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Acquisitions, Development and Divestures (Tables)
 9 Months Ended
Sep. 30, 2012
Acquisitions, Development and Divestitures [Line Items]  
Purchase Price and Related Purchase Price Allocation

The consideration paid for this acquisition, subject to finalization of net indebtedness and fair value adjustments, was as follows.

Aggregate enterprise consideration $326
Less: Estimated fair value of long-term debt outstanding assumed through consolidation (a)  258
Plus: Restricted cash debt service reserves  17
Cash consideration paid for equity interests (including working capital adjustments) $85

(a)       The estimated long-term debt assumed through consolidation consisted of $226 million aggregate principal amount of 8.857% senior secured bonds to be fully repaid by 2025, plus $8 million of debt service reserve loans, and a $24 million estimated fair value adjustment.

 

Preliminary Purchase Price Allocation

 

The following table summarizes the preliminary allocation of the purchase price to the estimated fair value of the major classes of assets acquired and liabilities assumed through consolidation, and the effective settlement of the tolling agreement through consolidation.

PP&E $ 505
Long-term debt (current and noncurrent) (a)   (258)
Tolling agreement assets eliminated (b)   (170)
Other net assets   8
Net identifiable assets acquired (c) $ 85

(a)       Represents non-cash activity excluded from the Statement of Cash Flows for the nine months ended September 30, 2012.

(b)       Primarily an intangible asset, which represented PPL EnergyPlus' rights to and the related accounting for the tolling agreement with PPL Ironwood, LLC prior to the acquisition. On the acquisition date, PPL Ironwood, LLC recorded a liability, recognized at estimated fair value, for its obligation to PPL EnergyPlus. The tolling agreement assets of PPL EnergyPlus and the tolling agreement liability of PPL Ironwood, LLC eliminate in consolidation for PPL and PPL Energy Supply as a result of the acquisition, and therefore the agreement is considered effectively settled. Any difference between the tolling agreement assets and liability will result in a gain or loss on the effective settlement of the agreement. That amount is currently estimated to be insignificant.

(c)       Goodwill is currently estimated to be insignificant.

Carrying Amount of Accrued Severance

The changes in the carrying amounts of accrued severance for the periods ended September 30, 2012 were as follows:

  Three Months Nine Months
       
Accrued severance at the beginning of period $8 $21
Severance compensation    2   12
Severance paid   (2)   (25)
Accrued severance at the end of period $ 8 $ 8
Pro-forma Information

The pro forma financial information for the nine months ended September 30, 2011, which includes WPD Midlands as if the acquisition had occurred January 1, 2010, is as follows.

             
Operating Revenues - PPL consolidated pro forma           $ 8,922
Net Income Attributable to PPL Shareowners - PPL consolidated pro forma             1,322
Nonrecurring Adjustments to Pro-forma Information

The pre-tax nonrecurring credits (expenses) for the nine months ended September 30, 2011 presented in the following table were directly attributable to the WPD Midlands acquisition and adjustments were included in the calculation of pro forma operating revenue and net income to remove the effect of these nonrecurring items and the related income tax effects.

    Income Statement      
    Line Item   Nine Months
           
 2011 Bridge Facility costs (a) Interest Expense    $ (43)
 Foreign currency loss on 2011 Bridge Facility (b) Other Income (Expense) - net      (57)
 Net hedge gains associated with the 2011 Bridge Facility (c) Other Income (Expense) - net      55
 Hedge ineffectiveness (d) Interest Expense      (12)
 U.K. stamp duty tax (e) Other Income (Expense) - net      (21)
 Separation benefits (f) Other operation and maintenance      (92)
 Other acquisition-related adjustments (g) Other Income (Expense) - net      (45)

(a)       The 2011 Bridge Facility costs, primarily commitment and structuring fees, were incurred to establish a bridge facility for purposes of funding the WPD Midlands acquisition purchase price.

(b)       The 2011 Bridge Facility was denominated in GBP. The amount includes a $42 million foreign currency loss on PPL Capital Funding's repayment of its 2011 Bridge Facility borrowing and a $15 million foreign currency loss associated with proceeds received on the U.S. dollar-denominated senior notes issued by PPL WEM in April 2011 that were used to repay a portion of PPL WEM's borrowing under the 2011 Bridge Facility.

(c)       The repayment of borrowings on the 2011 Bridge Facility was economically hedged to mitigate the effects of changes in foreign currency exchange rates with forward contracts to purchase GBP, which resulted in net hedge gains.

(d)       The hedge ineffectiveness includes a combination of ineffectiveness associated with closed out interest rate swaps and a charge recorded as a result of certain interest rate swaps failing hedge effectiveness testing, both associated with the acquisition financing.

(e)       The U.K. stamp duty tax represents a tax on the transfer of ownership of property in the U.K. incurred in connection with the acquisition.

(f)       See "Separation Benefits - U.K. Regulated Segment" above.

(g)       Primarily includes acquisition-related advisory, accounting and legal fees.

PPL Energy Supply LLC [Member]
  
Acquisitions, Development and Divestitures [Line Items]  
Purchase Price and Related Purchase Price Allocation

The consideration paid for this acquisition, subject to finalization of net indebtedness and fair value adjustments, was as follows.

Aggregate enterprise consideration $326
Less: Estimated fair value of long-term debt outstanding assumed through consolidation (a)  258
Plus: Restricted cash debt service reserves  17
Cash consideration paid for equity interests (including working capital adjustments) $85

(a)       The estimated long-term debt assumed through consolidation consisted of $226 million aggregate principal amount of 8.857% senior secured bonds to be fully repaid by 2025, plus $8 million of debt service reserve loans, and a $24 million estimated fair value adjustment.

 

Preliminary Purchase Price Allocation

 

The following table summarizes the preliminary allocation of the purchase price to the estimated fair value of the major classes of assets acquired and liabilities assumed through consolidation, and the effective settlement of the tolling agreement through consolidation.

PP&E $ 505
Long-term debt (current and noncurrent) (a)   (258)
Tolling agreement assets eliminated (b)   (170)
Other net assets   8
Net identifiable assets acquired (c) $ 85

(a)       Represents non-cash activity excluded from the Statement of Cash Flows for the nine months ended September 30, 2012.

(b)       Primarily an intangible asset, which represented PPL EnergyPlus' rights to and the related accounting for the tolling agreement with PPL Ironwood, LLC prior to the acquisition. On the acquisition date, PPL Ironwood, LLC recorded a liability, recognized at estimated fair value, for its obligation to PPL EnergyPlus. The tolling agreement assets of PPL EnergyPlus and the tolling agreement liability of PPL Ironwood, LLC eliminate in consolidation for PPL and PPL Energy Supply as a result of the acquisition, and therefore the agreement is considered effectively settled. Any difference between the tolling agreement assets and liability will result in a gain or loss on the effective settlement of the agreement. That amount is currently estimated to be insignificant.

(c)       Goodwill is currently estimated to be insignificant.