XML 77 R50.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes (Reconciliation of Income Tax Expense) (Details) (USD $)
In Millions, unless otherwise specified
1 Months Ended 3 Months Ended 9 Months Ended
Jul. 31, 2013
Jul. 31, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Reconciliation of Income Tax Expense            
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%     $ 173 $ 130 $ 550 $ 539
Federal statutory tax rate     35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:            
State income taxes, net of federal income tax benefit     12 6 29 38
State valuation allowance adjustments     38 [1] 2 [1] 38 [1] 2 [1]
Impact of lower U.K. income tax rates     (38) [2] (30) [2] (101) [2] (75) [2]
U.S. income tax on foreign earnings - net of foreign tax credit     10 [3] 1 [3] 5 [3] 2 [3]
Federal and state tax reserve adjustments     (1) [4] (2) [4] (41) [4] (7) [4]
Foreign tax reserve adjustments     (2)    (2) (5)
Federal and state income tax return adjustments     (4)    (4)   
Enactment of the United Kingdom's Finance Act 2013 and 2012     (93) [2] (74) [2] (93) [2] (74) [2]
Federal income tax credits     (4) (5) (9) (12)
Amortization of investment tax credit     (1) (2) (6) (7)
Depreciation not normalized     (2) (2) (6) (6)
State deferred tax rate change        (6) [5]    (17) [5]
Net operating loss carryforward adjustments              (9) [6]
Intercompany interest on U.K. financing entities     (2) [7] (3) [7] (7) [7] (8) [7]
Other     (2) 2 (9) 3
Total increase (decrease)     (89) (113) (206) (175)
Total income tax from continuing operations     84 17 344 364
United Kingdom statutory income tax rate in effect during period prior to a change         23.00% 25.00%
United Kingdom statutory income tax rate reduction   24.00%        
United Kingdom statutory income tax rate reduction in 2014 21.00%          
United Kingdom statutory income tax rate reduction in 2015 20.00%          
Increase to income tax expense primarily attributable to a revision in the expected taxable amount of cash repatriation in 2013         24  
Benefit related to the recalculation of 2010 United Kingdom earnings and profits         (19)  
Expense from reversal by United States Court of Appeals for the Third Circuit on deductibility of United Kingdom windfall profit tax         39  
Benefit from favorable United States Tax Court decision on deductibility of United Kingdom windfall profit tax         44  
Interest portion of benefit from favorable United States Tax Court decision on deductibility of United Kingdom windfall profit tax         19  
PPL Energy Supply LLC [Member]
           
Reconciliation of Income Tax Expense            
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%     70 25 98 205
Federal statutory tax rate     35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:            
State income taxes, net of federal income tax benefit     7 1 10 25
State valuation allowance adjustments     4 2 4 2
Federal and state tax reserve adjustments           6 [8]   
Federal income tax credits     (4) (4) (7) (10)
State deferred tax rate change        (6) [9]    (17) [9]
Other     (3) (2) (5) (3)
Total increase (decrease)     4 (9) 8 (3)
Total income tax from continuing operations     74 16 106 202
Reversal of tax benefit related to a 2008 change in accounting method         3  
Federal tax reserves related to differences in over (under) payment interest rates applied to audit claims as a result of the U.S. Supreme Court decision related to Windfall Profits tax         4  
PPL Electric Utilities Corp [Member]
           
Reconciliation of Income Tax Expense            
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%     27 17 85 51
Federal statutory tax rate     35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:            
State income taxes, net of federal income tax benefit     5 2 13 7
Federal and state tax reserve adjustments     (2) (2) (6) (5)
Depreciation not normalized     (2) (1) (6) (5)
Other     (2)    (3) (1)
Total increase (decrease)     (1) (1) (2) (4)
Total income tax from continuing operations     26 16 83 47
LG And E And KU Energy LLC [Member]
           
Reconciliation of Income Tax Expense            
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%     56 46 144 96
Federal statutory tax rate     35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:            
State income taxes, net of federal income tax benefit     6 5 14 7
Amortization of investment tax credit     (1) (1) (3) (4)
Net operating loss carryforward adjustments              (9) [10]
Other     (2) (2) (2) (1)
Total increase (decrease)     3 2 9 (7)
Total income tax from continuing operations     59 48 153 89
Louisville Gas And Electric Co [Member]
           
Reconciliation of Income Tax Expense            
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%     27 24 67 52
Federal statutory tax rate     35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:            
State income taxes, net of federal income tax benefit     3 2 7 5
Other     (3) (1) (5) (3)
Total increase (decrease)        1 2 2
Total income tax from continuing operations     27 25 69 54
Kentucky Utilities Co [Member]
           
Reconciliation of Income Tax Expense            
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%     35 28 95 66
Federal statutory tax rate     35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:            
State income taxes, net of federal income tax benefit     4 3 10 6
Other     (3) (1) (4) (2)
Total increase (decrease)     1 2 6 4
Total income tax from continuing operations     $ 36 $ 30 $ 101 $ 70
[1] During the three and nine months ended September 30, 2013, PPL recorded an increase in state deferred income tax expense related to a deferred tax valuation allowance primarily due to a decrease in projected future taxable income over the remaining carryforward period of Pennsylvania net operating losses.
[2] The U.K. Finance Act 2013, enacted in July 2013, reduced the U.K. statutory income tax rate from 23% to 21% effective April 1, 2014 and from 21% to 20% effective April 1, 2015. As a result, PPL reduced its net deferred tax liabilities and recognized a deferred tax benefit in the third quarter of 2013 related to both rate decreases.         The U.K. Finance Act 2012, enacted in July 2012, reduced the U.K. statutory income tax rate from 25% to 24% retroactive to April 1, 2012 and from 24% to 23% effective April 1, 2013. As a result, PPL reduced its net deferred tax liabilities and recognized a deferred tax benefit in the third quarter of 2012 related to both rate decreases.
[3] During the three and nine months ended September 30, 2013, PPL recorded a $10 million and $24 million increase to income tax expense primarily attributable to a revision in the expected taxable amount of cash repatriation in 2013.                  During the nine months ended September 30, 2013, PPL recorded a tax benefit of $19 million associated with a ruling obtained from the IRS impacting the recalculation of 2010 U.K. earnings and profits that was reflected on an amended 2010 U.S. tax return.
[4] In 1997, the U.K. imposed a Windfall Profits Tax (WPT) on privatized utilities, including WPD. PPL filed its tax returns for years subsequent to its 1997 and 1998 claims for refund on the basis that the U.K. WPT was creditable. In September 2010, the U.S. Tax Court (Tax Court) ruled in PPL's favor in a dispute with the IRS, concluding that the U.K. WPT is a creditable tax for U.S. tax purposes. In January 2011, the IRS appealed the Tax Court's decision to the U.S. Court of Appeals for the Third Circuit (Third Circuit). In December 2011, the Third Circuit issued its opinion reversing the Tax Court's decision, holding that the U.K. WPT is not a creditable tax. As a result of the Third Circuit’s adverse determination, PPL recorded a $39 million expense in the fourth quarter of 2011. In June 2012, the U.S. Court of Appeals for the Fifth Circuit issued a contrary opinion in an identical case involving another company. In July 2012, PPL filed a petition for a writ of certiorari seeking U.S. Supreme Court review of the Third Circuit's opinion. The Supreme Court granted PPL's petition and oral argument was held in February 2013. On May 20, 2013, the Supreme Court reversed the Third Circuit’s opinion and ruled that the WPT is a creditable tax. As a result of the Supreme Court ruling, PPL recorded a tax benefit of $44 million during the nine months ended September 30, 2013, of which $19 million relates to interest.
[5] During the three and nine months ended September 30, 2012, PPL recorded adjustments related to state deferred tax liabilities.
[6] During the nine months ended September 30, 2012, PPL recorded adjustments to deferred taxes related to net operating loss carryforwards of LKE based on income tax return adjustments.
[7] PPL recorded foreign income tax benefits related to interest expense on intercompany loans for which there was no domestic income tax expense.
[8] During the nine months ended September 30, 2013, PPL Energy Supply reversed $3 million in tax benefits related to a 2008 change in method of accounting for certain expenditures for tax purposes and recorded $4 million in federal tax reserves related to differences in over (under) payment interest rates applied to audit claims as a result of the U.S. Supreme Court decision related to Windfall Profits Tax.
[9] During the three and nine months ended September 30, 2012, PPL Energy Supply recorded adjustments related to state deferred tax liabilities.
[10] During the nine months ended September 30, 2012, LKE recorded adjustments to deferred taxes related to net operating loss carryforwards based on income tax return adjustments.