Discontinued Operations

12 Months Ended

Dec. 31, 2011

PPL Corp [Member]

Discontinued Operations [Line Items]

Discontinued Operations

9. Discontinued Operations

(PPL and PPL Energy Supply)

Sale of Certain Non-core Generation Facilities

In March 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, assets with a carrying amount of $473 million were written down to their estimated fair value (less cost to sell) of $377 million at September 30, 2010, resulting in a pre-tax impairment charge of $96 million ($58 million after tax). In addition, $5 million ($4 million after tax) of allocated goodwill was written off in the third quarter of 2010. During the fourth quarter of 2010 and in connection with the completion of the sale, in 2011, PPL Energy Supply recorded insignificant losses. These charges are included in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income.

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

	2011		2010		2009
Operating revenues	$	19	$	113	$	106
Operating expenses (a)		11		156		42
Operating income (loss)		8		(43)		64
Other income (expense) - net				2		2
Interest expense (b)		3		11		9
Income (loss) before income taxes		5		(52)		57
Income tax expense (benefit)		3		(18)		24
Income (Loss) from Discontinued Operations	$	2	$	(34)	$	33

(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.

Upon completion of the sale, assets primarily consisting of $357 million of PP&E and a $14 million equity method investment, which were classified as held for sale at December 31, 2010, were removed from the Balance Sheet.

Sale of Long Island Generation Business

In February 2010, PPL Energy Supply subsidiaries completed the sale of the Long Island generation business, which was included in the Supply segment. The definitive sales agreementincluded provisions that reduced the $135 million purchase price monthly, commencing September 1, 2009. After adjusting for these price-reduction provisions, proceeds from the sale approximated $124 million.

In the second quarter of 2009, the Long Island generation business met the held for sale criteria. As a result, at June 30, 2009, net assets held for sale were written down to their estimated fair value less cost to sell, resulting in a pre-tax impairment charge of $52 million ($34 million after tax). At both September 30 and December 31, 2009, the estimated fair value (less cost to sell) was remeasured and additional impairments totaling $10 million ($3 million after tax) were recorded. In 2010 PPL Energy Supply recorded an insignificantlossdue to the price-reduction provisions. The losses recognized in the third and fourth quarters of 2009 and in 2010 did not significantly impact earnings, as such amounts were substantially offset by tolling revenues from the Long Island generation assets during the same periods. In addition, an insignificant amount of goodwill allocated to this business was written off in 2009. These amounts are included in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income. There was no significant impact on earnings in 2010 from the operation of this business or as a result of this sale.

The tolling agreements related to these plants were transferred to the new owner upon completion of the sale.

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

	2009
Operating revenues	$	24
Operating expenses (a)		73
Operating income (loss)		(49)
Interest expense (b)		4
Income (loss) before income taxes		(53)
Income tax expense (benefit)		(20)
Income (Loss) from Discontinued Operations	$	(33)

(a)Includes impairment charges.

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

Sale of Maine Hydroelectric Generation Business

Sale of the Remaining Maine Hydroelectric Generation Facilities

In December 2010, a PPL Energy Supply subsidiary completed the sale of its remaining three hydroelectric facilities in Maine, which were included in the Supply segment, for $24 million. As a result of the sale, PPL Energy Supply recorded a gain of $11 million ($7 million after tax), reflected in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

Sale of the Majority of Maine Hydroelectric Generation Business

In 2009, a PPL Energy Supply subsidiary completed the sale of the majority of itsMaine hydroelectric generation business, which was included in the Supply segment, for $81 million in cash, adjusted for working capital. The assets sold in this transaction included five hydroelectric facilities and a 50% equity interest in a sixth hydroelectric facility, which had been accounted for as an equity investment, together with rights to increase energy output at these facilities upon completion of the sale of the PPL Energy Supply subsidiary's three other hydroelectric facilitiesin Maine (see "Sale of the Remaining Maine Hydroelectric Generation Business" above). As a result of the sale of the majority of the Maine hydroelectric generation business, PPL Energy Supply recorded a gain of $38 million ($22 million after tax), reflected in"Income (Loss) from Discontinued Operations (net of income taxes)"on the 2009 Statement of Income. Additionally, in December 2010, the PPL Energy Supply subsidiary received $14 million in contingent consideration, which was tied to its completion of the sale of the three other hydroelectric facilities noted above. PPL Energy Supply accordingly recorded a gain of $14 million ($8 million after tax), reflected in"Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

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

	2010		2009
Operating revenues			$	5
Operating expenses (a)	$	(25)		(34)
Operating income		25		39
Other income (expense) - net				3
Interest expense (b)				1
Income before income taxes		25		41
Income tax expense		10		17
Income from Discontinued Operations	$	15	$	24

(a)       Includes the gains recorded on the sales.

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

Sale of Latin American Businesses

In 2007, PPL Energy Supply completed the sale of its regulated electricity delivery businesses in Chile, El Salvador and Bolivia, which were included in the International Regulated segment. In 2009, PPL Energy Supply identified a correction to the previously computed tax bases of the Latin American businesses. The most significant adjustment related to the sale of the El Salvadoran business and was largely due to returns of capital in certain prior years that had not been reflected in the calculated tax basis. As a result, PPL Energy Supply recorded $24 million of additional income tax expense in 2009, which is reflected in "Income (Loss) from Discontinued Operations (net of income taxes)"on the 2009 Statement of Income. The additional expense is not considered by management to be material to the 2009 financial statements.

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

In January 2011, PPL Energy Supply distributed its 100% membership interest in PPL Global, which represented the entire International 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 Statements of Income.

	2010		2009
Operating revenues	$	761	$	716
Operating expenses		368		328
Operating income		393		388
Other income (expense) - net		4		(11)
Interest expense (a)		135		87
Income before income taxes		262		290
Income tax expense (b)		1		47
Income (Loss) from Discontinued Operations	$	261	$	243

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

(b)       2009 includes the impact of the Latin American adjustments discussed above.

In connection with the distribution, the following assets and liabilities were removed from PPL Energy Supply's Balance Sheet in the first quarter of 2011. Except for"Cash and cash equivalents,"which has been reflected as a financing activity, the remaining distribution represents a non-cash transaction excluded from PPL Energy Supply's 2011 Statement of Cash Flows.

Cash and cash equivalents	$	325
Accounts receivable		46
Unbilled revenues		70
Other current assets		21
PP&E, net		3,502
Goodwill		679
Other intangibles		80
Other noncurrent assets		77
Total Assets		4,800
Short-term debt		181
Accounts payable		86
Accrued interest		71
Other current liabilities		112
Long-term debt		2,313
Deferred income tax liabilities - noncurrent		399
Accrued pension obligations		320
Other deferred credits and noncurrent liabilities		30
Total Liabilities		3,512
Net assets distributed	$	1,288

WKE

(PPL and LKE)

WKE had a 25-year lease for and operated nine generating facilities of BREC, and a coal-fired generating facility owned by the City of Henderson, Kentucky.

In 2007,WKEentered into an agreement to terminate the lease, which closed in 2009, prior to PPL acquiring LKE. As part of the lease termination, LKE was obligated to pay a former customer, an aluminum smelter, an aluminum production payment in lieu of a lump-sum cash consent payment, as well as the difference between the electricity prices charged by WKEunder the previous long-term sales contract and the electricity prices charged by the aluminum smelter's current electricity supplier. This obligation was partially mitigated by the opportunity to make off-system sales, when economic, for the contractual demand not used by the aluminum smelter. In addition, the total amount of the obligation to this smelter was limited to $82 million; any amount paid by LKE over the limit has been recorded as an interest-bearing receivable and is required to be repaid (plus interest) only if certain conditions occur by 2028. Such exposure expired in January 2011. In addition, because the former customer posted a letter of credit supporting payment to its current electricity supplier, LKEreversed a portion of the accrualassociated with its guarantee of payment by the former customer. Also, WKE had a contingent obligation to another aluminum smelter, also a former customer, to make an escrow payment of approximately $4 million, which became payable and was included in the liability at December 31, 2010, and paid in January 2011. The income statement impacts are included in the Kentucky Regulated segment for PPL and are reflected in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income. See Note 15 for additional information related to the termination of the lease. The results of operations for the 2011 and 2010Successor periods were insignificant.

(LKE)

Following are the components of Discontinued Operations in LKE's Statements of Income.

	Predecessor
	Ten Months
	Ended		Year Ended
	October 31,		December 31,
	2010		2009
Operating revenues			$	128
Loss before taxes	$	(7)	$	(222)
Income tax benefit		3		79
Loss from discontinued operations	$	(4)	$	(143)
Gain (loss) on disposal of discontinued operations before tax		5		(114)
Income tax benefit (expense) from disposal of discontinued operations		(2)		45
Gain (loss) on disposal of discontinued operations	$	3	$	(69)

Argentine Gas Distribution

At December 31, 2009, LKE owned interests in two gas distribution companies in Argentina: 45.9% of Distribuidora de Gas Del Centro S.A. (Centro) and 14.4% of Distribuidora de Gas Cuyana S.A. (Cuyana). These two entities served a combined customer base of approximately one million customers. The Centro investment was consolidated due to LKE's majority ownership in the holding company of Centro. The Cuyana investment was accounted for using the equity method due to the ownership influence LKE exerted on the businesses.

In November 2009, subsidiaries of LKE entered into agreements to sell their direct and indirect interests in Centro and Cuyana to E.ON Spain and a subsidiary, both affiliates of E.ON. On January 1, 2010, the parties completed the transfer of the interests for a sale price of $35 million. In December 2009, LKE recorded an impairment loss of $12 million. The impairment loss represented the difference between the carrying values of LKE's interests in Centro and Cuyana and the sales price. LKE classified the results of operations of the Argentine gas distribution companies, including the impairment loss, as discontinued operations for all periods presented effective December 31, 2009. In connection with the reorganization transaction, E.ON Spain assumed rights and obligations relating to claims and liabilities associated with the former Argentine businesses or indemnified LKE with respect to such matters.

Following are the components of Discontinued Operations in LKE's Statement of Income.

	Predecessor
	Year Ended
	December 31,
	2009
Operating revenues	$	60
Income tax expense		(8)
Noncontrolling interest		(5)
Loss from discontinued operations	$	(13)

PPL Energy Supply [Member]

Discontinued Operations [Line Items]

Discontinued Operations

9. Discontinued Operations

(PPL and PPL Energy Supply)

Sale of Certain Non-core Generation Facilities

In March 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, assets with a carrying amount of $473 million were written down to their estimated fair value (less cost to sell) of $377 million at September 30, 2010, resulting in a pre-tax impairment charge of $96 million ($58 million after tax). In addition, $5 million ($4 million after tax) of allocated goodwill was written off in the third quarter of 2010. During the fourth quarter of 2010 and in connection with the completion of the sale, in 2011, PPL Energy Supply recorded insignificant losses. These charges are included in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income.

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

	2011		2010		2009
Operating revenues	$	19	$	113	$	106
Operating expenses (a)		11		156		42
Operating income (loss)		8		(43)		64
Other income (expense) - net				2		2
Interest expense (b)		3		11		9
Income (loss) before income taxes		5		(52)		57
Income tax expense (benefit)		3		(18)		24
Income (Loss) from Discontinued Operations	$	2	$	(34)	$	33

(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.

Upon completion of the sale, assets primarily consisting of $357 million of PP&E and a $14 million equity method investment, which were classified as held for sale at December 31, 2010, were removed from the Balance Sheet.

Sale of Long Island Generation Business

In February 2010, PPL Energy Supply subsidiaries completed the sale of the Long Island generation business, which was included in the Supply segment. The definitive sales agreementincluded provisions that reduced the $135 million purchase price monthly, commencing September 1, 2009. After adjusting for these price-reduction provisions, proceeds from the sale approximated $124 million.

In the second quarter of 2009, the Long Island generation business met the held for sale criteria. As a result, at June 30, 2009, net assets held for sale were written down to their estimated fair value less cost to sell, resulting in a pre-tax impairment charge of $52 million ($34 million after tax). At both September 30 and December 31, 2009, the estimated fair value (less cost to sell) was remeasured and additional impairments totaling $10 million ($3 million after tax) were recorded. In 2010 PPL Energy Supply recorded an insignificantlossdue to the price-reduction provisions. The losses recognized in the third and fourth quarters of 2009 and in 2010 did not significantly impact earnings, as such amounts were substantially offset by tolling revenues from the Long Island generation assets during the same periods. In addition, an insignificant amount of goodwill allocated to this business was written off in 2009. These amounts are included in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income. There was no significant impact on earnings in 2010 from the operation of this business or as a result of this sale.

The tolling agreements related to these plants were transferred to the new owner upon completion of the sale.

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

	2009
Operating revenues	$	24
Operating expenses (a)		73
Operating income (loss)		(49)
Interest expense (b)		4
Income (loss) before income taxes		(53)
Income tax expense (benefit)		(20)
Income (Loss) from Discontinued Operations	$	(33)

(a)Includes impairment charges.

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

Sale of Maine Hydroelectric Generation Business

Sale of the Remaining Maine Hydroelectric Generation Facilities

In December 2010, a PPL Energy Supply subsidiary completed the sale of its remaining three hydroelectric facilities in Maine, which were included in the Supply segment, for $24 million. As a result of the sale, PPL Energy Supply recorded a gain of $11 million ($7 million after tax), reflected in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

Sale of the Majority of Maine Hydroelectric Generation Business

In 2009, a PPL Energy Supply subsidiary completed the sale of the majority of itsMaine hydroelectric generation business, which was included in the Supply segment, for $81 million in cash, adjusted for working capital. The assets sold in this transaction included five hydroelectric facilities and a 50% equity interest in a sixth hydroelectric facility, which had been accounted for as an equity investment, together with rights to increase energy output at these facilities upon completion of the sale of the PPL Energy Supply subsidiary's three other hydroelectric facilitiesin Maine (see "Sale of the Remaining Maine Hydroelectric Generation Business" above). As a result of the sale of the majority of the Maine hydroelectric generation business, PPL Energy Supply recorded a gain of $38 million ($22 million after tax), reflected in"Income (Loss) from Discontinued Operations (net of income taxes)"on the 2009 Statement of Income. Additionally, in December 2010, the PPL Energy Supply subsidiary received $14 million in contingent consideration, which was tied to its completion of the sale of the three other hydroelectric facilities noted above. PPL Energy Supply accordingly recorded a gain of $14 million ($8 million after tax), reflected in"Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

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

	2010		2009
Operating revenues			$	5
Operating expenses (a)	$	(25)		(34)
Operating income		25		39
Other income (expense) - net				3
Interest expense (b)				1
Income before income taxes		25		41
Income tax expense		10		17
Income from Discontinued Operations	$	15	$	24

(a)       Includes the gains recorded on the sales.

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

Sale of Latin American Businesses

In 2007, PPL Energy Supply completed the sale of its regulated electricity delivery businesses in Chile, El Salvador and Bolivia, which were included in the International Regulated segment. In 2009, PPL Energy Supply identified a correction to the previously computed tax bases of the Latin American businesses. The most significant adjustment related to the sale of the El Salvadoran business and was largely due to returns of capital in certain prior years that had not been reflected in the calculated tax basis. As a result, PPL Energy Supply recorded $24 million of additional income tax expense in 2009, which is reflected in "Income (Loss) from Discontinued Operations (net of income taxes)"on the 2009 Statement of Income. The additional expense is not considered by management to be material to the 2009 financial statements.

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

In January 2011, PPL Energy Supply distributed its 100% membership interest in PPL Global, which represented the entire International 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 Statements of Income.

	2010		2009
Operating revenues	$	761	$	716
Operating expenses		368		328
Operating income		393		388
Other income (expense) - net		4		(11)
Interest expense (a)		135		87
Income before income taxes		262		290
Income tax expense (b)		1		47
Income (Loss) from Discontinued Operations	$	261	$	243

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

(b)       2009 includes the impact of the Latin American adjustments discussed above.

In connection with the distribution, the following assets and liabilities were removed from PPL Energy Supply's Balance Sheet in the first quarter of 2011. Except for"Cash and cash equivalents,"which has been reflected as a financing activity, the remaining distribution represents a non-cash transaction excluded from PPL Energy Supply's 2011 Statement of Cash Flows.

Cash and cash equivalents	$	325
Accounts receivable		46
Unbilled revenues		70
Other current assets		21
PP&E, net		3,502
Goodwill		679
Other intangibles		80
Other noncurrent assets		77
Total Assets		4,800
Short-term debt		181
Accounts payable		86
Accrued interest		71
Other current liabilities		112
Long-term debt		2,313
Deferred income tax liabilities - noncurrent		399
Accrued pension obligations		320
Other deferred credits and noncurrent liabilities		30
Total Liabilities		3,512
Net assets distributed	$	1,288

WKE

(PPL and LKE)

WKE had a 25-year lease for and operated nine generating facilities of BREC, and a coal-fired generating facility owned by the City of Henderson, Kentucky.

In 2007,WKEentered into an agreement to terminate the lease, which closed in 2009, prior to PPL acquiring LKE. As part of the lease termination, LKE was obligated to pay a former customer, an aluminum smelter, an aluminum production payment in lieu of a lump-sum cash consent payment, as well as the difference between the electricity prices charged by WKEunder the previous long-term sales contract and the electricity prices charged by the aluminum smelter's current electricity supplier. This obligation was partially mitigated by the opportunity to make off-system sales, when economic, for the contractual demand not used by the aluminum smelter. In addition, the total amount of the obligation to this smelter was limited to $82 million; any amount paid by LKE over the limit has been recorded as an interest-bearing receivable and is required to be repaid (plus interest) only if certain conditions occur by 2028. Such exposure expired in January 2011. In addition, because the former customer posted a letter of credit supporting payment to its current electricity supplier, LKEreversed a portion of the accrualassociated with its guarantee of payment by the former customer. Also, WKE had a contingent obligation to another aluminum smelter, also a former customer, to make an escrow payment of approximately $4 million, which became payable and was included in the liability at December 31, 2010, and paid in January 2011. The income statement impacts are included in the Kentucky Regulated segment for PPL and are reflected in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income. See Note 15 for additional information related to the termination of the lease. The results of operations for the 2011 and 2010Successor periods were insignificant.

(LKE)

Following are the components of Discontinued Operations in LKE's Statements of Income.

	Predecessor
	Ten Months
	Ended		Year Ended
	October 31,		December 31,
	2010		2009
Operating revenues			$	128
Loss before taxes	$	(7)	$	(222)
Income tax benefit		3		79
Loss from discontinued operations	$	(4)	$	(143)
Gain (loss) on disposal of discontinued operations before tax		5		(114)
Income tax benefit (expense) from disposal of discontinued operations		(2)		45
Gain (loss) on disposal of discontinued operations	$	3	$	(69)

Argentine Gas Distribution

At December 31, 2009, LKE owned interests in two gas distribution companies in Argentina: 45.9% of Distribuidora de Gas Del Centro S.A. (Centro) and 14.4% of Distribuidora de Gas Cuyana S.A. (Cuyana). These two entities served a combined customer base of approximately one million customers. The Centro investment was consolidated due to LKE's majority ownership in the holding company of Centro. The Cuyana investment was accounted for using the equity method due to the ownership influence LKE exerted on the businesses.

In November 2009, subsidiaries of LKE entered into agreements to sell their direct and indirect interests in Centro and Cuyana to E.ON Spain and a subsidiary, both affiliates of E.ON. On January 1, 2010, the parties completed the transfer of the interests for a sale price of $35 million. In December 2009, LKE recorded an impairment loss of $12 million. The impairment loss represented the difference between the carrying values of LKE's interests in Centro and Cuyana and the sales price. LKE classified the results of operations of the Argentine gas distribution companies, including the impairment loss, as discontinued operations for all periods presented effective December 31, 2009. In connection with the reorganization transaction, E.ON Spain assumed rights and obligations relating to claims and liabilities associated with the former Argentine businesses or indemnified LKE with respect to such matters.

Following are the components of Discontinued Operations in LKE's Statement of Income.

	Predecessor
	Year Ended
	December 31,
	2009
Operating revenues	$	60
Income tax expense		(8)
Noncontrolling interest		(5)
Loss from discontinued operations	$	(13)

LKE [Member]

Discontinued Operations [Line Items]

Discontinued Operations

9. Discontinued Operations

(PPL and PPL Energy Supply)

Sale of Certain Non-core Generation Facilities

In March 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, assets with a carrying amount of $473 million were written down to their estimated fair value (less cost to sell) of $377 million at September 30, 2010, resulting in a pre-tax impairment charge of $96 million ($58 million after tax). In addition, $5 million ($4 million after tax) of allocated goodwill was written off in the third quarter of 2010. During the fourth quarter of 2010 and in connection with the completion of the sale, in 2011, PPL Energy Supply recorded insignificant losses. These charges are included in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income.

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

	2011		2010		2009
Operating revenues	$	19	$	113	$	106
Operating expenses (a)		11		156		42
Operating income (loss)		8		(43)		64
Other income (expense) - net				2		2
Interest expense (b)		3		11		9
Income (loss) before income taxes		5		(52)		57
Income tax expense (benefit)		3		(18)		24
Income (Loss) from Discontinued Operations	$	2	$	(34)	$	33

(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.

Upon completion of the sale, assets primarily consisting of $357 million of PP&E and a $14 million equity method investment, which were classified as held for sale at December 31, 2010, were removed from the Balance Sheet.

Sale of Long Island Generation Business

In February 2010, PPL Energy Supply subsidiaries completed the sale of the Long Island generation business, which was included in the Supply segment. The definitive sales agreementincluded provisions that reduced the $135 million purchase price monthly, commencing September 1, 2009. After adjusting for these price-reduction provisions, proceeds from the sale approximated $124 million.

In the second quarter of 2009, the Long Island generation business met the held for sale criteria. As a result, at June 30, 2009, net assets held for sale were written down to their estimated fair value less cost to sell, resulting in a pre-tax impairment charge of $52 million ($34 million after tax). At both September 30 and December 31, 2009, the estimated fair value (less cost to sell) was remeasured and additional impairments totaling $10 million ($3 million after tax) were recorded. In 2010 PPL Energy Supply recorded an insignificantlossdue to the price-reduction provisions. The losses recognized in the third and fourth quarters of 2009 and in 2010 did not significantly impact earnings, as such amounts were substantially offset by tolling revenues from the Long Island generation assets during the same periods. In addition, an insignificant amount of goodwill allocated to this business was written off in 2009. These amounts are included in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income. There was no significant impact on earnings in 2010 from the operation of this business or as a result of this sale.

The tolling agreements related to these plants were transferred to the new owner upon completion of the sale.

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

	2009
Operating revenues	$	24
Operating expenses (a)		73
Operating income (loss)		(49)
Interest expense (b)		4
Income (loss) before income taxes		(53)
Income tax expense (benefit)		(20)
Income (Loss) from Discontinued Operations	$	(33)

(a)Includes impairment charges.

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

Sale of Maine Hydroelectric Generation Business

Sale of the Remaining Maine Hydroelectric Generation Facilities

In December 2010, a PPL Energy Supply subsidiary completed the sale of its remaining three hydroelectric facilities in Maine, which were included in the Supply segment, for $24 million. As a result of the sale, PPL Energy Supply recorded a gain of $11 million ($7 million after tax), reflected in "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

Sale of the Majority of Maine Hydroelectric Generation Business

In 2009, a PPL Energy Supply subsidiary completed the sale of the majority of itsMaine hydroelectric generation business, which was included in the Supply segment, for $81 million in cash, adjusted for working capital. The assets sold in this transaction included five hydroelectric facilities and a 50% equity interest in a sixth hydroelectric facility, which had been accounted for as an equity investment, together with rights to increase energy output at these facilities upon completion of the sale of the PPL Energy Supply subsidiary's three other hydroelectric facilitiesin Maine (see "Sale of the Remaining Maine Hydroelectric Generation Business" above). As a result of the sale of the majority of the Maine hydroelectric generation business, PPL Energy Supply recorded a gain of $38 million ($22 million after tax), reflected in"Income (Loss) from Discontinued Operations (net of income taxes)"on the 2009 Statement of Income. Additionally, in December 2010, the PPL Energy Supply subsidiary received $14 million in contingent consideration, which was tied to its completion of the sale of the three other hydroelectric facilities noted above. PPL Energy Supply accordingly recorded a gain of $14 million ($8 million after tax), reflected in"Income (Loss) from Discontinued Operations (net of income taxes)" on the 2010 Statement of Income.

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

	2010		2009
Operating revenues			$	5
Operating expenses (a)	$	(25)		(34)
Operating income		25		39
Other income (expense) - net				3
Interest expense (b)				1
Income before income taxes		25		41
Income tax expense		10		17
Income from Discontinued Operations	$	15	$	24

(a)       Includes the gains recorded on the sales.

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

Sale of Latin American Businesses

In 2007, PPL Energy Supply completed the sale of its regulated electricity delivery businesses in Chile, El Salvador and Bolivia, which were included in the International Regulated segment. In 2009, PPL Energy Supply identified a correction to the previously computed tax bases of the Latin American businesses. The most significant adjustment related to the sale of the El Salvadoran business and was largely due to returns of capital in certain prior years that had not been reflected in the calculated tax basis. As a result, PPL Energy Supply recorded $24 million of additional income tax expense in 2009, which is reflected in "Income (Loss) from Discontinued Operations (net of income taxes)"on the 2009 Statement of Income. The additional expense is not considered by management to be material to the 2009 financial statements.

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

In January 2011, PPL Energy Supply distributed its 100% membership interest in PPL Global, which represented the entire International 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 Statements of Income.

	2010		2009
Operating revenues	$	761	$	716
Operating expenses		368		328
Operating income		393		388
Other income (expense) - net		4		(11)
Interest expense (a)		135		87
Income before income taxes		262		290
Income tax expense (b)		1		47
Income (Loss) from Discontinued Operations	$	261	$	243

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

(b)       2009 includes the impact of the Latin American adjustments discussed above.

In connection with the distribution, the following assets and liabilities were removed from PPL Energy Supply's Balance Sheet in the first quarter of 2011. Except for"Cash and cash equivalents,"which has been reflected as a financing activity, the remaining distribution represents a non-cash transaction excluded from PPL Energy Supply's 2011 Statement of Cash Flows.

Cash and cash equivalents	$	325
Accounts receivable		46
Unbilled revenues		70
Other current assets		21
PP&E, net		3,502
Goodwill		679
Other intangibles		80
Other noncurrent assets		77
Total Assets		4,800
Short-term debt		181
Accounts payable		86
Accrued interest		71
Other current liabilities		112
Long-term debt		2,313
Deferred income tax liabilities - noncurrent		399
Accrued pension obligations		320
Other deferred credits and noncurrent liabilities		30
Total Liabilities		3,512
Net assets distributed	$	1,288

WKE

(PPL and LKE)

WKE had a 25-year lease for and operated nine generating facilities of BREC, and a coal-fired generating facility owned by the City of Henderson, Kentucky.

In 2007,WKEentered into an agreement to terminate the lease, which closed in 2009, prior to PPL acquiring LKE. As part of the lease termination, LKE was obligated to pay a former customer, an aluminum smelter, an aluminum production payment in lieu of a lump-sum cash consent payment, as well as the difference between the electricity prices charged by WKEunder the previous long-term sales contract and the electricity prices charged by the aluminum smelter's current electricity supplier. This obligation was partially mitigated by the opportunity to make off-system sales, when economic, for the contractual demand not used by the aluminum smelter. In addition, the total amount of the obligation to this smelter was limited to $82 million; any amount paid by LKE over the limit has been recorded as an interest-bearing receivable and is required to be repaid (plus interest) only if certain conditions occur by 2028. Such exposure expired in January 2011. In addition, because the former customer posted a letter of credit supporting payment to its current electricity supplier, LKEreversed a portion of the accrualassociated with its guarantee of payment by the former customer. Also, WKE had a contingent obligation to another aluminum smelter, also a former customer, to make an escrow payment of approximately $4 million, which became payable and was included in the liability at December 31, 2010, and paid in January 2011. The income statement impacts are included in the Kentucky Regulated segment for PPL and are reflected in "Income (Loss) from Discontinued Operations (net of income taxes)"on the Statements of Income. See Note 15 for additional information related to the termination of the lease. The results of operations for the 2011 and 2010Successor periods were insignificant.

(LKE)

Following are the components of Discontinued Operations in LKE's Statements of Income.

	Predecessor
	Ten Months
	Ended		Year Ended
	October 31,		December 31,
	2010		2009
Operating revenues			$	128
Loss before taxes	$	(7)	$	(222)
Income tax benefit		3		79
Loss from discontinued operations	$	(4)	$	(143)
Gain (loss) on disposal of discontinued operations before tax		5		(114)
Income tax benefit (expense) from disposal of discontinued operations		(2)		45
Gain (loss) on disposal of discontinued operations	$	3	$	(69)

Argentine Gas Distribution

At December 31, 2009, LKE owned interests in two gas distribution companies in Argentina: 45.9% of Distribuidora de Gas Del Centro S.A. (Centro) and 14.4% of Distribuidora de Gas Cuyana S.A. (Cuyana). These two entities served a combined customer base of approximately one million customers. The Centro investment was consolidated due to LKE's majority ownership in the holding company of Centro. The Cuyana investment was accounted for using the equity method due to the ownership influence LKE exerted on the businesses.

In November 2009, subsidiaries of LKE entered into agreements to sell their direct and indirect interests in Centro and Cuyana to E.ON Spain and a subsidiary, both affiliates of E.ON. On January 1, 2010, the parties completed the transfer of the interests for a sale price of $35 million. In December 2009, LKE recorded an impairment loss of $12 million. The impairment loss represented the difference between the carrying values of LKE's interests in Centro and Cuyana and the sales price. LKE classified the results of operations of the Argentine gas distribution companies, including the impairment loss, as discontinued operations for all periods presented effective December 31, 2009. In connection with the reorganization transaction, E.ON Spain assumed rights and obligations relating to claims and liabilities associated with the former Argentine businesses or indemnified LKE with respect to such matters.

Following are the components of Discontinued Operations in LKE's Statement of Income.

	Predecessor
	Year Ended
	December 31,
	2009
Operating revenues	$	60
Income tax expense		(8)
Noncontrolling interest		(5)
Loss from discontinued operations	$	(13)