Defined Benefits

9 Months Ended

Sep. 30, 2014

9. Defined Benefits

(PPL, PPL Energy Supply and PPL Electric)

Effective July 1, 2014, PPL’s primary defined benefit pension plan and postretirement medical plan were closed to newly hired IBEW Local 1600 employees. All of PPL’s defined benefit pension plans are now closed to newly hired employees.

(All Registrants except PPL Electric and KU)

Certain net periodic defined benefit costs are applied to accounts that are further distributed between capital and expense, including certain costs allocated to applicable subsidiaries for plans sponsored by PPL Services and LKE. Following are the net periodic defined benefit costs (credits) of the plans sponsored by PPL, PPL Energy Supply, LKE and LG&E for the periods ended September 30:

			Pension Benefits
			Three Months								Nine Months
			U.S.				U.K.				U.S.				U.K.
			2014		2013		2014		2013		2014		2013		2014		2013
PPL
Service cost			$	26	$	31	$	18	$	18	$	77	$	94	$	54	$	52
Interest cost				58		53		90		79		175		160		268		238
Expected return on plan assets				(75)		(73)		(133)		(115)		(224)		(220)		(395)		(346)
Amortization of:
		Prior service cost		5		6						15		17
		Actuarial (gain) loss		8		20		34		37		23		60		100		112
Net periodic defined benefit
	costs (credits) prior to
	termination benefits			22		37		9		19		66		111		27		56
Termination benefits (a)				(7)								13
Net periodic defined benefit
	costs (credits)		$	15	$	37	$	9	$	19	$	79	$	111	$	27	$	56

(a) See Note 10 for details of a one-time voluntary retirement window offered to certain bargaining unit employees.

		Pension Benefits
		Three Months				Nine Months
		2014		2013		2014		2013
PPL Energy Supply
Service cost		$	1	$	1	$	4	$	5
Interest cost			3		2		7		6
Expected return on plan assets			(3)		(2)		(8)		(7)
Amortization of:
	Actuarial (gain) loss				1		1		2
Net periodic defined benefit costs (credits)		$	1	$	2	$	4	$	6


LKE
Service cost		$	5	$	6	$	16	$	19
Interest cost			17		16		50		47
Expected return on plan assets			(21)		(20)		(62)		(61)
Amortization of:
	Prior service cost		1		1		3		3
	Actuarial (gain) loss		4		8		10		25
Net periodic defined benefit costs (credits)		$	6	$	11	$	17	$	33

LG&E
Service cost				$	1	$	1	$	2
Interest cost		$	4		3		11		10
Expected return on plan assets			(4)		(5)		(14)		(15)
Amortization of:
	Prior service cost		1		1		2		2
	Actuarial (gain) loss		1		3		4		10
Net periodic defined benefit costs (credits)		$	2	$	3	$	4	$	9

		Other Postretirement Benefits
		Three Months				Nine Months
		2014		2013		2014		2013
PPL
Service cost		$	3	$	4	$	9	$	11
Interest cost			8		7		24		21
Expected return on plan assets			(6)		(6)		(19)		(18)
Amortization of:
	Actuarial (gain) loss				1				4
Net periodic defined benefit costs (credits)		$	5	$	6	$	14	$	18


LKE
Service cost		$	1	$	2	$	3	$	4
Interest cost			2		2		7		6
Expected return on plan assets			(1)		(2)		(4)		(4)
Amortization of:
	Prior service cost		1		1		2		2
Net periodic defined benefit costs (credits)		$	3	$	3	$	8	$	8

(All Registrants except PPL)

In addition to the specific plans they sponsor, PPL Energy Supply subsidiaries are also allocated costs of defined benefit plans sponsored by PPL Services, and LG&E is allocated costs of defined benefit plans sponsored by LKE based on their participation in those plans, which management believes are reasonable. PPL Electric and KU do not directly sponsor any defined benefit plans. PPL Electric is allocated costs of defined benefit plans sponsored by PPL Services and KU is allocated costs of defined benefit plans sponsored by LKE based on their participation in those plans, which management believes are reasonable. For the periods ended September 30, PPL Services allocated the following net periodic defined benefit costs to PPL Energy Supply subsidiaries and PPL Electric, and LKE allocated the following net periodic defined benefit costs to LG&E and KU.

	Three Months				Nine Months
	2014		2013		2014		2013

PPL Energy Supply (a)	$	2	$	11	$	32	$	34
PPL Electric (a)		3		9		18		27

LG&E			2			3			6			9
KU			2			4			6			13

(a) For PPL Energy Supply and PPL Electric, the three months ended September 30, 2014 include $(5) million and $(2) million and the nine months ended September 30, 2014 include $11 million and $2 million of termination benefits related to a one-time voluntary retirement window offered to certain bargaining unit employees. See Note 10 for additional information.