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Discontinued Operations
 12 Months Ended
Dec. 31, 2012
Discontinued Operations [Line Items]  
Discontinued Operations

9. Discontinued Operations

 

(PPL and PPL Energy Supply)

 

Sale of Certain Non-core Generation Facilities

 

In 2011, PPL Energy Supply subsidiaries completed the sale of their ownership interests in certain non-core generation facilities, which were included in the Supply segment, for $381 million. The transaction included the natural gas-fired facilities in Wallingford, Connecticut and University Park, Illinois and an equity interest in Safe Harbor Water Power Corporation, which owns a hydroelectric facility in Conestoga, Pennsylvania.

 

These non-core generation facilities met the held for sale criteria in the third quarter of 2010. As a result, a pre-tax impairment charge of $96 million ($58 million after tax) was recorded and $5 million ($4 million after tax) of allocated goodwill was written off. These charges are included in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statements of Income.

 

Following are the components of Discontinued Operations in the Statements of Income.

    2011  2010
          
Operating revenues    $ 19 $ 113
Operating expenses (a)      11   156
Operating income (loss)      8   (43)
Other income (expense) - net         2
Interest expense (b)      3   11
Income (loss) before income taxes      5   (52)
Income tax expense (benefit)       3   (18)
Income (Loss) from Discontinued Operations    $ 2 $ (34)

(a)       2010 includes the impairments to the carrying value of the non-core generation facilities and the write-off of allocated goodwill.

(b)       Represents allocated interest expense based upon debt attributable to the generation facilities sold.

Sale of Long Island Generation Business

 

In 2010, PPL Energy Supply subsidiaries completed the sale of the Long Island generation business, which was included in the Supply segment. Proceeds from the sale approximated $124 million. There was no significant impact on earnings in 2010 from the operation of this business or as a result of the sale.

Sale of Maine Hydroelectric Generation Business

 

In 2010, a PPL Energy Supply subsidiary completed the sale of its Maine hydroelectric generation business, which was included in the Supply segment. The business included eight hydroelectric facilities as well as a 50% equity interest in another hydroelectric facility. The majority of the business was sold in 2009. The remaining three hydroelectric facilities were sold in 2010 for $24 million, and also resulted in the receipt of an additional $14 million in contingent consideration in connection with the 2009 sale. As a result of the consideration received in 2010, PPL Energy Supply recorded a gain of $25 million ($15 million after tax), reflected in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

Distribution of Membership Interest in PPL Global to Parent (PPL Energy Supply)

 

In January 2011, PPL Energy Supply distributed its entire membership interest in PPL Global, which represented the entire U.K. Regulated segment, to PPL Energy Supply's parent, PPL Energy Funding. The distribution was made based on the book value of the assets and liabilities of PPL Global with financial effect as of January 1, 2011, and no gains or losses were recognized on the distribution. The purpose of the distribution was to better align PPL's organizational structure with the manner in which it manages these businesses, separating the U.S.-based competitive energy marketing and supply business from the U.K.-based regulated electricity distribution business. Following the distribution, PPL Energy Supply operates in a single reportable segment, and through its subsidiaries is primarily engaged in the generation and marketing of power, primarily in the northeastern and northwestern U.S.

 

Following are the components of Discontinued Operations in the Statement of Income.

    2010
       
Operating revenues    $ 761
Operating expenses       368
Operating income      393
Other income (expense) - net      4
Interest expense (a)      135
Income before income taxes      262
Income tax expense      1
Income (Loss) from Discontinued Operations    $ 261

(a)       No interest was allocated, as PPL Global was sufficiently capitalized.

 

The amount of cash and cash equivalents of PPL Global at the time of the distribution was reflected as a financing activity in the 2011 Statement of Cash Flows.

WKE

 

(PPL and LKE)

 

WKE had a 25-year lease for and operated generating facilities of BREC, and a coal-fired generating facility owned by the City of Henderson, Kentucky. WKE terminated the lease in 2009 prior to PPL acquiring LKE. See Note 15 for additional information related to the termination of the lease. In 2012, an adjustment was made to the liability for certain WKE indemnifications, which is reflected in Discontinued Operations. See “Guarantees and Other Assurances” in Note 15 for additional information on the adjustment and related indemnification. The results of operations for the 2012, 2011 and 2010 periods were not significant.

PPL Energy Supply LLC [Member]
  
Discontinued Operations [Line Items]  
Discontinued Operations

9. Discontinued Operations

 

(PPL and PPL Energy Supply)

 

Sale of Certain Non-core Generation Facilities

 

In 2011, PPL Energy Supply subsidiaries completed the sale of their ownership interests in certain non-core generation facilities, which were included in the Supply segment, for $381 million. The transaction included the natural gas-fired facilities in Wallingford, Connecticut and University Park, Illinois and an equity interest in Safe Harbor Water Power Corporation, which owns a hydroelectric facility in Conestoga, Pennsylvania.

 

These non-core generation facilities met the held for sale criteria in the third quarter of 2010. As a result, a pre-tax impairment charge of $96 million ($58 million after tax) was recorded and $5 million ($4 million after tax) of allocated goodwill was written off. These charges are included in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statements of Income.

 

Following are the components of Discontinued Operations in the Statements of Income.

    2011  2010
          
Operating revenues    $ 19 $ 113
Operating expenses (a)      11   156
Operating income (loss)      8   (43)
Other income (expense) - net         2
Interest expense (b)      3   11
Income (loss) before income taxes      5   (52)
Income tax expense (benefit)       3   (18)
Income (Loss) from Discontinued Operations    $ 2 $ (34)

(a)       2010 includes the impairments to the carrying value of the non-core generation facilities and the write-off of allocated goodwill.

(b)       Represents allocated interest expense based upon debt attributable to the generation facilities sold.

Sale of Long Island Generation Business

 

In 2010, PPL Energy Supply subsidiaries completed the sale of the Long Island generation business, which was included in the Supply segment. Proceeds from the sale approximated $124 million. There was no significant impact on earnings in 2010 from the operation of this business or as a result of the sale.

Sale of Maine Hydroelectric Generation Business

 

In 2010, a PPL Energy Supply subsidiary completed the sale of its Maine hydroelectric generation business, which was included in the Supply segment. The business included eight hydroelectric facilities as well as a 50% equity interest in another hydroelectric facility. The majority of the business was sold in 2009. The remaining three hydroelectric facilities were sold in 2010 for $24 million, and also resulted in the receipt of an additional $14 million in contingent consideration in connection with the 2009 sale. As a result of the consideration received in 2010, PPL Energy Supply recorded a gain of $25 million ($15 million after tax), reflected in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

Distribution of Membership Interest in PPL Global to Parent (PPL Energy Supply)

 

In January 2011, PPL Energy Supply distributed its entire membership interest in PPL Global, which represented the entire U.K. Regulated segment, to PPL Energy Supply's parent, PPL Energy Funding. The distribution was made based on the book value of the assets and liabilities of PPL Global with financial effect as of January 1, 2011, and no gains or losses were recognized on the distribution. The purpose of the distribution was to better align PPL's organizational structure with the manner in which it manages these businesses, separating the U.S.-based competitive energy marketing and supply business from the U.K.-based regulated electricity distribution business. Following the distribution, PPL Energy Supply operates in a single reportable segment, and through its subsidiaries is primarily engaged in the generation and marketing of power, primarily in the northeastern and northwestern U.S.

 

Following are the components of Discontinued Operations in the Statement of Income.

    2010
       
Operating revenues    $ 761
Operating expenses       368
Operating income      393
Other income (expense) - net      4
Interest expense (a)      135
Income before income taxes      262
Income tax expense      1
Income (Loss) from Discontinued Operations    $ 261

(a)       No interest was allocated, as PPL Global was sufficiently capitalized.

 

The amount of cash and cash equivalents of PPL Global at the time of the distribution was reflected as a financing activity in the 2011 Statement of Cash Flows.

WKE

 

(PPL and LKE)

 

WKE had a 25-year lease for and operated generating facilities of BREC, and a coal-fired generating facility owned by the City of Henderson, Kentucky. WKE terminated the lease in 2009 prior to PPL acquiring LKE. See Note 15 for additional information related to the termination of the lease. In 2012, an adjustment was made to the liability for certain WKE indemnifications, which is reflected in Discontinued Operations. See “Guarantees and Other Assurances” in Note 15 for additional information on the adjustment and related indemnification. The results of operations for the 2012, 2011 and 2010 periods were not significant.

LG And E And KU Energy LLC [Member]
  
Discontinued Operations [Line Items]  
Discontinued Operations

9. Discontinued Operations

 

(PPL and PPL Energy Supply)

 

Sale of Certain Non-core Generation Facilities

 

In 2011, PPL Energy Supply subsidiaries completed the sale of their ownership interests in certain non-core generation facilities, which were included in the Supply segment, for $381 million. The transaction included the natural gas-fired facilities in Wallingford, Connecticut and University Park, Illinois and an equity interest in Safe Harbor Water Power Corporation, which owns a hydroelectric facility in Conestoga, Pennsylvania.

 

These non-core generation facilities met the held for sale criteria in the third quarter of 2010. As a result, a pre-tax impairment charge of $96 million ($58 million after tax) was recorded and $5 million ($4 million after tax) of allocated goodwill was written off. These charges are included in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statements of Income.

 

Following are the components of Discontinued Operations in the Statements of Income.

    2011  2010
          
Operating revenues    $ 19 $ 113
Operating expenses (a)      11   156
Operating income (loss)      8   (43)
Other income (expense) - net         2
Interest expense (b)      3   11
Income (loss) before income taxes      5   (52)
Income tax expense (benefit)       3   (18)
Income (Loss) from Discontinued Operations    $ 2 $ (34)

(a)       2010 includes the impairments to the carrying value of the non-core generation facilities and the write-off of allocated goodwill.

(b)       Represents allocated interest expense based upon debt attributable to the generation facilities sold.

Sale of Long Island Generation Business

 

In 2010, PPL Energy Supply subsidiaries completed the sale of the Long Island generation business, which was included in the Supply segment. Proceeds from the sale approximated $124 million. There was no significant impact on earnings in 2010 from the operation of this business or as a result of the sale.

Sale of Maine Hydroelectric Generation Business

 

In 2010, a PPL Energy Supply subsidiary completed the sale of its Maine hydroelectric generation business, which was included in the Supply segment. The business included eight hydroelectric facilities as well as a 50% equity interest in another hydroelectric facility. The majority of the business was sold in 2009. The remaining three hydroelectric facilities were sold in 2010 for $24 million, and also resulted in the receipt of an additional $14 million in contingent consideration in connection with the 2009 sale. As a result of the consideration received in 2010, PPL Energy Supply recorded a gain of $25 million ($15 million after tax), reflected in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

Distribution of Membership Interest in PPL Global to Parent (PPL Energy Supply)

 

In January 2011, PPL Energy Supply distributed its entire membership interest in PPL Global, which represented the entire U.K. Regulated segment, to PPL Energy Supply's parent, PPL Energy Funding. The distribution was made based on the book value of the assets and liabilities of PPL Global with financial effect as of January 1, 2011, and no gains or losses were recognized on the distribution. The purpose of the distribution was to better align PPL's organizational structure with the manner in which it manages these businesses, separating the U.S.-based competitive energy marketing and supply business from the U.K.-based regulated electricity distribution business. Following the distribution, PPL Energy Supply operates in a single reportable segment, and through its subsidiaries is primarily engaged in the generation and marketing of power, primarily in the northeastern and northwestern U.S.

 

Following are the components of Discontinued Operations in the Statement of Income.

    2010
       
Operating revenues    $ 761
Operating expenses       368
Operating income      393
Other income (expense) - net      4
Interest expense (a)      135
Income before income taxes      262
Income tax expense      1
Income (Loss) from Discontinued Operations    $ 261

(a)       No interest was allocated, as PPL Global was sufficiently capitalized.

 

The amount of cash and cash equivalents of PPL Global at the time of the distribution was reflected as a financing activity in the 2011 Statement of Cash Flows.

WKE

 

(PPL and LKE)

 

WKE had a 25-year lease for and operated generating facilities of BREC, and a coal-fired generating facility owned by the City of Henderson, Kentucky. WKE terminated the lease in 2009 prior to PPL acquiring LKE. See Note 15 for additional information related to the termination of the lease. In 2012, an adjustment was made to the liability for certain WKE indemnifications, which is reflected in Discontinued Operations. See “Guarantees and Other Assurances” in Note 15 for additional information on the adjustment and related indemnification. The results of operations for the 2012, 2011 and 2010 periods were not significant.