XML 65 R27.htm IDEA: XBRL DOCUMENT

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Other Intangible Assets [Abstract]

18. Goodwill and Other Intangible Assets

Goodwill

(PPL)

The changes in the carrying amount of goodwill by segment were:

		U.K. Regulated				Kentucky Regulated				Total
		2015		2014		2015		2014		2015		2014

Balance at beginning of period (a)		$	3,005	$	3,143	$	662	$	662	$	3,667	$	3,805
	Effect of foreign currency exchange rates		(117)		(138)						(117)		(138)
Balance at end of period (a)		$	2,888	$	3,005	$	662	$	662	$	3,550	$	3,667

(a) There were no accumulated impairment losses related to goodwill.

Other Intangible Assets

(PPL)

The gross carrying amount and the accumulated amortization of other intangible assets were:

		December 31, 2015				December 31, 2014
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Amount		Amortization		Amount		Amortization
Subject to amortization:
	Contracts (a)	$	407	$	300	$	408	$	250
	Land and transmission rights		337		111		329		108
	Emission allowances/RECs (b)		5				5
	Licenses and other		10		5		10		5
Total subject to amortization			759		416		752		363

Not subject to amortization due to indefinite life:
	Land and transmission rights		33				29
	Easements (c)		303				250
Total not subject to amortization due to indefinite life			336				279
Total		$	1,095	$	416	$	1,031	$	363

(a) Gross carrying amount includes the fair value at the acquisition date of the OVEC power purchase contract and coal contracts with terms favorable to market recognized as a result of the 2010 acquisition of LKE by PPL. Offsetting regulatory liabilities were recorded related to these contracts, which are being amortized over the same period as the intangible assets, eliminating any income statement impact. This is referred to as "regulatory offset" in the tables below. See Note 6 for additional information.

(b) Emission allowances/RECs are expensed when consumed or sold; therefore, there is no accumulated amortization.

Current intangible assets are included in "Other current assets" and long-term intangible assets are included in "Other intangibles" on the Balance Sheets.

Amortization Expense was as follows:

		2015		2014		2013

Intangible assets with no regulatory offset	$	6	$	6	$	6
Intangible assets with regulatory offset		51		47		51
Total	$	57	$	53	$	57

Amortization expense for each of the next five years, excluding insignificant amounts for consumption of emission allowances/RECs, is estimated to be:
		2016		2017		2018		2019		2020

Intangible assets with no regulatory offset	$	6	$	6	$	6	$	6	$	6
Intangible assets with regulatory offset		27		9		9		9		8
Total	$	33	$	15	$	15	$	15	$	14

(PPL Electric)

The gross carrying amount and the accumulated amortization of other intangible assets were:

		December 31, 2015				December 31, 2014
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Amount		Amortization		Amount		Amortization
Subject to amortization:
	Land and transmission rights	$	316	$	108	$	308	$	105
	Licenses and other		4		1		4		1
Total subject to amortization			320		109		312		106

Not subject to amortization due to indefinite life:
	Land and transmission rights		33				29
Total		$	353	$	109	$	341	$	106

Intangible assets are shown as "Intangibles" on the Balance Sheets.

Amortization expense was insignificant in 2015, 2014 and 2013 and is expected to be insignificant in future years.

(LKE)

The gross carrying amount and the accumulated amortization of other intangible assets were:

		December 31, 2015				December 31, 2014
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Amount		Amortization		Amount		Amortization
Subject to amortization:
	Coal contracts (a)	$	269	$	252	$	269	$	210
	Land and transmission rights		21		2		21		2
	Emission allowances (b)		3				3
	OVEC power purchase agreement (c)		126		42		126		33
Total subject to amortization		$	419	$	296	$	419	$	245

(a) Gross carrying amount represents the fair value at the acquisition date of coal contracts with terms favorable to market recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability was recorded related to these contracts, which is being amortized over the same period as the intangible assets, eliminating any income statement impact. See Note 6 for additional information.

(b) Emission allowances/RECs are expensed when consumed or sold; therefore, there is no accumulated amortization.

(c) Gross carrying amount represents the fair value at the acquisition date of the OVEC power purchase contract recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability was recorded related to this contract, which is being amortized over the same period as the intangible asset, eliminating any income statement impact. See Note 6 for additional information.

Current intangible assets are included in "Other current assets" on the Balance Sheets. Long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.

Amortization expense was as follows:

		2015		2014		2013

Intangible assets with no regulatory offset					$	1
Intangible assets with regulatory offset	$	51	$	47		51
Total	$	51	$	47	$	52

Amortization expense for each of the next five years, excluding consumption of emission allowances, is estimated to be:

		2016		2017		2018		2019		2020

Intangible assets with regulatory offset	$	27	$	9	$	9	$	9	$	8

(LG&E)

The gross carrying amount and the accumulated amortization of other intangible assets were:

		December 31, 2015				December 31, 2014
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Amount		Amortization		Amount		Amortization
Subject to amortization:
	Coal contracts (a)	$	124	$	116	$	124	$	98
	Land and transmission rights		7		1		7		1
	Emission allowances (b)		1				1
	OVEC power purchase agreement (c)		87		29		87		23
Total subject to amortization		$	219	$	146	$	219	$	122

(b) Emission allowances/RECs are expensed when consumed or sold; therefore, there is no accumulated amortization.

Current intangible assets are included in "Other current assets" on the Balance Sheets. Long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.

Amortization expense was as follows:

		2015		2014		2013

Intangible assets with regulatory offset	$	24	$	23	$	23

Amortization expense for each of the next five years, excluding consumption of emission allowances, is estimated to be:

		2016		2017		2018		2019		2020

Intangible assets with regulatory offset	$	14	$	6	$	6	$	6	$	6

(KU)

The gross carrying amount and the accumulated amortization of other intangible assets were:

		December 31, 2015				December 31, 2014
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Amount		Amortization		Amount		Amortization
Subject to amortization:
	Coal contracts (a)	$	145	$	136	$	145	$	112
	Land and transmission rights		14		1		14		1
	Emission allowances (b)		2				2
	OVEC power purchase agreement (c)		39		13		39		10
Total subject to amortization		$	200	$	150	$	200	$	123

(b) Emission allowances/RECs are expensed when consumed or sold; therefore, there is no accumulated amortization.

Current intangible assets are included in "Other current assets" on the Balance Sheets. Long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.

Amortization expense was as follows:

		2015		2014		2013

Intangible assets with no regulatory offset					$	1
Intangible assets with regulatory offset	$	27	$	24		28
Total	$	27	$	24	$	29

Amortization expense for each of the next five years, excluding consumption of emission allowances, is estimated to be:

		2016		2017		2018		2019		2020

Intangible assets with regulatory offset	$	13	$	3	$	3	$	3	$	2

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details