Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

4. Revenue from Contracts with Customers

(All Registrants)

See Note 3 in PPL's 2019 Form 10-K for a discussion of the principal activities from which the Registrants and PPL’s segments generate their revenues.

The following tables reconcile "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the periods ended June 30.

	2020 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	1,739	$	554	$	700	$	322	$	388
Revenues derived from:
Alternative revenue programs (b)	(8)		(1)		(7)		(1)		(6)
Other (c)	(7)		(1)		(4)		(1)		(3)
Revenues from Contracts with Customers	$	1,724	$	552	$	689	$	320	$	379
	2019 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	1,803	$	521	$	732	$	334	$	406
Revenues derived from:
Alternative revenue programs (b)	(20)		(2)		(18)		(3)		(15)
Other (c)	(10)		(2)		(6)		(3)		(3)
Revenues from Contracts with Customers	$	1,773	$	517	$	708	$	328	$	388

	2020 Six Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	3,793	$	1,162	$	1,525	$	729	$	820
Revenues derived from:
Alternative revenue programs (b)	(11)		(1)		(10)		(4)		(6)
Other (c)	(17)		(3)		(10)		(4)		(6)
Revenues from Contracts with Customers	$	3,765	$	1,158	$	1,505	$	721	$	808
	2019 Six Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	3,882	$	1,166	$	1,577	$	744	$	856
Revenues derived from:
Alternative revenue programs (b)	(26)		(6)		(20)		(5)		(15)
Other (c)	(19)		(5)		(10)		(4)		(6)
Revenues from Contracts with Customers	$	3,837	$	1,155	$	1,547	$	735	$	835

(a)PPL includes $476 million and $1,090 million for the three and six months ended June 30, 2020 and $541 million and $1,124 million for the three and six months ended June 30, 2019 of revenues from external customers reported by the U.K. Regulated segment. PPL Electric and LKE represent revenues from external customers reported by the Pennsylvania Regulated and Kentucky Regulated segments. See Note 3 for additional information.

(b)Alternative revenue programs include the transmission formula rate for PPL Electric, the ECR and DSM programs for LG&E and KU, the GLT program for LG&E, and the generation formula rate for KU. This line item shows the over/under collection of these rate mechanisms with over-collections of revenue shown as positive amounts in the table above and under-collections shown as negative amounts.

(c)Represents additional revenues outside the scope of revenues from contracts with customers, such as lease and other miscellaneous revenues.

The following tables show revenues from contracts with customers disaggregated by customer class for the periods ended June 30.

	2020 Three Months
	PPL (d)		PPL Electric (d)		LKE		LG&E		KU
Licensed energy suppliers (a)	$	449	$	—	$	—	$	—	$	—
Residential	583		290		293		149		144
Commercial	274		74		200		100		100
Industrial	134		12		122		38		84
Other (b)	108		12		62		28		34
Wholesale - municipality	3		—		3		—		3
Wholesale - other (c)	9		—		9		5		14
Transmission	164		164		—		—		—
Revenues from Contracts with Customers	$	1,724	$	552	$	689	$	320	$	379
	2019 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	510	$	—	$	—	$	—	$	—
Residential	572		301		271		138		133
Commercial	302		87		215		108		107
Industrial	156		15		141		43		98
Other (b)	117		13		66		29		37
Wholesale - municipality	4		—		4		—		4
Wholesale - other (c)	11		—		11		10		9
Transmission	101		101		—		—		—
Revenues from Contracts with Customers	$	1,773	$	517	$	708	$	328	$	388

	2020 Six Months
	PPL (d)		PPL Electric (d)		LKE		LG&E		KU
Licensed energy suppliers (a)	$	1,032	$	—	$	—	$	—	$	—
Residential	1,297		634		663		336		327
Commercial	586		155		431		224		207
Industrial	278		20		258		83		175
Other (b)	224		26		128		56		72
Wholesale - municipality	8		—		8		—		8
Wholesale - other (c)	17		—		17		22		19
Transmission	323		323		—		—		—
Revenues from Contracts with Customers	$	3,765	$	1,158	$	1,505	$	721	$	808
	2019 Six Months
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	1,066	$	—	$	—	$	—	$	—
Residential	1,350		708		642		327		315
Commercial	621		182		439		229		210
Industrial	306		32		274		87		187
Other (b)	232		27		136		62		74
Wholesale - municipality	32		—		32		—		32
Wholesale - other (c)	24		—		24		30		17
Transmission	206		206		—		—		—
Revenues from Contracts with Customers	$	3,837	$	1,155	$	1,547	$	735	$	835

(a)Represents customers of WPD.

(b)Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses.

(c)Includes wholesale power and transmission revenues. LG&E and KU amounts include intercompany power sales and transmission revenues, which are eliminated upon consolidation at LKE.

(d)In the fourth quarter of 2019, management deemed it appropriate to present the revenue offset associated with network integration transmission service (NITS) as distribution revenue rather than transmission revenue.

As discussed in Note 2 in PPL's 2019 Form 10-K, PPL segments its business by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the footnotes to the tables above. PPL Electric's revenues from contracts with customers are further disaggregated by distribution and transmission, which were $388 million and $164 million for the three months ended June 30, 2020 and $835 million and $323 million for the six months ended June 30, 2020. PPL Electric's revenue from contracts with customers disaggregated by distribution and transmission were $416 million and $101 million for the three months ended June 30, 2019 and $949 million and $206 million for the six months ended June 30, 2019.

Contract receivables from customers are primarily included in "Accounts receivable - Customer" and "Unbilled revenues" on the Balance Sheets.

The following table shows the accounts receivable and unbilled revenues balances that were impaired for the periods ended June 30.

	Three Months				Six Months
	2020		2019		2020		2019
PPL	$	7	$	2	$	15	$	11
PPL Electric	5		—		9		6
LKE	1		1		3		3
LG&E	—		—		1		1
KU	1		1		2		2

The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.

	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2019	$	44	$	21	$	9	$	5	$	4
Contract liabilities at June 30, 2020	37		16		9		4		5
Revenue recognized during the six months ended June 30, 2020 that was included in the contract liability balance at December 31, 2019	28		9		9		5		4
Contract liabilities at December 31, 2018	$	42	$	23	$	9	$	5	$	4
Contract liabilities at June 30, 2019	47		22		9		5		4
Revenue recognized during the six months ended June 30, 2019 that was included in the contract liability balance at December 31, 2018	29		11		9		5		4

Contract liabilities result from recording contractual billings in advance for customer attachments to the Registrants' infrastructure and payments received in excess of revenues earned to date. Advanced billings for customer attachments are recognized as revenue ratably over the billing period. Payments received in excess of revenues earned to date are recognized as revenue as services are delivered in subsequent periods.

At June 30, 2020, PPL had $30 million of performance obligations attributable to Corporate and Other that have not been satisfied. Of this amount, PPL expects to recognize approximately $29 million within the next 12 months.