XML 70 R43.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivative Instruments and Hedging Activities (Tables)
 6 Months Ended
Jun. 30, 2014
Derivative Instruments And Hedging Activities [Line Items]  
Commodity Price Risk (Non-trading) - Economic Activity - Pre-tax Gains (Losses) Associated with Economic Activity

The unrealized gains (losses) for economic activity for the periods ended June 30 were as follows

   Three Months Six Months
   2014 2013 2014 2013
Operating Revenues            
 Unregulated wholesale energy  $ (91) $ 590 $ (880) $ (232)
 Unregulated retail energy   4   20   (22)   12
Operating Expenses            
 Fuel   7   (4)   6   (5)
 Energy purchases   39   (479)   619   155
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At June 30, 2014, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

    Volumes (a)
Commodity Unit of Measure 2014 (b) 2015 2016 Thereafter
           
Power MWh  (20,439,732)  (26,034,375)  (2,187,131)  12,845,473
Capacity MW-Month  (8,589)  (5,120)  501  9
Gas MMBtu  66,064,719  40,183,723  55,354,593  37,786,174
Coal Tons  45,000      
FTRs MW-Month  4,283  3,364    
Oil Barrels  68,966  363,660  322,777  269,438

(a)       Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.

(b)       Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

       June 30, 2014 December 31, 2013
       Derivatives designated as  Derivatives not designated Derivatives designated as  Derivatives not designated
       hedging instruments  as hedging instruments  hedging instruments  as hedging instruments
       Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
Current:                        
 Price Risk Management                         
  Assets/Liabilities (a):                        
   Interest rate swaps (b)          $ 4 $ 82       $ 4
   Cross-currency swaps (b)    $ 5          $ 4      
   Foreign currency                        
    contracts      22      95      16      55
   Commodity contracts       $ 954   1,133       $ 860   750
     Total current      27   954   1,232   82   20   860   809
Noncurrent:                        
 Price Risk Management                         
  Assets/Liabilities (a):                        
   Interest rate swaps (b) $ 1   12      38   9         32
   Cross-currency swaps (b)      42            28      
   Foreign currency                        
    contracts      5   2   54      4      31
   Commodity contracts         420   347         328   320
     Total noncurrent   1   59   422   439   9   32   328   383
Total derivatives $ 1 $ 86 $ 1,376 $ 1,671 $ 91 $ 52 $ 1,188 $ 1,192

(a)       Represents the location on the Balance Sheets.

(b)       Excludes accrued interest, if applicable.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended June 30, 2014.

              Three Months Six Months
                 Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                 in Income    in Income
              on Derivative Gain (Loss) on Derivative
           Gain (Loss) (Ineffective Reclassified (Ineffective
        Location of Reclassified Portion and from AOCI Portion and
     Derivative Gain Gain (Loss) from AOCI Amount into Amount
     (Loss) Recognized in Recognized into Income Excluded from Income Excluded from
Derivative   OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships Three Months Six Months on Derivative Portion) Testing) Portion) Testing)
Cash Flow Hedges:                    
 Interest rate swaps $ (14) $ (60) Interest expense $ (4)    $ (9) $ 2
 Cross-currency swaps   9   (16) Interest expense   1      1   
           Other income            
            (expense) - net         (29)   
 Commodity contracts       Unregulated wholesale             
            energy   5      6   
           Energy purchases   8      15   
           Depreciation         1   
Total $ (5) $ (76)    $ 10    $ (15) $ 2
                         
Net Investment Hedges:                     
  Foreign currency contracts $ (14) $ (18)               
                        
                        

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Six Months
         
Foreign currency contracts Other income (expense) - net $ (72) $ (96)
Interest rate swaps Interest expense   (2)   (4)
Commodity contracts Unregulated wholesale energy (a)   (91)   (3,135)
  Unregulated retail energy   12   (52)
  Fuel   8   7
  Energy purchases (b)   78   2,442
  Total $ (67) $ (838)
         
         
Derivatives Not Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets Three Months Six Months
         
Interest rate swaps Regulatory assets - noncurrent $ (2) $ (6)

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI, or regulatory assets and regulatory liabilities for the periods ended June 30, 2013.

(a)       The six-month period ended June 30, 2014 includes significant realized and unrealized losses on physical and financial commodity sales contracts due to the unusually cold weather experienced in the first quarter of 2014.

(b)       The six-month period ended June 30, 2014 includes significant realized and unrealized gains on physical and financial commodity purchase contracts due to the unusually cold weather experienced in the first quarter of 2014.

              Three Months Six Months
                 Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                 in Income    in Income
              on Derivative Gain (Loss) on Derivative
           Gain (Loss) (Ineffective Reclassified (Ineffective
        Location of Reclassified Portion and from AOCI Portion and
     Derivative Gain Gain (Loss) from AOCI Amount into Amount
     (Loss) Recognized in Recognized into Income Excluded from Income Excluded from
Derivative   OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships Three Months Six Months on Derivative Portion) Testing) Portion) Testing)
Cash Flow Hedges:                    
 Interest rate swaps $ 68 $ 77 Interest expense $ (4)    $ (9)   
 Cross-currency swaps   (21)   52 Interest expense   1      1   
           Other income            
            (expense) - net   1      70   
 Commodity contracts       Unregulated             
            wholesale energy   73      140 $ 1
           Energy purchases   (14)      (30)   
           Depreciation   1      1   
Total $ 47 $ 129    $ 58    $ 173 $ 1
                         
Net Investment Hedges:                     
  Foreign currency contracts $1 $17               

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Six Months
         
Foreign currency contracts Other income (expense) - net $ 4 $ 123
Interest rate swaps Interest expense   (2)   (4)
Commodity contracts Unregulated wholesale energy    740   34
  Unregulated retail energy    22   15
  Fuel   (3)   (2)
  Energy purchases   (599)   (13)
  Total $ 162 $ 153
         
Derivatives Not Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets Three Months Six Months
         
Interest rate swaps Regulatory assets - noncurrent $ 11 $ 15
         
         
Derivatives Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets Three Months Six Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 48 $ 58
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
June 30, 2014                        
PPL                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156
 Treasury Derivatives   3   3         277   3   55   219
Total $ 1,377 $ 1,179 $ 12 $ 186 $ 1,757 $ 1,179 $ 203 $ 375
                           
PPL Energy Supply                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156

LKE                        
 Treasury Derivatives             $ 42    $ 21 $ 21
                           
LG&E                        
 Treasury Derivatives             $ 42    $ 21 $ 21

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At June 30, 2014, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 373 $ 155 $ 28 $ 28
Aggregate fair value of collateral posted on these derivative instruments   155   134   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   265(b)68(b) 8  8

  • Includes the effect of net receivables and payables already recorded on the Balance Sheet.
  • During the second quarter of 2014, PPL Energy Supply experienced a downgrade in its corporate credit ratings to below investment grade. Amounts related to PPL Energy Supply represent net liability positions subject to further adequate assurance features.
PPL Energy Supply LLC [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Commodity Price Risk (Non-trading) - Economic Activity - Pre-tax Gains (Losses) Associated with Economic Activity

The unrealized gains (losses) for economic activity for the periods ended June 30 were as follows

   Three Months Six Months
   2014 2013 2014 2013
Operating Revenues            
 Unregulated wholesale energy  $ (91) $ 590 $ (880) $ (232)
 Unregulated retail energy   4   20   (22)   12
Operating Expenses            
 Fuel   7   (4)   6   (5)
 Energy purchases   39   (479)   619   155
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At June 30, 2014, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

    Volumes (a)
Commodity Unit of Measure 2014 (b) 2015 2016 Thereafter
           
Power MWh  (20,439,732)  (26,034,375)  (2,187,131)  12,845,473
Capacity MW-Month  (8,589)  (5,120)  501  9
Gas MMBtu  66,064,719  40,183,723  55,354,593  37,786,174
Coal Tons  45,000      
FTRs MW-Month  4,283  3,364    
Oil Barrels  68,966  363,660  322,777  269,438

(a)       Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.

(b)       Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

       June 30, 2014  December 31, 2013
       Derivatives not designated  Derivatives not designated
       as hedging instruments  as hedging instruments
       Assets Liabilities  Assets Liabilities
Current:             
 Price Risk Management              
  Assets/Liabilities (a):             
   Commodity contracts $ 954 $ 1,133  $ 860 $ 750
     Total current   954   1,133    860   750
Noncurrent:             
 Price Risk Management              
  Assets/Liabilities (a):             
   Commodity contracts   420   347    328   320
     Total noncurrent   420   347    328   320
Total derivatives $ 1,374 $ 1,480  $ 1,188 $ 1,070

(a)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income or OCI for the periods ended June 30, 2014.

             Three Months Six Months
                Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                in Income    in Income
                on Derivative    on Derivative
          Gain (Loss) (Ineffective Gain (Loss) (Ineffective
        Location of Reclassified Portion and Reclassified Portion and
     Derivative Gain Gains (Losses) from AOCI Amount from AOCI Amount
     (Loss) Recognized in Recognized into Income Excluded from into Income Excluded from
Derivative  OCI (Effective Portion)  in Income(Effective Effectiveness (Effective Effectiveness
Relationships Three Months Six Months on Derivative  Portion)  Testing) Portion) Testing)
Cash Flow Hedges:                    
 Commodity contracts       Unregulated wholesale            
           energy $ 5    $ 6   
           Energy purchases   8      15   
           Depreciation         1   
Total          $ 13    $ 22   
                         

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Six Months
         
Commodity contracts Unregulated wholesale energy (a) $ (91) $ (3,135)
  Unregulated retail energy   12   (52)
  Fuel   8   7
  Energy purchases (b)   78   2,442
  Total $ 7 $ (738)

(a)       The six-month period ended June 30, 2014 includes significant realized and unrealized losses on physical and financial commodity sales contracts due to the unusually cold weather experienced in the first quarter of 2014.

(b)       The six-month period ended June 30, 2014 includes significant realized and unrealized gains on physical and financial commodity purchase contracts due to the unusually cold weather experienced in the first quarter of 2014.

The following tables present the pre-tax effect of derivative instruments recognized in income or OCI for the periods ended June 30, 2013.

             Three Months Six Months
                Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                in Income    in Income
                on Derivative    on Derivative
          Gain (Loss) (Ineffective Gain (Loss) (Ineffective
        Location of Reclassified Portion and Reclassified Portion and
     Derivative Gain Gains (Losses) from AOCI Amount from AOCI Amount
     (Loss) Recognized in Recognized into Income Excluded from into Income Excluded from
Derivative  OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships Three Months Six Months on Derivative  Portion)  Testing) Portion) Testing)
Cash Flow Hedges:                    
          Unregulated            
  Commodity contracts        wholesale energy $ 73    $ 140 $ 1
           Energy purchases   (14)      (30)   
           Depreciation   1      1   
Total          $ 60    $ 111 $ 1

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Six Months
         
Commodity contracts Unregulated wholesale energy $ 740 $ 34
  Unregulated retail energy   22   15
  Fuel   (3)   (2)
  Energy purchases   (599)   (13)
  Total $ 160 $ 34
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
June 30, 2014                        
PPL                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156
 Treasury Derivatives   3   3         277   3   55   219
Total $ 1,377 $ 1,179 $ 12 $ 186 $ 1,757 $ 1,179 $ 203 $ 375
                           
PPL Energy Supply                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156

LKE                        
 Treasury Derivatives             $ 42    $ 21 $ 21
                           
LG&E                        
 Treasury Derivatives             $ 42    $ 21 $ 21

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At June 30, 2014, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 373 $ 155 $ 28 $ 28
Aggregate fair value of collateral posted on these derivative instruments   155   134   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   265(b)68(b) 8  8

  • Includes the effect of net receivables and payables already recorded on the Balance Sheet.
  • During the second quarter of 2014, PPL Energy Supply experienced a downgrade in its corporate credit ratings to below investment grade. Amounts related to PPL Energy Supply represent net liability positions subject to further adequate assurance features.
LG And E And KU Energy LLC [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

(LKE and LG&E)

 

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

       June 30, 2014 December 31, 2013 
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 4     $ 4 
     Total current      4       4 
Noncurrent:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps      38       32 
     Total noncurrent      38       32 
Total derivatives    $ 42     $ 36 

(a)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

(LKE)

 

The following table presents the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the periods ended June 30, 2013.

Derivative Instruments Location of Gain (Loss) Three Months Six Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 48 $ 58
         

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended June 30, 2014.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Six Months
         
Interest rate swaps Interest expense $ (2) $ (4)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Six Months
         
Interest rate swaps Regulatory assets - noncurrent $ (2) $ (6)

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended June 30, 2013.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Six Months
         
Interest rate swaps Interest expense $ (2) $ (4)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Six Months
         
Interest rate swaps Regulatory assets - noncurrent $ 11 $ 15
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
June 30, 2014                        
PPL                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156
 Treasury Derivatives   3   3         277   3   55   219
Total $ 1,377 $ 1,179 $ 12 $ 186 $ 1,757 $ 1,179 $ 203 $ 375
                           
PPL Energy Supply                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156

LKE                        
 Treasury Derivatives             $ 42    $ 21 $ 21
                           
LG&E                        
 Treasury Derivatives             $ 42    $ 21 $ 21

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At June 30, 2014, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 373 $ 155 $ 28 $ 28
Aggregate fair value of collateral posted on these derivative instruments   155   134   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   265(b)68(b) 8  8

  • Includes the effect of net receivables and payables already recorded on the Balance Sheet.
  • During the second quarter of 2014, PPL Energy Supply experienced a downgrade in its corporate credit ratings to below investment grade. Amounts related to PPL Energy Supply represent net liability positions subject to further adequate assurance features.
Louisville Gas And Electric Co [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

(LKE and LG&E)

 

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

       June 30, 2014 December 31, 2013 
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 4     $ 4 
     Total current      4       4 
Noncurrent:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps      38       32 
     Total noncurrent      38       32 
Total derivatives    $ 42     $ 36 

(a)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

(LG&E)

 

The following table presents the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the periods ended June 30, 2013.

Derivative Instruments Location of Gain (Loss) Three Months Six Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 24 $ 29

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended June 30, 2014.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Six Months
         
Interest rate swaps Interest expense $ (2) $ (4)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Six Months
         
Interest rate swaps Regulatory assets - noncurrent $ (2) $ (6)

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended June 30, 2013.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Six Months
         
Interest rate swaps Interest expense $ (2) $ (4)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Six Months
         
Interest rate swaps Regulatory assets - noncurrent $ 11 $ 15
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
June 30, 2014                        
PPL                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156
 Treasury Derivatives   3   3         277   3   55   219
Total $ 1,377 $ 1,179 $ 12 $ 186 $ 1,757 $ 1,179 $ 203 $ 375
                           
PPL Energy Supply                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156

LKE                        
 Treasury Derivatives             $ 42    $ 21 $ 21
                           
LG&E                        
 Treasury Derivatives             $ 42    $ 21 $ 21

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At June 30, 2014, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 373 $ 155 $ 28 $ 28
Aggregate fair value of collateral posted on these derivative instruments   155   134   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   265(b)68(b) 8  8

  • Includes the effect of net receivables and payables already recorded on the Balance Sheet.
  • During the second quarter of 2014, PPL Energy Supply experienced a downgrade in its corporate credit ratings to below investment grade. Amounts related to PPL Energy Supply represent net liability positions subject to further adequate assurance features.
Kentucky Utilities Co [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the periods ended June 30, 2013.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet
Derivative Instruments Location of Gain (Loss)  Three Months Six Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 24 $ 29
Derivative Positions Eligible for Offset with Related Cash Collateral
     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
June 30, 2014                        
PPL                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156
 Treasury Derivatives   3   3         277   3   55   219
Total $ 1,377 $ 1,179 $ 12 $ 186 $ 1,757 $ 1,179 $ 203 $ 375
                           
PPL Energy Supply                        
 Energy Commodities $ 1,374 $ 1,176 $ 12 $ 186 $ 1,480 $ 1,176 $ 148 $ 156

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157