4,628
|
$
|
696
|
$
|
3,700
|
$
|
232
|
$
|
3,974
|
$
|
1,211
|
$
|
2,442
|
$
|
321
|
|||||||||||||||||
Liabilities
|
||||||||||||||||||||||||||||||||
Price
risk management liabilities:
|
||||||||||||||||||||||||||||||||
Energy
commodities
|
$
|
2,949
|
$
|
8
|
$
|
2,887
|
$
|
54
|
$
|
2,133
|
$
|
15
|
$
|
2,008
|
$
|
110
|
||||||||||||||||
Interest
rate/foreign exchange
|
17
|
17
|
16
|
16
|
||||||||||||||||||||||||||||
$
|
2,966
|
$
|
8
|
$
|
2,904
|
$
|
54
|
$
|
2,149
|
$
|
15
|
$
|
2,024
|
$
|
110
|
|||||||||||||||||
PPL
Electric
|
||||||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||
Cash
and cash equivalents
|
$
|
345
|
$
|
345
|
$
|
483
|
$
|
483
|
||||||||||||||||||||||||
Restricted
cash and cash equivalents
|
15
|
15
|
15
|
15
|
||||||||||||||||||||||||||||
$
|
360
|
$
|
360
|
$
|
498
|
$
|
498
|
Fair
Value Measurements Using Level 3 Inputs
|
||||||||||||||||
Energy
Commodities, net
|
Interest
Rate/Foreign Exchange
|
Auction
Rate Securities
|
Total
|
|||||||||||||
PPL
|
||||||||||||||||
Balance
at December 31, 2008
|
$
|
188
|
$
|
4
|
$
|
24
|
$
|
216
|
||||||||
Total
realized/
unrealized
gains (losses):
|
||||||||||||||||
Included
in earnings
|
(21
|
)
|
(21
|
)
|
||||||||||||
Included
in OCI
|
(10
|
)
|
3
|
(2
|
)
|
(9
|
)
|
|||||||||
Purchases,
sales, issuances and settlements, net
|
36
|
36
|
||||||||||||||
Transfers
(out of) and/or into Level 3
|
(77
|
)
|
38
|
(39
|
)
|
|||||||||||
Balance
at March 31, 2009
|
$
|
116
|
$
|
45
|
$
|
22
|
$
|
183
|
||||||||
PPL Energy
Supply
|
||||||||||||||||
Balance
at December 31, 2008
|
$
|
188
|
$
|
4
|
$
|
19
|
$
|
211
|
||||||||
Total
realized/
unrealized gains
(losses):
|
||||||||||||||||
Included
in earnings
|
(21
|
)
|
(21
|
)
|
||||||||||||
Included
in OCI
|
(10
|
)
|
3
|
(2
|
)
|
(9
|
)
|
|||||||||
Purchases,
sales, issuances and settlements, net
|
36
|
36
|
||||||||||||||
Transfers
(out of) and/or into Level 3
|
(77
|
)
|
38
|
(39
|
)
|
|||||||||||
Balance
at March 31, 2009
|
$
|
116
|
$
|
45
|
$
|
17
|
$
|
178
|
Energy
Commodities
|
||||||||||||
Wholesale
Energy Marketing
|
Net
Energy Trading Margins
|
Energy
Purchases
|
||||||||||
Total
gains (losses) included in earnings for the period
|
$
|
4
|
$
|
(9
|
)
|
$
|
(16
|
)
|
||||
Change
in unrealized gains (losses) relating to positions still held at the
reporting date
|
2
|
(1
|
)
|
(1
|
) |
Fair
Value Measurements Using Level
3 Inputs
|
||||||||||||
Energy
Commodities, net
|
Auction
Rate Securities
|
Total
|
||||||||||
PPL
|
||||||||||||
Balance
at December 31, 2007
|
$
|
134
|
$
|
134
|
||||||||
Total
realized/
unrealized gains
(losses):
|
||||||||||||
Included
in OCI
|
73
|
73
|
||||||||||
Purchases,
sales, issuances and settlements, net
|
||||||||||||
Transfers
into Level 3
|
$
|
40
|
40
|
|||||||||
Balance
at March 31, 2008
|
$
|
207
|
$
|
40
|
$
|
247
|
||||||
PPL Energy
Supply
|
||||||||||||
Balance
at December 31, 2007
|
$
|
134
|
$
|
134
|
||||||||
Total
realized/
unrealized gains
(losses):
|
||||||||||||
Included
in OCI
|
73
|
73
|
||||||||||
Purchases,
sales, issuances and settlements, net
|
||||||||||||
Transfers
into Level 3
|
$
|
35
|
35
|
|||||||||
Balance
at March 31, 2008
|
$
|
207
|
$
|
35
|
$
|
242
|
March
31, 2009
|
||||||||||||||||||||
Fair
Value Measurements Using
|
||||||||||||||||||||
Total
|
Level
1
|
Level
2
|
Level
3
|
Loss
|
||||||||||||||||
Sulfur
dioxide emission allowances (a)
|
$
|
15
|
$
|
15
|
$
|
(30
|
)
|
(a)
|
Current
and long-term sulfur dioxide emission allowances are included in "Other
intangibles" in their respective areas on the Balance
Sheet.
|
Net
Asset (Liability)
|
||||||||
March
31, 2009
|
December
31, 2008
|
|||||||
PPL
|
$
|
391
|
$
|
136
|
||||
PPL
Energy Supply
|
658
|
239
|
||||||
PPL
Electric
|
(267
|
)
|
(103
|
)
|
·
|
commodity
price risk for energy and energy-related products associated with the sale
of electricity from its generating assets and other electricity marketing
activities and the purchase of fuel and fuel-related commodities for
generating assets, as well as for proprietary trading
activities;
|
·
|
interest
rate and price risk associated with debt used to finance operations, as
well as debt and equity securities in PPL's nuclear decommissioning trust
funds and PPL's defined benefit plans; and
|
·
|
foreign
currency exchange rate risk associated with investments in U.K.
affiliates, as well as purchases of equipment in currencies other than
U.S. dollars.
|
·
|
commodity
derivatives with its energy trading partners, which include other energy
companies, fuel suppliers, and financial institutions;
|
·
|
interest
rate derivatives with financial institutions; and
|
·
|
foreign
currency derivatives with financial
institutions.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Revenues
|
||||||||
Unregulated
retail electric and gas
|
$
|
1
|
||||||
Wholesale
energy marketing
|
352
|
$
|
(180
|
)
|
||||
Expenses
|
||||||||
Fuel
|
2
|
7
|
||||||
Energy
purchases
|
(269
|
)
|
259
|
2009
(a)
|
2010
|
2011
|
2012
|
2013
- 2016 (b)
|
||||||||||
39,060
|
52,446
|
52,416
|
53,187
|
210,908
|
(a)
|
Represents
expected sales from April 1, 2009 to December 31, 2009.
|
|
(b)
|
Amount
based on 2013 volumes with no assumed change for 2014 through
2016.
|
Fuel
Purchases % (c)
|
||||||||||||||||
Year
|
Derivative
Sales % (a)
|
Total
Power Sales % (b)
|
Coal
|
Nuclear
|
||||||||||||
2009
(d)
|
14%
|
(e)
|
100%
|
100%
|
100%
|
|||||||||||
2010
|
79%
|
91%
|
98%
|
100%
|
||||||||||||
2011
|
51%
|
59%
|
77%
|
100%
|
||||||||||||
2012
|
29%
|
36%
|
59%
|
100%
|
||||||||||||
2013-2016
|
1%
|
5%
|
45%
|
77%
|
(a)
|
Excludes
non-derivative contracts and contracts that qualify for
NPNS. Volumes for option contracts factor in the probability of
an option being exercised and may be less than the notional amount of the
option. Percentages are based on fixed-price contracts
only.
|
|
(b)
|
Amount
represents derivative and non-derivative contracts. Volumes for option
contracts factor in the probability of an option being exercised and may
be less than the notional amount of the option. Percentages are
based on fixed-price contracts only.
|
|
(c)
|
Coal
and nuclear contracts receive accrual accounting treatment, as they are
not derivative contracts. Percentages are
based on both fixed- and variable-priced contracts.
|
|
(d)
|
Represents
the time period from April 1, 2009 to December 31,
2009.
|
|
(e)
|
The
majority of PPL Energy Supply's baseload generation for 2009 is allocated
to supplying the PLR contract with PPL Electric. This contract
is not a derivative contract. The PLR contract expires on
December 31, 2009.
|
Contract
Type
|
2009
(a)
|
2010
|
2011
|
2012
|
||||||||
Oil
Swaps
|
405
|
420
|
408
|
180
|
(a)
|
Represents
the time period from April 1, 2009 to December 31,
2009.
|
Units
|
2009
(a)
|
2010
|
||||||||
Net
Power Sales:
|
||||||||||
Options
(b)
|
GWh
|
104
|
|
186
|
|
|||||
Non-option
contracts
|
GWh
|
1,688
|
|
69
|
|
|||||
Net
Power/Fuel Purchases:
|
||||||||||
Options
(b)
|
GWh
|
229
|
||||||||
Non-option
contracts
|
Bcf
|
20.2
|
0.9
|
(a)
|
Represents
the time period from April 1, 2009 to December 31,
2009.
|
|
(b)
|
Volumes
for option contracts factor in the probability of an option being
exercised and may be less than the notional amount of the
option.
|
Units
|
2009
(a)
|
2010
|
2011
|
2012
|
2013
- 2017
|
||||||||||||||
Energy
sales contracts (b)
|
GWh
|
(16,968
|
)
|
(25,441
|
)
|
(9,390
|
)
|
(3,402
|
)
|
(8,938
|
)
|
||||||||
Related
supply contracts
|
|||||||||||||||||||
Energy
purchases
|
GWh
|
16,465
|
21,592
|
7,824
|
2,673
|
6,306
|
|||||||||||||
Volumetric
hedges (c)
|
GWh
|
(193
|
)
|
525
|
|||||||||||||||
Volumetric
hedges (c)
|
Bcf
|
(3.0
|
)
|
(0.4
|
)
|
||||||||||||||
Generation
supply
|
GWh
|
531
|
3,922
|
1,639
|
1,900
|
8,938
|
(a)
|
Represents
the time period from April 1, 2009 to December 31,
2009.
|
|
(b)
|
The
majority of PPL Energy Supply's full-requirement sales contracts receive
accrual accounting as they qualify for NPNS or are not derivative
contracts. Also included in these volumes are the sales from
PPL EnergyPlus to PPL Electric to supply PPL Electric's 2009 and 2010 load
obligation.
|
|
(c)
|
PPL
Energy Supply uses power and gas options, swaps and futures to hedge the
volumetric risk associated with full-requirement sales contracts since the
demand for power varies hourly.
|
Commodity
|
Units
|
2009
(a)
|
2010
|
2011
|
2012
|
|||||||||||
FTRs
|
GWh
|
19,169
|
739
|
192
|
||||||||||||
Power
Basis Swaps
|
GWh
|
(3,003
|
)
|
(8,409
|
)
|
(876
|
)
|
(878
|
)
|
|||||||
Gas
Basis Swaps
|
Bcf
|
14.0
|
1.9
|
1.0
|
(a)
|
Represents
the time period from April 1, 2009 to December 31,
2009.
|
·
|
Any
wholesale and retail contracts to sell electricity and the related
capacity that do not meet the definition of a derivative receive accrual
accounting.
|
·
|
Physical
electricity-only transactions can receive cash flow hedge treatment if all
of the qualifications are met.
|
·
|
Physical
capacity-only transactions to sell excess capacity from PPL's generation
qualify for NPNS. The forward value of these transactions is
not recorded in the financial statements and has no earnings impact until
delivery.
|
·
|
Any
physical energy sale or purchase not intended to hedge an economic
exposure is considered speculative, with unrealized gains or losses
recorded immediately through earnings.
|
·
|
Financial
transactions, which can be settled in cash, do not qualify for NPNS
because they do not require physical delivery. These
transactions can receive cash flow hedge treatment if they lock in the
cash flows PPL will receive or pay for energy expected to be sold or
purchased in the spot market.
|
·
|
PPL
purchases FTRs for both proprietary trading activities and hedging
purposes. FTRs, although economically effective as electricity
basis hedges, do not currently qualify for hedge accounting
treatment. Unrealized and realized gains and losses from FTRs
that were entered into for trading purposes are recorded in "Net energy
trading margins" on the Statements of Income. Unrealized and
realized gains and losses from FTRs that were entered into to offset
probable transmission congestion expenses are recorded in "Energy
purchases" on the Statements of Income.
|
·
|
Physical
and financial transactions for gas and oil to meet fuel and retail
requirements can receive cash flow hedge treatment if they lock in the
price PPL will pay and meet the definition of a
derivative.
|
·
|
Certain
option contracts may receive hedge accounting treatment. Those
that are not eligible are marked to fair value through
earnings.
|
·
|
Transactions
to lock in an interest rate prior to a debt issuance can be designated as
cash flow hedges. Any unrealized gains or losses on
transactions receiving cash flow hedge treatment are recorded in OCI and
are amortized as a component of interest expense when the hedged
transactions occur.
|
·
|
Transactions
entered into to hedge fluctuations in the fair value of existing debt can
be designated as fair value hedges. To the extent that the
change in the fair value of the derivative offsets the change in the fair
value of the existing debt, there is no earnings impact, as both changes
are reflected in interest expense. Realized gains and losses
over the life of the hedge are reflected in interest
expense.
|
·
|
Transactions
entered into to hedge the value of a net investment of foreign operations
can be designated as net investment hedges. To the extent that
the derivatives are highly effective at hedging the value of the net
investment, gains and losses are recorded in the foreign currency
translation adjustment component of OCI and will not be recorded in
earnings until the investment is substantially
liquidated.
|
·
|
Derivative
transactions that do not qualify for hedge accounting treatment are marked
to fair value through earnings. These transactions generally
include hedges of earnings translation risk associated with
subsidiaries that report their financial statements in a currency other
than the U.S. dollar. As such, these transactions eliminate
earnings volatility due solely to changes in foreign currency exchange
rates.
|
Assets
|
Liabilities
|
|||||||||||
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
|||||||||
Derivatives
designated as hedging instruments
|
||||||||||||
Interest
rate swaps
|
Price
Risk Management Assets - current
|
$
|
13
|
Price
Risk Management Liabilities - current
|
$
|
1
|
||||||
Price
Risk Management Assets - noncurrent
|
43
|
Price
Risk Management Liabilities - noncurrent
|
||||||||||
Cross-currency
swaps contracts
|
Price
Risk Management Assets - current
|
7
|
Price
Risk Management Liabilities - current
|
1
|
||||||||
Price
Risk Management Assets - noncurrent
|
69
|
Price
Risk Management Liabilities - noncurrent
|
16
|
|||||||||
Foreign
exchange contracts
|
Price
Risk Management Assets - current
|
16
|
Price
Risk Management Liabilities - current
|
|||||||||
Price
Risk Management Assets - noncurrent
|
16
|
Price
Risk Management Liabilities - noncurrent
|
||||||||||
Commodity
contracts
|
Price
Risk Management Assets - current
|
309
|
Price
Risk Management Liabilities - current
|
246
|
||||||||
Price
Risk Management Assets - noncurrent
|
919
|
Price
Risk Management Liabilities - noncurrent
|
254
|
|||||||||
Total
derivatives designated as hedging instruments
|
1,392
|
518
|
||||||||||
Derivatives
not designated as hedging instruments (a)
|
||||||||||||
Commodity
contracts
|
Price
Risk Management Assets - current
|
1,473
|
Price
Risk Management Liabilities - current
|
1,529
|
||||||||
Price
Risk Management Assets - noncurrent
|
939
|
Price
Risk Management Liabilities - noncurrent
|
920
|
|||||||||
Total
derivatives not designated as hedging instruments
|
2,412
|
2,449
|
||||||||||
Total
derivatives
|
$
|
3,804
|
$
|
2,967
|
(a)
|
$73
million of gains associated with derivatives that were no longer
designated as hedging instruments are recorded in AOCI at March 31,
2009.
|
Derivatives
in Fair Value Hedging Relationships
|
Location
of Gain (Loss) Recognized in Income on Derivative
|
Amount
of Gain (Loss) Recognized in Income on Derivative
|
Hedged
Items in Fair Value Hedging Relationships
|
Location
of Gain (Loss) Recognized in Income on Related Hedged Item
|
Amount
of Gain (Loss) Recognized in Income on Related Hedged
Item
|
|||||||||
Interest
rate swaps
|
Interest
expense
|
$
|
2
|
Fixed
rate debt
|
Interest
expense
|
$
|
6
|
|||||||
$
|
2
|
$
|
6
|
Derivatives
in Cash Flow Hedging Relationships
|
Amount
of Gain (Loss) Recognized in OCI on Derivative
(Effective Portion) |
Location
of Gain (Loss) Reclassified from AOCI into Income
(Effective
Portion)
|
Amount
of Gain (Loss) Reclassified from AOCI into Income
|
Location
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
Amount
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
|||||||||||
Interest
rate swaps
|
$
|
19
|
Interest
expense
|
$
|
(2
|
)
|
Interest
expense
|
|||||||||
Other
Income
|
4
|
Other
Income
|
||||||||||||||
Cross-currency
swaps
|
10
|
Interest
expense
|
1
|
Interest
expense
|
||||||||||||
Other
Income
|
22
|
Other
Income
|
||||||||||||||
Commodity
contracts
|
276
|
|||||||||||||||
Wholesale
energy marketing
|
166
|
Wholesale
energy marketing
|
$
|
29
|
||||||||||||
Fuel
|
1
|
Fuel
|
1
|
|||||||||||||
Energy
purchases
|
(103
|
)
|
Energy
purchases
|
(3
|
)
|
|||||||||||
Total
commodity
|
276
|
64
|
27
|
|||||||||||||
Total
|
$
|
305
|
$
|
89
|
$
|
27
|
Derivatives
in Net Investment Hedging Relationships
|
Amount
of Gain (Loss) Recognized in OCI on Derivative
(Effective
Portion)
|
Location
of Gain (Loss) Reclassified from AOCI into Income
(Effective
Portion)
|
Amount
of Gain (Loss) Reclassified from AOCI into Income
|
Location
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
Amount
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
|||||||||||
Foreign
exchange contracts
|
$
|
1
|
Derivatives
Not Designated as Hedging Instruments
|
Location
of Gain (Loss) Recognized in Income on Derivative
|
Amount
of Gain (Loss) Recognized in Income on Derivative
|
||||
Foreign
exchange contracts
|
Other
Income
|
$
|
1
|
|||
Commodity
contracts
|
Unregulated
retail electric and gas
|
3
|
||||
Wholesale
energy marketing
|
284
|
|||||
Net
energy trading margins (a)
|
(13
|
)
|
||||
Fuel
|
(8
|
)
|
||||
Energy
purchases
|
(384
|
)
|
||||
Total
|
$
|
(117
|
)
|
(a)
|
Differs
from statement of income due to intramonth transactions which PPL defines
as spot activity.
|
Assets
|
Liabilities
|
|||||||||||
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
|||||||||
Derivatives
designated as hedging instruments
|
||||||||||||
Cross-currency
swaps contracts
|
Price
Risk Management Assets - current
|
$
|
7
|
Price
Risk Management Liabilities - current
|
$
|
1
|
||||||
Price
Risk Management Assets - noncurrent
|
69
|
Price
Risk Management Liabilities - noncurrent
|
16
|
|||||||||
Foreign
exchange contracts
|
Price
Risk Management Assets - current
|
16
|
Price
Risk Management Liabilities - current
|
|||||||||
Price
Risk Management Assets - noncurrent
|
16
|
Price
Risk Management Liabilities - noncurrent
|
||||||||||
Commodity
contracts
|
Price
Risk Management Assets - current
|
309
|
Price
Risk Management Liabilities - current
|
246
|
||||||||
Price
Risk Management Assets - noncurrent
|
919
|
Price
Risk Management Liabilities - noncurrent
|
254
|
|||||||||
Total
derivatives designated as hedging instruments
|
1,336
|
517
|
||||||||||
Derivatives
not designated as hedging instruments (a)
|
||||||||||||
Commodity
contracts
|
Price
Risk Management Assets - current
|
1,473
|
Price
Risk Management Liabilities - current
|
1,529
|
||||||||
Price
Risk Management Assets - noncurrent
|
939
|
Price
Risk Management Liabilities - noncurrent
|
920
|
|||||||||
Total
derivatives not designated as hedging instruments
|
2,412
|
2,449
|
||||||||||
Total
derivatives
|
$
|
3,748
|
$
|
2,966
|
(a)
|
$73
million of gains associated with derivatives that were no longer
designated as hedging instruments are recorded in AOCI at March 31,
2009.
|
Derivatives
in Cash Flow Hedging Relationships
|
Amount
of Gain (Loss) Recognized in OCI on Derivative
(Effective Portion) |
Location
of Gain (Loss) Reclassified from AOCI into Income
(Effective
Portion)
|
Amount
of Gain (Loss) Reclassified from AOCI into Income
|
Location
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
Amount
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
|||||||||||
Cross-currency
swaps
|
$
|
10
|
Interest
expense
|
$
|
1
|
Interest
expense
|
||||||||||
Other
income
|
22
|
Other
income
|
||||||||||||||
Commodity
contracts
|
276
|
|||||||||||||||
Wholesale
energy marketing
|
166
|
Wholesale
energy marketing
|
$
|
29
|
||||||||||||
Fuel
|
1
|
Fuel
|
1
|
|||||||||||||
Energy
purchases
|
(103
|
)
|
Energy
purchases
|
(3
|
)
|
|||||||||||
Total
commodity
|
276
|
64
|
27
|
|||||||||||||
Total
|
$
|
286
|
$
|
87
|
$
|
27
|
Derivatives
in Net Investment Hedging Relationships
|
Amount
of Gain (Loss) Recognized in OCI on Derivative
(Effective
Portion)
|
Location
of Gain (Loss) Reclassified from AOCI into Income
(Effective
Portion)
|
Amount
of Gain (Loss) Reclassified from AOCI into Income
|
Location
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
Amount
of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
|
|||||||||||
Foreign
exchange contracts
|
$
|
1
|
Derivatives
Not Designated as Hedging Instruments
|
Location
of Gain (Loss) Recognized in Income on Derivative
|
Amount
of Gain (Loss) Recognized in Income on Derivative
|
||||
Foreign
exchange contracts
|
Other
income
|
$
|
1
|
|||
Commodity
contracts
|
Wholesale
energy marketing
|
284
|
||||
Unregulated
retail electric and gas
|
3
|
|||||
Net
Energy trading margins (a)
|
(13
|
)
|
||||
Fuel
|
(8
|
)
|
||||
Energy
purchases
|
(384
|
)
|
||||
Total
|
$
|
(117
|
)
|
(a)
|
Differs
from statement of income due to intramonth transactions which PPL defines
as spot activity.
|
15.
|
Supply
|
International
Delivery
|
Total
|
|||||||||
Balance
at December 31, 2008
|
$
|
94
|
$
|
669
|
$
|
763
|
|||||
Effect
of foreign currency exchange rates
|
(48
|
)
|
(48
|
)
|
|||||||
Balance
at March 31, 2009
|
$
|
94
|
$
|
621
|
$
|
715
|
AROs
at December 31, 2008
|
$
|
389
|
|
Accretion
expense
|
7
|
|
|
Revisions
to estimates
|
1
|
|
|
Obligations
settled
|
(5
|
)
|
|
AROs
at March 31, 2009
|
$
|
392
|
|
March 31,
2009
|
||||||||||||
PPL
|
PPL
Energy Supply
|
PPL
Electric
|
||||||||||
Current:
|
||||||||||||
Funds
deposited with trustee to defease First Mortgage
Bonds (a)
|
$
|
1
|
$
|
1
|
||||||||
Deposits
for trading purposes (b)
|
71
|
$
|
71
|
|||||||||
Counterparty
collateral
|
84
|
84
|
||||||||||
Client
deposits
|
6
|
|||||||||||
Miscellaneous
|
2
|
2
|
||||||||||
Total
current
|
164
|
157
|
1
|
|||||||||
Noncurrent:
|
||||||||||||
Required
deposits of WPD (c)
|
12
|
12
|
||||||||||
Funds
deposited with Trustee to defease First Mortgage
Bonds (a)
|
14
|
14
|
||||||||||
Total
noncurrent
|
26
|
12
|
14
|
|||||||||
$
|
190
|
$
|
169
|
$
|
15
|
December
31, 2008
|
||||||||||||
PPL
|
PPL
Energy Supply
|
PPL
Electric
|
||||||||||
Current:
|
||||||||||||
Funds
deposited with Trustee to defease First Mortgage
Bonds (a)
|
$
|
1
|
$
|
1
|
||||||||
Deposits
for trading purposes (b)
|
301
|
$
|
301
|
|||||||||
Counterparty
collateral
|
12
|
12
|
||||||||||
Client
deposits
|
4
|
|||||||||||
Miscellaneous
|
2
|
2
|
||||||||||
Total
current
|
320
|
315
|
1
|
|||||||||
Noncurrent:
|
||||||||||||
Required
deposits of WPD (c)
|
13
|
13
|
||||||||||
Funds
deposited with Trustee to defease First Mortgage
Bonds (a)
|
14
|
14
|
||||||||||
Total
noncurrent
|
27
|
13
|
14
|
|||||||||
$
|
347
|
$
|
328
|
$
|
15
|
(a)
|
The
carrying amount of related First Mortgage Bonds was $10 million at March
31, 2009 and December 31, 2008.
|
|
(b)
|
Represents
margin posted by PPL EnergyPlus in connection with trading
activities. The decrease from December 31, 2008, relates
primarily to decreases in market prices and the realization of certain
transactions.
|
|
(c)
|
Primarily
consists of insurance
reserves.
|
·
|
how
investment allocation decisions are made, including the factors that are
pertinent to an understanding of investment policies and
strategies,
|
·
|
the
major categories of plan assets,
|
·
|
the
inputs and valuation techniques used to measure the fair value of plan
assets,
|
·
|
the
effect of fair value measurements using significant unobservable inputs
(Level 3) on changes in plan assets for the period, and
|
·
|
significant
concentrations of risk within plan
assets.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Net
income attributable to PPL
|
$
|
241
|
$
|
260
|
||||
EPS
- basic
|
$
|
0.64
|
$
|
0.69
|
||||
EPS
- diluted
|
$
|
0.64
|
$
|
0.69
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Supply
|
$
|
105
|
$
|
102
|
||||
International
Delivery
|
87
|
98
|
||||||
Pennsylvania
Delivery
|
49
|
60
|
||||||
Total
|
$
|
241
|
$
|
260
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Energy
revenues
|
||||||||
External
(a)
|
$
|
1,194
|
$
|
289
|
||||
Intersegment
|
497
|
489
|
||||||
Energy-related
businesses
|
92
|
107
|
||||||
Total
operating revenues
|
1,783
|
885
|
||||||
Fuel
and energy purchases
|
||||||||
External
(a)
|
1,179
|
257
|
||||||
Intersegment
|
20
|
28
|
||||||
Other
operation and maintenance
|
233
|
227
|
||||||
Depreciation
|
51
|
44
|
||||||
Taxes,
other than income
|
8
|
2
|
||||||
Energy-related
businesses
|
88
|
105
|
||||||
Total
operating expenses
|
1,579
|
663
|
||||||
Other
Income - net
|
13
|
|||||||
Interest
Expense
|
47
|
41
|
||||||
Income
Taxes
|
65
|
79
|
||||||
Net
Income Attributable to PPL
|
$
|
105
|
$
|
102
|
(a)
|
Includes
unrealized gains and losses from economic activity. See
Note 14 to the Financial Statements for additional
information.
|
Domestic
gross energy margins
|
$
|
(4
|
)
|
||
Other
operation and maintenance
|
16
|
||||
Depreciation
|
(4
|
)
|
|||
Taxes,
other than income
|
(4
|
)
|
|||
Other
income - net
|
12
|
||||
Interest
expense
|
(3
|
)
|
|||
Income
taxes
|
(3
|
)
|
|||
Other
|
1
|
||||
Special
items
|
(8
|
)
|
|||
$
|
3
|
·
|
See
"Domestic Gross Energy Margins" for further discussion.
|
·
|
Other
operation and maintenance decreased primarily due to lower outage costs at
the Susquehanna nuclear plant as a result of the timing of the 2009
refueling outage.
|
·
|
Other
income - net increased primarily due to gains related to the
extinguishment of notes.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
MTM
adjustments from economic activity (Note 14)
|
$
|
50
|
$
|
50
|
||||
Impairment
of nuclear decommissioning trust investments (a)
|
(3
|
)
|
||||||
Impairments
and other impacts - emission allowances (Note 13)
|
(15
|
)
|
||||||
Other
asset impairments
|
(2
|
)
|
||||||
Workforce
reduction charge (Note 6)
|
(6
|
)
|
||||||
Montana
basin seepage litigation (Note 10)
|
(5
|
)
|
||||||
Synthetic
fuel tax adjustment (Note 10)
|
(13
|
)
|
||||||
Total
|
$
|
24
|
$
|
32
|
(a)
|
Represents
other-than-temporary impairment charges on securities, including realized
gains and losses from sales of previously impaired
securities.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Utility
revenues
|
$
|
176
|
$
|
241
|
||||
Energy-related
businesses
|
7
|
9
|
||||||
Total
operating revenues
|
183
|
250
|
||||||
Other
operation and maintenance
|
34
|
46
|
||||||
Depreciation
|
26
|
36
|
||||||
Taxes,
other than income
|
13
|
17
|
||||||
Energy-related
businesses
|
3
|
3
|
||||||
Total
operating expenses
|
76
|
102
|
||||||
Other
Income - net
|
2
|
3
|
||||||
Interest
Expense
|
13
|
38
|
||||||
Income
Taxes
|
9
|
20
|
||||||
Income
from Discontinued Operations
|
5
|
|||||||
Net
Income Attributable to PPL
|
$
|
87
|
$
|
98
|
U.K.
|
|||||
Delivery
margins
|
$
|
2
|
|||
Other
operating expenses
|
4
|
||||
Interest
expense
|
15
|
||||
Income
taxes
|
9
|
||||
Foreign
currency exchange rates
|
(34
|
)
|
|||
Hyder
liquidation distributions
|
(2
|
)
|
|||
U.S.
Income taxes
|
2
|
||||
Discontinued
operations (Note 8)
|
(5
|
)
|
|||
Other
|
1
|
||||
Special
items
|
(3
|
)
|
|||
$
|
(11
|
)
|
·
|
Lower
U.K. interest expense on the Index-Linked Senior Unsecured Notes primarily
due to lower inflation rates.
|
·
|
Lower
U.K. income taxes primarily due to a favorable settlement of an uncertain
tax position, partially offset by changes in other uncertain tax
positions.
|
·
|
Changes
in U.K. foreign currency exchange rates negatively impacted WPD earnings
between the periods. The weighted-average exchange rate for the
British pound sterling was approximately $1.45 for the first three months
of 2009 versus approximately $1.98 for the same period in
2008. This decreased WPD-related revenue and expense line items
by 27%.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Asset
impairments
|
$
|
(1
|
)
|
|||||
Workforce
reduction charge (Note 6)
|
(2
|
)
|
||||||
Total
|
$
|
(3
|
)
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
revenues
|
||||||||
External
|
$
|
890
|
$
|
880
|
||||
Intersegment
|
20
|
28
|
||||||
Total
operating revenues
|
910
|
908
|
||||||
Fuel
and energy purchases
|
||||||||
External
|
32
|
41
|
||||||
Intersegment
|
497
|
489
|
||||||
Other
operation and maintenance
|
106
|
104
|
||||||
Amortization
of recoverable transition costs
|
84
|
76
|
||||||
Depreciation
|
33
|
32
|
||||||
Taxes,
other than income
|
52
|
56
|
||||||
Total
operating expenses
|
804
|
798
|
||||||
Other
Income - net
|
4
|
5
|
||||||
Interest
Expense
|
29
|
29
|
||||||
Income
Taxes
|
27
|
30
|
||||||
Income
from Discontinued Operations
|
9
|
|||||||
Noncontrolling
Interests
|
5
|
5
|
||||||
Net
Income Attributable to PPL
|
$
|
49
|
$
|
60
|
Delivery
revenues (net of CTC/ITC amortization, interest expense on transition
bonds and ancillary charges)
|
$
|
1
|
|||
Other
operation and maintenance
|
7
|
||||
Interest
expense
|
(3
|
)
|
|||
Discontinued
operations (Note 8)
|
(9
|
)
|
|||
Other
|
(1
|
)
|
|||
Special
items
|
(6
|
)
|
|||
$
|
(11
|
)
|
·
|
Other
operation and maintenance decreased primarily due to higher PUC-reportable
storm costs in 2008 and decreased contractor expenses in
2009.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Asset
impairments
|
$
|
(1
|
)
|
|||||
Workforce
reduction charge (Note 6)
|
(5
|
)
|
||||||
Total
|
$
|
(6
|
)
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
Income (a)
|
$
|
417
|
$
|
480
|
||||
Adjustments:
|
||||||||
Energy-related
businesses, net (b)
|
(8
|
)
|
(8
|
)
|
||||
Other
operation and maintenance (a)
|
373
|
377
|
||||||
Amortization
of recoverable transition costs (a)
|
84
|
76
|
||||||
Depreciation
(a)
|
110
|
112
|
||||||
Taxes,
other than income (a)
|
73
|
75
|
||||||
Revenue
adjustments (c)
|
(897
|
)
|
(426
|
)
|
||||
Expense
adjustments (c)
|
243
|
(285
|
)
|
|||||
Domestic
gross energy margins
|
$
|
395
|
$
|
401
|
(a)
|
As
reported on the Statements of Income.
|
|
(b)
|
Amount
represents the net of "Energy-related businesses" revenue and expense as
reported on the Statements of Income.
|
|
(c)
|
The
components of these adjustments are detailed in the table
below.
|
Three
Months Ended March 31,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Revenue
|
||||||||||||
Utility
(a)
|
$
|
1,065
|
$
|
1,120
|
$
|
(55
|
)
|
|||||
Unregulated
retail electric and gas (a)
|
42
|
34
|
8
|
|||||||||
Wholesale
energy marketing (a)
|
1,165
|
258
|
907
|
|||||||||
Net
energy trading margins (a)
|
(12
|
)
|
(2
|
)
|
(10
|
)
|
||||||
Revenue
adjustments (b)
|
||||||||||||
WPD
utility revenue
|
(176
|
)
|
(241
|
)
|
65
|
|||||||
Domestic
delivery component of utility revenue
|
(354
|
)
|
(354
|
)
|
||||||||
Other
utility revenue
|
(14
|
)
|
(12
|
)
|
(2
|
)
|
||||||
MTM
adjustments from economic activity (c)
|
(353
|
)
|
180
|
(533
|
)
|
|||||||
Gains
from sale of emission allowances (d)
|
1
|
(1
|
)
|
|||||||||
Total
revenue adjustments
|
(897
|
)
|
(426
|
)
|
(471
|
)
|
||||||
1,363
|
984
|
379
|
||||||||||
Expense
|
||||||||||||
Fuel
(a)
|
258
|
240
|
18
|
|||||||||
Energy
purchases (a)
|
953
|
58
|
895
|
|||||||||
Expense
adjustments (b)
|
||||||||||||
MTM
adjustments from economic activity (c)
|
(267
|
)
|
266
|
(533
|
)
|
|||||||
Domestic
electric ancillaries (e)
|
(12
|
)
|
(12
|
)
|
||||||||
Gross
receipts tax (f)
|
31
|
30
|
1
|
|||||||||
Other
|
5
|
1
|
4
|
|||||||||
Total
expense adjustments
|
(243
|
)
|
285
|
(528
|
)
|
|||||||
968
|
583
|
385
|
||||||||||
Domestic
gross energy margins
|
$
|
395
|
$
|
401
|
$
|
(6
|
)
|
(a)
|
As
reported on the Statements of Income.
|
|
(b)
|
To
include/exclude the impact of any revenues and expenses not associated
with domestic gross energy margins, consistent with the way management
reviews domestic gross energy margins internally.
|
|
(c)
|
See
Note 14 to the Financial Statements for additional information regarding
economic activity.
|
|
(d)
|
Included
in "Other operation and maintenance" on the Statements of
Income.
|
|
(e)
|
Included
in "Energy purchases" on the Statements of Income.
|
|
(f)
|
Included
in "Taxes, other than income" on the Statements of
Income.
|
Three
Months Ended March 31,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Generation
related margins:
|
||||||||||||
Eastern
U.S.
|
$
|
297
|
$
|
315
|
$
|
(18
|
)
|
|||||
Western
U.S.
|
84
|
72
|
12
|
|||||||||
Marketing
and trading margins:
|
||||||||||||
Eastern
U.S.
|
15
|
25
|
(10
|
)
|
||||||||
Western
U.S.
|
(1
|
)
|
(11
|
)
|
10
|
|||||||
Domestic
gross energy margins
|
$
|
395
|
$
|
401
|
$
|
(6
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Domestic:
|
|||||
Retail
electric revenue (PPL Electric)
|
|||||
PLR
|
$
|
9
|
|||
Other
|
1
|
||||
U.K.:
|
|||||
Electric
delivery revenue
|
(1
|
)
|
|||
Foreign
currency exchange rates
|
(64
|
)
|
|||
$
|
(55
|
)
|
Three
Months Ended
March 31,
2009 vs. March 31, 2008
|
|||||
Impairment
of emission allowances (Note 13)
|
$
|
30
|
|||
Workforce
reduction charge (Note 6)
|
22
|
||||
Outage
costs at Western and Eastern U.S. fossil/hydroelectric
stations
|
4
|
||||
Defined
benefit costs
|
2
|
||||
Contractor
expenses
|
(4
|
)
|
|||
PUC-reportable
storm costs
|
(4
|
)
|
|||
Stock-based
compensation
|
(4
|
)
|
|||
Uncollectible
accounts
|
(6
|
)
|
|||
Montana
basin seepage litigation (Note 10)
|
(7
|
)
|
|||
U.K.
foreign currency exchange rates
|
(8
|
)
|
|||
Outage
costs at Susquehanna nuclear station
|
(23
|
)
|
|||
Other
- Domestic
|
(1
|
)
|
|||
Other
- U.K.
|
(5
|
)
|
|||
$
|
(4
|
)
|
Three
Months Ended
March 31,
2009 vs. March 31, 2008
|
|||||
Additions
to PP&E (a)
|
$
|
9
|
|||
U.K.
foreign currency exchange rates
|
(9
|
)
|
|||
Other
|
(2
|
)
|
|||
$
|
(2
|
)
|
(a)
|
Primarily
attributable to the completion of the Susquehanna uprate and the Montour
scrubber projects in the second quarter of
2008.
|
Three
Months Ended
March 31,
2009 vs. March 31, 2008
|
|||||
Property
tax expense (a)
|
$
|
7
|
|||
Pennsylvania
gross receipts tax expense
|
(2
|
)
|
|||
U.K.
foreign currency exchange rates
|
(4
|
)
|
|||
Other
|
(3
|
)
|
|||
$
|
(2
|
)
|
(a)
|
Primarily
due to a $7 million property tax credit recorded by PPL Montana during the
three months ended March 31, 2008.
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Long-term
debt interest expense
|
$
|
8
|
|||
Short-term
debt interest expense
|
4
|
||||
U.K.
foreign currency exchange rates
|
(4
|
)
|
|||
Hedging
activities
|
(9
|
)
|
|||
Inflation
adjustment on U.K. Index-linked Senior Unsecured Notes
|
(19
|
)
|
|||
Other
|
1
|
||||
$
|
(19
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Tax
reserve adjustments
|
$
|
4
|
|||
Tax
on foreign earnings
|
(1
|
)
|
|||
Nonconventional
fuel and other tax credits
|
(13
|
)
|
|||
Lower
pre-tax book income
|
(19
|
)
|
|||
Other
|
1
|
||||
$
|
(28
|
)
|
March 31, 2009
|
December
31, 2008
|
|||||||
Cash
and cash equivalents
|
$
|
631
|
$
|
1,100
|
||||
Short-term
investments (a)
|
150
|
150
|
||||||
$
|
781
|
$
|
1,250
|
|||||
Short-term
debt
|
$
|
581
|
$
|
679
|
(a)
|
Represents
tax-exempt bonds issued by the PEDFA in December 2008 on behalf of PPL
Energy Supply and purchased by a subsidiary of PPL Energy Supply upon
issuance. Such bonds were refunded in April
2009. See "Financing Activities" below for further
discussion.
|
·
|
the
payment of $421 million to retire $451 million aggregate principal amount
of long-term debt;
|
·
|
$270
million of capital expenditures;
|
·
|
the
payment of $126 million of common stock dividends;
|
·
|
a
net decrease in short-term debt of $90 million (excluding the impact of
U.K. foreign currency exchange rates);
|
·
|
$26
million in net expenditures for intangible assets;
|
·
|
$310
million of cash provided by operating activities;
|
·
|
a
decrease of $156 million in restricted cash and cash equivalents;
and
|
·
|
proceeds
of $16 million from the issuance of common
stock.
|
Committed
Capacity
|
Borrowed
|
Letters
of Credit Issued
|
Unused Capacity
|
|||||||||||||
PPL
Energy Supply Domestic Credit Facilities (a)
|
$
|
4,110
|
$
|
285
|
$
|
821
|
$
|
3,004
|
||||||||
PPL
Electric Credit Facilities (b)
|
340
|
1
|
339
|
|||||||||||||
Total
Domestic Credit Facilities (c)
|
$
|
4,450
|
$
|
285
|
$
|
822
|
$
|
3,343
|
||||||||
WPDH
Limited Credit Facility
|
₤
|
150
|
₤
|
145
|
₤
|
5
|
||||||||||
WPD
(South West) Credit Facilities
|
154
|
57
|
₤
|
4
|
93
|
|||||||||||
Total
WPD Credit Facilities (d)
|
₤
|
304
|
₤
|
202
|
₤
|
4
|
₤
|
98
|
(a)
|
In
March 2009, PPL Energy Supply's 364-day bilateral credit facility was
amended. The amendment included extending the expiration date
from March 2009 to March 2010 and reducing the capacity from $300 million
to $200 million.
|
|
(b)
|
Committed
capacity includes a $150 million credit facility related to an
asset-backed commercial paper program. At March 31, 2009, based
on accounts receivable and unbilled revenue pledged, $150 million was
available for borrowing under the asset-backed credit
facility.
|
|
(c)
|
The
commitments under PPL's domestic credit facilities are provided by a
diverse bank group consisting of 23 banks, with no one bank providing more
than 14% of the total committed capacity.
|
|
(d)
|
At
March 31, 2009, the unused capacity of WPD's committed credit facilities
was approximately $140 million.
|
Projected
|
|||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
|||||||||||
Construction
expenditures (a)
|
|||||||||||||||
Generating
facilities
|
$
|
283
|
$
|
588
|
$
|
630
|
$
|
472
|
$
|
428
|
|||||
Transmission
and distribution facilities
|
524
|
974
|
1,078
|
943
|
992
|
||||||||||
Environmental
|
210
|
68
|
98
|
114
|
6
|
||||||||||
Other
|
69
|
82
|
51
|
52
|
50
|
||||||||||
Total
Construction Expenditures
|
1,086
|
1,712
|
1,857
|
1,581
|
1,476
|
||||||||||
Nuclear
fuel
|
151
|
161
|
178
|
181
|
184
|
||||||||||
Total
Capital Expenditures
|
$
|
1,237
|
$
|
1,873
|
$
|
2,035
|
$
|
1,762
|
$
|
1,660
|
(a)
|
Construction
expenditures include AFUDC and capitalized interest, which are expected to
be $286 million for the 2009-2013
period.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Fair
value of contracts outstanding at the beginning of the
period
|
$
|
402
|
$
|
(305
|
)
|
|||
Contracts
realized or otherwise settled during the period
|
98
|
37
|
||||||
Fair
value of new contracts entered into during the period
|
(77
|
)
|
100
|
|||||
Changes
in fair value attributable to changes in valuation techniques
(a)
|
55
|
|||||||
Other
changes in fair values
|
305
|
(155
|
)
|
|||||
Fair
value of contracts outstanding at the end of the period
|
$
|
728
|
$
|
(268
|
)
|
(a)
|
Amount
represents the reduction of valuation reserves related to capacity and FTR
contracts upon the adoption of SFAS
157.
|
Net
Asset (Liability)
|
||||||||||||||||||||
Maturity
Less
Than
1
Year
|
Maturity
1-3
Years
|
Maturity
4-5
Years
|
Maturity
in
Excess
of
5 Years
|
Total
Fair
Value
|
||||||||||||||||
Source
of Fair Value
|
||||||||||||||||||||
Prices
quoted in active markets for identical instruments
|
$
|
4
|
$
|
4
|
||||||||||||||||
Prices
based on significant other observable inputs
|
(87
|
)
|
$
|
491
|
$
|
148
|
$
|
44
|
596
|
|||||||||||
Prices
based on significant unobservable inputs
|
(6
|
)
|
4
|
19
|
111
|
128
|
||||||||||||||
Fair
value of contracts outstanding at the end of the period
|
$
|
(89
|
)
|
$
|
495
|
$
|
167
|
$
|
155
|
$
|
728
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Fair
value of contracts outstanding at the beginning of the
period
|
$
|
(75
|
)
|
$
|
16
|
|||
Contracts
realized or otherwise settled during the period
|
33
|
|||||||
Fair
value of new contracts entered into during the period
|
26
|
(8
|
)
|
|||||
Other
changes in fair values
|
(21
|
)
|
14
|
|||||
Fair
value of contracts outstanding at the end of the period
|
$
|
(37
|
)
|
$
|
22
|
Net
Asset (Liability)
|
||||||||||||||||||||
Maturity
Less
Than
1
Year
|
Maturity
1-3
Years
|
Maturity
4-5
Years
|
Maturity
in
Excess
of
5 Years
|
Total
Fair
Value
|
||||||||||||||||
Source
of Fair Value
|
||||||||||||||||||||
Prices
quoted in active markets for identical instruments
|
$
|
2
|
$
|
2
|
||||||||||||||||
Prices
based on significant other observable inputs
|
3
|
$
|
(19
|
)
|
$
|
(11
|
)
|
(27
|
)
|
|||||||||||
Prices
based on significant unobservable inputs
|
(9
|
)
|
(3
|
)
|
(12
|
)
|
||||||||||||||
Fair
value of contracts outstanding at the end of the period
|
$
|
(4
|
)
|
$
|
(22
|
)
|
$
|
(11
|
)
|
$
|
(37
|
)
|
Trading
VaR
|
Non-Trading
VaR
|
|||||||||||||||
March
31,
|
Dec.
31,
|
March
31,
|
Dec.
31,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
95%
Confidence Level, Five-Day Holding Period
|
||||||||||||||||
Period
End
|
$
|
1
|
$
|
3
|
$
|
10
|
$
|
10
|
||||||||
Average
for the Period
|
1
|
10
|
9
|
14
|
||||||||||||
High
|
2
|
22
|
10
|
20
|
||||||||||||
Low
|
1
|
3
|
8
|
9
|
2009
|
2010
|
2011
|
||||||||||
Trading
(a)
|
$
|
(7
|
)
|
|||||||||
Non-trading
|
(9
|
)
|
$
|
(2
|
)
|
$
|
(1
|
)
|
||||
Total
|
$
|
(16
|
)
|
$
|
(2
|
)
|
$
|
(1
|
)
|
(a)
|
The
amount of trading losses expected to be realized in the next three months
is approximately $8 million.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Supply
|
$
|
104
|
$
|
106
|
||||
International
Delivery
|
87
|
98
|
||||||
Total
|
$
|
191
|
$
|
204
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Energy
revenues (a)
|
$
|
1,692
|
$
|
779
|
||||
Energy-related
businesses
|
89
|
105
|
||||||
Total
operating revenues
|
1,781
|
884
|
||||||
Fuel
and energy purchases (a)
|
1,199
|
285
|
||||||
Other
operation and maintenance
|
248
|
237
|
||||||
Depreciation
|
48
|
41
|
||||||
Taxes,
other than income
|
7
|
2
|
||||||
Energy-related
businesses
|
86
|
103
|
||||||
Total
operating expenses
|
1,588
|
668
|
||||||
Other
Income - net (b)
|
12
|
8
|
||||||
Interest
Expense
|
43
|
33
|
||||||
Income
Taxes
|
58
|
85
|
||||||
Net
Income Attributable to PPL Energy Supply
|
$
|
104
|
$
|
106
|
(a)
|
Includes
unrealized gains and losses from economic activity. See
Note 14 to the Financial Statements for additional
information.
|
|
(b)
|
Includes
interest income from affiliates.
|
Domestic
gross energy margins
|
$
|
(4
|
)
|
||
Other
operation and maintenance
|
13
|
||||
Depreciation
|
(4
|
)
|
|||
Taxes,
other than income
|
(3
|
)
|
|||
Other
income - net
|
6
|
||||
Interest
expense
|
(6
|
)
|
|||
Other
|
4
|
||||
Special
items
|
(8
|
)
|
|||
$
|
(2
|
)
|
·
|
See
"Domestic Gross Energy Margins" for further discussion.
|
·
|
Other
operation and maintenance decreased primarily due to lower outage costs at
the Susquehanna nuclear plant as a result of the timing of the 2009
refueling outage.
|
·
|
Other
income - net increased primarily due to gains related to the
extinguishment of notes.
|
·
|
Interest
expense increased primarily due to interest on long-term
debt.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
MTM
adjustments from economic activity (Note 14)
|
$
|
50
|
$
|
50
|
||||
Impairment
of nuclear decommissioning trust investments (a)
|
(3
|
)
|
||||||
Impairments
and other impacts - emission allowances (Note 13)
|
(15
|
)
|
||||||
Other
asset impairments
|
(2
|
)
|
||||||
Workforce
reduction charge (Note 6)
|
(6
|
)
|
||||||
Montana
basin seepage litigation (Note 10)
|
(5
|
)
|
||||||
Synthetic
fuel tax adjustment (Note 10)
|
(13
|
)
|
||||||
Total
|
$
|
24
|
$
|
32
|
(a)
|
Represents
other-than-temporary impairment charges on securities, including realized
gains and losses from sales of previously impaired
securities.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Utility
revenues
|
$
|
176
|
$
|
241
|
||||
Energy-related
businesses
|
7
|
9
|
||||||
Total
operating revenues
|
183
|
250
|
||||||
Other
operation and maintenance
|
34
|
46
|
||||||
Depreciation
|
26
|
36
|
||||||
Taxes,
other than income
|
13
|
17
|
||||||
Energy-related
businesses
|
3
|
3
|
||||||
Total
operating expenses
|
76
|
102
|
||||||
Other
Income - net
|
2
|
3
|
||||||
Interest
Expense
|
13
|
38
|
||||||
Income
Taxes
|
9
|
20
|
||||||
Income
from Discontinued Operations
|
5
|
|||||||
Net
Income Attributable to PPL Energy Supply
|
$
|
87
|
$
|
98
|
U.K.
|
|||||
Delivery
margins
|
$
|
2
|
|||
Other
operating expenses
|
4
|
||||
Interest
expense
|
15
|
||||
Income
taxes
|
9
|
||||
Foreign
currency exchange rates
|
(34
|
)
|
|||
Hyder
liquidation distributions
|
(2
|
)
|
|||
U.S.
Income taxes
|
2
|
||||
Discontinued
operations (Note 8)
|
(5
|
)
|
|||
Other
|
1
|
||||
Special
items
|
(3
|
)
|
|||
$
|
(11
|
)
|
·
|
Lower
U.K. interest expense on the Index-Linked Senior Unsecured Notes primarily
due to lower inflation rates.
|
·
|
Lower
U.K. income taxes primarily due to a favorable settlement of an uncertain
tax position, partially offset by changes in other uncertain tax
positions.
|
·
|
Changes
in U.K. foreign currency exchange rates negatively impacted WPD earnings
between the periods. The weighted-average exchange rate for the
British pound sterling was approximately $1.45 for the first three months
of 2009 versus approximately $1.98 for the same period in
2008. This decreased WPD-related revenue and expense line items
by 27%.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Asset
impairments
|
$
|
(1
|
)
|
|||||
Workforce
reduction charge (Note 6)
|
(2
|
)
|
||||||
Total
|
$
|
(3
|
)
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Operating
Income (a)
|
$
|
300
|
$
|
364
|
||||
Adjustments:
|
||||||||
Utility
(a)
|
(176
|
)
|
(241
|
)
|
||||
Energy-related
businesses, net (b)
|
(7
|
)
|
(8
|
)
|
||||
Other
operation and maintenance (a)
|
282
|
283
|
||||||
Depreciation
(a)
|
74
|
77
|
||||||
Taxes,
other than income (a)
|
20
|
19
|
||||||
Revenue
adjustments (c)
|
(358
|
)
|
176
|
|||||
Expense
adjustments (c)
|
260
|
(269
|
)
|
|||||
Domestic
gross energy margins
|
$
|
395
|
$
|
401
|
(a)
|
As
reported on the Statements of Income.
|
|
(b)
|
Amount
represents the net of "Energy-related businesses" revenue and expense as
reported on the Statements of Income.
|
|
(c)
|
The
components of these adjustments are detailed in the table
below.
|
Three
Months Ended March 31,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Revenue
|
||||||||||||
Wholesale
energy marketing (a)
|
$
|
1,165
|
$
|
258
|
$
|
907
|
||||||
Wholesale
energy marketing to affiliate (a)
|
497
|
489
|
8
|
|||||||||
Unregulated
retail electric and gas (a)
|
42
|
34
|
8
|
|||||||||
Net
energy trading margins (a)
|
(12
|
)
|
(2
|
)
|
(10
|
)
|
||||||
Revenue
adjustments (b)
|
||||||||||||
Miscellaneous
wholesale energy marketing to affiliate
|
(3
|
)
|
(4
|
)
|
1
|
|||||||
Miscellaneous
unregulated retail electric and gas
|
(1
|
)
|
(1
|
)
|
||||||||
MTM
adjustments from economic activity (c)
|
(353
|
)
|
180
|
(533
|
)
|
|||||||
Gains
from sale of emission allowances (d)
|
1
|
(1
|
)
|
|||||||||
Other
|
(1
|
)
|
(1
|
)
|
||||||||
Total
revenue adjustments
|
(358
|
)
|
176
|
(534
|
)
|
|||||||
1,334
|
955
|
379
|
||||||||||
Expense
|
||||||||||||
Fuel
(a)
|
258
|
240
|
18
|
|||||||||
Energy
purchases (a)
|
921
|
17
|
904
|
|||||||||
Energy
purchases from affiliate (a)
|
20
|
28
|
(8
|
)
|
||||||||
Expense
adjustments (b)
|
||||||||||||
MTM
adjustments from economic activity (c)
|
(267
|
)
|
266
|
(533
|
)
|
|||||||
Other
|
7
|
3
|
4
|
|||||||||
Total
expense adjustments
|
(260
|
)
|
269
|
(529
|
)
|
|||||||
939
|
554
|
385
|
||||||||||
Domestic
gross energy margins
|
$
|
395
|
$
|
401
|
$
|
(6
|
)
|
(a)
|
As
reported on the Statements of Income.
|
|
(b)
|
To
include/exclude the impact of any revenues and expenses not associated
with domestic gross energy margins, consistent with the way management
reviews domestic gross energy margins internally.
|
|
(c)
|
See
Note 14 to the Financial Statements for additional information regarding
economic activity.
|
|
(d)
|
Included
in "Other operation and maintenance" on the Statements of
Income.
|
Three
Months Ended March 31,
|
||||||||||||
2009
|
2008
|
Change
|
||||||||||
Generation
related margins:
|
||||||||||||
Eastern
U.S.
|
$
|
297
|
$
|
315
|
$
|
(18
|
)
|
|||||
Western
U.S.
|
84
|
72
|
12
|
|||||||||
Marketing
and trading margins:
|
||||||||||||
Eastern
U.S.
|
15
|
25
|
(10
|
)
|
||||||||
Western
U.S.
|
(1
|
)
|
(11
|
)
|
10
|
|||||||
Domestic
gross energy margins
|
$
|
395
|
$
|
401
|
$
|
(6
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
U.K.
electric delivery revenue
|
$
|
(1
|
)
|
||
U.K.
foreign currency exchange rates
|
(64
|
)
|
|||
$
|
(65
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Impairment
of emission allowances (Note 13)
|
$
|
30
|
|||
Workforce
reduction charge (Note 6)
|
13
|
||||
Outage
costs at Western and Eastern U.S. fossil/hydroelectric
stations
|
4
|
||||
Allocation
of certain corporate service costs (Note 11)
|
4
|
||||
Trademark
royalty fees from a PPL subsidiary (Note 11)
|
2
|
||||
Stock-based
compensation
|
(5
|
)
|
|||
Uncollectible
accounts
|
(6
|
)
|
|||
Montana
basin seepage litigation (Note 10)
|
(7
|
)
|
|||
U.K.
foreign currency exchange rates
|
(8
|
)
|
|||
Outage
costs at Susquehanna nuclear station
|
(23
|
)
|
|||
Other
- U.K.
|
(5
|
)
|
|||
$
|
(1
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Additions
to PP&E (a)
|
$
|
8
|
|||
U.K.
foreign currency exchange rates
|
(9
|
)
|
|||
Other
|
(2
|
)
|
|||
$
|
(3
|
)
|
(a)
|
Primarily
attributable to the completion of the Susquehanna uprate and the Montour
scrubber projects in the second quarter of
2008.
|
Three
Months Ended
March 31,
2009 vs. March 31, 2008
|
|||||
Property
tax expense (a)
|
$
|
7
|
|||
U.K.
foreign currency exchange rates
|
(4
|
)
|
|||
Other
|
(2
|
)
|
|||
$
|
1
|
(a)
|
Primarily
due to a $7 million property tax credit recorded by PPL Montana during the
three months ended March 31, 2008.
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Long-term
debt interest expense
|
$
|
7
|
|||
Short-term
debt interest expense
|
3
|
||||
U.K.
foreign currency exchange rates
|
(4
|
)
|
|||
Inflation
adjustment on U.K. Index-linked Senior Unsecured Notes
|
(19
|
)
|
|||
Other
|
(2
|
)
|
|||
$
|
(15
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Tax
on foreign earnings
|
$
|
(1
|
)
|
||
Tax
reserve adjustments
|
(2
|
)
|
|||
Nonconventional
fuel and other tax credits
|
(13
|
)
|
|||
Lower
pre-tax book income
|
(23
|
)
|
|||
Tax
return adjustments
|
1
|
||||
|
$
|
(38
|
)
|
March 31,
2009
|
December
31, 2008
|
|||||||
Cash
and cash equivalents
|
$
|
119
|
$
|
464
|
||||
Short-term
investments (a)
|
150
|
150
|
||||||
$
|
269
|
$
|
614
|
|||||
Short-term
debt
|
$
|
581
|
$
|
584
|
(a)
|
Represents
tax-exempt bonds issued by the PEDFA in December 2008 on behalf of PPL
Energy Supply and purchased by a subsidiary of PPL Energy Supply upon
issuance. Such bonds were refunded in April
2009. See "Financing Activities" below for further
discussion.
|
·
|
distributions
to Member of $296 million;
|
·
|
the
payment of $220 million to retire $250 million aggregate principal amount
of long-term debt;
|
·
|
$205 million
of capital expenditures;
|
·
|
$24
million in net expenditures for intangible assets;
|
·
|
$245 million
of cash provided by operating activities; and
|
·
|
a
decrease of $159 million in restricted cash and cash
equivalents.
|
Committed
Capacity
|
Borrowed
|
Letters
of Credit Issued
|
Unused Capacity
|
|||||||||||||
PPL
Energy Supply Domestic Credit Facilities (a)
|
$
|
4,110
|
$
|
285
|
$
|
821
|
$
|
3,004
|
||||||||
WPDH
Limited Credit Facility
|
₤
|
150
|
₤
|
145
|
₤
|
5
|
||||||||||
WPD
(South West) Credit Facilities
|
154
|
57
|
₤
|
4
|
93
|
|||||||||||
Total
WPD Credit Facilities (b)
|
₤
|
304
|
₤
|
202
|
₤
|
4
|
₤
|
98
|
(a)
|
In
March 2009, PPL Energy Supply's 364-day bilateral credit facility was
amended. The amendment included extending the expiration date
from March 2009 to March 2010 and reducing the capacity from $300 million
to $200 million.
The
commitments under PPL Energy Supply's domestic credit facilities are
provided by a diverse bank group consisting of 23 banks, with no one bank
providing more than 15% of the total committed
capacity.
|
|
(b)
|
At
March 31, 2009, the unused capacity of WPD's committed credit facilities
was approximately $140 million.
|
Projected
|
|||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
|||||||||||
Construction
expenditures (a)
|
|||||||||||||||
Generating
facilities
|
$
|
283
|
$
|
588
|
$
|
630
|
$
|
472
|
$
|
428
|
|||||
Transmission
and distribution facilities
|
251
|
428
|
448
|
460
|
477
|
||||||||||
Environmental
|
210
|
68
|
98
|
114
|
6
|
||||||||||
Other
|
14
|
17
|
6
|
7
|
6
|
||||||||||
Total
Construction Expenditures
|
758
|
1,101
|
1,182
|
1,053
|
917
|
||||||||||
Nuclear
fuel
|
151
|
161
|
178
|
181
|
184
|
||||||||||
Total
Capital Expenditures
|
$
|
909
|
$
|
1,262
|
$
|
1,360
|
$
|
1,234
|
$
|
1,101
|
(a)
|
Construction
expenditures include AFUDC and capitalized interest, which are expected to
be $206 million for the 2009-2013
period.
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Fair
value of contracts outstanding at the beginning of the
period
|
$
|
402
|
$
|
(305
|
)
|
|||
Contracts
realized or otherwise settled during the period
|
98
|
37
|
||||||
Fair
value of new contracts entered into during the period
|
(77
|
)
|
100
|
|||||
Changes
in fair value attributable to changes in valuation techniques
(a)
|
55
|
|||||||
Other
changes in fair values
|
305
|
(155
|
)
|
|||||
Fair
value of contracts outstanding at the end of the period
|
$
|
728
|
$
|
(268
|
)
|
(a)
|
Amount
represents the reduction of valuation reserves related to capacity and FTR
contracts upon the adoption of SFAS
157.
|
Net
Asset (Liability)
|
||||||||||||||||||||
Maturity
Less
Than
1
Year
|
Maturity
1-3
Years
|
Maturity
4-5
Years
|
Maturity
in
Excess
of
5 Years
|
Total
Fair
Value
|
||||||||||||||||
Source
of Fair Value
|
||||||||||||||||||||
Prices
quoted in active markets for identical instruments
|
$
|
4
|
$
|
4
|
||||||||||||||||
Prices
based on significant other observable inputs
|
(87
|
)
|
$
|
491
|
$
|
148
|
$
|
44
|
596
|
|||||||||||
Prices
based on significant unobservable inputs
|
(6
|
)
|
4
|
19
|
111
|
128
|
||||||||||||||
Fair
value of contracts outstanding at the end of the period
|
$
|
(89
|
)
|
$
|
495
|
$
|
167
|
$
|
155
|
$
|
728
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Fair
value of contracts outstanding at the beginning of the
period
|
$
|
(75
|
)
|
$
|
16
|
|||
Contracts
realized or otherwise settled during the period
|
33
|
|||||||
Fair
value of new contracts entered into during the period
|
26
|
(8
|
)
|
|||||
Other
changes in fair values
|
(21
|
)
|
14
|
|||||
Fair
value of contracts outstanding at the end of the period
|
$
|
(37
|
)
|
$
|
22
|
Net
Asset (Liability)
|
||||||||||||||||||||
Maturity
Less
Than
1
Year
|
Maturity
1-3
Years
|
Maturity
4-5
Years
|
Maturity
in
Excess
of
5 Years
|
Total
Fair
Value
|
||||||||||||||||
Source
of Fair Value
|
||||||||||||||||||||
Prices
quoted in active markets for identical instruments
|
$
|
2
|
$
|
2
|
||||||||||||||||
Prices
based on significant other observable inputs
|
3
|
$
|
(19
|
)
|
$
|
(11
|
)
|
(27
|
)
|
|||||||||||
Prices
based on significant unobservable inputs
|
(9
|
)
|
(3
|
)
|
(12
|
)
|
||||||||||||||
Fair
value of contracts outstanding at the end of the period
|
$
|
(4
|
)
|
$
|
(22
|
)
|
$
|
(11
|
)
|
$
|
(37
|
)
|
Trading
VaR
|
Non-Trading
VaR
|
|||||||||||||||
March
31,
|
Dec.
31,
|
March
31,
|
Dec.
31,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
95%
Confidence Level, Five-Day Holding Period
|
||||||||||||||||
Period
End
|
$
|
1
|
$
|
3
|
$
|
10
|
$
|
10
|
||||||||
Average
for the Period
|
1
|
10
|
9
|
14
|
||||||||||||
High
|
2
|
22
|
10
|
20
|
||||||||||||
Low
|
1
|
3
|
8
|
9
|
2009
|
2010
|
2011
|
||||||||||
Trading
(a)
|
$
|
(7
|
)
|
|||||||||
Non-trading
|
(9
|
)
|
$
|
(2
|
)
|
$
|
(1
|
)
|
||||
Total
|
$
|
(16
|
)
|
$
|
(2
|
)
|
$
|
(1
|
)
|
(a)
|
The
amount of trading losses expected to be realized in the next three months
is approximately $8 million.
|
Delivery
revenues (net of CTC/ITC amortization, interest expense on transition
bonds and ancillary charges)
|
$
|
1
|
|||
Other
operation and maintenance
|
6
|
||||
Interest
expense
|
(3
|
)
|
|||
Special
items
|
(6
|
)
|
|||
$
|
(2
|
)
|
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Asset
impairments
|
$
|
(1
|
)
|
|||||
Workforce
reduction charge (Note 6)
|
(5
|
)
|
||||||
Total
|
$
|
(6
|
)
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
PLR
|
$
|
9
|
|||
Other
|
1
|
||||
$
|
10
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Workforce
reduction charge (Note 6)
|
$
|
9
|
|||
Allocation
of certain corporate service costs (Note 11)
|
4
|
||||
Insurance
recovery of storm costs (Note 11)
|
3
|
||||
PUC-reportable
storm costs
|
(4
|
)
|
|||
Contractor
expenses
|
(4
|
)
|
|||
Other
|
(5
|
)
|
|||
$
|
3
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Long-term
debt interest expense primarily due to new issuances in
2008
|
$
|
7
|
|||
Interest
on PLR contract collateral (Note 11)
|
(2
|
)
|
|||
Repayment
of transition bonds in 2008
|
(5
|
)
|
|||
$
|
Three
Months Ended
March 31, 2009 vs. March 31, 2008
|
|||||
Tax
reserve adjustments
|
$
|
(1
|
)
|
||
Lower
pre-tax book income
|
(2
|
)
|
|||
Other
|
(1
|
)
|
|||
$
|
(4
|
)
|
March 31,
2009
|
December
31, 2008
|
|||||||
Cash
and cash equivalents
|
$
|
345
|
$
|
483
|
||||
Short-term
debt
|
95
|
·
|
a
net decrease in short-term debt of $95 million;
|
·
|
the
payment of $25 million of common stock dividends to
PPL;
|
·
|
$61 million
of capital expenditures; and
|
·
|
$48 million
of cash provided by operating
activities.
|
Committed
Capacity
|
Borrowed
|
Letters
of Credit Issued
|
Unused Capacity
|
|||||||||||||
5-year
Syndicated Credit Facility (a)
|
$
|
190
|
$
|
1
|
$
|
189
|
||||||||||
Asset-backed
Credit Facility (b)
|
150
|
150
|
||||||||||||||
Total
PPL Electric Credit Facilities
|
$
|
340
|
$
|
1
|
$
|
339
|
(a)
|
The
commitments under this credit facility are currently provided by a diverse
bank group consisting of 20 banks, with no one bank providing more than
18% of the total committed capacity.
|
|
(b)
|
At
March 31, 2009, based on accounts receivable and unbilled revenue pledged,
$150 million was available for borrowing under the asset-backed credit
facility.
|
PPL
Corporation
|
||
(a)
|
Evaluation
of disclosure controls and procedures.
|
|
The
registrant's principal executive officer and principal financial officer,
based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934) have concluded that, as of March 31, 2009, the
registrant's disclosure controls and procedures are effective to ensure
that material information relating to the registrant and its consolidated
subsidiaries is recorded, processed, summarized and reported within the
time periods specified by the SEC's rules and forms, particularly during
the period for which this quarterly report has been
prepared. The aforementioned principal officers have concluded
that the disclosure controls and procedures are also effective to ensure
that information required to be disclosed in reports filed under the
Exchange Act is accumulated and communicated to management, including the
principal executive and principal financial officer, to allow for timely
decisions regarding required disclosure.
|
||
(b)
|
Change
in internal controls over financial reporting.
|
|
The
registrant's principal executive officer and principal financial officer
have concluded that there were no changes in the registrant's internal
control over financial reporting during the registrant's first fiscal
quarter that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
|
PPL
Energy Supply, LLC and PPL Electric Utilities
Corporation
|
||
(a)
|
Evaluation
of disclosure controls and procedures.
|
|
The
registrants' principal executive officers and principal financial
officers, based on their evaluation of the registrants' disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of
the Securities Exchange Act of 1934) have concluded that, as of March 31,
2009, the registrants' disclosure controls and procedures are effective to
ensure that material information relating to the registrants and their
consolidated subsidiaries is recorded, processed, summarized and reported
within the time periods specified by the SEC's rules and forms,
particularly during the period for which this quarterly report has been
prepared. The aforementioned principal officers have concluded
that the disclosure controls and procedures are also effective to ensure
that information required to be disclosed in reports filed under the
Exchange Act is accumulated and communicated to management, including the
principal executive and principal financial officers, to allow for timely
decisions regarding required disclosure.
|
||
(b)
|
Change
in internal controls over financial reporting.
|
|
The
registrants' principal executive officers and principal financial officers
have concluded that there were no changes in the registrants' internal
control over financial reporting during the registrants' first fiscal
quarter that have materially affected, or are reasonably likely to
materially affect, the registrants' internal control over financial
reporting.
|
For
additional information regarding various pending administrative and
judicial proceedings involving regulatory, environmental and other
matters, which information is incorporated by reference into this Part II,
see:
|
||
·
|
"Item
3. Legal Proceedings" in PPL's, PPL Energy Supply's and PPL Electric's
2008 Form 10-K; and
|
|
·
|
Note
10 of the registrants' "Combined Notes to Condensed Consolidated Financial
Statements" in Part I of this
report.
|
There
have been no material changes in PPL's, PPL Energy Supply's and PPL
Electric's risk factors from those disclosed in "Item 1A. Risk Factors" of
the 2008 Form 10-K.
|
(a)
|
(b)
|
(c)
|
(d)
|
|
Period
|
Total
Number of
Shares
(or Units)
Purchased
(1)
|
Average
Price Paid
per
Share
(or
Unit)
|
Total
Number of
Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans
or Programs
|
Maximum
Number (or
Approximate
Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the
Plans or Programs (2)
|
January
1 to January 31, 2009
|
33,325
|
$31.61
|
$57,495
|
|
February
1 to February 28, 2009
|
$57,495
|
|||
March
1 to March 31, 2009
|
$57,495
|
|||
Total
|
33,325
|
$31.61
|
$57,495
|
(1)
|
Represents
shares of common stock withheld by PPL at the request of its executive
officers to pay taxes upon the vesting of the officers' restricted stock
awards, as permitted under the terms of PPL's ICP and
ICPKE.
|
|
(2)
|
In
June 2007, PPL announced a program to repurchase from time to time up to
$750 million of its common stock in open market purchases, pre-arranged
trading plans or privately negotiated
transactions.
|
-
|
Eighth
Amendment, dated as of March 30, 2009, to Reimbursement Agreement, dated
as of March 31, 2005, among PPL Energy Supply, LLC, The Bank of Nova
Scotia, as Issuer and Administrative Agent, and the Lenders party thereto
from time to time
|
|
-
|
PPL
Corporation and Subsidiaries Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
|
|
-
|
PPL
Energy Supply, LLC and Subsidiaries Computation of Ratio of Earnings to
Fixed Charges
|
|
-
|
PPL
Electric Utilities Corporation and Subsidiaries Computation of Ratio of
Earnings to Combined Fixed Charges and Preferred Stock
Dividends
|
|
Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, for the
quarterly period ended March 31, 2009, filed by the following officers for
the following companies:
|
||
-
|
James
H. Miller for PPL Corporation
|
|
-
|
Paul
A. Farr for PPL Corporation
|
|
-
|
James
H. Miller for PPL Energy Supply, LLC
|
|
-
|
Paul
A. Farr for PPL Energy Supply, LLC
|
|
-
|
David
G. DeCampli for PPL Electric Utilities Corporation
|
|
-
|
J.
Matt Simmons, Jr. for PPL Electric Utilities
Corporation
|
|
Certifications
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for the
quarterly period ended March 31, 2009, furnished by the following officers
for the following companies:
|
||
-
|
James
H. Miller for PPL Corporation
|
|
-
|
Paul
A. Farr for PPL Corporation
|
|
-
|
James
H. Miller for PPL Energy Supply, LLC
|
|
-
|
Paul
A. Farr for PPL Energy Supply, LLC
|
|
-
|
David
G. DeCampli for PPL Electric Utilities Corporation
|
|
-
|
J.
Matt Simmons, Jr. for PPL Electric Utilities
Corporation
|