EX-12.B 8 form10q-exhibit12b.htm EXHIBIT 12(B) form10q-exhibit12b.htm
Exhibit 12(b)
PPL ENERGY SUPPLY, LLC AND SUBSIDIARIES
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions of Dollars)
 
           
9 Months
                              
           
Ended
                              
           
Sep. 30,
  
Years Ended December 31,
           
2014
  
2013(a)
  
2012(a)
  
2011(a)
  
2010(a)
  
2009(a)
Earnings, as defined:
                                  
   
Income (Loss) from Continuing Operations Before
                                  
     
Income Taxes (d)
$
 54
  
$
 (420)
  
$
 665
  
$
 1,061
  
$
 860
  
$
 (77)
   
Adjustments to reflect earnings from equity method
                                  
     
investments on a cash basis
  
 
    
 
    
 
    
 1
    
 7
    
 1
         
 54
    
 (420)
    
 665
    
 1,062
    
 867
    
 (76)
                                             
   
Total fixed charges as below
  
 121
    
 226
    
 238
    
 259
    
 426
    
 364
       
Less:
                                  
       
Capitalized interest
  
 16
    
 36
    
 47
    
 47
    
 33
    
 44
       
Interest expense and fixed charges related to
                                  
         
discontinued operations
  
 6
    
 12
    
 10
    
 3
    
 166
    
 109
   
Total fixed charges included in Income (Loss) from
                                  
     
Continuing Operations Before Income Taxes
  
 99
    
 178
    
 181
    
 209
    
 227
    
 211
                                             
       
Total earnings
$
 153
  
$
 (242)
  
$
 846
  
$
 1,271
  
$
 1,094
  
$
 135
                                             
Fixed charges, as defined:
                                  
   
Interest charges (b)
$
 118
  
$
 207
  
$
 214
  
$
 223
  
$
 387
  
$
 321
   
Estimated interest component of operating rentals
  
 3
    
 19
    
 24
    
 36
    
 38
    
 42
   
Fixed charges of majority-owned share of 50% or
                                  
     
less-owned persons
  
 
    
 
    
 
    
 
    
 1
    
 1
                                             
       
Total fixed charges (c)
$
 121
  
$
 226
  
$
 238
  
$
 259
  
$
 426
  
$
 364
                                             
Ratio of earnings to fixed charges (d)
  
 1.3
    
 (1.1)
    
 3.6
    
 4.9
    
 2.6
    
 0.4

(a)
  
Years 2009 through 2013 have been adjusted to reflect the reclassification of certain PPL Montana hydroelectric generating facilities and related assets as Discontinued Operations.  See Note 8 to the Financial Statements for additional information.
(b)
  
Includes interest on long-term and short-term debt, as well as amortization of debt discount, expense and premium - net.
(c)
  
Interest on unrecognized tax benefits is not included in fixed charges.
(d)
  
To facilitate the sale of the hydroelectric generating facilities referred to in (a) above, in December 2013, PPL Montana terminated a lease agreement which resulted in a $697 million charge.  See Note 8 to the Financial Statements in PPL Energy Supply's 2013 Form 10-K for additional information.  As a result of the lease termination and the reclassification referred to in (a) above, earnings for 2013 were lower, which resulted in less than one-to-one coverage.  The adjusted amount of the deficiency, or the amount of fixed charges in excess of earnings, was $468 million.
     
   
As a result of PPL Energy Supply's 2011 distribution of its interest in PPL Global to PPL Energy Funding and related reclassification of PPL Global's operating results as Discontinued Operations and the reclassification referred to in (a) above, earnings for 2009 were lower, which resulted in less than one-to-one coverage.  The adjusted amount of the deficiency, or the amount of fixed charges in excess of earnings, was $229 million.
 
151