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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2013

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

Reconciliations of income taxes for the periods ended March 31 are:

(PPL)

			Three Months
			2013		2012
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%			$	197	$	281
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			3		24
	Impact of lower U.K. income tax rates			(38)		(21)
	U.S. income tax on foreign earnings - net of foreign tax credit			2		2
	Foreign tax reserve adjustments					3
	Federal income tax credits			(3)		(4)
	Amortization of investment tax credit			(3)		(2)
	Depreciation not normalized			(3)		(2)
	State deferred tax rate change (a)					(11)
	Net operating loss carryforward adjustments (b)					(6)
	Other			(4)		(5)
		Total increase (decrease)		(46)		(22)
Total income taxes			$	151	$	259

(a) During the three months ended March 31, 2012, PPL recorded adjustments related to state deferred tax liabilities.

(b) During the three months ended March 31, 2012, PPL recorded adjustments to deferred taxes related to net operating loss carryforwards of LKE based on income tax return adjustments.

Unrecognized Tax Benefits

Changes to unrecognized tax benefits for the periods ended March 31 were as follows:

		Three Months
		2013		2012
PPL
	Beginning of period	$	92	$	145
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years				(27)
	Additions based on tax positions related to the current year				1
	Lapse of applicable statutes of limitations		(2)		(2)
	End of period	$	90	$	121

PPL Energy Supply
	Beginning of period	$	30	$	28
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years				(1)
	End of period	$	30	$	31

PPL Electric
	Beginning of period	$	26	$	73
	Reductions based on tax positions of prior years				(26)
	Additions based on tax positions related to the current year				1
	Lapse of applicable statutes of limitations		(2)		(2)
	End of period	$	24	$	46

At March 31, 2013, it was reasonably possible that during the next 12 months the total amount of unrecognized tax benefits could increase or decrease by the following amounts.

	Increase		Decrease

PPL	$	10	$	88
PPL Energy Supply				30
PPL Electric		10		22

At March 31, the total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective income tax rate were as follows.

PPL Energy Supply LLC [Member]

Income Taxes [Line Items]

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

Reconciliations of income taxes for the periods ended March 31 are:

(PPL Energy Supply)

			Three Months
			2013		2012
Federal income tax on Income (Loss) Before Income Taxes at statutory tax rate - 35%			$	(26)	$	170
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			(6)		23
	Federal income tax credits			(3)		(4)
	State deferred tax rate change (a)					(11)
	Other					(1)
		Total increase (decrease)		(9)		7
Total income taxes			$	(35)	$	177

(a) During the three months ended March 31, 2012, PPL Energy Supply recorded adjustments related to state deferred tax liabilities.

Unrecognized Tax Benefits

Changes to unrecognized tax benefits for the periods ended March 31 were as follows:

		Three Months
		2013		2012
PPL
	Beginning of period	$	92	$	145
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years				(27)
	Additions based on tax positions related to the current year				1
	Lapse of applicable statutes of limitations		(2)		(2)
	End of period	$	90	$	121

PPL Energy Supply
	Beginning of period	$	30	$	28
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years				(1)
	End of period	$	30	$	31

PPL Electric
	Beginning of period	$	26	$	73
	Reductions based on tax positions of prior years				(26)
	Additions based on tax positions related to the current year				1
	Lapse of applicable statutes of limitations		(2)		(2)
	End of period	$	24	$	46

At March 31, 2013, it was reasonably possible that during the next 12 months the total amount of unrecognized tax benefits could increase or decrease by the following amounts.

	Increase		Decrease

PPL	$	10	$	88
PPL Energy Supply				30
PPL Electric		10		22

At March 31, the total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective income tax rate were as follows.

PPL Electric Utilities Corp [Member]

Income Taxes [Line Items]

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

Reconciliations of income taxes for the periods ended March 31 are:

(PPL Electric)

			Three Months
			2013		2012
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%			$	34	$	20
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			5		2
	Federal and state tax reserve adjustments			(2)		(1)
	Depreciation not normalized			(3)		(1)
	Other			(1)
		Total increase (decrease)		(1)
Total income taxes			$	33	$	20

Unrecognized Tax Benefits

Changes to unrecognized tax benefits for the periods ended March 31 were as follows:

		Three Months
		2013		2012
PPL
	Beginning of period	$	92	$	145
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years				(27)
	Additions based on tax positions related to the current year				1
	Lapse of applicable statutes of limitations		(2)		(2)
	End of period	$	90	$	121

PPL Energy Supply
	Beginning of period	$	30	$	28
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years				(1)
	End of period	$	30	$	31

PPL Electric
	Beginning of period	$	26	$	73
	Reductions based on tax positions of prior years				(26)
	Additions based on tax positions related to the current year				1
	Lapse of applicable statutes of limitations		(2)		(2)
	End of period	$	24	$	46

At March 31, 2013, it was reasonably possible that during the next 12 months the total amount of unrecognized tax benefits could increase or decrease by the following amounts.

	Increase		Decrease

PPL	$	10	$	88
PPL Energy Supply				30
PPL Electric		10		22

At March 31, the total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective income tax rate were as follows.

LG And E And KU Energy LLC [Member]

Income Taxes [Line Items]

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

Reconciliations of income taxes for the periods ended March 31 are:

(LKE)

			Three Months
			2013		2012
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%			$	54	$	26
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			5		2
	Net operating loss carryforward adjustments (a)					(6)
	Other			(2)		(1)
		Total increase (decrease)		3		(5)
Total income taxes			$	57	$	21

(a) During the three months ended March 31, 2012, LKE recorded adjustments to deferred taxes related to net operating loss carryforwards based on income tax return adjustments.

Louisville Gas And Electric Co [Member]

Income Taxes [Line Items]

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

Reconciliations of income taxes for the periods ended March 31 are:

(LG&E)

			Three Months
			2013		2012
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%			$	24	$	14
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			3		1
	Other			(2)
		Total increase (decrease)		1		1
Total income taxes			$	25	$	15

Kentucky Utilities Co [Member]

Income Taxes [Line Items]

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

Reconciliations of income taxes for the periods ended March 31 are:

(KU)

			Three Months
			2013		2012
Federal income tax on Income Before Income Taxes at statutory tax rate - 35%			$	36	$	21
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			4		2
	Other			(1)		(1)
		Total increase (decrease)		3		1
Total income taxes			$	39	$	22

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References+ Details

PPL Energy Supply

PPL Electric