XML 60 R43.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivative Instruments and Hedging Activities (Tables)
9 Months Ended
Sep. 30, 2013
Derivative Instruments And Hedging Activities [Line Items]  
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At September 30, 2013, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

    Volume (a)
Commodity Unit of Measure 2013 (b) 2014 2015 Thereafter
           
Power MWh  (9,950,950)  (28,280,182)  (4,110,530)  10,991,752
Capacity MW-Month  (5,114)  (14,418)  (309)  1,990
Gas MMBtu  12,653,279  18,794,545  (3,852,725)  5,320,453
Coal Tons    (30,000)    
FTRs MW-Month  5,056  8,724  1,465  
Oil Barrels  (15,335)  300,000  384,334  371,466

(a)       Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.

(b)       Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

       September 30, 2013 December 31, 2012
       Derivatives designated as  Derivatives not designated Derivatives designated as  Derivatives not designated
       hedging instruments  as hedging instruments (a) hedging instruments  as hedging instruments (a)
       Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
Current:                        
 Price Risk Management                         
  Assets/Liabilities (b):                        
   Interest rate swaps (c) $ 83 $ 16    $ 4 $ 14 $ 22    $ 5
   Cross-currency swaps    1   1            3      
   Foreign currency                        
    contracts      5 $    24      2      23
   Commodity contracts         961   773   59    $ 1,452   1,010
     Total current   84   22   961   801   73   27   1,452   1,038
Noncurrent:                        
 Price Risk Management                         
  Assets/Liabilities (b):                        
   Interest rate swaps (c)   3   1      37   1         53
   Cross-currency swaps    27            14   1      
   Foreign currency                        
    contracts      6   1   32            19
   Commodity contracts         519   462   27      530   556
     Total noncurrent   30   7   520   531   42   1   530   628
Total derivatives $ 114 $ 29 $ 1,481 $ 1,332 $ 115 $ 28 $ 1,982 $ 1,666

(a)       $216 million and $300 million of net gains associated with derivatives that were no longer designated as hedging instruments are recorded in AOCI at September 30, 2013 and December 31, 2012.

(b)       Represents the location on the Balance Sheets.

(c)       Excludes accrued interest, if applicable.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended September 30, 2013.

              Three Months Nine Months
                 Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                 in Income    in Income
              on Derivative Gain (Loss) on Derivative
           Gain (Loss) (Ineffective Reclassified (Ineffective
        Location of Reclassified Portion and from AOCI Portion and
     Derivative Gain Gain (Loss) from AOCI Amount into Amount
     (Loss) Recognized in Recognized into Income Excluded from Income Excluded from
Derivative   OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships Three Months Nine Months on Derivative Portion) Testing) Portion) Testing)
Cash Flow Hedges:                    
 Interest rate swaps $ 25 $ 102 Interest expense $ (5)    $ (14)   
 Cross-currency swaps   (36)   16 Interest expense   (1)         
           Other income            
            (expense) - net   (25)      45   
 Commodity contracts       Wholesale energy             
            marketing   58      198 $ 1
           Depreciation   1      2   
           Energy purchases   (11)      (41)   
Total $ (11) $ 118    $ 17    $ 190 $ 1
                         
Net Investment Hedges:                     
  Foreign currency contracts $ (22) $ (5)               

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Nine Months
         
Foreign currency contracts Other income (expense) - net $ (117) $ 6
Interest rate swaps Interest expense   (2)   (6)
Commodity contracts Unregulated retail electric and gas   3   18
  Wholesale energy marketing   104   144
  Net energy trading margins (a)   14   8
  Fuel   4   2
  Energy purchases   (86)   (99)
  Total $ (80) $ 73
         
Derivatives Not Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets Three Months Nine Months
         
Interest rate swaps Regulatory assets - noncurrent $ 2 $ 18
         
Derivatives Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets Three Months Nine Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 12 $ 70

(a)       Differs from the Statement of Income due to intra-month transactions that PPL defines as spot activity, which is not accounted for as a derivative.

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI, or regulatory assets and regulatory liabilities for the periods ended September 30, 2012.

Derivatives in Hedged Items in  Location of Gain Gain (Loss) Recognized Gain (Loss) Recognized
Fair Value Hedging Fair Value Hedging  (Loss) Recognized in in Income on Derivative  in Income on Related Item
Relationships Relationships  Income on Derivative Three Months Nine Months Three Months Nine Months
                  
Interest rate swaps Fixed rate debt Interest expense $ (1)    $ 1 $ 3

              Three Months Nine Months
                 Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                 in Income    in Income
              on Derivative Gain (Loss) on Derivative
           Gain (Loss) (Ineffective Reclassified (Ineffective
        Location of Reclassified Portion and from AOCI Portion and
     Derivative Gain Gain (Loss) from AOCI Amount into Amount
     (Loss) Recognized in Recognized into Income Excluded from Income Excluded from
Derivative   OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships Three Months Nine Months on Derivative Portion) Testing) Portion) Testing)
Cash Flow Hedges:                    
 Interest rate swaps $ (6) $ (28) Interest expense $ (4)    $ (13)   
           Other income            
            (expense) - net   1      1   
 Cross-currency swaps   (49)   (3) Interest expense         (1)   
           Other income            
            (expense) - net   (40)      (12)   
 Commodity contracts      99 Wholesale energy             
            marketing   174      673 $ (1)
           Depreciation   1      2   
           Energy purchases   (20) $ 1   (105)   (2)
Total $ (55) $ 68    $ 112 $ 1 $ 545 $ (3)
                         
Net Investment Hedges:                     
  Foreign currency contracts $ (4) $ (5)               

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Nine Months
         
Foreign currency contracts Other income (expense) - net $ (47) $ (40)
Interest rate swaps Interest expense   (2)   (4)
Commodity contracts Unregulated retail electric and gas   (3)   20
  Wholesale energy marketing   (476)   900
  Net energy trading margins (a)   (10)   12
  Fuel   6   
  Energy purchases   364   (717)
  Total $ (168) $ 171
         
Derivatives Not Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets Three Months Nine Months
         
Interest rate swaps Regulatory assets - noncurrent $ 1 $ (2)

(a)       Differs from the Statement of Income due to intra-month transactions that PPL defines as spot activity, which is not accounted for as a derivative.

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
September 30, 2013                        
PPL                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113
 Treasury Derivatives   115   47      68   126   47 $ 22   57
Total $ 1,595 $ 1,169 $ 14 $ 412 $ 1,361 $ 1,169 $ 22 $ 170
                           
PPL Energy Supply                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113

LKE                        
 Treasury Derivatives             $ 55    $ 22 $ 33
                           
LG&E                        
 Treasury Derivatives             $ 48    $ 22 $ 26
                           
KU                        
 Treasury Derivatives             $ 7       $ 7

December 31, 2012                        
PPL                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144
 Treasury Derivatives   29   19      10   128   19   30   79
Total $ 2,097 $ 1,432 $ 111 $ 554 $ 1,694 $ 1,432 $ 39 $ 223
                           
PPL Energy Supply                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144

LKE                        
 Treasury Derivatives $ 14       $ 14 $ 58    $ 30 $ 28
                           
LG&E                        
 Treasury Derivatives $ 7       $ 7 $ 58    $ 30 $ 28
                           
KU                        
 Treasury Derivatives $ 7       $ 7            
Credit Risk-Related Contingent Features

At September 30, 2013, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 178 $ 115 $ 29 $ 29
Aggregate fair value of collateral posted on these derivative instruments   39   17   22   22
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   167  127   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

PPL Energy Supply LLC [Member]
 
Derivative Instruments And Hedging Activities [Line Items]  
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At September 30, 2013, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

    Volume (a)
Commodity Unit of Measure 2013 (b) 2014 2015 Thereafter
           
Power MWh  (9,950,950)  (28,280,182)  (4,110,530)  10,991,752
Capacity MW-Month  (5,114)  (14,418)  (309)  1,990
Gas MMBtu  12,653,279  18,794,545  (3,852,725)  5,320,453
Coal Tons    (30,000)    
FTRs MW-Month  5,056  8,724  1,465  
Oil Barrels  (15,335)  300,000  384,334  371,466

(a)       Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.

(b)       Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

       September 30, 2013 December 31, 2012
       Derivatives not designated Derivatives designated as Derivatives not designated
       as hedging instruments (a) hedging instruments  as hedging instruments (a)
       Assets Liabilities Assets Liabilities Assets Liabilities
Current:                  
 Price Risk Management                   
  Assets/Liabilities (b):                  
   Commodity contracts $ 961 $ 773 $ 59    $ 1,452 $ 1,010
     Total current   961   773   59      1,452   1,010
Noncurrent:                  
 Price Risk Management                   
  Assets/Liabilities (b):                  
   Commodity contracts   519   462   27      530   556
     Total noncurrent   519   462   27      530   556
Total derivatives $ 1,480 $ 1,235 $ 86    $ 1,982 $ 1,566

(a)       $216 million and $300 million of net gains associated with derivatives that were no longer designated as hedging instruments are recorded in AOCI at September 30, 2013 and December 31, 2012.

(b)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income or OCI for the periods ended September 30, 2013.

             Three Months Nine Months
                Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                in Income    in Income
                on Derivative    on Derivative
          Gain (Loss) (Ineffective Gain (Loss) (Ineffective
        Location of Reclassified Portion and Reclassified Portion and
     Derivative Gain Gains (Losses) from AOCI Amount from AOCI Amount
     (Loss) Recognized in Recognized into Income Excluded from into Income Excluded from
Derivative  OCI (Effective Portion)  in Income(Effective Effectiveness (Effective Effectiveness
Relationships Three Months Nine Months on Derivative  Portion)  Testing) Portion) Testing)
Cash Flow Hedges:                    
 Commodity contracts       Wholesale energy             
           marketing $ 58    $ 198 $ 1
           Depreciation   1      2   
           Energy purchases   (11)      (41)   
Total          $ 48    $ 159 $ 1
                         

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instrument  Income on Derivative Three Months Nine Months
         
Commodity contracts Unregulated retail electric and gas $ 3 $ 18
  Wholesale energy marketing   104   144
  Net energy trading margins (a)   14   8
  Fuel   4   2
  Energy purchases   (86)   (99)
  Total $ 39 $ 73

(a)       Differs from the Statements of Income due to intra-month transactions that PPL Energy Supply defines as spot activity, which is not accounted for as a derivative.

The following tables present the pre-tax effect of derivative instruments recognized in income or OCI for the periods ended September 30, 2012.

             Three Months Nine Months
                Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                in Income    in Income
                on Derivative    on Derivative
          Gain (Loss) (Ineffective Gain (Loss) (Ineffective
        Location of Reclassified Portion and Reclassified Portion and
     Derivative Gain Gains (Losses) from AOCI Amount from AOCI Amount
     (Loss) Recognized in Recognized into Income Excluded from into Income Excluded from
Derivative  OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships Three Months Nine Months on Derivative  Portion)  Testing) Portion) Testing)
Cash Flow Hedges:                    
          Wholesale energy             
  Commodity contracts    $ 99  marketing $ 174    $ 673 $ (1)
           Depreciation         1   
           Energy purchases   (20) $ 1   (105)   (2)
Total    $ 99    $ 154 $ 1 $ 569 $ (3)

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative Three Months Nine Months
         
Commodity contracts Unregulated retail electric and gas $ (3) $ 20
  Wholesale energy marketing   (476)   900
  Net energy trading margins (a)   (10)   12
  Fuel   6   
  Energy purchases   364   (717)
  Total $ (119) $ 215

(a)       Differs from the Statements of Income due to intra-month transactions that PPL Energy Supply defines as spot activity, which is not accounted for as a derivative.

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
September 30, 2013                        
PPL                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113
 Treasury Derivatives   115   47      68   126   47 $ 22   57
Total $ 1,595 $ 1,169 $ 14 $ 412 $ 1,361 $ 1,169 $ 22 $ 170
                           
PPL Energy Supply                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113

LKE                        
 Treasury Derivatives             $ 55    $ 22 $ 33
                           
LG&E                        
 Treasury Derivatives             $ 48    $ 22 $ 26
                           
KU                        
 Treasury Derivatives             $ 7       $ 7

December 31, 2012                        
PPL                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144
 Treasury Derivatives   29   19      10   128   19   30   79
Total $ 2,097 $ 1,432 $ 111 $ 554 $ 1,694 $ 1,432 $ 39 $ 223
                           
PPL Energy Supply                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144

LKE                        
 Treasury Derivatives $ 14       $ 14 $ 58    $ 30 $ 28
                           
LG&E                        
 Treasury Derivatives $ 7       $ 7 $ 58    $ 30 $ 28
                           
KU                        
 Treasury Derivatives $ 7       $ 7            
Credit Risk-Related Contingent Features

At September 30, 2013, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 178 $ 115 $ 29 $ 29
Aggregate fair value of collateral posted on these derivative instruments   39   17   22   22
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   167  127   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

LG And E And KU Energy LLC [Member]
 
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and the location on the Balance Sheets of derivative instruments designated as cash flow hedges.

       September 30, 2013 December 31, 2012
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 14  $ 14    

(a)       Represents the location on the Balance Sheets.

(LKE and LG&E)

 

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

       September 30, 2013 December 31, 2012 
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 4     $ 5 
     Total current      4       5 
Noncurrent:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps      37       53 
     Total noncurrent      37       53 
Total derivatives    $ 41     $ 58 

(a)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the periods ended September 30, 2013.

Derivative Instruments Location of Gain (Loss) Three Months Nine Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 12 $ 70
         

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended September 30, 2013.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Nine Months
         
Interest rate swaps Interest expense $ (2) $ (6)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Nine Months
         
Interest rate swaps Regulatory assets - noncurrent (a) $ 2 $ 18

(a)       Includes both realized and unrealized gains (losses).

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended September 30, 2012.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Nine Months
         
Interest rate swaps Interest expense $ (2) $ (6)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Nine Months
         
Interest rate swaps Regulatory assets - noncurrent (a) $ 1 $ (2)

(a)       Includes both realized and unrealized gains (losses).

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
September 30, 2013                        
PPL                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113
 Treasury Derivatives   115   47      68   126   47 $ 22   57
Total $ 1,595 $ 1,169 $ 14 $ 412 $ 1,361 $ 1,169 $ 22 $ 170
                           
PPL Energy Supply                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113

LKE                        
 Treasury Derivatives             $ 55    $ 22 $ 33
                           
LG&E                        
 Treasury Derivatives             $ 48    $ 22 $ 26
                           
KU                        
 Treasury Derivatives             $ 7       $ 7

December 31, 2012                        
PPL                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144
 Treasury Derivatives   29   19      10   128   19   30   79
Total $ 2,097 $ 1,432 $ 111 $ 554 $ 1,694 $ 1,432 $ 39 $ 223
                           
PPL Energy Supply                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144

LKE                        
 Treasury Derivatives $ 14       $ 14 $ 58    $ 30 $ 28
                           
LG&E                        
 Treasury Derivatives $ 7       $ 7 $ 58    $ 30 $ 28
                           
KU                        
 Treasury Derivatives $ 7       $ 7            
Credit Risk-Related Contingent Features

At September 30, 2013, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 178 $ 115 $ 29 $ 29
Aggregate fair value of collateral posted on these derivative instruments   39   17   22   22
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   167  127   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

Louisville Gas And Electric Co [Member]
 
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and the location on the Balance Sheets of derivative instruments designated as cash flow hedges.

       September 30, 2013 December 31, 2012
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 7  $ 7    

(a)       Represents the location on the Balance Sheets.

 

(LKE and LG&E)

 

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

       September 30, 2013 December 31, 2012 
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 4     $ 5 
     Total current      4       5 
Noncurrent:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps      37       53 
     Total noncurrent      37       53 
Total derivatives    $ 41     $ 58 

(a)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the periods ended September 30, 2013.

Derivative Instruments Location of Gain (Loss) Three Months Nine Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 6 $ 35

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended September 30, 2013.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Nine Months
         
Interest rate swaps Interest expense $ (2) $ (6)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Nine Months
         
Interest rate swaps Regulatory assets - noncurrent (a) $ 2 $ 18

(a)       Includes both realized and unrealized gains (losses).

The following tables present the pre-tax effect of derivatives not designated as hedging instruments recognized in income or regulatory assets for the periods ended September 30, 2012.

  Location of Gain (Loss) Recognized in    
Derivative Instruments Income on Derivatives Three Months Nine Months
         
Interest rate swaps Interest expense $ (2) $ (6)
         
  Location of Gain (Loss) Recognized in    
Derivative Instruments Regulatory Assets Three Months Nine Months
         
Interest rate swaps Regulatory assets - noncurrent (a) $ 1 $ (2)

(a)       Includes both realized and unrealized gains (losses).

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
September 30, 2013                        
PPL                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113
 Treasury Derivatives   115   47      68   126   47 $ 22   57
Total $ 1,595 $ 1,169 $ 14 $ 412 $ 1,361 $ 1,169 $ 22 $ 170
                           
PPL Energy Supply                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113

LKE                        
 Treasury Derivatives             $ 55    $ 22 $ 33
                           
LG&E                        
 Treasury Derivatives             $ 48    $ 22 $ 26
                           
KU                        
 Treasury Derivatives             $ 7       $ 7

December 31, 2012                        
PPL                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144
 Treasury Derivatives   29   19      10   128   19   30   79
Total $ 2,097 $ 1,432 $ 111 $ 554 $ 1,694 $ 1,432 $ 39 $ 223
                           
PPL Energy Supply                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144

LKE                        
 Treasury Derivatives $ 14       $ 14 $ 58    $ 30 $ 28
                           
LG&E                        
 Treasury Derivatives $ 7       $ 7 $ 58    $ 30 $ 28
                           
KU                        
 Treasury Derivatives $ 7       $ 7            
Credit Risk-Related Contingent Features

At September 30, 2013, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

       PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 178 $ 115 $ 29 $ 29
Aggregate fair value of collateral posted on these derivative instruments   39   17   22   22
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   167  127   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

Kentucky Utilities Co [Member]
 
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

(KU)

 

The following table presents the fair value and the location on the Balance Sheets of derivative instruments designated as cash flow hedges.

       September 30, 2013 December 31, 2012
       Assets Liabilities  Assets Liabilities 
Current:              
 Price Risk Management               
  Assets/Liabilities (a):              
   Interest rate swaps    $ 7  $ 7    
Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

(a)       Represents the location on the Balance Sheets.

 

The following tables present the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the periods ended September 30, 2013.

Derivative Instruments Location of Gain (Loss)  Three Months Nine Months
         
Interest rate swaps Regulatory liabilities - noncurrent $ 6 $ 35
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
September 30, 2013                        
PPL                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113
 Treasury Derivatives   115   47      68   126   47 $ 22   57
Total $ 1,595 $ 1,169 $ 14 $ 412 $ 1,361 $ 1,169 $ 22 $ 170
                           
PPL Energy Supply                        
 Energy Commodities $ 1,480 $ 1,122 $ 14 $ 344 $ 1,235 $ 1,122    $ 113

LKE                        
 Treasury Derivatives             $ 55    $ 22 $ 33
                           
LG&E                        
 Treasury Derivatives             $ 48    $ 22 $ 26
                           
KU                        
 Treasury Derivatives             $ 7       $ 7

December 31, 2012                        
PPL                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144
 Treasury Derivatives   29   19      10   128   19   30   79
Total $ 2,097 $ 1,432 $ 111 $ 554 $ 1,694 $ 1,432 $ 39 $ 223
                           
PPL Energy Supply                        
 Energy Commodities $ 2,068 $ 1,413 $ 111 $ 544 $ 1,566 $ 1,413 $ 9 $ 144

LKE                        
 Treasury Derivatives $ 14       $ 14 $ 58    $ 30 $ 28
                           
LG&E                        
 Treasury Derivatives $ 7       $ 7 $ 58    $ 30 $ 28
                           
KU                        
 Treasury Derivatives $ 7       $ 7