XML 92 R32.htm IDEA: XBRL DOCUMENT v2.4.0.6
Available-for-Sale Securities
 12 Months Ended
Dec. 31, 2011
PPL Corp [Member]
  
Available-for-Sale Securities [Line Items]  
Available-for-Sale Securities

23. Available-for-Sale Securities

 

(PPL, PPL Energy Supply, LKE and LG&E)

 

PPL and its subsidiaries classify certain short-term investments, securities held by the NDT funds and auction rate securities as available-for-sale. Available-for-sale securities are carried on the Balance Sheet at fair value. Unrealized gains and losses on these securities are reported, net of tax, in OCI or are recognized currently in earnings when a decline in fair value is determined to be other-than-temporary. The specific identification method is used to calculate realized gains and losses.

 

The following table shows the amortized cost, the gross unrealized gains and losses recorded in AOCI and the fair value of available-for-sale securities.

       December 31, 2011 December 31, 2010
          Gross Gross      Gross Gross  
       Amortized   Unrealized   Unrealized    Amortized  Unrealized  Unrealized   
       Cost Gains Losses Fair Value  Cost  Gains Losses Fair Value
PPL                        
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12   10         10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   25      1   24   25         25
 Total  $ 479 $ 187 $ 2 $ 664 $ 624 $ 182    $ 806
                              
PPL Energy Supply                        
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12 $ 10       $ 10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   20      1   19   20         20
 Total $ 474 $ 187 $ 2 $ 659 $ 456 $ 182    $ 638

LKE and LG&E                        
                              
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
                              

(a)       Represents tax-exempt bonds issued by Louisville/Jefferson County, Kentucky, on behalf of LG&E that were subsequently purchased by LG&E.

Such bonds were remarketed to unaffiliated investors in January 2011.

 

There were no securities with credit losses at December 31, 2011 and 2010.

 

The following table shows the scheduled maturity dates of debt securities held at December 31, 2011.

   Maturity Maturity Maturity Maturity   
    Less Than1-55-10in Excess  
   1 YearYearsYearsof 10 YearsTotal
PPL               
Amortized cost $ 14 $ 69 $ 62 $ 82 $ 227
Fair value   14   72   67   90   243
                 
PPL Energy Supply               
Amortized cost $ 14 $ 69 $ 62 $ 77 $ 222
Fair value   14   72   67   85   238

The following table shows proceeds from and realized gains and losses on sales of available-for-sale securities.
           
   2011 2010 2009
PPL         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales    163      154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20
           
PPL Energy Supply         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales          154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20

(a)       These proceeds are used to pay income taxes and fees related to managing the trust. Remaining proceeds are reinvested in the trust.

(b)       Excludes the impact of other-than-temporary impairment charges recognized in the Statements of Income.

Short-term Investments

 

(PPL, LKE and LG&E)

 

At December 31, 2010, LG&E held $163 million aggregate principal amount of tax-exempt revenue bonds issued by Louisville/Jefferson County, Kentucky on behalf of LG&E that were purchased from the remarketing agent in 2008. At December 31, 2010, these investments were reflected in "Short-term investments" on the Balance Sheet. In 2011, LG&E received $163 million for its investments in these bonds when they were remarketed to unaffiliated investors. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was not significant.

 

(PPL and PPL Energy Supply)

 

In December 2008, the PEDFA issued $150 million aggregate principal amount of Exempt Facilities Revenue Bonds, Series 2008A and 2008B due 2038 (Series 2008 Bonds) on behalf of PPL Energy Supply. PPL Investment Corp. acted as the initial purchaser of the Series 2008 Bonds upon issuance. In April 2009, PPL Investment Corp. received $150 million for its investment in the Series 2008 Bonds when they were refunded by the PEDFA. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was insignificant.

 

NDT Funds

 

Beginning in January 1999 and ending in December 2009, in accordance with the PUC Final Order, decommissioning costs were recovered from PPL Electric's customers through the CTC over the 11-year life of the CTC rather than the remaining life of the Susquehanna nuclear plant. The recovery included a return on unamortized decommissioning costs. Under the power supply agreements between PPL Electric and PPL EnergyPlus, these revenues were passed on to PPL EnergyPlus. Similarly, these revenues were passed on to PPL Susquehanna under a power supply agreement between PPL EnergyPlus and PPL Susquehanna.

 

Amounts collected from PPL Electric's customers for decommissioning, less applicable taxes, were deposited in external trust funds for investment and can only be used for future decommissioning costs. To the extent that the actual costs for decommissioning exceed the amounts in the nuclear decommissioning trust funds, PPL Susquehanna would be obligated to fund 90% of the shortfall.

 

When the fair value of a security is less than amortized cost, PPL and PPL Energy Supply must make certain assertions to avoid recording an other-than-temporary impairment that requires a current period charge to earnings. The NRC requires that nuclear decommissioning trusts be managed by independent investment managers, with discretion to buy and sell securities in the trusts. As a result, PPL and PPL Energy Supply have been unable to demonstrate the ability to hold an impaired security until it recovers its value; therefore, unrealized losses on debt securities through March 31, 2009 and unrealized losses on equity securities for all periods presented, represented other-than-temporary impairments that required a current period charge to earnings. PPL and PPL Energy Supply recorded impairments for certain securities invested in the NDT funds of $6 million, $3 million and $18 million for 2011, 2010 and 2009. These impairments are reflected on the Statements of Income in "Other-Than-Temporary Impairments."

 

Effective April 1, 2009, when PPL and PPL Energy Supply intend to sell a debt security or more likely than not will be required to sell a debt security before recovery, then the other-than-temporary impairment recognized in earnings will equal the entire difference between the security's amortized cost basis and its fair value. However, if there is no intent to sell a debt security and it is not more likely than not that they will be required to sell the security before recovery, but the security has suffered a credit loss, the other-than-temporary impairment will be separated into the credit loss component, which is recognized in earnings, and the remainder of the other-than-temporary impairment, which is recorded in OCI. Temporary impairments of debt securities and unrealized gains on both debt and equity securities are recorded to OCI.

PPL Energy Supply [Member]
  
Available-for-Sale Securities [Line Items]  
Available-for-Sale Securities

23. Available-for-Sale Securities

 

(PPL, PPL Energy Supply, LKE and LG&E)

 

PPL and its subsidiaries classify certain short-term investments, securities held by the NDT funds and auction rate securities as available-for-sale. Available-for-sale securities are carried on the Balance Sheet at fair value. Unrealized gains and losses on these securities are reported, net of tax, in OCI or are recognized currently in earnings when a decline in fair value is determined to be other-than-temporary. The specific identification method is used to calculate realized gains and losses.

 

The following table shows the amortized cost, the gross unrealized gains and losses recorded in AOCI and the fair value of available-for-sale securities.

       December 31, 2011 December 31, 2010
          Gross Gross      Gross Gross  
       Amortized   Unrealized   Unrealized    Amortized  Unrealized  Unrealized   
       Cost Gains Losses Fair Value  Cost  Gains Losses Fair Value
PPL                        
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12   10         10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   25      1   24   25         25
 Total  $ 479 $ 187 $ 2 $ 664 $ 624 $ 182    $ 806
                              
PPL Energy Supply                        
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12 $ 10       $ 10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   20      1   19   20         20
 Total $ 474 $ 187 $ 2 $ 659 $ 456 $ 182    $ 638

LKE and LG&E                        
                              
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
                              

(a)       Represents tax-exempt bonds issued by Louisville/Jefferson County, Kentucky, on behalf of LG&E that were subsequently purchased by LG&E.

Such bonds were remarketed to unaffiliated investors in January 2011.

 

There were no securities with credit losses at December 31, 2011 and 2010.

 

The following table shows the scheduled maturity dates of debt securities held at December 31, 2011.

   Maturity Maturity Maturity Maturity   
    Less Than1-55-10in Excess  
   1 YearYearsYearsof 10 YearsTotal
PPL               
Amortized cost $ 14 $ 69 $ 62 $ 82 $ 227
Fair value   14   72   67   90   243
                 
PPL Energy Supply               
Amortized cost $ 14 $ 69 $ 62 $ 77 $ 222
Fair value   14   72   67   85   238

The following table shows proceeds from and realized gains and losses on sales of available-for-sale securities.
           
   2011 2010 2009
PPL         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales    163      154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20
           
PPL Energy Supply         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales          154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20

(a)       These proceeds are used to pay income taxes and fees related to managing the trust. Remaining proceeds are reinvested in the trust.

(b)       Excludes the impact of other-than-temporary impairment charges recognized in the Statements of Income.

Short-term Investments

 

(PPL, LKE and LG&E)

 

At December 31, 2010, LG&E held $163 million aggregate principal amount of tax-exempt revenue bonds issued by Louisville/Jefferson County, Kentucky on behalf of LG&E that were purchased from the remarketing agent in 2008. At December 31, 2010, these investments were reflected in "Short-term investments" on the Balance Sheet. In 2011, LG&E received $163 million for its investments in these bonds when they were remarketed to unaffiliated investors. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was not significant.

 

(PPL and PPL Energy Supply)

 

In December 2008, the PEDFA issued $150 million aggregate principal amount of Exempt Facilities Revenue Bonds, Series 2008A and 2008B due 2038 (Series 2008 Bonds) on behalf of PPL Energy Supply. PPL Investment Corp. acted as the initial purchaser of the Series 2008 Bonds upon issuance. In April 2009, PPL Investment Corp. received $150 million for its investment in the Series 2008 Bonds when they were refunded by the PEDFA. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was insignificant.

 

NDT Funds

 

Beginning in January 1999 and ending in December 2009, in accordance with the PUC Final Order, decommissioning costs were recovered from PPL Electric's customers through the CTC over the 11-year life of the CTC rather than the remaining life of the Susquehanna nuclear plant. The recovery included a return on unamortized decommissioning costs. Under the power supply agreements between PPL Electric and PPL EnergyPlus, these revenues were passed on to PPL EnergyPlus. Similarly, these revenues were passed on to PPL Susquehanna under a power supply agreement between PPL EnergyPlus and PPL Susquehanna.

 

Amounts collected from PPL Electric's customers for decommissioning, less applicable taxes, were deposited in external trust funds for investment and can only be used for future decommissioning costs. To the extent that the actual costs for decommissioning exceed the amounts in the nuclear decommissioning trust funds, PPL Susquehanna would be obligated to fund 90% of the shortfall.

 

When the fair value of a security is less than amortized cost, PPL and PPL Energy Supply must make certain assertions to avoid recording an other-than-temporary impairment that requires a current period charge to earnings. The NRC requires that nuclear decommissioning trusts be managed by independent investment managers, with discretion to buy and sell securities in the trusts. As a result, PPL and PPL Energy Supply have been unable to demonstrate the ability to hold an impaired security until it recovers its value; therefore, unrealized losses on debt securities through March 31, 2009 and unrealized losses on equity securities for all periods presented, represented other-than-temporary impairments that required a current period charge to earnings. PPL and PPL Energy Supply recorded impairments for certain securities invested in the NDT funds of $6 million, $3 million and $18 million for 2011, 2010 and 2009. These impairments are reflected on the Statements of Income in "Other-Than-Temporary Impairments."

 

Effective April 1, 2009, when PPL and PPL Energy Supply intend to sell a debt security or more likely than not will be required to sell a debt security before recovery, then the other-than-temporary impairment recognized in earnings will equal the entire difference between the security's amortized cost basis and its fair value. However, if there is no intent to sell a debt security and it is not more likely than not that they will be required to sell the security before recovery, but the security has suffered a credit loss, the other-than-temporary impairment will be separated into the credit loss component, which is recognized in earnings, and the remainder of the other-than-temporary impairment, which is recorded in OCI. Temporary impairments of debt securities and unrealized gains on both debt and equity securities are recorded to OCI.

LKE [Member]
  
Available-for-Sale Securities [Line Items]  
Available-for-Sale Securities

23. Available-for-Sale Securities

 

(PPL, PPL Energy Supply, LKE and LG&E)

 

PPL and its subsidiaries classify certain short-term investments, securities held by the NDT funds and auction rate securities as available-for-sale. Available-for-sale securities are carried on the Balance Sheet at fair value. Unrealized gains and losses on these securities are reported, net of tax, in OCI or are recognized currently in earnings when a decline in fair value is determined to be other-than-temporary. The specific identification method is used to calculate realized gains and losses.

 

The following table shows the amortized cost, the gross unrealized gains and losses recorded in AOCI and the fair value of available-for-sale securities.

       December 31, 2011 December 31, 2010
          Gross Gross      Gross Gross  
       Amortized   Unrealized   Unrealized    Amortized  Unrealized  Unrealized   
       Cost Gains Losses Fair Value  Cost  Gains Losses Fair Value
PPL                        
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12   10         10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   25      1   24   25         25
 Total  $ 479 $ 187 $ 2 $ 664 $ 624 $ 182    $ 806
                              
PPL Energy Supply                        
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12 $ 10       $ 10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   20      1   19   20         20
 Total $ 474 $ 187 $ 2 $ 659 $ 456 $ 182    $ 638

LKE and LG&E                        
                              
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
                              

(a)       Represents tax-exempt bonds issued by Louisville/Jefferson County, Kentucky, on behalf of LG&E that were subsequently purchased by LG&E.

Such bonds were remarketed to unaffiliated investors in January 2011.

 

There were no securities with credit losses at December 31, 2011 and 2010.

 

The following table shows the scheduled maturity dates of debt securities held at December 31, 2011.

   Maturity Maturity Maturity Maturity   
    Less Than1-55-10in Excess  
   1 YearYearsYearsof 10 YearsTotal
PPL               
Amortized cost $ 14 $ 69 $ 62 $ 82 $ 227
Fair value   14   72   67   90   243
                 
PPL Energy Supply               
Amortized cost $ 14 $ 69 $ 62 $ 77 $ 222
Fair value   14   72   67   85   238

The following table shows proceeds from and realized gains and losses on sales of available-for-sale securities.
           
   2011 2010 2009
PPL         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales    163      154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20
           
PPL Energy Supply         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales          154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20

(a)       These proceeds are used to pay income taxes and fees related to managing the trust. Remaining proceeds are reinvested in the trust.

(b)       Excludes the impact of other-than-temporary impairment charges recognized in the Statements of Income.

Short-term Investments

 

(PPL, LKE and LG&E)

 

At December 31, 2010, LG&E held $163 million aggregate principal amount of tax-exempt revenue bonds issued by Louisville/Jefferson County, Kentucky on behalf of LG&E that were purchased from the remarketing agent in 2008. At December 31, 2010, these investments were reflected in "Short-term investments" on the Balance Sheet. In 2011, LG&E received $163 million for its investments in these bonds when they were remarketed to unaffiliated investors. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was not significant.

 

(PPL and PPL Energy Supply)

 

In December 2008, the PEDFA issued $150 million aggregate principal amount of Exempt Facilities Revenue Bonds, Series 2008A and 2008B due 2038 (Series 2008 Bonds) on behalf of PPL Energy Supply. PPL Investment Corp. acted as the initial purchaser of the Series 2008 Bonds upon issuance. In April 2009, PPL Investment Corp. received $150 million for its investment in the Series 2008 Bonds when they were refunded by the PEDFA. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was insignificant.

 

NDT Funds

 

Beginning in January 1999 and ending in December 2009, in accordance with the PUC Final Order, decommissioning costs were recovered from PPL Electric's customers through the CTC over the 11-year life of the CTC rather than the remaining life of the Susquehanna nuclear plant. The recovery included a return on unamortized decommissioning costs. Under the power supply agreements between PPL Electric and PPL EnergyPlus, these revenues were passed on to PPL EnergyPlus. Similarly, these revenues were passed on to PPL Susquehanna under a power supply agreement between PPL EnergyPlus and PPL Susquehanna.

 

Amounts collected from PPL Electric's customers for decommissioning, less applicable taxes, were deposited in external trust funds for investment and can only be used for future decommissioning costs. To the extent that the actual costs for decommissioning exceed the amounts in the nuclear decommissioning trust funds, PPL Susquehanna would be obligated to fund 90% of the shortfall.

 

When the fair value of a security is less than amortized cost, PPL and PPL Energy Supply must make certain assertions to avoid recording an other-than-temporary impairment that requires a current period charge to earnings. The NRC requires that nuclear decommissioning trusts be managed by independent investment managers, with discretion to buy and sell securities in the trusts. As a result, PPL and PPL Energy Supply have been unable to demonstrate the ability to hold an impaired security until it recovers its value; therefore, unrealized losses on debt securities through March 31, 2009 and unrealized losses on equity securities for all periods presented, represented other-than-temporary impairments that required a current period charge to earnings. PPL and PPL Energy Supply recorded impairments for certain securities invested in the NDT funds of $6 million, $3 million and $18 million for 2011, 2010 and 2009. These impairments are reflected on the Statements of Income in "Other-Than-Temporary Impairments."

 

Effective April 1, 2009, when PPL and PPL Energy Supply intend to sell a debt security or more likely than not will be required to sell a debt security before recovery, then the other-than-temporary impairment recognized in earnings will equal the entire difference between the security's amortized cost basis and its fair value. However, if there is no intent to sell a debt security and it is not more likely than not that they will be required to sell the security before recovery, but the security has suffered a credit loss, the other-than-temporary impairment will be separated into the credit loss component, which is recognized in earnings, and the remainder of the other-than-temporary impairment, which is recorded in OCI. Temporary impairments of debt securities and unrealized gains on both debt and equity securities are recorded to OCI.

LGE [Member]
  
Available-for-Sale Securities [Line Items]  
Available-for-Sale Securities

23. Available-for-Sale Securities

 

(PPL, PPL Energy Supply, LKE and LG&E)

 

PPL and its subsidiaries classify certain short-term investments, securities held by the NDT funds and auction rate securities as available-for-sale. Available-for-sale securities are carried on the Balance Sheet at fair value. Unrealized gains and losses on these securities are reported, net of tax, in OCI or are recognized currently in earnings when a decline in fair value is determined to be other-than-temporary. The specific identification method is used to calculate realized gains and losses.

 

The following table shows the amortized cost, the gross unrealized gains and losses recorded in AOCI and the fair value of available-for-sale securities.

       December 31, 2011 December 31, 2010
          Gross Gross      Gross Gross  
       Amortized   Unrealized   Unrealized    Amortized  Unrealized  Unrealized   
       Cost Gains Losses Fair Value  Cost  Gains Losses Fair Value
PPL                        
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12   10         10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   25      1   24   25         25
 Total  $ 479 $ 187 $ 2 $ 664 $ 624 $ 182    $ 806
                              
PPL Energy Supply                        
 NDT funds:                        
   Cash and cash equivalents $ 12       $ 12 $ 10       $ 10
   Equity securities:                         
    U.S. large-cap   173 $ 119      292   180 $ 123      303
    U.S. mid/small-cap   67   50      117   67   52      119
   Debt securities:                        
    U.S. Treasury   76   10      86   71   4      75
    U.S. government sponsored                        
     agency   9   1      10   6   1      7
    Municipality   80   4 $ 1   83   69         69
    Investment-grade corporate   35   3      38   31   2      33
    Other   2         2   1         1
   Receivables/payables, net               1         1
   Total NDT funds   454   187   1   640   436   182      618
 Auction rate securities   20      1   19   20         20
 Total $ 474 $ 187 $ 2 $ 659 $ 456 $ 182    $ 638

LKE and LG&E                        
                              
 Short-term investments                        
  - municipal debt securities (a)             $ 163       $ 163
                              

(a)       Represents tax-exempt bonds issued by Louisville/Jefferson County, Kentucky, on behalf of LG&E that were subsequently purchased by LG&E.

Such bonds were remarketed to unaffiliated investors in January 2011.

 

There were no securities with credit losses at December 31, 2011 and 2010.

 

The following table shows the scheduled maturity dates of debt securities held at December 31, 2011.

   Maturity Maturity Maturity Maturity   
    Less Than1-55-10in Excess  
   1 YearYearsYearsof 10 YearsTotal
PPL               
Amortized cost $ 14 $ 69 $ 62 $ 82 $ 227
Fair value   14   72   67   90   243
                 
PPL Energy Supply               
Amortized cost $ 14 $ 69 $ 62 $ 77 $ 222
Fair value   14   72   67   85   238

The following table shows proceeds from and realized gains and losses on sales of available-for-sale securities.
           
   2011 2010 2009
PPL         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales    163      154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20
           
PPL Energy Supply         
Proceeds from sales of NDT securities (a) $ 156 $ 114 $ 201
Other proceeds from sales          154
Gross realized gains (b)   28   13   27
Gross realized losses (b)   16   5   20

(a)       These proceeds are used to pay income taxes and fees related to managing the trust. Remaining proceeds are reinvested in the trust.

(b)       Excludes the impact of other-than-temporary impairment charges recognized in the Statements of Income.

Short-term Investments

 

(PPL, LKE and LG&E)

 

At December 31, 2010, LG&E held $163 million aggregate principal amount of tax-exempt revenue bonds issued by Louisville/Jefferson County, Kentucky on behalf of LG&E that were purchased from the remarketing agent in 2008. At December 31, 2010, these investments were reflected in "Short-term investments" on the Balance Sheet. In 2011, LG&E received $163 million for its investments in these bonds when they were remarketed to unaffiliated investors. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was not significant.

 

(PPL and PPL Energy Supply)

 

In December 2008, the PEDFA issued $150 million aggregate principal amount of Exempt Facilities Revenue Bonds, Series 2008A and 2008B due 2038 (Series 2008 Bonds) on behalf of PPL Energy Supply. PPL Investment Corp. acted as the initial purchaser of the Series 2008 Bonds upon issuance. In April 2009, PPL Investment Corp. received $150 million for its investment in the Series 2008 Bonds when they were refunded by the PEDFA. No realized or unrealized gains (losses) were recorded on these securities, as the difference between carrying value and fair value was insignificant.

 

NDT Funds

 

Beginning in January 1999 and ending in December 2009, in accordance with the PUC Final Order, decommissioning costs were recovered from PPL Electric's customers through the CTC over the 11-year life of the CTC rather than the remaining life of the Susquehanna nuclear plant. The recovery included a return on unamortized decommissioning costs. Under the power supply agreements between PPL Electric and PPL EnergyPlus, these revenues were passed on to PPL EnergyPlus. Similarly, these revenues were passed on to PPL Susquehanna under a power supply agreement between PPL EnergyPlus and PPL Susquehanna.

 

Amounts collected from PPL Electric's customers for decommissioning, less applicable taxes, were deposited in external trust funds for investment and can only be used for future decommissioning costs. To the extent that the actual costs for decommissioning exceed the amounts in the nuclear decommissioning trust funds, PPL Susquehanna would be obligated to fund 90% of the shortfall.

 

When the fair value of a security is less than amortized cost, PPL and PPL Energy Supply must make certain assertions to avoid recording an other-than-temporary impairment that requires a current period charge to earnings. The NRC requires that nuclear decommissioning trusts be managed by independent investment managers, with discretion to buy and sell securities in the trusts. As a result, PPL and PPL Energy Supply have been unable to demonstrate the ability to hold an impaired security until it recovers its value; therefore, unrealized losses on debt securities through March 31, 2009 and unrealized losses on equity securities for all periods presented, represented other-than-temporary impairments that required a current period charge to earnings. PPL and PPL Energy Supply recorded impairments for certain securities invested in the NDT funds of $6 million, $3 million and $18 million for 2011, 2010 and 2009. These impairments are reflected on the Statements of Income in "Other-Than-Temporary Impairments."

 

Effective April 1, 2009, when PPL and PPL Energy Supply intend to sell a debt security or more likely than not will be required to sell a debt security before recovery, then the other-than-temporary impairment recognized in earnings will equal the entire difference between the security's amortized cost basis and its fair value. However, if there is no intent to sell a debt security and it is not more likely than not that they will be required to sell the security before recovery, but the security has suffered a credit loss, the other-than-temporary impairment will be separated into the credit loss component, which is recognized in earnings, and the remainder of the other-than-temporary impairment, which is recorded in OCI. Temporary impairments of debt securities and unrealized gains on both debt and equity securities are recorded to OCI.