Until January 1, 2012, the majority of PPL's subsidiaries domestic employees were eligible for pension benefits under non-contributory defined benefit pension plans with benefits based on length of service and final average pay, as defined by the plans. Effective January 1, 2012, PPL's domestic qualified pension plans were closed to newly hired salaried employees. Newly hired bargaining unit employees will continue to be eligible under the plans based on their collective bargaining agreements. Salaried employees hired on or after January 1, 2012 will be eligible to participate in the new PPL Retirement Savings Plan, a 401(k) savings plan with enhanced employer matching. PPL does not expect a significant near-term cost impact as a result of the change.

Certain employees may also be eligible for pension enhancements in the form of special termination benefits under PPL's separation plan. See "Separation Benefits" below for additional information regarding PPL's separation plan.

The defined benefit pension plans of LKE and its subsidiaries were closed to new salaried and bargaining unit employees hired after December 31, 2005. Employees hired after December 31, 2005 receive additional company contributions above the standard matching contributions to their savings plans.

Until January 1, 2012, employees of PPL Montana were eligible for pension benefits under a cash balance pension plan. Effective January 1, 2012, that plan was closed to newly hired salaried employees. Newly hired bargaining unit employees will continue to be eligible under the plan based on their collective bargaining agreements. Salaried employees hired on or after January 1, 2012 will be eligible to participate in the new PPL Retirement Savings Plan, a 401(k) savings plan with enhanced employer matching. PPL Montana does not expect a significant near-term cost impact as a result of the change.

Employees of certain of PPL Energy Supply's mechanical contracting companies are eligible for benefits under multiemployer plans sponsored by various unions.

Effective April 1, 2010, PPL WW's principal pension plan was closed to most new employees, except for those meeting specific grandfathered participation rights. New employees not eligible to participate in the plan are offered benefits under a defined contribution plan. WPD Midlands was acquired by PPL WEM on April, 1, 2011. WPD Midlands' defined benefit plan had been closed to new members, except for those meeting specific grandfathered participation rights, prior to acquisition.

PPL and certain of its subsidiaries also provide supplemental retirement benefits to executives and other key management employees through unfunded nonqualified retirement plans.

The majority of employees of PPL's domestic subsidiaries will become eligible for certain health care and life insurance benefits upon retirement through contributory plans. Postretirement health benefits are paid from 401(h) accounts established within the PPL Services Corporation Master Trust, LG&E and KU Energy LLC Pension Plan Trusts, funded VEBA trusts and company funds. Postretirement benefits under the PPL Montana Retiree Health Plan are paid from company assets. WPD does not sponsor any postretirement benefit plans other than pensions.

As a result of PPL Energy Supply's January 2011 distribution of its membership interest in PPL Global to its parent, PPL Energy Funding, the U.K. pension plans were removed from PPL Energy Supply's balance sheet in the first quarter of 2011. No future contributions to the plans are expected to be made by PPL Energy Supply beginning in 2011. See Note 9 for additional information.

The following disclosures distinguish between the domestic (U.S.) and WPD (U.K.) pension plans.

			Pension Benefits
			U.S.						U.K.						Other Postretirement Benefits
			2011		2010		2009		2011		2010		2009		2011		2010		2009
PPL
Net periodic defined benefit costs
	(credits):
Service cost			$	95	$	64	$	60	$	44	$	17	$	9	$	12	$	8	$	6
Interest cost				217		159		145		282		151		156		33		28		29
Expected return on plan assets				(245)		(184)		(169)		(338)		(202)		(189)		(23)		(20)		(18)
Amortization of:
		Transition (asset) obligation						(5)								2		5		9
		Prior service cost		24		21		19		4		4		4				4		9
		Actuarial (gain) loss		30		8		3		57		48		2		6		6		2
Net periodic defined benefit costs
	(credits) prior to settlement
	charges and termination benefits			121		68		53		49		18		(18)		30		31		37
Settlement charges (a)								2
Termination benefits (b)								9		50
Net periodic defined benefit costs
	(credits)		$	121	$	68	$	64	$	99	$	18	$	(18)	$	30	$	31	$	37

Other Changes in Plan Assets
	and Benefit Obligations
	Recognized in OCI and
	Regulatory Assets/Liabilities -
	Gross:
Settlements							$	(2)
Current year net (gain) loss			$	117	$	142		102	$	152	$	17	$	403	$	(9)	$	20	$	32
Current year prior service cost
	(credit)			8				1								10		(71)		(4)
Amortization of:
		Transition asset						5								(2)		(5)		(9)
		Prior service cost		(24)		(21)		(19)		(4)		(4)		(4)				(4)		(8)
		Actuarial gain (loss)		(30)		(7)		(3)		(57)		(48)		(2)		(6)		(6)		(2)
Acquisition of regulatory assets/
	liabilities:
		Transition obligation																4
		Prior service cost				31												6
		Actuarial (gain) loss				303												(2)
Total recognized in OCI and
	regulatory assets/liabilities (c) (d)			71		448		84		91		(35)		397		(7)		(58)		9

Total recognized in net periodic
	benefit costs, OCI and regulatory
	assets/liabilities (d)		$	192	$	516	$	148	$	190	$	(17)	$	379	$	23	$	(27)	$	46

(a) Includes the settlement of the pension plan of PPL's former mining subsidiary, PA Mines, LLC in 2009.

(b) Related to the 2011 WPD Midlands separations in the U.K. and a 2009 U.S. cost reduction initiative.

(c) For PPL's U.S. pension benefits, the amounts recognized in OCI for 2011, 2010 and 2009 were $47 million, $84 million and $51 million. The amounts recognized in regulatory assets/liabilities for 2011, 2010 and 2009 were $24 million, $364 million and $33 million. In total, the amounts recognized in either OCI or regulatory assets/liabilities for 2011, 2010 and 2009 were $71 million, $448 million and $84 million.

For other postretirement benefits, the amounts recognized in OCI for 2011, 2010 and 2009 were $(6) million, $(40) million and $6 million. The amounts recognized in regulatory assets/liabilities for 2011, 2010 and 2009 were $(1) million, $(18) million and $3 million. In total, the amounts recognized in either OCI or regulatory assets/liabilities for 2011, 2010 and 2009 were $(7) million, $(58) million and $9 million.

(d) WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP. As a result, WPD does not record regulatory assets/liabilities.

The estimated amounts to be amortized from AOCI and regulatory assets/liabilities into net periodic benefit costs in 2012 are as follows:

			Pension Benefits
			U.S.						U.K. (a)					Other Postretirement Benefits
			2011		2010		2009		2011	2010		2009		2011		2010		2009
PPL Energy Supply
Net periodic defined benefit costs
(credits):
Service cost			$	5	$	4	$	4		$	17	$	9	$	1	$	1	$	1
Interest cost				7		7		6			151		156		1		1		1
Expected return on plan assets				(9)		(7)		(6)			(202)		(189)
Amortization of:
		Prior service cost									4		4
		Actuarial (gain) loss		2		2		2			48		2
Net periodic defined benefit costs
	(credits) prior to settlement charges			5		6		6			18		(18)		2		2		2
Settlement charges (b)								2
Net periodic defined benefit costs
	(credits)		$	5	$	6	$	8		$	18	$	(18)	$	2	$	2	$	2

Other Changes in Plan Assets
	and Benefit Obligations
	Recognized in OCI:
Curtailments
Settlements							$	(2)
Current year net (gain) loss			$	7	$	4		4		$	17	$	403	$	(2)
Amortization of:
		Prior service cost									(4)		(4)
		Actuarial gain (loss)		(2)		(2)		(2)			(48)		(2)
Total recognized in OCI				5		2					(35)		397		(2)

Total recognized in net periodic
	benefit costs and OCI		$	10	$	8	$	8		$	(17)	$	379	$		$	2	$	2

(a) In January 2011, PPL Energy Supply distributed its membership interest in PPL Global to PPL Energy Supply's parent. See Note 9 for additional information.

(b) Includes the settlement of the pension plan of PPL Energy Supply's former mining subsidiary, PA Mines, LLC in 2009.

Actuarial loss of $2 million related to PPL Energy Supply's U.S. pension plan is expected to be amortized from AOCI into net periodic benefit costs in 2012.

The following table provides the components of net periodic benefit cost for LKE's pension and other postretirement benefit plans for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, and January 1, 2009 through December 31, 2009, for the Predecessor.

			Pension Benefits								Other Postretirement Benefits
			Successor				Predecessor				Successor				Predecessor
			2011		2010		2010		2009		2011		2010		2010		2009
LKE
Net periodic defined benefit costs
	(credits):
Service cost			$	24	$	4	$	17	$	20	$	4	$	1	$	3	$	4
Interest cost				67		11		54		62		10		1		9		11
Expected return on plan assets				(64)		(9)		(45)		(47)		(3)				(2)		(2)
Amortization of:
		Transition obligation										2				1		2
		Prior service cost		5		1		7		9		2				2		3
		Actuarial (gain) loss		24		5		16		27								(1)
Net periodic defined benefit costs
	prior to settlement charges
	and curtailment charges			56		12		49		71		15		2		13		17
Settlement charges										3
Curtailment charges (credits)										5								(2)
Net periodic defined benefit costs			$	56	$	12	$	49	$	79	$	15	$	2	$	13	$	15

Other Changes in Plan Assets
	and Benefit Obligations
	Recognized in OCI and
	Regulatory Assets/Liabilities -
	Gross:
Curtailments									$	(2)							$	(1)
Settlements										(2)
Current year net (gain) loss			$	29	$	(22)	$	96		(66)	$	(3)	$	(2)	$	3		2
Current year prior service cost				8								11
Amortization of:
		Transition asset										(2)				(2)		(2)
		Prior service cost		(5)		(1)		(7)		(9)		(2)				(1)		(2)
		Actuarial gain (loss)		(24)		(5)		(16)		(25)								1
Total recognized in OCI and
	regulatory assets/liabilities (a)			8		(28)		73		(104)		4		(2)				(2)

Total recognized in net periodic
	benefit costs, OCI and regulatory
	assets/liabilities		$	64	$	(16)	$	122	$	(25)	$	19	$		$	13	$	13

(a) For LKE's pension and other postretirement benefits, the amounts recognized in OCI and regulatory assets/liabilities are as follows at December 31, 2011 and 2010, for the Successor, and at October 31, 2010, and December 31, 2009, for the Predecessor.

The estimated amounts to be amortized from AOCI and regulatory assets/liabilities into net periodic benefit costs for LKE in 2012 are as follows.

The following table provides the components of net periodic benefit cost for LG&E's pension benefit plan for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, and January 1, 2009 through December 31, 2009, for the Predecessor.

			Pension Benefits
			Successor				Predecessor
			2011		2010		2010		2009
LG&E
Net periodic defined benefit costs (credits):
Service cost			$	2			$	1	$	2
Interest cost				14	$	2		12		15
Expected return on plan assets				(18)		(3)		(13)		(14)
Amortization of:
		Prior service cost		2		1		2		2
		Actuarial loss		11		2		6		8
Net periodic defined benefit costs			$	11	$	2	$	8	$	13

Other Changes in Plan Assets and Benefit Obligations
	Recognized in Regulatory Assets - Gross:
Current year net (gain) loss			$	15	$	(5)	$	18	$	(14)
Current year prior service cost				9
Amortization of:
		Prior service cost		(2)				(2)		(3)
		Actuarial (loss)		(11)		(2)		(6)		(8)
Total recognized in regulatory assets				11		(7)		10		(25)

Total recognized in net periodic benefit costs and regulatory assets			$	22	$	(5)	$	18	$	(12)

The estimated amounts to be amortized from regulatory assets into net periodic benefit costs for LG&E in 2012 are as follows.

Net periodic defined benefit costs (credits) charged to operating expense, excluding amounts charged to construction and other non-expense accounts were:

(a) As a result of PPL Energy Supply's January 2011 distribution of its membership interest in PPL Global to its parent, PPL Energy Funding, these amounts are included in "Income (Loss) from Discontinued Operations (net of income taxes)" on PPL Energy Supply's Statements of Income. See Note 6 for additional information.

(b) Includes costs for the specific plans it sponsors and the following allocated costs of defined benefit plans sponsored by PPL Services, based on PPL Energy Supply's participation in those plans, which management believes are reasonable.

(c) PPL Electric does not directly sponsor any defined benefit plans. PPL Electric was allocated these costs of defined benefit plans sponsored by PPL Services, based on its participation in those plans, which management believes are reasonable.

The following table provides net periodic benefit costs charged to operating expense for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, and January 1, 2009 through December 31, 2009, for the Predecessor.

(d) Includes costs for the specific plans it sponsors and the following allocated costs of defined benefit plans sponsored by LKE, based on its participation in those plans, which management believes are reasonable.

(e) KU does not directly sponsor any defined benefit plans. KU was allocated these costs of defined benefit plans sponsored by LKE, based on its participation in those plans, which management believes are reasonable.

The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31.

		Pension Benefits
		U.S.						U.K.						Other Postretirement Benefits
		2011		2010		2009		2011		2010		2009		2011		2010		2009
PPL
	Discount rate		5.06%		5.42%		6.00%		5.24%		5.54%		5.55%		4.80%		5.14%		5.81%
	Rate of compensation increase		4.02%		4.88%		4.75%		4.00%		4.00%		4.00%		4.00%		4.90%		4.75%

PPL Energy Supply
	Discount rate		5.12%		5.47%		6.00%				5.54%		5.55%		4.60%		4.95%		5.55%
	Rate of compensation increase		4.00%		4.75%		4.75%				4.00%		4.00%		4.00%		4.75%		4.75%

The following table provides the weighted-average assumptions used in the valuation of the benefit obligations at December 31, 2011 and 2010, for the Successor, and at October 31, 2010 and December 31, 2009, for the Predecessor.

The following weighted-average assumptions were used to determine the net periodic benefit costs for the year ended December 31.

		Pension Benefits
		U.S.						U.K.						Other Postretirement Benefits
		2011		2010		2009		2011		2010		2009		2011		2010		2009
PPL
	Discount rate		5.42%		5.96%		6.50%		5.59%		5.59%		7.47%		5.14%		5.47%		6.45%
	Rate of compensation increase		4.88%		4.79%		4.75%		3.75%		4.00%		4.00%		4.90%		4.78%		4.75%
	Expected return on plan assets (a)		7.25%		7.96%		8.00%		7.04%		7.91%		7.90%		6.57%		6.90%		7.00%

PPL Energy Supply
	Discount rate		5.47%		6.00%		6.50%				5.59%		7.47%		4.95%		5.55%		6.37%
	Rate of compensation increase		4.75%		4.75%		4.75%				4.00%		4.00%		4.75%		4.75%		4.75%
	Expected return on plan assets (a)		7.25%		8.00%		7.78%				7.91%		7.90%		N/A		N/A		N/A

The following table provides the weighted-average assumptions used to determine the net periodic benefit costs for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, and January 1, 2009 through December 31, 2009, for the Predecessor.

		Pension Benefits								Other Postretirement Benefits
		Successor				Predecessor				Successor				Predecessor
		2011		2010		2010		2009		2011		2010		2010		2009
LKE
	Discount rate		5.49%		5.40%		6.11%		6.28%		5.12%		4.94%		5.82%		6.36%
	Rate of compensation increase		5.25%		5.25%		5.25%		5.25%		5.25%		5.25%		5.25%		5.25%
	Expected return on plan assets (a)		7.25%		7.25%		7.75%		8.25%		7.16%		7.04%		7.20%		7.97%
LG&E
	Discount rate		5.39%		5.28%		6.08%		6.33%
	Rate of compensation increase		N/A		N/A		N/A		N/A
	Expected return on plan assets (a)		7.25%		7.25%		7.75%		8.25%

(a) The expected long-term rates of return for PPL, PPL Energy Supply, LKE and LG&E's U.S. pension and other postretirement benefits have been developed using a best-estimate of expected returns, volatilities and correlations for each asset class. The best estimates are based on historical performance, future expectations and periodic portfolio rebalancing among the diversified asset classes. PPL management corroborates these rates with expected long-term rates of return calculated by its independent actuary, who uses a building block approach that begins with a risk-free rate of return with factors being added such as inflation, duration, credit spreads and equity risk. Each plan's specific asset allocation is also considered in developing a reasonable return assumption.

The expected long-term rates of return for PPL's U.K. pension plans have been developed by PPL management with assistance from an independent actuary using a best estimate of expected returns, volatilities and correlations for each asset class. The best estimates are based on historical performance, future expectations and periodic portfolio rebalancing among the diversified asset classes.

The following table provides the assumed health care cost trend rates for the year ended December 31.

			2011		2010		2009
PPL and PPL Energy Supply
	Health care cost trend rate assumed for next year
		- obligations		8.5%		9.0%		8.0%
		- cost		9.0%		8.0%		8.4%
	Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
		- obligations		5.5%		5.5%		5.5%
		- cost		5.5%		5.5%		5.5%
	Year that the rate reaches the ultimate trend rate
		- obligations		2019		2019		2016
		- cost		2019		2016		2014

The following table provides the assumed health care cost trend rates for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, and January 1, 2009 through December 31, 2009, for the Predecessor.

			Successor				Predecessor
			2011		2010		2010		2009
LKE
	Health care cost trend rate assumed for next year
		- obligations		8.5%		9.0%		7.8%		8.0%
		- cost		9.0%		9.0%		8.0%		8.0%
	Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
		- obligations		5.5%		5.5%		4.5%		4.5%
		- cost		5.5%		5.5%		4.5%		5.0%
	Year that the rate reaches the ultimate trend rate
		- obligations		2019		2019		2029		2029
		- cost		2019		2019		2029		2016

A one percentage point change in the assumed health care costs trend rate assumption would have had the following effects on the other postretirement benefit plans in 2011.

The effects on PPL Energy Supply's other postretirement benefit plans would not have been significant.

			Pension Benefits
			U.S.				U.K.				Other Postretirement Benefits
			2011		2010		2011		2010		2011		2010
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	4,007	$	2,460	$	2,841	$	2,933	$	667	$	498
		Service cost		95		64		44		17		12		8
		Interest cost		217		159		282		151		33		28
		Participant contributions						11		6		5		7
		Plan amendments		8								10		(71)
		Actuarial loss		220		222		257		37		6		32
		Acquisition (a)				1,231		3,501						206
		Curtailments
		Termination benefits						50
		Actual expenses paid				(2)
		Gross benefits paid		(166)		(127)		(309)		(152)		(47)		(44)
		Federal subsidy										1		3
		Currency conversion						(39)		(151)
Benefit Obligation, end of period				4,381		4,007		6,638		2,841		687		667

Change in Plan Assets
Plan assets at fair value, beginning of period				2,819		1,772		2,524		2,331		360		301
		Actual return on plan assets		349		263		444		228		38		33
		Employer contributions		470		148		164		231		33		17
		Participant contributions						11		6		5		7
		Acquisition (a)				765		3,567						42
		401(h) transfer
		Actual expenses paid		(1)		(2)
		Gross benefits paid		(166)		(127)		(309)		(152)		(45)		(40)
		Currency conversion						(50)		(120)
Plan assets at fair value, end of period				3,471		2,819		6,351		2,524		391		360

Funded Status, end of period			$	(910)	$	(1,188)	$	(287)	$	(317)	$	(296)	$	(307)

Amounts recognized in the Balance
	Sheets consist of:
		Noncurrent asset					$	130
		Current liability	$	(29)	$	(10)					$	(1)	$	(2)
		Noncurrent liability		(881)		(1,178)		(417)	$	(317)		(295)		(305)
Net amount recognized, end of period			$	(910)	$	(1,188)	$	(287)	$	(317)	$	(296)	$	(307)

Amounts recognized in AOCI and
	regulatory assets/liabilities (pre-tax)
	consist of: (b)
Transition obligation											$	2	$	4
Prior service cost (credit)			$	115	$	131	$	3	$	7		(5)		(16)
Net actuarial loss				922		836		1,191		1,097		97		112
Total (c)			$	1,037	$	967	$	1,194	$	1,104	$	94	$	100

Total accumulated benefit obligation
	for defined benefit pension plans		$	3,949	$	3,564	$	6,144	$	2,646

(a) Includes the pension and other postretirement medical plans of LKE, which were acquired in 2010, and the pension plan of WPD Midlands, which was acquired in 2011. See Note 10 for additional information.

(b) For PPL's U.S. pension benefits, the amounts recognized in AOCI for 2011 and 2010 were $481 million, $431 million. The amounts recognized in regulatory assets/liabilities for 2011 and 2010 were $556 million and $536 million. In total, the amounts recognized in either OCI or regulatory assets/liabilities for 2011 and 2010 were $1,037 million and $967 million.

For other postretirement benefits, the amounts recognized in AOCI for 2011 and 2010 were $56 million and $53 million. The amounts recognized in regulatory assets/liabilities for 2011 and 2010 were $38 million and $47 million. In total, the amounts recognized in either OCI or regulatory assets/liabilities for 2011 and 2010 were $94 million and $100 million.

(c) WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP. As a result, WPD does not record regulatory assets/liabilities.

All of PPL's U.S. pension plans had projected and accumulated benefit obligations in excess of plan assets at December 31, 2011 and 2010. All of PPL's other postretirement benefit plans had accumulated postretirement benefit obligations in excess of plan assets at December 31, 2011 and 2010. For the U.K. pension plans of PPL WEM, the fair value of plan assets of $3.7 billion exceeded both the projected benefit obligations of $3.6 billion and the accumulated benefit obligations of $3.3 billion at December 31, 2011. For the pension plans of PPL WW, both the projected benefit obligations of $3.0 billion and accumulated benefit obligations of $2.8 billion exceeded the plan assets of $2.6 billion at December 31, 2011. For the pension plans of PPL WW, both the projected benefit obligations of $2.8 billion and accumulated benefit obligations of $2.6 billion exceeded the plan assets of $2.5 billion at 2010.

			Pension Benefits
			U.S.				U.K. (a)				Other Postretirement Benefits
			2011		2010		2011		2010		2011		2010
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	121	$	104	$	2,841	$	2,933	$	18	$	17
		Service cost		5		4				17		1		1
		Interest cost		7		7				151		1		1
		Participant contributions								6
		Actuarial loss		13		9				37		(2)
		Distribution to parent (a)						(2,841)
		Actual expenses paid										(1)
		Gross benefits paid		(3)		(3)				(152)				(1)
		Federal subsidy
		Currency conversion								(151)
Benefit Obligation, end of period				143		121				2,841		17		18

Change in Plan Assets
Plan assets at fair value, beginning of
	period			106		87		2,524		2,331
		Actual return on plan assets		14		12				228
		Employer contributions		15		10				231				1
		Participant contributions								6
		Distribution to parent (a)						(2,524)
		Gross benefits paid		(3)		(3)				(152)				(1)
		Currency conversion								(120)
Plan assets at fair value, end of period				132		106				2,524

Funded Status, end of period			$	(11)	$	(15)	$		$	(317)	$	(17)	$	(18)

Amounts recognized in the Balance
	Sheets consist of:
		Current liability									$	(1)	$	(1)
		Noncurrent liability	$	(11)	$	(15)			$	(317)		(16)		(17)
Net amount recognized, end of period			$	(11)	$	(15)			$	(317)	$	(17)	$	(18)

Amounts recognized in AOCI
	(pre-tax) consist of:
Prior service cost (credit)			$	1	$	1			$	7			$	(1)
Net actuarial loss				38		33				1,097	$	2		4
Total			$	39	$	34			$	1,104	$	2	$	3

Total accumulated benefit obligation
	for defined benefit pension plans		$	143	$	121			$	2,646

(a) As a result of PPL Energy Supply's January 2011 distribution of its membership interest in PPL Global to its parent, PPL Energy Funding, the funded status and AOCI were removed from the balance sheet in January 2011. See Note 9 for additional information.

All of PPL Energy Supply's pension plans had projected and accumulated benefit obligations in excess of plan assets at December 31, 2011 and 2010. All of PPL Energy Supply's other postretirement benefit plans had accumulated postretirement benefit obligations in excess of plan assets at December 31, 2011 and 2010.

In addition to the plans it sponsors, PPL Energy Supply and its subsidiaries are allocated a portion of the funded status and costs of the defined benefit plans sponsored by PPL Services based on their participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. PPL Energy Supply's allocated share of the funded status of the pension plans resulted in a liability of $204 million and $287 million at December 31, 2011 and 2010. PPL Energy Supply's allocated share of other postretirement benefits was a liability of $51 million and $55 million at December 31, 2011 and 2010.

The funded status of the LKE plans was as follows for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, for the Predecessor.

			Pension Benefits						Other Postretirement Benefits
			Successor				Predecessor		Successor				Predecessor
			2011		2010		2010		2011		2010		2010
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	1,229	$	1,230	$	1,085	$	204	$	206	$	199
		Service cost		24		4		17		4		1		3
		Interest cost		67		11		54		10		1		9
		Plan amendments		9						10
		Actuarial loss		25		(8)		116		(3)		(2)		4
		Gross benefits paid		(48)		(8)		(42)		(12)		(2)		(9)
		Federal subsidy								1
Benefit Obligation, end of period				1,306		1,229		1,230		214		204		206

Change in Plan Assets
Plan assets at fair value, beginning of period				778		764		696		49		42		37
		Actual return on plan assets		62		22		65		3		1		3
		Employer contributions		152				46		18		8		11
		Actual expenses paid						(1)
		Gross benefits paid		(48)		(8)		(42)		(12)		(2)		(9)
Plan assets at fair value, end of period				944		778		764		58		49		42

Funded Status, end of period			$	(362)	$	(451)	$	(466)	$	(156)	$	(155)	$	(164)

Amounts recognized in the Balance
	Sheets consist of:
		Current liability	$	(3)	$	(2)	$	(3)			$	(1)	$	(1)
		Noncurrent liability		(359)		(449)		(463)	$	(156)		(154)		(163)
Net amount recognized, end of period			$	(362)	$	(451)	$	(466)	$	(156)	$	(155)	$	(164)

Amounts recognized in AOCI and
	regulatory assets/liabilities (pre-tax)
	consist of: (a)
Transition obligation									$	2	$	3	$	4
Prior service cost			$	34	$	30	$	50		14		6		7
Net actuarial (gain) loss				280		276		396		(7)		(4)		(4)
Total			$	314	$	306	$	446	$	9	$	5	$	7

Total accumulated benefit obligation
	for defined benefit pension plans		$	1,141	$	1,043	$	1,039

(a) For LKE's pension and other post-retirement benefits, the amounts recognized in AOCI and regulatory assets/liabilities are as follows at December 31, 2011 and 2010, for the Successor, and at October 31, 2010, for the Predecessor.

LKE's pension plans had projected and accumulated benefit obligations in excess of plan assets at December 31, 2011 and 2010. LKE's postretirement benefit plan had accumulated postretirement benefit obligations in excess of plan assets at December 31, 2011 and 2010.

The funded status of the LG&E plan was as follows for January 1, 2011 through December 31, 2011, and November 1, 2010 through December 31, 2010, for the Successor, and January 1, 2010 through October 31, 2010, for the Predecessor.

			Pension Benefits
			Successor				Predecessor
			2011		2010		2010
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	274	$	276	$	251
		Service cost		2				2
		Interest cost		14		2		12
		Plan amendments		9
		Actuarial loss		14		(2)		24
		Gross benefits paid		(15)		(2)		(13)
Benefit Obligation, end of period				298		274		276

Change in Plan Assets
Plan assets at fair value, beginning of period				217		214		196
		Actual return on plan assets		16		6		19
		Employer contributions		38				12
		Actual expenses paid		(15)
		Gross benefits paid				(3)		(13)
Plan assets at fair value, end of period				256		217		214

Funded Status, end of period			$	(42)	$	(57)	$	(62)

Amounts recognized in the Balance Sheets consist of:
		Noncurrent liability	$	(42)	$	(57)	$	(62)
Net amount recognized, end of period			$	(42)	$	(57)	$	(62)

Amounts recognized in regulatory assets (pre-tax)
	consist of:
Prior service cost			$	20	$	13	$	14
Net actuarial loss				115		111		118
Total			$	135	$	124	$	132

Total accumulated benefit obligation for defined benefit pension plan			$	292	$	274	$	273

LG&E's pension plan had projected and accumulated benefit obligations in excess of plan assets at December 31, 2011 and 2010.

In addition to the plan it sponsors, LG&E is allocated a portion of the funded status and costs of certain defined benefit plans sponsored by LKE based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees and retired employees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. LG&E's allocated share of the funded status of the pension plans resulted in a liability of $53 million and $69 million at December 31, 2011 and 2010. LG&E's allocated share of other postretirement benefits was a liability of $87 million and $85 million at December 31, 2011 and 2010.

PPL Energy Supply's mechanical contracting subsidiaries make contributions to over 70 multiemployer pension plans, based on the bargaining units from which labor is procured. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:

 Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

 If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

 If PPL Energy Supply's mechanical contracting subsidiaries choose to stop participating in some of their multiemployer plans, they may be required to pay those plans an amount based on the unfunded status of the plan, referred to as a withdrawal liability.

PPL Energy Supply identified the Steamfitters Local Union No. 420 Pension Plan, EIN/Plan Number 23-2004424/001 as the only significant plan to which contributions are made. Contributions to this plan by PPL Energy Supply's mechanical contracting companies were $5 million for 2011, $4 million for 2010 and $5 million for 2009. At the date the financial statements were issued, the Form 5500 was not available for the plan year ending in 2011. Therefore, the following disclosures specific to this plan are being made based on the Form 5500s filed for the plan years ended December 31, 2010 and 2009. PPL Energy Supply's mechanical contracting subsidiaries were not identified individually as greater than 5% contributors on the Form 5500s. However, the combined contributions of the three subsidiaries contributing to the plan had exceeded 5%. The plan had a Pension Protection Act zone status of red, without utilizing an extended amortization period, as of December 31, 2010 and 2009. In addition, the plan is subject to a rehabilitation plan and surcharges have been applied to participating employer contributions. The expiration date of the collective-bargaining agreement related to those employees participating in this plan is April 30, 2014. There were no other plans deemed individually significant based on a multifaceted assessment of each plan. This assessment included review of the funded/zone status of each plan and PPL Energy Supply's potential obligations under the plan and the number of participating employers contributing to the plan.

PPL Energy Supply's mechanical contracting subsidiaries also participate in multiemployer other postretirement plans that provide for retiree life insurance and health benefits.

The table below details total contributions to all multiemployer pension and other postretirement plans, including the plan identified as significant above. The contribution amounts fluctuate each year based on the volume of work and type of projects undertaken from year to year.

PPL Energy Supply maintains a liability for the cost of health care of retired miners of former subsidiaries that had been engaged in coal mining, as required by the Coal Industry Retiree Health Benefit Act of 1992. At December 31, 2011, the liability was $6 million. The liability is the net of $67 million of estimated future benefit payments offset by $31 million of assets in a retired miners VEBA trust and an additional $30 million of excess assets available in a Black Lung Trust that can be used to fund the health care benefits of retired miners.

Although PPL Electric does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by PPL Services based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. PPL Electric's allocated share of the funded status of the pension plans resulted in a liability of $186 million and $259 million at December 31, 2011 and 2010. PPL Electric's allocated share of other postretirement benefits was a liability of $53 million and $57 million at December 31, 2011 and 2010.

Although KU does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by LKE based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees and retired employees of KU are used as a basis to allocate total plan activity, including active and retiree costs and obligations. KU's allocated share of the funded status of the pension plans resulted in a liability of $83 million and $113 million at December 31, 2011 and 2010. KU's allocated share of other postretirement benefits was a liability of $62 million at December 31, 2011 and 2010.

PPL's primary legacy pension plan and the pension plan in which employees of PPL Montana participate are invested in the PPL Services Corporation Master Trust that also includes a 401(h) account that is restricted for certain other postretirement benefit obligations. Through December 31, 2011, the plans sponsored by LKE were invested in Pension Trusts that also included a 401(h) account that is restricted for certain other postretirement benefit obligations. Effective January 1, 2012, the assets in the LKE Pension Trusts were transferred into the PPL Services Corporation Master Trust. The investment strategy for the master trust is to achieve a risk-adjusted return on a mix of assets that, in combination with PPL's funding policy, will ensure that sufficient assets are available to provide long-term growth and liquidity for benefit payments. The master trust benefits from a wide diversification of asset types, investment fund strategies and external investment fund managers, and therefore have no significant concentration of risk.

The investment policies of the PPL Services Corporation Master Trust and LG&E and KU Energy LLC Pension Trusts outline allowable investments and define the responsibilities of the EBPB and the external investment managers. The only prohibited investments are investments in debt or equity securities issued by PPL and its subsidiaries or PPL's pension plan consultant. Derivative instruments may be utilized as a cost-effective means to mitigate risk and match the duration of investments to projected obligations. The investment policies are reviewed annually by PPL's Board of Directors.

The EBPB created a risk management framework around the trust assets and pension liabilities. This framework considers the trust assets as being composed of three sub-portfolios: the growth, immunizing and liquidity portfolios. The growth portfolio is comprised of investments that generate a return at a reasonable risk, including equity securities, certain debt securities and alternative investments. The immunizing portfolio consists of debt securities and derivative positions that will typically have long durations. The immunizing portfolio is designed to offset a portion of the change in the pension liabilities due to changes in interest rates. The liquidity portfolio consists primarily of cash and cash equivalents.

Target allocation ranges have been developed for each portfolio based on input from external consultants with a goal of limiting funded status volatility. The EBPB monitors the investments in each portfolio, and seeks to obtain a target portfolio that emphasizes reduction of risk of loss from market volatility. In pursuing that goal, the EBPB establishes revised guidelines from time to time. Revised EBPB investment guidelines as of the end of 2011 are presented below.

The asset allocation for the trusts and the target allocation by portfolio, at December 31 are as follows.

(a) Includes commingled debt funds, which PPL treats as debt securities for asset allocation purposes.

(a) Includes commingled debt funds, which LKE treats as debt securities for asset allocation purposes.

(b) The asset allocation for this portfolio is not within the established target range due to the transition of assets at the end of 2011 in anticipation of transfer into the PPL Services Corporation Master Trust in January 2012.

Prior to the fourth quarter of 2011, the LKE trusts were managed using a different investment policy. As of December 31, 2010, the asset allocation was as follows.

PPL Montana, a subsidiary of PPL Energy Supply, has a pension plan whose assets are solely invested in the PPL Services Corporation Master Trust, which is fully disclosed by PPL (below). The fair value of this plan's assets of $133 million at December 31, 2011 represents a 5% undivided interest in the assets and liabilities of this master trust, including each asset whose fair value measurement was determined using significant unobservable inputs (Level 3).

The fair value of net assets in the U.S. pension plan trusts by asset class and level within the fair value hierarchy was:

				December 31, 2011								December 31, 2010
						Fair Value Measurements Using								Fair Value Measurements Using
				Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
PPL Services Corporation Master Trust
Cash and cash equivalents				$	78	$	78					$	87	$	87
Equity securities:
		U.S.:
			Large-cap		371		247	$	124				414		293	$	121
			Small-cap		112		112						113		113
			Commingled debt		458				458				249				249
		International			299		102		197				343		121		222
Debt securities:
		U.S. Treasury and U.S. government sponsored
			agency		515		443		72				331		295		36
		Residential/commercial backed securities			9				9				10				10
		Corporate			446				439	$	7		319				313	$	6
		Other			10				10				12				12
		International			6				6				3				3
Alternative investments:
		Real estate			85				85				76				76
		Private equity			45						45		10						10
		Hedge fund of funds			92				92				95				95
Derivatives:
		TBA debt securities			5						5		31						31
		Interest rate swaps			20				20				(4)				(4)
Receivables					50		31		19				24		13		11
Payables					(48)		(40)		(8)				(54)		(51)		(3)
Total PPL Services Corporation Master Trust assets					2,553		973		1,523		57		2,059		871		1,141		47
401(h) account restricted for other
	postretirement benefit obligations				(26)		(10)		(16)				(18)		(8)		(10)
Fair value - PPL Services Corporation Master
	Trust pension assets				2,527		963		1,507		57		2,041		863		1,131		47

(LKE)

LG&E and KU Energy LLC Pension Trusts
Cash and cash equivalents					122		122						6		6
Equity securities:
		U.S.:
			Large-cap		220				220				293				293
			Small/Mid-cap										67				67
			Commingled debt		65				65				307				307
		International			106		44		62				105				105
Debt securities:
		U.S. Treasury			97		97
		Corporate			342				342
Derivatives:
		Total return swaps			4				4
Insurance contracts					46						46		47						47
Total LG&E and KU Energy LLC
	Pension Trusts assets				1,002		263		693		46		825		6		772		47
401(h) account restricted for other
	postretirement benefit obligations				(58)		(13)		(45)				(47)				(47)
Fair value - LG&E and KU Energy LLC
	Pension Trusts pension assets				944		250		648		46		778		6		725		47

Fair value - total U.S. pension plans				$	3,471	$	1,213	$	2,155	$	103	$	2,819	$	869	$	1,856	$	94

A reconciliation of U.S. pension trust assets classified as Level 3 at December 31, 2011 is as follows.

A reconciliation of U.S. pension trust assets classified as Level 3 at December 31, 2010 is as follows.

				Residential
				/commercial
				backed		Corporate		Private		TBA debt		Insurance
				securities		debt		equity		securities		contracts		Total

Balance at beginning of period				$	2	$	10	$	6	$	10			$	28
	Actual return on plan assets
		Relating to assets still held
			at the reporting date		(1)		(1)		(1)						(3)
		Relating to assets sold during the period					1								1
	Acquisition of LKE											$	46		46
	Purchases, sales and settlements				(1)		(4)		5		21		1		22
Balance at end of period				$		$	6	$	10	$	31	$	47	$	94

The fair value measurements of cash and cash equivalents are based on the amounts on deposit.

The market approach is used to measure fair value of equity securities. The fair value measurements of equity securities (excluding commingled funds), which are generally classified as Level 1, are based on quoted prices in active markets. These securities represent actively and passively managed investments that are managed against various equity indices.

Investments in commingled funds are classified as Level 2 and categorized as equity securities. The fair value measurements are based on firm quotes of net asset values per share, which are not considered obtained from a quoted price in an active market. For the PPL Services Corporation Master Trust for 2011 and 2010 and the LG&E and KU Energy LLC Pension Trusts for 2011, these securities represent investments that are measured against the Russell 1000 Growth Index, the Russell 3000 Index and the MSCI EAFE Index. For the LG&E and KU Energy LLC Pension Trusts during 2010, these securities represent passively and actively managed investments in equity funds managed against the S&P 500 Index, the Russell 2500 Growth & Value Indexes and the MSCI EAFE Index.

The fair value measurements of debt securities are generally based on evaluated prices that reflect observable market information, such as actual trade information for identical securities or for similar securities, adjusted for observable differences. Debt securities are generally measured using a market approach, including the use of matrix pricing. Common inputs include reported trades; broker/dealer bid/ask prices, benchmark securities and credit valuation adjustments. When necessary, the fair value of debt securities is measured using the income approach, which incorporates similar observable inputs as well as benchmark yields, credit valuation adjustments, reference data from market research publications, monthly payment data, collateral performance and new issue data. For the PPL Services Corporation Master Trust, these securities represent investments in securities issued by U.S. Treasury and U.S. government sponsored agencies; investments securitized by residential mortgages, auto loans, credit cards and other pooled loans; investments in investment grade and non-investment grade bonds issued by U.S. companies across several industries; and investments in debt securities issued by foreign governments and corporations as well as commingled fund investments that are measured against the JP Morgan EMBI Global Diversified Index and the Barclays Long A or Better Index. During 2010 and the first ten months of 2011 for the LG&E and KU pension trusts, debt securities within commingled trusts were managed against the Barclays Aggregated Bond Index and the Barclays U.S. Government/Credit Long Index. During the last two months of 2011, the debt securities for the LG&E and KU pension trusts were transitioned to debt securities similar to those within the PPL Services Corporation Master Trust. The debt securities, excluding those in commingled funds, held by the PPL Services Corporation Master Trust at December 31, 2011 have a weighted-average coupon of 3.96% and a weighted-average maturity of 25 years.

Investments in real estate represent an investment in a partnership whose purpose is to manage investments in core U.S. real estate properties diversified geographically and across major property types (e.g., office, industrial, retail, etc.). The manager is focused on properties with high occupancy rates with quality tenants. This results in a focus on high income and stable cash flows with appreciation being a secondary factor. Core real estate generally has a lower degree of leverage when compared with more speculative real estate investing strategies. The partnership has limitations on the amounts that may be redeemed based on available cash to fund redemptions. Additionally, the general partner may decline to accept redemptions when necessary to avoid adverse consequences for the partnership, including legal and tax implications, among others. The fair value of the investment is based upon a partnership unit value.

Investments in private equity represent interests in partnerships in multiple early-stage venture capital funds and private equity fund of funds that use a number of diverse investment strategies. Four of the partnerships have limited lives of ten years, while the fifth has a life of 15 years, after which liquidating distributions will be received. Prior to the end of each partnership's life, the investment cannot be redeemed with the partnership; however, the interest may be sold to other parties, subject to the general partner's approval. The PPL Services Corporation Master Trust has unfunded commitments of $83 million that may be required during the lives of the partnerships. Fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed.

Investments in hedge fund of funds represent investments in two hedge fund of funds each with a different investment objective. Hedge funds seek a return utilizing a number of diverse investment strategies. The strategies, when combined aim to reduce volatility and risk while attempting to deliver positive returns under all market conditions. Major investment strategies for both hedge fund of funds include long/short equity, market neutral, distressed debt, and relative value. Generally, shares may be redeemed on 90 days prior written notice. Both funds are subject to short term lockups and have limitations on the amount that may be withdrawn based on a percentage of the total net asset value of the fund, among other restrictions. All withdrawals are subject to the general partner's approval. One fund's fair value has been estimated using the net asset value per share and the other fund's fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed.

The fair value measurements of derivative instruments utilize various inputs that include quoted prices for similar contracts or market-corroborated inputs. In certain instances, these instruments may be valued using models, including standard option valuation models and standard industry models. These securities represent investments in To-be-announced debt securities and interest rate swaps. To-be-announced debt securities are commitments to purchase debt securities and are used as a cost effective means of managing the duration of assets in the trust. These commitments are valued by reviewing the issuing agency, program and coupon. Interest rate swaps are valued based on the swap details such as: swap curves, notional amount, index and term of index, reset frequency and payer/receiver credit ratings.

Receivables/payables classified as Level 1 represent investments sold/purchased but not yet settled. Receivables/payables classified as Level 2 represent interest and dividends earned but not yet received and costs incurred but not yet paid.

Insurance contracts, classified as Level 3, are held by the LG&E and KU Energy LLC Pension Trusts and represent an investment in an immediate participation guaranteed group annuity contract. The fair value is based on contract value, which represents cost plus interest income less distributions for benefit payments and administrative expenses.

PPL's investment strategy with respect to its other postretirement benefit obligations is to fund VEBA trusts and 401(h) accounts with voluntary contributions and to invest in a tax efficient manner. Excluding the 401(h) accounts included in the PPL Services Corporation Master Trust and LG&E and KU Energy LLC Pension Trusts, discussed in Plan Assets - U.S. Pension Plans above, PPL's other postretirement benefit plans are invested in a mix of assets for long-term growth with an objective of earning returns that provide liquidity as required for benefit payments. These plans benefit from diversification of asset types, investment fund strategies and investment fund managers, and therefore, have no significant concentration of risk. The only prohibited investments are investments in debt or equity securities issued by PPL and its subsidiaries. Equity securities include investments in domestic large-cap commingled funds. Securities issued by commingled funds that invest entirely in debt securities are traded as equity units, but treated by PPL as debt securities for asset allocation and target allocation purposes. Securities issued by commingled money market funds that invest entirely in money market securities are traded as equity units, but treated by PPL as cash and cash equivalents for asset allocation and target allocation purposes. The asset allocation for the VEBA trusts and the target allocation, by asset class, at December 31, are detailed below.

The fair value of assets in the U.S. other postretirement benefit plans by asset class and level within the fair value hierarchy was:

			December 31, 2011							December 31, 2010
					Fair Value Measurement Using							Fair Value Measurement Using
			Total		Level 1		Level 2		Level 3	Total		Level 1		Level 2		Level 3
U.S. Equity securities:
		Large-cap	$	126			$	126		$	163			$	163
		Commingled debt		121				121			69				69
		Commingled money market funds		20				20			18				18
Debt securities:
		Municipalities		40				40			44				44
Receivables											1				1
Total VEBA trust assets				307				307			295				295
401(h) account assets				84	$	23		61			65	$	8		57
Fair value - U.S. other postretirement
	benefit plans		$	391	$	23	$	368		$	360	$	8	$	352

LKE's other postretirement benefit plans are invested primarily in a 401(h) account as disclosed in the LG&E and KU Energy LLC Pension Trusts Table.

Investments in large-cap equity securities represent investments in a passively managed equity index fund that invests in securities and a combination of other collective funds that together track the performance of the S&P 500 Index. Redemptions can be made daily on this fund.

Investments in commingled debt securities represent investments in a fund that invests in a diversified portfolio of investment grade money market instruments including, but not limited to, commercial paper, notes, repurchase agreements and other evidences of indebtedness with a maturity date not exceeding 13 months from date of purchase. Redemptions can be made weekly on this fund.

Investments in commingled money market funds represent investments in a fund that invests in securities and a combination of other collective funds that together are designed to track the performance of the Barclays Capital Long-term Treasury Index, as well as a fund that invests primarily in a diversified portfolio of investment grade money market instruments, including, but not limited to, commercial paper, notes, repurchase agreements and other evidences of indebtedness with a maturity not exceeding 13 months from the date of purchase. The primary objective of the fund is a high level of current income consistent with stability of principal and liquidity. Redemptions can be made daily on each of these funds.

Investments in municipalities represent investments in a diverse mix of tax-exempt municipal securities.

Receivables represent interest and dividends earned but not received as well as investments sold but not yet settled.

The overall investment strategy of WPD's pension plans is developed by each plan's independent trustees in its Statement of Investment Principles in compliance with the U.K. Pensions Act of 1995 and other U.K. legislation. The trustees' primary focus is to ensure that assets are sufficient to meet members' benefits as they fall due with a longer term objective to reduce investment risk. The investment strategy is intended to maximize investment returns while not incurring excessive volatility in the funding position. WPD's plans are invested in a wide diversification of asset types, fund strategies and fund managers and therefore have no significant concentration of risk. Commingled funds that consist entirely of debt securities are traded as equity units, but treated by WPD as debt securities for asset allocation and target allocation purposes. These include investments in U.K. corporate bonds and U.K. gilts.

The asset allocation and target allocation at December 31 of WPD's pension plans are detailed below.

						Target Asset
		Percentage of plan assets				Allocation
		2011		2010		2011
Asset Class
Cash and cash equivalents			5%		2%
Equity securities
	U.K.		14%		18%		14%
	European (excluding the U.K.)		5%		11%		6%
	Asian-Pacific		5%		11%		5%
	North American		5%		6%		4%
	Emerging markets		2%		5%		2%
	Currency		1%		2%		2%
	Global Tactical Asset Allocation				1%		1%
Debt securities (a)			56%		38%		57%
Alternative investments			7%		6%		9%
	Total		100%		100%		100%

The fair value of assets in the U.K. pension plans by asset class and level within the fair value hierarchy was:

			December 31, 2011							December 31, 2010
					Fair Value Measurement Using							Fair Value Measurement Using
			Total		Level 1		Level 2		Level 3	Total		Level 1		Level 2		Level 3

Cash and cash equivalents			$	313	$	313				$	46	$	46
Equity securities:
	U.K. companies			921			$	921			455			$	455
	European companies (excluding the U.K.)			313				313			273				273
	Asian-Pacific companies			312				312			279				279
	North American companies			335				335			162				162
	Emerging markets companies			116				116			127				127
	Currency			31				31			51				51
	Global Tactical Asset Allocation			25				25			23				23
	Commingled debt:
		U.K. corporate bonds		699				699			321				321
		U.K. gilts		2,109				2,109
		U.K. index-linked gilts		744				744			629				629
Alternative investments:
	Real estate			433				433			158				158
Fair value - international pension plans			$	6,351	$	313	$	6,038		$	2,524	$	46	$	2,478

Except for investments in real estate, the fair value measurements of WPD's pension plan assets are based on the same inputs and measurement techniques used to measure the U.S. pension plan assets described above.

Investments in U.K. equity securities represent passively managed equity index funds that are measured against the FTSE All Share Index. Investments in European equity securities represent passively managed equity index funds that are measured against the FTSE Europe ex U.K. Index. Investments in Asian-Pacific equity securities represent passively managed equity index funds that aim to outperform 50% FTSE Asia Pacific ex-Japan Index and 50% FTSE Japan Index. Investments in North American equity securities represent passively managed index funds that are measured against the FTSE North America Index. Investments in emerging market equity securities represent passively managed equity index funds that are measured against the MSCI Emerging Markets Index. Investments in currency equity securities represent investments in unitized passive and actively traded currency funds. The Global Tactical Asset Allocation strategy attempts to benefit from short-term market inefficiencies by taking positions in worldwide markets with the objective to profit from relative movements across those markets.

Debt securities include investment grade corporate bonds of companies from diversified U.K. industries.

Investments in real estate represent holdings in a U.K. unitized fund that owns and manages U.K. industrial and commercial real estate with a strategy of earning current rental income and achieving capital growth. The fair value measurement of the fund is based upon a net asset value per share, which is based on the value of underlying properties that are independently appraised in accordance with Royal Institution of Chartered Surveyors valuation standards at least annually with quarterly valuation updates based on recent sales of similar properties, leasing levels, property operations and/or market conditions. The fund may be subject to redemption restrictions in the unlikely event of a large forced sale in order to ensure other unit holders are not disadvantaged.

PPL's U.S. defined benefit plans have the option to utilize available prior year credit balances to meet current and future contribution requirements. However, PPL contributed $207 million to its U.S. pension plans in January 2012 to meet minimum funding requirements.

PPL sponsors various non-qualified supplemental pension plans for which no assets are segregated from corporate assets. PPL expects to make approximately $28 million of benefit payments under these plans in 2012.

PPL is not required to make contributions to its other postretirement benefit plans but has historically funded these plans in amounts equal to the postretirement benefit costs recognized. Continuation of this past practice would cause PPL to contribute $28 million to its other postretirement benefit plans in 2012.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid and the following federal subsidy payments are expected to be received by the separate plan trusts.

The PPL Montana pension plan has the option to utilize available prior year credit balances to meet current and future contribution requirements. However, PPL Montana contributed $4 million to the plan in January 2012 to meet minimum funding requirements.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the separate plan trusts.

LKE's defined benefit plans have the option to utilize available prior year credit balances to meet current and future contribution requirements. However, LKE contributed $53 million to its pension plans in January 2012.

LKE sponsors various non-qualified supplemental pension plans for which no assets are segregated from corporate assets. LKE expects to make $2 million of benefit payments under these plans in 2012.

LKE is not required to make contributions to its other postretirement benefit plan but has historically funded this plan in amounts equal to the postretirement benefit costs recognized. Continuation of this past practice would cause LKE to contribute $13 million to its other postretirement benefit plan in 2012.

LG&E's defined benefit plan has the option to utilize available prior year credit balances to meet current and future contribution requirements. However, LG&E contributed $13 million to its pension plan in January 2012.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the separate plan trust.

The pension plans of WPD are subject to formal actuarial valuations every three years, which are used to determine funding requirements. Future contributions for PPL WW were evaluated in accordance with the latest valuation performed as of March 31, 2010, in respect of PPL WW's principal pension scheme, to determine contribution requirements for 2012 and forward. Future contributions for PPL WEM are based on the assumption that a valuation had occurred as of March 31, 2010, and the deficit repair plan was settled on a similar basis. WPD expects to make contributions of approximately $161 million in 2012. PPL WW and PPL WEM are currently permitted to recover in rates approximately 75% of their deficit funding requirements for their primary pension plans.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the separate plan trusts.

Substantially all employees of PPL's domestic subsidiaries are eligible to participate in deferred savings plans (401(k)s). Employer contributions to the plans were as follows.

The increase for PPL in 2011 and 2010 is primarily the result of PPL's acquisition of LKE and the employer contributions related to the employees of that company and its subsidiaries under their existing plans.

Certain PPL subsidiaries sponsor a non-leveraged ESOP in which substantially all domestic employees, excluding those of PPL Montana, LKE and the mechanical contractors, are enrolled on the first day of the month following eligible employee status. Dividends paid on ESOP shares are treated as ordinary dividends by PPL. Under existing income tax laws, PPL is permitted to deduct the amount of those dividends for income tax purposes and to contribute the resulting tax savings (dividend-based contribution) to the ESOP.

The dividend-based contribution is used to buy shares of PPL's common stock and is expressly conditioned upon the deductibility of the contribution for federal income tax purposes. Contributions to the ESOP are allocated to eligible participants' accounts as of the end of each year, based 75% on shares held in existing participants' accounts and 25% on the eligible participants' compensation.

Compensation expense for ESOP contributions was $8 million in 2011, 2010 and 2009. These amounts were offset by the dividend-based contribution tax savings and had no impact on PPL's earnings.

PPL shares within the ESOP outstanding at December 31, 2011 were 7,867,977 or 1% of total common shares outstanding, and are included in all EPS calculations.

Certain PPL subsidiaries provide separation benefits to eligible employees. These benefits may be provided in the case of separations due to performance issues, loss of job related qualifications or organizational changes. Certain employees separated are eligible for cash severance payments, outplacement services, accelerated stock award vesting, continuation of group health and welfare coverage, and enhanced pension and postretirement medical benefits. The type and amount of benefits provided is based upon age, years of service and the nature of the separation. Separation benefits are recorded when such amounts are probable and estimable.

In February 2009, PPL announced workforce reductions that resulted in the elimination of approximately 200 management and staff positions across PPL's domestic operations, or approximately 6% of PPL's non-union, domestic workforce. The charges noted below consisted primarily of enhanced pension and severance benefits under PPL's Pension Plan and Separation Policy and were recorded primarily to "Other operation and maintenance" on the Statement of Income.

As a result of the workforce reductions, PPL recorded a charge of $22 million ($13 million after tax) in 2009.

PPL Energy Supply eliminated approximately 50 management and staff positions and recorded a charge of $13 million ($8 million after tax) in 2009. Included in this charge was $8 million ($4 million after tax) of allocated costs associated with the elimination of employees of PPL Services.

PPL Electric eliminated approximately 50 management and staff positions and recorded a charge of $9 million ($5 million after tax) in 2009. Included in this charge was $3 million ($1 million after tax) of allocated costs associated with the elimination of employees of PPL Services.

See Note 10 for separation benefits recorded in 2011 in connection with a reorganization following the acquisition of WPD Midlands.

In March 2010, Health Care Reform was signed into law. Many provisions of Health Care Reform do not take effect for an extended period of time, and most will require the publication of implementing regulations and/or issuance of program guidelines.

Beginning in 2013, provisions within Health Care Reform eliminate the tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D Coverage. As a result, in 2010:

· PPL decreased deferred tax assets by $13 million, increased regulatory assets by $9 million, increased deferred tax liabilities by $4 million and recorded income tax expense of $8 million;

· PPL Energy Supply decreased deferred tax assets by $5 million and recorded income tax expense of $5 million; and

· PPL Electric decreased deferred tax assets by $5 million, increased regulatory assets by $9 million and increased deferred tax liabilities by $4 million.

Other provisions within Health Care Reform that apply to PPL and its subsidiaries include:

· an excise tax, beginning in 2018, imposed on high-cost plans providing health coverage that exceeds certain thresholds;

PPL and its subsidiaries have evaluated the provisions of Health Care Reform and have included the applicable provision in the valuation of those benefit plans that are impacted. The inclusion of the various provision of Health Care Reform did not have a material impact on the financial statements. PPL and its subsidiaries will continue to monitor the potential impact of any changes to the existing provisions and implementation guidance related to Health Care Reform on their benefit programs.